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FridayJanuary 16, 1998Vol. 63 No. 11

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Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998

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RESERVATIONS: 202–523–4538

Contents Federal Register

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Vol. 63, No. 11

Friday, January 16, 1998

Agency for Health Care Policy and ResearchNOTICESMeetings:

Health Care Policy, Research, and Evaluation NationalAdvisory Council, 2682

Agricultural Marketing ServiceRULESPeanuts, domestically produced, 2846–2852

Agriculture DepartmentSee Agricultural Marketing ServiceSee Commodity Credit CorporationSee Economic Research Service

Air Force DepartmentNOTICESMeetings:

Scientific Advisory Board, 2672

Blind or Severely Disabled, Committee for Purchase FromPeople Who Are

See Committee for Purchase From People Who Are Blind orSeverely Disabled

Commerce DepartmentSee Foreign-Trade Zones BoardSee International Trade AdministrationSee National Oceanic and Atmospheric Administration

Committee for Purchase From People Who Are Blind orSeverely Disabled

NOTICESProcurement list; additions and deletions, 2658–2659

Commodity Credit CorporationNOTICESAgricultural Trade Development and Assistance Act:

Agricultural market development plans; agreements withdeveloping countries and private entities; commentrequest; correction, 2723

Comptroller of the CurrencyPROPOSED RULESNational banks:

Municipal securities dealers; reporting and recordkeepingrequirements, 2640–2642

Consumer Product Safety CommissionNOTICESMeetings; Sunshine Act, 2671–2672

Defense DepartmentSee Air Force Department

Economic Research ServiceNOTICESAgency information collection activities:

Proposed collection; comment request, 2657–2658

Education DepartmentNOTICESAgency information collection activities:

Proposed collection; comment request, 2672Meetings:

Education Statistics Advisory Council, 2673

Employment and Training AdministrationNOTICESGrants and cooperative agreements; availability, etc.:

Postsecondary education—School-to-work opportunities partnerships; State and

local systems, 2696–2697

Employment Standards AdministrationNOTICESMinimum wages for Federal and federally-assisted

construction; general wage determination decisions,2697–2698

Energy DepartmentSee Federal Energy Regulatory CommissionNOTICESMeetings:

Environmental Management Site-Specific AdvisoryBoard—

Los Alamos National Laboratory, 2673Secretary of Energy Advisory Board, 2673–2674

Environmental Protection AgencyRULESAir pollutants, hazardous; national emission standards:

Gasoline distribution facilities; bulk gasoline terminalsand pipeline breakout stations; limited exclusion,2630–2631

Air programs:Ozone areas attaining 1-hour standard; identification of

areas where standard will cease to apply, 2726–2803PROPOSED RULESAir programs:

Outer Continental Shelf regulations—California; consistency update, 2642–2646

Ozone areas attaining 1-hour standard; identification ofareas where standard will cease to apply, 2804

Water pollution; effluent guidelines for point sourcecategories:

Ore mining and dressing; withdrawn, 2646NOTICESAgency information collection activities:

Submission for OMB review; comment request, 2674–2676

Environmental statements; availability, etc.:Agency statements—

Comment availability, 2676–2677Weekly receipts, 2676

Reporting and recordkeeping requirements, 2677–2678Superfund; response and remedial actions, proposed

settlements, etc.:Lorentz Barrel and Drum Site, CA, 2678–2679Stickney Avenue Landfill, OH, 2679–2680

Superfund program:Prospective purchaser agreements—

Grant Chemical Site, PA, 2678

IV Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Contents

Executive Office of the PresidentSee Presidential Documents

Federal Aviation AdministrationRULESAirworthiness directives:

Boeing, 2593–2596Fokker, 2596–2598

Class E airspace, 2598–2601Standard instrument approach procedures, 2601–2605NOTICESMeetings:

Avaition Rulemaking Advisory Committee, 2714Aviation Rulemaking Advisory Committee; cancelled,

2714Passenger facility charges; applications, etc.:

Philadelphia International Airport, PA, 2714Wichita Mid-Continent Airport, KS, 2714–2715

Federal Communications CommissionRULESCommon carrier services:

Commercial mobile radio services—Wireless services compatibility with enhanced 911

services, 2631–2637NOTICESAgency information collection activities:

Proposed collection; comment request, 2680–2681

Federal Election CommissionNOTICESMeetings; Sunshine Act, 2681

Federal Emergency Management AgencyNOTICESDisaster and emergency areas:

Guam, 2681Northern Mariana Islands, 2682

Federal Energy Regulatory CommissionNOTICESApplications, hearings, determinations, etc.:

National Fuel Gas Supply Corp., 2674PacifiCorp, 2674

Federal Highway AdministrationNOTICESAgency information collection activities:

Proposed collection; comment request, 2715Environmental statements; availability, etc.:

Douglas County, KS; City of Lawrence, 2690

Federal Railroad AdministrationPROPOSED RULESRailroad power brakes and drawbars:

Train and locomotive power braking systems; advancedtechnology use; two-way end-of-train telemetrydevices, 2647–2651

NOTICESMeetings:

Railroad Safety Advisory Committee, 2716

Federal Reserve SystemRULESSecurities credit transactions:

Borrowing by brokers and dealers; revision, 2806–2839

Truth in lending (Regulation Z):Residential mortgage and variable-rate transactions—

Fifteen-year historical example of rates and payments;disclosure; correction, 2723

PROPOSED RULESSecurities credit transactions:

Margin regulations; periodic review, 2840–2844NOTICESMeetings; Sunshine Act, 2682

Food and Drug AdministrationNOTICESMeetings:

Arthritis Advisory Committee, 2682–2683

Foreign-Trade Zones BoardNOTICESApplications, hearings, determinations, etc.:

CaliforniaC. Ceronix Inc.; gaming/recreational machine video

monitor manufacturing plant, 2659Florida

Harris Corp.; telecommunication/information systemsmanufacturing facilities, 2660

Mississippi, 2660–2661

Health and Human Services DepartmentSee Agency for Health Care Policy and ResearchSee Food and Drug AdministrationSee National Institutes of Health

Housing and Urban Development DepartmentNOTICESGrants and cooperative agreements; availability, etc.:

Facilities to assist homeless—Excess and surplus Federal property, 2684–2689

Immigration and Naturalization ServiceNOTICESMeetings:

Immigration Matters District Advisory Council;correction, 2695

Interior DepartmentSee Land Management BureauSee Minerals Management Service

Internal Revenue ServiceRULESIncome taxes, etc.:

Withholding of tax on certain U.S. source income paid toforeign persons and related collection, refunds, andcredits, etc.; correction, 2723

NOTICESAgency information collection activities:

Proposed collection; comment request, 2720–2722Income taxes:

Low-income housing credit forms; electronic filing pilotprogram, 2722

International Trade AdministrationNOTICESAntidumping:

Ferrosilicon from—Brazil, 2661–2664

Fresh Atlantic salmon from—Chile, 2664–2671

VFederal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Contents

International Trade CommissionNOTICESImport investigations:

Preserved mushrooms from—Chile et al., 2693–2694

Justice DepartmentSee Immigration and Naturalization ServiceNOTICESPollution control; consent judgments:

American Cyanamid Co., Inc., et al., 2694Curtiss-Wright Corp. et al., 2694Marathon Oil Co., 2694–2695

Privacy Act:Systems of records, 2695

Labor DepartmentSee Employment and Training AdministrationSee Employment Standards AdministrationSee Mine Safety and Health AdministrationSee Occupational Safety and Health AdministrationNOTICESAgency information collection activities:

Submission for OMB review; comment request, 2695–2696

Land Management BureauNOTICESMeetings:

Resource advisory councils—John Day-Snake, 2715–2716Lower Snake River District, 2690Upper Columbia-Salmon Clearwater Districts, 2690

Realty actions; sales, leases, etc.:Oregon, 2690

Recreation management restrictions, etc.:Brothers/La Pine Resource Area; discharge of firearms,

2691Resource management plans:

Salem, Eugene, Roseburg, Medford, and Coos BayDistricts and Klamath Falls Resource Area, OR;evaluation, 2691–2692

Survey plat filings:Montana, 2692Nevada, 2692

Legal Services CorporationNOTICESMeetings; Sunshine Act, 2701

Minerals Management ServiceRULESOuter Continental Shelf; oil, gas, and sulphur operations:

Royalty-suspension terms for lease sales using biddingsystem; deep water, 2626–2630

Royalty management:Royalty relief for producing leases and certain existing

leases in deep water, 2605–2626

Mine Safety and Health AdministrationPROPOSED RULESCoal and metal and nonmetal mine safety and health:

Occupational noise exposure—Report availability, 2642

NOTICESSafety standard petitions:

Jim Walter Resources, Inc., et al., 2698–2700

National Institutes of HealthNOTICESMeetings:

National Institute on Drug Abuse, 2683Scientific Review Center Advisory Committee, 2684Scientific Review Center special emphasis panels, 2683–

2684

National Oceanic and Atmospheric AdministrationPROPOSED RULESFishery conservation and management:

Alaska; fisheries of Exclusive Economic Zone—Shortraker/rougheye rockfish, 2654–2656

Northeastern United States Fisheries—Summer flounder, 2651–2654

Nuclear Regulatory CommissionNOTICESEnvironmental statements; availability, etc.:

New York State Electric & Gas Corp., 2701–2702

Occupational Safety and Health AdministrationNOTICESNationally recognized testing laboratories, etc.:

Wyle Laboratories, Inc., 2700–2701

Postal ServiceNOTICESMeetings; Sunshine Act, 2702

Presidential DocumentsPROCLAMATIONSSierra Leone; suspension of entry into U.S. of persons who

are members of the military junta and members of theirfamilies (Proc. 7062), 2871

Public Health ServiceSee Agency for Health Care Policy and ResearchSee Food and Drug AdministrationSee National Institutes of Health

Securities and Exchange CommissionRULESSecurities:

Beneficial ownership in publicly-held companiesreporting requirements, 2854–2868

NOTICESSelf-regulatory organizations; proposed rule changes:

Chicago Stock Exchange, Inc., 2708–2709National Association of Securities Dealers, Inc., 2709–

2711Pacific Exchange, Inc., 2711–2713

Applications, hearings, determinations, etc.:Dreyfus Socially Responsible Growth Fund, Inc. et al.,

2702–2708

Surface Transportation BoardRULESRail procedures:

Simplified rail rate reasonableness proceedings;expedited procedures, 2638–2639

NOTICESMotor carriers:

Revenue pooling agreements—Peter Pan Bus Lines, Inc. et al., 2716–2717

Railroad operation, acquisition, construction, etc.:Illinois Central Railroad Co. et al., 2717–2718Maumee & Western Railroad Corp., 2718

VI Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Contents

Southern Pacific Transportation Co., 2718Wabash Central Railroad Corp., 2718

Railroad services abandonment:Boston and Maine Corp. et al., 2719

Transportation DepartmentSee Federal Aviation AdministrationSee Federal Highway AdministrationSee Federal Railroad AdministrationSee Surface Transportation BoardNOTICESAviation proceedings:

Agreements filed; weekly receipts, 2713Certificates of public convenience and necessity and

foreign air carrier permits; weekly applications, 2713

Treasury DepartmentSee Comptroller of the CurrencySee Internal Revenue ServiceNOTICESMeetings:

Debt Management Advisory Committee, 2719–2720

United States Information AgencyNOTICESMeetings:

Public Diplomacy, U.S. Advisory Commission, 2722

Separate Parts In This Issue

Part IIEnvironmental Protection Agency, 2726–2804

Part IIIFederal Reserve System, 2806–2844

Part IVDepartment of Agriculture, Agricultural Marketing Service,

2846–2852

Part VSecurities and Exchange Commission, 2854–2868

Part VIThe President, 2871

Reader AidsAdditional information, including a list of telephonenumbers, finding aids, reminders, and a list of Public Lawsappears in the Reader Aids section at the end of this issue.

Electronic Bulletin BoardFree Electronic Bulletin Board service for Public Lawnumbers, Federal Register finding aids, and a list ofdocuments on public inspection is available on 202–275–1538 or 275–0920.

CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in theReader Aids section at the end of this issue.

VIIFederal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Contents

3 CFRProclamations:7062...................................2871

7 CFR997.....................................2846998.....................................2846

12 CFR207.....................................2806220.....................................2806221.....................................2806224.....................................2806226.....................................2723265.....................................2806Proposed Rules:10.......................................2640220.....................................2840221.....................................2840224.....................................2840

14 CFR39 (2 documents) .............2593,

259671 (5 documents) .............2598,

2599, 2600, 260197 (3 documents) .............2601,

2603, 2604

17 CFR240.....................................2854

26 CFR513.....................................2723602.....................................2723

30 CFR203.....................................2605260.....................................2626Proposed Rules:56.......................................264257.......................................264262.......................................264270.......................................264271.......................................2642

40 CFR63.......................................263081.......................................2726Proposed Rules:55.......................................264281.......................................2804440.....................................2646

47 CFR20.......................................2631

49 CFR1111...................................2638Proposed Rules:232.....................................2647

50 CFRProposed Rules:648.....................................2651679.....................................2654

This section of the FEDERAL REGISTERcontains regulatory documents having generalapplicability and legal effect, most of whichare keyed to and codified in the Code ofFederal Regulations, which is published under50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold bythe Superintendent of Documents. Prices ofnew books are listed in the first FEDERALREGISTER issue of each week.

Rules and Regulations Federal Register

2593

Vol. 63, No. 11


DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 97–NM–267–AD; Amendment39–10284; AD 98–02–02]

RIN 2120–AA64

Airworthiness Directives; BoeingModel 747 Series Airplanes Equippedwith Pratt & Whitney JT9D–3 and –7Series Engines

AGENCY: Federal AviationAdministration, DOT.ACTION: Final rule; request forcomments.

SUMMARY: This amendment supersedesan existing airworthiness directive (AD),applicable to certain Boeing Model 747series airplanes, that currently requiresrepetitive inspections for discrepanciesof the forward engine mount bulkheadof the nacelle strut, and correctiveaction, if necessary. That AD alsoprovides for optional terminating actionfor the repetitive inspections. Forcertain airplanes, this amendment addsrepetitive inspections for discrepanciesin the forward engine mount bulkheadand in the forward lower spar web, andcorrective actions, if necessary. Forother airplanes, this amendment adds aone-time inspection to detect stopdrilled cracks of the exterior of theforward engine mount chord, andreplacement of the chord with a newchord, if necessary. This amendmentalso adds an additional optionalterminating action for the repetitiveinspections. This amendment isprompted by reports that fatiguecracking was found in an area adjacentto the inspection area specified in theexisting AD. The actions specified inthis AD are intended to detect andcorrect such fatigue cracking, whichcould lead to the failure of the forwardengine mount bulkhead and consequent

separation of the engine from theairplane.DATES: Effective February 2, 1998.

The incorporation by reference ofcertain publications listed in theregulations is approved by the Directorof the Federal Register as of February 2,1998.

Comments for inclusion in the RulesDocket must be received on or beforeMarch 17, 1998.ADDRESSES: Submit comments intriplicate to the Federal AviationAdministration (FAA), TransportAirplane Directorate, ANM–103,Attention: Rules Docket No. 97–NM–267–AD, 1601 Lind Avenue, SW.,Renton, Washington 98055–4056.

The service information referenced inthis AD may be obtained from BoeingCommercial Airplane Group, P.O. Box3707, Seattle, Washington 98124–2207.This information may be examined atthe FAA, Transport AirplaneDirectorate, 1601 Lind Avenue, SW.,Renton, Washington; or at the Office ofthe Federal Register, 800 North CapitolStreet, NW., suite 700, Washington, DC.FOR FURTHER INFORMATION CONTACT:Tamara L. Dow, Aerospace Engineer,Airframe Branch, ANM–120S, FAA,Transport Airplane Directorate, SeattleAircraft Certification Office, 1601 LindAvenue, SW., Renton, Washington98055–4056; telephone (425) 227–2771;fax (425) 227–1181.SUPPLEMENTARY INFORMATION: OnOctober 2, 1982, the FAA issued AD 82–22–02, amendment 39–4476 (47 FR46842, October 21, 1982), applicable tocertain Boeing Model 747 seriesairplanes, to require repetitiveinspections for discrepancies of theforward engine mount bulkhead of thenacelle strut, and corrective action, ifnecessary. That AD also provides foroptional terminating action (installationof a new doubler) for the repetitiveinspections. That action was promptedby reports of cracks in doublers thatwere installed as terminating action forAD 80–03–09, amendment 39–3832.The actions required by AD 82–22–02are intended to prevent failure of theforward engine mount bulkhead andpossible separation of an engine fromthe airplane.

Actions Since Issuance of Previous RuleSince the issuance of AD 82–22–02,

the FAA has received two reports offatigue cracking in an area adjacent to

the inspection area specified in that ADon the affected airplanes. In oneincident, a 5-inch long crack was foundin the forward lower spar web aft of thebulkhead-to-firewall channel, and a 2-inch long crack was found in the bendradius of the chord of the forwardmount bulkhead. These cracks occurredon the number 4 pylon. The airplanehad accumulated 15,200 total landingsand 67,600 total flight hours. In theother incident, a 2.5-inch crack wasfound in the chord of the forward mountbulkhead, and a 1.5-inch and 4-inchcracks were found in the forward lowerspar web. These cracks occurred on thenumber 3 pylon.

Such fatigue cracking, if not detectedand corrected in a timely manner, couldlead to the failure of the forward enginemount bulkhead and consequentseparation of the engine from theairplane.

Discussion of Relevant ServiceInformation

Subsequent to the finding of this newcracking, the FAA reviewed andapproved Boeing Alert Service Bulletin747–54A2069, Revision 9, dated May29, 1997. The revised alert servicebulletin continues to describeprocedures identical to those describedin Revision 2 of the alert service bulletin(which was referenced in AD 82–22–02as the appropriate source of serviceinformation). However, the revised alertservice bulletin also describes newprocedures for various repetitiveinspections to detect discrepancies (i.e.,cracks, damage, loose fasteners) in theforward engine mount bulkhead and inthe forward lower spar web, andcorrective actions, if necessary. Therevised alert service bulletin also deletesthe procedures for stop drilling cracksin the bulkhead chords.

The FAA also has reviewed andapproved the following Boeing serviceinformation:

• Alert Service Bulletin 747–54A2069, Revision 3, dated May 23,1980;

• Alert Service Bulletin 747–54A2069, Revision 4, dated November26, 1980;

• Service Bulletin 747–54A2069,Revision 5, dated August 21, 1981;

• Alert Service Bulletin 747–54A2069, Revision 6, dated October 22,1982;

• Service Bulletin 747–54A2069,Revision 7, dated July 28, 1988; and

2594 Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Rules and Regulations

• Service Bulletin 747–54A2069,Revision 8, dated June 9, 1994.

The inspection procedures specifiedin Revisions 3 through 8 of the servicebulletin are similar to those specified inRevision 2 of the service bulletin.Therefore, the FAA has included in thisAD references to these service bulletinrevisions as additional sources ofservice information.

Explanation of Requirements of RuleSince an unsafe condition has been

identified that is likely to exist ordevelop on other airplanes of this sametype design, this AD supersedes AD 82–22–02 to continue to require repetitiveinspections for discrepancies of theforward engine mount bulkhead of thenacelle strut, and corrective action, ifnecessary. This AD adds variousrepetitive inspections to detectdiscrepancies (i.e., cracks, damage,loose fasteners) in the forward enginemount bulkhead and in the forwardlower spar web, and corrective actions,if necessary. This AD also adds anadditional optional terminating actionfor the repetitive inspections. Unlike therequirements of AD 82–22–02, this ADdoes not permit further flight withcracks in the bulkhead chords.

Differences Between the AD and theRelevant Service Information

Operators should note that, althoughthe referenced service bulletins specifythat the manufacturer must be contactedfor disposition of certain conditions,this AD requires the repair orreplacement of any cracked chord and/or web to be accomplished inaccordance with a method approved bythe FAA.

The referenced service bulletins alsospecify that accomplishment of AD 95–10–16, amendment 39–9233 (59 FR65733, December 21, 1994), isterminating action for the repetitiveinspections. However, for airplanes onwhich the strut/wing modificationrequired by AD 95–10–16 has beenaccomplished, this AD requires a one-time detailed visual inspection to detectstop drilled cracks of the exterior of theforward engine mount chord. The FAAhas determined that accomplishment ofthis inspection will ensure that allchords with stop drilled cracks arereplaced.

Determination of Rule’s Effective DateSince a situation exists that requires

the immediate adoption of thisregulation, it is found that notice andopportunity for prior public commenthereon are impracticable, and that goodcause exists for making this amendmenteffective in less than 30 days.

Comments Invited

Although this action is in the form ofa final rule that involves requirementsaffecting flight safety and, thus, was notpreceded by notice and an opportunityfor public comment, comments areinvited on this rule. Interested personsare invited to comment on this rule bysubmitting such written data, views, orarguments as they may desire.Communications shall identify theRules Docket number and be submittedin triplicate to the address specifiedunder the caption ADDRESSES. Allcommunications received on or beforethe closing date for comments will beconsidered, and this rule may beamended in light of the commentsreceived. Factual information thatsupports the commenter’s ideas andsuggestions is extremely helpful inevaluating the effectiveness of the ADaction and determining whetheradditional rulemaking action would beneeded.

Comments are specifically invited onthe overall regulatory, economic,environmental, and energy aspects ofthe rule that might suggest a need tomodify the rule. All commentssubmitted will be available, both beforeand after the closing date for comments,in the Rules Docket for examination byinterested persons. A report thatsummarizes each FAA-public contactconcerned with the substance of this ADwill be filed in the Rules Docket.

Commenters wishing the FAA toacknowledge receipt of their commentssubmitted in response to this rule mustsubmit a self-addressed, stampedpostcard on which the followingstatement is made: ‘‘Comments toDocket Number 97–NM–267–AD.’’ Thepostcard will be date stamped andreturned to the commenter.

Regulatory Impact

The regulations adopted herein willnot have substantial direct effects on theStates, on the relationship between thenational government and the States, oron the distribution of power andresponsibilities among the variouslevels of government. Therefore, inaccordance with Executive Order 12612,it is determined that this final rule doesnot have sufficient federalismimplications to warrant the preparationof a Federalism Assessment.

The FAA has determined that thisregulation is an emergency regulationthat must be issued immediately tocorrect an unsafe condition in aircraft,and that it is not a ‘‘significantregulatory action’’ under ExecutiveOrder 12866. It has been determinedfurther that this action involves an

emergency regulation under DOTRegulatory Policies and Procedures (44FR 11034, February 26, 1979). If it isdetermined that this emergencyregulation otherwise would besignificant under DOT RegulatoryPolicies and Procedures, a finalregulatory evaluation will be preparedand placed in the Rules Docket. A copyof it, if filed, may be obtained from theRules Docket at the location providedunder the caption ADDRESSES.

List of Subjects in 14 CFR Part 39Air transportation, Aircraft, Aviation

safety, Incorporation by reference,Safety.

Adoption of the AmendmentAccordingly, pursuant to the

authority delegated to me by theAdministrator, the Federal AviationAdministration amends part 39 of theFederal Aviation Regulations (14 CFRpart 39) as follows:

PART 39—AIRWORTHINESSDIRECTIVES

1. The authority citation for part 39continues to read as follows:

Authority: 49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]2. Section 39.13 is amended by

removing amendment 39–4476 (47 FR46842, October 21, 1982), and by addinga new airworthiness directive (AD),amendment 39–10284, to read asfollows:98–02–02 Boeing: Amendment 39–10284.

Docket 97–NM–267–AD. Supersedes AD82–22–02, Amendment 39–4476.

Applicability: Model 747 series airplanes;as listed in Boeing Alert Service Bulletin747–54A2069, Revision 9, dated May 29,1997; certificated in any category.

Note 1: The airplanes specified in theapplicability of this AD are the same as thosespecified in the applicability of AD 82–22–02.

Note 2: This AD applies to each airplaneidentified in the preceding applicabilityprovision, regardless of whether it has beenmodified, altered, or repaired in the areasubject to the requirements of this AD. Forairplanes that have been modified, altered, orrepaired so that the performance of therequirements of this AD is affected, theowner/operator must request approval for analternative method of compliance inaccordance with paragraph (f) of this AD. Therequest should include an assessment of theeffect of the modification, alteration, or repairon the unsafe condition addressed by thisAD; and, if the unsafe condition has not beeneliminated, the request should includespecific proposed actions to address it.

Compliance: Required as indicated, unlessaccomplished previously.

To detect and correct fatigue cracking ofthe forward engine mount bulkhead, which

2595Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Rules and Regulations

could lead to the failure of the forwardengine mount bulkhead and consequentseparation of the engine from the airplane,accomplish the following:

(a) For airplanes on which the terminatingaction specified in AD 80–03–09, amendment39–3832, has been accomplished: Within 300hours time-in-service after October 27, 1982(the effective date of 82–22–02, amendment39–4476), accomplish paragraphs (a)(1),(a)(2), and (a)(3) of this AD. Repeat theinspections thereafter at intervals not toexceed 4,000 flight hours, untilaccomplishment of the inspections requiredby paragraphs (c)(1) and (c)(2) of this AD orthe terminating action specified in paragraph(e) of this AD.

(1) Perform an inspection to detect loose ormissing fasteners of the fasteners attachingthe forward engine mount bulkhead of thenacelle strut to the horizontal fire wall, inaccordance with one of the following servicebulletins listed below. If any loose or missingfastener is detected, prior to further flight,replace all fasteners in both rows of fasteners,in accordance with the service bulletin.

• Boeing Alert Service Bulletin 747–54A2069, Revision 2, dated February 1, 1980;

• Boeing Alert Service Bulletin 747–54A2069, Revision 3, dated May 23, 1980;

• Boeing Alert Service Bulletin 747–54A2069, Revision 4, dated November 26,1980;

• Boeing Service Bulletin 747–54A2069,Revision 5, dated August 21, 1981;

• Boeing Alert Service Bulletin 747–54A2069, Revision 6, dated October 22, 1982;

• Boeing Service Bulletin 747–54A2069,Revision 7, dated July 28, 1988;

• Boeing Service Bulletin 747–54A2069,Revision 8, dated June 9, 1994; or

• Boeing Alert Service Bulletin 747–54A2069, Revision 9, dated May 29, 1997.

(2) Remove by hand the protective coatingof the area to be penetrant inspected using400 grit or equivalent abrasive, and performa penetrant inspection to detect cracks of thebulkhead chords, in accordance with one ofthe service bulletins listed below:









(i) If any crack is detected on the outsideradius of the chord, and it is within the limitsspecified in the service bulletin, prior tofurther flight, perform a penetrant inspectionto detect cracks on the inside radius of thechord, in accordance with the servicebulletin.

(A) If any crack is detected on the insideradius of the chord, and it is within the limitsspecified in the service bulletin, prior to

further flight, rework the cracked part inaccordance with the service bulletin. Repeatthe penetrant inspection required byparagraph (a)(2) of this AD thereafter atintervals not to exceed 600 flight hours, untilaccomplishment of the inspections requiredby paragraphs (c)(1) and (c)(2) of this AD orthe terminating action specified in paragraph(e) of this AD.

(B) If any crack is detected on the insideradius of the chord, and it is outside thelimits specified in the service bulletin, priorto further flight, replace the cracked part witha new part, in accordance with a methodapproved by the Manager, Seattle AircraftCertification Office (ACO), FAA, TransportAirplane Directorate.

(ii) If any crack is detected on the outsideradius of the chord, and it is outside thelimits specified in the service bulletin, priorto further flight, replace the cracked part witha new part in accordance with a methodapproved by Seattle ACO.

(3) Perform an inspection to detectevidence of looseness of the fastenersattaching the forward engine mount fittingsto the strut bulkhead. If any loose fastener isdetected, prior to further flight, replace itwith a new fastener.

(b) For airplanes on which only loosefasteners have been replaced as required bytelegraphic AD T79–NW–21, amendment 39–3687: Within 600 hours time-in-service afterOctober 27, 1982, replace all fasteners in bothrows of fasteners with new fasteners inaccordance with one of the service bulletinslisted below:









(c) For airplanes on which the strut/wingmodification required by AD 95–10–16,amendment 39–9233, has not beenaccomplished: Within 90 days after theeffective date of this AD, accomplishparagraphs (c)(1) and (c)(2) of this AD.

(1) Perform various inspections to detectdiscrepancies (i.e., cracks, damage, loosefasteners) in the forward engine mountbulkhead and in the forward lower spar web,in accordance with Figure 1 of Boeing AlertService Bulletin 747–54A2069, Revision 9,dated May 29, 1997. If any discrepancy isdetected, prior to further flight, perform theapplicable corrective action in accordancewith Figure 1 of the alert service bulletin;except the repair or replacement of anycracked chord and/or web shall beaccomplished in accordance with a methodapproved by the Manager, Seattle ACO.Repeat the inspections thereafter at intervalsnot to exceed 4,000 flight hours.

(2) Perform an inspection to detectevidence of looseness of the fastenersattaching the forward engine mount fittingsto the strut bulkhead. If any loose fastener isdetected, prior to further flight, replace itwith a new fastener in accordance withBoeing Document D6–13592, ‘‘747 StructuralRepair Manual (SRM),’’ Chapter 51, Subject51–30–04, Revision 8, dated September 5,1997.

(d) For airplanes on which the strut/wingmodification required by AD 95–10–16,amendment 39–9233, has beenaccomplished: Within 90 days after theeffective date of this AD, perform a detailedvisual inspection to detect stop drilled cracksof the exterior of the forward engine mountchord. Inspect to the height of the enginemount fitting (approximately 12 inches). Ifany crack (including a stop drilled crack) isdetected, prior to further flight, replace thechord with a new chord in accordance witha method approved by the Manager, SeattleACO.

Note 3: Inspections required by AD 94–17–17, amendment 39–9012, are similar andsomewhat overlap the inspections requiredby this AD.

(e) Accomplishment of either paragraphs(e)(1) and (e)(2), or paragraphs (e)(2) and(e)(3) of this AD constitutes terminatingaction for the requirements of this AD.

(1) Modify the fasteners and install adoubler on the forward lower spar web, orreplace the doubler of the forward lower sparweb with a new doubler, in accordance withFigure 2 or Figure 3, as applicable, of BoeingAlert Service Bulletin 747–54A2069,Revision 6, dated October 22, 1982; BoeingService Bulletin 747–54A2069, Revision 7,dated July 28, 1988; Boeing Service Bulletin747–54A2069, Revision 8, dated June 9,1994; or Boeing Alert Service Bulletin 747–54A2069, Revision 9, dated May 29, 1997.

(2) Replace any cracked forward enginemount bulkhead chord with a new chord,and replace any cracked forward lower sparweb with a new web, in accordance with amethod approved by the Manager, SeattleACO.

(3) Modify the nacelle strut and wingstructure in accordance with Boeing AlertService Bulletin 747–54A2159, datedNovember 3, 1994; Revision 1, dated June 1,1995; or Revision 2, dated March 14, 1996.

(f) An alternative method of compliance oradjustment of the compliance time thatprovides an acceptable level of safety may beused if approved by the Manager, SeattleACO. Operators shall submit their requeststhrough an appropriate FAA PrincipalMaintenance Inspector, who may addcomments and then send it to the Manager,Seattle ACO.

Note 4: Information concerning theexistence of approved alternative methods ofcompliance with this AD, if any, may beobtained from the Seattle ACO.

(g) Special flight permits may be issued inaccordance with sections 21.197 and 21.199of the Federal Aviation Regulations (14 CFR21.197 and 21.199) to operate the airplane toa location where the requirements of this ADcan be accomplished.

(h) Except as provided in paragraphs(a)(2)(i)(B), (a)(2)(ii), (c)(1), (c)(2), (d), and


(e)(2) of this AD, the actions shall be donein accordance with the following Boeing

service bulletins, as applicable, whichcontain the specified effective pages:

Service bulletin referenced and date Page No.Revision level

shown onpage

Date shown on page

Alert Service Bulletin 747–54A2069, Revision 2, February 1, 1980 1–9 2 February 1, 1980.Alert Service Bulletin 747–54A2069, Revision 3, May 23, 1980 ....... 1–7

832

May 23, 1980.February 1, 1980.

Alert Service Bulletin 747–54A2069, Revision 4, November 26,1980.

1, 9, 10, 12, 19–212–7, 11, 13–188

432

November 26, 1980.May 23, 1980.February 1, 1980.

Service Bulletin 747–54A2069, Revision 5, August 21, 1981 ........... 1–7, 9, 10, 17811, 13–16, 1812, 19–21

5234

August 21, 1980.February 1, 1980.May 23, 1980.November 26, 1980.

Alert Service Bulletin 747–54A2069, Revision 6, October 22, 1982 1–28 6 October 22, 1982.Service Bulletin 747–54A2069, Revision 7, July 28, 1988 ................ 1–5, 7–16, 24, 28 7 July 28, 1988.

6, 17–23, 25–27 6 October 22, 1982.Service Bulletin 747–54A2069, Revision 8, June 9, 1994 ................ 1–28 8 June 9, 1994.Alert Service Bulletin 747–54A2069, Revision 9, May 29, 1997 ....... 1–28 9 May 29, 1997.

This incorporation by reference wasapproved by the Director of the FederalRegister in accordance with 5 U.S.C.552(a) and 1 CFR part 51. Copies maybe obtained from Boeing CommercialAirplane Group, P.O. Box 3707, Seattle,Washington 98124–2207. Copies may beinspected at the FAA, TransportAirplane Directorate, 1601 LindAvenue, SW., Renton, Washington; or atthe Office of the Federal Register, 800North Capitol Street, NW., suite 700,Washington, DC.

(i) This amendment becomes effectiveon February 2, 1998.

Issued in Renton, Washington, on January6, 1998.Darrell M. Pederson,Acting Manager, Transport AirplaneDirectorate, Aircraft Certification Service.[FR Doc. 98–713 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–U



14 CFR Part 39

[Docket No. 95–NM–94–AD; Amendment39–10285; AD 98–02–03]

RIN 2120–AA64

Airworthiness Directives; FokkerModel F28 Mark 0100 and Mark 0070Series Airplanes

AGENCY: Federal AviationAdministration, DOT.ACTION: Final rule.

SUMMARY: This amendment adopts anew airworthiness directive (AD),applicable to certain Fokker Model F28Mark 0100 and Mark 0070 seriesairplanes, that requires modification of

the hook and latch engagementassemblies of the engine cowl doors,measurement of the aerodynamicmismatch between the fixed cowl andlower cowl door, and repair, ifnecessary. This amendment is promptedby reports of operational experience thatindicate that an aerodynamic mismatchmay exist between the fixed engine cowland the lower cowl door, and may bethe result of one or more hooks of theengagement assemblies not engagingadequately. This condition may causethe other hooks to carry loads higherthan they were originally designed tocarry, and could result in the failure ofthose hooks that are engaged. Theactions specified by this AD areintended to prevent possible separationof the lower cowling from the airplanedue to failure of the hooks of theengagement assemblies.DATES: Effective February 20, 1998.

The incorporation by reference ofcertain publications listed in theregulations is approved by the Directorof the Federal Register as of February20, 1998.ADDRESSES: The service informationreferenced in this AD may be obtainedfrom Fokker Services B.V., TechnicalSupport Department, P. O. Box 75047,1117 ZN Schiphol Airport, theNetherlands. This information may beexamined at the Federal AviationAdministration (FAA), TransportAirplane Directorate, Rules Docket,1601 Lind Avenue, SW., Renton,Washington; or at the Office of theFederal Register, 800 North CapitolStreet, NW., suite 700, Washington, DC.FOR FURTHER INFORMATION CONTACT:Norman B. Martenson, Manager,International Branch, ANM–116, FAA,Transport Airplane Directorate, 1601Lind Avenue, SW., Renton, Washington

98055–4056; telephone (425) 227–2110;fax (425) 227–1149.SUPPLEMENTARY INFORMATION: Aproposal to amend part 39 of the FederalAviation Regulations (14 CFR part 39) toinclude an airworthiness directive (AD)that is applicable to certain FokkerModel F28 Mark 0100 and Mark 0070series airplanes was published in theFederal Register on November 5, 1996(61 FR 56925). That action proposed torequire modification of the hook andlatch engagement assemblies of theengine cowl doors, measurement of theaerodynamic mismatch between thefixed cowl and lower cowl door, andrepair, if necessary.

CommentsInterested persons have been afforded

an opportunity to participate in themaking of this amendment. Dueconsideration has been given to thecomments received.

Request to Extend the Compliance TimeTwo commenters request that the

compliance time for accomplishing theproposed inspection specified inparagraph (a)(2) of the AD be changedfrom ‘‘Within 2,500 flight cycles sincethe last inspection * * *’’ to ‘‘ Within2,500 flight cycles or 3,500 flight hourssince the last inspection * * *,whichever occurs later.’’ One of thesecommenters states that it is currentlyaccomplishing the proposed inspectionon its fleet of Fokker Model F28 Mark0100 series airplanes during itsregularly scheduled maintenance checksat 3,500 flight hour intervals. Thecommenter notes that the proposed2,500 flight cycle inspection time mayfall short of its currently scheduled3,500 flight hour maintenance check.

The FAA does not concur with thecommenters’ request to change the


compliance time. The FAA points outthat the proposed compliance time ofparagraph (a)(2) of the AD wasdeveloped in consideration of not onlythe degree of urgency associated withaddressing the unsafe condition, butsuch factors as the manufacturer’s andthe foreign airworthinesss authority’s[i.e., Rijksluchtvaartdienst (RLD)]recommendations, and the practicalaspect of inspecting the affectedairplanes within an interval of time thatparallels normal scheduled maintenancefor the majority of affected operators.

Based on the average utilization rateof the worldwide fleet of Fokker ModelF28 Mark 0100 series airplanes(approximately 1 flight hour per flightcycle), the request to include a 3,500flight hour compliance time option, ifgranted, would be approximately equalto 3,500 flight cycles. This option wouldresult in a 1,000 flight cycle extensionto the compliance time. Thecommenters have not provided any datato substantiate why extending thecompliance time by approximately1,000 flight cycles would notcompromise safety. However, under theprovisions of paragraph (e) of the finalrule, the FAA may approve requests foradjustments to the compliance time ifsufficient data are submitted tosubstantiate that such an adjustmentwould provide an acceptable level ofsafety.

Service Bulletin Change NotificationOne commenter states that certain

errors were found in the serviceinformation referenced in the proposedAD. Paragraph C.(2) of Part 2 of theAccomplishment Instructions of FokkerService Bulletin SBF100–71–019, datedMarch 21, 1996, should refer to Figure5 (not Figure 4) for dimensions X andY. Additionally, Figure 5 of the servicebulletin should refer to Figure 6 (notFigure 5) for tool geometry.

The FAA agrees with the commenter.Since issuance of the proposal, Fokkerhas issued Service Bulletin ChangeNotification (SBCN) SBF100–71–019/1,dated February 28, 1997, which revisesparagraph C.(2) of Part 2 of theAccomplishment Instructions of FokkerService Bulletin SBF100–71–019 tocorrectly reference Figure 5 fordimensions X and Y. The final rule hasbeen revised to reference SBCNSBF100–71–019/1, dated February 28,1997, in addition to the previouslyreferenced service information.

In addition, the FAA has determinedthat the reference in Figure 5 to Figure5 (rather than Figure 6) for toolgeometry is merely a typographicalerror, since paragraph C.(2) of Part 2 ofthe Accomplishment Instructions of

Fokker Service Bulletin SBF100–71–019states ‘‘As a reference, to obtain thecorrect measurements, use tool asshown in Figures 5 and 6.’’ However,the FAA has forwarded informationregarding this error to Fokker Services.

Conclusion

After careful review of the availabledata, including the comments notedabove, the FAA has determined that airsafety and the public interest require theadoption of the rule with the changepreviously described. The FAA hasdetermined that this change will neitherincrease the economic burden on anyoperator nor increase the scope of theAD.

Cost Impact

The FAA estimates that 124 FokkerModel F28 Mark 0100 and 0070 seriesairplanes of U.S. registry will be affectedby this AD, that it will takeapproximately 3 work hours perairplane to accomplish the initialinspection and modification, and thatthe average labor rate is $60 per workhour. Based on these figures, the costimpact of the AD on U.S. operators isestimated to be $22,320, or $180 perairplane.

The cost impact figure discussedabove is based on assumptions that nooperator has yet accomplished any ofthe requirements of this AD action, andthat no operator would accomplishthose actions in the future if this ADwere not adopted.

Regulatory Impact


For the reasons discussed above, Icertify that this action (1) is not a‘‘significant regulatory action’’ underExecutive Order 12866; (2) is not a‘‘significant rule’’ under DOTRegulatory Policies and Procedures (44FR 11034, February 26, 1979); and (3)will not have a significant economicimpact, positive or negative, on asubstantial number of small entitiesunder the criteria of the RegulatoryFlexibility Act. A final evaluation hasbeen prepared for this action and it iscontained in the Rules Docket. A copyof it may be obtained from the Rules

Docket at the location provided underthe caption ADDRESSES.

List of Subjects in 14 CFR Part 39Air transportation, Aircraft, Aviation

safety, Incorporation by reference,Safety.


authority delegated to me by theAdministrator, the Federal AviationAdministration amends part 39 of theFederal Aviation Regulations (14 CFRpart 39) as follows:

PART 39—AIRWORTHINESSDIRECTIVES


Authority: 49 U.S.C. 106(g), 40113, 44701.


adding the following new airworthinessdirective:98–02–03 Fokker: Amendment 39–10285.

Docket 95–NM–94–AD.Applicability: Model F28 Mark 0100 and

Mark 0070 series airplanes as listed in FokkerService Bulletin SBF100–71–019, datedMarch 21, 1996, as revised by Fokker ServiceBulletin Change Notification SBF100–71–019/1, dated February 28, 1997; certificatedin any category.

Note 1: This AD applies to each airplaneidentified in the preceding applicabilityprovision, regardless of whether it has beenotherwise modified, altered, or repaired inthe area subject to the requirements of thisAD. For airplanes that have been modified,altered, or repaired so that the performanceof the requirements of this AD is affected, theowner/operator must request approval for analternative method of compliance inaccordance with paragraph (e) of this AD.The request should include an assessment ofthe effect of the modification, alteration, orrepair on the unsafe condition addressed bythis AD; and, if the unsafe condition has notbeen eliminated, the request should includespecific proposed actions to address it.

Compliance: Required as indicated, unlessaccomplished previously.

To prevent separation of the lower cowlingfrom the airplane due to failure of the hookand latch engagement assembly of the cowldoor, accomplish the following:

(a) Accomplish the requirements ofparagraph (b) of this AD at the latest of thetimes indicated in paragraphs (a)(1), (a)(2),and (a)(3) of this AD:

(1) Prior to the accumulation of 2,500 totalflight cycles; or

(2) Within 2,500 flight cycles since the lastinspection performed in accordance withFokker Service Bulletin SBF100–71–003,dated April 14, 1989; Revision 1, datedAugust 8, 1989, or Revision 2, datedNovember 21, 1994; or

(3) Within 30 days after the effective dateof this AD.


(b) At the time specified in paragraph (a)of this AD, accomplish the actions specifiedin either paragraph (b)(1) or (b)(2) of this AD,as applicable:

(1) For airplanes specified in Part 1 ofFokker Service Bulletin SBF100–71–019,dated March 21, 1996, as revised by FokkerService Bulletin Change NotificationSBF100–71–019/1, dated February 28, 1997:Modify the hook and latch engagementassemblies of the left and right engine cowldoors, and inspect to determine theaerodynamic mismatch between the fixedcowl and lower cowl door; in accordancewith Part 1 of the AccomplishmentInstructions of Fokker Service BulletinSBF100–71–019, dated March 21, 1996, asrevised by Fokker Service Bulletin ChangeNotification SBF100–71–019/1, datedFebruary 28, 1997.

Note 2: Accomplishment of themodification of the hook and latchengagement assemblies of the left and rightengine cowl doors, in accordance with Part1 of the Accomplishment Instructions ofFokker Service Bulletin SBF100–71–003,dated April 14, 1989; Revision 1, datedAugust 8, 1989; or Revision 2, datedNovember 21, 1994; is considered acceptablefor compliance with the applicablemodification specified in paragraph (b)(1) ofthis amendment.

(2) For airplanes specified in Part 2 ofFokker Service Bulletin SBF100–71–019,dated March 21, 1996, as revised by FokkerService Bulletin Change NotificationSBF100–71–019/1, dated February 28, 1997,excluding those airplanes subject toparagraph (b)(1) of this AD: Perform a one-time inspection to determine theaerodynamic mismatch between the fixedcowl and the lower cowl door, in accordancewith Part 2 of the AccomplishmentInstructions of Fokker Service BulletinSBF100–71–019, dated March 21, 1996, asrevised by Fokker Service Bulletin ChangeNotification SBF100–71–019/1, datedFebruary 28, 1997.

(c) If the aerodynamic mismatch measuredbetween the fixed cowl and lower cowl dooris less than or equal to 4.5 mm, no furtheraction is required by this AD.

(d) If the aerodynamic mismatch measuredbetween the fixed cowl and lower cowl dooris greater than 4.5 mm, prior to further flight,perform a one-time inspection to measure themis-engagement between the left and rightengine hooks of the fixed cowl door and theclevis fittings of the lower cowl door; inaccordance with Part 2 of theAccomplishment Instructions of FokkerService Bulletin SBF100–71–019, datedMarch 21, 1996, as revised by Fokker ServiceBulletin Change Notification SBF100–71–019/1, dated February 28, 1997.

(1) If the mis-engagement is less than orequal to 6.5 mm, no further action is requiredby this AD.

(2) If the mis-engagement is greater than6.5 mm: Within 1 year after measuring themis-engagement required by this paragraph,modify the mid-clevis fitting on the right andleft engine lower cowl door; in accordancewith Part 3 of the AccomplishmentInstructions of Fokker Service BulletinSBF100–71–019, dated March 21, 1996, asrevised by Fokker Service Bulletin ChangeNotification SBF100–71–019/1, dated

February 28, 1997. After accomplishment ofthis modification, no further action isrequired by this AD.

(e) An alternative method of compliance oradjustment of the compliance time thatprovides an acceptable level of safety may beused if approved by the Manager,International Branch, ANM–116, FAA,Transport Airplane Directorate. Operatorsshall submit their requests through anappropriate FAA Principal MaintenanceInspector, who may add comments and thensend it to the Manager, International Branch,ANM–116.

Note 3: Information concerning theexistence of approved alternative methods ofcompliance with this AD, if any, may beobtained from the International Branch,ANM–116.

(f) Special flight permits may be issued inaccordance with sections 21.197 and 21.199of the Federal Aviation Regulations (14 CFR21.197 and 21.199) to operate the airplane toa location where the requirements of this ADcan be accomplished.

(g) The actions shall be done in accordancewith Fokker Service Bulletin SBF 100–71–019, dated March 21, 1996, as revised byFokker Service Bulletin Change NotificationSBF 100–71–019/1, dated February 28, 1997.This incorporation by reference wasapproved by the Director of the FederalRegister in accordance with 5 U.S.C. 552(a)and 1 CFR part 51. Copies may be obtainedfrom Fokker Services B.V., TechnicalSupport Department, P.O. Box 75047, 1117ZN Schiphol Airport, the Netherlands.Copies may be inspected at the FAA,Transport Airplane Directorate, 1601 LindAvenue, SW., Renton, Washington; or at theOffice of the Federal Register, 800 NorthCapitol Street, NW., suite 700, Washington,DC.

Note 4: The subject of this AD is addressedin Dutch airworthiness directive 1989–049/3(A), dated June 28, 1996.

(h) This amendment becomes effective onFebruary 20, 1998.

Issued in Renton, Washington, on January7, 1998.Darrell M. Pederson,Acting Manager, Transport AirplaneDirectorate, Aircraft Certification Service.[FR Doc. 98–822 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–U



14 CFR Part 71[Airspace Docket No. 97–ACE–30]

Amendment to Class E Airspace;Audubon, IA

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Direct final rule; request forcomments.

SUMMARY: This action amends the ClassE airspace area at Audubon CountyAirport. The FAA has developed a

Global Positioning System (GPS)Runway (RWY) 32 Standard InstrumentApproach Procedure (SIAP) to serve theAudubon County Airport. Additionalcontrolled airspace 700 feet AboveGround Level (AGL) is needed toaccommodate this SIAP. The enlargedarea will contain the new GPS RWY 32SIAP in controlled airspace at and above700 feet AGL in order to contain thenew SIAP within controlled airspace.The intended effect of this rule is toprovide controlled Class E airspace foraircraft executing the GPS RWY 32SIAP.

DATES: Effective date: 0901 UTC, April23, 1998.

Comments for inclusion in the RulesDocket must be received on or beforeFebruary 17, 1998.

ADDRESSES: Send comments regardingthe rule in triplicate to: Manager,Airspace Branch, Air Traffic Division,ACE–520, Federal AviationAdministration, Docket Number 97–ACE–30, 601 East 12th Street, KansasCity, MO 64106.

The official docket may be examinedin the Office of the Regional Counsel forthe Central Region at the same addressbetween 9:00 a.m. and 3:00 p.m.,Monday through Friday, except Federalholidays.

An informal docket may also beexamined during normal business hoursin the Air Traffic Division at the sameaddress listed above.

FOR FURTHER INFORMATION CONTACT:Kathy Randolph, Air Traffic Division,Airspace Branch, ACE–520C, FederalAviation Administration, 601 East 12thStreet, Kansas City, MO 64106;telephone: (816) 426–3408.

SUPPLEMENTARY INFORMATION: The FAAhas developed a GPS RWY 32 SIAP toserve the Audubon County Airport,Audubon, IA. The amendment to ClassE airspace at Audubon, IA, will provideadditional controlled airspace at andabove 700 feet AGL in order to containthe new SIAP within controlledairspace. The area will be depicted onappropriate aeronautical charts. Class Eairspace areas extending from 700 feetor more above the surface of the earthare published in paragraph 6005 of FAAOrder 7400.9E, dated September 10,1997, and effective September 16, 1997,which is incorporated by reference in 14CFR 71.1. The Class E airspacedesignation listed in this document willbe published subsequently in the Order.

The Direct Final Rule Procedure

The FAA anticipates that thisregulation will not result in adverse ornegative comment and, therefore, is


issuing it as a direct final rule. Previousactions of this nature have not beencontroversial and have not resulted inadverse comments or objections. Theamendment will enhance safety for allflight operations by designating an areawhere VFR pilots may anticipate thepresence of IFR aircraft at loweraltitudes, especially during inclementweather conditions. A greater degree ofsafety is achieved by depicting the areaon aeronautical charts. Unless a writtenadverse or negative comment, or awritten notice of intent to submit anadverse or negative comment is receivedwithin the comment period, theregulation will become effective on thedate specified above. After the close ofthe comment period, the FAA willpublish a document in the FederalRegister indicating that no adverse ornegative comments were received andconfirming the date on which the finalrule will become effective. If the FAAdoes receive, within the commentperiod, an adverse or negative comment,or written notice of intent to submitsuch a comment, a documentwithdrawing the direct final rule will bepublished in the Federal Register, anda notice of proposed rulemaking may bepublished with a new comment period.

Comments InvitedAlthough this action is in the form of

a final rule and was not preceded by anotice of proposed rulemaking,comments are invited on this rule.Interested persons are invited tocomment on this rule by submittingsuch written data, views, or argumentsas they may desire. Communicationsshould identify the Rules Docketnumber and be submitted in triplicate tothe address specified under the captionADDRESSES. All communicationsreceived on or before the closing datefor comments will be considered, andthis rule may be amended or withdrawnin light of the comments received.Factual information that supports thecommenter’s ideas and suggestions isextremely helpful in evaluating theeffectiveness of this action anddetermining whether additionalrulemaking action would be needed.

Comments are specifically invited onthe overall regulatory, economic,aeronautical, environmental, andenergy-related aspects of the rule thatmight suggest a need to modify the rule.All comments submitted will beavailable, both before and after theclosing date for comments, in the RulesDocket for examination by interestedpersons. A report that summarizes eachFAA-public contact concerned with thesubstance of this action will be filed inthe Rules Docket.

Commenters wishing the FAA toacknowledge receipt of their commentssubmitted in response to this rule mustsubmit a self-addressed, stampedpostcard on which the followingstatement is made: ‘‘Comments toDocket No. 97–ACE–30.’’ The postcardwill be date stamped and returned to thecommenter.

Agency Findings


The FAA has determined that thisregulation is noncontroversial andunlikely to result in adverse or negativecomments. For the reasons discussed inthe preamble, I certify that thisregulation (1) is not a ‘‘significantregulatory action’’ under ExecutiveOrder 12866; (2) is not a ‘‘significantrule’’ under Department ofTransportation (DOT) RegulatoryPolicies and Procedures (44 FR 11034,February 26, 1979); and (3) will nothave a significant economic impact,positive or negative, on a substantialnumber of small entities under thecriteria of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference,Navigation (air).

Adoption of the Amendment

Accordingly, the Federal AviationAdministration amends 14 CFR part 71as follows:

PART 71—DESIGNATION OF CLASS A,CLASS B, CLASS C, CLASS D, ANDCLASS E AIRSPACE AREAS;AIRWAYS; ROUTES; AND REPORTINGPOINTS


Authority: 49 U.S.C. 106(g), 40103, 40113,40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.

§ 71.1 [Amended]

2. The incorporation by reference in14 CFR 71.1 of Federal AviationAdministration Order 7400.9E, AirspaceDesignations and Reporting Points,dated September 10, 1997, and effectiveSeptember 16, 1997, is amended asfollows:

Paragraph 6005 Class E airspace areasextending upward from 700 feet or moreabove the surface of the Earth.

* * * * *

ACE IA E5 Audubon, IA [Revised]Audubon County Airport, IA

(lat. 41°42′05′′N., long. 95°55′14′′W.)Audubon NDB

(lat. 41°41′25′′N., long. 94°54′36′′W.)That airspace extending upward from 700feet above the surface within a 6.4-mileradius of the Audubon County Airport andwithin 2.6-miles each side of the 146° bearingfrom the Audubon NDB extending from the6.4-mile radius to 7 miles southeast of theairport.

* * * * *Issued in Kansas City, MO, on October 24,

1997.Herman J. Lyons, Jr.,Manager, Air Traffic Division, Central Region.[FR Doc. 98–1105 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M



14 CFR Part 71

[Airspace Docket No. 97–ACE–11]

Amendment to Class E Airspace; Lee’sSummit, MO

AGENCY: Federal AviationAdministration, DOT.ACTION: Direct final rule; confirmation ofeffective date.

SUMMARY: This notice confirms theeffective date of a direct final rule whichrevises Class E airspace at Lee’sSummit, MO.EFFECTIVE DATE: The direct final rulepublished at 62 FR 53740 is effective on0901 UTC February 26, 1998.FOR FURTHER INFORMATION CONTACT:Kathy Randolph, Air Traffic Division,Airspace Branch, ACE–520C, FederalAviation Administration, 601 East 12thStreet, Kansas City, Missouri 64106;telephone: (816) 426–3408.SUPPLEMENTARY INFORMATION: The FAApublished this direct final rule with arequest for comments in the FederalRegister on October 16, 1997 (62 FR53740). The FAA uses the direct finalrulemaking procedure for a non-controversial rule where the FAAbelieves that there will be no adversepublic comment. This direct final ruleadvised the public that no adversecomments were anticipated, and thatunless a written adverse comment, or awritten notice of intent to submit suchan adverse comment, were receivedwithin the comment period, theregulation would become effective


February 26, 1998. No adversecomments were received, and thus thisnotice confirms that this direct final rulewill become effective on that date.

Issued in Kansas City, MO, on November20, 1997.Christopher R. Blum,Acting Manager, Air Traffic Division CentralRegion.[FR Doc. 98–1102 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M



14 CFR Part 71


Amendment to Class E Airspace;Lincoln, NE

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Direct final rule; request forcomments.

SUMMARY: This action amends the ClassE airspace area at Lincoln MunicipalAirport, Lincoln, NE. A review of theairspace for Lincoln Municipal Airportindicates it does not meet the criteria for700 feet Above Ground Level (AGL)Class E airspace as required in FAAOrder 7400.2D. The area has beenenlarged to conform to the criteria ofFAA Order 7400.2D. The intended effectof this rule is to comply with the criteriaof FAA Order 7400.2D, and to provideadditional Class E airspace forinstrument operations.DATES: Effective date: 0901 UTC, April23, 1998.

Comment date: Comments must bereceived on or before February 17, 1998.ADDRESSES: Send comments regardingthe rule in triplicate to: Manager,Airspace Branch, Air Traffic Division,ACE–520, Federal AviationAdministration, Airspace DocketNumber 97–ACE–24, 601 East 12thStreet, Kansas City, MO 64106.

The official docket may be examinedin the Office of Regional Counsel for theCentral Region at the same addressbetween 9:00 a.m. and 3:00 p.m.,Monday through Friday, except Federalholidays.

An informal docket may also beexamined during normal business hoursin the Air Traffic Division at the sameaddress listed above.FOR FURTHER INFORMATION CONTACT:Kathy Randolph, Air Traffic Division,Airspace Branch, ACE–520C, FederalAviation Administration, 601 East 12thStreet, Kansas City, MO 64106;telephone (816) 426–3408.

SUPPLEMENTARY INFORMATION: A reviewof the airspace for Lincoln MunicipalAirport indicates it does not meet thecriteria for 700 feet AGL Class Eairspace as required in FAA Order7400.2D. The criteria in FAA Order7400.2D for an aircraft to reach 1200 feetAGL is based on a standard climbgradient of 200 feet per mile, plus thedistance from the ARP to the end of theoutermost runway. Any fractional partof a mile is converted to the next highertenth of a mile increment. Theamendment to Class E airspace atLincoln, NE, will comply with thecriteria of FAA Order 7400.2D. The areawill be depicted on appropriateaeronautical charts. Class E airspaceareas extending from 700 feet or moreabove the surface of the earth arepublished in paragraph 6005 of FAAOrder 7400.9E, dated September 10,1997, and effective September 16, 1997,which is incorporated by reference in 14CFR 71.1. The Class E airspacedesignation listed in this document willbe published subsequently in the Order.

The Direct Final Rule ProcedureThe FAA anticipates that this

regulation will not result in adverse ornegative comment and, therefore, isissuing it as a direct final rule. Previousactions of this nature have not beencontroversial and have not resulted inadverse comments or objections. Theamendment will enhance safety for allflight operations by designating an areawhere VFR pilots may anticipate thepresence of IFR aircraft at loweraltitudes, especially during inclementweather conditions. A greater degree ofsafety is achieved by depicting the areaon aeronautical charts. Unless a writtenadverse or negative comment, or awritten notice of intent to submit anadverse or negative comment is receivedwithin the comment period, theregulation will become effective on thedate specified above. After the close ofthe comment period, the FAA willpublish a document in the FederalRegister indicating that no adverse ornegative comments were received andconfirming the date on which the finalrule will become effective. If the FAAdoes receive, within the commentperiod, an adverse or negative comment,or written notice of intent to submitsuch a comment, a documentwithdrawing the direct final rule will bepublished in the Federal Register, anda notice of proposed rulemaking may bepublished with a new comment period.

Comments InvitedAlthough this action is in the form of

a final rule and was not preceded by anotice of proposed rulemaking,

comments are invited on this rule.Interested persons are invited tocomment on this rule by submittingsuch written data, views, or argumentsas they may desire. Communicationsshould identify the Rules Docketnumber and be submitted in triplicate tothe address specified under the captionADDRESSES. All communicationsreceived on or before the closing datefor comments will be considered, andthis rule may be amended or withdrawnin light of the comments received.Factual information that support thecommenter’s ideas and suggestions isextremely helpful in evaluating theeffectiveness of this action anddetermining whether additionalrulemaking action would be needed.

Comments are specifically invited onthe overall regulatory aeronauticaleconomic, environmental, and energy-related aspects of the rule that mightsuggest a need to modify the rule. Allcomments submitted will be available,both before and after the closing date forcomments, in the Rules Docket forexamination by interested persons. Areport that summarizes each FAA-public contact concerned with thesubstance of this action will be filed inthe Rules Docket.

Commenters wishing the FAA toacknowledge receipt of their commentssubmitted in response to this rule mustsubmit a self-addressed, stampedpostcard on which the followingstatement is made: ‘‘Comments toAirspace Docket No. 97–ACE–24.’’ Thepostcard will be date stamped andreturned to the commenter.

Agency FindingsThe regulations adopted herein will

not have substantial direct effects on theStates, on the relationship between thenational government and the States, oron the distribution of power andresponsibilities among the variouslevels of government. Therefore, inaccordance with Executive Order 12612,it is determined that this final rule doesnot have sufficient federalismimplications to warrant the preparationof a Federalism Assessment.

The FAA has determined that thisregulation is noncontroversial andunlikely to result in adverse or negativecomments. For the reasons discussed inthe preamble, I certify that thisregulation (1) is not a ‘‘significantregulatory action’’ under ExecutiveOrder 12866; (2) is not a ‘‘significantrule’’ under Department ofTransportation (DOT) RegulatoryPolicies and Procedures (44 FR 11034,February 26, 1979); and (3) will nothave a significant economic impact,positive or negative, on a substantial


number of small entities under thecriteria of the Regulatory Flexibility Act.


Airspace, Incorporation by reference,Navigation (air).


Accordingly, the Federal AviationAdministration amends 14 CFR part 71as follows:

PART 71—DESIGNATION OF CLASS A,CLASS B, CLASS C, CLASS D, ANDCLASS E AIRSPACE AREAS;AIRWAYS; ROUTES; AND REPORTINGPOINTS


Authority: 49 U.S.C. 106(g), 40103, 40113,40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389.

§ 71.1 [Amended]

2. The incorporation by reference in14 CFR 71.1 of Federal AviationAdministration Order 7400.9E, AirspaceDesignations and Reporting Points,dated September 10, 1997, and effectiveSeptember 16, 1997, is amended asfollows:

Paragraph 6005 Class E airspace areasextending upward from 700 feet or moreabove the surface of the earth.

* * * * *

ACE NE E5, Lincoln, NE [Revised]

Lincoln Municipal Airport, NE(lat. 40°51′03′′N., long. 96°45′33′′W.

Lincoln VORTAC(lat. 40°55′26′N., long. 96°44′31′W.)

That airspace extending upward from 700feet above the surface within a 7.4-mileradius of the Lincoln Municipal Airport andwithin 3.9 miles each side of the 014° radialof the Lincoln VORTAC extending from the7.4-mile radius to 10 miles north of theVORTAC and within 6 miles each and 4miles west of the Lincoln ILS localizer courseextending from the 7.4-mile radius to 18miles south of the airport and within 4 mileseast and 6 miles west of the Lincoln ILSlocalizer course extending from the 7.4-mileradius to 14.7 miles north of the airport,excluding that airspace within the LincolnMunicipal Airport, NE, Class C airspace area.

* * * * *Issued in Kansas City, MO, on October 27,

1997.

Hermon J. Lyons, Jr.,Manager, Air Traffic Division, Central Region.[FR Doc. 98–1104 Filed 1–15–98; 8:45 am]

BILLING CODE 4910–13–M



14 CFR Part 71


Amendment to Class E Airspace;Vinton, IA

AGENCY: Federal AviationAdministration, DOT.ACTION: Direct final rule; confirmation ofeffective date.

SUMMARY: This notice confirms theeffective date of a direct final rule whichrevises Class E airspace at Vinton, IA.EFFECTIVE DATE: The direct final rulepublished at 62 FR 53946 is effective on0901 UTC February 26, 1998.FOR FURTHER INFORMATION CONTACT:Kathy Randolph, Air Traffic Division,Airspace Branch, ACE–520C, FederalAviation Administration, 601 East 12thStreet, Kansas City, Missouri 64106;telephone: (816) 426–3408.SUPPLEMENTARY INFORMATION: The FAApublished this direct final rule with arequest for comments in the FederalRegister on October 17, 1997 (62 FR53946). The FAA uses the direct finalrulemaking procedure for a non-controversial rule where the FAAbelieves that there will be no adversepublic comment. This direct final ruleadvised the public that no adversecomments were anticipated, and thatunless a written adverse comment, or awritten notice of intent to submit suchan adverse comment, were receivedwithin the comment period, theregulation would become effective onFebruary 26, 1998. No adversecomments were received, and thus thisnotice confirms that this direct final rulewill become effective on that date.

Issued in Kansas City, MO, on November20, 1997.Christopher R. Blum,Acting Manager, Air Traffic Division, CentralRegion.[FR Doc. 98–1101 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M



14 CFR Part 71


Amendment to Class E Airspace;Kansas City, Richards-Gebaur Airport,MO

AGENCY: Federal AviationAdministration, DOT.

ACTION: Direct final rule; confirmation ofeffective date.

SUMMARY: This notice confirms theeffective date of a direct final rule whichrevises Class E airspace at Kansas City,Richards-Gebaur Airport, MO.EFFECTIVE DATE: The direct final rulepublished at 62 FR 53944 is effective on0901 UTC February 26, 1998.FOR FURTHER INFORMATION CONTACT:Kathy Randolph, Air Traffic Division,Airspace Branch, ACE–520C, FederalAviation Administration, 601 East 12thStreet, Kansas City, Missouri 64106;telephone: (816) 426–3408.SUPPLEMENTARY INFORMATION: The FAApublished this direct final rule with arequest for comments in the FederalRegister on October 17, 1997 (62 FR53944). The FAA uses the direct finalrulemaking procedure for a non-controversial rule where the FAAbelieves that there will be no adversepublic comment. This direct final ruleadvised the public that no adversecomments were anticipated, and thatunless a written adverse comment, or awritten notice of intent to submit suchan adverse comment, were receivedwithin the comment period, theregulation would become effective onFebruary 26, 1998. No adversecomments were received, and thus thisnotice confirms that this direct final rulewill become effective on that date.

Issued in Kansas City, MO, on November20, 1997.Christopher R. Blum,Acting Manager, Air Traffic Division, CentralRegion.[FR Doc. 98–1100 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M



14 CFR Part 97

[Docket No. 29107; Amdt. No. 1845]

Standard Instrument ApproachProcedures; MiscellaneousAmendments

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Final rule.

SUMMARY: This amendment establishes,amends, suspends, or revokes StandardInstrument Approach Procedures(SIAP’s) for operations at certainairports. These regulatory actions areneeded because of the adoption of newor revised criteria, or because of changesoccurring in the National AirspaceSystem, such as the commissioning of


new navigational facilities, addition ofnew obstacles, or changes in air trafficrequirements. These changes aredesigned to provide safe and efficientuse of the navigable airspace and topromote safe flight operations underinstrument flight rules at the affectedairports.DATES: An effective date for each SIAPis specified in the amendatoryprovisions.

Incorporation by reference-approvedby the Director of the Federal Registeron December 31, 1980, and reapprovedas of January 1, 1982.ADDRESSES: Availability of mattersincorporated by reference in theamendment is as follows:

For Examination—

1. FAA Rules Docket, FAAHeadquarters Building, 800Independence Avenue, SW.,Washington, DC 20591;

2. The FAA Regional Office of theregion in which the affected airport islocated; or

3. The Flight Inspection Area Officewhich originated the SIAP.

For Purchase—

Individual SIAP copies may beobtained from:

1. FAA Public Inquiry Center (APA–200), FAA Headquarters Building, 800Independence Avenue, SW.,Washington, DC 20591; or

2. The FAA Regional Office of theregion in which the affected airport islocated.

By Subscription—

Copies of all SIAP’s, mailed onceevery 2 weeks, are for sale by theSuperintendent of Documents, U.S.Government Printing Office,Washington, DC 20402.FOR FURTHER INFORMATION CONTACT:Paul J. Best, Flight ProceduresStandards Branch (AFS–420), TechnicalPrograms Division, Flight StandardsService, Federal AviationAdministration, 800 IndependenceAvenue, SW., Washington, DC 20591;telephone (202) 267–8277.SUPPLEMENTARY INFORMATION: Thisamendment to part 97 of the FederalAviation Regulations (14 CFR part 97)establishes, amends, suspends, orrevokes SIAP’s. The complete regulatorydescription of each SIAP is contained inofficial FAA form documents which areincorporated by reference in thisamendment under 5 U.S.C. 552(a), 1CFR part 51, and § 14 CFR 97.20 of theFederal Aviation Regulations (FAR).The applicable FAA Forms are

identified as FAA Form 8260–5.Materials incorporated by reference areavailable for examination or purchase asstated above.

The large number of SIAP’s, theircomplex nature, and the need for aspecial format make their verbatimpublication in the Federal Registerexpensive and impractical. Further,airmen do not use the regulatory text ofthe SIAPs, but refer to their graphicdepiction on charts printed bypublishers of aeronautical materials.Thus, the advantages of incorporationby reference are realized andpublication of the complete descriptionof each SIAP contained in FAA formdocuments is unnecessary. Theprovisions of this amendment state theaffected CFR sections, with the typesand effective dates of the SIAPs. Thisamendment also identifies the airport,its location, the procedure identificationand the amendment number.

This amendment to part 97 is effectiveupon publication of each separate SIAPas contained in the transmittal. TheSIAP’s contained in this amendment arebased on the criteria contained in theUnited States Standard for TerminalInstrument Approach Procedures(TERPS). In developing these SIAPs, theTERPS criteria were applied to theconditions existing or anticipated at theaffected airports.

The FAA has determined throughtesting that current non-localizer type,non-precision instrument approachesdeveloped using the TERPS criteria canbe flown by aircraft equipped with aGlobal Positioning System (GPS) and orFlight Management System (FMS)equipment. In consideration of theabove, the applicable SIAP’s will bealtered to include ‘‘or GPS or FMS’’ inthe title without otherwise reviewing ormodifying the procedure. (Once a standalone GPS or FMS procedure isdeveloped, the procedure title will bealtered to remove ‘‘or GPS or FMS’’ fromthese non-localizer, non-precisioninstrument approach procedure titles.)

The FAA has determined throughextensive analysis that current SIAP’sintended for use by Area Navigation(RNAV) equipped aircraft can be flownby aircraft utilizing various other typesof navigational equipment. Inconsideration of the above, those SIAP’scurrently designated as ‘‘RNAV’’ will beredesignated as ‘‘VOR/DME RNAV’’without otherwise reviewing ormodifying the SIAP’s.

Because of the close and immediaterelationship between these SIAP’s andsafety in air commerce, I find that noticeand public procedure before adoptingthese SIAPs are, impracticable and

contrary to the public interest and,where applicable, that good cause existsfor making some SIAPs effective in lessthan 30 years.

The FAA has determined that thisregulation only involves an establishedbody of technical regulations for whichfrequent and routine amendments arenecessary to keep them operationallycurrent. It, therefore—(1) is not a‘‘significant regulatory action’’ underExecutive Order 12866; (2) is not a‘‘significant rule’’ under DOTRegulatory Policies and Procedures (44FR 11034; February 26, 1979); and (3)does not warrant preparation of aregulatory evaluation as the anticipatedimpact is so minimal. For the samereason, the FAA certifies that thisamendment will not have a significanteconomic impact on a substantialnumber of small entities under thecriteria of the Regulatory Flexibility Act.


Air Traffic Control, Airports,Navigation (Air).

Issued in Washington, DC on January 9,1998.

Quentin J. Smith, Jr.,

Acting Director, Flight Standards Service.


Accordingly, pursuant to theauthority delegated to me, part 97 of theFederal Aviation Regulations (14 CFRpart 97) is amended as follows:

PART 97—STANDARD INSTRUMENTAPPROACH PROCEDURES

1. The authority citation for part 97continues to read:

Authority: 49 U.S.C. 106(g), 40103, 40106,40113–40114, 40120, 44502, 44514, 44701,44719, 44721–44722.

§§ 97.23, 97.27, 97.33 and 97.35 [Amended]

2. Amend 97.23, 97.27, 97.33 and97.35, as appropriate, by adding,revising, or removing the followingSIAP’s, effective at 0901 UTC on thedates specified:

Effective On Publication

New York, NY, John F. Kennedy Intl,VOR or GPS RWY 13L/13R, Amdt 18CANCELLED

New York, NY, John F. Kennedy Intl,VOR or FMS or GPS RWY 13L/13R,Amdt 18

[FR Doc. 98–1097 Filed 1–15–98; 8:45 am]





14 CFR Part 97



AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Final rule.

SUMMARY: This amendment establishes,amends, suspends, or revokes StandardInstrument Approach Procedures(SIAPs) for operations at certainairports. These regulatory actions areneeded because of changes occurring inthe National Airspace System, such asthe commissioning of new navigationalfacilities, addition of new obstacles, orchanges in air traffic requirements.These changes are designed to providesafe and efficient use of the navigableairspace and to promote safe flightoperations under instrument flight rulesat the affected airports.DATES: An effective date for each SIAPis specified in the amendatoryprovisions.

Incorporation by reference-approvedby the Director of the Federal Registeron December 31, 1980, and reapprovedas of January 1, 1982.ADDRESSES: Availability of matterincorporated by reference in theamendment is as follows:

For Examination—


2. The FAA Regional Office of theregion in which affected airport islocated; or


For Purchase—




By Subscription—

Copies of all SIAPs, mailed onceevery 2 weeks, are for sale by theSuperintendent of Documents, USGovernment Printing Office,Washington, DC 20402.

FOR FURTHER INFORMATION CONTACT:Paul J. Best, Flight ProceduresStandards Branch (AFS–420), TechnicalPrograms Division, Flight StandardsService, Federal AviationAdministration, 800 IndependenceAvenue, SW., Washington, DC 20591;telephone (202) 267–8277.SUPPLEMENTARY INFORMATION: Thisamendment to part 97 of the FederalAviation Regulations (14 CFR part 97)establishes, amends, suspends, orrevokes Standard Instrument ApproachProcedures (SIAPs). The completeregulatory description on each SIAP iscontained in the appropriate FAA Form8260 and the National Flight DataCenter (FDC)/Permanent (P) Notices toAirmen (NOTAM) which areincorporated by reference in theamendment under 5 U.S.C. 552(a), 1CFR part 51, and § 97.20 of the FederalAviations Regulations (FAR). Materialsincorporated by reference are availablefor examination or purchase as statedabove.

The large number of SIAPs, theircomplex nature, and the need for aspecial format make their verbatimpublication in the Federal Registerexpensive and impractical. Further,airmen do not use the regulatory text ofthe SIAPs, but refer to their graphicdepiction of charts printed bypublishers of aeronautical materials.Thus, the advantages of incorporationby reference are realized andpublication of the complete descriptionof each SIAP contained in FAA formdocuments is unnecessary. Theprovisions of this amendment state theaffected CFR (and FAR) sections, withthe types and effective dates of theSIAPs. This amendment also identifiesthe airport, its location, the procedureidentification and the amendmentnumber.

The RuleThis amendment to part 97 of the

Federal Aviation Regulations (14 CFRpart 97) establishes, amends, suspends,or revokes SIAPs. For safety andtimeliness of change considerations, thisamendment incorporates only specificchanges contained in the content of thefollowing FDC/P NOTAM for eachSIAP. The SIAP information in somepreviously designated FDC/Temporary(FDC/T) NOTAMs is of such duration asto be permanent. With conversion toFDC/P NOTAMs, the respective FDC/TNOTAMs have been cancelled.

The FDC/P NOTAMs for the SIAPscontained in this amendment are basedon the criteria contained in the U.S.Standard for Terminal InstrumentApproach Procedures (TERPS). Indeveloping these chart changes to SIAPs

by FDC/P NOTAMs, the TERPS criteriawere applied to only these specificconditions existing at the affectedairports. All SIAP amendments in thisrule have been previously issued by theFAA in a National Flight Data Center(FDC) Notice to Airmen (NOTAM) as anemergency action of immediate flightsafety relating directly to publishedaeronautical charts. The circumstanceswhich created the need for all theseSIAP amendments requires makingthem effective in less than 30 days.

Further, the SIAPs contained in thisamendment are based on the criteriacontained in the TERPS. Because of theclose and immediate relationshipbetween these SIAPs and safety in aircommerce, I find that notice and publicprocedure before adopting these SIAPsare impracticable and contrary to thepublic interest and, where applicable,that good cause exists for making theseSIAPs effective in less than 30 days.

ConclusionThe FAA has determined that this

regulation only involves an establishedbody of technical regulations for whichfrequent and routine amendments arenecessary to keep them operationallycurrent. It, therefore—(1) is not a‘‘significant regulatory action’’ underExecutive Order 12866; (2) is not a‘‘significant rule’’ under DOTRegulatory Policies and Procedures (44FR 11034; February 26, 1979); and (3)does not warrant preparation of aregulatory evaluation as the anticipatedimpact is so minimal. For the samereason, the FAA certifies that thisamendment will not have a significanteconomic impact on a substantialnumber of small entities under thecriteria of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 97Air Traffic Control, Airports,

Navigation (Air).Issued in Washington, DC on January 9,

1998.Quentin J. Smith, Jr.,Acting Director, Flight Standards Service.


authority delegated to me, part 97 of theFederal Aviation Regulations (14 CFRpart 97) is amended by establishing,amending, suspending, or revokingStandard Instrument ApproachProcedures, effective at 0901 UTC onthe dates specified, as follows:


1. The authority citation for part 97 isrevised to read as follows:


Authority: 49 U.S.C. 40103, 40113, 40120,44701; 49 U.S.C. 106(g); and 14 CFR11.49(b)(2).

2. Part 97 is amended to read asfollows:

§§ 97.23, 97.25, 97.27, 97.29, 97.31, 97.33and 97.35 [Amended]

By amending § 97.23 VOR, VOR/DME,VOR or TACAN, and VOR/DME orTACAN; § 97.25 LOC, LOC/DME, LDA,LDA/DME, SDF, SDF/DME; § 97.27

NDB, NDB/DME; § 97.29 ILS, ILS/DME,ISMLS, MLS, MLS/DME, MLS/RNAV;§ 97.31 RADAR SIAPs; § 97.33 RNAVSIAPs; and § 97.35 COPTER SIAPs,identified as follows:

. . . Effective upon publication

FDC Date State City Airport FDC Number SIAP

01/01/98 .................. AK .......... Huslia ........... Huslia ..................................................... FDC 8/0032 ...... VOR/DME Rwy 21, Orig.01/01/98 .................. AK .......... Huslia ........... Huslia ..................................................... FDC 8/0033 ...... VOR/DME Rwy 3, Orig.01/01/98 .................. CA .......... Los Angeles Los Angeles Intl ..................................... FDC 8/0008 ...... ILS Rwy 25R.01/01/98 .................. CA .......... Modesto ....... Modesto City-County Arpt—Harry Sham

Field.FDC 8/0011 ...... GPS Rwy 28R Orig.

01/01/98 .................. MO ......... St Louis ........ Lambert-St Louis Intl .............................. FDC 8/0031 ...... ILS Rwy 6, Orig.01/01/98 .................. NY .......... Syracuse ...... Syracuse Hancock Intl ........................... FDC 8/0017 ...... VOR or TACAN Rwy 32 Orig01/07/98 .................. NY .......... Weedsport ... Whitfords ................................................ FDC 8/0217 ...... VOR–A Orig12/09/97 .................. OH ......... Marion .......... Marion Muni ........................................... FDC 7/8055 ...... VOR or GPS–A, Orig.12/22/97 .................. OH ......... Millersburg ... Holmes County ...................................... FDC 7/8348 ...... NDB or GPS Rwy 27, Amdt 5.12/22/97 .................. OH ......... Millersburg ... Holmes County ...................................... FDC 7/8349 ...... VOR or GPS–A, Amdt 6.12/23/97 .................. SD .......... Aberdeen ..... Aberdeen Regional ................................ FDC 7/8364 ...... ILS Rwy 31, Amdt 12A.12/23/97 .................. SD .......... Aberdeen ..... Aberdeen Regional ................................ FDC 7/8365 ...... NDB Rwy 31, Amdt 9A.12/23/97 .................. SD .......... Aberdeen ..... Aberdeen Regional ................................ FDC 7/8366 ...... LOC/DME BC Rwy 13, Amdt

9A.12/23/97 .................. SD .......... Aberdeen ..... Aberdeen Regional ................................ FDC 7/8367 ...... VOR/DME or GPS Rwy 13,

Amdt 11A.12/23/97 .................. SD .......... Aberdeen ..... Aberdeen Regional ................................ FDC 7/8368 ...... VOR or GPS Rwy 31, Amdt

19A.12/23/97 .................. SD .......... Brookings ..... Brookings Muni ...................................... FDC 7/8362 ...... ILS/DME Rwy 30, Amdt 1.12/23/97 .................. SD .......... Mitchell ......... Mitchell Muni .......................................... FDC 7/8363 ...... ILS/DME Rwy 30, Amdt 2.12/30/97 .................. VT .......... Burlington ..... Burlington Intl ......................................... FDC 7/8471 ...... ILS/DME Rwy 33 Orig.

[FR Doc. 98–1099 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M



14 CFR Part 97



AGENCY: Federal AviationAdministration (FAA), DOT.

ACTION: Final rule.

SUMMARY: This amendment establishes,amends, suspends, or revokes StandardInstrument Approach Procedures(SIAPs) for operations at certainairports. These regulatory actions areneeded because of the adoption of newor revised criteria, or because of changesoccurring in the National AirspaceSystem, such as the commissioning ofnew navigational facilities, addition ofnew obstacles, or changes in air trafficrequirements. These changes aredesigned to provide safe and efficientuse of the navigable airspace and topromote safe flight operations underinstrument flight rules at the affectedairports.

DATES: An effective date for each SIAPis specified in the amendatoryprovisions.

Incorproation by reference-approvedby the Director of the Federal Registeron December 31, 1980, and reapprovedas of January 1, 1982.ADDRESSES: Availability of mattersincorporated by reference in theamendment is as follows:

For Examination—


2. The FAA Regional Office of theregion in which the affected airport islocated; or


For Purchase—




By Subscription—

Copies of all SIAPs, mailed onceevery 2 weeks, are for sale by theSuperintendent of Documents, U.S.

Government Printing Office,Washington, DC 20402.FOR FURTHER INFORMATION CONTACT: PaulJ. Best, Flight Procedures StandardsBranch (AFS–420), Technical ProgramsDivision, Flight Standards Service,Federal Aviation Administration, 800Independence Avenue, SW.,Washington, DC 20591; telephone (202)267–8277.SUPPLEMENTARY INFORMATION: Thisamendment to part 97 of the FederalAviation Regulations (14 CFR part 97)establishes, amends, suspends, orrevokes Standard Instrument ApproachProcedures (SIAPs). The completeregulatory description of each SIAP iscontained in official FAA formdocuments which are incorporated byreference in this amendment under 5U.S.C. 552(a), 1 CFR part 51, and § 97.20of the Federal Aviation Regulations(FAR). The applicable FAA Forms areidentified as FAA Forms 8260–3, 8260–4, and 8260–5. Materials incorporatedby reference are available forexamination or purchase as statedabove.

The large number of SIAPs, theircomplex nature, and the need for aspecial format make their verbatimpublication in the Federal Registerexpensive and impractical. Further,airmen do not use the regulatory text ofthe SIAPs, but refer to their graphicdepiction on charts printed bypublishers of aeronautical materials.


Thus, the advantages of incorporationby reference are realized andpublication of the complete descriptionof each SIAP contained in FAA formdocuments is unnecessary. Theprovisions of this amendment state theaffected CFR (and FAR) sections, withthe types and effective dates of theSIAPs. This amendment also identifiesthe airport, its location, the procedureidentification and the amendmentnumber.

The Rule

This amendment to part 97 is effectiveupon publication of each separate SIAPas contained in the transmittal. SomeSIAP amendments may have beenpreviously issued by the FAA in aNational Flight Data Center (FDC)Notice to Airmen (NOTAM) as anemergency action of immediate flightsafety relating directly to publishedaeronautical charts. The circumstanceswhich created the need for some SIAPamendments may require making themeffective in less than 30 days. For theremaining SIAPs, an effective date atleast 30 days after publication isprovided.

Further, the SIAPs contained in thisamendment are based on the criteriacontained in the U.S. Standard forTerminal Instrument ApproachProcedures (TERPS). In developingthese SIAPs, the TERPS criteria wereapplied to the conditions existing oranticipated at the affected airports.Because of the close and immediaterelationship between these SIAPs andsafety in air commerce, I find that noticeand public procedure before adoptingthese SIAPs are impracticable andcontrary to the public interest and,where applicable, that good cause existsfor making some SIAPs effective in lessthan 30 days.

The FAA has determined that thisregulation only involves an establishedbody of technical regulations for whichfrequent and routine amendments arenecessary to keep them operationallycurrent. It, therefore—(1) is not a‘‘significant regulatory action’’ underExecutive Order 12866; (2) is not a‘‘significant rule’’ under DOTRegulatory Policies and Procedures (44FR 11034; February 26, 1979); and (3)does not warrant preparation of aregulatory evaluation as the anticipatedimpact is so minimal. For the samereason, the FAA certifies that thisamendment will not have a significanteconomic impact on a substantialnumber of small entities under thecriteria of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 97Air Traffic Control, Airports,

Navigation (Air).Issued in Washington, DC on January 9,

1998.Quentin J. Smith, Jr.,Acting Director, Flight Standards Service.


authority delegated to me, part 97 of theFederal Aviation Regulations (14 CFRpart 97) is amended by establishing,amending, suspending, or revokingStandard Instrument ApproachProcedures, effective at 0901 UTC onthe dates specified, as follows:


1. The authority citation for part 97 isrevised to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,40120, 44701; and 14 CFR 11.49(b)(2).

2. Part 97 is amended to read asfollows:

§§ 97.23, 97.25, 97.27, 97.29, 97.31. 97.33and 97.35 Amended

By amending: § 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DMEor TACAN; § 97.25 LOC, LOC/DME,LDA, LDA/DME, SDF, SDF/DME;§ 97.27 NDB, NDB/DME; § 97.29 ILS,ILS/DME, ISMLS, MLS, MLS/DME,MLS/RNAV; § 97.31 RADAR SIAPs;§ 97.33 RNAV SIAPs; and § 97.35COPTER SIAPs, identified as follows:

...Effective January 29, 1998

New York, NY, John F. Kennedy Intl,ILS RWY 4L, Amdt 9

...Effective February 26, 1998

Ames, IA, Ames Muni, GPS RWY 13,Orig

Ames, IA, Ames Muni, GPS RWY 19,Orig

Plymouth, MA, Plymouth Muni, GPSRWY 6, Amdt 2

Worcester, MA, Worcester Regional,GPS RWY 29, Orig

Morris, MN, Morris Muni, GPS RWY 32,Orig

Lebanon, NH, Lebanon Muni, ILS RWY18, Amdt 4

Manville, NJ, Central Jersey Regional,VOR OR GPS–A, Amdt 6

Manville, NJ, Central Jersey RegionalGPS RWY 7, Orig

Newark, NJ, Newark Intl, ILS RWY 4R,Amdt 10

Fredricksburg, VA, Shannon, NDB RWY24, Amdt 2

Fredricksburg, VA, Shannon, GPS RWY24, Orig

Appleton, WI, Outagamie County, NDBRWY 29, Amdt 1

Appleton, WI, Outagamie County, ILSRWY 29, Amdt 2

Wisconsin Rapids, WI, Alexander FieldSouth Wood County, GPS RWY 20,Orig

Note: The following Standard InstrumentApproach Procedures (SIAPs) published inTL 98–01 effective February 26, 1998, havebeen rescinded:Yuma, AZ, Yuma MCAS-YUMA Intl, GPS

RWY 17 OrigYuma, AZ, Yuma MCAS-Yuma Intl, GPS

RWY 21R, Orig

...Effective April 23, 1998

Ashland, OH, Ashland County, VOR ORGPS-A, Amdt 8

Ashland, OH, Ashland County, NDB ORGPS RWY 18, Amdt 10

Georgetown, OH, Brown County, GPSRWY 35, Orig

Wilmington, OH, Airborne Airpark, ILSRWY 4L, Amdt 4

Wilmington, OH, Airborne Airpark, ILS/DME RWY 4R, Amdt 1A,CANCELLED

Wilmington, OH, Airborne Airpark, ILSRWY 4R, Orig

Wilmington, OH, Airborne Airpark, ILS/DME RWY 22L, Amdt 1,CANCELLED

Wilmington, OH, Airborne Airpark, ILSRWY 22L, Orig

Rice Lake, WI, Rice Lake Regional-Carl’sField, VOR RWY 1, Orig

[FR Doc, 98–1098 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M

DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 203

RIN 1010–AC13

Royalty Relief for Producing Leasesand Certain Existing Leases In DeepWater

AGENCY: Minerals Management Service(MMS), Interior.ACTION: Final rule.

SUMMARY: This rule establishesconditions for reducing royalties onproducing leases; provides forsuspension of royalty payments oncertain deep water leases issued as theresult of lease sales held beforeNovember 28, 1995; and describes theinformation required for a completeapplication for royalty relief.EFFECTIVE DATE: This rule is effectiveFebruary 17, 1998. However, theinformation collection requirementscontained in § 203.61 will not becomeeffective until approved by the Office ofManagement (OMB). MMS will publish


a document at that time announcing theeffective date.FOR FURTHER INFORMATION CONTACT: Dr.Marshall Rose, Chief, EconomicsDivision, at (703) 787–1536.

SUPPLEMENTARY INFORMATION:

I. Objectives of Royalty Relief

Royalty relief can lead to increaseddevelopment and production of naturalgas and oil, creating profits for lesseesand royalty and tax revenues for thegovernment that it might not otherwisereceive. This rule establishes economicincentives that encourage OuterContinental Shelf (OCS) lessees tospend or invest the money needed topromote development and encourageincreased production. For all Federaloffshore planning areas, we may provideenough relief to allow a reasonableoperating profit if expenses plusroyalties are approaching revenues. Forcases in certain deep water (water atleast 200 meters deep) planning areas ofthe Gulf of Mexico (GOM), we maysuspend royalty payments to permitlessees to earn a reasonable return ontheir capital investments.

The Secretary of the Interior(Secretary) carries out royalty relief aspart of his stewardship and soundmanagement of public lands. Thisincludes conserving resources, getting afair return to the public on OCSresources, and ensuring all OCSdevelopment is safe and consistent withsound environmental standards.

II. Legislative Background

The Secretary has broad legislativeauthority to reduce royalty rates on OCSleases. Section 8(a)(3)(A)of the OuterContinental Shelf Lands Act (OCSLA),as amended (43 U.S.C. 1337(a)(3)(A)),gives the Secretary authority to reduceroyalties on leases in order to increaseproduction. Relief must be justified andgranted case by case.

On November 28, 1995, PresidentClinton signed Public Law 104–58,which included the Deep Water RoyaltyRelief Act (DWRRA). Section 302 of theDWRRA amends section 8(a) of theOCSLA (43 U.S.C. 1337(a)(3)(B))authority so the Secretary may grantrelief on a producing or non-producinglease, or category of leases. Its purposeis to promote development or increasedproduction, or to encourage productionof marginal resources, for GOM leaseslying west of 87 degrees, 30 minutesWest longitude.

The DWRRA also covers leases issuedin water depths greater than 200 meters(deep water) as a result of sales heldbefore the DWRRA’s enactment. Section302 of the DWRRA singles out ‘‘new

production’’, from a lease or unitexisting on the date of its enactment andin the GOM’s deep water west of 87degrees, 30 minutes West longitude. Theamended OCSLA (43 U.S.C.1337(a)(3)(C)) says this new productiondoesn’t qualify for royalty suspension ifthe Secretary determines that this newproduction would be economic withoutroyalty relief. Otherwise, the Secretarymust determine for each case how muchproduction to exclude from royalty inorder to make the new productioneconomic.

Existing leases or units having noroyalty-bearing production, other thantest production, before November 28,1995, and qualified for relief underSection 302, need not pay royalties froma field on the first:

• 17.5 million barrels of oilequivalent (MMBOE) for leases in fieldsin 200 to 400 meters of water,

• 52.5 MMBOE for leases in fields in400 to 800 meters of water, and

• 87.5 MMBOE for leases in fields inmore than 800 meters of water.

These leases or units may qualify fora larger suspension volume if thisspecified volume wouldn’t make thefield economic.

Under § 8(a) of the OCSLA asamended by § 302 of the DWRRA, wemay also grant a royalty-suspensionvolume for production from leasedevelopment involving a substantialcapital investment (e.g., fixed-legplatform, subsea template and manifold,tension-leg platform, multiple wellprojects, etc.) proposed in aDevelopment Operations CoordinationDocument (DOCD), or a supplement toan approved DOCD, approved by theSecretary after November 28, 1995. Thistype of relief is available to leases thatproduced before November 28, 1995. Inthis case, we’ll grant the suspensionvolume we determine necessary to makethe new production economic.

We issued the Interim Rule forRoyalty Relief for Producing Leases andCertain Existing Leases in Deep Wateron May 31, 1996 (61 FR 27263). Weasked for comments, received many,and are now issuing a final rule.

III. Response to CommentsFifteen respondents—the American

Petroleum Institute (API), the NationalOcean Industries Association (NOIA),the Independent Petroleum Associationof America (IPAA), and 12 oil and gascompanies—submitted comments onthe Interim Rule and the supplementaryguidelines. We analyzed all commentsand sometimes revised the finallanguage based on them. We firstaddress the general concern expressedabout the Net Revenue Share (NRS)

royalty relief system, followed by thethree main themes raised in thecomments on the Deep Water royaltyrelief system. Finally, we provideresponses to the other individualcomments and answer questionsrelating to selected provisions retainedfrom the Interim Rule.

Comment on Utility of NRS ReliefComment: The regulations dealing

with NRS leases will be of little or noutility. Regarding leases withinadequate revenues to sustainproduction, the qualifying requirementstipulating that royalty payments mustbe at least 75 percent of net revenuesover the most recent 12-month period isunrealistic and too stringent (§§ 203.50,52 and 53).

Response: We’ve chosen to keep thetwo principal features of the proposedNRS system. These are a qualificationrequirement based on a 75 percentroyalty share of net revenue and afeature whereby the average lease rategradually rises back to the pre-relieflevel when production made possible bythe relief rises sufficiently. However,we’ve made changes in this form ofrelief that will make it easier toimplement and operate under the NRSsystem. These changes will reduce theapplication burden, simplify thequalification requirements, and modifythe operational framework.

We proposed the NRS system toimplement the OCS Lands Act (43U.S.C. 1337(a)(3)(A)) authority to offerroyalty relief to a producing lease topromote increased production. Wespecified different qualificationconditions for two situations: end-of-lifeleases with inadequate revenues tosustain production and marginallyeconomic projects to expandproduction. We’ve decided to no longeroffer a separate form of royalty relief forexpansion projects, because lessees withsuch projects should generally preferapplying for, and operating under, therevised end-of-life relief system in thisfinal rule. Also, by dropping projectrelief we’ve simplified the program byeliminating the need for the applicant toshow that production would beeconomic only with relief and that theproject would add at least 1 year’s worthof production. To emphasize thisnarrower scope and avoid confusionwith an NRS system that has beengenerally avoided by industry, we’veadopted the new name ‘‘end-of-liferelief.’’ However, we have retained theunderlying conceptual framework of theproposed NRS system in the new end-of-life royalty relief system.

For end-of-life situations, the interimrule required a demonstration that


royalties were taking 75 percent of netrevenues and were projected to take anincreasing share in the future. Wedesigned these stipulations to fulfill the‘‘increase production’’ condition in thestatute. However, we now believe thatthe increasing share requirement addedlittle to the assurance that royalty reliefwould result in increased production.Also, it was burdensome and placed usin a position of relying unnecessarily onprojections made by the applicant.Accordingly, we’ve dropped theincreasing share condition.

Moreover, we’ve reduced the extent ofinformation that must be submitted inan application. Instead of 36 months ofcost history and 12 months ofprospective data, under the new end-of-life system, applicants provide cost andproduction for the 12 out of the pastmost recent 15 months that have averagedaily production of at least 100 barrelsof oil equivalent (BOE). Note the 100BOE per day threshold applies to wholeleases, not individual wells. The 12 outof 15 months provision protectsproducers from being disqualified bytemporary shut down events like wellwork-overs, and it mitigatesmisrepresentations due to seasonalvariation. The 100 BOE average dailyproduction requirement gives us moreassurance than the previous proposed‘‘increasing share’’ requirement of theinterim rule that relief would make theincreased production economic. Webelieve that leases with productionsmaller than 100 BOE cannot coverplatform operating costs and that theylikely continue to operate for reasonsbeyond those that royalty relief wouldaffect. That is, while royalty relief mayreduce losses for under 100 BOE/dayoperators, it will not increaseproduction from them.

The proposed NRS relief system took50 percent of increases or decreases innet revenue, regardless of the cause. Wedesigned this feature to allow the publicto share automatically in unforeseenexpansions of production, priceincreases, or cost decreases whilecushioning lessee losses fromunforeseen deterioration in thesefactors. The absence of applicationssuggests to us that these advantageswere outweighed by a perception thatthe NRS system imposed on lessees aheavy and ongoing data collectionburden and extracted from them toomuch of their upside profit potential.

Fortunately, we’ve found that asimpler and less burdensome royaltysystem can approximate the sliding ratestructure of the NRS system. Therefore,we’ve replaced the NRS terms, whichtypically included a 50 percent rate overany possible level of production, with a

2-tier royalty rate. We give you reliefwith a rate fixed at one-half the pre-relief rate for a specific monthly amountof production followed by anincremental rate fixed at 50 percentabove the pre-relief rate for productionabove that monthly amount. We addedother features to balance the end-of-lifesystem. Features that encourage lesseesinclude a cap on the average royalty rateat the pre-relief rate and a lessee optionto end relief at any time. Features thatprotect public interest include lifting ofrelief during periods of very high prices,an eventual end of relief if prices orproduction, or both, remain high for anextended period, and a provisionallowing us to identify conditions inindividual cases which would lead toterminating the relief arrangementbecause those conditions areinconsistent with an end-of-lifesituation.

Main Themes in Comments on the DeepWater Interim Rule

1. Qualification Circumstances

Comment: The current interim rule istoo complex. As an alternative, API,NOIA, and IPAA suggest settingminimum economic field sizes (MEFS)by water depth and development systemthat automatically qualify fields forroyalty relief (§ 203.67).

Response: Automatic MEFS are tooimpractical and difficult to develop andmaintain. So, we won’t use them todecide if a field qualifies for the amountof royalty relief the DWRRA specifies.

We estimate that calculating an MEFSrequires values for more than 90parameters, such as price, quality, waterand drilling depth, gas-to-oil ratio,production rates, and scheduling ofcosts and production. We’d need tocalculate many MEFS and would haveto update them regularly as prices, costsand other significant values change.With large amounts of relief and rapidlychanging values, and given the nearlyexplicit statutory mandate to providesufficient relief, but not too much, we’dhave to carefully set the qualifying fieldsizes. As a result, we’d not be able to setMEFS at sizes that would be worthdeveloping even with royalty relief.

In contrast, the potential number ofnon-producing leases that may come infor relief looks relatively small. Theseare pre-Act leases, formerly pre-enactment deep water leases, or PDWLs.We can now identify fewer than 75fields in this category, a small fractionof which may need relief. Moreimportantly, we can’t justify relying ongeneric data to determine an MEFSwhen an application gives us specificdata for each field.

2. Early Relief Indication

Comment: MMS requires that a DOCDbe approved before an applicant cansubmit a complete application forroyalty relief on a pre-Act lease.Unfortunately, that pushes the requestfor royalty relief too late intodevelopment to be useful. Lessees won’tprepare expensive DOCDs for projectsthat might not go into production, sothey want some assurance royalty reliefwill be granted before preparing one(§ 203.83).

Rather than require an approvedDOCD before submission of anapplication, break approval into twophases. In phase one, an applicantwould file a preliminary applicationearly in the life of a project based on thebest information available at the timebut with significantly less data thanrequired in a final application. Based ona less extensive review than required fora final application, MMS would give apreliminary finding about whether theproject qualified for relief and theappropriate suspension volume. Unlessthere were material changes, thepreliminary finding would be binding.In phase two, a final application wouldeither confirm the relief or cause MMSto do a new evaluation because ofmaterial changes (§ 203.61).

Response: We agree that the DOCDrequirement is unnecessarily restrictiveand have removed it in the final rule.Instead, we’ll depend on other means toensure appraisals are complete enoughfor the applicant to make an informeddecision to develop and for us toevaluate the need for royalty relief. Wewill:

• Shorten the period allowed from 2years to 1 year between the approval ofrelief and the start of construction onthe development and productionsystem,

• Allow significant new geologicaland geophysical (G&G) data to qualifyonly for the initial redetermination, and

• Use our own professional judgmenton whether the appraisal is sufficient fordecision making.

Breaking the approval into two phasesas proposed by industry comments hasa number of flaws. MMS would have tomake a conditionally binding reliefdecision in phase one with less data andcertainty than the company would havewhen it decides whether to developafter phase two. Foregoing Federalproperty rights to royalty income underthe existing lease contract withoutsufficient information would be tooarbitrary. Also, our conditional approvalmay discourage an applicant fromdeveloping more information that might


change the preliminary finding, beforefiling a phase two application.

We’ve changed the rule to fitindustry’s request for an assessment ofrelief early in the project. In certaincircumstances, a lessee or operator mayrequest a nonbinding assessment ofwhether a field would qualify forroyalty relief before submitting the firstcomplete application on a field. Thisoption will help those who don’t wantto risk having to meet qualifications fora redetermination if we reject acomplete application, but want to knowearly about the chances for royalty reliefon a marginal prospect.

The request would involve a draftapplication plus a processing fee. Itcould come any time after discovery(after a well qualifies under 30 CFR250.11 or production is allocated underan approved unit agreement). The detailmust be comparable to a completeapplication to ensure we assess thesame prospect the lessee or operatorenvisions. We would develop anonbinding assessment presuming thatcontinued appraisal would produceexpected values for unknown, butessential, data. Therefore, applicantsmust also send in an appraisal plan todrill one or more wells should MMSissue a favorable nonbindingassessment. After at least 90 days, afinal, complete application can confirmor revise the data in the draftapplication and present the applicant’sbinding proposal as a condition forreceiving royalty relief.

3. Complexity of Methods and DataRequirements

Comment: MMS proposes to useMonte Carlo simulations to account forthe uncertainty in application data.

Probability distributions in Monte Carlotechniques may be appropriate toanalyze exploration and evaluate theadequacy of lease sale bids for whichmost data are unavailable andestimated. However, these approachesare less appropriate to analyzedevelopment. After discoveringhydrocarbons, drilling delineation wellsand taking seismic readings, the data aremuch more certain. Companies typicallyuse simple scenario modeling andsensitivity analyses on developmentprojects. MMS should adopt thescenario approach most used byindustry (§§ 203.85–89).

Response: We’ve kept the Monte Carlomethods, though somewhat simplified,for several reasons. No clear milestonesshow when appraisal or delineation isadequate for making the developmentdecision, so scenario modeling wouldnot be suitable for many applications.Also, we must systematically handle theuncertainty associated with applicationsto be submitted at an early stage ofdevelopment and we’ve been given amandate to deal with the extra risk deepwater poses. The Monte Carlo approachhandles these diverse situations andrequirements by allowing for theincorporation of as much or as little riskas perceived, a full range of sensitivityanalysis, and the small but positivechance for all the circumstances anoperation needs to become highlyprofitable.

We differ from the scenario approachindustry describes mainly in the way weestimate reserves. The scenarioapproach offers no systematic way toarrive at a reserve size and chance ofoccurrence. We use careful descriptionsof reservoirs and a standard procedurefor calculating resources and aggregating

them to the field level. Generally, wehave adopted the reserves and resourcedefinitions of the Society of PetroleumEngineers. This standardized proceduretreats all applicants alike. It keeps ourevaluators from having to learn thesubtleties of each applicant’s definitionof reserves in order to verify andperhaps change that part of theevaluation. The level of detail proposedwill ensure that we apply a consistent,analytically supportable method,especially for estimating produciblereserves and resources.

The G&G report requests measurablereservoir data to help us validate inputsto the evaluation model. Distributionsfor all data items provide a way todocument the uncertainty about thesefactors, but we don’t need estimates forall data items because the modelcombines some items and derives otherinputs. We’ve tried to clarify andsimplify the data requirements in thespirit of the ‘‘scenario’’ approach.

Under our Monte Carlo procedure,applicants may use up to three discretedevelopment scenarios, and they mayinclude ranges for many of theirvariables. We need this detail so we canclearly understand the options anduncertainties an applicant faces. Ourmodel has a less complex structure thanpublicly available models for estimatingreserves and evaluating economics.

Individual Comments on the DeepWater Interim Rule and Guidelines

The following tables respond to thecomments we received on the interimrule and supplementary guidelines.Each row references appropriatesections in the final rule and subjectareas in the interim rule that relate tothat comment and response.

COMMENT ON GENERAL PROVISIONS

Requirement/Subject Comment MMS Response

203.3/Processing Fees The fees for royalty relief are too high and more thancover the costs of processing and deterring nuisanceapplications. Applicants should get refunds if fees aremore than actual processing costs, which could bethe case if screens for minimum field size are used toapprove relief.

We estimate fees based on how many hours of workwe expect the average application to take. After wehave more experience with applications, we’ll reviewprocessing costs and adjust fees if necessary. Weplan to give refunds only for incomplete applications.But, we won’t charge more when processing costsexceed the established fees.

COMMENTS ON NET REVENUE SHARE (NRS) ROYALTY RELIEF


203.52/NRS Relief—Ap-proval Criteria for Mul-tiple-field Leases

If a lease produces from two or more fields, one ormore of which do not qualify for NRS relief, royaltyrelief should still be possible for the lease productionwhich would otherwise qualify.

Relief for end-of-life cases is designed for and grantedto a whole lease or unit, not to a project or field. If alease as a whole qualifies for end-of-life relief, it getsit regardless of how many fields are involved.


COMMENTS ON NET REVENUE SHARE (NRS) ROYALTY RELIEF—Continued


Guidelines—Supplementing203.53/Relief Operation

Requiring the operator to act as a single payor couldnot have been anticipated at the time the produceragreed to become the operator and exposes the op-erator to unforeseen legal implications or burdens.Getting money and accurate information to pay andreport royalties from other lease owners is difficult, ifnot impossible, and could obligate the operator forlate or improper payment and reporting interest andpenalties.

Agree. We’ve dropped this requirement. It was pro-posed because the scope of an audit for a lease re-ceiving royalty relief is greater than for normal leases.A single payor is designated to keep our audit ex-penses reasonable wherever multiple lease ownersenjoy relief. However, the Royalty Simplification andFairness Act contains language which precludes ourinsistence on a single payor.

203.56/NRS Relief—LeaseTransfers or Assignments

If a lease is assigned, the NRS terms should be trans-ferred to the assignee upon request. If the assigneedoesn’t ask to retain NRS terms, the lease should re-vert to the standard lease royalty rate.

In concept, relief is granted to a lease or unit, not to alessee. We’ve changed the rule to automaticallytransfer relief terms to the assignee. Lessees alsohave the option to end relief at anytime.

COMMENTS ON DEEP WATER ROYALTY RELIEF (DWRR)


203.60 & 78/Field DefinitionDecision Level & Appeals.

MMS should elevate the level for field defini-tion decisions, notify lessees of the fielddesignations, and allow them to object. Itshould also extend the period for appeal-ing a field decision from 15 to 30–60days. And it should allow companies toreview current field designations for theGOM and industry input in any revisions

Agree in part. The Chief, Reserves Section, Office of ResourceEvaluation, GOM Region (GOMR), will make field decisions aftera lease has been qualified as producible. As part of that process,affected lessees and operators will be able to review and discussany data with us before we make the final field decision. Wewon’t extend the formal appeal period after this decision. Until theGOMR issues a final decision on the field designation, lessees ofa pre-Act lease can’t apply for DWRR. However, a DWRR appli-cation based on the GOM Regions’ final field designation deci-sion can be filed and processed while the field designation isunder appeal.

203.60/Field Concept andDesignation—Methodol-ogy.

Industry is accustomed to delineating a fieldfor reasons of infrastructure, not geology,so disagreements over ‘‘field’’ designationcan be expected. Recommend that MMSmake public the methods it uses to iden-tify fields and work with industry to de-velop a more precise definition for ‘‘field.’’

Agree. The term ‘‘field’’ in geological and petroleum literature isusually defined relative to geologic structure or stratigraphic con-ditions. The Field Naming Handbook, already available on theINTERNET from the GOMR, explains our methods. The GOMRwill gladly entertain suggestions for improvements. Meetings on afield designation before starting the completeness review can im-prove understanding. But the basic entity for relief on royalties indeep water is the geologic field, not the project.

Deep Water GuidelinesSupplementing 203.62/Applications—InformalConsulting.

Will MMS answer questions on preparing anapplication before it is filed and a feepaid?

Yes. As the revised guidelines state, we’ll informally advise youhow to fill out an application, but not whether to file one. Giventhe extensive guidelines and model documentation, informal ad-vice can save you time before filing and us time during the com-pleteness review and evaluation.

203.62 & 65(f)/Applications& Revising Applicants’Assumptions.

The economic, geologic, and engineeringreports are too complicated, voluminous,and costly for marginal opportunities thatdepend on royalty relief. But MMS shouldnot revise any assumptions without con-sulting the applicant and, if necessary, let-ting a third party settle disputes. At thevery least MMS should justify any revi-sions to an applicant’s assumptions

Agree in part. Application requirements impose a small cost in com-parison to the size of the royalty relief at stake. We’ll use ourjudgment and discretion in deciding whether to ask an applicantfor more information or for clarification before making anychanges, tolling the clock as needed to complete a full evalua-tion.

We also will identify changes in related variables that may need tobe discussed. Where major assumptions are unsupported bybackup or important data elements are inconsistent with otherparts of the application, we’ll fully explain the source of the prob-lem and provide a chance to explain or resolve the outstandingissues before deciding on an application. We aren’t planning touse third parties to resolve disputes.

203.63/Applications—JointApplication Difficulties.

Industry is pleased that DWRR doesn’tmandate unitization. However, joint appli-cations may be unworkable due to dif-ferent reserve numbers, costs, etc., esti-mated by different lessees

If lessees want DWRR, they will have to at least design applica-tions jointly and, if approved, make sure they meet performanceconditions for retaining relief. In cases where a party refuses tocooperate in submitting a joint application, it won’t be eligible toreceive any relief granted, and we’ll likely need to make assump-tions about how it might have participated in and contributed tojoint development of the field.


COMMENTS ON DEEP WATER ROYALTY RELIEF (DWRR)—Continued


203.63/Applications—JointApplication Coercion.

MMS shouldn’t require lessees that sharethe same geologic structure to file jointapplications because this requirementcould inhibit applications or restrict howcompanies operate offshore. For instance,on multi-lease fields, an economic projectmight negate another’s less robustproject; or a more advanced project mayrefuse to co-operate with a competitive,but lagging, project, etc

Joint applications don’t require joint development, but they are aninescapable feature of a field-based system. The rules allowgood-cause exceptions to joint applications. Should other lesseeson the field choose not to apply for relief, they’re still free to de-velop their leases as they wish, but they won’t share any reliefgranted.

203.64/Applications withAssignments.

A limit of one application per field restricts acompany from seeking relief on a farmed-out lease if the prior owner applied for re-lief on that field and was rejected. Thenew company that thinks it could developthe field with royalty relief must qualify fora redetermination to apply

The limit is intended in part to close the potential loophole of as-signing leases to get around requirements for redetermination.

203.65/Review and Evalua-tion—Notification of MMSDeterminations.

MMS should notify all affected lessees whenroyalty relief is granted and publish when,who, and how much relief is given

Agree. We will notify all designated lease operators within a fieldwhen royalty relief is granted. The basic summary information willbe published on MMS’s and GOMR’s home pages on theINTERNET.

203.65/Review and Evalua-tion—Determination Pe-riod.

MMS’s determination review is too long andwill delay field development because les-sees can’t invest without knowing whetherroyalty relief will be available. Reduce thereview time to 3 months

Public law sets the allowed review periods. However, we don’t planto use the entire time if we can do determinations faster. Yetcareful review often requires time, especially when new and com-plex developments are proposed and huge amounts ($100 millionplus) of royalty relief and taxpayer assets are at stake.

203.65/Review and Evalua-tion—Tolling the Clock—Measurement.

The clock should be tolled by using onemeasure of time, either work days or cal-endar days

DWRRA stipulated calendar days for its deadlines of 120 or 180days for approval or rejection. We’ll continue to use work days forreviewing applications for completeness because of the shorttime allowed. MMS must review each application thoroughly toascertain whether it is complete before we start the statutoryclock in calendar days to analyze economic viability. Industry isaccustomed to our using work days to conduct completenesschecks for other filings.

203.65/Review and Evalua-tion—Method for Tollingthe Clock.

Evaluation time should be tolled ‘‘upon re-ceipt by the applicant of written notifica-tion’’ of an information deficiency and theclock should be restarted ‘‘upon receipt ofthe needed information in the [GOM] Re-gional MMS office.’’

Agree. As the rule states, the evaluation clock will be stopped whenthe applicant receives written notice from us and will begin whenthe requested information is received in the regional office.

Deep Water GuidelinesSupplementing 203.65/Review and Evaluation—Consistency with Dif-ferences in Geologic In-terpretation.

How will MMS account for costs and pro-duction (revenues) that it believes shouldbe added to the economic evaluation of afield because they are associated with de-veloping reservoirs omitted from an appli-cation?

Each application and scenario presents a unique proposal. We’lladjust data as necessary. For example, if we determine that anapplicant omitted prospective reservoirs, it’s reasonable to as-sume they’ll be found and developed later. By adding the nec-essary costs after production begins, we avoid the complexity ofhaving to adjust the estimated pre-production costs used as aperformance condition.

203.67/Review and Evalua-tion—Dual Test Role inEvaluation Model (Roy-alty Suspension ViabilityProgram (RSVP)).

Eliminate the dual test, at least for appli-cants seeking only the minimum suspen-sion volume. MMS should grant relief andnot interject itself into the process bywhich a lessee decides to develop andincur costs to bring a field into production

We’ve kept the dual test, but have modified the calculations to re-flect industry concerns that our determinations may not alwayscoincide with industry decisions, even using the same input data.If, under these altered conditions, the dual test indicates that noamount of royalty relief will make the field economic, we can rea-sonably infer that the application is missing some key factor inthe decision to develop.

203.68/Review and Evalua-tion—Dual Test Treat-ment of Sunk Costs.

Because sunk costs aren’t in the dual test, itdoesn’t prove development is economicwithout royalty when compared to the waythe primary test defines ‘‘economic-ness.’’Treat sunk costs the same in both testsand include them in the volume deter-mination. Chance of relief is lost in a re-determination by defining all of the ex-pended development costs as sunk

The difference in the way the two economic tests treat sunk costsfavors the applicant. Omission of sunk costs from the dual testraises the net present value (NPV), improving chances for pass-ing that part of the viability test. Their inclusion in the primary testhas the opposite effect on NPV, again improving chances forpassing that part of the viability test. As for volume determina-tions, the DWRRA directs us to consider sunk costs in determin-ing eligibility for relief but not in setting a volume suspension torecover them. Finally, there is no difference in the treatment ofsunk costs in the original application and redetermination. Theonly difference is in timing, i.e., more development costs mayhave been expended and hence treated as sunk at time of re-submission. That will raise the NPV in the dual test more than itwill raise the NPV in the primary test, expanding the range ofqualifying values.




203.70 & 91/Review andEvaluation—Post-produc-tion development report.

Full development cost is seldom known be-fore first production, so a pre-productionreport would come before all wells wouldbe drilled. Drilling costs are significant,often around 50 percent. Keep self-disclo-sure to encourage efficiency and reduceaudit requirements but have an updatedestimate of development costs providedbefore the first anniversary of start of pro-duction.

We agree that a review before production starts may be premature.The rules require the start-of-production cost report within 60days after production begins. We may grant short extensions forextenuating circumstances. This gives applicants time to compiledata on expenditures up to a well-defined point and avoids theambiguity surrounding the actual start date and the need to esti-mate some cost items.

203.70, 76 & 90/Change inMaterial Fact—Start ofConstruction.

What constitutes start of construction or fab-rication?

The revised rule stipulates the following requirements to verifywhen construction starts: (1) a copy of the contract with the fab-rication yard, (2) a letter from the contractor certifying that con-struction has started on a specific system for a specific location,and (3) evidence of a payment of appropriate size based on cur-rent industry standards for the proposed development and pro-duction system.

203.71/Applying Suspen-sion Volumes—Addingleases to a field.

Can a higher minimum suspension volumeapply if the MMS evaluation of the appli-cation includes potential resources on un-leased blocks and or leases not currentlyassigned to the field?

No. Minimum suspension volumes are based on the deepest leaseassigned to the field up to the time the application is approved.Of course, we can still grant larger amounts of relief than theminimum suspension volumes, if we find them necessary tomake the whole field economic.

203.73/Applying Suspen-sion Volumes—Gas-to-OilConversion Factor.

The fixed conversion factor ignores fluctua-tions in the relative values of oil and gasand introduces bias as it overvalues gasrelative to oil properties at current valueratios. The 8-to-1 ratio implied in theDWRRA may be better than the 5.62-to-1ratio in the interim rule

The oil/gas ratio will continue to be based on the British thermalunit (Btu) conversion factor. Because the RSVP model values oiland gas separately, the conversion ratio affects only the size ofthe volume suspension, not qualification for relief. Qualified appli-cants already get minimum volumes under the DWRRA even ifonly small volume suspensions are needed. These minimum stip-ulated volumes were based on our studies using the Btu ratio.Hence, it would be inconsistent to have the volume suspensionamounts based on relative prices when the minimum volumeswere based on studies using the Btu ratio.

203.74/Redeterminations—Reprocessed SeismicData.

Conditions for redeterminations should in-clude reprocessed seismic data (usingnew algorithms). This differs from reinter-preting existing data, which is explicitlyexcluded as a basis for redetermination

We often can’t distinguish a new algorithm from a reinterpretation ofan old one, so we’ll limit this requirement to new data developedby the applicant as a basis for a redetermination.

203.74/Redeterminations—Price Change Size.

A decline of 25 percent in oil or gas price ismuch too low to trigger a redetermination.Cash flow is very sensitive to price and a10 percent drop in price can be enough totrigger a redetermination

Sharp price swings are often short-run phenomena not matched bychanges in forecasts of long-term price trends used in a redeter-mination. Also price/cost differences, not just prices, drive cashflow. Some cost-cutting inevitably accompanies price declines.Only sustained, sizeable price declines, such as 25 percent, arelikely to overwhelm cost-cutting opportunities enough to warrant aredetermination.

203.74/Redeterminations—Price Base.

What is the relevant price which must dropby 25 percent to qualify an applicant for aredetermination?

Applicants may seek a redetermination if a weighted 12-monthmoving average of daily closing New York Mercantile Exchange(NYMEX) prices for oil or gas has decreased by more than 25percent since the most recent complete application. As the re-vised rule explains, the before and after prices are weightedusing the volumes of oil and gas identified in the most likely sce-nario described in that application.

Deep Water GuidelinesSupplementing 203.74/Redeterminations—PriceAssumptions.

The minimum oil price of $16.30 per barreland the average annual growth rate of1.67 percent is too high for the next 25years

Starting price assumptions are based on Energy Information Admin-istration (EIA) historical data and growth rates in EIA’s AnnualEnergy Outlook and will be updated regularly. To match the GOMmarket better, we’ll use recent prices for Petroleum Administra-tion for Defense District (PADD) III imports as a benchmark forstarting prices. Adjustments for gravity differences are allowed.As with all projections, experience may prove starting prices rep-resentative or not and growth rates right or wrong. But applicantswill be on an equal footing because we mandate specific param-eters.

Deep Water GuidelinesSupplementing 203.76/Changes in MaterialFact—Limits.

The guidelines aren’t consistent with the in-terim rule language and preamble discus-sion regarding ‘‘material change.’’

Agree. We have changed the guidelines to be consistent with therule. In particular, the four circumstances (change of system, ex-cess delay in starting, underspending on development, or falsestatements/omitted reports) used to signify a material change arethe only ones—not just examples—of what justifies withdrawal ofalready granted relief.




203.76 & 87–89/Changes inMaterial Fact & Engineer-ing, Production, and Costreports—Multiple Devel-opment Scenarios.

MMS doesn’t need three development sce-narios to test viability because the sectionon withdrawing approval for royalty reliefprotects against significant changes

The withdrawal conditions focus on underspending developmentcosts and changes in development systems evaluated in the ap-plication. They don’t consider adjustments to planned capacitybefore or after production begins. We consider up to three sce-narios to reflect uncertainty about final project size, timing, andproduction rates.

We have clarified the options for simplifying the input data. Gen-erally, whenever observed conditions or formal decisions fore-close some or all the uncertainty about particular variables, weaccept fewer scenarios or point estimates for reservoirs, costs,and production.

203.76/Change in MaterialFact—Reapplication withSunk Development Costs.

Conversion of proposed development coststo sunk costs in a reapplication com-pounds the penalty from withdrawal. Thereapplication is allowed less cost withwhich to justify relief

Agree. We’ll allow applicants to renounce relief at any point afterapproval is granted and before production starts. When violationof a withdrawal condition is anticipated, giving up relief early canreduce the share of development costs that get considered assunk costs in a subsequent application.

Deep Water GuidelinesSupplementing 203.76 &89/Change in MaterialFact—Defining Develop-ment Cost.

What expenditures are included in develop-ment costs?

We’ll count all eligible expenses planned for the most likely sce-nario between application and start of production. The spendingthreshold and any disallowed costs (for uneconomic reservoirs)will be specified in the relief approval. In assessing the economicviability of the subject field, we may remove the cash flows asso-ciated with uneconomic reservoirs.

Deep Water GuidelinesSupplementing 203.76/Change in MaterialFact—Development Pe-riod.

What happens if the development period(i.e., time to first production) deviates froman applicant’s proposal?

We’ll compare actual to approved pre-production costs, regardlessof how much or little time it takes to start production.

203.76/Only ‘‘Significant’’Change in Material Factbefore Withdrawal of Ap-proved Relief.

Withdrawal as a result of actual cost below80 percent (or 90 percent for redetermina-tion that follows withdrawal of previouslygranted relief) of application estimatesdiscourages capital efficiency. Also a 10to 20 percent cost reduction may notgreatly improve project economics. MMSshould withdraw relief only if reduction incapital costs ‘‘substantially’’ improveproject economics beyond those on whichthe project qualified. Even if such achange occurs, the applicant ought to beallowed to appeal to keep relief so as notto encourage inefficient expenditures

Withdrawal conditions need to be fixed and obvious, not flexiblecombinations to be determined later. We’ve taken three steps tosoften the danger of a fixed threshold. First, the applicant maykeep one-half of the relief if we’re notified of the shortfall. Sec-ond, the withdrawal date is now after production begins. Third,the pre-production period is variable, so we count an applicant’scosts over a flexible interval. As a result, it’s unlikely that thecompany would substantially underspend its earlier capital costprojections by the time of review.

203.78/Applying Suspen-sion Volumes—PriceCeilings on DifferentProducts.

Will a market gas price increase that is notaccompanied by a rise in oil price triggera lifting of all the royalty-suspension vol-ume for a field with mostly oil reserves orvice versa?

No. The statute doesn’t explicitly answer this question. We’ve inter-preted the applicable text to mean that price ceilings prescribedin the law for lifting relief should apply separately to each productfor fields that produce both. Relief can be suspended on just thepart of total production from a field whose price exceeded thethreshold. Gas prices above $3.50 per million Btus (escalated tothen-current dollars) won’t lift relief on oil volumes if oil prices re-main below $28 per barrel (escalated to then-current dollars) andvice versa. Escalation by the Gross Domestic Price deflatorraises the thresholds each year.

203.78/Applying Suspen-sion Volumes—Time Lim-its for Royalty Refunds orCredits.

A time limit should be set for MMS to makeroyalty refunds or credits, as are set forcompanies to repay back royalties with in-terest, under the price escalation clause

Agree. The new Royalty Simplification and Fairness Act requiresthat MMS process refunds or credits on production after Septem-ber 1996 within 120 days of a lessee’s request. Future rules willset forth procedures which deal with this request. The repaymentperiod for companies is also set at 120 days.

COMMENTS ON THE REQUIRED REPORTS


203.81/Independent Certifi-cation.

A certified public accountant (CPA) certifi-cation of historical expenditures reportedin either the application or the pre-produc-tion report imposes unnecessary costs.Internal records and self certification areadequate

A CPA certification is an independent check and so might substitutefor our audit. Besides, only eligible expenditures must be cer-tified. However, to reduce the cost of the independent audit, wewill accept a CPA opinion which identifies questionable elementsor an unqualified opinion on the accuracy and relevance of thehistorical information presented.


COMMENTS ON THE REQUIRED REPORTS—Continued


Deep Water GuidelinesSupplementing 203.81/Certification Format.

What is a CPA certification for sunk costs? It’s a CPA report that certifies your historical information is accurateand meets our stipulations on eligibility. As the revised guidelinesstate, an agent of the CPA firm must sign the certification andidentify someone who knows the case and is authorized to re-spond to questions on it.

203.83/Administrative re-port—Certification ofNon-Development.

Requiring certification that reserves won’t beproduced without relief is not enforceableand can be outdated as conditionschange

Agree. We’ve eliminated this requirement. Considering sunk costsin the evaluation means that some fields that qualify for reliefwould be worth developing without relief.

203.85/Economic viabilityreport—Inflation.

The spreadsheet model should allow forcost inflation

Future versions of the spreadsheet model may include a variable toaccount for cost-specific inflation or deflation. Technologicalprogress could actually lower real costs over time despite generalinflation of all prices and costs.

203.85/Economic viabilityreport— Updating PriceAssumptions Schedule.

MMS should fix a schedule for revising priceassumptions (e.g., quarterly, annually). IfMMS issues new assumptions while re-viewing an application, they should clarifywhich assumptions apply (those at time ofapplication or latest issued before the de-termination)

Agree. We’ll publish updated price assumptions on the INTERNETannually, probably in the late spring when EIA’s Annual EnergyOutlook releases new data and forecasts. We’ll use the price as-sumptions in place on the date of application submission.

203.85/Economic viabilityreport—Revising Appli-cants’ Assumptions-Dis-count Rates.

Will MMS accept the discount rate an appli-cant selects, or reserve the right to revisethe discount rate?

We’ll use the discount rate an applicant proposes in both the dualand primary tests, with no appropriateness review as long as it iswithin the range provided in the guidelines.

203.85/Economic viabilityreport—Discount RateSize.

The 10 percent discount rate is too low.Even 15 percent is too low because itrisks rejected projects being abandoned

In all cases, the rates of return apply to a field with a discovery, sothe risk of not finding oil or gas is gone. The range specified inthe guidelines for the discount rate is based on recent historicalexperience, which in future years may assume a different trend.The industry’s average after-tax, real rate of return, has been es-timated to range from a high of 10.9 percent to a low of 1.4 per-cent between 1959 and 1988. (See A.T. Guernsey on behalf ofShell Oil Company, Profitability Study: Crude Oil and Natural GasExploration, Development, and Production Activities in the USA,1959–1988, November 1990). Simulations with a version of ourmodel found before-tax rates of return ranged from 1.2 to 4 per-cent higher than after-tax rates of return over various project con-ditions. Together, these estimates indicate that expecting before-tax discount rates, and hence rates of return, in the range of 10to 15 percent are appropriate.

203.85/Economic viabilityreport—Discount RateRange.

Allowing variability in discount rates couldlead to unequal treatment. Where appli-cants choose discount rates, the playingfield isn’t level. Instead, specify one foreach of three water-depth thresholds andapply uniformly

The goal of a range of discount rates is to fit differences in compa-nies’ risk tolerance and opportunity cost. Applicants can tailortheir risk preferences by water depth within this range if theychoose to. We use probability methods that don’t require a riskpremium in the discount rate. However, a fixed discount rateacross fields and companies within a water-depth categoryplaces all the burden for dealing with differences in risk on theseprobability distributions. We believe a better compromise is togive applicants the chance to use both factors to express theirrisks and uncertainties. Allowing companies to choose a rate fortheir projects is eminently fair, as long as they stay within ourstipulated range and we use it in both economic viability tests.

203.89/Cost report—SunkCosts Measurement.

The way MMS includes sunk costs doesn’trecognize the time value of money, aspast expenditures are carried forwardwithout escalation. It’s inappropriate tocombine after-tax sunk costs with futurecosts and revenues expressed on a be-fore-tax basis

The DWRRA directs us to consider all exploration, development,and production costs. Because the decision to proceed on aproject is independent of sunk costs, the proper treatment ofsunk costs for economic viability is to value them as zero. Webalance these considerations by carefully defining expenses thatconstitute sunk costs, then we allow them as a deduction in theprimary test and exclude them from the dual test. The after-taxpart of sunk costs, like the before-tax size of prospective costs, iswhat the company still has to recover from the proposed project.

203.89/Sunk Costs—Scope Sunk costs should include all reasonablepost-lease acquisition costs (seismic datacosts, overhead expenses, etc.). Extendthe definition to include all project costsincurred by the lessee or on behalf of alessee

We won’t consider sunk costs incurred by previous owners of yourlease or by third-parties. Also, we won’t consider portions of sunkcosts on your lease that you incurred prior to when you lastbought into your lease. Further, if you have maintained continousownership but changed the share of the lease you own, we countyour sunk costs only in proportion to the share you owned whenyou incurred these costs. We do this because previous ownersand third-parties already have been compensated through markettransactions. Also, we do not believe we can really verify the rel-evance to current development of expenditures by third-parties orprevious owners.


COMMENTS ON THE REQUIRED REPORTS—Continued


203.91 & 76/Review andEvaluation—Post-produc-tion development report.

What must the post-production report con-tain? What happens if it isn’t submitted?

The report must show and compare planned and actual pre-produc-tion costs. If you don’t submit the report, you’ll lose relief, just asyou would for providing false historical or intentionally inaccurateinformation.

IV. Recovery of CostsBy Federal policy and law, we’ll

charge lessees applying for royalty reliefunder this rule an amount whichrecovers our cost of processing theirapplications. The Independent OfficeAppropriation Act (31 U.S.C. 9701) andOMB Circular A–25 require agencies torecover their costs when they provideservices that confer special benefits orprivileges to identifiable non-Federalrecipients. Processing of applications forroyalty relief clearly falls within thismandate. Furthermore, the OmnibusAppropriations Bill (Pub. L. 104–134,110 Stat. 1321, April 26, 1996)authorizes collecting such fees.

We issued NTL No. 96–3N (signedJune 21, 1996), which gives detailedamounts for processing royalty-reliefapplications and when and howapplicants may pay us. Processingapplications for royalty relief to increaseproduction will cost $8,000. Completeapplications under DWRR will costeither $16,000 to $34,000. Draftapplications will cost either $10,500 to$28,500. For some applications, we mayneed to audit the financial datasubmitted to determine the proposeddevelopment’s economics. That wouldcost up to $37,500. Ordinarily, norefund is given when we reject anapplication. However, if we reject adeep water application forincompleteness during the first 20business days after receiving it, we’llrefund all but $5,500 of the applicationfee. We’ll revise the Notice to Lessees(NTL) periodically to reflect our costexperience and to provide otherinformation helpful or necessary foradministering this program.Authors: Sam Fraser and Marshall Rose,Economics Division, prepared thisdocument.

V. Administrative Matters

Executive Order (E.O.) 12866

This rule is significant due to novelpolicy issues arising from legalmandates, and OMB has reviewed thisrule. We will make a copy of ourdetermination of the effects of this ruleavailable on request.

In summary, the DWRRA instructs usto grant royalty relief only in situationsthat are uneconomic at the lease-

stipulated royalty rate. Hence, theeconomic effects can be estimated bythe additional royalties that may becollected from fields that wouldotherwise not be developed until a latertime, if at all. We estimated these effectsby extrapolating to all known deepwater fields the results of detailedanalyses of 30 fields in the relevantwater depths. MMS’s field-basedapproach generates up to $45 millionper year in additional royalty revenue,which is less than the threshold amountof $100 million annually.

The field-based approach provided inthis final rule gives a single royalty-suspension volume for each qualifyingfield. The main alternative approachgives each individual lease or unit aseparate royalty-suspension volume,subject to the minimum volumesspecified in the DWRRA.

We chose the field-based approachbecause:

• The DWRRA’s primary authorstated that he intended the DWRRA toencourage production from new fieldswithout providing any more relief thanneeded;

• The field-based approach providesa substantial incentive for developingmarginal fields in deep water while stillensuring a fair return to the Treasury;

• The minimum suspension volumesspecified in the DWRRA were derivedfrom an analysis of fields, notindividual leases; and

• This rule needs to be consistentwith the rules for royalty suspensionson deep water tracts leased afterNovember 28, 1995, in the same parts ofthe GOM so that all deep water leaseson the OCS receive equitable treatment.

Regulatory Flexibility Act

This rule can have a positiveeconomic effect on some small entities.A copy of our analysis of this impact isavailable on request.

In summary, this rule sets the termsand conditions for granting royalty reliefunder the provisions of section8(a)(3)(A) of the OCSLA. These termsreduce costs for end-of-life operationsby 6 to 10 percent, more than doublingprofits. That should significantlyprolong operations on marginallyeconomic leases. We can’t estimate thenumber of leases that may be affected

from past experience, because the termshave been changed from thosepreviously available to marginal OCSleases. We estimate that small entityoperators account for under 10 percentof production from OCS leases.

This rule also sets terms andconditions for granting royalty-suspension volumes under the DWRRAfor certain deep water leases on the OCSin the GOM. These leases were issuedas a result of a lease sale held beforeNovember 28, 1995. The conditionslimit these terms to the rare situationsin which royalty costs are the differencebetween unprofitable and profitabledevelopment. One of two applicationsfor deep water relief received under theinterim version of this rule was from asmall entity.

Paperwork Reduction ActIn connection with the interim final

rulemaking (IFR) process, we submittedthe information collection requirementsin 30 CFR 203 to OMB and conducteda full review and comment process forthis collection of information. OMBapproved the information collection(OMB No. 1010–0071) on October 7,1996, to expire on October 31, 1999.

Earlier in the preamble we discussedcomments received on the informationcollection aspects of the IFR. Based onexperience and the changes made in thisrule, we will submit a revisedinformation collection package to OMBfor approval 60 days after this rule ispublished. With this rule, we arestarting the 60-day comment period.The Paperwork Reduction Act of 1995(44 U.S.C. 3501 et seq.) provides that anagency may not conduct or sponsor, anda person is not required to respond to,a collection of information unless itdisplays a currently valid OMB controlnumber. The information collectionaspects of this final rule will not takeeffect until approved by OMB.

We invite the public and otherFederal agencies to comment on thecollection of information as discussedbelow. Send comments regarding anyaspect of the collection to the MineralsManagement Service, Attention: RulesProcessing Team, 381 Elden Street, MailStop 4020, Herndon, VA 20170. Yourcomments should be received by March17, 1998.


We use the information to determinewhether royalty relief will result inproduction that wouldn’t otherwiseoccur. We rely largely on yourinformation to make thesedeterminations. Your application forroyalty relief must contain enoughinformation on finances, economics,reservoirs, G&G characteristics,production, and engineering estimatesfor us to determine whether: (1) Weshould grant relief under the law, and(2) the requested relief will ultimatelyrecover more resources and return areasonable profit on projectinvestments. Your fabricatorconfirmation and post-productiondevelopment reports must containenough information for us to verify thatyour application reasonably representedyour plans.

Applicants (respondents) are FederalOCS oil and gas lessees. Applicationsare required to obtain or retain a benefit.Therefore, if you apply for royalty relief,you must provide this information. Wewill protect information consideredproprietary under applicable law andunder regulations at § 203.63(b) and part250 of this chapter.

We estimate the annual publicreporting burden for this informationcollection will average approximately14,700 hours, not the 38,730 hoursoriginally estimated for the interim finalrule. The reduction is due primarily toan adjustment in re-estimating thenumber of applications we expect toreceive. We also made minor programreductions in the estimate based on thechanges in the final rule. The averageburden per response is estimated at 335burden hours. This includes the time forreviewing instructions, searchingexisting data sources, gathering andmaintaining the data needed, andcompleting and reviewing the collectionof information. A breakdown of theestimated burden is included in thesupporting statement we submitted toOMB for this collection of information.You may obtain a copy of thatsupporting statement from MMS’sInformation Collection Clearance Officer(202/208–7744). In calculating theburdens, we’ve assumed thatrespondents perform some of therequirements and maintain records inthe normal course of their activities. Weconsider these to be usual andcustomary. You are invited to provideinformation in your comments if youdisagree with this assumption.

We specifically solicit comments onthe following questions:

(a) Is the proposed collection ofinformation necessary for us to properlyperform our functions, and will it beuseful?

(b) Are the burden hours estimatesreasonable for the proposed collection?

(c) Do you have any suggestions thatwould enhance the quality, clarity, orusefulness of the information to becollected?

(d) Is there a way to minimize theinformation collection burden on theapplicants, including the use ofappropriate automated electronic,mechanical, or other forms ofinformation technology?

In addition, the Paperwork ReductionAct requires us to estimate the totalannual cost burden to respondents orrecordkeepers resulting from thecollection of information. We need yourcomments to identify any reporting andrecordkeeping cost burdens other thanthose discussed above. Your responseshould split the cost estimate into twocomponents: (a) Total capital andstartup cost component; and (b) annualoperation, maintenance, and purchaseof services component. Your estimatesshould consider the costs to generate,maintain, and disclose or provide theinformation. You should describe themethods you use to estimate major costfactors, including system andtechnology acquisition, expected usefullife of capital equipment, discountrate(s), and the period over which youincur costs. Capital and startup costsinclude, among other items, computersand software you purchase to preparefor collecting information; monitoring,sampling, drilling, and testingequipment; and record storage facilities.Generally, your estimates should notinclude equipment or servicespurchased: (i) before October 1, 1995;(ii) to comply with requirements notassociated with the informationcollection; (iii) for reasons other than toprovide information or keep records forthe Government; or (iv) as part ofcustomary and usual business or privatepractices.

Takings Implication Assessment

DOI certifies that this rule does notrepresent a governmental action that caninterfere with constitutionally protectedproperty rights. Therefore, we don’tneed to do a Takings ImplicationAssessment under E.O. 12630,Governmental Actions and Interferencewith Constitutionally Protected PropertyRights.

E.O. 12988

DOI has certified to OMB that the rulemeets the applicable reform standardsprovided in sections 3(a) and 3(b)(2) ofE.O. 12988.

National Environmental Policy Act

DOI has determined that this rule isn’ta major Federal action that significantlyaffects the quality of the humanenvironment, so we don’t need anEnvironmental Impact Statement.

Unfunded Mandates Reform Act of 1995

DOI has determined and certifiesaccording to the Unfunded MandatesReform Act, 2 U.S.C. 1502 et seq., thatthis rule will not impose a cost of $100million or more in any given year onState, local, and tribal governments orthe private sector.

‘‘Plain English’’ Style of Writing

We’ve written this regulation in theform of questions in the first person (I)and answers in the second person (you)because readers may find it simpler toread and understand. A question and itsanswer combine to establish a rule. Theapplicant and the agency must followthe language in the question and itsanswer.


Continental shelf, Governmentcontracts, Indians-lands, MineralsRoyalties, Oil and gas exploration,Public lands-mineral resources,Sulphur.

Dated: November 6, 1997.Bob Armstrong,Assistant Secretary, Land and MineralsManagement.

For the reasons stated in thepreamble, the Minerals ManagementService (MMS) is amending 30 CFR part203 as follows:

PART 203—RELIEF OR REDUCTION INROYALTY RATES


Authority: 25 U.S.C. 396 et seq.; 25 U.S.C.396a et seq.; 25 U.S.C. 2101 et seq.; 30 U.S.C.181 et seq.; 30 U.S.C. 351 et seq.; 30 U.S.C.1001 et seq.; 30 U.S.C. 1701 et seq.; 31 U.S.C.9701 et seq.; 43 U.S.C. 1301 et seq.; 43 U.S.C.1331 et seq.; and 43 U.S.C. 1801 et seq.

2. Subpart A is revised to read asfollows:

Subpart A—General Provisions

Sec.203.0 What definitions apply to this part?203.1 What is MMS’s authority to grant

royalty relief?203.2 When can I get royalty relief?203.3 Why must I pay a fee to request

royalty relief?203.4 How do the provisions in this part

apply to different types of leases andprojects?


Subpart A—General Requirements

§ 203.0 What definitions apply to this part?

Authorized field means a field in awater depth of at least 200 meters andin the Gulf of Mexico west of 87degrees, 30 minutes West longitudefrom which no current pre-Act leaseproduced, other than test production,before November 28, 1995.

Complete application means anoriginal and two copies of the sixreports consisting of the data specifiedin 30 CFR 203.81, 203.83 and 203.85through 203.89, along with one set ofdigital information, which MMS hasreviewed and found complete.

Determination means the bindingdecision by MMS on whether your fieldqualifies for relief or how large aroyalty-suspension volume must be tomake the field economically viable.

Draft application means thepreliminary set of information andassumptions you submit to seek anonbinding assessment on whether afield could be expected to qualify forroyalty relief.

Eligible lease means a lease thatresults from a lease sale held afterNovember 28, 1995; is located in theGulf of Mexico (GOM) in water depths200 meters or deeper; lies wholly westof 87 degrees, 30 minutes Westlongitude; and is offered subject to aroyalty-suspension volume authorizedby statute.

Expansion project means a projectyou propose in a DevelopmentOperations Coordination Document(DOCD) or a Supplement approved bythe Secretary of the Interior afterNovember 28, 1995, that will increasethe ultimate recovery of resources froma pre-Act lease and that involves asubstantial capital investment (e.g.,fixed-leg platform, subsea template andmanifold, tension-leg platform, multiplewell project, etc.).

Fabrication (or start of construction)means evidence of irreversiblecommitment to a concept and scale ofdevelopment, including copies of abinding contract between you (asapplicant) and a fabrication yard, aletter from a fabricator certifying thatconstruction has begun, and a receiptfor the customary down payment.

Field means an area consisting of asingle reservoir or multiple reservoirsall grouped on, or related to, the samegeneral geological structural feature orstratigraphic trapping condition. Two or

more reservoirs may be in a field,separated vertically by interveningimpervious strata or laterally by localgeologic barriers, or both.

Lease means a lease or unit.New production means any

production from a current pre-Act leasefrom which no royalties are due onproduction, other than test production,before November 28, 1995. Also, itmeans any production resulting fromlease-development activities involving asubstantial capital investment (e.g.,fixed-leg platform, subsea template andmanifold, tension-leg platform, multiplewell project, etc.) on a current pre-Actlease under a Development OperationsCoordination Document—or itssupplement—approved by the Secretaryof the Interior after November, 28, 1995.

Nonbinding assessment means anopinion by MMS of whether your fieldcould qualify for royalty relief. It isbased on your draft application anddoes not entitle the field to relief.

Performance conditions meansminimum conditions you must meet,after we have granted relief and beforeproduction begins, to remain qualifiedfor that relief. If you do not meet eachone of these performance conditions, weconsider it a change in material factsignificant enough to invalidate ouroriginal evaluation and approval.

Pre-Act lease means a lease issued asa result of a lease sale held beforeNovember 28, 1995; in a water depth ofat least 200 meters; and in the Gulf ofMexico west of 87 degrees, 30 minutesWest longitude.

Production means all oil, gas, andother relevant products you save,remove, or sell from a tract or thosequantities allocated to your tract undera unitization formula, as measured forthe purposes of determining the amountof royalty payable to the United States.

Project means any activity thatrequires at least a permit to drill.

Redetermination means your requestfor us to reconsider our determinationon royalty relief if we have rejected yourapplication or if we have granted reliefbut you want a larger suspensionvolume.

Renounce means action you take togive up relief after we have granted itand before you start production.

Sunk costs means costs (as specifiedin 30 CFR 203.89(a)) of exploration,development, and production that youincur after the date of first discovery onthe field and before the date we receive

your complete application for royaltyrelief. Sunk costs include the costs ofthe discovery well qualified asproducible under 30 CFR part 250,subpart A but do not include any pre-discovery activity costs or leaseacquisition and holding costs such ascash bonus and rental payments.

Withdraw means action we take on afield that has qualified for relief if youhave not met one or more of theperformance conditions.

§ 203.1 What is MMS’s authority to grantroyalty relief?

The Outer Continental Shelf (OCS)Lands Act, 43 U.S.C. 1337, as amendedby the OCS Deep Water Royalty ReliefAct (DWRRA), Public Law 104–58,authorizes us to grant royalty relief inthree situations.

(a) Under 43 U.S.C. 1337(a)(3)(A), wemay reduce or eliminate any royalty ora net profit share specified for an OCSlease to promote increased production.

(b) Under 43 U.S.C. 1337(a)(3)(B), wemay reduce, modify, or eliminate anyroyalty or net profit share to promotedevelopment, increase production, orencourage production of marginalresources on certain leases or categoriesof leases. This authority is restricted toleases in the Gulf of Mexico (GOM) thatare west of 87 degrees, 30 minutes Westlongitude.

(c) Under 43 U.S.C. 1337(a)(3)(C), wemay suspend royalties for designatedvolumes of new production from anylease if:

(1) Your lease is in deep water (waterat least 200 meters deep);

(2) Your lease is in designated areasof the GOM (west of 87 degrees, 30minutes West longitude);

(3) Your lease was acquired in a leasesale held before the DWRRA (beforeNovember 28, 1995);

(4) We find that your new productionwould not be economic without royaltyrelief; and

(5) Your lease is on a field that did notproduce before enactment of theDWRRA, or if you propose a project tosignificantly expand production under aDevelopment Operations CoordinationDocument (DOCD) or a supplementaryDOCD, that MMS approved afterNovember 28, 1995.

§ 203.2 When can I get royalty relief?

We can reduce or suspend royaltiesfor OCS leases or projects that meet thecriteria in the following table.


IF YOU HAVE A LEASE— AND IF YOU— THEN YOU MAY BE GRANTED—

That generates earnings which cannot sustainproduction (End-of-Life lease),.

Seek to increase production by operating thelease beyond the point at which it is eco-nomic under the existing royalty rate,.

A reduced royalty rate on current productionflows along with a higher royalty rate onsome additional production flows.

In designated areas of the deep water GOM,acquired in a lease sale held before Novem-ber 28, 1995, and you propose activity in aDOCD or supplement to significantly expandproduction,.

Are producing and seek to increase ultimaterecovery of resources from the field with asubstantial investment (e.g., platform, mul-tiple wells, subsea template) (an expansionproject),.

A royalty suspension for an increment to pro-duction large enough to make the projecteconomic.

In designated areas of the deep water GOM,acquired in a lease sale held before Novem-ber 28, 1995 (pre-Act lease),.

Are on a field from which no current pre-Actlease produced (other than test production)before November 28, 1995 (authorizedfield),.

A royalty suspension for a minimum produc-tion volume plus any additional volumeneeded to make the field economic.

§ 203.3 Why must I pay a fee to requestroyalty relief?

(a) When you submit an applicationor ask for a preview assessment, youmust include a fee to reimburse us forour costs of processing your applicationor assessment. Federal policy and lawrequire us to recover the cost of servicesthat confer special benefits toidentifiable non-Federal recipients. TheIndependent Offices Appropriation Act

(31 U.S.C. 9701), Office of Managementand Budget Circular A–25, and theOmnibus Appropriations Bill (Pub. L.104–133, 110 Stat. 1321, April 26, 1996)authorize us to collect these fees.

(b) We will specify the necessary feesfor each of the types of royalty-reliefapplications and possible MMS auditsin a Notice to Lessees. We willperiodically update the fees to reflectchanges in costs as well as provide other

information necessary to administerroyalty relief.

§ 203.4 How do the provisions in this partapply to different types of leases andprojects?

The tables in this section summarizehow similar provisions in this partapply in different situations.

(a) Provisions relating to applicationcontent in §§ 203.51, 203.62 and 203.81through 203.89.

Information elements End-of-lifelease

Deep waterexpansion

project

Pre-act deepwater lease

Administrative information report ................................................................................................. x x xNet revenue and relief justification report (prescribed format) .................................................... xEconomic viability and relief justification report (Royalty Suspension Viability Program (RSVP)

model inputs justified with Geological & Geophysical (G&G), Engineering, Production, &Cost reports) ............................................................................................................................. ........................ x x

G&G report ................................................................................................................................... ........................ x xEngineering report ........................................................................................................................ ........................ x xProduction report .......................................................................................................................... ........................ x xDeep Water cost report ................................................................................................................ ........................ x x

(b) Provisions relating to verification in §§ 203.70, 203.81 and 203.90 through 203.91.

Confirmation elements End-of-lifelease

Deep waterexpansion

project


Fabricator’s confirmation report ................................................................................................... ........................ x xPost-production development report (approved by certified public accountant (CPA) ............... ........................ x x

(c) Provisions relating to approval criteria contained in §§ 203.50, 203.52, 203.60 and 203.67.

Approval conditions End-of-lifelease

Deep waterexpansion

project


At least 12 of the last 15 months have the required level of production .................................... xAlready producing ........................................................................................................................ x xWell can produce ......................................................................................................................... ........................ ........................ xRoyalties for qualifying months exceed 75 percent of net revenue (NR) ................................... xSubstantial investment (e.g., platform, multiple wells, subsea template) .................................... ........................ xDetermined to be economic only with relief ................................................................................. ........................ x x

(d) Provisions related to redetermination in §§ 203.52 and 203.74 through 203.75.

Redetermination conditions End-of-lifelease

Deep waterexpansion

project


After 12 months under current rate, criteria same as for approval ............................................. xFor material change in geologic data, prices, or costs ................................................................ ........................ x x


(e) Provisions related to the format of relief in §§ 203.53 and 203.69.

Relief rate & volume End-of-lifelease

Deep waterexpansion

project


One-half pre-application effective lease rate on the qualifying amount, 1.5 times pre-applica-tion effective lease rate on additional production up to twice the qualifying amount, and thepre-application effective lease rate for any larger volumes ..................................................... x

Qualifying amount is the average monthly production for 12 qualifying months ........................ xZero royalty rate on the suspension volume and the original lease rate on additional produc-

tion ............................................................................................................................................ x xField Suspension volume is at least 17.5, 52.5 or 87.5 million barrels of oil equivalent

(MMBOE) .................................................................................................................................. xAmount needed to become economic ......................................................................................... x x

(f) Provisions related to discontinuing relief §§ 203.54 and 203.78.

Full royalty resumes when— End-of-lifelease

Deep waterexpansion

project


Average NYMEX price for last 12 months is at least 25 percent above the average for thequalifying months ...................................................................................................................... x

Average NYMEX price for last 12 months exceeds $28/bbl or $3.50/mcf, escalated by thegross domestic product deflator since 1994 ............................................................................ x x

(g) Provisions related to the end, loss or reduction of relief in §§ 203.55 and 203.76.

Relief withdrawn or reduced End-of-lifelease

Deep waterexpansion

project


Recipient so requests ................................................................................................................... xLease rate is at the effective rate for 12 consecutive months .................................................... xConditions that we may specify in the approval letter in individual cases actually occur ........... xNot submitting post-production report that compares expected to actual costs ......................... x xChange of development system .................................................................................................. x xExcess delay in starting fabrication ............................................................................................. x xSpending less than 80 percent of proposed pre-production costs but notifying us in post-pro-

duction report ............................................................................................................................ x xAmount of relief volume is produced ........................................................................................... x x

3. Subpart B is revised to read asfollows:

Subpart B—OCS Oil, Gas, and SulfurGeneral

Royalty Relief for end-of-life Leases

Sec.203.50 Who may apply for end-of-life

royalty relief?203.51 How do I apply for end-of-life

royalty relief?203.52 What criteria must I meet to get

relief?203.53 What relief will MMS grant?203.54 How does my relief arrangement for

an oil and gas lease operate if prices risesharply?

203.55 Under what conditions can my end-of-life royalty relief arrangement for anoil and gas lease be ended?

203.56 Does relief transfer when a lease isassigned?

Royalty Relief For Deep Water ExpansionProjects And Pre-Act Deep Water Leases

203.60 Who may apply for deep waterroyalty relief?

203.61 How do I assess my chances forgetting relief?

203.62 How do I apply for relief?203.63 Does my application have to include

all leases in the field?203.64 How many applications may I file

on a field?203.65 How long will MMS take to evaluate

my application?203.66 What happens if MMS does not act

in the time allowed under § 203.65,including any extensions?

203.67 What economic criteria must I meetto get royalty relief on an authorizedfield or expansion project?

203.68 What pre-application costs willMMS consider in determining economicviability?

203.69 If my application is approved, whatroyalty relief will I receive?

203.70 What information must I provideafter MMS approves relief?

203.71 How does MMS allocate a field’ssuspension volume between my leaseand other leases on my field?

203.72 Can my lease receive more than onesuspension volume?

203.73 How do suspension volumes applyto natural gas?

203.74 When will MMS reconsider itsdetermination?

203.75 What risk do I run if I request aredetermination?

203.76 When might MMS withdraw orreduce the approved size of my relief?

203.77 May I voluntarily give up relief ifconditions change?

203.78 Do I keep relief if prices risesignificantly?

203.79 How do I appeal MMS’s decisionsrelated to Deep Water Royalty Relief?

Required Reports

203.81 What supplemental reports doroyalty-relief applications require?


203.82 What is MMS’s authority to collectthis information?

203.83 What is in an administrativeinformation report?

203.84 What is in a net revenue and reliefjustification report?

203.85 What is in an economic viability andrelief justification report?

203.86 What is in a G&G report?203.87 What is in an engineering report?203.88 What is in a production report?203.89 What is in a deep water cost report?203.90 What is in a fabricator’s

confirmation report?203.91 What is in a post-production

development report?

Subpart B–OLS Oil, Gas, and SulfurGeneral

Royalty Relief for End–of–life Leases

§ 203.50 Who may apply for end-of-liferoyalty relief?

You may apply for royalty relief intwo situations.

(a) Your end-of-life lease (as definedin § 203.2) is an oil and gas lease andhas average daily production of at least100 barrels of oil equivalent (BOE) permonth (as calculated in § 203.73) in atleast 12 of the past 15 months. The mostrecent of these 12 months areconsidered the qualifying months.

(b) Your end-of-life lease is other thanan oil and gas lease (e.g., sulphur) andhas production in at least 12 of the past15 months. The most recent of these 12months are considered the qualifyingmonths.

§ 203.51 How do I apply for end-of-liferoyalty relief?

You must submit a completeapplication and the required fee to theappropriate MMS Regional Director.Your MMS regional office will providespecific guidance on the report formats.A complete application for reliefincludes:

(a) An administrative informationreport (specified in § 203.83) and

(b) A net revenue and reliefjustification report (specified in§ 203.84).

§ 203.52 What criteria must I meet to getrelief?

(a) To qualify for relief, you mustdemonstrate that the sum of royaltypayments over the 12 qualifying monthsexceeds 75 percent of the sum of netrevenues (before-royalty revenues minusallowable costs, as defined in § 203.84).

(b) To re-qualify for relief, e.g., eitherapplying for additional relief on top ofrelief already granted, or applying forrelief sometime after your earlieragreement terminated, you mustdemonstrate that:

(1) You have met the criterion listedin paragraph (a) of this section, and

(2) The 12 required qualifying monthsof operation have occurred under thecurrent royalty arrangement.

§ 203.53 What relief will MMS grant?

(a) If we approve your application andyou meet certain conditions, we willreduce the pre-application effectiveroyalty rate by one-half on productionup to the relief volume amount. If youproduce more than the relief volumeamount:

(1) We will impose a royalty rateequal to 1.5 times the effective royaltyrate on your additional production up totwice the relief volume amount; and

(2) We will impose a royalty rateequal to the effective rate on allproduction greater than twice the reliefvolume amount.

(b) Regardless of the level ofproduction or prices (see § 203.54),royalty payments due under end-of-liferelief will not exceed the royaltyobligations that would have been due atthe effective royalty rate.

(1) The effective royalty rate is theaverage lease rate paid on productionduring the 12 qualifying months.

(2) The relief volume amount is theaverage monthly BOE production for the12 qualifying months.

§ 203.54 How does my relief arrangementfor an oil and gas lease operate if pricesrise sharply?

In those months when your currentreference price rises by at least 25percent above your base reference price,you must pay the effective royalty rateon all monthly production.

(a) Your current reference price is aweighted average of daily closing priceson the NYMEX for light sweet crude oiland natural gas over the most recent full12 calendar months;

(b) Your base reference price is aweighted average of daily closing priceson the NYMEX for light sweet crude oiland natural gas during the qualifyingmonths; and

(c) Your weighting factors are theproportions of your total productionvolume (in BOE) provided by oil andgas during the qualifying months.

§ 203.55 Under what conditions can myend-of-life royalty relief arrangement for anoil and gas lease be ended?

(a) If you have an end-of-life royaltyrelief arrangement, you may renounce itat any time. The lease rate will returnto the effective rate during thequalifying period in the first full monthfollowing our receipt of yourrenouncement of the relief arrangement.

(b) If you pay the effective lease ratefor 12 consecutive months, we willterminate your relief. The lease rate willreturn to the effective rate in the firstfull month following this termination.

(c) We may stipulate in the letter ofapproval for individual cases certainevents that would cause us to terminaterelief because they are inconsistent withan end-of-life situation.

§ 203.56 Does relief transfer when a leaseis assigned?

Yes. Royalty relief is based on thelease circumstances, not ownership. Ittransfers upon lease assignment.

Royalty Relief For Deep WaterExpansion Projects And Pre-Act DeepWater Leases

§ 203.60 Who may apply for deep waterroyalty relief?

Under conditions in §§ 203.61(b) and203.62, you may apply for royalty reliefif:

(a) You are a lessee of a lease in waterat least 200 meters deep in the GOM andlying wholly west of 87 degrees, 30minutes West longitude;

(b) We have assigned your lease to afield (as defined in § 203.0); and

(c) You hold a pre-Act lease on anauthorized field (as defined in § 203.0)or you propose an expansion project (asdefined in § 203.0).

§ 203.61 How do I assess my chances forgetting relief?

You may ask for a nonbindingassessment (a formal opinion onwhether a field would qualify forroyalty relief) before turning in yourfirst complete application on anauthorized field. This field must have aqualifying well under 30 CFR part 250,subpart A, or be on a lease that hasallocated production under an approvedunit agreement.

(a) To request a nonbindingassessment, you must:

(1) Submit a draft application in theformat and detail specified in guidancefrom the MMS regional office for theGOM;

(2) Propose to drill at least one moreappraisal well if you get a favorableassessment; and

(3) Pay a fee under § 203.3.(b) You must wait at least 90 days

after receiving our assessment to applyfor relief under § 203.62.

(c) This assessment is not bindingbecause a complete application maycontain more accurate information thatdoes not support our original


assessment. It will help you decidewhether your proposed inputs forevaluating economic viability and yoursupporting data and assumptions areadequate.

§ 203.62 How do I apply for relief?

You must send a complete applicationand the required fee to the MMS GOMRegional Director.

(a) Your application for deep waterroyalty relief must include an originaland two copies (one set of digitalinformation) of:

(1) Administrative information report;(2) Deep water economic viability and

relief justification report;(3) G&G report;(4) Engineering report;(5) Production report; and(6) Deep water cost report.(b) Section 203.82 explains why we

are authorized to require these reports.(c) Sections 203.81, 203.83, and

203.85 through 203.89 describe whatthese reports must include. The MMSGOM Regional Office will guide you onthe format for the required reports.

§ 203.63 Does my application have toinclude all leases in the field?

For authorized fields, we will acceptonly one joint application for all leases

that are part of the designated field onthe date of application, except asprovided in paragraph (c) of this sectionand § 203.64.

(a) The Regional Director maintains aField Names Master List with updates ofall leases in each designated field.

(b) To avoid sharing proprietary datawith other lessees on the field, you maysubmit your proprietary G&G reportseparately from the rest of yourapplication. Your application is notcomplete until we receive all therequired information for each lease onthe field. We will not discloseproprietary data when explaining ourassumptions and reasons for ourdeterminations under § 203.67.

(c) We will not require a jointapplication if you show good cause andhonest effort to get all lessees in thefield to participate. If you must excludea lease from your application because itslessee will not participate, that lease isineligible for the royalty relief for thedesignated field.

§ 203.64 How many applications may I fileon a field?

You may file one completeapplication for royalty relief during the

life of the field. However, you may sendanother application if:

(a) You are eligible to apply for aredetermination under § 203.74;

(b) You apply for royalty relief for anexpansion project;

(c) You withdraw the applicationbefore we make a determination; or

(d) You apply for end-of-life royaltyrelief.

§ 203.65 How long will MMS take toevaluate my application?

(a) We will determine within 20working days if your application forroyalty relief is complete. If yourapplication is incomplete, we willexplain in writing what it needs. If youwithdraw a complete application, youmay reapply.

(b) We will evaluate your firstapplication on a field within 180 daysand a redetermination under § 203.75within 120 days after we say it iscomplete.

(c) We may ask to extend the reviewperiod for your application under theconditions in the following table.

If— Then we may—

We need more records to audit sunk costs ............................................. Ask to extend the 120-day or 180-day evaluation period. The extensionwe request will equal the number of days between when you receiveour request for records and the day we receive the records.

We cannot evaluate your application for a valid reason, such as miss-ing vital information or inconsistent or inconclusive supporting data.

Add another 30 days. We may add more than 30 days, but only if youagree.

We need more data, explanations, or revision ........................................ Ask to extend the 120-day or 180-day evaluation period. The extensionwe request will equal the number of days between when you receiveour request and the day we receive the information.

(d) We may change your assumptionsunder § 203.62 if our technicalevaluation reveals others that are moreappropriate. We may consult with youbefore a final decision and will explainany changes.

(e) We will notify all designated leaseoperators within a field when royaltyrelief is granted.

§ 203.66 What happens if MMS does notact in the time allowed under § 203.65,including any extensions?

If we do not act within the timeframesestablished in § 203.65, the conditionsin the following table apply.

If you apply for royalty relief for— And we do not decide within the timespecified— As long as you—

An authorized field ......................... You get the minimum suspension volumes specified in § 203.69 ......... Abide by §§ 203.70 & 76An expansion project ..................... You get a royalty suspension for the first year of production ................ Abide by §§ 203.70 & 76

§ 203.67 What economic criteria must Imeet to get royalty relief on an authorizedfield or expansion project?

Your field or project must requireroyalty relief to be economic and mustbecome economic with this relief. Thatis, we will not approve applications ifwe determine that royalty relief cannot

make the field or project economicallyviable.

§ 203.68 What pre-application costs willMMS consider in determining economicviability?

(a) We will not consider ineligiblecosts as set forth in § 203.89(h) indetermining economic viability forpurposes of royalty relief.

(b) We will consider sunk costs(allowable expenditures on and after thediscovery well as specified in§ 203.89(a)) in accordance with thefollowing table.


We will— When—

Include sunk costs ................ The field has not produced, other than test production, before the application submission date.Not include sunk costs ......... Determining whether an authorized field can become economic with any relief (see § 203.67).Not include sunk costs ......... Determining how much suspension volume is necessary to make development economic (see § 203.69(c)).Not include sunk costs ......... Evaluating an expansion project.

§ 203.69 If my application is approved,what royalty relief will I receive?

This section applies only to leases onwhich you have applied for andreceived a royalty-suspension volumeunder section 302 of the DWRRA. Wewill not collect royalties on a specifiedsuspension volume for your field.Suspension amounts include volumesallocated to a lease under an approvedunit agreement and exclude anyvolumes that do not bear a royalty underthe lease or the regulations of thischapter.

(a) For authorized fields, theminimum royalty-suspension volumesare:

(1) 17.5 million barrels of oilequivalent (MMBOE) for fields in 200 to400 meters of water;

(2) 52.5 MMBOE for fields in 400 to800 meters of water; and

(3) 87.5 MMBOE for fields in morethan 800 meters of water.

(b) If the application for the fieldincludes leases in different categories ofwater depth, we apply the minimumroyalty-suspension volume for thedeepest lease then associated with thefield. We base the water depth andmakeup of a field on the water-depthdelineations in the ‘‘Royalty SuspensionAreas Map’’ and the Field Names MasterList and updates in effect at the timeyour application is approved. Thesepublications are available from the GOMRegional Office.

(c) You will get a royalty-suspensionvolume above the minimum if wedetermine that you need more to makedeveloping the field economic.

(d) For expansion projects, theminimum suspension volumes do notapply. If we determine that your

expansion project may be economiconly with relief, we will determine andgrant you the royalty-suspensionvolume necessary to make the projecteconomic.

(e) A royalty-suspension volume willcontinue through the end of the monthin which cumulative production reachesthat volume. The cumulative productionis from all the leases in the authorizedfield or expansion project that areentitled to share the royalty suspensionvolume.

§ 203.70 What information must I provideafter MMS approves relief?

You must submit reports to us asindicated in the following table.Sections 203.81 and 203.90 through203.91 describe what these reports mustinclude. MMS’s GOM Regional Officewill tell you the formats.

Required report When due to MMS Due date extensions

Fabricator’s confirmation re-port.

Within 1 year after approval of relief .............................. MMS Director may grant you an extension under§ 203.79(c) for up to 1 year.

Post-production report .......... Within 60 days after the start of production that is sub-ject to the approved royalty-suspension volume.

With acceptable justification from you, MMS’s GOMRegional Director may extend due date up to 60days.

§ 203.71 How does MMS allocate a field’ssuspension volume between my lease andother leases on my field?

The allocation depends on whenproduction occurs, when the lease isassigned to the field, and whether we

award the volume suspension by anapproved application or establish it inthe lease terms.

(a) If your authorized field has anapproved royalty-suspension volumeunder §§ 203.67 and 203.69, we will

suspend payment of royalties onproduction from all applying leases inthe field until their cumulativeproduction equals the approved volume.The following conditions also apply asappropriate:

If— Then— And—

We assign an eligible lease to your field afterwe approve or establish relief.

We will not change your field’s royalty-suspen-sion volume.

The newly assigned leases may share in anyremaining royalty relief.

We assign a pre-Act lease to your field afteryou submit a complete application.


The newly assigned leases may share in anyremaining royalty relief by filing the shortform application specified in § 203.83 andauthorized in § 203.82.

We assigned a pre-Act lease to your field be-fore you submitted the royalty relief applica-tion.


The newly assigned lease will not share in therelief if it did not participate in the applica-tion.

We reassign a well on a pre-Act lease to an-other field.

The past production from that well counts to-ward the royalty suspension volume of thefield to which the well is reassigned.

The past production from that well will notcount toward any royalty suspension volumegranted to the field from which it was reas-signed.

(b) If your authorized field has anautomatic royalty-suspension volume

established under § 260.110 of thischapter, we will suspend payment of

royalties on production from all eligibleleases in the field until their cumulativeproduction equals the automaticvolume. The following conditions alsoapply as appropriate:


If— Then— And—

Another eligible lease is assigned to your field Your field’s royalty-suspension volume doesnot change.

The newly assigned lease may share in reliefonly to the extent that cumulative productionfrom your field is less than the automaticvolume.

A pre-Act lease applies (along with the otherleases in the field) and qualifies (subject tothe field’s automatic suspension volume) forroyalty relief under §§ 203.67 and 203.69.

Your field’s royalty-suspension volume may in-crease or stay the same.

All leases in the field share the one, higherroyalty-suspension volume if we approve theapplication;

orThe eligible leases in the field keep the auto-

matic volume if we reject the application.

(c) If you have an expansion projectwith more than one lease, the royalty-suspension volume for each lease equalsthat lease’s actual incrementalproduction from the project (orproduction allocated under an approvedunit agreement) until cumulativeincremental production for all leases inthe project equals the project’s approvedroyalty-suspension volume.

(d) You may receive a royalty-suspension volume only if your entirelease is west of 87 degrees, 30 minutesWest longitude. If the field lies on bothsides of this meridian, only leaseslocated entirely west of the meridianwill receive a royalty-suspensionvolume.

§ 203.72 Can my lease receive more thanone suspension volume?

Yes. You may apply for royalty reliefthat involves more than one suspensionvolume under § 203.62 in twocircumstances.

(a) Each field that includes your leasemay receive a separate royalty-suspension volume, if it meets theevaluation criteria of § 203.67.

(b) An expansion project on yourlease may receive a separate royalty-suspension volume, even if we havealready granted a royalty-suspensionvolume to the field that encompassesthe project. But the reserves associatedwith the project must not have been partof our original determination, and theproject must meet the evaluation criteriaof § 203.67.

§ 203.73 How do suspension volumesapply to natural gas?

You must measure natural gasproduction under the royalty-suspension volume as follows: 5.62thousand cubic feet of natural gas,measured in accordance with 30 CFRpart 250, subpart L, equals one barrel ofoil equivalent.

§ 203.74 When will MMS reconsider itsdetermination?

Under certain conditions, you mayrequest a redetermination if we denyyour application, if you want yourapproved royalty-suspension volume to

change, after we withdraw approval, orafter you renounce royalty relief. To beeligible for a redetermination, at leastone of the following three conditionsmust occur.

(a) You have significant new G&Gdata and you previously have not eitherrequested a redetermination orreapplied for relief after we withdrewapproval or you relinquished royaltyrelief. ‘‘Significant’’ means that the newG&G data:

(1) Results from drilling new wells orgetting new three-dimensional seismicdata and information (but notreinterpreting old data);

(2) Did not exist at the time of theearlier application; and

(3) Changes your estimates of grossresource size, quality, or projected flowrates enough to materially affect theresults of our earlier determination.

(b) Your current reference pricedecreases by more than 25 percent fromyour base reference price. For royaltyrelief on deep water expansion projectsand pre-Act deep water leases:

(1) Your current reference price is aweighted average of daily closing priceson the NYMEX for light sweet crude oiland natural gas over the most recent full12-calendar months;

(2) Your base reference price is aweighted average of daily closing priceson the NYMEX for oil and gas for themost recent full 12-calendar monthspreceding the date of your most recentlyapproved application for this royaltyrelief; and

(3) The weighting factors are theproportions of the total productionvolume (in BOE) for oil and gasassociated with the most likely scenario(identified in §§ 203.85 and 203.88)from your most recently approvedapplication for this royalty relief.

(c) Before starting to build yourdevelopment and production system,you have revised your estimateddevelopment costs, and they are morethan 120 percent of the eligibledevelopment costs associated with themost likely scenario from your mostrecently approved application for thisroyalty relief.

§ 203.75 What risk do I run if I request aredetermination?

If you request a redetermination afterwe have granted you a suspensionvolume, you could lose some or all ofthe previously granted relief. This canhappen because you must file a newcomplete application and pay therequired fee, as discussed in § 203.62.We will evaluate your application under§ 203.67 using the conditions prevailingat the time of your redeterminationrequest. In our evaluation, we may findthat you should receive a larger,equivalent, smaller, or no suspensionvolume. This means we could find thatyou do not qualify for the amount ofrelief previously granted or for any reliefat all.

§ 203.76 When might MMS withdraw orreduce the approved size of my relief?

We will withdraw approval of relieffor any of the following reasons.

(a) You change the type ofdevelopment system proposed in yourapplication (e.g., change from a fixedplatform to floating production system,tension leg platform to a mooredcatenary system such as a SPARplatform, an independent developmentand production system to one withsubsea wells tied back to a hostproduction facility, etc.).

(b) You do not start building theproposed development and productionsystem within 1 year of the date weapproved your application—unless theMMS Director grants you an extensionunder § 203.79(c).

(c) You do not tell us in your post-production development report(§ 203.70), and we find out your actualdevelopment costs are less than 80percent of the eligible developmentcosts estimated in your application’smost likely scenario. Development costsare those incurred between theapplication submission date and start ofproduction. If you tell us about thisresult in the post-productiondevelopment report, you may retain 50percent of the original royalty-suspension volume.

(d) We granted you a royalty-suspension volume after you qualified


for a redetermination under § 203.74(c),and we find out your actualdevelopment costs are less than 90percent of the eligible developmentcosts associated with your application’smost likely scenario. Development costsare those expenditures defined in§ 203.89(b) incurred between yourapplication submission date and start ofproduction.

(e) You do not send us the fabricationconfirmation report or the post-production development report, or youprovide false or intentionally inaccurateinformation that was material to ourgranting royalty relief under thissection. You must pay royalties andlate-payment interest determined under30 U.S.C. 1721 and § 218.54 of thischapter on all volumes for which youused the royalty suspension. You alsomay be subject to penalties under otherprovisions of law.

§ 203.77 May I voluntarily give up relief ifconditions change?

You may renounce approved royalty-suspension volumes as soon as youanticipate violating one of thewithdrawal conditions, or for any otherreason, before you start production.

§ 203.78 Do I keep relief if prices risesignificantly?

No, you must pay full royalties ifprices rise above the statutory base pricefor light sweet crude oil or natural gas.

(a) Suppose the arithmetic average ofthe daily closing NYMEX light sweetcrude oil prices for the previouscalendar year exceeds $28.00 per barrel,as adjusted in paragraph (f) of thissection. In this case, we retract theroyalty relief authorized in this sectionand you must:

(1) Pay royalties on all oil productionfor the previous year at the lease

stipulated royalty rate plus interest(under 30 U.S.C. 1721 and § 218.54 ofthis chapter) by April 30 of the currentcalendar year, and

(2) Pay royalties on all your oilproduction in the current year.

(b) Suppose the arithmetic average ofthe daily closing NYMEX natural gasprices for the previous calendar yearexceeds $3.50 per million Britishthermal units (Btu), as adjusted inparagraph (f) of this section. In this case,we retract the royalty relief authorizedin this section and you must:

(1) Pay royalties on all natural gasproduction for the previous year at thelease stipulated royalty rate plus interest(under 30 U.S.C. 1721 and § 218.54 ofthis chapter) by April 30 of the currentcalendar year, and

(2) Pay royalties on all your naturalgas production in the current year.

(c) Production under both paragraphs(a) and (b) of this section counts as partof the royalty-suspension volume.

(d) You are entitled to a refund orcredit, with interest, of royalties paid onany production (that counts as part ofthe royalty-suspension volume):

(1) Of oil if the arithmetic average ofthe closing oil prices for the currentcalendar year is $28.00 per barrel orless, as adjusted in paragraph (f) of thissection, and

(2) Of gas if the arithmetic average ofthe closing natural gas prices for thecurrent calendar year is $3.50 permillion Btu or less, as adjusted inparagraph (f) of this section.

(e) You must follow our regulations inpart 230 of this chapter for receivingrefunds or credits.

(f) We change the prices referred to inparagraphs (a), (b) and (d) of this sectionduring each calendar year after 1994.These prices change by the percentagethe implicit price deflator for the gross

domestic product changed during thepreceding calendar year.

§ 203.79 How do I appeal MMS’s decisionsrelated to Deep Water Royalty Relief?

(a) Once we have designated yourlease as part of a field and notified youand other affected operators of thedesignation, you can requestreconsideration by sending the MMSDirector a letter within 15 days that alsostates your reasons. The MMS Director’sresponse is the final agency action.

(b) Our decisions on your applicationfor relief from paying royalty under§ 203.67 and the royalty-suspensionvolumes under § 203.69 are final agencyactions.

(c) If you cannot start construction bythe deadline in § 203.76(b) for reasonsbeyond your control (e.g., strike at thefabrication yard), you may request anextension up to 1 year by writing theMMS Director and stating your reasons.The MMS Director’s response is thefinal agency action.

(d) We will notify you of all finalagency actions by certified mail, returnreceipt requested. Final agency actionsare not subject to appeal to the InteriorBoard of Land Appeals under 30 CFRpart 290 and 43 CFR part 4. They arejudicially reviewable under section10(a) of the Administrative ProcedureAct (5 U.S.C. 702) only if you file anaction within 30 days of the date youreceive our decision.

Required Reports

§ 203.81 What supplemental reports doroyalty-relief applications require?

(a) You must send us thesupplemental reports listed below thatapply to your field. §§ 203.83 through203.91 describe these reports in detail.

Required reports End-of-lifelease

Deep waterexpansion

project


Administrative information report ................................................................................................. x x xNet revenue & relief justification report ........................................................................................ x ........................ ........................Economic viability & relief justification report (RSVP model inputs justified by other required

reports) ...................................................................................................................................... ........................ x xG&G report ................................................................................................................................... ........................ x xEngineering report ........................................................................................................................ ........................ x xProduction report .......................................................................................................................... ........................ x xDeep water cost report ................................................................................................................. ........................ x xFabricator’s confirmation report ................................................................................................... ........................ x xPost-production development report ............................................................................................ ........................ x x

(b) You must certify that allinformation in your application,fabricator’s confirmation and post-production development reports isaccurate, complete, and conforms to themost recent content and presentation

guidelines available from the MMSGOM Regional Office.

(c) You must submit with yourapplication and post-productiondevelopment report an additional reportprepared by a CPA that:

(1) Assesses the accuracy of thehistorical financial information in yourreport; and

(2) Certifies that the content andpresentation of the financial data and


information conforms to our most recentguidelines on royalty relief.

(d) You must identify the people inthe CPA firm who prepared the reportsreferred to in paragraph (c) of thissection and make them available to usto respond to questions about thehistorical financial information. We mayalso further review your records tosupport this information.

§ 203.82 What is MMS’s authority to collectthis information?

The Office of Management and Budget(OMB) approved the informationcollection requirements in part 203under 44 U.S.C. 3501 et seq. andassigned OMB control number 1010–0071.

(a) We use the information todetermine whether royalty relief willresult in production that wouldn’totherwise occur. We rely largely on yourinformation to make thesedeterminations.

(1) Your application for royalty reliefmust contain enough information onfinances, economics, reservoirs, G&Gcharacteristics, production, andengineering estimates for us todetermine whether:

(i) We should grant relief under thelaw, and

(ii) The requested relief willultimately recover more resources andreturn a reasonable profit on projectinvestments.

(2) Your fabricator confirmation andpost-production development reportsmust contain enough information for usto verify that your applicationreasonably represented your plans.

(b) Applicants (respondents) areFederal OCS oil and gas lessees.Applications are required to obtain orretain a benefit. Therefore, if you applyfor royalty relief, you must provide thisinformation. We will protectinformation considered proprietaryunder applicable law and underregulations at § 203.63(b) and part 250of this chapter.

(c) The Paperwork Reduction Act of1995 requires us to inform you that wemay not conduct or sponsor, and youare not required to respond to, acollection of information unless itdisplays a currently valid OMB controlnumber.

(d) You may send commentsregarding any aspect of the collection ofinformation under this part, includingsuggestions for reducing the burden, tothe Information Collection ClearanceOfficer, Minerals Management Service,Mail Stop 4230, 1849 C Street, N.W.,Washington, DC 20240; and to theOffice of Information and RegulatoryAffairs, Office of Management and

Budget, Attention: Desk Officer for theDepartment of the Interior (1010–0071),Washington, DC 20503.

§ 203.83 What is in an administrativeinformation report?

This report identifies the field or leasefor which royalty relief is requested andmust contain the following items:

(a) The field or lease name;(b) The serial number of leases we

have assigned to the field, names of thelease title holders of record, the leaseoperators, and whether any lease is partof a unit;

(c) Lessee’s designation, the APInumber and location of each well thathas been drilled on the field or lease orproject (not required for non-oil and gasleases);

(d) The location of any new wellsproposed under the terms of theapplication (not required for non-oil andgas leases);

(e) A description of field or leasehistory;

(f) Full information as to whether youwill pay royalties or a share ofproduction to anyone other than theUnited States, the amount you will pay,and how much you will reduce thispayment if we grant relief;

(g) The type of royalty relief you arerequesting;

(h) Confirmation that we approved aDOCD or supplemental DOCD (DeepWater expansion project applicationsonly); and

(i) A narrative description of thedevelopment activities associated withthe proposed capital investments and anexplanation of proposed timing of theactivities and the effect on production(Deep Water applications only).

§ 203.84 What is in a net revenue and reliefjustification report?

This report presents cash flow data for12 qualifying months, using the formatspecified in the ‘‘Guidelines for theApplication, Review, Approval, andAdministration of Royalty Relief forEnd-of-Life Leases’’, U.S. Department ofthe Interior, MMS. Qualifying monthsfor an oil and gas lease are the mostrecent 12 months out of the last 15months that you produced at least 100BOE per day on average. Qualifyingmonths for other than oil and gas leasesare the most recent 12 of the last 15months having some production.

(a) The cash flow table you submitmust include historical data for:

(1) Lease production subject toroyalty;

(2) Total revenues;(3) Royalty payments out of

production;(4) Total allowable costs; and

(5) Transportation and processingcosts.

(b) Do not include in your cash flowtable the non-allowable costs listed at 30CFR 220.013 (a), (b), and (d) through (k)or:

(1) OCS rental payments on thelease(s) in the application;

(2) Damages and losses;(3) Taxes;(4) Any costs associated with

exploratory activities;(5) Civil or criminal fines or penalties;(6) Fees for your royalty relief

application; and(7) Costs associated with existing

obligations (e.g., royalty overrides orother forms of payment for acquiring thelease).

(c) We may, in reviewing andevaluating your application, disallowcosts when you have not shown they arenecessary to operate the lease, or if itappears you spent the money only toqualify for royalty relief.

§ 203.85 What is in an economic viabilityand relief justification report?

This report should show that yourproject appears economic withoutroyalties and sunk costs using the RSVPmodel we provide. The format of thereport and the assumptions andparameters we specify are found in the‘‘Guidelines for the Application,Review, Approval and Administrationof the Deep Water Royalty ReliefProgram,’’ U.S. Department of theInterior, MMS. Clearly justify eachparameter you set in every scenario youspecify in the RSVP. You may providesupplemental information, includingyour own model and results. Theeconomic viability and reliefjustification report must contain thefollowing items for an oil and gas lease.

(a) Economic assumptions we providewhich include:

(1) Starting oil and gas prices;(2) Real price growth;(3) Real cost growth or decline rate, if

any;(4) Base year;(5) Range of discount rates; and(6) Tax rate (for use in determining

after-tax sunk costs).(b) Analysis of projected cash flow

(from the date of the application usingannual totals and constant dollar values)which shows:

(1) Oil and gas production;(2) Total revenues;(3) Capital expenditures;(4) Operating costs;(5) Transportation costs; and(6) Before-tax net cash flow without

royalties, overrides, sunk costs, andineligible costs.

(c) Discounted values which include:


(1) Discount rate used (selected fromwithin the range we specify).

(2) Before-tax net present valuewithout royalties, overrides, sunk costs,and ineligible costs.

(d) Demonstrations that:(1) All costs, gross production, and

scheduling are consistent with the datain the G&G, engineering, production,and cost reports (§§ 203.86 through203.89) and

(2) The development and productionscenarios provided in the variousreports are consistent with each otherand with the proposed developmentsystem. You can use up to threescenarios (conservative, most likely, andoptimistic), but you must link each to aspecific range on the distribution ofresources from the RSVP ResourceModule.

§ 203.86 What is in a G&G report?This report supports the reserve and

resource estimates used in the economicevaluation and must contain each of thefollowing elements.

(a) Seismic data which includes:(1) Non-interpreted 2D/3D survey

lines reflecting any available state-of-the-art processing technique in a formatreadable by MMS and specified by thedeep water royalty relief guidelines;

(2) Interpreted 2D/3D seismic surveylines reflecting any available state-of-the-art processing technique identifyingall known and prospective payhorizons, wells, and fault cuts;

(3) Digital velocity surveys in theformat of the GOM region’s letter tolessees of 10/1/90;

(4) Plat map of ‘‘shot points;’’ and(5) ‘‘Time slices’’ of potential

horizons.(b) Well data which includes:(1) Hard copies of all well logs in

which—(i) The 1-inch electric log shows pay

zones and pay counts and lithologic andpaleo correlation markers at least every500-feet,

(ii) The 1-inch type log shows missingsections from other logs where faultingoccurs,

(iii) The 5-inch electric log shows payzones and pay counts and labeled pointsused in establishing resistivity of theformation, 100 percent water saturated(Ro) and the resistivity of theundisturbed formation (Rt), and

(iv) The 5-inch porosity logs show payzones and pay counts and labeled pointsused in establishing reservoir porosityor labeled points showing values usedin calculating reservoir porosity such asbulk density or transit time;

(2) Digital copies of all well logsspudded before December 1, 1995;

(3) Core data, if available;

(4) Well correlation sections;(5) Pressure data;(6) Production test results; and(7) Pressure-volume-temperature

analysis, if available.(c) Map interpretations which

includes for each reservoir in the field:(1) Structure maps consisting of top

and base of sand maps showing welland seismic shot point locations;

(2) Isopach maps for net sand, net oil,net gas, all with well locations;

(3) Maps indicating well surface andbottom hole locations, location ofdevelopment facilities, and shot points;and

(4) Identification of reservoirs notcontemplated for development.

(d) Reservoir-specific data whichincludes:

(1) Probability of reservoir occurrencewith hydrocarbons;

(2) Probability the hydrocarbon in thereservoir is all oil and the probability itis all gas;

(3) Distributions or point estimates(accompanied by explanations of whydistributions less appropriately reflectthe uncertainty) for the parameters usedto estimate reservoir size, i.e., acres andnet thickness;

(4) Most likely values for porosity, saltwater saturation, volume factor for oilformation, and volume factor for gasformation;

(5) Distributions or point estimates(accompanied by explanations of whydistributions less appropriately reflectthe uncertainty) for recovery efficiency(in percent) and oil or gas recovery (instock-tank-barrels per acre-foot or inthousands of cubic feet per acre foot);

(6) A gas/oil ratio distribution or pointestimate (accompanied by explanationsof why distributions less appropriatelyreflect the uncertainty) for eachreservoir; and

(7) A yield distribution or pointestimate (accompanied by explanationsof why distributions less appropriatelyreflect the uncertainty) for each gasreservoir.

(e) Aggregated reserve and resourcedata which includes:

(1) The aggregated distributions forreserves and resources (in BOE) and oilfraction for your field computed by theresource module of our RSVP model;

(2) A description of anticipatedhydrocarbon quality (i.e., specificgravity); and

(3) The ranges within the aggregateddistribution for reserves and resourcesthat define the development andproduction scenarios presented in theengineering and production reports.Typically there will be three rangesspecified by two positive reserve andresource points on the aggregated

distribution. The range at the low endof the distribution will be associatedwith the conservative development andproduction scenario; the middle rangewill be related to the most likelydevelopment and production scenario;and, the high end range will beconsistent with the optimisticdevelopment and production scenario.

§ 203.87 What is in an engineering report?

This report defines the developmentplan and capital requirements for theeconomic evaluation and must containthe following elements.

(a) A description of the developmentconcept (e.g., tension leg platform, fixedplatform, floater type, subsea tieback,etc.) which includes:

(1) Its size and(2) The construction schedule.(b) An identification of planned wells

which includes:(1) The number;(2) The type (platform, subsea,

vertical, deviated, horizontal);(3) The well depth;(4) The drilling schedule;(5) The kind of completion (single,

dual, horizontal, etc.); and(6) The completion schedule.(c) A description of the production

system equipment which includes:(1) The production capacity for oil

and gas and a description of limitingcomponent(s);

(2) Any unusual problems (lowgravity, paraffin, etc.);

(3) All subsea structures;(4) All flowlines; and(5) Schedule for installing the

production system.(d) A discussion of any plans for

multi-phase development whichincludes:

(1) The conceptual basis fordeveloping in phases and goals ormilestones required for starting laterphases; and

(2) An explanation for excluding thereservoirs you are not planning todevelop.

(e) A set of development scenariosconsisting of activity timing and scaleassociated with each of up to threeproduction profiles (conservative, mostlikely, optimistic) provided in theproduction report for your field(§ 203.88). Each development scenarioand production profile must denote thelikely events should the field size turnout to be within a range represented byone of the three segments of the fieldsize distribution. If you send in fewerthan three scenarios, you must explainwhy fewer scenarios are more efficientacross the whole field size distribution.


§ 203.88 What is in a production report?This report supports your

development and production timing andproduct quality expectations and mustcontain the following elements.

(a) Production profiles by wellcompletion and field that specify theactual and projected production by yearfor each of the following products: oil,condensate, gas, and associated gas. Theproduction from each profile must beconsistent with a specific level ofreserves and resources on the aggregateddistribution of field size.

(b) Production drive mechanisms foreach reservoir.

§ 203.89 What is in a deep water costreport?

This report lists all actual andprojected costs for your field, mustexplain and document the source ofeach cost estimate, and must identifythe following elements.

(a) Sunk cost, which are all youreligible post-discovery exploration,development, and production expenses(no third party costs), and also includethe eligible costs of the discovery wellon the field. Report them in nominaldollars and only if you havedocumentation. We count sunk costs inan evaluation (specified in § 203.68) asafter-tax expenses, using nominal dollaramounts.

(b) Appraisal, delineation anddevelopment costs. Base them on actualspending, current authorization forexpenditure, engineering estimates, oranalogous projects. These costs cover:

(1) Platform well drilling and averagedepth;

(2) Platform well completion;(3) Subsea well drilling and average

depth;(4) Subsea well completion;(5) Production system (platform); and(6) Flowline fabrication and

installation.(c) Production costs based on

historical costs, engineering estimates,or analogous projects. These costs cover:

(1) Operation;(2) Equipment; and(3) Existing royalty overrides (we will

not use the royalty overrides inevaluations).

(d) Transportation costs, based onhistorical costs, engineering estimates,or analogous projects. These costs cover:

(1) Oil or gas tariffs from pipeline ortankerage;

(2) Trunkline and tieback lines; and(3) Gas plant processing for natural

gas liquids.(e) Abandonment costs, based on

historical costs, engineering estimates,or analogous projects. You shouldprovide the costs to plug and abandon

only wells and to remove onlyproduction systems for which you havenot incurred costs as of the time ofapplication submission. You shouldalso include a point estimate ordistribution of prospective salvage valuefor all potentially reusable facilities andmaterials, along with the source and anexplanation of the figures provided.

(f) A set of cost estimates consistentwith each one of up to three field-development scenarios and productionprofiles (conservative, most likely,optimistic). You should express costs inconstant real dollar terms for the baseyear. You may also express theuncertainty of each cost estimate with aminimum and maximum percentage ofthe base value.

(g) A spending schedule. You shouldprovide costs for each year (in realdollars) for each category in paragraphs(a) through (f) of this section.

(h) A summary of other costs whichare ineligible for evaluating your needfor relief. These costs cover:

(1) Expenses before first discovery onthe field;

(2) Cash bonuses;(3) Fees for royalty relief applications;(4) Lease rentals, royalties, and

payments of net profit share and netrevenue share;

(5) Legal expenses;(6) Damages and losses;(7) Taxes;(8) Interest or finance charges,

including those embedded in equipmentleases;

(9) Fines or penalties; and(10) Money spent on previously

existing obligations (e.g., royaltyoverrides or other forms of payment foracquiring a financial position in a lease,expenditures for plugging wells andremoving and abandoning facilities thatexisted on the application submissiondate).

§ 203.90 What is in a fabricator’sconfirmation report?

This report shows you havecommitted in a timely way to theapproved system for production. Thisreport must include the following (or itsequivalent for unconventionallyacquired systems):

(a) A copy of the contract(s) underwhich the fabrication yard is buildingthe approved system for you;

(b) A letter from the contractorbuilding the system to the MMS’s GOMRegional Supervisor—Production andDevelopment, certifying whenconstruction started on your system;and

(c) Evidence of an appropriate downpayment or equal action that you’vestarted acquiring the approved system.

§ 203.91 What is in a post-productiondevelopment report?

For each cost category in the deepwater cost report, you must compareactual costs up to the date whenproduction starts to your planned pre-production costs. If your applicationincluded more than one developmentscenario, you need to compare actualcosts with those in your scenario ofmost likely development. Keepsupporting records for these costs andmake them available to us on request.

[FR Doc. 98–842 Filed 1–15–98; 8:45 am]BILLING CODE 4310–MR–P


Minerals Management Service

30 CFR Part 260

RIN 1010–AC14

Royalty Relief for New Leases in DeepWater

AGENCY: Minerals Management Service(MMS), Interior.ACTION: Final rule.

SUMMARY: The Secretary of the Interioris authorized to offer Outer ContinentalShelf (OCS) tracts in parts of the Gulf ofMexico for lease with suspension ofroyalties for a volume, value, or periodof production. This applies to tracts inwater depths of 200 meters or more.This final rule specifies the royalty-suspension terms for lease sales usingthis bidding system.DATES: This final rule is effectiveFebruary 17, 1998.FOR FURTHER INFORMATION CONTACT:Walter Cruickshank, Chief, WashingtonDivision, Office of Policy andManagement Improvement, at (202)208–3822.


I. Background

LegislativeOn November 28, 1995, President

Clinton signed Public Law 104–58,which included the Outer ContinentalShelf Deep Water Royalty Relief Act(‘‘Act’’). The Act contains four majorprovisions concerning new and existingleases. New leases are tracts leasedduring a sale held after the Act’senactment on November 28, 1995.Existing leases are all other leases.

First, section 302 of the Act clarifiesthe Secretary’s authority in 43 U.S.C.1337(a)(3) to reduce royalty rates onexisting leases to promote development,increase production, and encourageproduction of marginal resources on


producing or non-producing leases. Thisprovision applies only to leases in theGulf of Mexico west of 87 degrees, 30minutes West longitude.

Second, section 302 also provides that‘‘new production’’ from existing leasesin deep water (water at least 200 metersdeep) qualifies for royalty suspensions ifthe Secretary determines that the newproduction would not be economicwithout royalty relief. The Act defines‘‘new production’’ as production (1)From a lease from which no royaltiesare due on production, other than testproduction, before the date of theenactment of the Outer ContinentalShelf Deep Water Royalty Relief Act; or(2) resulting from lease developmentactivities under a DevelopmentOperations Coordination Document(DOCD), or supplement thereto thatwould expand production significantlybeyond the level anticipated in theDOCD approved by the Secretary afterthe date of the Act. The Secretary mustdetermine the appropriate royalty-suspension volume on a case-by-casebasis, subject to specified minimums forleases not in production before the dateof enactment. This provision alsoapplies only to leases in the Gulf ofMexico west of 87 degrees, 30 minutesWest longitude.

Third, section 303 establishes a newbidding system that allows the Secretaryto offer tracts with royalty suspensionsfor a period, volume, or value theSecretary determines.

Fourth, section 304 provides that alltracts offered within 5 years of the dateof enactment in deep water (water atleast 200 meters deep) in the Gulf ofMexico west of 87 degrees, 30 minutesWest longitude, must be offered underthe new bidding system. The followingminimum volumes of production arenot subject to a royalty obligation:

• 17.5 million barrels of oilequivalent (MMBOE) for leases in 200 to400 meters of water;

• 52.5 MMBOE for leases in 400 to800 meters of water; and

• 87.5 MMBOE for leases in morethan 800 meters.

RegulatoryOn February 2, 1996, we published a

final rule modifying the regulationsgoverning the bidding systems we use tooffer OCS tracts for lease (61 FR 3800).New § 260.110(a)(7) implements thenew bidding system under section 303of the Act.

We published an advance notice ofproposed rulemaking (ANPR) in theFederal Register on February 23, 1996(61 FR 6958), and informed the publicof our intent to develop comprehensiveregulations implementing the Act. The

ANPR sought comments andrecommendations to assist us in thatprocess. In addition, we conducted apublic meeting in New Orleans onMarch 12–13, 1996, about the mattersthe ANPR addressed.

On March 25, 1996, we published aninterim final rule in the FederalRegister (61 FR 12022) specifying theroyalty-suspension terms under whichthe Secretary would make tractsavailable under the bidding systemrequirements of sections 303 and 304 ofthe Act. We issued an interim final rule,in part, because we needed royalty reliefrules in place before the lease sale heldon April 24, 1996. However, in theinterim final rule we asked forcomments on any of the provisions andstated that we would consider thosecomments and issue a final rule. Thisfinal rule now modifies some of theprovisions in the March 25, 1996,interim final rule.

On May 31, 1996, we publishedanother interim final rule in the FederalRegister (61 FR 27263) implementingsection 302 of the Act. The interim finalrule established the terms andconditions under which the MineralsManagement Service (MMS) wouldsuspend royalty payments on certaindeep water leases issued as a result ofa lease sale held before November 28,1995. (The rule also containedprovisions dealing with royalty relief onproducing leases under the authoritygranted the Secretary by the OCS LandsAct.) We again asked for comments thatwe would consider before issuing a finalrule.

Simultaneous with the publication ofthis rule, we are issuing another finalrule (RIN 1010–AC13) to replace theinterim final rule implementing section302 of the Act. The final rule will revise30 CFR 203 to establish conditions forsuspension of royalty payments oncertain deep water leases issued as aresult of lease sales held beforeNovember 28, 1995.

II. Responses to CommentsOne respondent—Exxon Exploration

Company (Exxon)—submittedcomments on the Interim Final Rule forDeep Water Royalty Relief for NewLeases, issued March 25, 1996.

Exxon disagreed with our definitionof the term ‘‘Field’’ (§ 260.102). Exxonsaid that our definition could be appliedin such a way as to place unrelated andwidely separated reservoirs within thesame field. Exxon offered an alternativedefinition that it said provides for thecreation of fields based on geology byallowing the inclusion of separatereservoirs in the same field when thereis a meaningful geologic relationship

between those reservoirs and avoidsinclusion of reservoirs when such arelationship does not exist.

Exxon offered this alternativedefinition:

‘‘Field means an area consisting of a singlehydrocarbon reservoir or multiplehydrocarbon reservoirs all grouped on orrelated to same local geologic feature orstratigraphic trapping condition. There maybe two or more reservoirs in a field that areseparated vertically by interveningimpervious strata. Separate reservoirs wouldbe considered to constitute separate fields ifsignificant lateral separation exists and/orthey are controlled by separate trappingmechanisms. Reservoirs vertically separatedby a significant interval of nonproductivestrata may be considered as separate fieldswhen their reservoir quality, fluid content,drive mechanisms, and trapping mechanismsare sufficiently different to support such adetermination.’’

Except for a minor editorial change,we have decided to leave the definitionof ‘‘Field’’ unchanged from the interimfinal rule for the following reasons:

• The definition in the interim finalrule is similar to, or consistent with,standard definitions used in industryand government, including theAmerican Petroleum Institute, theNational Petroleum Council, and theDepartment of Energy’s EnergyInformation Administration.

• We do not segregate reservoirsvertically since the reservoirs aredeveloped from the same platforms anduse the same infrastructure. Affectedlessees/operators typically makedevelopment decisions based on aprimary objective(s) knowing thatsecondary targets exist which they willpursue subsequently.

• Reservoir quality, fluid content, anddrive mechanisms are not appropriatedeterminants for field designations.These factors are reservoir performance/recovery issues. Indeed, suchinformation is rarely available to MMSat the time field determinations aremade. We have not considered thesefactors in our past field designationsand their inclusion now wouldcomplicate the process significantly andlead to too much subjectivity.

• Elements of the alternativedefinition, e.g., ‘‘a significant interval ofnonproductive strata’’ and ‘‘significantlateral separation’’ would be difficult todefine and even more difficult to applyconsistently.

We recognize industry’s concernsabout field designations. This ruleestablishes, as discussed below, aprocess whereby lessees may appealfield designations to the Director, MMS.

Other steps include:• The MMS Field Naming Handbook,

which explains our methodology for


designating fields, is available on theInternet (www.mms.gov). The Gulf ofMexico Region will entertainsuggestions for improvements in themethodology.

• We will elevate the level at whichwe make field definition decisions inthe Gulf of Mexico Region. The Chief,Reserves Section, Office of ResourceEvaluation, will make thesedeterminations after a lease has a wellinto the field qualified as producible.

• As part of the field designationprocess, affected lessees/operators willhave the chance to review and discussthe field designation with Gulf ofMexico Region personnel before MMSmakes a final decision.

III. Summary of Modifications to theInterim Final Rule

As discussed below, we havemodified the interim final rule to:

• Allow for appeals of fielddesignations;

• Clarify when the cumulativeroyalty-suspension volume ends;

• Describe how MMS will establishand allocate royalty-suspension volumein fields that have a combination ofeligible leases and leases that aregranted a royalty-suspension volumeunder section 302 of the Act; and

• Eliminate the reference to apressure base standard in the provisionfor the conversion of natural gas to oilequivalency (§ 260.110(d)(14)). The rulenow indicates you must measure thatnatural gas in accordance with theprocedures set forth in 30 CFR 250,subpart L.

1. We have added a new provision(§ 260.110(d)(2)) establishing that you orany other affected lessees may appeal tothe Director the decision designatingyour lease as part of a field. TheDirector’s decision is a final agencyaction subject to judicial review.

2. The preamble to the interim finalrule indicated that a royalty-suspensionvolume would continue until the end ofthe month in which cumulativeproduction from eligible leases in thefield reached the royalty-suspensionvolume for the field. The interim finalrule itself did not include thisprovision. This final rule now includesa provision (§ 260.110(d)(10)) that aroyalty-suspension volume willcontinue through the end of the monthin which cumulative production fromleases in the field entitled to share theroyalty-suspension volume reaches thatvolume. The purpose of this provisionis to avoid the complications that wouldoccur for royalty payors if the royaltyrate changed in the middle of themonth.

3. We have modified § 260.110(d)(9)and added a new § 260.110(d)(10) todescribe how MMS will establish andallocate royalty-suspension volumes infields having a combination of pre-Actand eligible leases. (Pre-Act leases aredefined as OCS leases issued as a resultof a sale held before November 28, 1995;in a water depth of at least 200 meters;and in the Gulf of Mexico west of 87degrees, 30 minutes West longitude. See30 CFR 203.60 through 203.80). Theprovisions are necessary to account forand ensure consistency with the deepwater royalty relief rules for pre-Actleases (§ 203.60). We published theinterim final rule for pre-Act leases onMay 31, 1996 (61 FR 27263), afterpublication of the interim final rule fornew leases in deep water on March 25,1996.

We have added wording in§ 260.110(d)(9) for cases where aneligible lease is added to a field thatincludes pre-Act leases granted aroyalty-suspension volume undersection 302 of the Act. This ruleprovides that the addition of the eligiblelease will not change the field’sestablished royalty-suspension volume.The added lease(s) may share in thesuspension volume even if the volumeis more than the eligible lease wouldqualify for based on its water depth.

The new § 260.110(d)(10) describes acase where pre-Act leases in a field thatincludes eligible leases apply for andreceive a royalty-suspension volumelarger than the suspension volumeestablished for the field by the eligibleleases. This rule provides that theeligible leases may share in the largersuspension volume to the extent of theiractual production until cumulativeproduction by all lessees equals theroyalty-suspension volume.

4. This final rule states that lesseesmust measure natural gas in accordancewith 30 CFR 250, Subpart L. We haveeliminated the specific measurementprocedures from the interim final rulebecause a forthcoming final rule willchange those procedures.

IV. Administrative Matters

Executive Order (E.O.) 12866

This rule is a significant rule underE.O. 12866 due to novel policy issuesarising out of legal mandates. You mayobtain a copy of the determination fromMMS. The Office of Management andBudget (OMB) has reviewed this rule.

Regulatory Flexibility Act

The Department of the Interior (DOI)has determined that the primary impactof this rule, i.e., royalty relief to spurdeep water oil and gas development,

may have a significant effect on smallentities although we can’t estimate theirnumber at this time. The number ofsmall entities affected will depend onhow many of them acquire leases thatmeet the statutory and regulatorycriteria for royalty relief at lease salesbetween November 28, 1995, andNovember 28, 2000.

Exploration and developmentactivities in the deep water areas of theGulf of Mexico have traditionally beenconducted by the major oil companiesbecause of the expertise and financialresources required. ‘‘Small entities’’(classified by the Small BusinessAdministration as oil and gas producerswith fewer than 500 employees) areincreasingly active on the OCS,including in deep water, and we expectthat trend to continue. The only firm towhom we have granted royalty relief sofar under section 302 of the Act is asmall entity.

In any case, this rule will havepositive impacts on OCS oil and gascompanies, large or small. Royalty reliefin the form of a royalty-suspensionvolume is automatically established forleases that meet the statutory andregulatory criteria. No applications orspecial reports are necessary.

The beneficial effect of this relief oncompanies’ financial operations will besubstantial. Once we determine that alease is eligible for a royalty-suspensionvolume, the value of that relief mayrange from tens of millions of dollars toover $100 million. The suspensions willallow companies to recover more oftheir investment costs before payingroyalties, which may allow greateropportunity for small companies tooperate in deep water.

This rule also will have a verypositive impact on small entities.Constructing and equipping theplatforms and other infrastructureassociated with deep waterdevelopment are huge projects thatinvolve not only large companies butnumerous small businesses nationwideas well. Once the platforms areoperational, other small businesses willprovide supplies and services.

Paperwork Reduction ActThis rule contains no reporting and

recordkeeping requirements subject tothe Paperwork Reduction Act of 1995.

Takings Implication AssessmentDOI certifies that this rule does not

represent a governmental action capableof interference with constitutionallyprotected property rights. A TakingsImplication Assessment preparedpursuant to E.O. 12630, GovernmentalActions and Interference with


Constitutionally Protected PropertyRights, is not required.

Unfunded Mandates Reform Act of 1995DOI has determined and certifies

according to the Unfunded MandatesReform Act, 2 U.S.C. 1502 et seq., thatthis final rule will not impose a cost of$100 million or more in any given yearon State, local, and tribal governments,or the private sector.

E.O. 12988DOI has certified to OMB that this

regulation meets the applicablestandards provided in section 3(b)(2) ofE.O. 12988.

National Environmental Policy ActWe examined this rulemaking and

have determined that this rule does notconstitute a major Federal actionsignificantly affecting the quality of thehuman environment pursuant to Section102(2)(C) of the National EnvironmentalPolicy Act of 1969 (42 U.S.C.4332(2)(C)).

List of Subjects in 30 CFR Part 260Continental shelf, Government

contracts, Minerals royalties, Oil andgas exploration, Public lands—mineralresources.

Dated: September 22, 1997.Sylvia V. Baca,Assistant Secretary, Land and MineralsManagement.

For the reasons stated in thepreamble, the Minerals ManagementService (MMS) amends 30 CFR part 260,as follows:

PART 260—OUTER CONTINENTALSHELF OIL AND GAS LEASING


Authority: 43 U.S.C. 1331 and 1337.

2. In § 260.102, the definitions for‘‘Eligible lease’’ and ‘‘Field’’ are revisedto read as follows:

§ 260.102 Definitions.

* * * * *Eligible lease means a lease that

results from a sale held after November28, 1995; is located in the Gulf ofMexico in water depths 200 meters ordeeper; lies wholly west of 87 degrees,30 minutes West longitude; and isoffered subject to a royalty-suspensionvolume authorized by statute.

Field means an area consisting of asingle reservoir or multiple reservoirsall grouped on, or related to, the samegeneral geological structural featureand/or stratigraphic trapping condition.Two or more reservoirs may be in afield, separated vertically by intervening

impervious strata, or laterally by localgeologic barriers, or by both.* * * * *

3. In § 260.110, paragraph (d) isrevised to read as follows:

§ 260.110 Bidding systems.* * * * *

(d) This paragraph explains how theroyalty-suspension volumes in section304 of the Outer Continental Shelf DeepWater Royalty Relief Act, Public Law104–58, apply to eligible leases. Forpurposes of this paragraph, any volumesof production that are not royaltybearing under the lease or theregulations in this chapter do not countagainst royalty-suspension volumes.Also, for the purposes of this paragraph,production includes volumes allocatedto a lease under an approved unitagreement.

(1) Your eligible lease may receive aroyalty-suspension volume only if yourlease is in a field where no current leaseproduced oil or gas (other than testproduction) before November 28, 1995.Paragraph (d) of this section appliesonly to eligible leases in fields that meetthis condition.

(2) We will assign your lease to anexisting field or designate a new fieldand will notify you and other affectedlessees of that assignment. Within 15days of that notification, you or any ofthe other affected lessees may file awritten request with the Director, MMS,for reconsideration accompanied by astatement of reasons. The Director willrespond in writing either affirming orreversing the assignment decision. TheDirector’s decision is final for theDepartment and is not subject to appealto the Interior Board of Land Appealsunder 30 CFR part 290 and 43 CFR part4.

(3) The Final Notice of Sale willspecify the water depth for each eligiblelease. Our determination of water depthfor each lease is final once we issue thelease. The Notice also will specify theroyalty-suspension volume applicable toeach water depth. The minimumroyalty-suspension volumes for fieldsare:

(i) 17.5 million barrels of oilequivalent (MMBOE) in 200 to 400meters of water;

(ii) 52.5 MMBOE in 400 to 800 metersof water; and

(iii) 87.5 MMBOE in more than 800meters of water.

(4) When production (other than testproduction) first occurs from any of theeligible leases in a field, we willdetermine what royalty-suspensionvolume applies to the eligible lease(s) inthat field. The determination is based onthe royalty-suspension volumes

specified in paragraph (d)(3) of thissection.

(5) If a new field consists of eligibleleases in different water depthcategories, the royalty-suspensionvolume associated with the deepesteligible lease applies.

(6) If your eligible lease is the onlyeligible lease in a field, you do not oweroyalty on the production from yourlease up to the applicable royalty-suspension volume.

(7) If a field consists of more than oneeligible lease, payment of royalties onthe eligible leases’ initial production issuspended until their cumulativeproduction equals the field’s establishedroyalty-suspension volume. The royalty-suspension volume for each eligiblelease is equal to each lease’s actualproduction (or production allocatedunder an approved unit agreement)until the field’s established royalty-suspension volume is reached.

(8) If an eligible lease is added to afield that has an established royalty-suspension volume as the result of anapproved application for royalty reliefsubmitted under 30 CFR part 203 or asthe result of one or more eligible leaseshaving been assigned previously to thefield, the field’s royalty-suspensionvolume will not change even if theadded lease is in deeper water. If aroyalty-suspension volume has beengranted under 30 CFR part 203 that islarger than the minimum specified forthat water depth, the added eligiblelease may share in the larger suspensionvolume. The lease may receive aroyalty-suspension volume only to theextent of its production before thecumulative production from all leases inthe field entitled to share in thesuspension volume equals the field’spreviously established royalty-suspension volume.

(9) If a pre-Act lease(s) receives aroyalty-suspension volume under 30CFR part 203 for a field that already hasa royalty-suspension volume due toeligible leases, then the eligible and pre-Act leases will share a single royalty-suspension volume. (Pre-Act leases areOCS leases issued as a result of a saleheld before November 28, 1995; in awater depth of at least 200 meters; andin the Gulf of Mexico west of 87degrees, 30 minutes West longitude. See30 CFR part 203). The field’s royalty-suspension volume will be the larger ofthe volume for the eligible leases or thevolume MMS grants in response to thepre-Act leases’ application. Thesuspension volume for each lease willbe its actual production from the fielduntil cumulative production from allleases in the field equals the suspensionvolume.


(10) A royalty-suspension volume willcontinue through the end of the monthin which cumulative production fromleases in a field entitled to share theroyalty-suspension volume reaches thatvolume.

(11) If we reassign a well on aneligible lease to another field, the pastproduction from that well will counttoward the royalty-suspension volume,if any, specified for the field to whichit is reassigned. The past productionwill not count toward the royaltysuspension volume, if any, for the fieldfrom which it was reassigned.

(12) You may receive a royalty-suspension volume only if your entirelease is west of 87 degrees, 30 minutesWest longitude. A field that lies on bothsides of this meridian will receive aroyalty-suspension volume only forthose eligible leases lying entirely westof the meridian.

(13) Your lease may obtain more thanone royalty-suspension volume. If a newfield is discovered on your eligible leasethat already benefits from the royalty-suspension volume for another field,production from that new field receivesa separate royalty suspension.

(14) You must measure natural gasproduction subject to the royalty-suspension volume as follows: 5.62thousand cubic feet of natural gas,measured in accordance with 30 CFRpart 250, subpart L, equals one barrel ofoil equivalent.

[FR Doc. 98–843 Filed 1–15–98; 8:45 am]BILLING CODE 4310–MR–P

ENVIRONMENTAL PROTECTIONAGENCY

40 CFR Part 63

[FRL–5950–4]

National Emission Standards forGasoline Distribution Facilities; BulkGasoline Terminals and PipelineBreakout Stations

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice of limited exclusion forgasoline distribution facilities.

SUMMARY: The EPA publishes todaynotification of a limited exclusion fromapplicability for gasoline distributionfacilities that would be, but for thisaction, subject to the air toxic provisionsof 40 CFR part 63, subpart R, theNational Emission Standards forGasoline Distribution Facilities (BulkGasoline Terminals and PipelineBreakout Stations).DATES: This policy took effect onDecember 12, 1997, the day that the

attached letter detailing this policy wassigned. Petitions for review of thisdetermination must be filed on or beforeMarch 17, 1998 in accordance with theprovisions of section 307(b)(1) of theClean Air Act (CAA).ADDRESSES: The related material insupport of this policy may be examinedduring normal business hours at theUnited States Environmental ProtectionAgency, Office of Enforcement andCompliance Assurance, AirEnforcement Division, Ariel RiosBuilding, Room 1119, 12th andPennsylvania Ave., NW, Washington,DC 20004.FOR FURTHER INFORMATION CONTACT:Charles Garlow of the U.S. EPA, AirEnforcement Division (Mail Code2242A), 401 M St SW, Washington, DC20460, telephone (202) 564–1088.SUPPLEMENTARY INFORMATION: OnOctober 15, 1997, the AmericanPetroleum Institute (API) requestedrelief from the applicability of theGasoline Distribution National EmissionStandard for Hazardous Air Pollutants(NESHAP) as the compliance date ofDecember 15, 1997 was approaching.Certain members of the API tradeassociation had timely applied forsynthetic minor permits so as to qualifyas area or minor sources not subject tothe Gasoline Distribution MACTstandard. However, state or localpermitting authorities had, in manyinstances, not been able to process theotherwise-approvable applicationsbefore December 15, 1997. Since manystates have a public comment period, itwas apparent that these permits couldnot be issued prior to the compliancedate even if every effort was made.Therefore, API asserted, through nofault of their members, they would besubject to the requirements of thisNESHAP when they assumed theywould not be, resulting in some sourcespotentially facing operationalshutdowns or violation of the standard.

The EPA responded, as is detailed inthe attached letter, by granting a timelimited exclusion from applicability tothose sources that notify the EPA thatthey have timely applied and haveotherwise made good faith efforts toobtain the synthetic minor permits inquestion. Due to delays in publishingthis document, sources wishing to availthemselves of this policy have untilJanuary 30, 1998, to notify EPA of theirstatus, if they have not already done so.

In addition to publication of thisdocument, US EPA has placed a copy ofthis policy letter on its TechnologyTransfer Network (TTN) bulletin boardservice and Website.

(Sec. 112, Clean Air Act (42 U.S.C. 7412))Bruce Buckheit,Director, Air Enforcement Division.

December 12, 1997.Ms. Ellen Siegler,American Petroleum Institute, 1220 L Street,

NW, Washington, DC 20005–4070.Re: Gasoline Distribution MACT Standard.

Dear Ms. Siegler: The American PetroleumInstitute recently approached theEnvironmental Protection Agency (EPA)seeking relief from the Gasoline DistributionMaximum Achievable Control Technology(MACT) standard for those facilities thattimely sought permits limiting their potentialto emit so as to qualify as area sources notcovered by that standard. We were theninformed that numerous facilities (throughno fault of their own) have not yet beenissued such permits by their permit issuingauthorities. Under EPA’s ‘‘once in—alwaysin’’ policy, such facilities will become subjectto the Gasoline Distribution MACT standardon that rule’s compliance date (December 15,1997).

As a general matter, we believe that it isthe source’s obligation to achieve compliancewith the regulation as of the effective date ofthat regulation. Where, as here, the regulationprovided 3 years to achieve compliance, webelieve that sources that wish to avoid theimposition of major source obligations byseeking ‘‘synthetic minor’’ permits should doso shortly after the date of rule promulgation.Given the substantial workload imposed onpermitting authorities by the Title III andTitle V programs, those who wait until thereis less than 1 year from the compliance dateto submit their permit application shouldanticipate that there is a substantial risk, thatthey must bear, that the synthetic minorpermit may not be issued in time. However,because this is an issue of first impression,and facilities may have relied in good faithon representations of permitting authoritiesthat permits received within a shorter timeframe would be processed by December 15,1997, we have agreed to provide a limitedenforcement discretion as set out below.

Based on the facts presented and subject tothe terms, conditions and limitationsoutlined herein, we concluded that the EPAshould and, therefore, will provide limitedrelief for certain facilities:

Limited Exclusion—EPA will not consideran otherwise covered facility to be subject tothe Gasoline Distribution MACT standard (1)if the facility owner or operator filed acomplete application with its appropriatepermitting authority for a permit limiting itspotential to emit so as to qualify as an areasource not covered by that standard prior toJune 15, 1997, and (2) if it identifies thefacility to EPA not later than January 15,1998. This limited exclusion is limited to a90-day period and will expire on March 15,1998.

Conditional Extension—If a facility has notyet received its permit by March 15, 1998, itwill be subject to the Gasoline DistributionMACT standard as of this date unless suchfacility notifies EPA, prior to March 15, 1998,that an additional period of time is neededfor good cause shown. If the facility has notyet received such permit and then certifies to


1 See Section 1.429(b) of the Commission’s Rules,47 CFR 1.429(b).

EPA that it has made diligent efforts to obtainthe needed permit by (1) providing allinformation requested by the permittingauthority and (2) accepting reasonable permitconditions, then EPA may grant an additionalextension for up to 90 days beyond March 15,1998. Failure to accept reasonable permitterms and conditions will not be recognizedas a good cause basis for seeking anextension. If a facility has not yet received itspermit by that later date, it will be subjectfully to the Gas Distribution MACT standardas of its compliance date.

General Conditions/Limitations—As anexpress condition of benefiting from andoperating under the above-described limitedexclusion, each facility must comply at alltimes with each of the following:

• The source must have submitted thesynthetic minor permit by June 15, 1997.

• The permit application terms andconditions must effectively limit emissions toarea source levels.

• The source must certify to EPA andmaintain full compliance with all the terms,conditions and representations reflected orreferred to in its timely, complete permitapplication.

• The reason for the delay in the issuanceof the permit must not be the fault of thesource (e.g., at least one source will not beissued a permit because of unresolved NewSource Performance Standards violations atthe facility. Such source does not qualify forthis exclusion.

• The source must submit, by January 15,1998, supporting documentation, includingthe executive summary and enforcementprovisions of the permit application withtransmittal date, any indication from thepermitting agency regarding thecompleteness of the application and recentcommunication from or to the permittingauthority indicating the current status of theapplication (e.g., public comment beingsought, etc.). Such documentation must bemailed to Air Enforcement Division,Attention: Charles Garlow, Esq., US EPA,Mail Code 2242A, 401 M St. SW,Washington, D.C. 20460, or sent by deliveryservice to the same Division, Ariel RiosBuilding, Room 2111, 12th and PennsylvaniaAves., N.W., Washington, DC 20004.

A failure to fully comply with each andevery requirement, as may be determined byEPA, will void this grant of discretionaryenforcement relief, cause such facility to besubject to the requirements of the GasolineDistribution MACT standard as of itscompliance date (December 15, 1997), andsubject the facility to possible enforcementfor violation of the MACT standard.

Sources in this situation should bereminded that if they presently qualify assynthetic minor sources, by operation of theJanuary 25, 1995 Seitz/Van Heuvelen policymemorandum entitled ‘‘Options for Limitingthe Potential to Emit (PTE) of a StationarySource Under Section 112 and Title V of theClean Air Act’’, then these sources do notneed to utilize the option described hereprior to the termination date of that policy.For example, if a source has documentedactual emissions since January 1994 of lessthan 50% of the major source thresholds,then a permit is not needed to limit the PTE.

Other options are described in thismemorandum.

As the Gasoline Distribution MACTstandard compliance date is fastapproaching, you have agreed to endeavor todistribute this memorandum broadly at theearliest practicable time to all facilities thatmay be subject to the MACT standard.

Questions regarding this matter should bedirected to the Air Enforcement Division,202–564–1088.

Sincerely,Steven A. Herman,Assistant Administrator.

Identical letters sent to:Mr. John Prokof, Independent Liquid

Terminal Association (ILTA), 1133 15thStreet, NW, Suite 650, Washington, D.C.20005.

Ms. Michele Joy, Association of Oil Pipelines(AOPL), 110 Vermont Ave, NW,Washington, D.C. 20005.

Mr. Tom Osburn, Society of IndependentGasoline Marketers of America (SIGMA),11911 Freedom Drive, Reston, Virginia20190.

cc: Regional Counsel, Regions I–X, RegionalAir Program Directors, Regions I–X, JohnSeitz, Director, OAQPS, Lydia Wegman,Deputy Director, OAQPS, Bruce Jordan,Director, ESD.

[FR Doc. 98–1133 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONSCOMMISSION

47 CFR Part 20

[CC Docket No. 94–102, FCC 97–402]

Wireless Compatibility With Enhanced911 Emergency Calling Systems

AGENCY: Federal CommunicationsCommission.ACTION: Final rule, petitions forreconsideration.

SUMMARY: The Federal CommunicationsCommission has adopted aMemorandum Opinion and Order in thewireless Enhanced 911 (E911)rulemaking proceeding, reaffirming itscommitment to the rapidimplementation of technologies neededto bring emergency help to wirelesscallers throughout the United States.The action is taken to resolve petitionsfor reconsideration of the rules adoptedin the First Report and Orderconcerning the availability of basic 911services and the implementation ofE911 for wireless telecommunicationsservices. The primary goal of thisproceeding is to ensure that reliable,effective 911 and E911 service isavailable to wireless users as soon astechnologically possible. The limitedrevisions to the Commission’s rulesadopted in this decision are intended to

remedy technical problems raised in therecord. This Memorandum Opinion andOrder contains proposed informationcollections subject to the PaperworkReduction Act of 1995 (PRA). It hasbeen submitted to the Office ofManagement and Budget (OMB) forreview under the PRA. OMB, thegeneral public, and other Federalagencies are invited to comment on theproposed information collectionscontained in this proceeding.EFFECTIVE DATE: The definition of‘‘designated PSAP’’ in § 20.3, and§§ 20.18(a), (b), (c), and (g) becomeeffective January 16, 1998. Theremaining rule amendments becomeeffective February 17, 1998. Writtencomments on the proposed or modifiedinformation collections by the publicare due January 20, 1998. Writtencomments must be submitted by theOMB on the proposed informationcollections on or before February 10,1998.ADDRESSES: A copy of any comments onthe information collections containedherein should be submitted to JudyBoley, Federal CommunicationsCommission, Room 234, 1919 M Street,N.W., Washington, D.C. 20554, or viathe Internet to [email protected], and toTimothy Fain, OMB Desk Officer, 10236NEOB, 725–17th Street, N.W.,Washington, D.C. 20503, or via theInternet to [email protected] FURTHER INFORMATION CONTACT: WonKim or Dan Grosh, Policy Division,Wireless Telecommunications Bureau,at (202) 418–1310. For additionalinformation concerning the informationcollections contained in theMemorandum Opinion and Order,contact Judy Boley at 202–418–0214, orvia the Internet at [email protected] INFORMATION: This is asynopsis of the memorandum Opinionand Order (MO&O) in CC Docket No.94–102, FCC 97–402 , adoptedDecember 1, 1997, and releasedDecember 23, 1997. The complete textof this MO&O is available for inspectionand copying during normal businesshours in the FCC Reference Center(Room 239), 1919 M Street, N.W.,Washington, D.C., and also may bepurchased from the Commission’s copycontractor, International TranscriptionServices, at (202) 857–3800, 1231 20thStreet, N.W., Washington, D.C. 20036.

Synopsis of the Memorandum Opinionand Order

1. In this MO&O, pursuant to Section1.429 of the Commission’s Rules,1 the


2 See 61 FR 40348; 61 FR 40374 (August 2, 1996).3 ‘‘Code Identification’’ was defined in section

20.03 of the Commission’s Rules to mean a handsetthat transmits the 34-bit Mobile IdentificationNumber (MIN) typically used by cellular or PCSlicensees, or the functional equivalent of a MIN inthe case of SMR services.

4 The October 1, 1997 implementation date forsection 20.18(c) of the Commission’s Rules wastemporarily stayed until November 30, 1997. SeeRevision of the Commission’s Rules To EnsureCompatibility with Enhanced 911 EmergencyCalling Systems, CC Docket No. 94–102, Order, DA97–2119 (released Sept. 30, 1997).

Commission made limited revisions toits rules by (1) modifying basic 911 rulesto require wireless carriers to transmitall 911 calls without regard to validationprocedures and regardless of codeidentification; (2) temporarilysuspending enforcement of therequirement that wireless carriersprovide 911 access to customers usingTTY devices until October 1, 1998, butonly for digital systems that are notcompatible with TTY calls and subjectto a notification requirement; (3)modifying the definition of ‘‘coveredSpecialized Mobile Radio (SMR)’’service for E911 purposes to includeonly providers of real-time, two-wayinterconnected voice service thenetworks of which utilize intelligentswitching capability and offer seamlesshandoff to customers, and to extend thisdefinition to broadband PersonalCommunications Services (PCS) andcellular service as well as SMRproviders; and (4) clarifying the Phase Irequirement for call back numbers andmodifying associated rule definitions.The Commission also reemphasized thatits 911 rules are intended to betechnology-neutral, and to encouragethe most efficient and effectivetechnologies to report the location ofwireless handsets, the most importantE911 feature both for those seeking helpin emergencies and for the public safetyorganizations that respond to emergencycalls.

2. On June 12, 1996, the Commissionadopted a First Report and Order (R&O)and a Further Notice of ProposedRulemaking in this proceeding,establishing rules requiring wirelesscarriers to implement 911 and enhanced911 (E911) services. 2 The Commissionreceived 16 petitions for reconsiderationof the R&O. In the MO&O, theCommission resolved issues raised inthe petitions for reconsideration orclarification of the rules adopted in theR&O.

3. For basic 911 services, the MO&Ofirst reviewed the rules that requirewireless carriers to transmit 911 callsfrom all handsets with a ‘‘codeidentification’’ without validation andto transmit all 911 calls, even thosewithout code identification, if requestedto do so by a Public Safety AnsweringPoint (PSAP) administrator.3 Based onthe record of this reconsiderationproceeding, the Commission revised therules by requiring covered carriers to

forward all 911 calls, without regard tovalidation procedures and regardless ofcode identification. Accordingly, theCommission deleted the definitions of‘‘code identification’’ and ‘‘mobileidentification number’’ from theCommission’s Rules. The Commissionalso eliminated the PSAP choice toselectively receive wireless 911 calls,while generally reaffirming basic 911requirement schedules.

4. The MO&O also reexamined therequirement that, no later than October1, 1997, covered carriers be capable oftransmitting 911 calls from individualswith speech or hearing disabilitiesthrough means other than mobile radiohandsets, such as through the use ofText Telephone Devices (TTYs). Basedon the record in the reconsiderationproceeding, the Commission modifiedthe Section 20.18(c) TTYimplementation deadlines for analogwireless systems and digital wirelesssystems. For analog systems, theimplementation deadline is December 1,1997, the expiration of the stay of therule.4 For digital systems, theCommission decided to temporarilysuspend enforcement of the TTYrequirement until October 1, 1998,subject to conditions that protectconsumers, encourage compliance, andensure minimal delay.

5. Under the revised rules, carrierswhose digital systems are notcompatible with TTY calls must makeevery reasonable effort to notify currentand potential subscribers that they willnot be able to use TTYs to call 911 withdigital wireless devices and services. Inaddition, wireless industry associationsand consumer groups are required to filequarterly progress reports on efforts andachievements in E911–TTYcompatibility, including efforts made toimplement the notificationrequirements. Based on these quarterlystatus reports, the WirelessTelecommunications Bureau, underdelegated authority, may extend thesuspension of enforcement of section20.18(c) for an additional three months,until January 1, 1999, if necessary.

6. In the MO&O, the Commissionconcluded that the ‘‘covered SMR’’definition adopted in the R&O isoverinclusive with respect to certaintypes of SMR systems and should benarrowed to include only those systemsthat will directly compete with cellularand PCS in providing comparable

public mobile interconnected service.Accordingly, the Commission modifiedits rules to change the definition of‘‘covered SMR’’ for 911 purposes toinclude only providers of real-time, two-way interconnected voice service thenetwork of which utilize intelligentswitching capability and offer seamlesshandoff to customers, and to extend thisdefinition to broadband PCS andcellular as well as SMR providers.

7. In addition, under the revised rules,‘‘covered’’ SMR systems that offerdispatch services to customers maymeet their 911 and E911 obligations totheir dispatch customers either byproviding customers with direct accessto 911 services, or alternatively, byrouting dispatch customer emergencycalls through a dispatcher. A coveredcarrier who chooses the latteralternative for its dispatch customersmust make every reasonable effort toexplicitly notify current and potentialdispatch customers and their users thatthey will not be able to directly reacha PSAP by calling 911 and that, in theevent of an emergency, the dispatchershould be contacted.

8. As to E911 Phase I requirementsand implementation schedule, theCommission upheld its decision torequire that, as of April 1, 1998, coveredcarriers be able to provide automaticnumber identification (ANI) and cellsite information for 911 calls to thePSAP. At the same time, the MO&Oclarified carriers’ obligations to providecall back numbers and modifiedassociated rule definitions. With respectto the call back obligation, theCommission clarified that where thehandset’s directory number is notknown to the serving carrier, thecarrier’s obligations extend only todelivering 911 calls to PSAPs.Therefore, covered carriers will not berequired to provide reliable call backnumbers to PSAPs in the case of mobileunits that are not associated with adialable telephone number. However,carriers will be expected to transmit allcalling party information that iscompatible with their systems for 911calls from validated customers.

9. The MO&O also upheld Phase IIrequirements and the implementationschedule by clarifying that, as ofOctober 1, 2001, covered carriersprovide to the designated PSAP thelocation of all 911 calls by longitudeand latitude such that the accuracy forall calls is 125 meters or less using aRoot Mean Square (RMS) methodology.In denying petitions for reconsiderationof the Phase II implementationschedule, the Commission concludedthat broadband PCS and other digitalsystem providers had sufficient notice


5 Title II of the Contract with America Act is ‘‘TheSmall Business Regulatory Enforcement FairnessAct of 1996’’ (SBREFA), codified at 5 U.S.C. § 601et seq.

to prepare for the implementation of theE911 features and it is not necessary todelay the October 1, 2001implementation schedule at this time. Inaddition, the Commission reaffirmedthat its rules and their application areintended to be technologically andcompetitively neutral.

10. The MO&O also reaffirmed theCommission’s decision not to exemptproviders of E911 service from liabilityfor certain negligent acts, finding thatnone of the petitioners presentsarguments sufficient to persuade theCommission to modify its determinationthat it is unnecessary to exemptproviders of E911 service from liabilityand to preempt state tort law. Likewise,the Commission reaffirmed the decisionin the R&O not to prescribe a particularE911 cost recovery methodology. TheCommission continued to find noadequate basis on this record forpreemption of the various state andlocal funding mechanisms that are inplace or under development, or forconcluding that state and local costrecovery mechanisms will bediscriminatory or inadequate.

Paperwork Reduction Act11. This MO&O contains either

proposed or modified informationcollections. The Commission, as part ofits continuing effort to reducepaperwork burdens, invites the generalpublic and the Office of Managementand Budget (OMB) to comment on theinformation collections contained inthis MO&O, as required by thePaperwork Reduction Act of 1995,Public Law No. 104–13. Public andagency comments are due on January20, 1998. OMB comments are due onFebruary 10, 1998. Comments shouldaddress: (a) whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the Commission, includingwhether the information shall havepractical utility; (2) the accuracy of theCommission’s burden estimates; (3)ways to enhance the quality, utility, andclarity of the information collected; (4)ways to minimize the burden of thecollection of information on therespondents, including the use ofautomated collection techniques orother forms of information technology.

OMB Approval Number: 3060-xxxx.Title: Revision of the Commission’s

Rules to Ensure Compatibility withEnhanced 911 Emergency CallingSystem (Memorandum Opinion andOrder, CC Docket 94–102).

Form Number: N/A.Type of Review: New Collection.Respondents: Cellular, broadband

PCS, and SMR carriers subject to the

modified rules; State and localgovernment entities; Public SafetyAnswering Points.

Number of Respondents: 42,031.Estimated Time Per Response:a. Two time notification burden on

4,700 PSAPs @ 1 hr per=9,400 hours.b. Two time response burden on

carriers @ 1 hr per=9,400 hours.c. One time review or establishment

of cost recovery program by 375government entities @ 10 hrs per=3,750hours.

One time burden for consultation forremaining 125 government entitiesusing contractors to review and/orestablish cost recovery program @ 1 hrper=125 hours.

d. One time burden for 3,469 digitallicensees to place notificationinformation in digital user manuals orservice contracts @ 1⁄2 hr per=1,735hours.

e. One time burden on 3,469 digitallicensees to notify existing digitalsubscribers @ 1⁄4 hr per=868 hours.

f. One time burden on 7representative organizations to draftsurvey for quarterly TTY report @ 1 hrper=7 hours.

Quarterly burden on 7 representativeorganizations to review survey results @12 hrs per=84 hours.

Quarterly burden on 7 representativeorganizations to draft joint quarterlyTTY report @ 20 hrs. per=140 hours.

Quarterly burden on 3,469 licenseesto respond to survey @ 8 hrs. per=27,752hours.

g. One time burden on 31,530 SMRlicensees offering direct dispatchcapability to place notification in usermanuals and service agreements @ 1⁄2hour per=15,765 hours.

h. One time burden on 31,530 SMRlicensees offering direct dispatchcapability to notify existing customers @1⁄4 hr per=7,884.

i. One time burden on 35,424 carriersto consult on determining a designatedPSAP @ 1 hr per=35,424 hours.

j. One time burden on 500government entities to consult with35,424 carriers in determining adesignated PSAP @ 1 hr per=35,424hours.

k. One time burden on 1,400telephone systems to consult ondefinition of pseudo-ANI @ 3 hrper=4,200 hours.

l. One time burden on 8,500 licenseesto prepare a deployment schedule toaccompany a waiver request @ 4 hoursper=34,000 hours.

One time burden on 8,500 licensees toconsult with a contract engineer toprepare a deployment schedule toaccompany a waiver request @ 1 hrper=8,500 hours.

Total Annual Burden: 194,457 hours.Estimated Costs Per Respondent:

$7,050,000.Review and/or establishment of cost

recovery program to 125 state and localentitities using contract CPAs @ $200per hour=$2000 per entity.

Preparation of deployment scheduleto 8,500 licensees using contractengineers @ $100 per hour=$800.

Needs and Uses: The notificationburden on PSAPs will be used bycarriers to verify that wireless 911 callsare referred to PSAPs who have thetechnical capability to use the data tothe caller’s benefit. TTY and dispatchnotification requirements will be usedto avoid consumer confusion as to theability to reach 911 services using theirwireless handsets. These notificationswill also avoid delays in emergencyresponse time. The quarterly reportswill be used to monitor the progress ofTTY compatibility. Consultations on thespecific meaning assigned to pseudo-ANI are appropriate to ensure that allparties are working with the sameinformation. Coordination betweencarriers and State and local entities todetermine the PSAPs that areappropriate to receive 911 calls isnecessary because of the difficulty inassigning PSAPs based on the locationof the caller. The deployment schedulethat should be submitted by carriersseeking a waiver of the Phase I or PhaseII schedule will be used by theCommission to guarantee that the rulesadopted in this proceeding are enforcedin as timely a manner as possible withintechnological constraints.

Procedural Matters

Supplemental Final RegulatoryFlexibility Analysis

12. As required by the RegulatoryFlexibility Act, 5 U.S.C. 603 (RFA), aFinal Regulatory Flexibility Analysis(FRFA) was incorporated the E911 FirstReport and Order in this proceeding.The Commission’s Supplemental FinalRegulatory Flexibility Analysis (SFRFA)in this Memorandum Opinion andOrder (MO&O) reflects revised oradditional information to that containedin the FRFA. The SFRFA is thus limitedto matters raised in response to the R&Oand addressed in this MO&O. ThisSFRFA conforms to the RFA, asamended by the Contract with AmericaAdvancement Act of 1996 (CWAAA),Public Law No. 104–121, 110 Stat. 846(1996). 5


6 13 CFR 121.201, Standard IndustrialClassification (SIC) Code 4812.

7 Federal Communications Commission, CCBIndustry Analysis Division, TelecommunicationIndustry Revenue: TRS Worksheet Data, Tbl. 1(Average Total Telecommunication RevenueReported by Class of Carrier) (December 1996) (TRSWorksheet).

8 See Amendment of parts 20 and 24 of theCommission’s Rules—Broadband PCS CompetitiveBidding and the Commercial Mobile Radio ServiceSpectrum Cap, WT Docket No. 96–59, Report andOrder, 61 FR 33859 (July 1, 1996).

9 Id.10 FCC News, Broadband PCS, D, E, and F Block

Auction Closes, No. 71744 (released Jan. 14, 1997).11 See Amendment of Parts 2 and 90 of the

Commission’s Rules to Provide for the Use of 200Channels Outside the Designated Filing Areas inthe 896–901 MHz and the 935–940 MHz BandsAllotted to the Specialized Mobile Radio Pool, PRDocket No. 89–553, Second Order onReconsideration and Seventh Report and Order, 60FR 48913 (September 21, 1995); Amendment of Part90 of the Commission’s Rules to Facilitate FutureDevelopment of SMR Systems in the 800 MHzFrequency Band, PR Docket No. 93–144, FirstReport and Order, Eighth Report and Order, andSecond Further Notice of Proposed Rulemaking, 61FR 06212 (February 16, 1996).

I. Need For and Objectives of the Action

13. The actions taken in this MO&Oare in response to petitions forreconsideration or clarification of therules adopted in the E911 First Reportand Order requiring wireless carriers toimplement 911 and Enhanced 911(E911) services. The limited revisionsmade in the MO&O are intended toremedy technical problems raised in therecord while otherwise reaffirming theCommission’s commitment to the rapidimplementation of the technologiesneeded to bring emergency help towireless callers throughout the UnitedStates.

II. Summary of Significant Issues Raisedby the Public Comments in Response tothe Final Regulatory FlexibilityStatement

14. No comments were received indirect response to the FRFA, but theCommission received 16 petitions forreconsideration of the E911 First Reportand Order. The majority of petitionersask that the Commission reconsider therules governing when covered wirelesscarriers must make 911 access availableto callers. Other petitioners ask that theCommission reconsider or clarify avariety of issues ranging from theimplementation date for coveredcarriers to provide 911 access to peoplewith hearing or speech disabilitiesthrough the use of Text TelephoneDevices, such as TTYs, to the definitionof which wireless carriers must complywith the rules, particularly in regard to‘‘covered Special Mobile Radios(SMRs).’’ Paragraphs 1–5 of this MO&Oprovide a more detailed discussion ofthe petitions and the resulting actions.Additionally, as discussed inparagraphs 10–12, several parties filedex parte presentations raising technicalissues which prompted the Commissionto stay the October 1, 1997implementation dates for § 20.18 (a), (b),and (c) through November 30, 1997, andto seek further comment.

III. Description and Estimate of theNumber of Small Entities to WhichRules Will Apply

15. The rules adopted in this MO&Owill apply to providers of broadbandPersonal Communications Service(PCS), Cellular Radio TelephoneService, and Specialized Mobile Radio(SMR) Services in the 800 MHz and 900MHz bands. Service providers in theseservices are subject to 911 requirementssolely to the extent that they offer real-time, two way switched voice servicethat is interconnected with the publicswitched network and utilize an in-network switching facility which

enables the provider to reusefrequencies and accomplish seamlesshand-offs of subscriber calls.

a. Estimates for Cellular Licensees. 16.As indicated in the FRFA, theCommission has not developed adefinition of small entities applicable tocellular licensees. Therefore, theapplicable definition of small entity isthe definition under the Small BusinessAdministration (SBA) rules applicableto radiotelephone companies. Thisdefinition provides that a small entity isa radiotelephone company employingfewer than 1,500 persons.6 In additionto the data supplied in the FRFA, amore recent source of informationregarding the number of cellularservices carriers nationwide is the datathat the Commission collects annuallyin connection with theTelecommunications Relay Service(TRS) Worksheet.7 That data shows that792 companies reported that they wereengaged in the provision of cellularservices. Although it seems certain thatsome of these carriers have fewer than1,500 employees, and because a cellularlicensee may have several licenses, weare unable at this time to estimate withgreater precision the number of cellularcarriers that would qualify as smallbusiness concerns under the SBA’sdefinition. Consequently, we estimatethat, for purposes of our evaluations andconclusions in the SFRFA, all of thecurrent cellular licensees are smallentities, as that term is defined by theSBA.

b. Estimates for Broadband PCSLicensees. 17. As indicated in the FRFA,the broadband PCS spectrum is dividedinto six frequency blocks designated Athrough F. The FRFA provides a fullexplanation as to the definition of smallbusiness in the context of broadbandPCS licensees, using the definition SBAapproved, developed by theCommission for Blocks C–F, that a smallbusiness is an entity that has averagegross revenues of less that $40 millionin the three previous calendar years.8 Inaddition, the SBA has approved aCommission definition (for Block F) of‘‘very small business’’ which is an entitythat, together with their affiliates, hasaverage gross revenues of not more than

$15 million for the preceding threecalendar years.9 No small businesseswithin the SBA approved definition bidsuccessfully for licenses in Blocks Aand B. There were 90 winning biddersthat qualified as small entities in theBlock C auctions. A total of 93 smalland very small business bidders wonapproximately 40 percent of the 1,479licenses for Blocks D, E, and F.10

However, not all licenses for Block Fhave been awarded. Because licenseswere awarded only recently, there arefew small businesses currentlyproviding broadband PCS services.Based on this information, we concludethat the number of small broadband PCSlicensees includes the 90 small businesswinning C Block bidders and the 93qualifying bidders in the D, E, and FBlocks, for a total of 183 smallbroadband PCS providers as defined bythe SBA and the Commission’s auctionrules.

c. Estimates for SMR Licensees. 18.The FRFA indicates that, pursuant to 47CFR 90.814(b)(1), the Commission hasdefined ‘‘small entity’’ for geographicarea 800 MHz and 900 MHz SMRlicenses as firms that had average grossrevenues of less than $15 million in thethree previous calendar years. Thisregulation defining ‘‘small entity’’ in thecontext of 800 MHz and 900 MHz SMRhas been approved by the SBA.11 As theFRFA noted, we do not know how manyfirms provide 800 MHz or 900 MHzgeographic area SMR service pursuantto extended implementationauthorizations, nor how many of theseproviders have annual revenues of lessthan $15 million. The number oflicensees cannot be estimated, because,although we know that there are a totalof slightly more than 31,000 SMRlicensees, one licensee can hold morethan one license. We do know, however,that one of these firms has over $15million in revenues. We assume, forpurposes of our evaluations andconclusions in this SFRFA, that all ofthe remaining existing extendedimplementation authorizations are held


by small entities, as that term is definedby the SBA.

19. Further, the Commission has noway of accurately determining whichlicensees would fall under thedefinition of ‘‘covered carrier’’ asexpressed in the MO&O. TheCommission still concludes that thenumber of geographic area SMRlicensees affected by our action in thisproceeding includes the 55 smallentities who bid for and won geographiclicenses in the 900 MHz SMR band.These 55 small entities hold a total of245 licensees.

As of the adopted date of thisdecision, the auction for 800 MHzgeographic area SMR licenses had notyet been completed. A total of 525licenses will be awarded for the upper200 channels in the 800 MHzgeographic area SMR auction. However,the Commission has not yet determinedhow many licenses will be awarded forthe lower 230 channels in the 800 MHzgeographic area SMR auction. There isno basis to estimate, moreover, howmany small entities within the SBA’sdefinition will win these licenses. Giventhe facts that nearly all radiotelephonecompanies have fewer than 1,000employees and that no reliable estimateof the number of prospective 800 MHzlicensees can be made, we assume, forpurposes of our evaluations andconclusions in this SFRFA, that all ofthe licenses will be awarded to smallentities, as that term is defined by theSBA.

IV. Description of Projected Reporting,Recordkeeping, and Other ComplianceRequirements

20. The Commission is submittingseveral burdens to the Office ofManagement and Budget for approval.First, Public Safety Answering Points(PSAP) who are willing to participate inPhase I and Phase II of E911 servicemust notify the covered carrier that theyare capable of receiving and utilizingthe data elements associated with theservice and request the service. Also,cost recovery mechanisms must be inplace as a prerequisite to the impositionof enhanced 911 service requirementsupon covered carriers. In the MO&O, theCommission requires that coveredcarriers whose digital systems are notcompatible with TTY calls must makeevery reasonable effort to notify currentand potential subscribers that they willnot be able to use TTYs to call 911 withdigital wireless devices and services.

21. In addition, to monitor theprogress of the wireless industryregarding TTY compatibility, theCommission requires that thesignatories to the TTY Consensus

Agreement file quarterly progressreports in this docket within ten daysafter the end of the quarter beginningJanuary 1, 1998, until the quarter endingSeptember 30, 1998. At the same time,the Commission grants the request ofextension of time to file a Joint StatusReport on TTY issues, that was due onOctober 1, 1997, and requires thesignatories to the Consensus Agreementto file the Joint Status Report on TTYissues by December 30, 1997.

22. In the MO&O, the Commissionalso requires that covered carriers whooffer dispatch service to customers andchoose to comply with Commissionrules by routing dispatch customeremergency calls through a dispatcher,rather than directly routing to the PSAP,must make every reasonable effort toexplicitly notify the current andpotential dispatch customers and theirusers that they will not be able todirectly reach a PSAP by calling 911and that, in the event of an emergency,the dispatcher should be contacted.

23. The MO&O, while revising thedefinition of ‘‘pseudo-ANI,’’ providesthat the specific meaning assigned to thepseudo-ANI is determined byagreements, as necessary, between thetelephone system originating the call,intermediate telephone systemshandling and routing the call, and thedestination telephone system.Additionally, in recognition of thedifficulty involved in assigning wireless911 calls to the appropriate PSAP basedon location, the MO&O clarifies that theresponsible local or State entity has theauthority and responsibility to designatethe PSAPs that are appropriate toreceive wireless E911 calls, noting thatthis will require continued coordinationbetween carriers and State and localentities. The MO&O lastly provides thatcovered carriers can request a waiver ofthe Phase I implementation schedulebased on inability to transmit 10-digittelephone numbers and cell siteinformation, but requires that anywaiver request based on a LEC’scapability must be accompanied by adeployment schedule for meeting thePhase I requirements.

V. Significant Alternatives and StepsTaken By Agency To MinimizeSignificant Economic Impact on SmallEntities Consistent With StatedObjectives

24. This MO&O is adopted inresponse to petitions forreconsideration, including several filedby small businesses. After considerationof these petitions, the MO&O firstmodifies the rules by requiring coveredcarriers to transmit all 911 calls. Section20.18(b) of the Commission’s Rules, 47

CFR 20.18(b), as adopted in the R&O,required that carriers transmit 911 callsfrom all handsets which transmit ‘‘codeidentifications’’ and transmit all 911calls, even those without codeidentification, if requested to do so bya PSAP administrator. Thirteen of thesixteen petitioners ask that theCommission reconsider thisrequirement. After a review of thearguments raised by the petitioners inopposition to the rule, the MO&O findsthat the rules adopted in the E911 FirstReport and Order would imposeunreasonable cost, delay, andadministrative burdens on wirelesscarriers, and that, at least for thepresent, the most practical, leastexpensive and most efficient option is torequire covered carriers to forward all911 calls.

25. Three original petitioners requestthat the Commission modify or defer theimplementation dates of rules requiringcovered carriers to provide 911 access topeople with hearing or speechdisabilities through the use of TTYswith respect to digital wireless systems,due to technical incompatibility.Although the Commission decidesagainst deferring the implementationdate indefinitely until the industrystandards bodies resolve all thetechnical issues, as these petitionersrequest, it temporarily suspendsenforcement of the TTY requirement fordigital wireless systems until October 1,1998, subject to a notificationrequirement.

26. Also, in response to 5 petitionsseeking reconsideration of theCommission’s decision as to thewireless carriers to whom the rulesapply particularly for covered SMRs, theMO&O narrows the definition of‘‘Covered SMRs’’ for E911 purposes toinclude only those systems that offerreal-time, two way switched voiceservice that is interconnected with thepublic switched network and utilize anin-network switching facility whichenables the provider to reusefrequencies and accomplish seamlesshand-offs of subscriber calls. TheCommission also decides to extend themodified definition to coveredbroadband PCS and cellular as well asSMR providers. We agree with thepetitioners on this issue that the currentrule could encompass SMR providersthat primarily offer traditional dispatchservices but also offer limitedinterconnection capability and that suchtraditional dispatch providers wouldhave to overcome significant andpotentially costly obstacles to provide911 access. Furthermore, under therevised rules, the ‘‘covered’’ SMRsystems that offer dispatch services to


customers may meet their 911obligations either by providingcustomers with direct capability for 911purposes, or alternatively, by routingdispatch customer emergency callsthrough a dispatcher, subject to anotification requirement.

27. The Commission also reviewedand rejected the Coast Guard’s petition,which requested the Commission toapply E911 requirements to MobileSatellite Services (MSS) and to issue afurther notice of proposed rulemakingregarding the provision of emergencycommunications by MSS systems. In theMO&O, the Commission upholds itsdecision that MSS should be exemptfrom the 911 and E911 rules becauseadding specific regulatory requirementsto MSS in this early stage of its growthmay impede the development of servicein ways that might reduce its ability tomeet public safety needs. However, theCommission does urge the MSSindustry and the public safetycommunity to continue their efforts todevelop and establish public safetystandards along with internationalstandards bodies.

28. Finally, although severalpetitioners asked the Commission toestablish a specific cost recoveryprogram (rather than the flexiblealternative adopted in the E911 FirstReport and Order, the Commissiondeclined to do so preferring to providegovernment entities with the option ofkeeping their existing cost recoveryprogram in place or to create a costrecovery program that best suits theneeds of all parties concerned in theirlocality.

Report to Congress29. We will submit a copy of this

Supplementary Final RegulatoryFlexibility Analysis, along with theMO&O, in a report to Congress pursuantto 5 U.S.C. 801(a)(1)(A). A copy of thisSFRFA will also be published in theFederal Register.

Authority30. The Commission’s action is taken

pursuant to Sections 1, 4(i), 201, 303,309, and 332 of the CommunicationsAct of 1934, as amended by theTelecommunications Act of 1996, 47U.S.C. 151, 154(i), 201, 303, 309, 332.

Ordering Clauses31. Accordingly, it is ordered that the

Petitions for Reconsideration of the FirstReport and Order, Revision of theCommission’s Rules to EnsureCompatibility with Enhanced 911Emergency Calling Systems, CC DocketNo. 94–102, filed by parties listed inAppendix A of the full text of this

decision, are granted in part, asprovided in the text of the MO&O, andotherwise denied.

32. It is further ordered that Part 20of the Commission’s Rules is amendedas set forth below.

33. It is further ordered that§§ 20.18(a), 20.18(c), and 20.18(g) of theCommission’s Rules, 47 CFR 20.18(a),20.18(c), 20.18(g), as amended by thisMO&O as set forth below, and theforegoing provisions of this MO&O thatpertain to sections 20.18(a), 20.18(c),and 20.18(g) of the Commission’s Rules,shall become effective January 16, 1998.This action is taken on the basis of ourfinding that, because the amendedprovisions of §§ 20.18(a), 20.18(c), and20.18(g) are substantive rules that havethe effect of granting an exemption, theeffective date of these provisions mayoccur less than 30 days beforepublication of the provisions, pursuantto Section 553(d)(1) of Title 5, UnitedStates Code.

34. It is further ordered that: (1)§ 20.18(b) of the Commission’s Rules, 47CFR 20.18(b), as amended by thisMO&O below; (2) the definition of‘‘designated PSAP’’ in section 20.3 ofthe Commission’s Rules, 47 CFR 20.3, asadded by this MO&O below; and (3) theforegoing provisions of this MO&O thatpertain to section 20.18(b) of theCommission’s Rules, and to thedefinition of ‘‘designated PSAP’’ in§ 20.3 of the Commission’s Rules shallbecome effective January 16, 1998. Thisaction is taken, pursuant to Section553(d)(3) of Title 5, United States Code,on the basis of our finding that there isgood cause that the effective date ofthese provisions should occur less than30 days before publication of theprovisions. The Commission’s finding ofgood cause is based upon its findingthat the rule change will serve thepurpose of ‘‘promoting the safety of lifeand property’’ under Section 1 of theCommunications Act and that theparticular safety issues involved—extending the benefits of 911 services toas many wireless phone users aspossible—are of sufficient importance towarrant making the rule requirementsimmediately effective upon publicationin the Federal Register. In addition, theCommission notes that, since theadoption of the E911 First Report andOrder in June 1996 there has beenconsiderable confusion and uncertaintyregarding the ability of covered carriersto comply with the provisions of§ 20.18(b) of the Commission’s Rules, asthose provisions were initiallyprescribed in the E911 First Report andOrder. This confusion and uncertaintywere heightened by assertions made bythe Wireless 911 Coalition regarding

technical issues associated withrequirements imposed by the rule.Although the decision of the WirelessTelecommunications Bureau in the StayOrder was an appropriate step in thiscase in light of the continuing pendencyof these issues at the time the StayOrder was issued, it also resulted in acontinuation of the confusion anduncertainty surrounding the question ofwhether all users of wireless servicesprovided by covered carriers couldexpect and rely upon the fact that their911 calls would go through toemergency service providers. Now thatthe Commission has resolved this issueby the action taken today, it can find nobasis for any failure to end as quicklyas possible this confusion anduncertainty regarding the obligations ofcovered carriers and the public safetyexpectations of the users of wirelessservices.

35. It is further ordered that theremaining rule amendments made bythis MO&O and specified below shallbecome effective February 17, 1998.

36. It is further ordered that theWireless Telecommunications Bureau ishereby delegated authority to grant anadditional 3-month suspension ofenforcement of section 20.18(c) of theCommission’s Rules, 47 CFR 20.18(c),until January 1, 1999, with respect towireless carriers who use digitalwireless systems, upon reviewing thejoint quarterly status reports on TTYcompatibility with digital systems filedby the signatories to the TTY ConsensusAgreement.

37. It is further ordered that thesignatories to the TTY ConsensusAgreement SHALL FILE a jointquarterly status report regarding TTYcompatibility with digital systemswithin 10 days after the end of eachcalendar quarter during the periodbeginning January 1, 1998, and endingSeptember 30, 1998, with the first reportdue April 10, 1998, as set forth in theforegoing provisions of this MO&O.

38. It is further ordered that theRequest of an Extension of Time to Filethe Joint Status Report on TTY Issues,filed by the CellularTelecommunications IndustryAssociation on October 1, 1997, ISGRANTED, and that the signatories tothe Consensus Agreement, the PersonalCommunications Industry Association,and Telecommunications for the Deaf,Inc. must file a Joint Status Report on orbefore December 31, 1997.

39. It is further ordered that theinformation collections contained in therule amendments set forth below WILLBECOME EFFECTIVE followingapproval by the Office of Managementand Budget. The Commission will


publish a document at a later dateestablishing the effective date.

40. It is further ordered that, theDirector of the Office of Public Affairsshall send a copy of this MO&Oincluding the Supplementary FinalRegulatory Flexibility Analysis, to theChief Counsel for Advocacy of the SmallBusiness Administration in accordancewith paragraph 603(a) of the RegulatoryFlexibility Act, 5 U.S.C. 601 et seq.


Communications common carriers.

Federal Communications Commission.Magalie Roman Salas,Secretary.

Rule Changes

Part 20 of Title 47 of the Code ofFederal Regulations is amended asfollows:

PART 20—COMMERCIAL MOBILERADIO SERVICES

1. The authority citation for Part 20continues to read as follows:

Authority: Sections 4, 251–2, 303, and 332,48 Stat. 1066, 1062, as amended; 47 U.S.C.154, 251–4, 303, and 332 unless otherwisenoted.

2. Section 20.3 is amended byremoving the definitions CodeIdentification and Mobile IdentificationNumber; by adding a definition forDesignated PSAP; and revisingdefinitions for Automatic NumberIdentification, and Pseudo AutomaticNumber Identification to read asfollows:

§ 20.3 Definitions

Automatic Number Identification(ANI). A system that identifies thebilling account for a call. For 911systems, the ANI identifies the callingparty and may be used as a call backnumber.* * * * *

Designated PSAP. The Public SafetyAnswering Point (PSAP) designated bythe local or state entity that has theauthority and responsibility to designatethe PSAP to receive wireless 911 calls.* * * * *

Pseudo Automatic NumberIdentification (Pseudo-ANI). A number,consisting of the same number of digitsas ANI, that is not a North AmericanNumbering Plan telephone directorynumber and may be used in place of anANI to convey special meaning. Thespecial meaning assigned to the pseudo-

ANI is determined by agreements, asnecessary, between the systemoriginating the call, intermediatesystems handling and routing the call,and the destination system.* * * * *

3. Section 20.18 is revised to read asfollows:

§ 20.18 911 Service.

(a) Scope of section. The followingrequirements are only applicable toBroadband Personal CommunicationsServices (part 24, subpart E of thischapter), Cellular Radio TelephoneService (part 22, subpart H of thischapter), and Geographic AreaSpecialized Mobile Radio Services andIncumbent Wide Area SMR Licensees inthe 800 MHz and 900 MHz bands(included in part 90, subpart S of thischapter). In addition, service providersin these enumerated services are subjectto the following requirements solely tothe extent that they offer real-time, twoway switched voice service that isinterconnected with the public switchednetwork and utilize an in-networkswitching facility which enables theprovider to reuse frequencies andaccomplish seamless hand-offs ofsubscriber calls.

(b) Basic 911 Service. Licenseessubject to this section must transmit allwireless 911 calls without respect totheir call validation process to a PublicSafety Answering Point, provided that‘‘all wireless 911 calls’’ is defined as‘‘any call initiated by a wireless userdialing 911 on a phone using acompliant radio frequency protocol ofthe serving carrier.’’

(c) TTY Access to 911 Services.Licensees subject to this section must becapable of transmitting 911 calls fromindividuals with speech or hearingdisabilities through means other thanmobile radio handsets, e.g., through theuse of Text Telephone Devices (TTY).

Note to paragraph (c): Enforcement of theprovisions of this paragraph is suspendeduntil October 1, 1998, in the case of callsmade using a digital wireless system that isnot compatible with TTY calls, provided thatthe licensee operating such a digital systemshall make every reasonable effort to notifycurrent and potential subscribers who use ormay use such a system that they will not beable to make a 911 call over such systemthrough the use of a TTY device.

(d) Phase I enhanced 911 services. (1)As of April 1, 1998, licensees subject tothis section must provide the telephonenumber of the originator of a 911 calland the location of the cell site or base

station receiving a 911 call from anymobile handset accessing their systemsto the designated Public SafetyAnswering Point through the use of ANIand Pseudo-ANI.

(2) When the directory number of thehandset used to originate a 911 call isnot available to the serving carrier, suchcarrier’s obligations under the paragraph(d)(1) extend only to delivering 911 callsand available calling party informationto the designated Public SafetyAnswering Point.

Note to paragraph (d): With respect to 911calls accessing their systems through the useof TTYs, licensees subject to this sectionmust comply with the requirements inparagraphs (d)(1) and (d)(2) of this section, asto calls made using a digital wireless system,as of October 1, 1998.

(e) Phase II enhanced 911 services. Asof October 1, 2001, licensees subject tothis section must provide to thedesignated Public Safety AnsweringPoint the location of all 911 calls bylongitude and latitude such that theaccuracy for all calls is 125 meters orless using a Root Mean Square (RMS)methodology.

(f) Conditions for enhanced 911services. The requirements set forth inparagraphs (d) and (e) of this sectionshall be applicable only if theadministrator of the designated PublicSafety Answering Point has requestedthe services required under thoseparagraphs and is capable of receivingand utilizing the data elementsassociated with the service, and amechanism for recovering the costs ofthe service is in place.

(g) Dispatch service. A serviceprovider covered by this section whooffers dispatch service to customers maymeet the requirements of this sectionwith respect to customers who utilizedispatch service either by complyingwith the requirements set forth inparagraphs (b) through (e) of thissection, or by routing the customer’semergency calls through a dispatcher. Ifthe service provider chooses the latteralternative, it must make everyreasonable effort to explicitly notify itscurrent and potential dispatchcustomers and their users that they arenot able to directly reach a PSAP bycalling 911 and that, in the event of anemergency, the dispatcher should becontacted.



1 Rate Guidelines—Non-Coal Proceedings, ExParte No. 347 (Sub-No. 2) (STB served Dec. 31,1996), l S.T.B. l (1996), pet. for judicial reviewpending sub nom. Association of Am. Railroads v.Surface Transp. Bd., No. 97–1020 (D.C. Cir. filedJan. 10, 1997).

2 The evidentiary factors are set forth inSimplified Rate Guidelines, slip op. at 37–38.

3 Factors (6) through (9) are:(6) The feasibility and anticipated cost of

preparing a stand-alone cost presentation in thecase.

(7) An estimate of the other costs to be incurredin pursuing the rate complaint, including preparingnecessary jurisdictional threshold and marketdominance evidence.

(8) The relief sought, including all reparations aswell as the level and duration of any rateprescription.

(9) The present value of the relief sought.4 Constrained market pricing, including the stand-

alone cost test, was adopted in Coal RateGuidelines—Nationwide, 1 I.C.C.2d 520 (1985),aff’d sub nom. Consolidated Rail Corp. v. UnitedStates, 812 F.2d 1444 (3d Cir. 1987).

5 Both AAR and NITL support the NPR proposalconcerning a conference of the parties.

6 49 U.S.C. 10704(c)(2) requires us to decide therate reasonableness issue within months after theclose of the administrative record.


Surface Transportation Board

49 CFR Part 1111

[STB Ex Parte No. 527 (Sub-No. 1)]

Expedited Procedures for ProcessingSimplified Rail Rate ReasonablenessProceedings

AGENCY: Surface Transportation Board,DOT.ACTION: Final rule.

SUMMARY: The Board amends itscomplaint and investigation regulationsat 49 CFR part 1111 to reflect theadoption of Simplified Rate Guidelines.1

EFFECTIVE DATE: February 17, 1998.FOR FURTHER INFORMATION CONTACT:Thomas J. Stilling, (202) 565–1567.(TDD for the hearing impaired: (202)565–1695.)SUPPLEMENTARY INFORMATION: In aNotice of Proposed Rulemaking (NPR)served September 24, 1997, andpublished in the Federal Register onSeptember 26, 1997 (62 FR 50550), weproposed to include in our regulationsa list of the information that acomplainant should supply whenseeking to challenge the reasonablenessof a rail rate using the Simplified RateGuidelines. We also proposed todetermine within 50 days of the filingof a complaint whether the SimplifiedRate Guidelines could be used in aparticular case. We indicated, however,that we were not inclined at this timeto adopt a general procedural schedulefor processing rate complaints under theSimplified Rate Guidelines until wegained more experience using thoseguidelines. The Association ofAmerican Railroads (AAR) and theNational Industrial TransportationLeague (NITL) filed comments inresponse to the NPR.

Evidentiary Factors

Both AAR and NITL support theproposal to list in our regulations thenine evidentiary factors that a complaintseeking to use the Simplified RateGuidelines should address.2 AARsuggests that the regulations alsoexplicitly require a complainant toprovide the assumptions, calculationsand workpapers on which the

information on factors (6) through (9) isbased.3

In our proposal, we assumed that acomplainant would provide sufficientsupport for its responses to theevidentiary factors. Without adequatesupport, it would be difficult for us todetermine whether use of the simplifiedguidelines should be permitted in aparticular case. To ensure that adequateinformation is supplied to enable usquickly to decide the appropriateness ofusing the simplified guidelines, we willadd a tenth factor requiring that ‘‘theassumptions, calculations and anydocumentation necessary to support theresponses to the above listed factors’’also be provided.

Use of Simplified ProceduresIn Simplified Rate Guidelines, slip op.

at 38, we noted that a decision as towhether to apply the simplifiedguidelines or the more sophisticatedconstrained market pricing procedures(specifically the stand-alone cost test)for evaluating the reasonableness of achallenged rate needs to be determinedat the outset of a case.4 We alsosuggested that a reasonable time framefor making such a determinationappeared to be within 45 days after thefiling of the complaint. In its originalcomments responding to the AdvancedNotice of Proposed Rulemaking (ANPR)in this proceeding, AAR complainedthat a 45-day time frame would be tootight, as it would provide a defendantrailroad only two weeks to respond toa complainant’s request to use thesimplified guidelines. To afford therailroad more time to prepare itsresponse and to allow that response tobe filed together with the answer to therate complaint, in the NPR we proposeda 50-day period instead. NITL assertsthat the initial 45-day schedule issufficient and that the additional fivedays are unnecessary.

We adopt the 50-day scheduleproposed in the NPR. The additionalfive days will not unduly prolong theprocess. As indicated in the NPR, itshould also alleviate some

administrative burden by allowing arailroad to simultaneously answer thecomplaint and respond to the requestfor using the simplified guidelines,rather than requiring the filing ofseparate pleadings 5 days apart.

Procedural ScheduleNITL expresses concern that, without

a general procedural schedule, theprocessing of cases will be undulydelayed. NITL suggests that casesprocessed under the simplifiedguidelines be handled under the basicstructure of the procedures used toprocess stand-alone cost cases.

We appreciate NITL’s concern thatthese cases be expedited, but we believethat expedition can best beaccomplished, at least at the outset, ona case-by-case basis. Absent experienceprocessing cases under the SimplifiedRate Guidelines, we cannot practicallyestablish a general schedule to governthe filing of evidence for all cases. Tofacilitate the prompt establishment ofappropriate procedural schedules inindividual cases, the parties areexpected to discuss, and if possibleagree on, a procedural schedule at theconference of the parties that is to beconvened no later than 12 days after thedefendant files an answer to thecomplaint.5 Under the regulations weare adopting, the parties are to file areport on the issues discussed at theconference within 19 days of the filingof an answer, and this report shouldinclude a proposed proceduralschedule. Following receipt of thisreport, we will move quickly toestablish the procedural schedule forthe filing of evidence.6

Waybill AccessIn response to the ANPR, NITL

suggested that our Rules of Practicegoverning the filing of a rate complaintcross reference the regulations at 49 CFR1244.8 concerning access to the WaybillSample. In its comments on the NPR,NITL repeated its cross-referencingsuggestion. In light of NITL’s positionthat a cross reference may ‘‘avoidconfusion that may create delays andsubsequent difficulties in meeting theprocedural schedule,’’ we will include anew paragraph (d) in part 1111.1referencing our regulation regardingaccess to the Waybill Sample.

The Board certifies that these ruleswill not have a significant economiceffect on a substantial number of smallentities. The rules should result in the


more expeditious processing of railcomplaints using the simplifiedprocedures.

This action will not significantlyaffect either the quality of the humanenvironment or the conservation ofenergy resources.


Administrative practice andprocedure, Investigations.

Decided: January 7, 1998.By the Board, Chairman Morgan and Vice

Chairman Owen.Vernon A. Williams,Secretary.

For the reasons set forth in thepreamble, title 49 chapter X, Part 1111of the Code of Federal Regulations isamended as follows:

PART 1111—COMPLAINT ANDINVESTIGATION PROCEDURES

1. The authority citation for part 1111is revised to read as follows:

Authority: 49 U.S.C. 721, 10704, and11701.

2. Section 1111.1 is amended byrevising the last two sentences ofparagraph (a), adding paragraphs (a)(1)through (a)(10), and adding newparagraph (d) to read as follows:

§ 1111.1 Content of formal complaints;joinder.

(a) * * * In a complaint challengingthe reasonableness of a rail rate, thecomplainant should indicate whether,in its view, the reasonableness of therate should be examined usingconstrained market pricing or using thesimplified standards adopted pursuantto 49 U.S.C. 10701(d)(3). If thecomplainant seeks to use the simplifiedstandards, it should support this requestby submitting, at a minimum, thefollowing information:

(1) A general history of the traffic atissue, including how the traffic has

moved in the past, how it currentlymoves, and how it can and will bemoved in the future. This informationshould address not only the physicalmovement of the traffic, but the typeand level of rates actually used. Itshould include all carriers (rail andnonrail) that have participated in thetransportation of this traffic or could doso.

(2) The specific commoditydescription(s) for the traffic at issue, theshipping characteristics andrequirements of the traffic, and the typeof railroad cars required or used for thetraffic.

(3) All origins, destinations, andorigin-destination (O–D) pairs involvedin the complaint, by commodity type.

(4) The amount of traffic involved (bycommodity type), including total annualcarloadings, average tons per car,number of carloads per shipment, andnumber of carloads per week or month.

(5) Total or average revenue percarload paid to the defendantrailroad(s), by commodity type.

(6) The feasibility and anticipated costof preparing a stand-alone costpresentation in the case.

(7) An estimate of the other costs tobe incurred in pursuing the ratecomplaint, including preparingnecessary jurisdictional threshold andmarket dominance evidence.

(8) The relief sought, including allreparations as well as the level andduration of any rate prescription.

(9) The present value of the reliefsought.

(10) The assumptions, calculationsand any documentation necessary tosupport the responses to the abovelisted factors.* * * * *

(d) Request for access to waybill data.Parties needing access to the WaybillSample to prepare their case shouldfollow the procedures set forth at 49CFR 1244.8.

3. Section 1111.8 is amended byremoving the phrase ‘‘section 1111.9(b)’’and adding the phrase ‘‘§ 1111.10(b)’’ inits place.

4. Section 1111.9 is redesignated assection 1111.10 and a new section1111.9 is added to read as follows:

§ 1111.9 Procedural schedule to determinewhether to use simplified procedures.

Absent a specific order by the Board,the following procedural schedule willapply in determining whether to grant arequest under § 1111.1(a) to use thesimplified procedures (with theremainder of the procedural schedule tobe determined on a case-by-case basis):Day 0—Complaint filed, discovery

period begins.Day 20—Defendant’s answer to

complaint and opposition to use ofsimplified procedures due.

Day 30—Complainant’s response to useof simplified procedures due.

Day 50—Board’s determination ofwhether simplified procedures shouldbe used.5. In newly designated § 1111.10,

paragraph (a) is revised to read asfollows:

§ 1111.10 Meeting to discuss proceduralmatters.

(a) Generally. In all complaintproceedings, other than thosechallenging the reasonableness of a railrate based on stand-alone cost, theparties shall meet, or discuss bytelephone, discovery and proceduralmatters within 12 days after an answerto a complaint is filed. Within 19 daysafter an answer to a complaint is filed,the parties, either jointly or separately,shall file a report with the Board settingforth a proposed procedural schedule togovern future activities and deadlines inthe case.* * * * *[FR Doc. 98–1066 Filed 1–15–98; 8:45 am]BILLING CODE 4915–00–P

This section of the FEDERAL REGISTERcontains notices to the public of the proposedissuance of rules and regulations. Thepurpose of these notices is to give interestedpersons an opportunity to participate in therule making prior to the adoption of the finalrules.

Proposed Rules Federal Register

2640

Vol. 63, No. 11


1 The MSRB rules may be obtained by contactingthe Municipal Securities Rulemaking Board bytelephone at (202) 223–9347 or by mail at 1150 18thStreet, NW., Suite 400, Washington, DC 20036–3816.

2 Subsidiaries of national banks that engage inmunicipal securities activities must register withthe NASD and are regulated by NASD Regulation,Inc., the subsidiary of NASD charged withregulating the securities industry and the NasdaqStock Market.

DEPARTMENT OF THE TREASURY

Office of the Comptroller of theCurrency

12 CFR Part 10

[Docket No. 98–01]

RIN 1557–AB62

Municipal Securities Dealers

AGENCY: Office of the Comptroller of theCurrency, Treasury.ACTION: Notice of proposed rulemaking.

SUMMARY: The Office of the Comptrollerof the Currency (OCC) proposes torevise its Municipal Securities Dealersregulation to remove unnecessaryprovisions. This change would not haveany substantive effect on the operationsof national banks, but would simplifythe OCC’s rule regarding bankmunicipal securities dealers (MSDs) byremoving a redundant restatement ofrules found elsewhere.DATES: Comments must be received byMarch 17, 1998.ADDRESSES: Comments should bedirected to: Office of the Comptroller ofthe Currency, CommunicationsDivision, 250 E Street, SW, Washington,DC 20219, Attention: Docket No. 98–01.Comments will be available for publicinspection and photocopying at thesame location. In addition, commentsmay be sent by facsimile transmission toFAX number (202) 874–5274 or byelectronic mail [email protected] FURTHER INFORMATION CONTACT: JoeMalott, National Bank Examiner, CapitalMarkets (202) 874–5070; DonaldLamson, Assistant Director, Securitiesand Corporate Practices; or Ursula Pfeil,Attorney, Legislative and RegulatoryActivities (202) 874–5090.


Background and Discussion of Proposal

Section 15B(b) of the SecuritiesExchange Act of 1934 (Exchange Act)(15 U.S.C. 78o-4(b)) created the

Municipal Securities Rulemaking Board(MSRB) and mandated that the MSRBadopt rules that establish qualificationcriteria for municipal securities brokersor dealers and associated persons. Toimplement section 15B(b), the MSRBadopted Rule G–7 (InformationConcerning Associated Persons) (RuleG–7).1 Rule G–7 requires, among otherthings, that municipal securitiesprincipals and representativesassociated with a bank MSD file withthe bank either (a) Form MSD–4(Uniform Application for MunicipalSecurities Principal or MunicipalSecurities Representative Associatedwith a Bank Municipal SecuritiesDealer) or (b) a similar form prescribedby the bank’s primary regulator. Anational bank MSD is in turn requiredby Rule G–7 to submit to the OCC theform that the bank’s associatedmunicipal securities principals andrepresentatives file with it. Rule G–7also requires bank MSDs to updateinformation as necessary, to retainrecords for specified periods of time,and to file with the appropriate bankingagency ‘‘such of the informationprescribed by [Rule G–7] as such * * *agency * * * shall by rule or regulationrequire.’’ Rule G–7(g).

Shortly after the MSRB adopted RuleG–7, the OCC adopted part 10 in orderto prescribe the information and formsthat national bank MSDs are to submit.(42 FR 16813 (March 30, 1977)). Part 10currently sets out the scope of the rule(§ 10.1); definitions used therein(§ 10.2); information about where andhow to file the appropriate forms(§ 10.3); and requirements governing thesubmission and retention of Form MSD–4 and Form MSD–5 (UniformTermination Notice for MunicipalSecurities Principal or MunicipalSecurities Representative Associatedwith a Bank Municipal SecuritiesDealer) (§ 10.4).

As explained in the following section-by-section analysis, much of currentpart 10 either is substantively identicalto the requirements contained in RuleG–7 or is otherwise unnecessary.

Section-by-Section Analysis

Section 10.1 of Current and ProposedRules

This section identifies the entities andindividuals covered by part 10. Section10.1 of the proposed rule clarifies thatsubsidiaries of national banks are notcovered by the rule. This clarification isconsistent with MSRB Rule G–7, whichstates that ‘‘bank dealers’’ are to complywith the rules and requirementsadopted by the appropriate bankregulatory agency. The term ‘‘bankdealer’’ is defined in Rule D–8 of theMSRB’s rules to include ‘‘a municipalsecurities dealer which is a bank or aseparately identifiable department ordivision of a bank as defined in rule G–1 of the [Municipal SecuritiesRulemaking] Board.’’ Subsidiaries ofbanks are not included in the definitionof ‘‘bank dealer,’’ and are, therefore,governed directly by the MSRB’s filingrequirements. The proposed change to§ 10.1 reflects this fact. It does not,however, affect the content of whatthese subsidiaries are to file or whoregulates their municipal securitiesactivities.2

Section 10.2 of Current RuleThe terms defined in current § 10.2

are not used in part 10 as proposed.Accordingly, this section is removed.

Section 10.3 of Current RuleSection 10.3 provides information

about the mechanics of filing the MSD–4 and MSD–5 forms with the OCC. Thisinformation is unnecessary in light ofthe filing instructions that accompanythese forms. Therefore, the proposedrule removes this section.

Section 10.4 of Current Rule/§ 10.2 ofProposed Rule

Section 10.4(a)(1) of the current rulestates that Form MSD–4 is anappropriate means of carrying out thepurposes of Rule G–7(b). Twoprovisions in Rule G–7 make itappropriate for the proposed rule toretain a provision identifying whichform national bank MSDs are to use andwhat information is to be submitted inorder to comply with Rule G–7. First,

2641Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Proposed Rules

3 The Board of Governors of the Federal ReserveSystem (Board) and Federal Deposit InsuranceCorporation (FDIC) recently published proposedamendments to each agency’s MSD regulation. See62 FR 15272 (March 31, 1997) (Board) and 62 FR26994 (May 16, 1997) (FDIC). Both the Board andthe FDIC propose to repeal their MSD rulesaltogether. However, both agencies intend for bankswithin their respective jurisdictions to continuefiling the MSD–4 and MSD–5 forms with thoseagencies. Accordingly, the OCC, Board, and FDICintend to impose substantively identicalrequirements on bank MSDs. The stylisticdifferences between the OCC’s proposed rule andthose of the Board and FDIC reflect the OCC’s viewthat it is necessary and helpful to national bankMSDs for the OCC’s rule to address those areasidentified in Rule G–7 where bank dealers are tolook to the rules of their primary regulator.

1 The MSRB rules may be obtained by contactingthe Municipal Securities Rulemaking Board at 115018th Street, NW., Suite 400, Washington, DC20036–3816.

paragraph (b) of Rule G–7 states that ‘‘inthe case of a bank dealer a completedForm MSD–4 or similar form prescribedby the appropriate regulatory agency forsuch bank dealer, containing theforegoing information [i.e., theinformation listed in Rule G–7(b)(i)–(x)],shall satisfy the requirements of thisparagraph [(b)].’’ Given that Rule G–7(b)provides bank regulators the option ofusing a form other than Form MSD–4,there remains a need for the OCC toclarify which form national banksshould use. Second, as previouslynoted, paragraph (g) of Rule G–7 statesthat bank MSDs are to file with theirappropriate regulatory agency ‘‘such ofthe information prescribed by this rule[i.e., Rule G–7] as such * * * agency* * * shall by rule or regulationrequire.’’ Repealing all of part 10arguably would create an unintendedgap in the filing requirements for bankMSDs, because there would be no ruleor regulation requiring national banks tofile.

In light of paragraphs (b) and (g) ofRule G–7, the proposed rule retains arequirement, at § 10.2(a), stating that anational bank is to use Form MSD–4 tosubmit the information required by RuleG–7(b)(i)-(x) to be obtained from aperson identified in § 10.1(b). Section10.2(a) also states that a national bankreceiving completed MSD–4 forms mustsubmit these forms to the OCC beforepermitting any person to be associatedwith it as a municipal securitiesprincipal or a municipal securitiesrepresentative. Should the MSRB amendRule G–7 to remove the reference torules or regulations issued by thebanking agencies, the OCC will revisitthe need for a continued reference to theMSRB rules in part 10.3

Section 10.4(a)(2) of the current rulerepeats filing requirements found inRule G–7 and, therefore, is removed.

Section 10.4(b) of the current ruleinstructs national bank MSDs regardinghow they should proceed if a FormMSD–4 contains materially inaccurate

or incomplete information. This sectionis unnecessary, given that paragraph (c)of Rule G–7 requires that theinformation required to be submittedmust remain accurate and complete. Anational bank MSD receiving updatedinformation from an associatedmunicipal securities representative ormunicipal securities principal isobligated pursuant to Rule G–7 tosubmit the amended information to theOCC in order to ensure that theindividuals are properly registered.Accordingly, the proposed rule removescurrent § 10.4(b).

Current § 10.4(c) requires nationalbank MSDs to file Form MSD–5 within30 days of terminating a person’sassociation with the bank as amunicipal securities representative orprincipal. This requirement does notappear in Rule G–7. In order to facilitatethe effective supervision of MSDactivity by national banks, the proposalretains the requirement, at proposed§ 10.2(b), that a termination notice besubmitted.

Finally, current § 10.4(d)(1) restatesrecord retention requirements found inRule G–7(e) while § 10.4(d)(2) states thatthe MSD–4 and MSD–5 forms arecovered by section 32(a) of the ExchangeAct (15 U.S.C. 78ff). These provisions incurrent § 10.4 are unnecessary and are,therefore, removed.

CommentsThe OCC invites general comments on

all aspects of this proposal, includingspecific comments on the proposedchanges.

Regulatory Flexibility ActIt is hereby certified that this proposal

will not have a significant economicimpact on a substantial number of smallentities. Accordingly, a regulatoryflexibility analysis is not required.

As noted earlier, the OCC has onlyeliminated unnecessary provisions thatappear in the current rule. This proposalwill, therefore, reduce the regulatoryburden on national banks, regardless ofsize. No new burden is added by theproposed changes.

Executive Order 12866

The OCC has determined that thisproposal is not a significant regulatoryaction under Executive Order 12866.

Unfunded Mandates Act of 1995

Section 202 of the UnfundedMandates Act of 1995 (UnfundedMandates Act) requires that an agencyprepare a budgetary impact statementbefore promulgating a proposal likely toresult in a rule that includes a Federalmandate that may result in the annual

expenditure of $100 million or more inany one year by State, local, and tribalgovernments, in the aggregate, or by theprivate sector. If a budgetary impactstatement is required, section 205 of theUnfunded Mandates Act requires anagency to identify and consider areasonable number of alternatives beforepromulgating a proposal.

The OCC has determined that theproposal, if adopted, will not result inexpenditures by State, local, and tribalgovernments, or by the private sector, ofmore than $100 million in any one year.Accordingly, the OCC has not prepareda budgetary impact statement orspecifically addressed the regulatoryalternatives considered.

List of Subjects in 12 CFR Part 10National banks, Reporting and

recordkeeping requirements, Securities.

Authority and IssuanceFor the reasons set out in the

preamble, the OCC proposes to revisepart 10 of chapter I of title 12 of theCode of Federal Regulations as set forthbelow:

PART 10—MUNICIPAL SECURITIESDEALERS

Sec.10.1 Scope.10.2 Filing requirements.

Authority: 5 U.S.C. 93a, 481, and 1818; 15U.S.C. 78o–4(c)(5) and 78q–78w.

§ 10.1 Scope.This part applies to:(a) Any national bank, District bank,

and separately identifiable departmentor division of either (collectively, anational bank) that acts as a municipalsecurities dealer, as that term is definedin section 3(a)(30) of the SecuritiesExchange Act of 1934 (15 U.S.C.78c(a)(30)); and

(b) Any person who is associated orto be associated with a national bank inthe capacity of a municipal securitiesprincipal or a municipal securitiesrepresentative, as those terms aredefined in Rule G–3 of the MunicipalSecurities Rulemaking Board (MSRB).1

§ 10.2 Filing requirements.(a) A national bank shall use Form

MSD–4 (Uniform Application forMunicipal Securities Principal orMunicipal Securities RepresentativeAssociated with a Bank MunicipalSecurities Dealer) for obtaining theinformation required by MSRB Rule G–7(b)(i)–(x) from a person identified in

2642 Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Proposed Rules

1 The reader may refer to the Notice of ProposedRulemaking, December 5, 1991 (56 FR 63774), and

§ 10.1(b). A national bank receiving acompleted MSD–4 form from a personidentified in § 10.1(b) must submit thisform to the OCC before permitting theperson to be associated with it as amunicipal securities principal or amunicipal securities representative.

(b) A national bank must submit FormMSD–5 (Uniform Termination Noticefor Municipal Securities Principal orMunicipal Securities RepresentativeAssociated with a Bank MunicipalSecurities Dealer) to the OCC within 30days of terminating a person’sassociation with the bank as amunicipal securities principal ormunicipal securities representative.

(c) Forms MSD–4 and MSD–5, withinstructions, may be obtained bycontacting the OCC at 250 E Street, SW.,Washington, DC 20219, Attention: BankDealer Activities.

Dated: December 1, 1997.Eugene A. Ludwig,Comptroller of the Currency.[FR Doc. 98–815 Filed 1–15–98; 8:45 am]BILLING CODE 4810–33–P

DEPARTMENT OF LABOR

Mine Safety and Health Administration

30 CFR Parts 56, 57, 62, 70, and 71

RIN–AA53

Health Standards for OccupationalNoise Exposure

AGENCY: Mine Safety and HealthAdministration (MSHA), Labor.ACTION: Proposed rule; Extension ofcomment period.

SUMMARY: On December 23, 1997,MSHA published a notice solicitingcomments on a report from the NationalInstitute for Occupational Safety andHealth (NIOSH) entitled ‘‘Prevalence ofHearing Loss For Noise-Exposed Metal/Nonmetal Miners.’’ This notice extendsthe original comment period on thereport.DATES: Submit written comments on thereport on or before February 23, 1998.ADDRESSES: Comments may betransmitted by electronic mail, fax, ormail. Comments by electronic mail mustbe clearly identified and sent to:[email protected]. Faxed commentsmust be clearly identified and sent to:MSHA, Office of Standards,Regulations, and Variances, 703–235–5551. Send mail comments to: MineSafety and Health Administration,Office of Standards, Regulations, andVariances, 4015 Wilson Boulevard,Room 631, Arlington, VA 22203–1984.

Commenters are encouraged tosupplement written comments withcomputer files or disks.FOR FURTHER INFORMATION CONTACT:Patricia W. Silvey, Director, MSHA,Office of Standards, Regulations, andVariances, 703–235–1910.SUPPLEMENTARY INFORMATION: OnDecember 17, 1996, MSHA published aproposed rule in the Federal Register(61 FR 66348) revising its healthstandards for occupational noiseexposure in coal and metal andnonmetal mines.

On December 16, 1997, MSHApublished a notice in the FederalRegister (62 FR 65777) announcing theavailability of a report from NIOSHentitled ‘‘Prevalence of Hearing Loss ForNoise-Exposed Metal/NonmetalMiners.’’ The Agency further stated itsintent to supplement the rulemakingrecord with this report and to make itavailable to interested parties uponrequest.

MSHA received several requests fromthe mining community that they beprovided an opportunity to comment onthe report. On December 23, 1997,MSHA published a notice in the FederalRegister (62 FR 67013) allowing thepublic 30 days in which to review thereport and submit comments.

In response to a request from themining community, MSHA is extendingthis comment period an additional 30days to February 23, 1998. Interestedpersons are encouraged to submitcomments by this date.

Dated: January 12, 1998.J. Davitt McAteer,Assistant Secretary for Mine Safety andHealth.[FR Doc. 98–1139 Filed 1–15–98; 8:45 am]BILLING CODE 4510–43–P


40 CFR Part 55

[FRL–5950–9]

Outer Continental Shelf AirRegulations Consistency Update forCalifornia

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Proposed rule; consistencyupdate.

SUMMARY: EPA is proposing to update aportion of the Outer Continental Shelf(OCS) Air Regulations. Requirementsapplying to OCS sources located within25 miles of states’ seaward boundariesmust be updated periodically to remain

consistent with the requirements of thecorresponding onshore area (COA), asmandated by section 328(a)(1) of theClean Air Act, as amended in 1990 (theAct). The portion of the OCS airregulations that is being updatedpertains to the requirements for OCSsources for which the Santa BarbaraCounty Air Pollution Control District(Santa Barbara County APCD) and SouthCoast Air Quality Management District(South Coast AQMD) are the designatedCOAs. The intended effect of approvingthe OCS requirements for the aboveDistricts, contained in the TechnicalSupport Document, is to regulateemissions from OCS sources inaccordance with the requirementsonshore. The changes to the existingrequirements discussed below areproposed to be incorporated byreference into the Code of FederalRegulations and are listed in theappendix to the OCS air regulations.DATES: Comments on the proposedupdate must be received on or beforeFebruary 17, 1998.ADDRESSES: Comments must be mailed(in duplicate if possible) to: EPA AirDocket (Air-4), Attn: Docket No. A–93–16 Section XVI, EnvironmentalProtection Agency, Air Division, Region9, 75 Hawthorne St., San Francisco, CA94105.

Docket: Supporting information usedin developing the rule and copies of thedocuments EPA is proposing toincorporate by reference are containedin Docket No. A–93–16 Section XVI.This docket is available for publicinspection and copying Monday–Fridayduring regular business hours at thefollowing locations:

EPA Air Docket (Air-4), Attn: DocketNo. A–93–16 Section XVI,Environmental Protection Agency, AirDivision, Region 9, 75 Hawthorne St.,San Francisco, CA 94105.

EPA Air Docket (LE–131), Attn: AirDocket No. A–93–16 Section XVI,Environmental Protection Agency, 401M Street SW, Room M–1500,Washington, DC 20460.

A reasonable fee may be charged forcopying.FOR FURTHER INFORMATION CONTACT:Christine Vineyard, Air Division (Air-4),U.S. EPA Region 9, 75 HawthorneStreet, San Francisco, CA 94105, (415)744–1197.


I. Background

On September 4, 1992, EPApromulgated 40 CFR part 55 1, which


the preamble to the final rule promulgatedSeptember 4, 1992 (57 FR 40792) for furtherbackground and information on the OCSregulations.

2 Each COA which has been delegated theauthority to implement and enforce part 55, willuse its administrative and procedural rules asonshore. However, in those instances where EPAhas not delegated authority to implement andenforce part 55, EPA will use its own administrativeand procedural requirements to implement thesubstantive requirements. 40 CFR 55.14(c)(4).

established requirements to control airpollution from OCS sources in order toattain and maintain federal and stateambient air quality standards and tocomply with the provisions of part C oftitle I of the Act. Part 55 applies to allOCS sources offshore of the Statesexcept those located in the Gulf ofMexico west of 87.5 degrees longitude.Section 328 of the Act requires that forsuch sources located within 25 miles ofa state’s seaward boundary, therequirements shall be the same as wouldbe applicable if the sources were locatedin the COA. Because the OCSrequirements are based on onshorerequirements, and onshore requirementsmay change, section 328(a)(1) requiresthat EPA update the OCS requirementsas necessary to maintain consistencywith onshore requirements.

Pursuant to section 55.12 of the OCSrule, consistency reviews will occur (1)at least annually; (2) upon receipt of aNotice of Intent under section 55.4; or(3) when a state or local agency submitsa rule to EPA to be considered forincorporation by reference in part 55.This proposed action is being taken inresponse to the submittal of rules by twolocal air pollution control agencies.Public comments received in writingwithin 30 days of publication of thisdocument will be considered by EPAbefore publishing a final rule.

Section 328(a) of the Act requires thatEPA establish requirements to controlair pollution from OCS sources locatedwithin 25 miles of states’ seawardboundaries that are the same as onshorerequirements. To comply with thisstatutory mandate, EPA mustincorporate applicable onshore rulesinto part 55 as they exist onshore. Thislimits EPA’s flexibility in decidingwhich requirements will beincorporated into part 55 and preventsEPA from making substantive changesto the requirements it incorporates. Asa result, EPA may be incorporating rulesinto part 55 that do not conform to allof EPA’s state implementation plan(SIP) guidance or certain requirementsof the Act. Consistency updates mayresult in the inclusion of state or localrules or regulations into part 55, eventhough the same rules may ultimately bedisapproved for inclusion as part of theSIP. Inclusion in the OCS rule does notimply that a rule meets the requirementsof the Act for SIP approval, nor does itimply that the rule will be approved byEPA for inclusion in the SIP.

II. EPA Evaluation and ProposedAction

In updating 40 CFR part 55, EPAreviewed the rules submitted forinclusion in part 55 to ensure that theyare rationally related to the attainmentor maintenance of federal or stateambient air quality standards or part Cof title I of the Act, that they are notdesigned expressly to preventexploration and development of theOCS and that they are applicable to OCSsources. 40 CFR 55.1. EPA has alsoevaluated the rules to ensure they arenot arbitrary or capricious. 40 CFR55.12(e). In addition, EPA has excludedadministrative or procedural rules,2 andrequirements that regulate toxics whichare not related to the attainment andmaintenance of federal and stateambient air quality standards.

A. After review of the rule submittedby Santa Barbara County APCD againstthe criteria set forth above and in 40CFR part 55, EPA is proposing to makethe following rule revision applicable toOCS sources for which the SantaBarbara County APCD is designated asthe COA:Rule 321 Solvent Cleaning Operations

(Adopted 9/18/97)B. After review of the rules submitted

by South Coast AQMD against thecriteria set forth above and in 40 CFRpart 55, EPA is proposing to make thefollowing rules applicable to OCSsources for which the South CoastAQMD is designated as the COA.

1. The following rules were submittedas revisions to existing requirements:Rule 102 Definition of Terms (Adopted

6/13/97)Rule 301 Permit Fees (Adopted 5/9/97)

except (e)(6) and Table IVRule 304 Equipment, Materials, and

Ambient Air Analyses (Adopted 5/9/97)

Rule 304.1 Analyses Fees (Adopted 5/9/97)

Rule 306 Plan Fees (Adopted 5/9/97)Rule 309 Fees for Regulation XVI

Plans (Adopted 5/9/97)Rule 701 Air Pollution Emergency

Contingency Actions (Adopted 6/13/97)

Rule 1122 Solvent Degreasers(Adopted 7/11/97)

Rule 1134 Emissions of Oxides ofNitrogen from Stationary GasTurbines (Adopted 8/8/97)

Rule 1168 Control of Volatile OrganicCompound Emissions fromAdhesive Application (Adopted 4/11/97)

Rule 1610 Old-Vehicle Scrapping(Adopted 5/5/97)

Rule 2000 General (Adopted 4/11/97)Rule 2011 Requirements for

Monitoring, Reporting, andRecordkeeping for Oxides of Sulfur(SOX) Emissions (Adopted 4/11/97)

Rule 2012 Requirement forMonitoring, Reporting, andRecordkeeping for Oxides ofNitrogen (NOX) Emissions (Adopted4/11/97)

2. The following new rule wassubmitted:Rule 2100 Registration of Portable

Equipment (Adopted 7/1/97)3. The following rules were submitted

but will not be included because eitherthey do not apply to OCS Sources or areadministrative/procedural rules:Rule 303 Hearing Board Fees (Adopted

5/9/97)Rule 308 On-Road Motor Vehicle

Mitigation Options Fees (Adopted5/9/97)

Rule 311 Air Quality InvestmentPrograms (AQIP) Fees (Adopted 5/9/97)

Rule 1421 Control ofPerchloroethylene Emissions fromDry Cleaning Operations (Adopted6/13/97)

Rule 2501 Air Quality InvestmentProgram (Adopted 5/9/97)

Rule 2506 Area Source Credits forNOX and SOX (Adopted 4/11/97)

III. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget(OMB) has exempted this regulatoryaction from E.O. 12866 review.

B. Regulatory Flexibility Act

Under the Regulatory Flexibility Act,5 U.S.C. 600 et seq., EPA must preparea regulatory flexibility analysisassessing the impact of any proposed orfinal rule on small entities. 5 U.S.C. 603and 604. Alternatively, EPA may certifythat the rule will not have a significantimpact on a substantial number of smallentities. Small entities include smallbusinesses, small not-for-profitenterprises, and government entitieswith jurisdiction over populations ofless than 50,000.

SIP approvals under section 110 andsubchapter I, part D of the Clean Air Actdo not create any new requirements butsimply approve requirements that theState is already imposing. Therefore,because the Federal SIP approval doesnot impose any new requirements, the


Administrator certifies that it does nothave a significant impact on any smallentities affected. Moreover, due to thenature of the Federal-State relationshipunder the CAA, preparation of aflexibility analysis would constituteFederal inquiry into the economicreasonableness of state action. TheClean Air Act forbids EPA to base itsactions concerning SIPs on suchgrounds. Union Electric Co. v. U.S. EPA,427 U.S. 246, 255–66 (1976); 42 U.S.C.7410(a)(2).

C. Unfunded MandatesUnder section 202 of the Unfunded

Mandates Reform Act of 1995(‘‘Unfunded Mandates Act’’), signedinto law on March 22, 1995, EPA mustprepare a budgetary impact statement toaccompany any proposed or final rulethat includes a Federal mandate thatmay result in estimated costs to State,local, or tribal governments in theaggregate; or to private sector, of $100million or more. Under section 205,EPA must select the most cost-effectiveand least burdensome alternative thatachieves the objectives of the rule andis consistent with statutoryrequirements. Section 203 requires EPAto establish a plan for informing andadvising any small governments thatmay be significantly or uniquelyimpacted by the rule.

EPA has determined that the approvalaction promulgated does not include aFederal mandate that may result inestimated costs of $100 million or moreto either State, local, or tribalgovernments in the aggregate, or to theprivate sector. This Federal actionapproves pre-existing requirementsunder State or local law, and imposesno new Federal requirements.Accordingly, no additional costs toState, local, or tribal governments, or tothe private sector, result from thisaction.

D. Submission to Congress and theGeneral Accounting Office

Under 5 U.S.C. 801(a)(1)(A) as addedby the Small Business RegulatoryEnforcement Fairness Act of 1996, EPAsubmitted a report containing this ruleand other required information to theU.S. Senate, the U.S. House ofRepresentatives and the ComptrollerGeneral of the General AccountingOffice prior to publication of the rule intoday’s Federal Register. This rule isnot a ‘‘major’’ rule as defined by 5U.S.C. 804(2).

E. Petitions for Judicial ReviewUnder section 307(b)(1) of the Clean

Air Act, petitions for judicial review ofthis action must be filed in the United

States Court of Appeals for theappropriate circuit by March 17, 1998.Filing a petition for reconsideration bythe Administrator of this final rule doesnot affect the finality of this rule for thepurposes of judicial review nor does itextend the time within which a petitionfor judicial review may be filed, andshall not postpone the effectiveness ofsuch rule or action. This action may notbe challenged later in proceedings toenforce its requirements. (See section307(b)(2).)


Environmental protection,Administrative practice and procedures,Air pollution control, Hydrocarbons,Incorporation by reference,Intergovernmental relations, Nitrogendioxide, Nitrogen oxides, OuterContinental Shelf, Ozone, Particulatematter, Permits, Reporting andrecordkeeping requirements, and Sulfuroxides.

Dated: December 22, 1997.Felicia Marcus,Regional Administrator, Region IX.

Title 40 of the Code of FederalRegulations, part 55, is proposed to beamended as follows:

PART 55—[AMENDED]


Authority: Section 328 of the Clean Air Act(42 U.S.C. 7401 et seq.) as amended by PublicLaw 101–549.

2. Section 55.14 is proposed to beamended by revising paragraphs(e)(3)(ii)(F) and (e)(3)(ii)(G) to read asfollows:

§ 55.14 Requirements that apply to OCSsources located within 25 miles of statesseaward boundaries, by state.

* * * * *(e) * * *(3) * * *(ii) * * *(F) Santa Barbara County Air Pollution

Control District Requirements Applicable toOCS Sources.

(G) South Coast Air Quality ManagementDistrict Requirements Applicable to OCSSources (Part I and Part II).

* * * * *

Appendix to Part 55—[Amended]

3. Appendix A to CFR Part 55 isproposed to be amended by revisingparagraph (b)(6) and (7) under theheading ‘‘California’’ to read as follows:

Appendix A to 40 CFR Part 55—Listing ofState and Local Requirements Incorporatedby Reference Into Part 55, by State

* * * * *

California

* * * * *(b) Local requirements.

* * * * *(6) The following requirements are

contained in Santa Barbara County AirPollution Control District RequirementsApplicable to OCS Sources:Rule 102 Definitions (Adopted 4/17/97)Rule 103 Severability (Adopted 10/23/78)Rule 201 Permits Required (Adopted 4/17/

97)Rule 202 Exemptions to Rule 201 (Adopted

4/17/97)Rule 203 Transfer (Adopted 4/17/97)Rule 204 Applications (Adopted 4/17/97)Rule 205 Standards for Granting

Applications (Adopted 4/17/97)Rule 206 Conditional Approval of

Authority to Construct or Permit toOperate (Adopted 10/15/91)

Rule 207 Denial of Application (Adopted10/23/78)

Rule 210 Fees (Adopted 4/17/97)Rule 212 Emission Statements (Adopted 10/

20/92)Rule 301 Circumvention (Adopted 10/23/

78)Rule 302 Visible Emissions (Adopted 10/

23/78)Rule 304 Particulate Matter—Northern

Zone (Adopted 10/23/78)Rule 305 Particulate Matter

Concentration—Southern Zone (Adopted10/23/78)

Rule 306 Dust and Fumes—Northern Zone(Adopted 10/23/78)

Rule 307 Particulate Matter EmissionWeight Rate—Southern Zone (Adopted10/23/78)

Rule 308 Incinerator Burning (Adopted 10/23/78)

Rule 309 Specific Contaminants (Adopted10/23/78)

Rule 310 Odorous Organic Sulfides(Adopted 10/23/78)

Rule 311 Sulfur Content of Fuels (Adopted10/23/78)

Rule 312 Open Fires (Adopted 10/2/90)Rule 316 Storage and Transfer of Gasoline

(Adopted 4/17/97)Rule 317 Organic Solvents (Adopted 10/23/

78)Rule 318 Vacuum Producing Devices or

Systems—Southern Zone (Adopted 10/23/78)

Rule 321 Solvent Cleaning Operations(Adopted 9/18/97)

Rule 322 Metal Surface Coating Thinnerand Reducer (Adopted 10/23/78)

Rule 323 Architectural Coatings (Adopted7/18/96)

Rule 324 Disposal and Evaporation ofSolvents (Adopted 10/23/78)

Rule 325 Crude Oil Production andSeparation (Adopted 1/25/94) Rule 326Storage of Reactive Organic LiquidCompounds (Adopted 12/14/93)

Rule 327 Organic Liquid Cargo Tank VesselLoading (Adopted 12/16/85)

Rule 328 Continuous Emission Monitoring(Adopted 10/23/78)

Rule 330 Surface Coating of MiscellaneousMetal Parts and Products (Adopted 4/21/95)


Rule 331 Fugitive Emissions Inspection andMaintenance (Adopted 12/10/91)

Rule 332 Petroleum Refinery VacuumProducing Systems, WastewaterSeparators and Process Turnarounds(Adopted 6/11/79)

Rule 333 Control of Emissions fromReciprocating Internal CombustionEngines (Adopted 4/17/97)

Rule 342 Control of Oxides of Nitrogen(NOX) from Boilers, Steam Generatorsand Process Heaters) (Adopted 4/17/97)

Rule 343 Petroleum Storage Tank Degassing(Adopted 12/14/93)

Rule 344 Petroleum Sumps, Pits, and WellCellars (Adopted 11/10/94)

Rule 359 Flares and Thermal Oxidizers (6/28/94)

Rule 370 Potential to Emit—Limitations forPart 70 Sources (Adopted 6/15/95)

Rule 505 Breakdown Conditions SectionsA., B.1., and D. only (Adopted 10/23/78)

Rule 603 Emergency Episode Plans(Adopted 6/15/81)

Rule 702 General Conformity (Adopted 10/20/94)

Rule 801 New Source Review (Adopted 4/17/97)

Rule 802 Nonattainment Review (Adopted4/17/97)

Rule 803 Prevention of SignificantDeterioration (Adopted 4/17/97)

Rule 804 Emission Offsets (Adopted 4/17/97)

Rule 805 Air Quality Impact Analysis andModeling (Adopted 4/17/97)

Rule 1301 Part 70 Operating Permits—General Information (Adopted 4/17/97)

Rule 1302 Part 70 Operating Permits—Permit Application (Adopted 11/09/93)

Rule 1303 Part 70 Operating Permits—Permits (Adopted 11/09/93)

Rule 1304 Part 70 Operating Permits—Issuance, Renewal, Modification andReopening (Adopted 11/09/93)

Rule 1305 Part 70 Operating Permits—Enforcement (Adopted 11/09/93)

(7) The following requirements arecontained in South Coast Air QualityManagement District RequirementsApplicable to OCS Sources:Rule 102 Definition of Terms (Adopted 6/

13/97)Rule 103 Definition of Geographical Areas

(Adopted 1/9/76)Rule 104 Reporting of Source Test Data and

Analyses (Adopted 1/9/76)Rule 108 Alternative Emission Control

Plans (Adopted 4/6/90)Rule 109 Recordkeeping for Volatile

Organic Compound Emissions (Adopted3/6/92)

Rule 201 Permit to Construct (Adopted 1/5/90)

Rule 201.1 Permit Conditions in FederallyIssued Permits to Construct (Adopted 1/5/90)

Rule 202 Temporary Permit to Operate(Adopted 5/7/76)

Rule 203 Permit to Operate (Adopted 1/5/90)

Rule 204 Permit Conditions (Adopted 3/6/92)

Rule 205 Expiration of Permits to Construct(Adopted 1/5/90)

Rule 206 Posting of Permit to Operate(Adopted 1/5/90)

Rule 207 Altering or Falsifying of Permit(Adopted 1/9/76)

Rule 208 Permit for Open Burning(Adopted 1/5/90)

Rule 209 Transfer and Voiding of Permits(Adopted 1/5/90)

Rule 210 Applications (Adopted 1/5/90)Rule 212 Standards for Approving Permits

(Adopted 8/12/94) except (c)(3) and (e)Rule 214 Denial of Permits (Adopted 1/5/

90)Rule 217 Provisions for Sampling and

Testing Facilities (Adopted 1/5/90)Rule 218 Stack Monitoring (Adopted 8/7/

81)Rule 219 Equipment Not Requiring a

Written Permit Pursuant to Regulation II(Adopted 12/13/96)

Rule 220 Exemption—Net Increase inEmissions (Adopted 8/7/81)

Rule 221 Plans (Adopted 1/4/85)Rule 301 Permit Fees (Adopted 5/9/97)

except (e)(6) and Table IVRule 304 Equipment, Materials, and

Ambient Air Analyses (Adopted 5/9/97)Rule 304.1 Analyses Fees (Adopted 5/9/97)Rule 305 Fees for Acid Deposition

(Adopted 10/4/91)Rule 306 Plan Fees (Adopted 5/9/97)Rule 309 Fees for Regulation XVI Plans

(Adopted 5/9/97)Rule 401 Visible Emissions (Adopted 4/7/

89)Rule 403 Fugitive Dust (Adopted 2/14/97)Rule 404 Particulate Matter—Concentration

(Adopted 2/7/86)Rule 405 Solid Particulate Matter—Weight

(Adopted 2/7/86)Rule 407 Liquid and Gaseous Air

Contaminants (Adopted 4/2/82)Rule 408 Circumvention (Adopted 5/7/76)Rule 409 Combustion Contaminants

(Adopted 8/7/81)Rule 429 Start-Up and Shutdown

Provisions for Oxides of Nitrogen(Adopted 12/21/90)

Rule 430 Breakdown Provisions, (a) and (e)only (Adopted 7/12/96)

Rule 431.1 Sulfur Content of Gaseous Fuels(Adopted 10/2/92)

Rule 431.2 Sulfur Content of Liquid Fuels(Adopted 5/4/90)

Rule 431.3 Sulfur Content of Fossil Fuels(Adopted 5/7/76)

Rule 441 Research Operations (Adopted 5/7/76)

Rule 442 Usage of Solvents (Adopted 3/5/82)

Rule 444 Open Fires (Adopted 10/2/87)Rule 463 Organic Liquid Storage (Adopted

3/11/94)Rule 465 Vacuum Producing Devices or

Systems (Adopted 11/1/91)Rule 468 Sulfur Recovery Units (Adopted

10/8/76)Rule 473 Disposal of Solid and Liquid

Wastes (Adopted 5/7/76)Rule 474 Fuel Burning Equipment-Oxides

of Nitrogen (Adopted 12/4/81)Rule 475 Electric Power Generating

Equipment (Adopted 8/7/78)Rule 476 Steam Generating Equipment

(Adopted 10/8/76)

Rule 480 Natural Gas Fired Control Devices(Adopted 10/7/77)

Addendum to Regulation IV (Effective 1977)Rule 518 Variance Procedures for Title V

Facilities (Adopted 8/11/95)Rule 518.1 Permit Appeal Procedures for

Title V Facilities (Adopted 8/11/95)Rule 518.2 Federal Alternative Operating

Conditions (Adopted 1/12/96)Rule 701 Air Pollution Emergency

Contingency Actions (Adopted 6/13/97)Rule 702 Definitions (Adopted 7/11/80)Rule 704 Episode Declaration (Adopted 7/

9/82)Rule 707 Radio—Communication System

(Adopted 7/11/80)Rule 708 Plans (Adopted 7/9/82)Rule 708.1 Stationary Sources Required to

File Plans (Adopted 4/4/80)Rule 708.2 Content of Stationary Source

Curtailment Plans (Adopted 4/4/80)Rule 708.4 Procedural Requirements for

Plans (Adopted 7/11/80)Rule 709 First Stage Episode Actions

(Adopted 7/11/80)Rule 710 Second Stage Episode Actions

(Adopted 7/11/80)Rule 711 Third Stage Episode Actions

(Adopted 7/11/80)Rule 712 Sulfate Episode Actions (Adopted

7/11/80)Rule 715 Burning of Fossil Fuel on Episode

Days (Adopted 8/24/77)Regulation IX—New Source Performance

Standards (Adopted 4/8/94)Rule 1106 Marine Coatings Operations

(Adopted 1/13/95)Rule 1107 Coating of Metal Parts and

Products (Adopted 3/8/96)Rule 1109 Emissions of Oxides of Nitrogen

for Boilers and Process Heaters inPetroleum Refineries (Adopted 8/5/88)

Rule 1110 Emissions from StationaryInternal Combustion Engines(Demonstration) (Adopted 11/6/81)

Rule 1110.1 Emissions from StationaryInternal Combustion Engines (Adopted10/4/85)

Rule 1110.2 Emissions from Gaseous andLiquid-Fueled Internal CombustionEngines (Adopted 12/9/94)

Rule 1113 Architectural Coatings (Adopted11/8/96)

Rule 1116.1 Lightering Vessel Operations—Sulfur Content of Bunker Fuel (Adopted10/20/78)

Rule 1121 Control of Nitrogen Oxides fromResidential-Type Natural Gas-FiredWater Heaters (Adopted 3/10/95)

Rule 1122 Solvent Degreasers (Adopted 7/11/97)

Rule 1123 Refinery Process Turnarounds(Adopted 12/7/90)

Rule 1129 Aerosol Coatings (Adopted 3/8/96)

Rule 1134 Emissions of Oxides of Nitrogenfrom Stationary Gas Turbines (Adopted8/8/97)

Rule 1136 Wood Products Coatings(Adopted 6/14/96)

Rule 1140 Abrasive Blasting (Adopted 8/2/85)

Rule 1142 Marine Tank Vessel Operations(Adopted 7/19/91)


Rule 1146 Emissions of Oxides of Nitrogenfrom Industrial, Institutional, andCommercial Boilers, Steam Generators,and Process Heaters (Adopted 5/13/94)

Rule 1146.1 Emission of Oxides of Nitrogenfrom Small Industrial, Institutional, andCommercial Boilers, Steam Generators,and Process Heaters (Adopted 5/13/94)

Rule 1148 Thermally Enhanced OilRecovery Wells (Adopted 11/5/82)

Rule 1149 Storage Tank Degassing(Adopted 4/1/88)

Rule 1168 Control of Volatile OrganicCompound Emissions from AdhesiveApplication (Adopted 4/11/97)

Rule 1171 Solvent Cleaning Operations(Adopted 9/13/96)

Rule 1173 Fugitive Emissions of VolatileOrganic Compounds (Adopted 5/13/94)

Rule 1176 VOC Emissions from WastewaterSystems (Adopted 9/13/96)

Rule 1301 General (Adopted 6/28/90)Rule 1302 Definitions (Adopted 5/3/91)Rule 1303 Requirements (Adopted 5/10/96)Rule 1304 Exemptions (Adopted 6/14/96)Rule 1306 Emission Calculations (Adopted

6/14/96)Rule 1313 Permits to Operate (Adopted 6/

28/90)Rule 1403 Asbestos Emissions from

Demolition/Renovation Activities(Adopted 4/8/94)

Rule 1605 Credits for the Voluntary Repairof On-Road Vehicles Identified ThroughRemote Sensing Devices (Adopted 10/11/96)

Rule 1610 Old-Vehicle Scrapping (Adopted5/5/97)

Rule 1701 General (Adopted 1/6/89)Rule 1702 Definitions (Adopted 1/6/89)Rule 1703 PSD Analysis (Adopted 10/7/88)Rule 1704 Exemptions (Adopted 1/6/89)Rule 1706 Emission Calculations (Adopted

1/6/89)Rule 1713 Source Obligation (Adopted 10/

7/88)Regulation XVII Appendix (effective 1977)Rule 1901 General Conformity (Adopted 9/

9/94)Rule 2000 General (Adopted 4/11/97)Rule 2001 Applicability (Adopted 2/14/97)Rule 2002 Allocations for Oxides of

Nitrogen (NOx) and Oxides of Sulfur(SOx) Emissions (Adopted 2/14/97)

Rule 2004 Requirements (Adopted 7/12/96)except (1) (2 and 3)

Rule 2005 New Source Review forRECLAIM (Adopted 2/14/97) except (i)

Rule 2006 Permits (Adopted 10/15/93)Rule 2007 Trading Requirements (Adopted

10/15/93)Rule 2008 Mobile Source Credits (Adopted

10/15/93)Rule 2010 Administrative Remedies and

Sanctions (Adopted 10/15/93)Rule 2011 Requirements for Monitoring,

Reporting, and Recordkeeping for Oxidesof Sulfur (SOx) Emissions (Adopted 4/11/97)

Appendix A Volume IV—(Protocol foroxides of sulfur) (Adopted 3/10/95)

Rule 2012 Requirements for Monitoring,Reporting, and Recordkeeping for Oxidesof Nitrogen (NOx) Emissions (Adopted 4/11/97)

Appendix A Volume V—(Protocol foroxides of nitrogen) (Adopted 3/10/95)

Rule 2015 Backstop Provisions (Adopted 2/14/97) except (b)(1)(G) and (b)(3)(B)

Rule 2100 Registration of PortableEquipment (Adopted 7/1/97)

XXX Title V Permits (Adopted 8/11/95)XXXI Acid Rain Permit Program (Adopted

2/10/95)

* * * * *[FR Doc. 98–1137 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 440

[WH–FRL–5937–6]

Withdrawal of Amendment to OreMining and Dressing Point SourceCategory; Effluent LimitationsGuidelines and New SourcePerformance Standards

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Proposed rule; withdrawal.

SUMMARY: EPA is withdrawing aproposed rule published in the FederalRegister on February 12, 1996 (61 FR5364). The proposed rule would haveamended the applicability of certaineffluent limitations guidelines and newsource performance standards governingmines with froth-flotation mills to theAlaska-Juneau (A–J) gold mine projectnear Juneau, Alaska. Specifically, EPAproposed to exempt dewatered tailingsproduced by the proposed A–J mine andmill from effluent guidelines based onbest practicable control technology(BPT) and best available controltechnology economically achievable(BAT), and from new sourceperformance standards (NSPS) thatappear at 40 CFR part 440, subpart J.EPA also proposed that a definition of‘‘dewatered tailings’’ be added to 40CFR part 440, subpart L.DATES: This proposed rule is withdrawnas of January 16, 1998.ADDRESSES: Supporting informationused in developing the proposed rule,including studies prepared as part of asupplemental environmental impactstatement prepared on the A–J projectand comments received during theperiod for public comment on theproposed rule, are available for publicinspection and copying at the EPAWater Docket at Headquarters,Waterside Mall, Room M2616, 401 MStreet, SW., Washington DC 20460. For

access to the Docket materials, call (202)260–3027 between 9:00 a.m. and 3:30p.m. for an appointment. A reasonablefee may be charged for copying.

FOR FURTHER INFORMATION CONTACT:

For information concerning theproposed rule that is being withdrawn,you may contact Ronald G. Kirby,Address: Engineering and AnalysisDivision (Mail Code 4303), 401 M StreetSW., Washington, DC 20460; TelephoneNumber: (202) 260–7168; FacsimileNumber: (202) 260–7185 or by e-mail atkirby.ronald@epamail,epa.gov.

SUPPLEMENTARY INFORMATION: Theproposed rule would have excludedmill tailings from the definition ofprocess wastewater, thereby exemptingdewatered tailings from the nodischarge requirement and in turn allowconsideration of other disposaltechnologies. Process wastewatersseparated from the dewatered tailingsand mine drainage wastewater wouldhave continued to be covered by theSubpart. In addition, EPA solicitedcomments on whether other mine sitesexhibit extreme environmentalconditions such as those at the A–J minesite. This information was requestedbecause the A–J mine site was the onlysite known to EPA that might warrantan exemption from the current SubpartJ regulations as a result of extremeenvironmental conditions. In addition,EPA solicited information on the typesof criteria that could be used to establisha more general exemption from therequirements of subpart J than thatproposed for the A–J site, in the eventthat additional, potentially eligible siteswere identified. However, very littleinformation was submitted during thecomment period that warrants furtherEPA review regarding any other site orcriteria.

On January 14, 1997, Echo Bay Minesannounced that it would terminate itsdevelopment plans for the A–J mineproject. EPA has concluded, in light ofthe closure of the A–J mine project andthe lack of information about other minesites exhibiting similarly extremeenvironmental conditions, that it isunnecessary to continue this rulemakig.Therefore, EPA withdraws the proposedrule.

Dated: December 15, 1997.

Carol M. Browner,

Administrator.[FR Doc. 98–1115 Filed 1–15–98; 8:45 am]




Federal Railroad Administration

49 CFR Part 232

[FRA Docket No. PB–9, Notice No. 10]

RIN 2130–AB22

Two-Way End-of-Train TelemetryDevices and Certain Passenger TrainOperations

AGENCY: Federal RailroadAdministration (FRA), DOT.ACTION: Notice of proposed rulemaking.

SUMMARY: FRA proposes to revise theregulations regarding the use and designof two-way end-of-train telemetrydevices (two-way EOTs) to specificallyaddress certain passenger trainoperations where multiple units offreight-type equipment, materialhandling cars, or express cars are part ofa passenger train’s consist. Trains of thisnature are currently being operated bythe National Railroad PassengerCorporation (Amtrak), and swift actionis necessary to clarify and address theapplicability of the two-way EOTrequirements to these types ofoperations.DATES: Written comments regarding thisproposal must be filed no later thanFebruary 2, 1998. Comments receivedafter that date will be considered to theextent possible without incurringadditional expense or delay.ADDRESSES: Written comments shouldidentify the docket number and thenotice number and must be submitted intriplicate to the Docket Clerk, Office ofChief Counsel, FRA, 400 Seventh Street,S.W., Stop 10, Washington, D.C. 20590.FOR FURTHER INFORMATION CONTACT:James Wilson, Motive Power andEquipment Division, Office of Safety,RRS–14, FRA, 400 Seventh Street, S.W.,Stop 25, Washington, D.C. 20590(telephone 202–632–3367), or ThomasHerrmann, Trial Attorney, Office of theChief Counsel, RCC–12, FRA, 400Seventh Street, S.W., Stop 10,Washington, D.C. 20590 (telephone202–632–3178).


BackgroundOn January 2, 1997, FRA published a

final rule amending the regulationsgoverning train and locomotive powerbraking systems at 49 CFR part 232 toadd provisions pertaining to the use anddesign of two-way end-of-traintelemetry devices (two-way EOTs). See62 FR 278. The purpose of the revisionswas to improve the safety of railroadoperations by requiring the use of two-

way EOTs on a variety of freight trainspursuant to 1992 legislation, and byestablishing minimum performance andoperational standards related to the useand design of the devices. See Pub. L.No. 102–365 (September 3, 1992); 49U.S.C. 20141. In this document, FRAproposes to revise the regulations ontwo-way EOTs to specifically addresscertain passenger train operations wherenumerous freight-type cars, materialhandling cars, or express cars are part ofa train’s consist. Trains of this natureare currently being operated by theNational Railroad Passenger Corporation(Amtrak), and prompt action isnecessary to clarify and address theapplicability of two-way EOTrequirements to these types ofoperations.

The current regulations regardingtwo-way EOTs provide an exceptionfrom the requirements for ‘‘passengertrains with emergency brakes.’’ See 49CFR 232.23(e)(9). The language used inthis exception was extracted in totalfrom the statutory exception containedin the statutory provisions mandatingthat FRA develop regulations addressingthe use and operation of two-way EOTsor similar technology. See 49 U.S.C.20141(c)(2). A review of the legislativehistory reveals that there was nodiscussion by Congress as to the precisemeaning of the phrase ‘‘passenger trainswith emergency brakes.’’ Consequently,FRA is required to effectuate Congress’intent based on the precise languageused in that and the other expressexceptions and based on the overallintent of the statutory mandate. See 49U.S.C. 20141(c)(1)–(c)(5). Furthermore,any exception contained in a specificstatutory mandate should be narrowlyconstrued. See Chesapeake & Ohio Ry.v. United States, 248 F. 85 (6th Cir.1918) cert. den., 248 U.S. 580; DRG R.R.v. United States, 249 F. 822 (8th Cir.1918); United States v. ATSF Ry., 156F.2d 457 (9th Cir. 1946).

The intent of the statutory provisionsrelated to two-way EOTs was to ensurethat trains operating at a speed over 30mph or in heavy grade territory wereequipped with the technology toeffectuate an emergency application ofthe train’s brakes starting from both thefront and rear of the train. The specificexceptions contained in the statute wereaimed at trains (i) that do not operatewithin the express parameters or (ii)that are equipped or operated in afashion that provides the ability toeffectuate an emergency brakeapplication that commences at the rearof the train without the use of a two-wayEOT. See 49 U.S.C. 20141(c)(1)–(c)(5).Based on the intent of the statute andbased upon a consistent and narrow

construction of the specific languageused by Congress in the expressexceptions, FRA believes it is clear thatCongress did not intend the phrase‘‘passenger trains with emergencybrakes’’ to constitute a blanketexception for all passenger trains. If thatwas Congress’ intent, it would not haveadded the qualifying phrase ‘‘withemergency brakes.’’ In FRA’s view, thislanguage limits the specific statutoryexception to passenger trains equippedwith a separate emergency brake valvein each car throughout the train and,thus, to passenger trains possessing theability to effectuate an emergencyapplication of the train’s brakes from therear of the train. Therefore, passengertrains that include RoadRailers, autoracks, express cars, or other similarvehicles that are designed to carryfreight that are placed at the rear of thetrain, that are not equipped withemergency brake valves, would not fallwithin the specific statutory orregulatory exception as they areincapable of effectuating an emergencybrake application that commences at therear of the train. Further, FRA does notbelieve that Congress envisioned freight-type equipment being hauled at the rearof passenger trains when the specificexception was included in the statute.

FRA believes that Congress intendedto except only those trains traditionallyconsidered to be passenger trains, whichwould include passenger trainscontaining baggage and mail cars asthese have consistently been consideredpassenger equipment with emergencybrakes. However, passenger trainswhich operate with numerousinaccessible baggage or mail carsattached to the rear of the train that lackany ability to effectuate an emergencybrake application from the rear of thetrain would, in FRA’s view, fall outsidethe specific statutory and regulatoryexception for ‘‘passenger trains withemergency brakes.’’

Subsequent to the issuance of thefinal rule and the period permitted forthe submission of petitions forreconsideration of the rule, Amtrakraised concerns regarding theapplicability of the final rule to some ofits passenger train operations,particularly those which recently beganto operate with numerous express,material handling cars, or RoadRailers

entrained in the consist. These concernsfocused on FRA’s enforcement guidanceprovided to its field inspectors, whichstated that the exception for ‘‘passengertrains with emergency brakes’’ wasintended to apply only to trainstraditionally considered to be passengertrains, a category that would includepassenger trains containing a limited


number of baggage and mail cars at therear of the train. This guidance wasbased on the reasoning provided in thepreceding discussion. Amtrakcontended that FRA’s interpretiveguidance was an improper reading ofthe statutory and regulatory exceptionand did not adequately consider thesuperior braking capabilities ofpassenger equipment. Although FRAdisagrees that its guidance wasimproper, FRA does agree that a closerexamination of the applicability of thetwo-way EOT requirements to passengertrains needed to be performed in lightof the superior braking ratios ofpassenger cars and the presence ofemergency brake valves on thepassenger cars in mixed train consistswhich provide certain safety assurancesthat are not present in traditional freightoperations. Consequently, FRA agreesthat the mixed passenger and ‘‘express’’service currently being operated byAmtrak is unique and needs to behandled separately from traditionalfreight operations.

None of the consists proposed to beexcepted raises any issue with respect tothe ability to stop on grade using therearmost available conductor’s valve.The issue is the ability to stop withinnormal signal spacing after determiningthat there is a blockage in the train line.To gain a perspective on the stoppingcharacteristics and safety implicationsof the ‘‘mixed’’ passenger trainoperations, FRA requested the VolpeNational Transportation Systems Center(Volpe) to review the information andprocedures used by Amtrak indeveloping various stopping distancecalculations submitted to FRA. Inaddition, FRA requested that Volpedevelop and analyze its own dataregarding these types of ‘‘mixed’’passenger trains. In making theircalculations, both Volpe and Amtrakused variables of grade; trainconfiguration; and the number, weight,and types of cars and locomotivesexpected to be used in these types ofoperations. Although all of thecalculations were based on worse-casescenarios (e.g., the angle cock wasassumed to be closed just behind thelast car with an accessible emergencybrake valve, and only friction braking—tread or disc brakes of locomotives andcars—was considered available to stopthe train), all stops were achieved on thespecified grade used in the calculation.

In making its calculations Volpe useda MathCad program to computestopping distances. Volpe used theresults of its calculations as a checkagainst the results Amtrak had producedand submitted to FRA. Volpe concludedthat Amtrak’s procedures predicted

longer (more conservative) stoppingdistances than the approach taken byVolpe. Amtrak’s results were alsocompared to the requirements of theAmtrak Communication and SignalDepartment, Specification S–603, Curve8, which is used to determine stoppingdistances for passenger equipment forsignal block spacing. Curve 8 values forstopping distances are augmented by afactor of 25 percent to account forconditions which may impair brakeperformance. The absolute (actual)signal block spacing on the NortheastCorridor is actually greater than any ofthe stopping distances produced byeither Volpe or Amtrak in theircalculations. Therefore, stoppingdistances within established signalblocks should not be a problem. Theprocess Amtrak used was sufficientlyconservative so that predicted stoppingdistances were greater than would beexperienced in reality. Nevertheless,FRA has worked with Amtrak to definefurther limitations adequate to ensuresafety under identified worst-caseconditions, and these limitations are setforth in this proposal.

Need for 15-Day Comment PeriodAs previously discussed, Amtrak

currently operates a number of trainsthat include numerous materialhandling cars, express cars, auto racks,mail cars, and/or RoadRailer

equipment. These types of rollingequipment are either not equipped withemergency brake valves or, if equippedwith such valves, they are not accessibleto any member of the train crew. Amtrakexpects that the operation of this type ofrolling equipment will continue to growand that many of its trains willeventually have a number of thesevehicles in their consists. As explainedearlier, FRA believes that a passengertrain operated with this rollingequipment falls outside the statutoryand regulatory exception to the two-wayEOT requirement for ‘‘passenger trainswith emergency brakes,’’ and thus,would be required under the existingrules to be equipped with an operativetwo-way EOT or alternative technology.However, FRA also recognizes theunique nature of these types of ‘‘mixed’’operations and realizes that the safetyassurances provided by the brakingratios and the presence of emergencybrake valves at various locationsthrough much of the consist on certainmixed passenger trains make requiringthe use of a two-way EOT unnecessary.

As will be further clarified, FRAbelieves that swift action must be takenwith regard to the provisions proposedin this document and that a lengthycomment period would be

impracticable, unnecessary, andcontrary to the public interest. Anumber of freight railroads are currentlyexpressing concern and apprehensionover permitting these ‘‘mixed’’passenger trains to operate over theirrails in light of FRA’s above-mentionedinterpretive guidance. In fact, at leastone instance has occurred in which a‘‘mixed’’ Amtrak train was detained forsix hours by a freight railroad until atwo-way EOT was applied because thefreight railroad refused to permit thetrain to operate without the device. Inaddition, requiring Amtrak to acquire anumber of two-way EOTs and operateunder the provisions of the currentregulatory scheme during a lengthycomment period would impose asubstantial and unwarranted financialand operational burden withoutimproving the safety of Amtrakoperations. Furthermore, the proposalscontained in this document includecertain restrictions on the operation andmake-up of certain passenger trains thatare proposed for exception from thetwo-way EOT requirements, restrictionsthat FRA believes enhance the safety ofthose operations and that are notcurrently mandated.

The current situation mandates swiftaction to address both safety concernsand practical operating concerns. On theone hand, Amtrak is continuing to takedelivery of express and other equipmentand to build this line of business inorder to close its operating deficit andto support continued intercity railpassenger service in a time of decliningsupport from the public treasury. Thepublic’s interest in continued railpassenger service warrants reasonableflexibility to achieve this businessobjective. This development hascorresponded with the implementationof two-way EOT requirements, rapidlycomplicating what appeared at theoutset to be a relatively straightforwardissue. Prior to the effective date of therule, Amtrak had implemented a two-way EOT system on its AutoTrain,previously the only Amtrak trainoperated with any significant number ofunoccupied cars at the rear of the train.Anticipating the need to equip othertrains as the express business grows,Amtrak is equipping over 100locomotives and deploying rear-endunits at appropriate points along itslines where trains are built. Meanwhile,Amtrak has committed to FRA tooperate cars with cables for head-endpower transmission (such as mail andbaggage cars) at the front of trains wherepracticable given constraints on loadingand unloading, in order limit thenumber of cars to the rear of the train


that are beyond the last car with anaccessible emergency valve. As notedabove, passenger trains have historicallyoperated with small numbers ofunoccupied cars at the rear and withoutdifficulty from the point of view ofeffective braking. However, as expressservice grows and Amtrak builds trainsresponsive to that growth (aphenomenon that is well underway), thedanger increases that Amtrak’s owninternal policies for use of availabletwo-way EOT systems may not behonored in the field through oversight.That is, having clear and certain Federalrequirements becomes essential topublic safety. FRA recognizes thatprevious interpretive guidance has beenexcessively narrow in relation to thesafety issues presented by mixedconsists.

In conclusion, FRA believes thatprompt action is necessary in order toalleviate and avoid the concerns notedabove. Consequently, FRA is issuingthis NPRM with a comment period ofonly 15 days in order to quickly addressthe applicability of the two-way EOTrequirements to ‘‘mixed’’ passengertrain operations.

FRA wishes to make clear that if nosubstantive adverse comments arereceived on this proposal within the 15-day comment period, it willimmediately issue a final rulecontaining the provisions of thisproposal. Any comments receivedduring this 15-day comment period willbe fully considered prior to the issuanceof a final rule. FRA intends for any finalrule issued to take effect immediatelyupon publication. FRA is now solicitingcomments on this proposal and willconsider those comments indetermining whether there is a need toamend the proposal at the final rulestage. It should be noted that, FRA willcontinue to exercise its enforcementdiscretion pursuant to 49 CFR part 209,Appendix A, and not require strictadherence to the current requirementsby certain ‘‘mixed’’ passenger trainoperations in order to prevent furtherconfusion within the industry regardingFRA’s previous interpretative guidancewhile ensuring the continued safety ofsuch operations.

Section-by-Section AnalysisFRA proposes to amend § 232.23 by

revising paragraphs (e) and (g) and byadding a new paragraph (h) tospecifically address passenger trainoperations that include using cars thatdo not have readily accessibleemergency brake valves.

Paragraph (e) of § 232.23 contains alisting of the trains that are exceptedfrom the two-way EOT requirements.

FRA proposes conforming changes toparagraphs (e)(8) and (e)(9). Inparagraph (e)(9) FRA proposes to retainthe exception for passenger trains inwhich all of the cars in the train areequipped with a readily accessibleemergency brake valve, as discussed indetail above.

In paragraph (e)(10) FRA proposes anexception to the requirements regardingtwo-way EOTs for passenger trains thatoperate with a car placed at the rear ofthe train that is equipped with anemergency brake valve readilyaccessible to a crew member in radiocommunication with the locomotiveengineer of the train. FRA intends forthis proposed exception to be applicableto passenger trains containing cars thatdo have a readily accessible emergencybrake valve at the rear of the train. FRAbelieves this proposed exception isjustified as it is virtually identical to theexception granted to freight trains withan occupied caboose (contained inparagraph (e)(3)) since it would permitan emergency application of brakes tobe initiated from the occupied car at therear of the passenger train.

In paragraph (e)(11) FRA proposes toexcept certain passenger trains that havecars placed at the rear of the train thatdo not have readily accessibleemergency brake valves. This proposedexception is intended to recognize thesafety of these types of trains ifconfigured and operated in accordancewith the provisions of this exception.The proposed exception contained inthis subparagraph applies only to trainsof twenty-four (24) cars or fewer.Therefore, passenger trains that havemore than 24 cars in the consist and thatdo not fall within the exceptionscontained in subparagraphs (e)(9) or(e)(10) would be required to beequipped with an operative two-wayEOT device or alternative technology. Itshould be noted that FRA intends thateach bogie used in RoadRaileroperation be counted as a car forpurposes of calculating the number ofcars in a passenger train consist.Furthermore, FRA proposes that alocomotive that is not designed to carrypassengers should not be considered acar for purposes of these calculations.

Based on data and informationsubmitted by Amtrak and reviewed byVolpe and based upon Volpe’sindependent analysis regardingpassenger train braking ratios and theresponse of passenger train brakes, FRAbelieves that certain ‘‘mixed’’ passengertrains can be safely operated withoutbeing required to be equipped with atwo-way EOT or alternative technologyprovided certain operational and trainconfiguration restrictions are

maintained. Paragraph (e)(11)(i)proposes that if the total number of carsin a passenger train consist is twelve(12) or fewer, a car located no less thanhalfway through the consist must beequipped with an emergency brakevalve readily accessible to a crewmember. For example, in a consistcontaining twelve (12) cars, the sixth(6th) car (or a car closer to the rear) inthe consist must have a readilyaccessible emergency brake valve;likewise, in an eleven (11) car consist,the sixth (6th) car (or a car closer to therear) must have a readily accessibleemergency brake valve, since all halfnumbers will be rounded up. Paragraph(e)(11)(ii) proposes that if the totalnumber of cars in a passenger trainconsist is from thirteen (13) to twenty-four (24), a car located no less than two-thirds (2⁄3) of the way through theconsist (counting from the first car inthe train) must be equipped with anemergency brake valve readilyaccessible to a crew member. Forexample, in a twenty-one (21) carconsist, the fourteenth (14th) car (or acar closer to the rear) must have areadily accessible emergency brakevalve.

In addition to these train-configuration requirements, paragraphs(e)(11)(iii) and (iv) contain certainproposed operating requirements thatmust be followed by any passenger trainoperating pursuant to this specificexception. Such trains would berequired to have a train crew memberoccupy the rearmost car equipped witha readily accessible emergency brakevalve and remain in constant radiocommunication with the locomotiveengineer whenever the train is operatingover a section of track with an averagegrade of two percent or higher over twocontinuous miles. FRA recommendsthat the engineer alert the train crewmember approximately ten (10) minutesprior to descending the heavy grade, sothe crew member will be in place at thecrest of the grade. Furthermore, FRAproposes that the crew member notleave his or her position until thelocomotive engineer advises that thetrain has traversed the grade. FRAbelieves that these proposed operationalrequirements will ensure thatimmediate action can be taken by amember of the train crew to effectuatean emergency brake applicationwhenever the train is descending aheavy grade.

FRA proposes to amend paragraph (g)to indicate that the operating limitationsthat will be imposed on a passengertrain required to be equipped with atwo-way EOT that experiences an enroute failure of the device will be


contained in paragraph (h). It should benoted that FRA intends that the criteriacontained paragraph (g) to determinewhen a loss of communication betweenthe front and rear units will beconsidered an en route failure will beapplicable to passenger train operations.

Paragraph (h) contains the operationallimitations and restrictions that areproposed to be placed on passengertrains that experience en route failuresof two-way EOTs. Due to the time-sensitive nature of passenger operations,FRA believes that placing a speedrestriction on these trains would not bethe most effective method of handlingen route failures of a device. Rather,FRA believes that other operatingrestrictions can be imposed to ensurethe safety of these trains. FRA believesthat in order to realize the benefits of atwo-way EOT as contemplated byCongress, the device must be operativewhen the train descends a heavy grade.Therefore, FRA proposes that if apassenger train is required to beequipped with an operable device, itshall not be permitted to descend anaverage grade of two percent or more fortwo continuous miles until an operabledevice is installed or an alternativemethod of initiating an emergency brakeapplication from the rear of the train isachieved. However, FRA furtherproposes that passenger trains thatdevelop an en route failure of the two-way EOT may continue to operate overtrack that is not in heavy grade territoryas long as a crew member occupies therearmost car with a readily accessibleemergency brake valve and remains inconstant radio communication with thelocomotive engineer. FRA also believesthat since the train no longer has thesafety assurances provided by a two-way EOT, the engineer mustperiodically test the brakingcharacteristics of the train by makingrunning brake tests. If the engineersuspects the brakes are not functioningproperly, immediate action shall betaken to bring the train to a stop untilcorrections can be made. FRA alsoproposes that all en route failures of thedevices must be corrected either at thenext location where the necessaryrepairs can be made or at the nextlocation where a required brake test ofthe train is to be conducted, whicheverpoint the train arrives at first.

Regulatory Impact

Executive Order 12866 and DOTRegulatory Policies and Procedures

This proposal has been evaluated inaccordance with existing policies andprocedures. Because the requirementscontained in this proposal clarify theapplicability of the two-way EOT

regulations to a specific segment of theindustry and generally reduce theregulatory burden on these operators,FRA has concluded that this NPRMdoes not constitute a significant ruleunder either Executive Order 12866 orDOT’s policies and procedures.

Regulatory Flexibility ActThe Regulatory Flexibility Act of 1980

(5 U.S.C. 601 et seq.) requires a reviewof rules to assess their impact on smallentities. FRA certifies that this proposaldoes not have a significant impact on asubstantial number of small entities.Because the requirements contained inthis proposal clarify the applicability ofthe two-way EOT regulations to aspecific segment of the industry andgenerally reduce the regulatory burdenon these operators, FRA has concludedthat there are no substantial economicimpacts for small units of government,businesses, or other organizations.

Paperwork Reduction ActThis proposal does not change any

information collection requirements.

Environmental ImpactFRA has evaluated this proposal in

accordance with its procedures forensuring full consideration of thepotential environmental impacts of FRAactions, as required by the NationalEnvironmental Policy Act (42 U.S.C.4321 et seq.), other environmentalstatutes, Executive Orders, and DOTOrder 5610.1c. It has been determinedthat this proposal does not have anyeffect on the quality of the environment.

Federalism ImplicationsThis proposal does not have a

substantial effect on the States, on therelationship between the nationalgovernment on the States, or on thedistribution of power andresponsibilities among the variouslevels of government. Thus, inaccordance with Executive Order 12612,preparation of a Federalism Assessmentis not warranted.

Request for Public CommentsFRA proposes to revise part 232

regarding two-way EOTs as set forthbelow. FRA is contemplating eventuallymoving the two-way EOT requirementsrelated to passenger train operations toproposed part 238 containing thePassenger Equipment Safety Standardsand would potentially seek theconsultation of the working groupcurrently involved with finalizing thosestandards on the issues addressed inthis proposal. Consequently, FRAsolicits comments on all aspects of thisproposal whether through writtensubmissions, participation in the

passenger equipment working group, orboth.


Penalties, Railroad power brakes,Railroad safety, Two-way end-of-traindevices.

The Proposal

In consideration of the foregoing, FRAproposes to amend part 232, title 49,Code of Federal Regulations to read asfollows:

PART 232—RAILROAD POWERBRAKES AND DRAWBARS


Authority: 49 U.S.C. 20102, 20103, 20107,20108, 20110–20112, 20114, 20133, 20141,20301–20304, 20701–20703, 21301, 21302,21304, and 21311; and 49 CFR 1.49 (c), (g),and (m).

2. Section 232.23 is amended byrevising paragraphs (e) introductorytext, (e)(8), and (e)(9); adding a newsentence to the beginning of theintroductory text of paragraph (g) andadding and reserving paragraph (g)(2);and adding new paragraphs (e)(10),(e)(11), and (h) to read as follows:

§ 232.23 Operations requiring use of two-way end-of-train devices; prohibition onpurchase of nonconforming devices.* * * * *

(e) The following types of trains areexcepted from the requirement for theuse of a two-way end-of-train device:* * * * *

(8) Trains that operate exclusively ontrack that is not part of the generalrailroad system;

(9) Passenger trains in which all of thecars in the train are equipped with anemergency brake valve readilyaccessible to a crew member;

(10) Passenger trains that have a carat the rear of the train, readily accessibleto one or more crew members in radiocontact with the engineer, that isequipped with an emergency brakevalve readily accessible to such a crewmember; and

(11) Passenger trains that havetwenty-four (24) or fewer cars (notincluding locomotives) in the consistand that are equipped and operated inaccordance with the following:

(i) If the total number of cars in apassenger train consist is twelve (12) orfewer, a car located no less than halfwaythrough the consist (counting from thefirst car in the train) must be equippedwith an emergency brake valve readilyaccessible to a crew member;

(ii) If the total number of cars in apassenger train consist is thirteen (13) to


twenty-four (24), a car located no lessthan two-thirds (2⁄3) of the way throughthe consist (counting from the first carin the train) must be equipped with anemergency brake valve readilyaccessible to a crew member;

(iii) Prior to descending a section oftrack with an average grade of twopercent or greater over a distance of twocontinuous miles, the engineer of thetrain shall communicate with theconductor, to ensure that a member ofthe crew with a working two-way radiois stationed in the car with the rearmostreadily accessible emergency brakevalve on the train when the train beginsits descent; and

(iv) While the train is descending asection of track with an average grade oftwo percent or greater over a distance oftwo continuous miles, a member of thetrain crew shall occupy the car thatcontains the rearmost readily accessibleemergency brake valve on the train andbe in constant radio communicationwith the locomotive engineer. The crewmember shall remain in this car until

the train has completely traversed theheavy grade.* * * * *

(g) Except on passenger trainsrequired to be equipped with a two-wayend-of-train device (which are providedfor in paragraph (h) of this section), enroute failures of a two-way end-of-traindevice shall be handled in accordancewith this paragraph. * * ** * * * *

(2) [Reserved](h) A passenger train required to be

equipped with a two-way end-of-traindevice that develops an en route failureof the device (as explained in paragraph(g) of this section) shall be operated inaccordance with the following:

(1) The train shall not operate over asection of track with an average grade oftwo percent or greater over a distance oftwo continuous miles until an operabletwo-way end-of-train device is installedon the train;

(2) A member of the train crew willbe immediately positioned in the car

which contains the rearmost readilyaccessible emergency brake valve on thetrain and shall be equipped with anoperable two-way radio thatcommunicates with the locomotiveengineer;

(3) The locomotive engineer shallperiodically make running tests of thetrain’s air brakes until the failure iscorrected; and

(4) Each en route failure shall becorrected at the next location where thenecessary repairs can be conducted or atthe next location where a required braketest is to be performed, whichever isreached first.

3. Appendix A to Part 232, ‘‘Scheduleof Civil Penalties,’’ is amended byrevising the heading of the entry for§ 232.23 and revising the entry for§ 232.23(g) and adding an entry for§ 232.23(h), to read as follows:

Appendix—A to Part 232—Schedule ofCivil Penalties

* * * * *

Section Violation Willful viola-tion

* * * * * * *232.23 Operating standards:

* * * * * * *(g) En route failure, freight ........................................................................................................................................... 5,000 7,500(h) En route failure, passenger ..................................................................................................................................... 5,000 7,500

* * * * * * *

Issued in Washington, DC, on January 12,1998.Jolene M. Molitoris,Administrator.[FR Doc. 98–1082 Filed 1–15–98; 8:45 am]BILLING CODE 4901–06–P

DEPARTMENT OF COMMERCE

National Oceanic and AtmosphericAdministration

50 CFR Part 648

[I.D. 052097C]

Fisheries of the Northeastern UnitedStates; Decision on Petition forRulemaking for Redistribution of theSummer Flounder Quota

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Decision on petition forrulemaking.

SUMMARY: NMFS announces its decisionto not undertake the rulemakingrequested in a petition submitted by theState of Connecticut, Commissioner ofEnvironmental Protection (Connecticut).Connecticut petitioned the Secretary ofCommerce (Secretary) to eliminate thecurrent state-specific allocation of thecommercial quota for summer flounderand implement one of two optionsspecified in its place. The decision todeny the petition at this time is basedon public comments received on thispetition for rulemaking and on the Mid-Atlantic Fishery Management Council’s(Council) and on the Atlantic StatesMarine Fisheries Commission’s(Commission) decision to retain thecurrent state-by-state quota system forsummer flounder in Amendment 10 tothe Fishery Management Plan for theSummer Flounder, Scup, and Black SeaBass Fisheries (FMP).

FOR FURTHER INFORMATION CONTACT: GaryC. Matlock, Ph.D., Director, Office ofSustainable Fisheries, (301) 713–2334,or Mark R. Millikin, (301) 713–2341.

SUPPLEMENTARY INFORMATION: On June 2,1997 (62 FR 29694), NMFS published anotice of receipt of a petition forrulemaking submitted by Connecticut.The petition requested the Secretary toimplement either a commercialallocation for summer flounder of twowinter coastwide periods and a state-by-state summer period, or a coastwideallocation system for all three periods(two winter periods and a summerperiod). Connecticut further petitionedthat any regulation implementing astate-by-state allocation system base thepercent shares for each state uponlandings data for the period 1990through 1992. On behalf of theSecretary, NMFS considered thepetition and comments received on thepetition.

In considering this petition, NMFSalso considered actions surroundingAmendment 10 to the FMP(Amendment 10) as they relate to thesummer flounder quota. Amendment 10was approved by NMFS on November21, 1997 (62 FR 63872, December 3,


1997). In Amendment 10, the Counciland Commission reconsidered themethod by which the FMP allocates thequota for the summer floundercommercial fishery. All of thealternatives advocated by Connecticutin its petition were thoroughlyconsidered by the Council in thedevelopment of Amendment 10. Afterconsidering the alternatives, the Counciland Commission chose to maintain thestatus quo for the commercial summerflounder fishery and to retain thecurrent state-by-state allocation. TheCouncil and Commission noted duringthe discussions of Amendment 10 thatmany states have developed quotamanagement systems to account forseasonal variations in abundance and inthe size of the vessels that targetsummer flounder. With a coastwidesystem, as suggested in Connecticut’spetition, states would lose thatflexibility either during the winter orover the entire year.

No alternative system was identifiedthat could provide the same level ofequity as the current system,particularly between the northern andthe southern states and between thesmall day boats and larger offshorevessels. The Council and Commissionfurther noted that revising the years forthe baseline allocation to 1990-92 wasdiscussed at length during thedevelopment of Amendment 10. Thistime period was rejected underAmendment 10 because the shorter timeperiod did not account adequately forhistorical participation in the fisherywhen summer flounder were moreabundant and generally more availableto the fishery along the entire coast. Inlight of the deficiencies noted in thealternatives, the Council andCommission decided to maintain thecurrent state-by-state system.

Given that the Council andCommission thoroughly consideredthese proposed alternatives beforeproposing to retain the state-by-stateallocation system and that the Council’sactions were determined to beconsistent with the Magnuson-StevensFishery Conservation and ManagementAct (Magnuson-Stevens Act), thenational standards, and other applicablelaws, NMFS could find no compellingjustification for any action other thanwhat was approved in Amendment 10.

Since the approved commercial quotaallocation system complies with theMagnuson-Stevens Act and otherapplicable laws, NMFS believes that anychanges to the allocation system arebetter handled through the FMPamendment process, which affords allmembers of the affected public anopportunity to comment on proposed

measures. Connecticut participated inthe Amendment 10 process as a memberof the Commission but was not able toconvince the Council or theCommission to make the modification itadvocates.

In October 1997, the Commissionattempted again to address the issue ofdifferent minimum fish sizes in variousstates over past years. The Commissionconducted public hearings on aproposed Commission amendment(Amendment 11) in October 1997.Amendment 11 contained an analysisthat would be used to redistribute thequota among the states. Theredistribution would have beenachieved for 1998 through the quotatransfer provision already contained inthe FMP. The Commission Boarddisapproved Amendment 11 during theannual meeting held on October 20–23,1997. The disapproval noted that ‘‘theBoard could find no compromisesufficient to resolve the many regionaldifferences invoked by thisAmendment.’’

Comments and ResponsesA total of 74 letters; including 1 letter

from the Commonwealth ofMassachusetts, 1 letter from the State ofNew Hampshire, 1 letter from the Stateof Connecticut, 1 cosigned letter fromConnecticut senators and from onerepresentative, 1 letter from theSouthern New England Fishermen’s andLobstermen’s Association, and 33individual form letters and 36individual form postcards were receivedduring the comment period for thisaction, which ended on August 1, 1997.Several of the letters containedcomments on the FMP in general oroffered suggestions for futuremanagement that are not within thescope of this action. Only commentsrelevant to the proposed petition forrulemaking that were received by NMFSprior to the close of business on the datespecified as the close of comments wereconsidered for this action.

Comment: The State of NewHampshire, the Commonwealth ofMassachusetts, and several individualssupport the petition. New Hampshirespecifically agreed with Connecticut’spoint in the petition regarding theinequities in state quota shares based onhistorical summer flounder landingsbecause some states had smallerminimum fish sizes than thoseimplemented by Connecticut and byother states during the base period1980–89. Connecticut SenatorsLieberman and Dodd andRepresentative Gejdenson also feel thatthe current quota system did not takeinto consideration the stricter

conservation requirements in somestates, including in Connecticut. NewHampshire feels that the current systemis flawed and in need of correction.

Response: NMFS believes the Counciladdressed the minimum fish size issueclearly in Amendment 10 to the FMP.The Council explained that landingsdata reflect minimum size regulationsimplemented in each of the states.Landings do not reflect the actual sizesof fish available to the gear, caught bycommercial fishermen, and discardeddead. Hypothetically speaking, if morerestrictive minimum size regulationshad been implemented in southernstates during those years, more fishwould have been discarded dead andthere would have been increasedpressure on, and increased landings of,larger fish. As such, the availability oflarger fish to the northern states couldhave been reduced. Consequently, thelandings in the northern states couldhave been reduced. In reality, the factthat some northern states had a largerminimum size than some southernstates reflects that fewer fish smallerthan that length had been traditionallyavailable to commercial fishermen inthe northern states.

Comment: Connecticut SenatorsLieberman and Dodd andRepresentative Gejdenson support acoastwide quota and uniform landinglimits, as described in the petition.

Response: As with the response to thecomment above, NMFS believes theCouncil addressed the coastwide quotaand uniform trip limits issue clearly inAmendment 10 to the FMP. The Counciland Commission determined, andNMFS agrees, that a coastwide quotawould not provide the flexibilityafforded under the state-by-state system.Since the inception of the currentsystem, state personnel have developedand refined management systems toaccount for seasonal variations inabundance, as well as in the vessels thatharvest summer flounder. In addition,the Council and Commission noted, andNMFS agrees, that it would be difficultto design a coastwide system thatprovides for an equitable distributionbetween the northern and southernparticipants, as well as between thesmaller day boats and the larger offshorevessels. Uniform landing limits, it wasnoted, may not be suitable for allvessels, gears, or areas. For thesereasons, the Council and Commissionconcluded that the coastwide systemsproposed in Amendment 10, and againproposed by this petition, were found tonot provide the same level of equity toall user groups and areas as the existingquota allocation system.


Comment: The Commonwealth ofMassachusetts commented that, sincethe commercial quota allocation andmanagement regimes for the relatedfisheries of summer flounder, scup, andblack sea bass are all different, the state-by-state allocation system for summerflounder discriminates betweenresidents of different states and violatesnational standard 4.

Response: That three fisheries havedifferent allocation systems does notmean that one is discriminatory. Eachsystem was implemented through anFMP amendment that was foundconsistent with all of the nationalstandards. NMFS notes that to recognizethe varying levels of historicalparticipation in each of the states is notinherently discriminatory. Because eachstate participated in a fishery to varyingdegrees, each state receives a differentportion of the whole, reflecting itsrelative level of historical participation.The same basis for distribution isemployed for all states. Thus, there is nodiscrimination between residents ofdifferent states.

Comment: The State of Connecticutfeels that the current commercial quotamanagement system violates (1) nationalstandard 1 (overfishing) because it hasnot prevented overfishing, (2) nationalstandard 5 (efficiency) because it doesnot consider efficiency in the utilizationof the resource, (3) national standard 7(minimize costs) because it fails tominimize costs, and (4) nationalstandard 10 (safety at sea) becausefishermen travel to states with the mostfavorable trip limit, increasing the riskof mishap or disaster at sea. TheCommonwealth of Massachusetts alsofeels that the current state-specificcommercial quota system violatesnational standard 1 because it has beenunsuccessful in reducing fishingmortality although it has beenimplemented for 5 years. Massachusettsurges NMFS to develop the regulationssuggested in the petition since, as thecurrent system has not reduced fishingmortality, quotas are likely to getsmaller. Lastly, Massachusetts notes thatthe current system forces fishermen totravel to ports that are open to landingsor that have higher trip limits, thereforeincreasing the risk to vessel and life atsea, in violation of national standard 10and negatively impacting New Englandports, which lose those landings whileother ports benefit from them.

Response: Since Amendment 10 tothe FMP contemplated alternatives tothe commercial quota allocationmethod, the Council was required toreview all alternatives for consistencywith the national standards. As with theminimum fish size issue, NMFS

believes the Council addressed thisissue adequately and clearly in thatdocument. The points of thosediscussions are reiterated here.

National standard 1 - The most recentstock assessment, completed in August1997, indicates that the summerflounder stock is at a medium level ofhistorical (1968–96) abundance and isoverexploited. The fishing mortality rate(F) estimated for 1996 was 1.0 (anexploitation rate of 58 percent). Whilethis estimate of fishing mortality isabove the overfishing definition (Fmax =0.24), it is significantly below the peakfishing mortality rate estimated for 1992(F = 2.1). More importantly, thespawning stock biomass estimate for1996 indicated the highest level since1983. Additionally, the age structure isimproving, with 34 percent of thebiomass age 2 and older in 1996,compared with 17 percent in 1992. Thesize of the stock older than age 2 is animportant indicator of the stock health,as it may reflect more accurately thenumber of successful spawners. Whilethe stock is showing signs ofimprovement, the improvement is notoccurring at as high a rate as anticipatedby managers. NMFS notes that quotaoverages and unaccounted for mortality(underreporting and/or discard) aremore likely to explain the slow recoverythan the manner in which the quota isallocated. Overall, the managementscheme is allowing a stock rebuildingand a progression toward an end ofoverfishing.

National standard 5 - The Council andCommission have developed a systemthat is intended to operate at the lowestpossible cost with regard to effort,administration, and enforcement, giventhe objectives of the FMP. NMFS hasdetermined that the state-by-stateallocation system makes efficient use offishery resources and is, therefore,consistent with national standard 5.

National standard 7 - Amendment 10,a joint document from both the Counciland Commission, contains managementmeasures that will be implemented bythe Commission as part of its interstatemanagement process. These measures,called compliance criteria, include arequirement that states document allsummer flounder commercial landingsin their states. This will aid in theelimination of double counting of anylandings and, therefore, help keepenforcement costs down, as much effortis spent tracking down landings in orderto maintain the integrity of the quota.Such costs are independent of theallocation system. Under any otherscenario proposed in this petition, costsare still incurred with regard to quota

monitoring, enforcement of trip limits,and seasons.

National standard 10 - The state-by-state quota allocation system forsummer flounder is not inconsistentwith national standard 10. Many of theNew England vessels are permitted toland in neighboring states. These andother vessels have traditionally traveledlong distances to fish for and landsummer flounder, so risks at sea cannotbe ascribed solely to behavior resultingfrom a state-by-state quota allocation.The state-bystate quota system doesnot require a vessel to travel to distantports, and an individual vessel operatormust weigh the benefits of landing in adistant port versus the costs associatedwith that travel with regard to steamingtime, fuel consumption, weather, andother factors.

Comment: Connecticut’s petitionstated that, should the alternativeembracing a state-by-state summerallocation be implemented, the percentshares for each state should be basedupon landings data for the period 1990through 1992.

Response: When the quota allocationsystem was developed, the Council andCommission reviewed the history of thefishery and recommended a 10-yeartime frame as the appropriate historicalperiod upon which quotas would bebased. This decision was discussedthoroughly. While proposals were madeto shorten the period to as little as 3years, it was recognized that short-termvariations in landings did occur andthat quotas based on a short time serieswould penalize one segment of thefishery while granting others what wasconsidered an excessive share. Thestates, through the Commission,approved the 10-year time period andthe method of allocating the quota.

Comment: One form letter requeststhe Secretary to use his office to assurethat Council plans comply with therequirements of the Magnuson-StevensAct which, the letter states, the plans donot currently do.

Response: The Magnuson-Stevens Actrequires that any management planprepared, and any regulationpromulgated to implement any suchplan, shall be consistent with the 10national standards for fisheryconservation and management, otherprovisions of the Magnuson-StevensAct, and other applicable laws. Indeed,any Council regulatory submissionadopted by NMFS has been thoroughlyreviewed for its consistency with everyapplicable legal requirement. There isno exception to this requirement.

Authority: 16 U.S.C. 1801 et seq.


Dated: January 9, 1998.David L. Evans,Deputy Assistant Administrator for Fisheries,National Marine Fisheries Service.[FR Doc. 98–1154 Filed 1–15–98; 8:45 am]BILLING CODE 3510–22–F


National Oceanic and AtmosphericAdministration

50 CFR Part 679

[Docket No. 971231319–7319–01; I.D.112697A]

RIN 0648–AK09

Fisheries of the Exclusive EconomicZone Off Alaska; Maximum RetainableBycatch Percentages

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Proposed rule; request forcomments.

SUMMARY: NMFS proposes a regulatoryamendment to separate shortrakerrockfish and rougheye rockfish (SR/RE)from the aggregated rockfish bycatchspecies group and reduce maximumretainable bycatch (MRB) percentagesfor SR/RE in the Aleutian IslandsSubarea (AI) groundfish fisheries. Thisaction is necessary to slow the harvestrate of SR/RE thereby reducing thepotential for overfishing. This action isintended to further the objectives of theFishery Management Plan for theGroundfish Fishery of the Bering Seaand Aleutian Islands (FMP).DATES: Comments must be received atthe following address by February 17,1998.ADDRESSES: Comments may be sent toSue Salveson, Assistant RegionalAdministrator, Sustainable FisheriesDivision, Alaska Region, NMFS, P.O.Box 21668, Juneau, AK 99802, Attn:Lori Gravel or delivered to the FederalBuilding, 709 West 9th Street, Juneau,AK. Copies of the EnvironmentalAssessment/Regulatory Impact Review(EA/RIR) prepared for this action maybe obtained from the same address or bycalling the Alaska Region, NMFS, at907–586–7228.FOR FURTHER INFORMATION CONTACT:Alan Kinsolving, 907–586–7228.SUPPLEMENTARY INFORMATION: Fishingfor groundfish by U.S. vessels in theexclusive economic zone of the BeringSea and Aleutian Islands managementarea (BSAI) is managed by NMFSaccording to the FMP. The FMP was

prepared by the North Pacific FisheryManagement Council (Council) underauthority of the Magnuson-StevensFishery Conservation and ManagementAct (Magnuson-Stevens Act). Fishing byU.S. vessels is governed by regulationsimplementing the FMP at subpart H of50 CFR part 600 and 50 CFR part 679.

Regulations at 50 CFR 679.20(e)establish MRB percentages forgroundfish species or species groupsthat are closed to directed fishing. TheMRB amount is calculated as apercentage of the species on bycatchstatus relative to the amount of otherspecies retained onboard the vessel thatare open for directed fishing. MRBpercentages serve as a management toolto slow down the harvest rates ofbycatch species by limiting the amountthat can be retained on board a vessel.By not placing the bycatch species on‘‘prohibited’’ status, thereby prohibitingall retention, MRB’s also serve tominimize regulatory discard of bycatchspecies when they are taken incidentalto other directed fisheries. MRBpercentages reflect a balance betweenthe need to slow harvest rates while atthe same time, minimizing the potentialfor undesirable discard. Although MRBpercentages limit the incentive to targeton a bycatch species, fishermen can‘‘top off’’ their retained catch with thesespecies up to the MRB amount bydeliberately targeting the bycatchspecies.

At its June 1997 meeting, the Councilrequested that NMFS initiate aregulatory amendment to reduce theMRB percentages for SR/RE to reduceharvest rates of SR/RE in the groundfishfisheries, thereby reducing the potentialfor overfishing and minimizing industryincentives to top off retained catch withSR/RE. Based on the analysis presentedto the Council at its September 1997meeting, the Council recommended thatSR/RE be separated from the aggregatedrockfish bycatch species group, and thatMRB percentages for SR/RE in the AI bereduced to 7 percent relative to deep-water complex species (primarily POP)and to 2 percent relative to shallow-water complex species (primarily Atkamackerel). The MRB percentage relativeto arrowtooth flounder would remain at0 percent. Further justification for theseMRB adjustments is discussed below.

Separation of SR/RE From AggregatedRockfish

MRB percentages are established foraggregate rockfish species that areclosed to directed fishing. Rockfishspecies were aggregated because ofconcerns that separate MRB percentagesfor each rockfish TAC category wouldincrease the overall amount of rockfish

that could be retained and increaseincentives to vessel operators to ‘‘topoff’’ their retained catch of target specieswith rockfish. As part of the aggregaterockfish MRB, the combined amounts ofrockfish on bycatch status must notexceed specified percentages of otherretained species that are open todirected fishing. These percentages are15 percent relative to deep-watercomplex species (other rockfish species,sablefish, Greenland turbot, andflathead sole) and 5 percent relative toshallow-water complex species (Atkamackerel, pollock, Pacific cod,yellowfin sole, rock sole, ‘‘otherflatfish’’, squid, and other species).

SR/RE are highly valued, but amountsavailable to the commercial fisheries arelimited by a relatively small TACamount that is fully needed to supportbycatch needs in other groundfishfisheries. As a result, the directedfishery for SR/RE typically is closed atthe beginning of the fishing year.Nonetheless, bycatch amounts of SR/REcan exceed TAC and approach theoverfishing level. In 1997, the SR/REbycatch in the Pacific ocean perch (POP)and Atka mackerel trawl fisheries (778mt and 162 mt, respectively) exceededthe acceptable biological catch andcaused overfishing concerns. Thisresulted in the closure of these andother trawl fisheries in the AI, as wellas the hook-and-line gear fisheries forPacific cod and Greenland turbot.Although closure of the individualfishing quota (IFQ) fisheries for AIsablefish and halibut was a possibility,SR/RE bycatch did not reach theoverfishing level and those fisheriesremained open.

Based on the discussion above, NMFSproposes to remove SR/RE from theaggregated rockfish bycatch speciesgroup and establish an SR/RE bycatchspecies group for the AI.

Reduction of the SR/RE MRBPercentages

The majority of SR/RE bycatch istaken in the POP and Atka mackerelfisheries. Based on data reported by theindustry since 1995, the amount ofretained SR/RE bycatch in the POPfishery has ranged from 4.5 to 5.7percent. During the same time period,the retained amount of SR/RE in theAtka mackerel fishery relative to otherretained catch has ranged from 0.08 to0.2 percent.

Analyses of 1995–1996 observer datafrom observed hauls in the AI Atkamackerel and POP fisheries indicate thatmost SR/RE bycatch is taken in theminority of hauls. In the Atka mackerelfishery during 1995 and 1996, only 2percent of observed hauls had bycatch


rates higher than 2 percent, but thosehauls were responsible for 50 percent ofthe observed SR/RE bycatch. In the POPfishery during 1995, only 10 percent ofthe observed hauls exceeded a bycatchrate of 7 percent but these hauls wereresponsible for 50 percent of the SR/REbycatch. In the 1996 POP fishery, 29percent of the observed hauls exceededa bycatch rate of 7 percent, but wereresponsible for 78 percent of the SR/REbycatch.

To the extent that these high-bycatchhauls represent topping off, a reductionin MRB percentages would limit theincentive to do so and reduce the riskof approaching the overfishing level forSR/RE stocks. At the same time, theproposed MRB percentages would be ata level that is unlikely to increaseregulatory discards.

Classification

The Assistant General Counsel forLegislation and Regulation of theDepartment of Commerce certified tothe Chief Counsel for Advocacy of theSmall Business Administration that thisproposed rule, if adopted, would nothave a significant impact on asubstantial number of small entities.NMFS prepared a regulatory impactreview (RIR) that describes the impactthis proposed rule, if adopted, wouldhave on small entities.

The Small Business Administration hasdefined all fish-harvesting or hatcherybusinesses that are independently owned andoperated, not dominant in their field ofoperation, with annual receipts not in excessof $3,000,000 as small businesses.Additionally, seafood processors with 500employees or fewer, wholesale industrymembers with 100 employees or fewer, not-for-profit enterprises, and governmentjurisdictions with a population of 50,000 orless are considered small entities. NMFS hasdetermined that a ‘‘substantial number’’ ofsmall entities would generally be 20 percentof the total universe of small entities affectedby the regulation. A regulation would havea ‘‘significant economic impact’’ on thesesmall entities if it reduced annual grossrevenues by more than 5 percent, increasedtotal costs of production by more than 5percent, resulted in compliance costs forsmall entities that are at least 10 percenthigher than compliance costs as a percent ofsales for large entities, or would be likely tocause approximately 2 percent of the affectedsmall business to go out of business. NMFSassumes that catcher vessels participating in

the Alaska groundfish fisheries are ‘‘smallentities’’ for purposes of the RegulatoryFlexibility Act (RFA).

In 1996, 213 vessels participated in theAleutian Islands groundfish fisheries all ofwhich would be affected by this rule. Ofthese, 140 vessels (66 percent) were catchervessels and would be considered smallentities by NMFS. One hundred percent ofthese small entities would be affected by thisrule. Thus, this rule affects a ‘‘substantialnumber of small entities.’’

This rule could have a variety of differentimpacts on different entities depending oneach small entity’s previous fishing history.For vessels that have never landed SR/RE,this rule’s impacts would be strictlybeneficial in that the only impacts would bethat there would be less likelihood of otherfisheries in which those vessels operate beingclosed due to excessive SR/RE bycatch. Forentities that have historically landed SR/RE,this rule’s impact could vary as well. NMFS’data indicate that most vessels typicallyharvest SR/RE at a rate substantially belowthis rule’s new MRB of 7 percent. Vessels inthe POP fishery typically harvest SR/RE at arate ranging from 4.5 to 5.7 percent. Vesselsin the Atka mackerel fishery typically haveSR/RE bycatch rates of .08 to 0.2 percent.Forty-eight small entities landed SR/RE in1996. For those vessels whose SR/RE bycatchrates are already under 7 percent, this rule’simpacts will be only positive as well.However, it is possible that one or more ofthese 48 small entities landed SR/RE at a rategreater than 7 percent. For any such vessel,this rule could result in an economic loss.

In 1996, small entities took only 0.2percent of the total SR/RE that was landed.Using an assumed exvessel price of $1.10 perpound, the total value of the 1996 SR/REretained catch is estimated at $1.8 million, ofwhich less than $3,600 was taken by the 48small entities (34 percent of the totaluniverse of small entities, a substantialnumber). Data is not available on how many,if any, small entities have historically landedSR/RE at a bycatch rate greater than 7percent. However, if NMFS assumes that all48 small entities retained bycatch at themaximum rate of 14 percent, then the mostany vessel could stand to lose as a result ofthis rule would be 50 percent (because thenew maximum retainable level, 7 percent, isone-half of the current maximum retainablelevel, 14 percent) of $3,600, divided by 48:$37.50 per vessel. If only 20 percent of theaffected small entities (28 vessels) landedSR/RE at a rate higher than 7 percent, thegreatest economic loss they could beexpected to suffer would be $64.30. If only10 percent of the small entities landed over7 percent of SR/RE, the most these vesselscould expect to lose as a result of this rule

would be $129 each. Based on the total valueof the SR/RE landed by small entities, NMFScan conclude that very few, if any, smallentities would be likely to experience areduction in gross annual income of greaterthan 5 percent or be forced to go out ofbusiness because of this rule. In addition, anylosses would be offset for these vessels to theextent that other lucrative fisheries such asPOP and Sitka mackerel would not risk earlyclosure due to excessive SR/RE bycatch.

Also, data indicate that this rule is notlikely to result in compliance costsproportionally higher for small entities thanfor large entities. Annual compliance costsare not likely to increase production costs bymore than 5 percent. Compliance costs as apercent of sales for small entities are notlikely to be greater than 10 percent of salesfor large entities.

Thus although NMFS is not able toascertain the exact number of small entitiesthat would experience negative economicimpact as a result of this rule, NMFS is ableto conclude that substantially fewer than 20percent of the affected small entities wouldexperience any negative impact at all, andthat in no case would this rule result in asignificant impact on a substantial number ofsmall entities.

As a result, a regulatory flexibilityanalysis was not prepared. A copy of theEA/RIR is available from NMFS (SeeADDRESSES).

This proposed rule has beendetermined to be not significant forpurposes of E.O. 12866.


Alaska, Fisheries, Recordkeeping andreporting requirements.

Dated: January 12, 1998.David L. Evans,Deputy Assistant Administrator for Fisheries,National Marine Fisheries Service.

For the reasons set out in thepreamble, 50 CFR part 679 is proposedto be amended as follows:

PART 679—FISHERIES OF THEEXCLUSIVE ECONOMIC ZONE OFFALASKA


Authority: 16 U.S.C. 773 et seq., 1801 etseq. and 3631 et seq.

2. In part 679, Table 11 is revised toread as follows:


TABLE 11.—BERING SEA AND ALEUTIAN ISLANDS MANAGEMENT AREA RETAINABLE PERCENTAGES

Bycatch Species 1

Pollock Pacificcod

Atkamack-erel

Arrowtooth Yellow-fin sole

Otherflatfish Rocksole

Flat-headsole

Green-land

turbot

Sable-fish

Shortrakerrougheye

(AI)

Aggre-gatedrock-fish 2

SquidOtherspe-cies

Basis species:Pollock .................................. 3 na 20 20 35 20 20 20 20 1 1 2 5 20 20Pacific cod ............................ 20 3 na 20 35 20 20 20 20 1 1 2 5 20 20Atka mackerel ....................... 20 20 3 na 35 20 20 20 20 1 1 2 5 20 20Arrowtooth ............................ 0 0 0 3 na 0 0 0 0 0 0 0 0 0 0Yellowfin sole ........................ 20 20 20 35 3 na 35 35 35 1 1 2 5 20 20Other flatfish ......................... 20 20 20 35 35 3 na 35 35 1 1 2 5 20 20Rocksole ............................... 20 20 20 35 35 35 3 na 35 1 1 2 5 20 20Flathead sole ........................ 20 20 20 35 35 35 35 3 na 35 15 7 15 20 20Greenland turbot ................... 20 20 20 35 20 20 20 20 3 na 15 7 15 20 20Sablefish ............................... 20 20 20 35 20 20 20 20 35 3 na 7 15 20 20Other rockfish ....................... 20 20 20 35 20 20 20 20 35 15 7 15 20 20Other red rockfish–BS .......... 20 20 20 35 20 20 20 20 35 15 7 15 20 20Pacific ocean perch .............. 20 20 20 35 20 20 20 20 35 15 7 15 20 20Sharpchin/Northern–AI ......... 20 20 20 35 20 20 20 20 35 15 7 15 20 20Shortraker/Rougheye–AI ...... 20 20 20 35 20 20 20 20 35 15 3 na 15 20 20Squid ..................................... 20 20 20 35 20 20 20 20 1 1 2 5 3 na 20Other species ....................... 20 20 20 35 20 20 20 20 1 1 2 5 20 3 naAggregated amount non-

groundfish species ............ 20 20 20 35 20 20 20 20 1 1 2 5 20 20

1 For definition of species, see Table 1 of the Bering Sea and Aleutian Islands groundfish specifications.2 Aggregated rockfish of the genera Sebastes and Sebastolobus except in the Aleutian Islands Subarea where shortraker and rougheye rockfish is a separate cat-

egory.3 na=not applicable.


This section of the FEDERAL REGISTERcontains documents other than rules orproposed rules that are applicable to thepublic. Notices of hearings and investigations,committee meetings, agency decisions andrulings, delegations of authority, filing ofpetitions and applications and agencystatements of organization and functions areexamples of documents appearing in thissection.

Notices Federal Register

2657

Vol. 63, No. 11


DEPARTMENT OF AGRICULTURE

Economic Research Service

Notice of Intent to Seek Approval toCollect Information

AGENCY: Economic Research Service,USDA.ACTION: Notice and request forcomments.

SUMMARY: In accordance with thePaperwork Reduction Act of 1995(Pub.L. No. 104–13) and Office ofManagement and Budget (OMB)regulations at 5 CFR Part 1320 (60 FR44978, August 29, 1995), this noticeannounces the Economic ResearchService’s (ERS) intention to requestapproval for a new informationcollection from day care homesponsoring organizations participatingin the Child and Adult Care FoodProgram (CACFP); from day care homesthat participate in CACFP; from day carehomes that have dropped out of theprogram; and from parents of childrencared for in participating day carehomes in order to answer the legislativemandate in the Personal Responsibilityand Work Opportunity ReconciliationAct of 1996 (Pub. L. 104–193, Sec. 708(l)) to study the impact of amendmentsto the CACFP’s authorizing legislationon participation and day care homelicensing.DATES: Comments on this notice must bereceived by March 23, 1998 to beassured of consideration.ADDITIONAL INFORMATION OR COMMENTS:Contact Linda Ghelfi, Food Assistance,Poverty, and Well-Being Branch, Foodand Rural Economics Division,Economic Research Service, U.S.Department of Agriculture, 1800 M. St.,NW, Room 2145, Washington, DC20036–5831, 202–694–5351.

SUPPLEMENTARY INFORMATION:Title: Application for ERS collection

of information on day care home

sponsoring organizations, current and‘‘dropout’’ day care homes, and parentsof children cared for in day care homesthat receive food assistance through theChild and Adult Care Food Program(CACFP).

Type of Request: Approval to collectinformation on the sponsors, currentand ‘‘dropout’’ day care homes, andparents of children cared for in day carehomes that receive food assistancethrough the Child and Adult Care FoodProgram (CACFP).

Abstract: The Economic ResearchService has the responsibility to providesocial and economic intelligence onconsumer, food marketing, and ruralissues, including: Food consumptiondeterminants and trends; consumerdemand for food quality, safety, andnutrition; food market competition andcoordination; food security status of thepoor; domestic food assistanceprograms; low-income assistanceprograms; and food safety regulation.

The Food and Nutrition Service (FNS)administers the nutrition assistanceprograms of the U.S. Department ofAgriculture. FNS’’ Child and Adult CareFood Program (CACFP) provides cashreimbursements and commodity foodsfor meals served in child and adult carecenters, and day care homes. Some 2.3million children, of which about988,000 were cared for in day carehomes, participated in the program inJune 1997. Generally, day care homesprovide care in a licensed or approvedprivate home for a small group ofchildren. Day care homes must beadministered by a sponsoringorganization that ensures compliancewith Federal and State regulations andprepares a monthly food reimbursementclaim. The sponsoring organization alsoreceives Federal reimbursement foradministrative expenses, based on thenumber of homes it sponsors.

The Personal Responsibility and WorkOpportunity Reconciliation Act of 1996(Pub.L. 104–193, Sec. 708) amended theCACFP’s authorizing legislation,instituting, on July 1, 1997, a tieredreimbursement system that reimbursesday care homes in low-income areas andthose in other areas that are run by low-income providers (tier I) at a higher ratethan day care homes in other areas thatare run by higher income providers (tierII). Meals served to low-income childrenin tier II homes may be reimbursed atthe tier I rate if the parents of those

children apply to the sponsoringorganization.

The data collection effort proposedhere will obtain information necessaryto complete the Study of Impact ofAmendments on Program Participationand Family Day Care Licensingmandated by the PersonalResponsibility and Work OpportunityReconciliation Act of 1996 (Pub.L. 104–193, Sec. 708 (l)).

A sample of day care homesponsoring organizations will be askedabout the number of homes theysponsored before July 1, 1997, thenumber of homes by tier they sponsorat the time of the interview, and changesin their business operations orrecruitment efforts related to theintroduction of tiering. A sample of daycare homes participating in CACFP willbe asked about the number of childrenthey care for, their tier status, andchanges in their operations related tothe tiering. Tier II homes in the samplewill additionally be asked about thefoods they serve and to obtain waiversfrom parents so that the portions offoods eaten by children they care formay be recorded. A sample of day carehomes that dropped out of CACFP butcontinued to provide child care will beasked about the reasons they droppedout. They will also be asked about thefoods they serve and to obtain waiversfrom parents so that the portions offoods eaten by children they care formay be recorded. A sample of parentswhose children are cared for in tier Iand tier II day care homes will be askedabout their household characteristics ona voluntary basis.

Information gathered in these surveysis crucial to completing the Study ofImpact of Amendments on ProgramParticipation and Family Day CareLicensing mandated by the PersonalResponsibility and Work OpportunityReconciliation Act of 1996 (Pub.L. 104–193, Sec. 708 (l)). The U.S. Departmentof Agriculture is required to report toCongress on changes in the numbers ofparticipating day care homes, thenutritional adequacy and quality ofmeals served in tier II and ‘‘dropout’’day care homes, and the income levelsof children cared for in participatingday care homes. Data collected in thesurveys will provide the basis for thatreport.

ERS, working with Abt Associates,will conduct the surveys of CACFP day

2658 Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Notices

care home sponsoring organizations,participating day care homes, ‘‘dropout’’day care homes, and parents of childrencared for in participating day carehomes. The sampling process is fourstaged. Twenty States have beenselected for the survey as a nationallyrepresentative sample of CACFP. TheCACFP-administering agencies in thoseStates will be asked for lists of sponsors.A random sample of the sponsors willbe drawn and surveyed. From lists ofparticipating and ‘‘dropout’’ homesprovided by the sampled sponsors,random samples of participating and‘‘dropout’’ homes will be selected andsurveyed. From lists of parents providedby the participating day care homes, arandom sample of parents will be drawnand surveyed.

Survey data will be collected throughmail surveys, Computer-AssistedTelephone Interviewing (CATI), and,when necessary, personal interviews.With each stage of the sampling processdependent upon the success of theprevious stage, every effort will be madeto make the process as simple and userfriendly as possible. For example,parents will be able to choose betweena phone interview or mail survey toanswer the household questions.Responses are voluntary andconfidential. Survey data will be usedwith other data for statistical purposesand reported only in aggregate orstatistical form.

No existing data sources, includingFNS administrative data, can providethe information needed to complete theStudy of Impact of Amendments onProgram Participation and Family DayCare Licensing mandated by Congress.These data and the research they willsupport are vital to the Department’sability to assess the impact ofamendments to CACFP.

Estimate of Burden: Public reportingburden for this data collection isestimated to vary by the type ofrespondent. Responses by sponsors andtier I providers are estimated to average30 minutes. Responses by tier II and‘‘dropout’’ homes are estimated toaverage 3 hours, with those who preparefoods needing an additional hour toanswer an additional set of questions.Responses by parents of children caredfor in participating day care homes areestimated to average 17 minutes. Theestimates include time for listening toinstructions, gathering data needed, andresponding to questionnaire items.

Respondents: Representatives of daycare home sponsoring organizations,participating day care providers,‘‘dropout’’ day care providers, andparents of children cared for inparticipating day care homes.

Estimated Number of Respondents:400 sponsors, 580 tier I providers, 580tier II providers of which 145 preparetheir own foods, 580 ‘‘dropout’’ day careproviders of which 145 prepare theirown foods, and 1,536 parents ofchildren cared for in participating daycare homes.

Estimated Total Annual Burden onRespondents: 4,521 hours.

Copies of the information to becollected can be obtained from LindaGhelfi, Food Assistance, Poverty, andWell-Being Branch, Food and RuralEconomics Division, Economic ResearchService, U.S. Department of Agriculture,1800 M. St., NW, Room 2145,Washington, DC 20036–5801, 202–694–5351.

Comments: Comments are invited on(a) whether the proposed collection ofinformation is necessary for the properfunctions of the agency, includingwhether the information will havepractical utility; (b) the accuracy of theagency’s estimate of the burden of theproposed collection of informationincluding the validity of themethodology and assumptions used; (c)ways to enhance the quality, utility, andclarity of the information to becollected; and (d) ways to minimize theburden on those who are to respond,such as through the use of appropriateautomated, electronic, mechanical, orother technological collectiontechniques. Comments may be sent toLinda Ghelfi, Food Assistance, Poverty,and Well-Being Branch, Food and RuralEconomics Division, Economic ResearchService, U.S. Department of Agriculture,1800 M. St., NW, Room 2145,Washington, DC 20036–5831. Allresponses to this notice will besummarized and included in the requestfor OMB approval. All comments willalso become a matter of public record.

Signed at Washington, D.C.Betsey Kuhn,Director, Food and Rural Economics Division.[FR Doc. 98–1085 Filed 1–15–98; 8:45 am]BILLING CODE 3410–18–P

COMMITTEE FOR PURCHASE FROMPEOPLE WHO ARE BLIND ORSEVERELY DISABLED

Procurement List; Proposed Additions

AGENCY: Committee for Purchase FromPeople Who Are Blind or SeverelyDisabled.ACTION: Proposed additions toProcurement List.

SUMMARY: The Committee has receivedproposals to add to the Procurement List

commodities and services to befurnished by nonprofit agenciesemploying persons who are blind orhave other severe disabilities.COMMENTS MUST BE RECEIVED ON ORBEFORE: February 17, 1998.ADDRESSES: Committee for PurchaseFrom People Who Are Blind or SeverelyDisabled, Crystal Gateway 3, Suite 310,1215 Jefferson Davis Highway,Arlington, Virginia 22202–4302.FOR FURTHER INFORMATION CONTACT:Beverly Milkman (703) 603–7740.SUPPLEMENTARY INFORMATION: Thisnotice is published pursuant to 41U.S.C. 47(a)(2) and 41 CFR 51–2.3. Itspurpose is to provide interested personsan opportunity to submit comments onthe possible impact of the proposedactions.

If the Committee approves theproposed additions, all entities of theFederal Government (except asotherwise indicated) will be required toprocure the commodities and serviceslisted below from nonprofit agenciesemploying persons who are blind orhave other severe disabilities.

I certify that the following action willnot have a significant impact on asubstantial number of small entities.The major factors considered for thiscertification were:

1. The action will not result in anyadditional reporting, recordkeeping orother compliance requirements for smallentities other than the smallorganizations that will furnish thecommodities and services to theGovernment.

2. The action does not appear to havea severe economic impact on currentcontractors for the commodities andservices.

3. The action will result inauthorizing small entities to furnish thecommodities and services to theGovernment.

4. There are no known regulatoryalternatives which would accomplishthe objectives of the Javits-Wagner-O’Day Act (41 U.S.C. 46–48c) inconnection with the commodities andservices proposed for addition to theProcurement List. Comments on thiscertification are invited. Commentersshould identify the statement(s)underlying the certification on whichthey are providing additionalinformation.

The following commodities andservices have been proposed foraddition to Procurement List forproduction by the nonprofit agencieslisted:

Commodities

Slacks, Woman’s

2659Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Notices

8410–01–NSH–0001 thru –0048(Requirements for the U.S. Coast Guard)NPA: Vocational Guidance Services,

Cleveland, Ohio

Services

Food Service, Naval Nuclear Power TrainingCommand, Naval Weapons StationCharleston, Goose Creek, South Carolina

NPA: Goodwill Industries of Lower SouthCarolina, Inc., Charleston, SouthCarolina

Furnishings Management Service, Travis AirForce Base, California

NPA: Pacific Coast Community Services,Alameda, California

Janitorial/Custodial

U.S. Coast Guard Air Station, Sitka, AlaskaNPA: REACH, Inc., Juneau, AlaskaNaval Air Station Atlanta, Marietta, GeorgiaNPA: Nobis Enterprises, Inc., Marietta,

GeorgiaLocator Operator, Department of Housing and

Urban Development, Washington, DCNPA: Fairfax Opportunities Unlimited, Inc.,

Alexandria, VirginiaSwitchboard Operation, Veterans Affairs

Medical Center, 5901 East SeventhStreet, Long Beach, California

NPA: The Lighthouse of Houston, Houston,Texas

Beverly L. Milkman,Executive Director.[FR Doc. 98–1140 Filed 1–15–98; 8:45 am]BILLING CODE 6353–01–P

COMMITTEE FOR PURCHASE FROMPEOPLE WHO ARE BLIND ORSEVERELY DISABLED

Procurement List; Proposed Additions

AGENCY: Committee for Purchase FromPeople Who Are Blind or SeverelyDisabled.ACTION: Proposed additions toProcurement List.

SUMMARY: The Committee has receivedproposals to add to the Procurement Listcommodities and a service to befurnished by nonprofit agenciesemploying persons who are blind orhave other severe disabilities.COMMENTS MUST BE RECEIVED ON ORBEFORE: February 17, 1998.ADDRESSES: Committee for PurchaseFrom People Who Are Blind or SeverelyDisabled, Crystal Gateway 3, Suite 310,1215 Jefferson Davis Highway,Arlington, Virginia 22202–4302.FOR FURTHER INFORMATION CONTACT:Beverly Milkman (703) 603–7740.SUPPLEMENTARY INFORMATION: Thisnotice is published pursuant to 41U.S.C. 47(a)(2) and 41 CFR 51–2.3. Its

purpose is to provide interested personsan opportunity to submit comments onthe possible impact of the proposedactions.

If the Committee approves theproposed additions, all entities of theFederal Government (except asotherwise indicated) will be required toprocure the commodities and servicelisted below from nonprofit agenciesemploying persons who are blind orhave other severe disabilities.

I certify that the following action willnot have a significant impact on asubstantial number of small entities.The major factors considered for thiscertification were:

1. The action will not result in anyadditional reporting, recordkeeping orother compliance requirements for smallentities other than the smallorganizations that will furnish thecommodities and service to theGovernment.

2. The action will result inauthorizing small entities to furnish thecommodities and service to theGovernment.

3. There are no known regulatoryalternatives which would accomplishthe objectives of the Javits-Wagner-O’Day Act (41 U.S.C. 46–48c) inconnection with the commodities andservice proposed for addition to theProcurement List. Comments on thiscertification are invited. Commentersshould identify the statement(s)underlying the certification on whichthey are providing additionalinformation.

The following commodities andservice have been proposed for additionto Procurement List for production bythe nonprofit agencies listed:

Commodities

Frame, Mattress, Wooden37—1⁄2′′ × 74′′35—1⁄2′′ × 74′′37—1⁄2′′ × 79′′52—1⁄2′′ × 74′′59—1⁄2′′ × 79′′52—1⁄2′′ × 79′′35—1⁄2′′ × 79′′

NPA: Wilkes County Vocational Workshop,Inc., North Wilkesboro, North Carolina

Service

Medical Transcription, Veterans AffairsMedical Center, Clarksburg, WestVirginia

NPA: National Industries for the Blind,Alexandria, Virginia

Beverly L. Milkman,Executive Director.[FR Doc. 98–1141 Filed 1–15–98; 8:45 am]BILLING CODE 6353–01–P


Foreign-Trade Zones Board

[Order No. 948]

Relocation/Expansion of Foreign-TradeSubzone 143A; C. Ceronix, Inc.,Auburn, California

Pursuant to its authority under theForeign-Trade Zones Act of June 18,1934, as amended (19 U.S.C. 81a-81u),the Foreign-Trade Zones Board (theBoard) adopts the following Order:

Whereas, an application from theSacramento-Yolo Port District, granteeof Foreign-Trade Zone 143, requestingauthority on behalf of C. Ceronix, Inc.,to relocate subzone status (Subzone143A) to a larger facility (21 acres)located in Auburn, California, was filedby the Board on April 21, 1997 (FTZDocket 35–97, 62 FR 24393, 5/5/97);

Whereas, notice inviting publiccomment was given in Federal Registerand the application has been processedpursuant to the FTZ Act and the Board’sregulations; and,

Whereas, the Board adopts thefindings and recommendations of theexaminer’s report, and finds that therequirements of the FTZ Act andBoard’s regulations are satisfied, andthat the proposal is in the publicinterest;

Now, therefore, the Board herebyorders:

The application to relocate/expand SZ143A is approved, subject to the Act andthe Board’s regulations, includingSection 400.28. The existing site of SZ143A will retain FTZ status for a periodof six months from the date of approval,subject to concurrence of the U.S.Customs Service Port Director.

Signed at Washington, DC, this 7th day ofJanuary 1998.

Robert S. LaRussa,

Assistant Secretary of Commerce, for ImportAdministration, Alternate Chairman, Foreign-Trade Zones Board.

Attest:

Dennis Puccinelli,

Acting Executive Secretary.[FR Doc. 98–1163 Filed 1–15–98; 8:45 am]

BILLING CODE 3510–DS–P




[Docket 84–97]

Foreign-Trade Zone 136—BrevardCounty, FL; Application for Foreign-Trade Subzone Status HarrisCorporation—Electronic SystemsSector (Telecommunication/Information Systems), Brevard County,FL

An application has been submitted tothe Foreign-Trade Zones Board (theBoard) by the Canaveral Port Authority,grantee of FTZ 136, requesting special-purpose subzone status for themanufacturing facilities(telecommunication/informationsystems) of the Electronic SystemsSector (ESS) business unit of HarrisCorporation, located at sites in BrevardCounty, Florida. The application wassubmitted pursuant to the Foreign-TradeZones Act, as amended (19 U.S.C. 81a–81u), and the regulations of the Board(15 CFR part 400). It was formally filedon December 22, 1997.

The Harris ESS facilities are located atfour sites in Brevard County, Florida(388 acres, 1.9 million sq. ft.): Site 1 (44buildings/1.9 million square feet on 181acres)—located at 2400 NE Palm BayRoad, Palm Bay; Site 2 (4 buildings/315,000 sq. ft. on 50 acres)—located at150 S. Wickham Road, Melbourne; Site3 (2 buildings/114,000 sq. ft. on 30acres)—located at 505 N. John RodesBlvd., West Melbourne; and Site 4 (3buildings/215 sq. ft. on 127 acres)—located at 2800 Jordan Boulevard,Malabar.

The facilities (6,200 employees) areused for the development andmanufacture of telecommunication andinformation systems products andrelated software for defense, aerospace,transportation and energy management,meteorology and publishing.Applications include digital maps,cockpit controls and displays, antennas,land and satellite communicationsterminals and networks, satelliteantenna testing, electronic warfare andevaluation systems, global positioningcontrol systems, signal and imagingprocessing, weather support systems,civil and military air traffic controlsystems, integrated airportcommunication and managementsystems, and information processingsystems for publishing. Some of thecomponents used in the manufacturingprocess are purchased from abroad (anestimated 10–15% of finished productvalue), including power supplies,mobile data terminals, optical switchmodules, transmission apparatus,

printed circuits, connectors, opticalinstruments and appliances, testingequipment, audio-frequency electricalamplifiers, static connectors, electronicparts and equipment, and antennaereflectors (duty rates range from duty-free to 8.5%; weighted average—3.4%).

Zone procedures would exemptHarris from Customs duty payments onforeign components used in exportproduction. On its domestic sales,Harris would be able to choose thelower duty rate that applies to thefinished products (duty-free to 6.0%;weighted average—2.5%) for the foreigncomponents noted above. FTZprocedures will also help Harris ESS toimplement a more cost-effective systemfor handling Customs requirements(including reduced brokerage fees andCustoms merchandise processing fees).FTZ status may also make a site eligiblefor benefits provided under state/localprograms. The application indicates thatthe savings from zone procedures wouldhelp improve the plant’s internationalcompetitiveness.

In accordance with the Board’sregulations, a member of the FTZ Staffhas been designated examiner toinvestigate the application and report tothe Board.

Public comment on the application isinvited from interested parties.Submissions (original and three copies)shall be addressed to the Board’sExecutive Secretary at the addressbelow. The closing period for theirreceipt is March 17, 1998. Rebuttalcomments in response to materialsubmitted during the foregoing periodmay be submitted during the subsequent15-day period to April 1, 1998. A copyof the application and theaccompanying exhibits will be availablefor public inspection at each of thefollowing locations:

Office of the Executive Secretary,Foreign-Trade Zones Board, U.S.Department of Commerce, Room3716, 14th and Pennsylvania Avenue,NW., Washington, DC 20230

U.S. Department of Commerce ExportAssistance Center, 200 E. RobinsonSt., Suite 1270, Orlando, Florida32801

Dated: December 23,1997.

Dennis Puccinelli,Acting Executive Secretary.[FR Doc. 98–1161 Filed 1–15–98; 8:45 am]




[Docket 1–98]

Foreign-Trade Zone 92, HarrisonCounty, Mississippi Area Applicationfor Expansion

An application has been submitted tothe Foreign-Trade Zones (FTZ) Board(the Board) by the Greater Gulfport/Biloxi Foreign-Trade Zone, Inc., granteeof FTZ 92, based in Harrison County,Mississippi, requesting authority toexpand its zone at sites in Jackson andHancock Counties, Mississippi, withinthe Pascagoula and Gulfport Customsports of entry. The application wassubmitted pursuant to the provisions ofthe FTZ Act, as amended (19 U.S.C.81a–81u), and the regulations of theBoard (15 CFR Part 400). It was formallyfiled on January 6, 1998.

FTZ 92 was approved on November 4,1983 (Board Order 232, 48 FR 52107,11/16/83) and expanded on August 17,1992 (Board Order 595, 57 FR 39388, 8/31/97). The zone project currentlyconsists of the following sites inHarrison County: Site 1 (167 acres)—Port of Gulfport complex, Highway 90and 30th Avenue, Gilbert; Site 2 (717acres)—industrial area within theGulfport/Biloxi Regional Airport,Gulfport; Site 3 (2,471 acres)—BernardBayou Industrial Park, 1 mile north ofGulfport, Harrison County; and, Site 4(484 acres)—Long Beach Industrial Park,5 miles west of Gulfport between EspyAvenue and Beat Line Road, LongBeach.

The applicant, in a major revision toits zone plan, now requests authority toexpand the general-purpose zone toinclude nine new sites (1,731 acres) inJackson and Hancock Counties(Proposed Sites 5–13): Site 5 (254acres)—Trent C. Lott InternationalAirport, 8301 Saracennia Road, MossPoint (Jackson County); Site 6 (148acres)—Greenwood Island, BayouCasotte area of Pascagoula (JacksonCounty); Site 7 (193 acres)—Port ofPascagoula (2 harbors)—West Harbor(112 acres), located on the PascagoulaRiver, and East Harbor (81 acres),located in the Bayou Casotte industrialarea, Pascagoula (Jackson County); Site8 (283 acres)—John C. Stennis IndustrialPark (formerly the Jackson CountyAirport), Highway 611/63, adjacent tothe Bayou Casotte Harbor’s deep waterport facility, Pascagoula (JacksonCounty); Site 9 (13 acres)—Heinzfacility, east bank of the PascagoulaRiver, across from the Port of PascagoulaWest Harbor, Pascagoula (JacksonCounty); Site 10 (65 acres)—within the


300-acre Sunplex Industrial Park,Mississippi Highway 57 betweenInterstate 10 and US Highway 90,within one mile of the city limits ofOcean Springs (Jackson County); Site 11(621 acres)—within the 3,600-acre PortBienville Industrial Park, mouth of thePearl River, 2.7 miles south of U.S.Highway 90, Pearlington (HancockCounty); Site 12 (87 acres)—MississippiArmy Ammunition Plant (part of the14,000-acre John C. Stennis SpaceCenter), 4 miles north of Interstate 10,State Highway 607, Kiln, (HancockCounty); and, Site 13 (67 acres)—Stennis International Airport, Kiln(Hancock County). All of these sites areowned or controlled by either theJackson County Port Authority or theHancock County Port and HarborCommission. No specific manufacturingrequests are being made at this time.Such requests would be made to theBoard on a case-by-case basis.

In accordance with the Board’sregulations, a member of the FTZ Staffhas been designated examiner toinvestigate the application and report tothe Board.

Public comment on the application isinvited from interested parties.Submissions (original and 3 copies)shall be addressed to the Board’sExecutive Secretary at the addressbelow. The closing period for theirreceipt is March 17, 1998. Rebuttalcomments in response to materialsubmitted during the foregoing periodmay be submitted during the subsequent15-day period to April 1, 1998.

A copy of the application andaccompanying exhibits will be availablefor public inspection at each of thefollowing locations:

Gulf Regional Planning Commission,1232 Pass Road, Gulfport, MS 39501

Office of the Executive Secretary,Foreign-Trade Zones Board, Room3716, U.S. Department of Commerce,14th and Pennsylvania Avenue, NW.,Washington, DC 20230

Dated: January 7, 1998.

Dennis Puccinelli,Acting Executive Secretary.[FR Doc. 98–1162 Filed 1–15–98; 8:45 am]



International Trade Administration

[A–351–820]

Ferrosilicon From Brazil: Notice ofPartial Termination and PreliminaryResults of Antidumping DutyAdministrative Review

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of Preliminary Results ofAntidumping Duty AdministrativeReview.

SUMMARY: In response to timely requestsfor administrative review, theDepartment of Commerce has conductedan administrative review of theantidumping duty order on ferrosiliconfrom Brazil. Because we determined thatCompanhia Brasileria Carbureto deCalcio had no shipment of the subjectmerchandise, we are terminating thisreview with regard to that firm. Thisnotice of preliminary results covers onemanufacturer/exporter, Companhia deFerro Ligas da Bahia, for the periodMarch 1, 1996, through February 28,1997. The review indicates that therewas no dumping margin during thisperiod. If these preliminary results areadopted for purposes of the final resultsof our administrative review, we willinstruct the Customs Service to assessantidumping duties of zero on entriesduring the period of review. Interestedparties are invited to comment on thesepreliminary results. Parties who submitarguments in this proceeding arerequested to submit with the arguments(1) a statement of the issues, and (2) abrief summary of each argument.EFFECTIVE DATE: January 16, 1998.FOR FURTHER INFORMATION CONTACT:Wendy Frankel or Sal Tauhidi, AD/CVDEnforcement Group II, Office Four,Import Administration, InternationalTrade Administration, U.S. Departmentof Commerce, 14th Street andConstitution Avenue, N.W.,Washington, D.C. 20230; telephone:(202) 482–5849 or (202) 482–4851,respectively.

SUPPLEMENTAL INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, allcitations to the Tariff Act of 1930, asamended (the Act) are references to theprovisions effective January 1, 1995, theeffective date of the amendments to theAct by the Uruguay Round AgreementsAct (URAA). In addition, unlessotherwise indicated, all references to theDepartment of Commerce’s (the

Department’s) regulations are to theregulations as codified at 19 CFR Part353 (1997). Where appropriate, we havecited the Department’s new regulations,codified at 19 CFR Part 351 (62 FR27296, May 19, 1997). While notbinding on this review, the newregulations serve as a restatement of theDepartment’s policies.

BackgroundOn March 7, 1997 (62 FR 10521), the

Department published in the FederalRegister a notice of ‘‘Opportunity toRequest an Administrative Review’’ ofthe antidumping duty order onFerrosilicon from Brazil covering theperiod March 1, 1996, through February28, 1997. In accordance with 19 CFR353.22(a)(2), in March 1997, Companhiade Ferro Ligas da Bahia (Ferbasa),Companhia Brasileira Carbureto DeCalcio (CBCC), and CompanhiaFerroligas Minas Gerais (Minasligas)requested that the Department conductan administrative review of theirrespective shipments of ferrosilicon tothe United States during this period. OnApril 24, 1997, the Departmentpublished a notice of initiation ofadministrative review (62 FR 19988).The Department is now conducting thisadministrative review in accordancewith section 751 of the Act.

On May 14, 1997, the Departmentissued an antidumping dutyquestionnaire to Ferbasa, CBCC, andMinasligas. On June 20, 1997, CBCCsubmitted a letter to the Departmentstating that it had no shipments or salesof the subject merchandise to the UnitedStates during the period of review(POR). On June 25, 1997, we requestedthe Customs Service (Customs) toconfirm that CBCC had no shipments ofthe subject merchandise during thePOR. On June 27, 1997, Customs did so.Therefore, because we determined thatCBCC had no shipments of the subjectmerchandise during the POR, we areterminating this review with respect toCBCC. Further, on July 7, 1997,Minasligas requested that it be allowedto withdraw its request for review andthat the review be terminated pursuantto 19 CFR 353.22(a)(5). On July 29,1997, the Department published apartial termination notice of theadministrative review on ferrosiliconfrom Brazil with respect to Minasligas.(See Ferrosilicon From Brazil: PartialTermination of Antidumping DutyAdministrative Review (62 FR 40501)(July 29, 1997).)

Ferbasa submitted its response to thequestionnaire on July 11, 1997. TheDepartment issued supplementalquestionnaires on August 13, 1997, andOctober 14, 1997. We received Ferbasa’s


responses to the supplementalquestionnaires on September 2, 1997,and October 24, 1997, respectively.Under section 751(a)(3)(A) of the Act,the Department may extend thedeadline for completion of apreliminary determination if itdetermines that it is not practicable tocomplete the review within thestatutory time limit. On September 15,1997, the Department published anextension of the time limits for thepreliminary results. (See Ferrosiliconfrom Brazil: Extension of Time Limits ofAntidumping Duty AdministrativeReview, (62 FR 48218).)

VerificationIn accordance with section 782(i) of

the Act, we verified the sales and costquestionnaire responses of Ferbasa fromNovember 3, 1997 to November 11,1997. We conducted verification ofhome market and U.S. sales informationprovided by Ferbasa using standardverification procedures, including on-site inspection of the company’s salesand production facility, the examinationof relevant sales and financial records,and original documentation containingrelevant information.

Scope of ReviewThe merchandise subject to this

review is ferrosilicon, a ferro alloygenerally containing, by weight, not lessthan four percent iron, more than eightpercent but not more than 96 percentsilicon, not more than 10 percentchromium, not more than 30 percentmanganese, not more than three percentphosphorous, less than 2.75 percentmagnesium, and not more than 10percent calcium or any other element.Ferrosilicon is a ferro alloy produced bycombining silicon and iron throughsmelting in a submerged-arc furnace.Ferrosilicon is used primarily as analloying agent in the production of steeland cast iron. It is also used in the steelindustry as a deoxidizer and a reducingagent, and by cast iron producers as aninoculant.

Ferrosilicon is differentiated by sizeand by grade. The sizes express themaximum and minimum dimensions ofthe lumps of ferrosilicon found in agiven shipment. Ferrosilicon grades aredefined by the percentages by weight ofcontained silicon and other minorelements. Ferrosilicon is mostcommonly sold to the iron and steelindustries in standard grades of 75percent and 50 percent ferrosilicon.Calcium silicon, ferrocalcium silicon,and magnesium ferrosilicon arespecifically excluded from the scope ofthis review. Calcium silicon is an alloycontaining, by weight, not more than

five percent iron, 60 to 65 percentsilicon, and 28 to 32 percent calcium.Ferrocalcium silicon is a ferro alloycontaining, by weight, not less than fourpercent iron, 60 to 65 percent silicon,and more than 10 percent calcium.Magnesium ferrosilicon is a ferro alloycontaining, by weight, not less than fourpercent iron, not more than 55 percentsilicon, and not less than 2.75 percentmagnesium. Ferrosilicon is currentlyclassifiable under the followingsubheadings of the Harmonized TariffSchedule of the United States (HTSUS):7202.21.1000, 7202.21.5000,7202.21.7500, 7202.21.9000,7202.29.0010, and 7202.29.0050. TheHTSUS subheadings are provided forconvenience and customs purposes. Ourwritten description of the scope of thisreview is dispositive.

Ferrosilicon in the form of slag isincluded within the scope of this orderif it meets, in general, the chemicalcontent definition stated above and iscapable of being used as ferrosilicon.Parties that believe their importations offerrosilicon slag do not meet thesedefinitions should contact theDepartment and request a scopedetermination.

Product ComparisonsIn accordance with section 771(16) of

the Act, we considered all productsproduced by Ferbasa, covered by thedescription in the ‘‘Scope of theReview’’ section, above, and sold in thehome market during the POR, to beforeign like products for purposes ofdetermining appropriate productcomparisons to the U.S. sale. During themonth of the U.S. sale, Ferbasa hadhome market sales of identicalmerchandise; therefore, pursuant tosection 771(16) of the Act we used thosesales for comparison purposes and madeno adjustments for differences inmerchandise.

Level of TradeIn accordance with section

773(a)(1)(B) of the Act, to the extentpracticable, we determine normal value(NV) based on sales in the comparisonmarket at the same level of trade (LOT)as the export price (EP) or constructedexport price (CEP) transaction. The NVLOT is that of the starting-price sales inthe comparison market or, when NV isbased on constructed value (CV), that ofthe sales from which we derive selling,general and administrative (SG&A)expenses and profit. For EP, the U.S.LOT is also the level of the starting-price sale, which is usually fromexporter to importer. For CEP, it is thelevel of the constructed sale from theexporter to the importer.

To determine whether NV sales are ata different LOT than EP or CEP, weexamine stages in the marketing processand selling functions along the chain ofdistribution between the producer andthe unaffiliated customer. If thecomparison-market sales are at adifferent LOT, and the difference affectsprice comparability, as manifested in apattern of consistent price differencesbetween the sales on which NV is basedand comparison-market sales at the LOTof the export transaction, we make anLOT adjustment under section773(a)(7)(A) of the Act. Finally, for CEPsales, if the NV level is more remotefrom the factory than the CEP level andthere is no basis for determiningwhether the difference in the levelsbetween NV and CEP affects pricecomparability, we adjust NV undersection 773(a)(7)(B) of the Act (the CEPoffset provision). See Notice of FinalDetermination of Sales at Less Than FairValue: Certain Cut-to-Length CarbonSteel Plate from South Africa, 62 FR61731 (November 19, 1997).

In implementing these principles inthis review, we obtained informationfrom Ferbasa regarding the marketingstages involved in the reported homemarket and U.S. sales, including adescription of the selling activitiesperformed by Ferbasa for each channelof distribution. Pursuant to section773(a)(1)(B)(i) of the Act and the SAA at827, in identifying levels of trade for EPand home market sales we consideredthe selling functions reflected in thestarting prices before any adjustments.Ferbasa made only one U.S. sale duringthe period of review, which was to anunaffiliated reseller in the U.S. market.It made sales to unaffiliated resellersand to steel producers in the homemarket. The selling functions for theU.S. sale and for all home market salesare almost identical. The sellingfunctions include invoicing, orderacknowledgment, order processing,quality control, marketing, and pricenegotiation. With regard to the U.S. sale,Ferbasa also incurred freight expensesfor movement of the subjectmerchandise from the factory to the portof embarkation. This does not representa significant difference in sellingfunctions. Thus, based on our analysisof the selling functions performed byFerbasa, we conclude that a single levelof trade exists in each market and thathome market sales and the U.S. salewere all made at the same level of trade.Therefore, we have not made a level oftrade adjustment because the pricecomparison is at the same level of tradeand an adjustment pursuant to section


773(a)(7)(A) of the Act is notappropriate.

Export Price

We calculated EP, in accordance withsubsections 772(a) and (c) of the Act,because the subject merchandise wassold directly to the first unaffiliatedpurchaser in the United States prior toimportation and constructed exportprice was not otherwise warrantedbased on the facts of record. Wecalculated EP based on the packed FOBprices to Ferbasa’s unaffiliated customerin the United States. In accordance withsection 772(c)(2)(A) of the Act, we madedeductions, where appropriate, forforeign inland freight from the plant tothe port and for brokerage and handling,because these expenses were incident tobringing the subject merchandise fromthe original place of shipment in theexporting country to the place ofdelivery. No other adjustments to EPwere claimed or allowed.

Normal Value

Viability

In order to determine whether therewas a sufficient volume of sales in thehome market to serve as a viable basisfor calculating NV, we comparedFerbasa’s volume of home market salesof foreign like product to the volume ofU.S. sales of the subject merchandise inaccordance with section 773(a)(1)(C)(ii)of the Act. Since the aggregate volumeof home market sales of the foreign likeproduct was greater than five percent ofthe aggregate volume of U.S. sales of thesubject merchandise, we determinedthat the home market was viable forFerbasa. Therefore, in accordance withsection 773(a)(1)(B)(i) of the Act, webased NV on the prices at which theforeign like products were first sold forconsumption in the exporting country.We calculated NV as noted in the‘‘Price-to-Price Comparisons’’ section ofthis notice, below.

Cost of Production (COP) Analysis

Because we disregarded sales belowthe COP in the last completed segmentof the proceeding for Ferbasa (i.e.,Ferrosilicon from Brazil; Final Results ofAdministrative Review (61 FR 59407)(November 22, 1996)), we hadreasonable grounds to believe or suspectthat sales of the foreign product underconsideration for the determination ofNV in this review may have been madeat prices below the COP, as provided bysection 773(b)(2)(A)(ii) of the Act.Therefore, pursuant to section 773(b)(1)of the Act, we initiated a COPinvestigation of sales by Ferbasa in thehome market.

1. Calculation of COPIn accordance with section 773(b)(3)

of the Act, we calculated the COP basedon the sum of Ferbasa’s cost of materialsand fabrication employed in producingthe foreign like product, plus amountsfor general and administrative expenses(G&A). We adjusted Ferbasa’s reportedcosts to calculate the cost ofmanufacturing for the monthscorresponding to the company’s salesreporting period. We further adjustedFerbasa’s reported net interest expensecalculations to account for certain itemsof income or expense that wereimproperly excluded or included in thecompany’s calculation.

2. Net Home Market Prices forComparison to COP

We calculated net price by reducingthe gross unit price by amounts for IPIand ICMS taxes, indirect sellingexpenses, home market packingexpenses, direct selling expenses, andbilling adjustments. We also madeupward adjustments to the home marketprices for interest revenue and packingrevenue earned by Ferbasa. We adjustedFerbasa’s reported home market packingcosts for errors found at verification.

3. Test of Home Market PricesWe used Ferbasa’s weighted-average

COP, as adjusted (see above), for theperiod September 1996, throughFebruary 1997. We compared theweighted-average COP figure to the nethome-market sales prices (see above) ofthe foreign like product as requiredunder section 773(b) of the Act. Indetermining whether to disregard homemarket sales made at prices below theCOP, we examined whether (1) withinan extended period of time, such saleswere made in substantial quantities, and(2) such sales were made at priceswhich permitted the recovery of allcosts within a reasonable period of time.On a product-specific basis, wecompared the COP to the home marketprices (which did not include valueadded taxes) (VAT) less any applicablemovement charges, discounts, andrebates. Since the COP did not containVAT, for purposes of our sales-below-cost analysis, we used home marketprices which were exclusive of VAT.

4. Results of the COP TestIn accordance with section

773(b)(2)(C), where less than 20 percentof Ferbasa’s sales of ferrosilicon were atprices below the COP, we did notdisregard any below-cost sales of thatproduct because we determined that thebelow-cost sales were not made in‘‘substantial quantities.’’ Where 20percent or more of Ferbasa’s sales

during the POR were at prices less thanthe COP, we determined such sales tohave been made in ‘‘substantialquantities’’ within an extended periodof time in accordance with section773(b)(2)(B) of the Act, and not at priceswhich would permit recovery of allcosts within a reasonable period of time,in accordance with section 773(b)(2)(D)of the Act. Therefore, we disregardedsuch below-cost sales of Ferbasa.

Fair Value ComparisonsTo determine whether sales of

ferrosilicon by Ferbasa to the UnitedStates were made at less than fair value,we compared the EP to the NV, asdescribed in the ‘‘Export Price’’ and‘‘Normal Value’’ sections of this notice.In accordance with section 777A(d)(2)of the Act, we calculated a monthlyweighted-average price for NV andcompared this to the U.S. transaction.

Price to Price ComparisonsWe based NV on the price at which

the foreign like product was first soldfor consumption in the exportingcountry, in the usual commercialquantities and in the ordinary course oftrade, and at the same level of trade asthe export price, as defined by section773(a)(1)(B)(i) of the Act. We increasedNV by U.S. packing costs in accordancewith section 773(a)(6)(A) and reduced itby home market packing costs and ICMSand IPI taxes in accordance with773(a)(6)(B) (i) and (iii) of the Act. Weadjusted Ferbasa’s reported U.S. andhome market packing costs to correct forerrors found at verification. In addition,we increased NV for packing revenueand interest revenue earned by Ferbasaand decreased NV for billingadjustments reported by Ferbasa. Wemade a circumstance of sale adjustmentfor credit expenses under773(a)(6)(C)(iii). Further, in accordancewith 19 CFR 353.56(a)(2), we made anoffset to NV for U.S. commissions. Noother adjustments to NV were claimedor allowed.

Currency ConversionWe made currency conversions in

accordance with section 773(A) of theAct. Currency conversions were madebased on the rates certified by theFederal Reserve Bank. Section 773(A)directs the Department to use a dailyexchange rate to convert foreigncurrencies into U.S. dollars unless thedaily rate involves a ‘‘fluctuation.’’ It isour practice to find that a fluctuationexists when the daily exchange ratediffers from a benchmark rate by 2.25percent. See Preliminary Results ofAntidumping Duty AdministrativeReview: Certain Welded Carbon Steel


Pipe and Tube from Turkey (61 FR35188, 35192) (July 5, 1996). Thebenchmark rate is defined as the rollingaverage of the rates for the past 40business days.

Preliminary Results of the ReviewAs a result of this review, we

preliminarily determine that theweighted-average dumping margin forFerbasa is zero percent for the periodMarch 1, 1996, through February 28,1997.

Parties to the proceeding may requestdisclosure within 5 days of the date ofpublication of this notice. Anyinterested party may request a hearingwithin 10 days of the date ofpublication. Any hearing, if requested,will be held 44 days after thepublication of this notice, or the firstworkday thereafter. Interested partiesare invited to comment on thepreliminary results. Parties who submitarguments in this proceeding arerequested to submit with eachargument: (1) A statement of the issueand (2) a brief summary of theargument. All case briefs must besubmitted within 30 days of the date ofpublication of this notice. Rebuttalbriefs, which are limited to issues raisedin the case briefs, may be filed not laterthan 37 days after the date ofpublication. The Department willpublish a notice of the final results ofthis administrative review, which willinclude the results of its analysis ofissues raised in any such writtencomments within 120 days from thepublication of these preliminary results.

The Department shall determine, andCustoms shall assess, antidumpingduties on all appropriate entries. Uponcompletion of this review, theDepartment will issue appraisementinstructions directly to Customs. Thefinal results of this review shall be thebasis for the assessment of antidumpingduties on entries of merchandisecovered by the determination and forfuture deposits of estimated duties. Forduty assessment purposes, because thisreview covers only one importer, wewill divide the total dumping margin(calculated as the difference betweenNV and EP) by the total number ofmetric tons imported. We will directCustoms to assess the resulting per-metric ton dollar amount against eachmetric ton of subject merchandiseentered by the importer during the POR.Furthermore, the following depositrequirements will be effective uponcompletion of the final results of thisadministrative review for all shipmentsof ferrosilicon from Brazil entered, orwithdrawn from warehouse, forconsumption on or after the publication

date of the final results of thisadministrative review, as provided bysection 751(a)(1) of the Act: (1) The cashdeposit rate for Ferbasa will be the rateestablished in the final results of thisadministrative review, except if the rateis less than 0.5 percent, ad valorem and,therefore, de minimis within themeaning of 19 CFR 353.6, the cashdeposit rate will be zero; (2) formerchandise exported by manufacturersor exporters not covered in this reviewbut covered in the original less than fairvalue (LTFV) investigation or a previousreview, the cash deposit rate willcontinue to be the company-specific ratepublished in the most recent period; (3)if the exporter is not a firm covered inthis review, a previous review, or theLTFV investigation, but themanufacturer is, the cash deposit ratewill be the rate established for the mostrecent period for the manufacturer ofthe merchandise; (4) if neither theexporter nor the manufacturer is a firmcovered in this or any previous reviews,the cash deposit rate will be 35.95percent, the ‘‘All Others’’ rate madeeffective by the antidumping duty order(59 FR 11769, March 14, 1994) and; (5)consistent with our practice in previousreviews of this order, for thosecompanies that did not have shipmentsof the subject merchandise during thePOR but which had previously beenreviewed or investigated, their cashdeposit rate will continue to be thecompany-specific rate published for themost recently reviewed period. Theserequirements, when imposed, shallremain in effect until publication of thefinal results of the next administrativereview.

This notice serves as a preliminaryreminder to importers of theirresponsibility under 19 CFR 353.26 tofile a certificate regarding thereimbursement of antidumping dutiesprior to liquidation of the relevantentries during this review period.Failure to comply with this requirementcould result in the Secretary’spresumption that reimbursement ofantidumping duties occurred and thesubsequent assessment of doubleantidumping duties.

This administrative review and noticeare in accordance with section 751(a)(1)of the Act (19 U.S.C. 1675(a)(1)) and 19CFR 353.22.


Robert S. LaRussa,Assistant Secretary for ImportAdministration.[FR Doc. 98–1157 Filed 1–15–98; 8:45 am]

BILLIGN CODE 3510–DS–P


International Trade Administration

[A–337–803]

Notice of Preliminary Determination ofSales at Less Than Fair Value andPostponement of Final Determination:Fresh Atlantic Salmon From Chile

AGENCY: Import Administration,International Trade Administration,Department of Commerce.EFFECTIVE DATE: January 16, 1998.FOR FURTHER INFORMATION CONTACT:Gabriel Adler or Kris Campbell, Officeof AD/CVD Enforcement 2, ImportAdministration, International TradeAdministration, U.S. Department ofCommerce, 14th Street and ConstitutionAvenue, N.W., Washington, D.C. 20230;telephone: (202) 482–1442 or (202) 482–3813, respectively.


The Applicable Statute and Regulations

Unless otherwise indicated, allcitations to the statute are references tothe provisions effective January 1, 1995,the effective date of the amendmentsmade to the Tariff Act of 1930 (the Act)by the Uruguay Round Agreements Act(URAA). In addition, unless otherwiseindicated, all citations to Department ofCommerce (Department) regulationsrefer to the regulations last codified at19 CFR part 353 (April 1, 1997).

Preliminary Determination

We preliminarily determine that freshAtlantic salmon from Chile is beingsold, or is likely to be sold, in theUnited States at less than fair value(LTFV), as provided in section 733 ofthe Act. The estimated margins areshown in the Suspension of Liquidationsection of this notice.

Case History

This investigation was initiated onJuly 2, 1997. See Initiation ofAntidumping Duty Investigation: FreshAtlantic Salmon From Chile, 62 FR37027 (July 10, 1997) (Initiation Notice).Since the initiation of the investigation,the following events have occurred:

On July 12, 1997, the United StatesInternational Trade Commission (theITC) preliminarily determined that thereis a reasonable indication that importsof the product under investigation arematerially injuring the United Statesindustry.

On July 21, 1997, the Departmentinvited interested parties to submitcomments regarding selection ofrespondents and model matching. Afterconsidering those comments, on August


1 Section A of the questionnaire requests generalinformation concerning a company’s corporatestructure and business practices, the merchandiseunder investigation that it sells, and the manner inwhich it sells that merchandise in all of its markets.Section B requests a complete listing of all homemarket sales, or, if the home market is not viable,of sales in the most appropriate third-countrymarket. Section C requests a complete listing of U.S.sales. Section D requests information on the cost ofproduction of the foreign like product and theconstructed value of the merchandise underinvestigation.

2 The petition had demonstrated reasonablegrounds to believe that Chilean producers/exportersof the foreign like product had made sales belowcost in Japan and Brazil, and the Department hadinitiated country-wide cost investigations withrespect to these markets. However, the petition didnot make an allegation of sales below cost withrespect to Canada. See Initiation Notice at 37029.

26, 1997, the Department selected thefollowing companies as respondents inthis investigation: Pesquera MaresAustrales Ltda. (Mares Australes);Marine Harvest Chile (Marine Harvest);Aguas Claras S.A. (Aguas Claras);Pesquera Eicosal Ltda. (Eicosal); andCia. Pesquera Camanchaca S.A.(Camanchaca) (collectively‘‘respondents’’). See Selection ofRespondents, below. On the same date,the Department issued an antidumpingquestionnaire to the selectedrespondents. 1

The respondents submitted theirinitial responses to that questionnaire inSeptember and October of 1997. Afteranalyzing these responses, we issuedsupplemental questionnaires to therespondents to clarify or correct theinitial questionnaire responses.

On October 6, 1997, the Coalition forFair Atlantic Salmon Trade (thepetitioners) requested that theDepartment initiate a sales-below-costinvestigation with respect to sales inCanada by Aguas Claras. 2 Thepetitioners’ allegation was timely, andprovided reasonable grounds to believethat Aguas Claras had made sales belowcost in Canada. Therefore, in accordancewith section 773(b) of the Act, onOctober 21, 1997, we initiated a sales-below-cost investigation with respect toAguas Claras’ sales to Canada. See Costof Production, below.

On October 17, 1997, in accordancewith section 773(a)(1) of the Act, theDepartment determined that a particularmarket situation existed in the homemarket that rendered sales in thatmarket an inappropriate basis forcomparison to U.S. sales. TheDepartment requested that Eicosal andMares Australes, the two respondentsthat had provided a response to SectionB of our questionnaire based on homemarket sales, provide a revised responsebased on sales to Japan, the only viablethird-country market for those twocompanies. Eicosal and Mares Australes

complied with this request, but arguedthat to the extent that the Departmentconsidered that the home marketpresents a particular market situation, itshould find that Japan also presents aparticular market situation. SeeSelection of Comparison Markets,below.

On October 17, 1997, the petitionersfiled a timely request for a 50-daypostponement of the preliminarydetermination. Absent compellingreasons to deny this request, and inaccordance with section 733(c)(1)(A) ofthe Act and section 353.15(c) of theDepartment’s regulations, on October23, 1997, the Department postponed thepreliminary determination until notlater than January 8, 1998. See Notice ofPostponement of PreliminaryAntidumping Determination: FreshAtlantic Salmon from Chile, 62 FR56151 (October 29, 1997).

Postponement of Final DeterminationSection 735(a)(2) of the Act provides

that a final determination may bepostponed until not later than 135 daysafter the date of the publication of thepreliminary determination, if in theevent of an affirmative preliminarydetermination, a request for suchpostponement is made by exporters whoaccount for a significant proportion ofexports of the subject merchandise.

On December 18, 1997, therespondents in this investigation, whoaccount for a significant proportion ofexports of subject merchandise, madesuch a request. In their request for anextension of the deadline for the finaldetermination, the respondentsconsented to the extension ofprovisional measures to no longer thansix months. Since this preliminarydetermination is affirmative, and thereis no compelling reason to deny therespondents’ request, we have extendedthe deadline for issuance of the finaldetermination until the 135th day afterthe date of publication of thispreliminary determination in theFederal Register.

Period of InvestigationThe period of investigation (POI) is

April 1, 1996, through March 31, 1997.This period corresponds to eachrespondent’s four most recent fiscalquarters prior to the month of the filingof the petition (i.e., June 1996).

Scope of InvestigationThe scope of this investigation covers

fresh, farmed Atlantic salmon, whetherimported ‘‘dressed’’ or cut. Atlanticsalmon is the species Salmo salar, in thegenus Salmo of the family salmoninae.‘‘Dressed’’ Atlantic salmon refers to

salmon that has been bled, gutted, andcleaned. Dressed Atlantic salmon maybe imported with the head on or off;with the tail on or off; and with the gillsin or out. All cuts of fresh Atlanticsalmon are included in the scope of theinvestigation. Examples of cuts include,but are not limited to: crosswise cuts(steaks), lengthwise cuts (fillets),lengthwise cuts attached by skin(butterfly cuts), combinations ofcrosswise and lengthwise cuts(combination packages), and Atlanticsalmon that is minced, shredded, orground. Cuts may be subjected tovarious degrees of trimming, andimported with the skin on or off andwith the ‘‘pin bones’’ in or out.

Excluded from the scope are (1) freshAtlantic salmon that is ‘‘not farmed’’(i.e., wild Atlantic salmon); (2) liveAtlantic salmon; and (3) Atlanticsalmon that has been subject to furtherprocessing, such as frozen, canned,dried, and smoked Atlantic salmon, orprocessed into forms such as sausages,hot dogs, and burgers.

The merchandise subject to thisinvestigation is classifiable as itemnumbers 0302.12.0003 and0304.10.4093 of the Harmonized TariffSchedule (HTS) of the United States.Although the HTS statistical reportingnumbers are provided for convenienceand customs purposes, the writtendescription of the merchandise isdispositive.

Class or KindWe have preliminarily determined

that the products subject to thisinvestigation comprise a single class orkind of merchandise. Our determinationis based on an evaluation of the criteriaset forth in Diversified Products v.United States, 572 F. Supp. 883, 889(CIT 1983) (Diversified Products), whichlook to differences in: (1) The generalphysical characteristics of themerchandise, (2) the expectations of theultimate purchaser, (3) the ultimate useof the merchandise, (4) the channels oftrade in which the merchandise moves,and (5) cost. In making thisdetermination, we have rejected arequest by two of the respondents inthis investigation, Mares Australes andEicosal, that the Department determinethat there are two separate classes orkinds of merchandise subject toinvestigation: (1) Fresh whole dressedAtlantic salmon, and (2) fresh Atlanticsalmon meat. See letter from Arnold &Porter to Department of Commerce(November 3, 1997). In our analysis ofthe Diversified Products criteria, wefound first, with respect to physicaldifferences, that although certaindifferences between the two forms of the


3 Certain respondents contend that, in theJapanese market, there is a distinction betweenpremium and super-premium salmon. While wehave accepted this claim for the preliminarydetermination, we intend to examine this issuethoroughly at verification.

4 On October 31, 1997, the petitioners alleged thatrespondents Mares Australes, Camanchaca, andEicosal are affiliated with their U.S. consignmentsellers because the nature of a consignmentrelationship is such that the consignment sellercontrols the exporter. We have not adopted thatposition for this preliminary determination. Inrecent cases involving consignment sales ofagricultural products, we explicitly recognized thata consignment relationship does not per se establishaffiliation between the producer and theconsignment seller. See, e.g., Certain Fresh CutFlowers from Colombia; Final Results and PartialRescission of Antidumping Duty AdministrativeReview, 62 FR 53287, 53295 (October 14, 1997)(rejecting petitioners’ contention that ‘‘anyconsignment sale implies affiliation between theexporter and the consignment importer’’). Beyondthe consignment nature of the relationship betweenthe parties, the evidence on the record does notwarrant a finding of affiliation. For a further

merchandise exist, these differenceshave not been shown to outweigh thesimilarities among the products. Withrespect to the expectations of theultimate purchaser and the ultimate useof the merchandise, we found that bothwhole dressed salmon and salmon cutsare ultimately destined for humanconsumption. Moreover, even if wewere to consider restaurants/supermarkets as the ‘‘ultimatepurchaser,’’ there is insufficientevidence to support the respondents’claim that whole salmon is sold togourmet restaurants and fillets ofsalmon are sold to supermarkets andwarehouse retailers. Finally, withrespect to cost, we found while there isa cost difference involved in theadditional cutting procedure required tomake a fillet from a dressed fish, thatdifference alone is not significantenough to warrant a finding that thereare two classes or kinds of merchandise.For a more detailed discussion of ourpreliminary determination with respectto the class or kind issue, seeMemorandum from Gary Taverman toRichard W. Moreland, Fresh AtlanticSalmon from Chile: Issues Concerningthe Preliminary Determination of Salesat Less Than Fair Value (January 8,1998) (Preliminary DeterminationMemorandum).

Selection of RespondentsSection 777A(c)(1) of the Act directs

the Department to calculate individualdumping margins for each knownexporter and producer of the subjectmerchandise. However, section777A(c)(2) of the Act gives theDepartment discretion, when faced witha large number of exporters/producers,to limit its examination to a reasonablenumber of such companies if it is notpracticable to examine all companies.Where it is not practicable to examineall known producers/exporters ofsubject merchandise, this provisionpermits the Department to investigateeither: (1) A sample of exporters,producers, or types of products that isstatistically valid based on theinformation available at the time ofselection, or (2) exporters and producersaccounting for the largest volume of thesubject merchandise that can reasonablybe examined.

After consideration of thecomplexities expected to arise in thisproceeding (including issues of modelmatching, market viability, and cost ofproduction), and the resources availableto the Department, we determined thatit was not practicable in thisinvestigation to examine all knownproducers/exporters of subjectmerchandise. Instead, we found that

given our resources we would be able toinvestigate the five producers/exporterswith the greatest export volume, asidentified above. These companiesaccounted for slightly less than 50percent of all known exports of thesubject merchandise during the POI. Fora more detailed discussion ofrespondent selection in thisinvestigation, see Memorandum fromthe Team to Richard W. Moreland,(August 26, 1997) (RespondentSelection Memorandum).

Product Comparisons

Pursuant to section 771(16) of the Act,all products produced by therespondents that fit the definition of thescope of the investigation and were soldin the comparison third-country marketsduring the POI fall within the definitionof the foreign like product. We haverelied on three criteria to match U.S.sales of subject merchandise tocomparison market sales of the foreignlike product: form, grade, and weightband. We have determined that it isgenerally not possible to match acrossforms, grades, or weight bands, becausethere are significant differences amongproducts that cannot be accounted forby means of a difference-in-merchandiseadjustment. (The exception to thisgeneral rule is that dressed salmon withgills in can be compared to dressedsalmon with gills out, after making adifference-in-merchandise adjustment.)Therefore, we have compared U.S. salesto comparison market sales of identicalmerchandise, and have not comparedU.S. sales to comparison market sales ofsimilar merchandise. A detaileddescription of the matching criteria, aswell as our matching methodology, iscontained in the PreliminaryDetermination Memorandum.3

Fair Value Comparisons

To determine whether sales of freshAtlantic salmon from Chile were madein the United States at less than fairvalue, we compared the export price(EP) or constructed export price (CEP) tothe normal value (NV), as described inthe Export Price and Constructed ExportPrice and Normal Value sections of thisnotice. In accordance with section777A(d)(1)(A)(i) of the Act, wecalculated weighted-average EPs andCEPs for comparison to weighted-average NVs.

Export Price and Constructed ExportPrice

In accordance with section 772 of theAct, we calculated either an EP or aCEP, depending on the nature of eachsale. Section 772(a) of the Act definesEP as the price at which the subjectmerchandise is first sold before the dateof importation by the exporter orproducer outside the United States to anunaffiliated purchaser in the UnitedStates, or to an unaffiliated purchaserfor exportation to the United States.Section 772(b) of the Act defines CEP asthe price at which the subjectmerchandise is first sold in the UnitedStates before or after the date ofimportation, by or for the account of theproducer or exporter of themerchandise, or by a seller affiliatedwith the producer or exporter, to anunaffiliated purchaser, as adjustedunder sections 772 (c) and (d) of theAct.

Consistent with these definitions, wehave found that Aguas Claras, MaresAustrales, and Camanchaca made EPsales during the POI. These sales areproperly classified as EP sales becausethey were made by the exporter orproducer outside the United States tounaffiliated customers in the UnitedStates prior to the date of importation.We note that the Aguas Claras EP saleswere indirect (i.e., these sales weremade through an affiliated U.S. resellerthat facilitated the processing of salesdocumentation).

We also found that all therespondents made CEP sales during thePOI. Marine Harvest and Aguas Clarasmade sales through an affiliated resellerin the United States after the date ofimportation. Mares Australes, Eicosal,and Camanchaca made sales classifiableas CEP sales because the sales weremade for the account of the producer/exporter by an unaffiliated consignmentagent in the United States after the dateof importation.4


discussion of this issue, see PreliminaryDetermination Memorandum.

5 Consistent with our practice, we did not deductfrom the CEP the expenses of the unaffiliatedconsignment seller, since such expenses areeffectively covered by the commission charged bythe consignment seller to the producer/exporter.See, e.g., Certain Fresh Cut Flowers from Colombia;Final Results and Partial Rescission ofAntidumping Duty Administrative Review, 62 FR53287, 53295 (October 14, 1997).

In their original questionnaireresponses, Mares Australes, Eicosal, andCamanchaca reported prices based onthe aggregated revenues reportedperiodically by unaffiliatedconsignment sellers. Because it is theDepartment’s preference to examinetransaction-specific data whereverpossible, we requested that these threerespondents prepare a listing of all salesmade by unaffiliated consignmentsellers to their U.S. customers. Seeletters from Department of Commerce toArnold & Porter (October 31, 1997)(regarding sales by Eicosal andCamanchaca), and (November 20, 1997)(regarding sales by Mares Australes).The respondents complied with thisrequest, but argued that since this datais not normally in their possession, theDepartment should instead rely onprices calculated on the basis of theaggregated revenues reported by theunaffiliated consignment sellers. Seeletters from Arnold & Porter toDepartment of Commerce (November18, 1997) (submitting sales data forEicosal and Camanchaca), and(December 8, 1997) (submitting salesdata for Mares Australes). Given theDepartment’s preference for transaction-specific data, we have relied on thatdata for this preliminary determination.

For all respondents, we calculated EPand CEP, as appropriate, based onpacked prices charged to the firstunaffiliated customer in the UnitedStates. (Where sales were made throughconsignment sellers, we did notconsider the consignment seller to bethe customer; rather, the relevantcustomer was the consignment seller’scustomer.) We based the date of sale onthe date of the invoice issued to the U.S.customer.

In accordance with section 772(c)(2)of the Act, we reduced the EP and CEPby movement expenses and export taxesand duties, where appropriate.

Section 772(d)(1) of the Act providesfor additional adjustments to the CEP.Generally, where sales were madethrough an unaffiliated consignmentseller for the account of the exporter, wededucted commissions from the CEP.5Where sales were made through anaffiliated reseller, we deducted directand indirect selling expenses that

related to commercial activity in theUnited States.

Section 772(d)(3) of the Act requiresthat the CEP be adjusted for the profitallocated to the selling expenses of aproducer/exporter’s affiliated reseller.For Marine Harvest and Aguas Claras,which made sales through affiliatedresellers, we calculated a CEP profitratio following the methodology setforth in section 772(f) of the Act.

We made company-specificadjustments as follows:

Aguas Claras. We based EP and CEPon delivered or C&F prices tounaffiliated customers in the UnitedStates. For both EP and CEP sales, wemade deductions from the starting price,where appropriate, for movementexpenses including foreign inlandfreight from the plant to Santiagoairport, international air freight/insurance, and U.S. brokerage andhandling fees and port charges. We alsomade deductions for post sale priceadjustments corresponding to qualityclaims.

In addition, for CEP sales, we madedeductions for U.S. inland freight to thecustomer, imputed credit, directadvertising, export documentation fees,quality control/inspection fees, and U.S.repacking costs.

Camanchaca. We based EP on eitherdelivered, CIF Miami airport, ordelivered, C&F Los Angeles airport,prices to unaffiliated customers in theUnited States. We based CEP on eitherdelivered to customer or delivered FOBwarehouse prices to unaffiliatedcustomers of the consignment seller. Forboth EP and CEP sales, we madedeductions from the starting price,where appropriate, for movementexpenses including foreign inlandfreight from plant to Santiago airport,international air freight, transportationinsurance from plant to finaldestination, and customs exportdocumentation fees.

In addition, for CEP sales, we madedeductions for U.S. customs duties,handling and warehousing fees, U.S.inland freight from the consignee tocustomer, as well as imputed credit,direct advertising, and wire transferfees.

Eicosal. We based CEP on either FOBMiami, or delivered prices to theunaffiliated consignment seller’scustomers in the United States. Wemade deductions from the starting price,where appropriate, for movementexpenses including foreign inlandfreight from plant to Chilean port ofexit, international air freight, Chileanbrokerage and handling fees, and U.S.inland freight from warehouse tocustomer. We also deducted post-sale

price adjustments, including qualityclaims and invoicing errors; imputedcredit; direct advertising; qualitycontrol/inspection fees; expenses formaintaining bank accounts in theUnited States for sales of the subjectmerchandise; and expenses associatedwith gill tags. We made an upwardadjustment to the starting price for dutydrawback.

Mares Australes. We based EP andCEP on either ex-factory, C&F U.S. port,or FOB Santiago prices to unaffiliatedcustomers in the United States. For bothEP and CEP sales, we made deductionsfrom the starting price, whereappropriate, for movement expensesincluding foreign inland freight fromplant to Santiago airport, internationalair freight, U.S. customs duty, U.S.brokerage and handling, and post saleprice adjustments including qualityclaims and a consignment broker’ssurcharge.

In addition, for CEP sales, we madedeductions for U.S. inland freight fromthe consignee to customer, as well as forimputed credit, direct advertising,Chilean customs export documentationfees, and quality control/inspection fees.

Marine Harvest. We based CEP onFOB U.S. port and delivered prices tounaffiliated customers in the UnitedStates. We made deductions from thestarting price, where appropriate, formovement expenses including foreigninland freight from plant to Santiagoairport, international air freight, U.S.customs duty, U.S. brokerage andhandling, and post sale priceadjustments including quality claimsand rebates. In addition, we deductedU.S. inland freight from the port to theaffiliated reseller and from the affiliatedreseller to customer, as well as indirectselling expenses incurred by theaffiliated reseller, repacking costs,imputed credit, inventory carryingcosts, advertising, Chilean customs fees,quality control/inspection fees, andAssociation membership fees.

Normal Value

A. Selection of Comparison Markets

Section 773(a)(1) of the Act directsthat NV be based on the price at whichthe foreign like product is sold in thehome market (or third country market),provided that the merchandise is sold insufficient quantities (or value, ifquantity is inappropriate) and that thereis no particular market situation thatprevents a proper comparison with theEP or CEP. The statute contemplatesthat quantities (or value) will normallybe considered insufficient if they areless than five percent of the aggregate


quantity (or value) of sales of the subjectmerchandise to the United States.

In their responses to our antidumpingquestionnaires, Mares Australes andEicosal claimed that NV should bebased on home market sales because thehome market was viable. MarineHarvest and Aguas Claras indicated thattheir respective home markets were notviable, and claimed that NV shouldinstead be based on sales to Japan andCanada, respectively, the only viablethird-country market for each of thesecompanies. Camanchaca stated that ithad no viable comparison market at all,and claimed that NV should be based onthe constructed value.

In determining the appropriatecomparison market for each respondent,we examined several issues, asdiscussed in detail in the PreliminaryDetermination Memorandum. First, wedetermined that Chile was not anappropriate comparison market forMares Australes and Eicosal because aparticular market situation existed inChile. Our determination was based onrecord evidence indicating that thismarket involves almost exclusively‘‘industrial’’ or ‘‘off-quality’’ grades solddirectly from the factory depending onavailability. Since the Chilean market isincidental to the respondents, it is notappropriate for comparison with theU.S. market, which is one of therespondents’ primary marketing targetsand which involves sales of primarilyhigh-grade ‘‘premium’’ salmon madethrough distributors.

After rejecting the use of the homemarket for Mares Australes and Eicosal,we determined that Japan is theappropriate comparison market forMares Australes, Eicosal, and MarineHarvest. In making this determination,we rejected a contention by MaresAustrales and Eicosal that, by the logicof the Department’s decision to rejectthe home market, the Departmentshould also find that Japan presents aparticular market situation. Wedetermined that the Japanese market,unlike the home market, is notincidental to the respondents. Sales tothat market involve export-qualitymerchandise which, while oftendifferent in grade from merchandisesold in the United States, is not sodifferent as to render the Japanesemarket as a whole an unsuitable basisfor NV. By contrast, as explained above,the merchandise sold in the homemarket involved a relatively smallvolume of merchandise that was not ofexport-quality. Further, we note that theDepartment’s decision to reject the useof the home market was predicated inpart on the manner in which the foreignlike product is sold in that market. Sales

in Chile are made directly from therespondents’ processing facilities, withno guarantee of quality, on an ‘‘asavailable’’ basis. By contrast, sales toboth the United States and Japaninvolve much more elaboratedistribution systems, which aredesigned to ensure customersatisfaction. In view of theseconsiderations, we determined thatJapan could serve as a proper market onwhich to base NV.

We note that for Eicosal and MarineHarvest, we were unable to find anyappropriate price-to-price comparisonsbased on sales to Japan for thispreliminary determination.Accordingly, for these companies wecompared all U.S. sales to constructedvalue (CV), i.e., the cost of themerchandise sold in the United Statesas if it were sold in Japan. However, forMares Australes we were able to makeprice-to-price comparisons for someU.S. sales.

For Aguas Claras, we determined thatthe appropriate comparison market isCanada. For this company, we were ableto find appropriate price-based NVmatches for some U.S. sales; for theothers, we resorted to CV. Finally, webased NV for Camanchaca entirely onCV, as that company did not have aviable comparison market.

Adjustments made in deriving theNVs for each company are described indetail in Calculation of Normal ValueBased on Third-Country Prices andCalculation of Normal Value Based onConstructed Value, below.

B. Cost of Production AnalysisWe tested whether comparison market

sales were made below cost for allrespondents except Camanchaca, whichdid not have a viable comparisonmarket. Although Eicosal and MarineHarvest did not have comparison marketsales of comparable merchandise duringthe POI, we performed a cost analysisbased upon the petitioners’ timely costallegation for purposes of determiningthe proper basis for calculation of profitfor CV.

Based on an allegation contained inthe petition, we found reasonablegrounds to believe or suspect that salesof fresh Atlantic salmon made in Japanand Brazil were made at prices belowthe cost of production (COP). SeeInitiation Notice, 62 FR at 37029, andMemorandum from the Team to RichardMoreland, (July 1, 1997) (InitiationChecklist), at 10. In addition, based ona timely allegation filed by thepetitioners on October 6, 1997, theDepartment found reasonable groundsto believe or suspect that sales made byAguas Claras in Canada were made at

prices below the COP. SeeMemorandum from the Team to RichardMoreland, Regarding Petitioners’Allegation of Sales Below the Cost ofProduction for Aguas Claras (October21, 1997). As a result, the Departmenthas conducted investigations todetermine whether the respondentsmade sales in their respective third-country markets at prices below theirrespective COPs during the POI withinthe meaning of section 773(b) of the Act.

1. Calculation of COP. In accordancewith section 773(b)(3) of the Act, wecalculated a weighted-average COP foreach form of fresh Atlantic salmon,based on the sum of the cost ofmaterials, fabrication and generalexpenses, and packing costs. We reliedon the COP data submitted by eachrespondent in its supplementary costquestionnaire response, except, asdiscussed below, in specific instanceswhere the submitted costs were notappropriately quantified or valued.

Aguas Claras. We revised AguasClaras’ financial expenses to exclude anoffset for accounts receivables andfinished goods inventory.

Camanchaca. We revisedCamanchaca’s financial expenses toreflect the ratio of net financial expensesto cost of goods sold, consistent withour general practice in the calculation offinancial expenses.

Eicosal. We recalculated Eicosal’s netfinancial expense on the basis of theconsolidated financial expenses ofEicosal’s parent company, SociedadPesquera Eicosal S.A. We alsorecalculated Eicosal’s general &administrative (G&A) expenses toexclude an affiliated company’s G&Aexpenses.

Mares Australes. We revised MaresAustrales’ financial expenses to excludean offset for accounts receivables andfinished goods inventory. We alsorejected Mares Australes’ claim that thecalculation of costs should not includethe costs associated with a particulargroup of salmon that had reached sexualmaturation prior to harvesting (i.e.,salmon that had reached a ‘‘grilse’’stage), because we found that therespondent did not adequately supportits claim that this is an unusual, isolatedevent. We relied on the average cost toproduce all groups of salmon soldduring the POI.

Marine Harvest. We increased thereported cost of eggs and feed purchasedfrom affiliated parties to reflect thedifference between transfer prices andmarket prices, since the transfer priceswere below market prices.

2. Test of Third-Country ComparisonMarket Sales Prices. We compared theadjusted weighted-average COP for each


6 In accordance with section 773(b)(2)(C)(i) of theAct, we determined that sales made at below theCOP were made in substantial quantities if thevolume of such sales represented 20 percent ormore of the volume of sales under consideration forthe determination of normal value. We note that onDecember 18, 1997, the respondents submitted aletter arguing that fresh Atlantic salmon is a highlyperishable product and that the Department shouldnot use the 20-percent ‘‘substantial quantities’’ test,but instead apply the test set forth by section773(b)(2)(C)(ii) of the Act (which compares theaverage sales price to the average unit cost for theperiod). Because the respondents did not raise theirargument until shortly before the issuance of thispreliminary determination, we have not had anadequate opportunity to consider it. We havetherefore relied on the standard 20 percent test,which has been used in past investigationsinvolving salmon. See Final Determination of Salesat Less Than Fair Value: Fresh and Chilled AtlanticSalmon from Norway 56 FR 7661 (February 25,1991). However, we intend to examine this issuefurther for the final determination of thisinvestigation.

respondent to the third-countrycomparison market sales of the foreignlike product as required under section773(b) of the Act (except forCamanchaca, which had no viablecomparison market), in order todetermine whether these sales had beenmade at prices below the COP within anextended period of time in substantialquantities,6 and whether such priceswere sufficient to permit the recovery ofall costs within a reasonable period oftime.

On a product-specific basis, wecompared the revised COP to the third-country comparison market prices, lessany applicable movement charges,taxes, rebates, commissions and otherdirect and indirect selling expenses.

3. Results of the COP Test. Afterperforming the COP test, we determinedthat Aguas Claras, Eicosal, MarineHarvest, and Mares Australes madethird-country comparison market salesof certain products at prices below theCOP, within an extended period of timein substantial quantities. Further, wefound that the sales prices did notpermit for the recovery of costs withina reasonable period of time. Wetherefore excluded these sales from ouranalysis.

For Aguas Claras and MaresAustrales, which had sales ofcomparable merchandise during thePOI, we did not conduct price-to-pricecomparisons where all sales of aparticular product were made at pricesbelow the COP. Instead, we based NVon CV, and calculated profit for CV onthe basis of third-country sales that didnot fail the cost test. See Calculation ofNormal Value Based on ConstructedValue, below. For Marine Harvest andEicosal, which had no sales ofcomparable merchandise in the third-country market that would permit price-to-price comparisons, the finding of

sales below cost affected only thecalculation of profit for CV, inasmuch asprofit for these companies was basedonly on third-country sales that did notfail the cost test.

C. Calculation of Normal Value Basedon Third-Country Prices

We performed price-to-pricecomparisons where there were sales ofcomparable merchandise in the third-country market that did not fail the costtest. Such comparisons were possibleonly for Aguas Claras and MaresAustrales.

Aguas Claras. We calculated NVbased on delivered or C&F prices, andmade deductions from the starting price,where appropriate, for movementexpenses including inland freight andinsurance from the plant to the Chileanairport, international air freight andinsurance, customs exportdocumentation fee, and U.S. brokerageand handling fees. We also adjusted thestarting price for quality claims. Inaddition, we made circumstance of sale(COS) adjustments for direct expenses,where appropriate, in accordance withsection 773(a)(6)(C)(iii) of the Act. Theseincluded imputed credit expenses andquality control/inspection fees. Inaccordance with section 773(a)(6)(A)and (B) of the Act, we deducted thirdcountry market packing costs and addedU.S. packing costs.

As discussed in the Level of Trade/CEP Offset section of this notice below,we preliminarily determined that it wasappropriate to make a CEP offset to NV.

Mares Australes. We calculated NVbased on C&F Japanese port or FOBSantiago prices to unaffiliatedcustomers and made deductions, whereappropriate, from the starting price forinland freight from the plant to Santiagoairport and international air freight. Weadjusted for COS differences in imputedcredit expenses, quality control/inspection fees, Chilean customs exportdocument fees, repacking costs, anddirect advertising expenses.

D. Calculation of Normal Value Basedon Constructed Value

Section 773(a)(4) of the Act providesthat where NV cannot be based oncomparison market sales, NV may bebased on CV. Accordingly, for thosefresh Atlantic salmon products forwhich we could not determine the NVbased on comparison market sales,either because (1) there were no sales ofa comparable product (as was the casefor Eicosal, Marine Harvest, andCamanchaca) or (2) all sales of thecomparison product failed the COP test(as was the case for Aguas Claras and

Mares Australes, with respect to certainproducts), we based NV on CV.

Section 773(e)(1) of the Act providesthat CV shall be based on the sum of thecost of materials and fabrication for theforeign like product, plus amounts forselling, general, and administrativeexpenses (SG&A), profit, and U.S.packing costs. For each respondent, wecalculated the cost of materials andfabrication based on the methodologydescribed in the Calculation of COPsection of this notice, above. Except forCamanchaca, for every respondent webased SG&A and profit on the actualamounts incurred and realized by therespondent in connection with theproduction and sale of the foreign likeproduct in the ordinary course of tradefor consumption in the comparisonmarket, in accordance with section773(e)(2)(A) of the Act. Because there isno viable comparison market forCamanchaca, and hence no actualcompany-specific profit and SG&A dataavailable for Camanchaca, we calculatedprofit and indirect selling expenses inaccordance with section 773(e)(2)(B)(iii)of the Act and the SAA at 841.Specifically, the SAA at 841 providesthat where, due to the absence of data,the Department cannot determineamounts for profit under alternatives (i)or (ii) of section 773(e)(2)(B) of the Actor a ‘‘profit cap’’ under alternative (iii)of section 773(e)(2)(B) of the Act, theDepartment may apply alternative (iii)on the basis of the facts available. In thiscase, we are unable to determine anamount for profit under alternatives (i)or (ii) or a profit cap under alternative(iii) because none of the respondentshave viable home markets. See 19 CFR405(b)(2) of the Department’s revisedregulations (clarifying that undersection 773(e)(2)(B) of the Act, ‘‘foreigncountry’’ means the country in whichthe merchandise is produced), (62 FR27296, 27412–13 (May 19, 1997)). As aresult, we are applying alternative (iii)on the basis of the facts availableconsistent with the SAA. As factsavailable, we calculated Camanchaca’sprofit and indirect selling expensesbased on the weighted-average actualprofit and indirect selling expenses ofthe other respondents in connectionwith the production and sale of theforeign like product in the ordinarycourse of trade for consumption in theirrespective comparison markets.

In addition, for each respondent weused U.S. packing costs as described inthe Export Price and Constructed ExportPrice section of this notice, above.

We made adjustments to CV fordifferences in COS in accordance withsection 773(a)(8) of the Act and 19 CFR353.56. For comparisons to EP, we made


COS adjustments by deducting directselling expenses incurred on third-country market sales and adding U.S.direct selling expenses. For comparisonsto CEP, we made COS adjustments bydeducting direct selling expensesincurred on third-country market salesand adding U.S. direct selling expensesexcept those deducted from the startingprice in calculating CEP pursuant tosection 772(d) of the Act. We also madeadjustments, where applicable, forindirect selling expenses incurred onthird-country market sales to offset U.S.commissions in EP and CEPcomparisons; specifically, we deductedfrom NV the lesser of (1) the amount ofcommission paid on a U.S. sale for aparticular product, or (2) the amount ofindirect selling expenses incurred onthe third-country market sales for aparticular product.

Level of Trade/CEP OffsetIn accordance with section

773(a)(1)(B) of the Act, to the extentpracticable, we determine NV based onsales in the comparison market at thesame level of trade (LOT) as the EP orCEP transaction. The NV LOT is that ofthe starting-price sales in thecomparison market or, when NV isbased on CV, that of the sales fromwhich we derive SG&A expenses andprofit. For EP, the U.S. LOT is also thelevel of the starting-price sale, which isusually from exporter to importer. ForCEP, it is the level of the constructedsale from the exporter to the importer.

To determine whether NV sales are ata different LOT than EP or CEP, weexamine stages in the marketing processand selling functions along the chain ofdistribution between the producer andthe unaffiliated customer. If thecomparison-market sales are at adifferent LOT, and the difference affectsprice comparability, as manifested in apattern of consistent price differencesbetween the sales on which NV is basedand comparison-market sales at the LOTof the export transaction, we make anLOT adjustment under section773(a)(7)(A) of the Act. Finally, for CEPsales, if the NV level is more remotefrom the factory than the CEP level andthere is no basis for determiningwhether the difference in the levelsbetween NV and CEP affects pricecomparability, we adjust NV undersection 773(a)(7)(B) of the Act (the CEPoffset provision). See Notice of FinalDetermination of Sales at Less ThanFair Value: Certain Cut-to-LengthCarbon Steel Plate from South Africa,62 FR 61731 (November 19, 1997).

In implementing these principles inthis investigation, we obtainedinformation from each respondent about

the marketing stage involved in thereported U.S. and third-country marketsales, including a description of theselling activities performed by therespondents for each channel ofdistribution. In identifying levels oftrade for EP and third-country marketsales we considered the sellingfunctions reflected in the starting pricebefore any adjustments. For CEP sales,we considered only the selling activitiesreflected in the price after the deductionof expenses and profit under section772(d) of the Act. We expect that, ifclaimed levels of trade are the same, thefunctions and activities of the sellershould be similar. Conversely, if a partyclaims that levels of trade are differentfor different groups of sales, thefunctions and activities of the sellershould be dissimilar.

For Mares Australes and Eicosal, wefound one level of trade in Japan andone level of trade in the United States,between which there were no significantdifferences. Other than expenses relatedto movement, these companiesperformed few or no selling functions.Therefore, we preliminarily determinethat these companies’ Japanese levels oftrade constitute neither more or lessadvanced stages of distribution than thelevels of trade found in the UnitedStates at the levels of trade of the CEP.Accordingly, no adjustment fordifferences in levels of trade iswarranted for either company.

For both Aguas Claras and MarineHarvest, we found that there is one levelof trade for sales to Canada and Japan,respectively, and one level of trade forsales to the United States. As explainedbelow, we also preliminarily determinethat these companies’ comparisonmarket sales are made at a more advancelevel of trade than that of the CEP.

Aguas Claras makes all sales toCanada and all CEP sales to the UnitedStates through its affiliated consignee,Bowrain Corp. Information on therecord indicates that Bowrain performsthe same services with respect to bothgroups of sales, including identifyingcustomers, arranging for handling andstorage, and sales support to the finalcustomer. As noted above, for CEP sales,we consider only the selling activitiesreflected in the price after the deductionof expenses and profit under section772(d) of the Act. Thus, the level oftrade of Aguas Claras’ Canadian salesinvolves substantially more sellingfunctions (those performed by Bowrain)than the level of trade of the CEP. Wealso note that the level of trade ofCanadian sales differs from that of theCEP with respect to customer class:Canadian sales by Bowrain Corp. are toCanadian distributors, retailers,

restaurants, and further processors; thecustomer at the CEP level of trade isAguas Claras’ reseller, Bowrain Corp. Inlight of these facts, we have determinedthat Aguas Claras’ Canadian sales aremade at a different, and more advanced,stage of marketing than the level of tradeof the CEP. Aguas Claras also madeindirect EP sales to the United Statesthat are at a level of trade in the UnitedStates that is not substantially differentfrom that of the level of trade of theCEP.

Similarly, Marine Harvest’scomparison market sales are made at amore advanced stage of marketing thanits CEP sales. Marine Harvest sells inJapan to a trading company thatsubsequently sells to processors andfishmongers through layers ofwholesalers. The respondent maintainsa sales office in Japan (Marine HarvestJapan) that coordinates with the tradingcompany. Marine Harvest Japan setsprices and establishes order quantitieswith the trading company’s primarywholesaler, coordinating the terms andconditions of the sale with the tradingcompany. Marine Harvest Japan alsoassists in marketing salmon byaccompanying the primary wholesaleron sales trips to secondary wholesalersand by working directly with thesecondary wholesaler’s customers.Further, Marine Harvest Japan providesafter-sales service and quality claims.For CEP sales to its affiliated consigneein the United States, Marine Harvestperforms few or no selling functionsother than services related to movementof merchandise. Thus, Marine Harvestperforms fewer selling functions forsales to the United States, at a differentstage of marketing. We thereforepreliminarily determine that MarineHarvest’s sales to Japan are at a moreadvanced level of trade than the level oftrade of the CEP.

Accordingly, for Aguas Claras andMarine Harvest, a level-of-tradeadjustment is appropriate. However,neither company sells salmon or anyother product at any other level of tradein their comparison markets than that oftheir fresh Atlantic salmon sales.Therefore, because the data available donot permit a determination that there isa pattern of consistent price differencesbetween sales at different levels of tradein the comparison markets, section773(a)(7)(B) of the Act permits a CEPoffset to be made to NV. We grantedsuch an offset equal to the amount ofindirect expenses incurred in thecomparison markets, but not exceedingthe amount of the deductions madefrom the U.S. price in accordance with772(d)(1)(D) of the Act. For Aguas


Claras, we made no LOT adjustment forcomparisons to EP.

Finally, with respect to Camanchaca,we did not perform a level-of-tradeanalysis because this company does nothave a viable comparison market.

Currency Conversions

We made currency conversions inaccordance with section 773A of theAct. The Department’s preferred sourcefor daily exchange rates is the FederalReserve Bank. The Federal Reserve Bankpublishes daily exchange rates forJapanese yen, but not for Chilean pesos.For purposes of the preliminary results,we made conversions of figuresdenominated in Japanese yen based onthe official exchange rates published bythe Federal Reserve. For conversions offigures involving Chilean pesos, werelied instead on daily exchange ratespublished by Dow Jones News/Retrievalon-line system.

Verification

In accordance with section 782(i) ofthe Act, we intend to verify informationdetermined to be acceptable for use inmaking our final determination.

Suspension of Liquidation

In accordance with section 733(d) ofthe Act, we are directing the CustomsService to suspend liquidation of allentries of fresh Atlantic salmon fromChile, except for subject merchandiseproduced and exported by Camanchaca,Mares Australes, and Marine Harvest(which have de minimis weighted-average margins), that are entered, orwithdrawn from warehouse, forconsumption on or after the date ofpublication of this notice in the FederalRegister. We are also instructing theCustoms Service to require a cashdeposit or the posting of a bond equalto the weighted-average amount bywhich the NV exceeds the EP or CEP, asindicated in the chart below. Theseinstructions suspending liquidation willremain in effect until further notice. Wenote that, as stated in the Case Historysection of the notice above, we haveextended the provisional measures fromfour months to no more than sixmonths.

The weighted-average dumpingmargins are as follows:

Exporter/Manufacturer

Weighted-average

margin per-centage

Aguas Claras ............................ 3.31Eicosal ...................................... 8.27Camanchaca ............................. 0.18Mares Australes ........................ 1.21Marine Harvest ......................... 1.87

Exporter/Manufacturer

Weighted-average

margin per-centage

All Others .................................. 5.79

Section 735(c)(5)(A) of the Act directsthe Department to exclude all zero andde minimis weighted-average dumpingmargins, as well as dumping marginsdetermined entirely under factsavailable under section 776 of the Act,from the calculation of the ‘‘all others’’rate. We have excluded the de minimisdumping margins for Camanchaca,Mares Australes, and Marine Harvestfrom the calculation of the ‘‘all others’’rate. No dumping margins were basedentirely on facts available.

ITC NotificationIn accordance with section 733(f) of

the Act, we have notified the ITC of ourdetermination. If our final antidumpingdetermination is affirmative, the ITCwill determine whether these importsare materially injuring, or threatenmaterial injury to, the U.S. industry.The deadline for that ITC determinationwould be the later of 120 days after thedate of this preliminary determinationor 45 days after the date of our finaldetermination.

Public CommentCase briefs must be submitted to the

Assistant Secretary for ImportAdministration no later than April 13,1998. Rebuttal briefs will be due no laterthan April 20, 1998. A list of authoritiesused, a table of contents, and anexecutive summary of issues shouldaccompany any briefs submitted to theDepartment. Executive summariesshould be limited to five pages total,including footnotes.

Section 774 of the Act provides thatthe Department will hold a hearing toafford interested parties an opportunityto comment on arguments raised in caseor rebuttal briefs, provided that such ahearing is requested by any interestedparty. If a request for a hearing is made,the hearing will tentatively be held onMonday, April 28, 1998, at 8:30 A.M.,at the U.S. Department of Commerce,14th Street and Constitution Avenue,N.W., Washington, D.C. 20230. Partiesshould confirm by telephone the time,date, and place of the hearing 48 hoursbefore the scheduled time.

Interested parties who wish to requesta hearing, or to participate if one isrequested, must submit a writtenrequest within ten days of thepublication of this notice. Requestsshould specify the number ofparticipants and provide a list of theissues to be discussed. Oral

presentations will be limited to issuesraised in the briefs.

If this investigation proceedsnormally, we will make our finaldetermination no later than 135 daysafter the date of publication of thisnotice in the Federal Register.

This determination is publishedpursuant to section 733(f) of the Act.

Dated: January 8, 1998.Robert S. LaRussa,Assistant Secretary for ImportAdministration.[FR Doc. 98–1164 Filed 1–15–98; 8:45 am]BILLING CODE 3510–DS–P

CONSUMER PRODUCT SAFETYCOMMISSION

Sunshine Act Meeting

AGENCY: Consumer Product SafetyCommission, Washington, DC 20207.

TIME AND DATE: Wednesday, January 21,1998, 10:00 a.m.

LOCATION: Room 420, East West Towers,4330 East West Highway, Bethesda,Maryland.

STATUS: Open to the Public.

MATTER TO BE CONSIDERED:

Bicycle Helmets

The staff will brief the Commission onoptions for a final safety standard forbicycle helmets.

For a recorded message containing thelatest agenda information, call (301)504–0709.

CONTACT PERSON FOR ADDITIONALINFORMATION: Sadye E. Dunn, Office ofthe Secretary, 4330 East West Highway,Bethesda, MD 20207 (301) 504–0800.

Dated: January 14, 1998.Sadye E. Dunn,Secretary.[FR Doc. 98–1287 Filed 1–14–98; 2:49 pm]BILLING CODE 6355–01–M

CONSUMER PRODUCT SAFETYCOMMISSION


AGENCY: Consumer Product SafetyCommission, Washington, DC 20207.

TIME AND DATE: Friday, January 23, 1998,10:00 a.m.

LOCATION: Room 420, East West Towers,4330 East West Highway, Bethesda,Maryland.

STATUS: Open to the Public.


MATTER TO BE CONSIDERED:

Shopping Carts Petition CP 97–2

The staff will brief the Commission onPetition CP 97–2 submitted by Mr. JohnS. Morse requesting that theCommission develop a standard forshopping cart stability.

For a recorded message containing thelatest agenda information, call (301)504–0709.CONTACT PERSON FOR ADDITIONALINFORMATION: Sadye E. Dunn, Office ofthe Secretary, 4330 East West Highway,Bethesda, MD 20207 (301) 504–0800.

Dated: January 14, 1998.Sadye E. Dunn,Secretary.[FR Doc. 98–1288 Filed 1–14–98; 2:49 am]BILLING CODE 6355–01–M

DEPARTMENT OF DEFENSE

Department of the Air Force

HQ USAF Scientific Advisory BoardMeeting

The Going to Space Panel Meeting insupport of the HQ USAF ScientificAdvisory Board will meet inWashington, DC on January 20–21,1998, from 8:00 a.m. to 5:00 p.m.

The purpose of the meeting is togather information and receive briefingsfor the 1998 USAF Scientific AdvisoryBoard Summer Study on Going toSpace.

The meeting will be closed to thepublic in accordance with Section 552bof Title 5, United States Code,specifically subparagraphs (1) and (4)thereof.

For further information, contact theHQ USAF Scientific Advisory BoardSecretariat at (703) 697–8404.Barbara A. Carmichael,Alternate Air Force Federal Register LiaisonOfficer.[FR Doc. 98–1156 Filed 1–15–98; 8:45 am]BILLING CODE 3910–01–P

DEPARTMENT OF EDUCATION

Notice of Proposed InformationCollection Requests

AGENCY: Department of Education.ACTION: Notice of proposed informationcollection requests.

SUMMARY: The Deputy Chief InformationOfficer, Office of the Chief InformationOfficer, invites comments on theproposed information collectionrequests as required by the PaperworkReduction Act of 1995.

DATES: An emergency review has beenrequested in accordance with the Act(44 U.S.C. Chapter 3507 (j)), sincepublic harm is reasonably likely toresult if normal clearance proceduresare followed. Approval by the Office ofManagement and Budget (OMB) hasbeen requested by January 16, 1998. Aregular clearance process is alsobeginning. Interested persons areinvited to submit comments on or beforeMarch 17, 1998.ADDRESSES: Written commentsregarding the emergency review shouldbe addressed to the Office ofInformation and Regulatory Affairs,Attention: Dan Chenok, Desk Officer:Department of Education, Office ofManagement and Budget, 725 17thStreet, NW., Room 10235, NewExecutive Office Building, Washington,DC 20503. Requests for copies of theproposed information collection requestshould be addressed to Patrick J.Sherrill, Department of Education, 7th &D Streets, SW., Room 5624, RegionalOffice Building 3, Washington, DC20202–4651. Written commentsregarding the regular clearance andrequests for copies of the proposedinformation collection requests shouldbe addressed to Patrick J. Sherrill,Department of Education, 600Independence Avenue, SW., Room5624, Regional Office Building 3,Washington, DC 20202–4651, or shouldbe electronic mailed to the internetaddress #[email protected], or should befaxed to 202–708–9346.FOR FURTHER INFORMATION CONTACT:Patrick J. Sherrill (202) 708–8196.Individuals who use atelecommunications device for the deaf(TDD) may call the Federal InformationRelay Service (FIRS) at 1–800–877–8339between 8 a.m. and 8 p.m., Eastern time,Monday through Friday.SUPPLEMENTARY INFORMATION: Section3506(c)(2)(A) of the PaperworkReduction Act of 1995 (44 U.S.C.Chapter 3506(c)(2)(A) requires that theDirector of OMB provide interestedFederal agencies and the public an earlyopportunity to comment on informationcollection requests. The Office ofManagement and Budget (OMB) mayamend or waive the requirement forpublic consultation to the extent thatpublic participation in the approvalprocess would defeat the purpose of theinformation collection, violate State orFederal law, or substantially interferewith any agency’s ability to perform itsstatutory obligations. The Deputy ChiefInformation Officer, Office of the ChiefInformation Officer, publishes thisnotice containing proposed informationcollection requests at the beginning of

the Departmental review of theinformation collection. Each proposedinformation collection, grouped byoffice, contains the following: (1) Typeof review requested, e.g., new, revision,extension, existing or reinstatement; (2)Title; (3) Summary of the collection; (4)Description of the need for, andproposed use of, the information; (5)Respondents and frequency ofcollection; and (6) Reporting and/orRecordkeeping burden. ED invitespublic comment at the address specifiedabove. Copies of the requests areavailable from Patrick J. Sherrill at theaddress specified above.

The Department of Education isespecially interested in public commentaddressing the following issues: (1) Isthis collection necessary to the properfunctions of the Department, (2) willthis information be processed and usedin a timely manner, (3) is the estimateof burden accurate, (4) how might theDepartment enhance the quality, utility,and clarity of the information to becollected, and (5) how might theDepartment minimize the burden of thiscollection on the respondents, includingthrough the use of informationtechnology.

Dated: January 13, 1998.Gloria Parker,Deputy Chief Information Officer, Office ofthe Chief Information Officer.

Office of Postsecondary Education

Type of Review: Revision.Title: European Community(EU)/

United States of America (US) JointConsortia for Cooperation in HigherEducation and Vocational Education.

Abstract: The EC/US Joint Consortiafor Cooperation in a program that willsupport new types of cooperation andthe exchanges between institutions ofHigher Education in the U.S. andcounterparts in the member states of theEuropean Community.

Additional Information: Thisprogram’s European translators needthis clearance immediately in order toconvert the information into elevenlanguages and clear the necessarygovernmental processes throughoutEurope. This program must runsimultaneously there and in America.

Frequency: Annually.Affected Public: Not-for-profit

institutions; State, local or Tribal Gov’t,SEAs or LEAs

Reporting and Recordkeeping HourBurden: Responses: 80; Burden Hours:2,400.



DEPARTMENT OF EDUCATION

Advisory Council on EducationStatistics, Policy Committee

AGENCY: National Center on EducationStatistics, Education.ACTION: Notice of closed meeting.

SUMMARY: This notice sets forth theschedule and proposed agenda of aforthcoming meeting of the PolicyCommittee of the Advisory Council onEducation Statistics (ACES). Notice ofthis meeting is required under Section10(a)(2) of the Federal AdvisoryCommittee Act.DATES: January 28, 1998.TIMES: 9:00 a.m.-5:00 p.m., (closed).LOCATION: 555 New Jersey Avenue, NW,Board Room #100, Washington DC.FOR FURTHER INFORMATION CONTACT:Barbara Marenus, National Center onEducation Statistics, 555 New JerseyAve., NW, Room 400j, Washington, DC20208–5530 (202) 219–1835.SUPPLEMENTARY INFORMATION: TheAdvisory Council on EducationStatistics (ACES) is established underSection 406(c)(1) of the EducationAmendments of 1974, Pub. L. 93–380.The Council is established to reviewgeneral policies for the operation of theNational Center for Education Statistics(NCES) in the Office of EducationalResearch and Improvement and isresponsible for advising on standards toinsure that statistics and analysesdisseminated by NCES are of highquality and are not subject to politicalinfluence. In addition; ACES is requiredto advise the Commissioner of NCESand the National Assessment GoverningBoard on technical and statisticalmatters related to the NationalAssessment of Education Progress(NAEP).

The proposed agenda for the PolicyCommittee’s meeting includes thefollowing:

• Review and discussion of costestimates for planned procurements inthe hear 2000. Because the discussionwill include information on costestimates on future procurements, thissession must be closed to the public.The public disclosure of thisinformation would be likely tosignificantly frustrate theimplementation of planned agencyaction if conducted in open session.Such matters are protected byexemption (9)(B) of section 552(c) oftitle 5 U.S.C.

A summary of the activities andrelated matters, which are informativeto the public and consistent with thepolicy of 5 U.S.C. 552b, will be available

to the public within 14 days after themeetings. Records are kept of allCouncil proceedings and are availablefor public inspection at the Office of theExecutive Director, Advisory Council onEducation Statistics, 555 New JerseyAvenue, NW, Room 400J, Washington,DC 20208–7575.Ricky Takai,Acting Assistant Secretary for EducationalResearch and Improvement.[FR Doc. 98–1153 Filed 1–15–98; 8:45 am]BILLING CODE 4000–01–M

DEPARTMENT OF ENERGY

Environmental Management Site-Specific Advisory Board, Departmentof Energy, Los Alamos NationalLaboratory

AGENCY: Department of Energy.ACTION: Notice of open meeting.

SUMMARY: Pursuant to the provisions ofthe Federal Advisory Committee Act(Public Law 92–463, 86 Stat. 770) noticeis hereby given of the followingAdvisory Committee meeting:Environmental Management Site-Specific Advisory Board (EM SSAB),Los Alamos National Laboratory.DATES: Saturday, January 24, 1998: 9:00a.m.–12:00 p.m. 10:30 a.m. to 11:00 a.m.(public comment session).ADDRESSES: San Ildefonso Pueblo, TewaCenter, State Route 4.FOR FURTHER INFORMATION CONTACT: Ms.Ann DuBois, Los Alamos NationalLaboratory Citizens’ Advisory Board,528 35th Street, Los Alamos, NM 87544,(505) 665–5048.


Purpose of the Board: The purpose ofthe Advisory Board is to makerecommendations to DOE and itsregulators in the areas of environmentalrestoration, waste management, andrelated activities.

Tentative Agenda

9:00 a.m.Call to OrderAdoption of BylawsElection of Officers

9:30 a.m. Old Business10:00 a.m. New Business10:30 a.m. Public Comment Session12:00 p.m. Adjourn

Public Participation: The meeting isopen to the public. Written statementsmay be filed with the Committee eitherbefore or after the meeting. Individualswho wish to make oral statementspertaining to agenda items shouldcontact Ms. Ann DuBois, at (505) 665–

5048. Requests must be received 5 daysprior to the meeting and reasonableprovision will be made to include thepresentation in the agenda. TheDesignated Federal Official isempowered to conduct the meeting in afashion that will facilitate the orderlyconduct of business. This notice is beingpublished less than 15 days in advanceof the meeting due to programmaticissues that needed to be resolved.

Minutes: The minutes of this meetingwill be available for public review andcopying at the Freedom of InformationPublic Reading Room, 1E–190, ForrestalBuilding, 1000 Independence Avenue,SW, Washington, DC 20585 between9:00 a.m. and 4 p.m., Monday–Friday,except Federal holidays. Minutes willalso be available by writing to JoeVozella, Department of Energy, LosAlamos Area Office, 528 35th Street, LosAlamos, NM 87185–5400.

Issued at Washington, DC on January 12,1998.Rachel Samuel,Deputy Advisory Committee ManagementOfficer.[FR Doc. 98–1125 Filed 1–15–98; 8:45 am]BILLING CODE 6450–01–P


Secretary of Energy Advisory Board;Notice of Open Meeting

AGENCY: Department of Energy.SUMMARY: Consistent with theprovisions of the Federal AdvisoryCommittee Act (Public Law 92–463, 86Stat. 770), notice is hereby given of thefollowing advisory committee meeting:

Name: Secretary of Energy AdvisoryBoard—Task Force on Education.

Dates and Times: Monday, February 2,1998, 9:00 a.m.–4:00 p.m.

Addresses: Madison Hotel, Dolley MadisonBallroom, 15th & M Streets, NW.,Washington, DC.

For Further Information Contact: BruceBornfleth, Secretary of Energy AdvisoryBoard (AB–1), U.S. Department of Energy,1000 Independence Avenue, SW.,Washington, DC 20585, (202) 586–4040 or(202) 586–6279 (fax).

Supplementary Information: The purposeof the Task Force on Education is to provideinformation and recommendations to theSecretary of Energy Advisory Board on waysto make the Department’s scientific, technicaland supercomputing capabilities moreavailable to our Nation’s schools, collegesand universities, and to providerecommendations on how the Departmentcan best enhance science, technology,engineering and mathematics education inthe United States. The Task Force onEducation will prepare a report forsubmission to the Secretary of EnergyAdvisory Board.


Tentative Agenda: Monday, February 2,1998.

9–9:45 a.m. Welcome and OpeningRemarks—Dr. Hanna Gray, Task ForceChairman and Secretary Fedrico Pena

9:45–10:00 a.m. Report on DOE’s Initiatives10:00–10:15 a.m. Break10:15–12:00 a.m. Panel I: Discussion of

DOE’s Historical and Ongoing EducationActivities

12:00–1:00 p.m. Lunch1:00–2:30 p.m. Panel II: Overview of

Federal Activities in Math/ScienceEducation

2:30–3:30 p.m. Discussion of Task ForceAction Plan

3:30–4:00 p.m. Public Comment PeriodThis tentative agenda is subject to change.

The final agenda will be available at themeeting.

Public Participation: The Chairman of theTask Force is empowered to conduct themeeting in a fashion that will, in theChairman’s judgment, facilitate the orderlyconduct of business. During its meeting inWashington, DC, the Task Force welcomespublic comment. Members of the public willbe heard in the order in which they sign upat the beginning of the meeting. The TaskForce will make every effort to hear the viewsof all interested parties. Written commentsmay be submitted to Skila Harris, ExecutiveDirector, Secretary of Energy Advisory Board,AB–1, U.S. Department of Energy, 1000Independence Avenue, SW., Washington, DC20585.

Minutes: Minutes and a transcript of themeeting will be available for public reviewand copying approximately 30 daysfollowing the meeting at the Freedom ofInformation Public Reading Room, 1E–190Forrestal Building, 1000 IndependenceAvenue, SW., Washington, DC, between 9:00a.m. and 4:00 p.m., Monday through Fridayexcept Federal holidays. Information on theTask Force on Education and future reportsmay be found at the Secretary of EnergyAdvisory Board’s web site, located at http://www.hr.doe.gov/seab.

Issued at Washington, D.C., on January 13,1998.Rachel M. Samuel,Deputy Advisory Committee ManagementOfficer.[FR Doc. 98–1124 Filed 1–15–98; 8:45 am]BILLING CODE 6450–01–P


Federal Energy RegulatoryCommission

[Docket No. CP98–170–000]

National Fuel Gas Supply Corporation;Notice of Request Under BlanketAuthorization

January 12, 1998.Take notice that on January 5, 1998,

National Fuel Gas Supply Corporation(National), 10 Lafayette Square, Buffalo,NY 14203, filed in Docket No. CP98–

170–000 a request pursuant to sections157.205 and 157.211 of theCommission’s Regulations under theNatural Gas Act (18 CFR 157.205 and157.211) for authorization to install andoperate a new sales tap, located inMercer County, Pennsylvania, to renderservice to a new residential customer ofNational Fuel Gas DistributionCorporation (Distribution) underNational’s blanket certificate issued inDocket No. CP83–4–000, pursuant tosection 7(c) of the Natural Gas Act, allas more fully set forth in the request thatis on file with the Commission and opento public inspection.

National proposes to construct andoperate a new residential sales tap on itsLine S, located in Mercer County,Pennsylvania, for delivery ofapproximately 150 Mcf annually of gasto Distribution, an existing firmtransportation customer. National statesthe proposed sales tap is estimated tocost $1,500, for which National will bereimbursed by Distribution.

Any person or the Commission’s staffmay, within 45 days after issuance ofthe instant notice by the Commission,file pursuant to Rule 214 of theCommission’s Procedural Rules (18 CFR385.214) a motion to intervene or noticeof intervention and pursuant to section157.205 of the Regulations under theNatural Gas Act (18 CFR 157.205) aprotest to the request. If no protest isfiled within the time allowed therefor,the proposed activity shall be deemed tobe authorized effective the day after thetime allowed for filing a protest. If aprotest is filed and not withdrawnwithin 30 days after the time allowedfor filing a protest, the instant requestshall be treated as an application forauthorization pursuant to section 7 ofthe Natural Gas Act.David P. Boergers,Acting Secretary.[FR Doc. 98–1089 Filed 1–15–98; 8:45 am]BILLING CODE 6717–01–M


Federal Energy RegulatoryCommission

[Project No. 1927–008]

PacifiCorp; Notice of Meeting

January 12, 1998.A meeting will be convened by staff

of the Office of Hydropower Licensingon February 4, 1998, at 10:00 a.m. at theKingstad Meeting Center, Suite A,located at 850 SW Broadway, Portland,OR. The purpose of this meeting is todiscuss PacifiCorp’s October 10, 1997,additional information filing on the

relicense application for the NorthUmpqua Project. The meeting willprimarily focus on PacifiCorp’s responseto staff’s information request on soilerosion and slope stability at theproject’s canals and flumes, andalternatives for obtaining theinformation needed. However, otherissues will be discussed as time permits.

Any person wishing to attend orneeding additional information shouldcontact Vince Yearick at (202) 219–3073or e-mail at [email protected]. us.Please notify Mr. Yearick by January 28,if you plan to atttend.David P. Boergers,Acting Secretary.[FR Doc. 98–1090 Filed 1–15–98; 8:45 am]BILLING CODE 6717–01–M


[FRL–5950–7]

Agency Information CollectionActivities: Submission for OMBReview; Comment Request; ExportsFrom and Imports to the United StatesUnder the OECD Decision

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice.

SUMMARY: In compliance with thePaperwork Reduction Act (44 U.S.C.3501 et seq.), this document announcesthat the following InformationCollection Request (ICR) has beenforwarded to the Office of Managementand Budget (OMB) for review andapproval: ‘‘Exports From and ImportsTo the United States Under the OECDDecision,’’ EPA ICR Number 1647.02,OMB Control Number 2050–0143,which expires on January 31, 1998. TheICR describes the nature of theinformation collection and its expectedburden and cost; where appropriate, itincludes the actual data collectioninstrument.DATES: Comments must be submitted onor before February 17, 1998.FOR FURTHER INFORMATION CONTACT:Sandy Farmer at EPA by phone at (202)260–2740, by email [email protected], ordownload off the Internet at http://www.epa.gov/icr/icr.htm and refer toEPA ICR No.1647.02.


Title: Exports from and imports to theUnited States under the OECD DecisionOMB Control Number 2050–0143; EPAICR No. 1647.02 expiring 1/31/98. This


is a request for extension of a currentlyapproved collection.

Abstract: Authority to promulgate thisrule is found in sections 2002(a) and3017(a)(2) and (f) of the Solid WasteDisposal Act, as amended by theResource Conservation and RecoveryAct, and as amended by the Hazardousand Solid Waste Amendments, 42U.S.C. 6901 et seq. The OECD Decisionis considered legally binding on theUnited States under Articles 5(a) and6(2) of the OECD Convention, 12 U.S.T.1728. In addition, the OECD Decisionand the rule implementing the OECDDecision (61 FR 16290–16316, April 12,1996) ensure that exports and imports ofrecoverable hazardous waste betweenthe U.S. and OECD member countriesmay proceed even though the U.S. is notyet a ‘‘Party’’ to the Basel Convention onthe Control of TransboundaryMovements of Hazardous Wastes andTheir Disposal. The Office ofEnforcement and ComplianceAssurance, U.S. EPA, uses theinformation provided by each U.S.exporter and U.S. importer to determinecompliance with the applicable OECDregulatory provisions. In addition, theinformation will be used to determinethe number, origin, destination, andtype of exports from and imports to theU.S. for tracking purposes and forreporting to the OECD. This informationalso will be used to assess the efficiencyof the program.

An agency may not conduct orsponsor, and a person is not required torespond to, a collection of informationunless it displays a currently valid OMBcontrol number. The OMB controlnumbers for EPA’s regulations are listedin 40 CFR part 9 and 48 CFR Chapter15. The Federal Register documentrequired under 5 CFR 1320.8(d),soliciting comments on this collectionof information was published on8/26/97 (62 FR 45248); no commentswere received.

Burden Statement: The annual publicreporting and recordkeeping burden forthis collection of information isestimated to average 8.74 hours for theU.S. exporter and 5.83 hours for the U.S.importer. These estimates include allaspects of the information collectionincluding the time necessary to obtainand read the regulations and assessapplicability, to complete a notificationof intent to export hazardous waste, tocomplete the tracking document, signand transmit copies of the trackingdocument, as well as the reducedresponse time (3 working days ascompared to 30 days) to transmit asigned copy of a tracking document.Burden means the total time, effort, orfinancial resources expended by persons

to generate, maintain, retain, or discloseor provide information to or for aFederal agency. This includes the timeneeded to review instructions; develop,acquire, install, and utilize technologyand systems for the purposes ofcollecting, validating, and verifyinginformation, processing andmaintaining information, and disclosingand providing information; adjust theexisting ways to comply with anypreviously applicable instructions andrequirements; train personnel to be ableto respond to a collection ofinformation; search data sources;complete and review the collection ofinformation; and transmit or otherwisedisclose the information.

Estimated Number of Notification ofIntent to Export: 437.

Estimated Number of Notification ofIntent to Import: 771.

Estimated Total Annual Burden forRespondents: 8,314 hours.

Frequency of Response: On occasion.Estimated Total Annualized Cost

Burden: $391,000.Send comments on the Agency’s need

for this information, the accuracy of theprovided burden estimates, and anysuggested methods for minimizingrespondent burden, including throughthe use of automated collectiontechniques to the following addresses.Please refer to EPA ICR No.1647.02 andOMB Control No. 2050–0143 in anycorrespondence.Ms. Sandy Farmer, U.S. Environmental

Protection Agency, OPPE RegulatoryInformation Division (2137), 401 MStreet, SW, Washington, DC 20460, orEmail:[email protected];

andOffice of Information and Regulatory

Affairs, Office of Management andBudget, Attention: Desk Officer forEPA, 725 17th Street, NW,Washington, DC 20503.Dated: January 12, 1998.

Joseph Retzer,Director, Regulatory Information Division.[FR Doc. 98–1134 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–P


[FRL–5950–5]

Pesticides; OMB Review of InformationCollection Activities

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice of submission to OMB.

SUMMARY: In compliance with thePaperwork Reduction Act (44 U.S.C.

3501 et seq.), this document announcesthat the Information Collection Request(ICR) entitled: Asbestos-ContainingMaterials in Schools Rule and AsbestosModel Accreditation Plan Rule [EPAICR No. 1365.05; OMB Control No.2070–0091] has been forwarded to theOffice of Management and Budget(OMB) for review and approvalpursuant to the OMB procedures in 5CFR 1320.12. The ICR, which isabstracted below, describes the nature ofthe information collection and itsestimated cost and burden.

The Agency is requesting that OMBrenew for 3 years the existing approvalfor this ICR, which is scheduled toexpire on March 31, 1998. A FederalRegister document announcing theAgency’s intent to seek the renewal ofthis ICR and the 60-day public commentopportunity, requesting comments onthe request and the contents of the ICR,was issued on October 3, 1997 (62 FR51853). EPA did not receive anycomments on this ICR during thecomment period.DATES: Additional comments may besubmitted on or before February 17,1998.FOR FURTHER INFORMATION CONTACT:Sandy Farmer at EPA by phone on (202)260–2740, by e-mail:‘‘[email protected],’’ ordownload off the Internet at http://www.epa.gov/icr/icr.htm and refer toEPA ICR No. 1365.05.ADDRESSES: Send comments, referencingEPA ICR No. 1365.05 and OMB ControlNo. 2070–0091, to the followingaddresses:Ms. Sandy Farmer, U.S. Environmental

Protection Agency, RegulatoryInformation Division (Mailcode:2137), 401 M Street, SW.,Washington, DC 20460.

And to:Office of Information and Regulatory

Affairs, Office of Management andBudget (OMB), Attention: DeskOfficer for EPA 725 17th Street, NW.,Washington, DC 20503.

SUPPLEMENTARY INFORMATION:Review Requested: This is a request to

renew a currently approved informationcollection pursuant to 5 CFR 1320.12.

ICR Numbers: EPA ICR No. 1365.05;OMB Control No. 2070–0091.

Current Expiration Date: CurrentOMB approval expires on March 31,1998.

Title: Asbestos-Containing Materialsin Schools Rule

Abstract: The Asbestos HazardEmergency Response Act (AHERA)requires local education agencies (LEAs)to conduct inspections, develop


management plans, and design orconduct response actions with respectto the presence of asbestos-containingmaterials in school buildings. AHERAalso requires states to develop modelaccreditation plans for persons whoperform asbestos inspections, developmanagement control plans, and designor conduct response actions. Thisinformation collection addresses theburden associated with recordkeepingrequirements imposed on LEAs by theasbestos in schools rule, and reportingand recordkeeping requirementsimposed on states and trainingproviders related to the modelaccreditation plan rule.

Responses to the collection ofinformation are mandatory (see 40 CFRpart 763, subpart E).

Burden Statement: The annual publicreporting burden for this collection ofinformation is estimated to rangebetween 6 hours and 140 hours perresponse, depending upon the categoryof respondent, for an estimated 107,551respondents making one or moresubmissions of information annually.These estimates include the timeneeded to review instructions; develop,acquire, install and utilize technologyand systems for the purposes ofcollecting, validating and verifyinginformation, processing andmaintaining information, and disclosingand providing information; adjust theexisting ways to comply with anypreviously applicable instructions andrequirements; train personnel to be ableto respond to a collection ofinformation; search data sources;complete and review the collection ofinformation; and transmit or otherwisedisclose the information. No person isrequired to respond to a collection ofinformation unless it displays acurrently valid OMB control number.The OMB control numbers for theseregulations are displayed in 40 CFR part9.

Respondents/Affected Entities:Entities potentially affected by thisaction are local education agencies andstates with recordkeeping and/orreporting responsibilities under theAsbestos-Containing Materials inSchools rule, and training providers andstates with recordkeeping and/orreporting responsibilities under theModel Accreditation Plan rule.

Estimated No. of Respondents:107,551.

Estimated Total Annual Burden onRespondents: 2,367,293 hours.

Frequency of Collection: On occasion.Changes in Burden Estimates: There

is a decrease of 19,857 hours in the totalestimated respondent burden ascompared with that identified in the

information collection request mostrecently approved by OMB, from2,387,150 hours currently to anestimated 2,367,293 hours. Most of thisdecrease reflects the completion ofstartup costs associated with the ModelAccreditation Plan. A smaller portion ofthe decrease is due to the reduction inthe number of training providers andchanges in the numbers of schoolbuildings containing friable asbestos.

According to the proceduresprescribed in 5 CFR 1320.12, EPA hassubmitted this ICR to OMB for reviewand approval. Any comments related tothe renewal of this ICR should besubmitted within 30 days of thisdocument, as described above.

Dated: January 12, 1998Joseph Retzer,Director, egulatory Information Division.[FR Doc. 98–1136 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–P


[ER–FRL–5487–9]

Environmental Impact Statements;Notice of Availability

Responsible Agency: Office of FederalActivities, General Information (202)564–7167 OR (202) 564–7153.

Weekly receipt of EnvironmentalImpact Statements Filed January 05,1998 Through January 09, 1998Pursuant to 40 CFR 1506.9.EIS No. 980000, Draft EIS, COE, MN,

WI, Duluth-Superior Harbor Phase II,Dredge Material Management Plan,Cities of Duluth, St. Louis County,MN and Douglas County, WI, Due:March 02, 1998, Contact: Terry A.Long (313) 226–6758.

EIS No. 980001, Draft EIS, BLM, AK,Northern Intertie Project,Construction of 230 kV TransmissionLine from Healy to Fairbanks, AK,Application for Right-of-Way Grant,Gold Valley Electric Association, AK,Due: March 05, 1998, Contact: GaryForeman 1 (800) 437–7021.

EIS No. 980002, FINAL EIS, FHW, AK,Kenai River Bridge Crossing Project,Construction from Sterling Highwayto Funny River Road, Funding, COESection 10 and 404 Permits, US CGDPermit and EPA NPDES Permit, KenaiPeninsula, AK, Due: March 03, 1998,Contact: Jim Bryson (907) 586–7428.

EIS No. 980003, Draft EIS, UMC, CA,Tustin Marine Corps Air Station(MCAS) Disposal and Reuse,Implementation, Orange County, CA,Due: March 02, 1998, Contact: Cpt.George Opria (714) 726–5565.

EIS No. 980004, Draft EIS, AFS, AK,Canal-Hoya Timber Sale,Implementation, Stikine Area,Tongass National Forest, ValueComparison Unit (VCU), AK, Due:March 02, 1998, Contact: Scott Posner(907) 874–2323.

EIS No. 980005, DRAFT EIS, NPS, OR,Oregon Caves National Monument,General Management Plan,Development Concept Plan, JosephineCounty, OR, Due: March 13, 1998,Contact: Craig Ackerman (541) 592–2100.

Amended Notices

EIS No. 970489, DRAFT EIS, DOE, KY,TN, OH, TN, Programmatic EIS—Alternative Strategies for the Long-Term Management and Use ofDepleted Uranium Hexafluoride,Paducah Site, McCracken County, KY;Portsmouth Site, Pike County, OH;and K–25 Site on the Oak RidgeReservation, Anderson and RoaneCounties, TN, Due: April 23, 1998,Contact: Charles E. Bradley (301) 903–4781. Published FR—12–24–97—DueDate Correction.

EIS No. 970497, FINAL EIS, URC, UT,Provo River Restoration Project(PRRP), Riverine Habitat Restoration,Reconstruction and Realignment ofthe existing Provo River Channel andFloodplain System between JordanellDam and Deer River Reservoir,Wasatch County, UT, Due: February06, 1998, Contact: Mark A. Holden(801) 524–3146. Published FR—1–2–98—Due Date Correction.Dated: January 13, 1998.

William D. Dickerson,Director, NEPA Compliance Division, Officeof Federal Activities.[FR Doc. 98–1159 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–U


[ER–FRL–5488–1]

Environmental Impact Statements andRegulations; Availability of EPAComments

Availability of EPA commentsprepared December 29, 1997 ThroughJanuary 02, 1998 pursuant to theEnvironmental Review Process (ERP),under Section 309 of the Clean Air Actand Section 102(2)(c) of the NationalEnvironmental Policy Act as amended.Requests for copies of EPA commentscan be directed to the Office of FederalActivities at (202) 564–7167. Anexplanation of the ratings assigned todraft environmental impact statements


(EISs) was published in FR dated April11, 1997 (62 FR 16154).

Draft EISs

ERP No. D–FHW–C40141–NY RatingEC2, Judd Road ConnectorTransportation Improvements, Fundingand COE Section 404 Permit, Village ofNew York Mills, Towns of New Hartfordand Whitestown, Oneida County, NY.

Summary: EPA expressedenvironmental concerns about impactsto wetlands and recommended theSouthern alignment and the single pointinterchange be chosen.

ERP No. D–FHW–G40146–NM RatingLO, New Mexico Highway 126 (NM–126), Cuba-La Cueva Road (also Knownas Forest Highway 12) Improvement,COE Section 404 Permit and NPDESPermit, Sandoval and Rio ArribaCounties, NM.

Summary: EPA had no objection tothe selection of the lead agency’spreferred alternative as described in theDEIS.

ERP No. D–GSA–J81009–CO RatingEC2, Denver Federal Center Master SitePlan, Implementation, City ofLakewood, Jefferson County, CO.

Summary: EPA expressedenvironmental concerns regardingpotential water quality and wetlandimpacts. EPA requested that these issuesbe fully addressed in the final EIS. EPAalso requested that clarification on howfuture development relate to the ongoing clean-up under RCRA andCERCLA.

ERP No. DS–COE–G32054–00 RatingLO, Red River Waterway, Louisiana,Texas, Arkansas and Oklahoma andRelated Projects, New and UpdatedInformation, Red River Below DenisonDam Levee Rehabilition,Implementation, Hempstead, Lafayetteand Miller Counties, AR.

Summary: EPA expressed noobjection to the selection of themitigation measures as described in theEIS based on the Corp’s preferredalternative.

ERP No. DS–USA–E65040–MS RatingEC2, Camp Shelby Continued MilitaryTraining Activities, Use of NationalForest Lands, Updated Information,Final Site Selection Authorization forImplementation of the Proposed G.V.(Sonny) Montgomery Ranges, SpecialUse Permit, DeSoto National Forest,Forrest, George and Perry Counties, MS.

Summary: EPA expressedenvironmental concerns regardingpotential wetland, wildlife habitate loss/modification and noise impacts. EPArequested that additional information onthese issues be provided in the finaldocument.

ERP No. D1–FAA–C51020–NY RatingEC2, Terminal Doppler Weather Radar(TDWR) Installation and Operation,Serve the John F. Kennedy InternationalAirports (JFK) and La Guardia (LFA),Site Specific, Air Station Brooklyn,Borough of Queens, King County, NY.

Summary: EPA expressedenvironmental concerns regardingpotential hazardous waste and carbonmonoxide air quality impacts. EPArequested that FAA commit tocomprehensively characterize anycontamination prior to implementationand do carbon monoxide hot spotanalysis.

Final EISsERP No. F–DOE–E09802–SC,

Savannah River Site, Shutdown of theRiver Water System (DOE/EIS–0268D),Implementation, Aiken, SC.

Summary: EPA continues to expressconcerns about the project’s ecologicalrisks and impacts on endangeredspecies. EPA encourages completion ofconsultations with the NaturalResources Trustees before issuing anyCERCLA Record of Decision on theRiver Water Distribution System.

ERP No. F–FHW–C40138–NY, NY–17Highway Conversion from a Partial to aFull Access Control Facility, Five-MilePoint to Occanum and NY–17Rehabilitation or Reconstruction,Funding and COE Section 404 PermitIssuance, Towns of Kirkwood andWindsor, Broome County, NY.

Summary: EPA’s concerns wereaddressed in the final EIS and has noobjections to implementing the projectas proposed.

ERP No. F–TVA–E06017–AL,Bellefonte Nuclear Plant ConversionProject, Construction and Operation,NPDES Permit and COE Section 404Permit, Tennessee River nearHollywood, AL.

Summary: EPA expressedenvironmental concerns primarilyinvolve the EIS connected issue ofimpacts associated with theconstruction of a natural gas pipeline(separate NEPA issue and federal leadagency) logically needed to adequatelysupply the proposed conversion ofBellefonte to natural gas. Proposedcoordination with local residents wasalso recommended.

RegulationsERP No. R–ACH–A99216–00, 36 CFR

part 800—Revised RegulationImplementing Section 106 of theNational Historic PreservationAdministration.

Summary: EPA’s primary issue is thedefinition of ‘‘undertaking’’ EPA wouldlike to resolve interpretation of this

definition before the regulations areadopted as final.

Dated: January 13, 1998.William D. Dickerson,Director, NEPA Compliance Division, Officeof Federal Activities.[FR Doc. 98–1160 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–U


[FRL–5950–6]

Agency Information CollectionActivities OMB Responses

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice.

SUMMARY: This document announces theOffice of Management and Budget’s(OMB) responses to Agency clearancerequests, in compliance with thePaperwork Reduction Act (44 U.S.C.3501 et seq.). An agency may notconduct or sponsor, and a person is notrequired to respond to, a collection ofinformation unless it displays acurrently valid OMB control number.The OMB control numbers for EPA’sregulations are listed in 40 CFR part 9and 48 CFR Chapter 15.FOR FURTHER INFORMATION CONTACT:Call Sandy Farmer at (202) 260–2740, orE-mail at‘‘[email protected],’’ andplease refer to the appropriate EPAInformation Collection Request (ICR)Number.


OMB Responses to Agency ClearanceRequests

OMB ApprovalsEPA ICR No. 1503.03; Data

Acquisition for Registration; wasapproved 12/04/97; OMB No. 2070–0122; expires 12/31/2000.

EPA ICR No. 1250.05; Request forContractor Access to TSCA ConfidentialBusiness Information; was approved 12/05/97; OMB No. 2070–0075; expires 12/31/2000.

EPA ICR No. 1666.03; NESHAPSubpart O: National Emission Standardsfor Hazardous Air Pollutants (NESHAP)for Commercial Ethylene OxideSterilization and FumigationOperations; was approved 12/05/97;OMB No. 2060–0283; expires 12/31/2000.

EPA ICR No. 1678.03; NationalEmission Standards for Magnetic TapeManufacturing Operations—Subpart EE;was approved 12/05/97; OMB No. 2060–0326; expires 12/31/2000.


EPA ICR No. 0586.08; PreliminaryAssessment Information Rule (PAIR)—TSCA Section 8(a); was approved 12/09/97; OMB No. 2070–0054; expires 12/31/2000.

EPA ICR No. 1611.03; NationalEmission Standards for Hazardous AirPollutants (NESHAP) for ChromiumEmissions from Hard and DecorativeChromium Electroplating andChromium Anodizing Tanks; wasapproved 12/09/97; OMB No. 2060–0327; expires 12/31/2000.

EPA ICR No. 1287.05; Questionnairesfor Reviewing Operations andMaintenance (O&M), Biosolids Use(Biosolids), Combined Sewer Overflow(CSO), and Storm Water (SW) AwardsNominees under the NWMEAP; wasapproved 12/17/97; OMB No. 2040–0101; expires 12/31/2000.

EPA ICR No. 1805.01; NationalEmissions Standards for Hazardous AirPollutants for Chemical RecoveryCombustion Sources at Kraft, Soda,Sulfite, and Stand-Alone SemichemicalPulp Mills (Proposed Rule); wasapproved 12/22/97; OMB No. 2060–0377; expires 12/31/2000.

EPA ICR No. 1767.02; Reporting andRecordkeeping Requirements forPrimary Aluminum Reduction Plants;was approved 12/19/97; OMB No. 2060–0374; expires 12/31/2000.

EPA ICR No. 1591.08; Regulation ofFuels and Fuel Additives: BaselineRequirements for Gasoline Produced byForeign Refiners; was approved 12/23/97; OMB No. 2060–0277; expires 12/31/2000.

Change in Expiration Date

EPA ICR No. 1778.01; Authorizationof Indian Tribe Hazardous WasteProgram; OMB No. 2050–0155;expiration date was changed from 08/31/99 to 11/30/97.

OMB Disapproval

EPA ICR 1811.01; National EmissionStandards for Hazardous Air Pollutantfor Polyester Polyols Production; wasdisapproved by OMB 12/10/97.

Dated: January 12, 1998.Joseph Retzer,Division Director, Regulatory InformationDivision.[FR Doc. 98–1135 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–M


[FRL–5950–8]

Notice of Proposed PurchaserAgreement Pursuant to theComprehensive EnvironmentalResponse, Compensation and LiabilityAct of 1980, as Amended by theSuperfund Amendments andReauthorization Act

AGENCY: Environmental ProtectionAgency.

ACTION: Notice; Request for PublicComment.

SUMMARY: In accordance with section122 of the ComprehensiveEnvironmental Response, Compensationand Liability Act of 1980, as amendedby the Superfund amendments andReauthorization Act of 1986(‘‘CERCLA’’), 42 U.S.C. 9622,notification is hereby given that aproposed purchaser agreementassociated with the Grant ChemicalSuperfund Site in Philadelphia, PA, wasexecuted by the Agency on September30, 1997, and is subject to final approvalby the Department of Justice. ThePurchaser Agreement would resolvecertain potential EPA claims undersection 107 of CERCLA, 42 U.S.C. 9607,against National Street Associates, Inc.,a Pennsylvania Corporation (‘‘thePurchasers’’). The settlement wouldrequire the purchaser to pay a principalpayment of $15,500 to the HazardousSubstance Superfund.

For thirty (30) days following the dateof publication of this notice, the Agencywill receive written comments relatingto the proposed settlement. TheAgency’s response to any commentsreceived will be available for publicinspection at the U.S. EnvironmentalProtection Agency, Region III, 841Chestnut Street, Philadelphia, PA19107.

DATES: Comments must be submitted onor before February 17, 1998.

AVAILABILITY: The proposed agreementand additional background informationrelating to the settlement are availablefor public inspection at the U.S.Environmental Protection Agency,Region III, 841 Chestnut Street,Philadelphia, PA 19107. A copy of theproposed agreement may be obtainedfrom Suzanne Canning, U.S.Environmental Protection Agency,Regional Docket Clerk (3RC00), 841Chestnut Street, Philadelphia, PA19107. Comments should be forwardedto Suzanne Canning at the addressabove.

FOR FURTHER INFORMATION CONTACT:Rodney T. Carter (3RC21), SeniorAssistant Regional counsel, U.S.Environmental Protection Agency, 841Chestnut Street, Philadelphia, PA19107; (215) 566–2478.

Thomas Voltaggio,Regional Administrator, Region III.[FR Doc. 98–1132 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–M

ENVIRONMENTAL PROTECTIONAGENCY[FRL–5949–3]

Lorentz Barrel and Drum SuperfundSite; Notice of ProposedAdministrative Settlement

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice; request for publiccomment.

SUMMARY: In accordance with section122(i)(1) of the ComprehensiveEnvironmental Response,Compensation, and Liability Act of1980, as amended (‘‘CERCLA,’’commonly referred to as Superfund), 42U.S.C., 9622(i) and section 7003(d) ofthe Resource Conservation andRecovery Act, as amended (‘‘RCRA’’), 42U.S.C. 6973, notification is hereby givenof a proposed cost recoveryadministrative settlement concerningthe Lorentz Barrel and Drum SuperfundSite in San Jose, CA (the ‘‘Site’’). TheUnited States Environmental ProtectionAgency (‘‘EPA’’) is proposing to enterinto a de minimis settlement pursuant tosection 122(g)(4) of CERCLA. Thisproposed settlement is intended toresolve the liabilities under CERCLAand RCRA of 42 de minimis parties forall past and future response costsassociated with the Lorentz Barrel andDrum Site. The names of the settlingparties are listed below in theSupplementary Information section.These 42 parties collectively haveagreed to pay $1,042,296.53 to EPA and$490,492.51 to the CaliforniaDepartment of Toxic Substances Control(‘‘DTSC’’).

EPA is entering into this agreementunder the authority of section 122(g)(4)of CERCLA. Section 122(g) authorizesearly settlements with de minimisparties to allow them to resolve theirliabilities at Superfund sites withoutincurring substantial transaction costs.A de minimis party is one thatcontributed a minimal amount ofhazardous substances at a site, andcontributed hazardous substances thatare not significantly more toxic or ofsignificantly greater hazardous effect


than other hazardous substances at asite. Under the authority granted bySection 122(g), EPA proposes to settlewith 42 potentially responsible partiesat the Lorentz Barrel and DrumSuperfund Site, each of whom isresponsible for no more than onepercent of the total hazardoussubstances sent to the Site, as that totalis reflected on the July 29 waste-in listdeveloped by EPA.

De minimis settling parties will berequired to pay their allocated share ofall past response costs and the estimatedfuture response costs at the LorentzBarrel and Drum Site, including allfederal and state response costs, and apremium to cover the risks of remedyfailure and cost overruns.

EPA may withdraw or withhold itsconsent to this settlement if commentsreceived during the 30-day publiccomment period disclose facts ofconsiderations which indicate theproposed settlement is inappropriate,improper, or inadequate.DATES: Pursuant to section 122(i)(1) ofCERCLA and section 7003(d) of RCRA,EPA will receive written commentsrelating to this proposed settlement onor before February 17, 1998. If EPAreceives a request for a public meetingon or before February 17, 1998,pursuant to section 7003(d) of RCRA,EPA will hold a public meeting.ADDRESSES: Comments and requests fora public meeting should be addressed tothe Docket Clerk, U.S. EPA Region IX(RC–1), 75 Hawthorne Street, SanFrancisco, CA 94105 and should referto: Lorentz Barrel and Drum SuperfundSite, San Jose, CA, U.S. EPA Docket No.97–10. A copy of the proposedAdministrative Order on Consent maybe obtained from the Regional HearingClerk at the address provided above.EPA’s response to any commentsreceived will be available for inspectionfrom the Regional Hearing Clerk; at theDr. Martin Luther King, Jr. PublicLibrary, Reference Desk, 180W. SanCarlos Street, San Jose, CA 95113; andat San Jose State University, ClarkLibrary, Government Publications Desk,One Washington Square, San Jose, CA95192.FOR FURTHER INFORMATION CONTACT:Vicky Lang, Assistant Regional Counsel,(415) 744–1331, U.S. EnvironmentalProtection Agency (RC–1), Regional IX,75 Hawthorne Street, San Francisco, CA94105.SUPPLEMENTARY INFORMATION: Theproposed de minimis settlementresolves EPA and DTSC’s claims undersection 107 of CERCLA and section7003 of RCRA against the followingrespondents: Almaden Vineyards Inc.,

American Home Foods, ApacheEnterprises, Apex Marble, ArmourGrocery Products Co., Beatrice FoodsCo., Borden Inc., Bruce Church Co., CalStone, California Cheese Co., CaliforniaRoofing, Concrete Chemicals, FMCCorp., Four Phase, Garratt-Callahan Co.,Gibson Homans Co., Globe Union Inc.,Hal Crumly Inc., Industrial Models, ITT,L.M. Quartaroli, Libby Labs, MonsantoChemical Co., Olocco Agricultural PestControl, Pacific Coast Lacquer, PacificCoast Producers, Power &Communication Systems, PrecisionTechnical Coatings, Protect-o-Top,Racor Industries Inc., Safeway StoresInc., Savnik & Co. Inc., SCM Corp.Glidden Div., Sears Roebuck & Co.,Stokely Van Camp, TeledyneMcCormick Selph, Teralive Mfg., Tri-Valley Growers Packing, U.S. PrintingInk Corp., United Technologies Corp.,Western Farm Service, and WitcoChemical Co.

Dated: January 8, 1998.Michael Hingerty,Acting Director, Superfund Division.[FR Doc. 98–1131 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–M


[FRL–5951–4]

Proposed CERCLA AdministrativeCost Recovery Settlement Pursuant tothe Comprehensive EnvironmentalResponse, Compensation, and LiabilityAct; Stickney Avenue Landfill, Toledo,OH

AGENCY: Environmental ProtectionAgency.ACTION: Notice; request for publiccomment.

SUMMARY: In accordance with section122(i) of the ComprehensiveEnvironmental Response,Compensation, and Liability Act, asamended (CERCLA), 42 U.S.C. 9622(I),notification is hereby given of aproposed administrative settlement byconsent, pursuant to CERCLA sections106(a), 107 and 122(h), 42 U.S.C.sections 9606(a), 9607 and 9622,concerning the Stickney AvenueLandfill and Tyler Street Landfill Sitesin Lucas County, Toledo, Ohio. Thesettling parties are listed in section B ofthis document.

The settlement requires that thesettling parties construct multi-layerlandfill cover systems over the StickneyAvenue Landfill, the Tyler StreetLandfill, and the central portion of theXXKem facility, as defined in the

Enforcement Action Memoranda for theStickney Avenue and Tyler StreetLandfills. The settlement includesEPA’s covenant not to sue the settlingparties pursuant to section 106 and 107of CERCLA, 42 U.S.C. sections 9606 and9607, for the work which is to becompleted pursuant to the settlement,and for the recovery of past responsecosts and the payment of oversightcosts. The EPA’s authority to enter intothis administrative settlementagreement was conditioned upon theapproval of the Attorney General of theUnited States (or her delegatee); thisapproval has been obtained.

For thirty (30) days following the dateof publication of this notice, the Agencywill receive written comments relatingto the settlement. The Agency willconsider all comments received andmay modify or withdraw its consent tothe settlement if comments receiveddisclose facts or considerations whichindicate that the settlement isinappropriate, improper, or inadequate.The Agency’s response to any commentsreceived will be available for publicinspection at the 7th Floor RecordsCenter, (for address, see below).DATES: Comments must be submitted onor before February 17, 1998.ADDRESSES: Comments should beaddressed to Sherry Estes, Office ofRegional Counsel, Mail Code C–14J,U.S. Environmental Protection Agency,Region 5, 77 West Jackson Blvd.,Chicago, Illinois, 60604–3590, andshould reference the Stickney AvenueLandfill and Tyler Street Landfill Sites,Toledo, Ohio.

The proposed AOC embodying thesettlement agreement and additionalbackground information relating to thesettlement are available for publicinspection at the U.S. EnvironmentalProtection Agency, Region 5, SuperfundDivision Record Center (address above),or a copy of the proposed AOC may beobtained from Sherry L. Estes.FOR FURTHER INFORMATION CONTACT:Sherry L. Estes, Office of RegionalCounsel, (address above) or call (312)886–7164.


A. BackgroundThe Stickney Avenue Landfill and

Tyler Avenue Landfill are located inLucas County, Toledo, Ohio. The Sitesare 50-acre and 41-acre, respectively,inactive municipal, commercial,industrial and institutional landfillslocated along the Ottawa River,upstream from the point where theOttawa River discharges into theMaumee Bay and Lake Erie. Fifty-eightknown dump sites, including Stickney


and Tyler, along with combined seweroverflows, agricultural pollution andsediment desposition, have causedsevere pollution problems in theMaumee Bay.

Separate Engineering Evaluations/Cost Analyses (EE/CAs) were performedfor the Stickney Avenue and TylerStreet Landfills, which studied thenature and extent of the contaminationat the sites and evaluated thepresumptive remedy for municipallandfills. Based upon the analysescontained in the EE/CA, EPA issuedproposed plans for public commentfrom October 16, 1995, throughDecember 15, 1995 and responded tothe substantive comments receivedduring this period. Enforcement ActionMemoranda (EAM), embodying theEPA’s response action decision for thetwo sites, were issued on January 22,1996. The EAM call for the installationof a multi-layer cover system incompliance with the functionalrequirements of the OhioAdministrative Code, landfill gascollection and passive venting to theatmosphere, and institutional controls.

Immediately south of the StickneyAvenue Landfill is the XXKem facility,which formerly was occupied bycompanies which performed wastesolvent and waste fuel oil blendingoperations. This site is divided by afence line which separates the front(east) portion from the central portion,which contains a closed lagoon. TheEAM for the Stickney Avenue Landfillalso calls for the same multi-layer coversystem that will be installed at Stickneyto be installed over the closed lagoonarea. It should also be noted that furtherEPA response action decisions areanticipated for the central portion of theXXKem facility.

B. Settling PartiesProposed settling parties are: Allied

Signal Inc.; AP Parts International, Inc.;Blade Communications, Inc.; BFI WasteSystems of North America, Inc.,successor to Browning-Ferris Industriesof Ohio and Michigan, Inc.; CenteriorEnergy Corporation; Chevron U.S.A.,Inc.; Chrysler Corporation; City ofToledo, a municipal corporation;Cooper Industries; Cytec Industries,Inc.; Dana Corporation; E.I. du Pont deNemours and Company; EnvirosafeServices of Ohio, Inc. f/k/a FondesseyEnterprises Inc.; Flower Hospital;Gencorp, Inc.; Mercy Hospital ofToledo, Ohio Inc.; Owens-Illinois, Inc.and Libbey Glass Inc.; RiversideHospital; Northcoast Health Systems,Inc.; St. Charles Hospital of Oregon,Ohio; St. Luke’s Hospital; St. VincentMedical Center, Inc.; The Toledo

Hospital; Promedica Health Systems,Inc.; City Auto Stamping Division ofShellar-Globe Corporation, n/k/a UnitedTechnologies Automotive Systems, Inc.;and Waste Management of Ohio, Inc.

C. Description of SettlementIn exchange for the settling parties’

agreement to design, finance andconstruct the multi-layer cover systemsat the Stickney Avenue and Tyler StreetLandfills and the central portion of theXXKem facility, according to the EAMfor the Stickney and Tyler sites, EPAcovenants not to sue or issueadministrative orders to the settlingparties, pursuant to section 106 and 107of CERCLA, as described above. TheEAM estimated that the cumulativecosts for the multi-layer cover systemsat Stickney, Tyler and the centralportion of the XXKem sites would totalapproximately $26 million.

During the 1995 public commentperiod on the proposed plans, severalcommenters raised concerns that theproposed plans did not call for theinstallation of a leachate collectionsystem at the sites. However, in theEAM, EPA found that the installation ofmulti-layer cover systems should obtainthe rapid reduction in risk to humanhealth and to the Ottawa River which isanticipated in the EE/CAs. The Scope ofWork which is incorporated into theproposed AOC calls for the detailedmonitoring of the leachate and modelingof the reduction in risk. If, contrary tothe expectations of the settling partiesand EPA, the anticipated reduction inrisk is not achieved, EPA retains theauthority to determine that additionalresponse actions are required. While thesettling parties would not be required toperform these additional responseactions under the terms of the proposedAOC, EPA has reserved its rights toinitiate additional enforcement actionsunder sections 106(a) and 107 ofCERCLA.

EPA is not, pursuant to thisdocument, requesting further commenton the response action determinationsembodied in the EAM. This Noticerequests comment on the fairness andappropriateness of the proposed AOC,including the AOC’s covenant not to sueprovisions. EPA’s unreimbursed pastcosts total approximately $500,000;oversight costs for the work would becompleted pursuant to the proposedAOC are estimated at $200,000. Thus, inexchange for compromising potentialclaims for approximately $700,000against the settling parties, EPA isassuring that removal actions worthover $26 million are accomplished atthe Stickney and Tyler sites, and thecentral portion of the XXKem facility.

If, after the consideration ofcomments during the public commentperiod, EPA retains its prior consent tothe AOC and finalizes the settlement,the Contribution Protection Section ofthe AOC states EPA’s belief that thesettling parties are entitled tocontribution protection to the extentprovided by section 113(f) and122(h)(4), 42 U.S.C. sections 9613(f)(2),and 9622(h)(4). It should also be notedthat the contribution protection sectionof the AOC expressly reservescontribution claims as to the centralportion of the XXKem facility.Therefore, the settling parties havereserved any claims that they mighthave as against each other for the centralportion of the XXKem facility, andwould also be subject to contributionclaims for the central portion of theXXKem facility, to the extent that suchclaims exist, from entities which are notparties respondent to this proposedAOC.

Dated: January 13, 1998.William E. Muno,Director, Superfund Division.[FR Doc. 98–1247 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONSCOMMISSION

Notice of Public InformationCollection(s) Being Reviewed by theFederal Communications Commission

January 12, 1998.SUMMARY: The Federal CommunicationsCommission, as part of its continuingeffort to reduce paperwork burdeninvites the general public and otherFederal agencies to take thisopportunity to comment on thefollowing information collection(s), asrequired by the Paperwork ReductionAct of 1995, Public Law 104–13. Anagency may not conduct or sponsor acollection of information unless itdisplays a currently valid controlnumber. No person shall be subject toany penalty for failing to comply witha collection of information subject to thePaperwork Reduction Act (PRA) thatdoes not display a valid control number.Comments are requested concerning (a)whether the proposed collection ofinformation is necessary for the properperformance of the functions of theCommission, including whether theinformation shall have practical utility;(b) the accuracy of the Commission’sburden estimate; (c) ways to enhancethe quality, utility, and clarity of theinformation collected; and (d) ways tominimize the burden of the collection of


information on the respondents,including the use of automatedcollection techniques or other forms ofinformation technology.DATES: Written comments should besubmitted on or before March 17, 1998.If you anticipate that you will besubmitting comments, but find itdifficult to do so within the period oftime allowed by this notice, you shouldadvise the contact listed below as soonas possible.ADDRESSES: Direct all comments to JudyBoley, Federal CommunicationsCommission, Room 234, 1919 M St.,NW., Washington, DC 20554 or viainternet to [email protected] FURTHER INFORMATION CONTACT: Foradditional information or copies of theinformation collection(s), contact JudyBoley at 202–418–0214 or via internet [email protected] INFORMATION:

OMB Control No.: 3060–0633.Title: Station Licenses—Sections

73.1230, 74.165, 74.432, 74.564, 74.664,74.765, 74.832, 74.965, and 74.1265.

Form No.: N/A.Type of Review: Extension of a

currently approved collection.Respondents: Businesses or other for

profit; not-for-profit institutions.Number of Respondents: 10,000.Estimated Time Per Response: .083

hours.Frequency of Response: On occasion

reporting requirement.Cost to Respondents: $14,000.Total Annual Burden: 830 hours.Needs and Uses: Licensees of

broadcast stations are required to post,file or have available a copy of theinstrument of authorization at thestation and/or transmitter site. The datais used by FCC staff in fieldinvestigations and the public to ensurethat a station is licensed and operatingin the manner specified in the license.The information posted at thetransmitter site are used by the publicand FCC staff to know by whom thetransmitter is licensed.

OMB Control No.: 3060–0627.Title: Application for AM Broadcast

Station License.Form No.: FCC Form 302–AM.Type of Review: Extension of a

currently approved collection.Respondents: Businesses or other for

profit.Number of Respondents: 350.Estimated Time Per Response: Direct

of measurement of power applications—206 hours (8 hours per respondent, 8hours per legal, 190 hour per engineer);new license applications—1,016 (40

hours per respondent, 16 hours perattorney, 960 hours per engineer).

Frequency of Response: On occasionreporting requirement.

Cost to Respondents: $26,075,000.Total Annual Burden: 8,400 hours.Needs and Uses: Licensees and

permittees of AM broadcast stations arerequired to file FCC Form 302–AM toobtain a new or modified stationlicense, and/or to notify theCommission of certain changes in thelicensed facilities of these stations.Additionally, when changes are made toan AM station which alter the resistanceof the antenna system, a licensee mustinitiate a determination of the operatingpower by the direct method. The resultsof this are reported to the Commissionusing the FCC 302–AM. The data isused by FCC staff to confirm that thestation has been built to terms specifiedin the outstanding construction permit,and to update FCC station files. Data isthen extracted from FCC 302–AM forinclusion in the subsequent license tooperate the station.Federal Communications Commission.Magalie Roman Salas,Secretary.[FR Doc. 98–1109 Filed 1–15–98; 8:45 am]BILLING CODE 6712–01–M

FEDERAL ELECTION COMMISSION

Sunshine Act Notice

AGENCY: Federal Election Commission.FEDERAL REGISTER NUMBER: 1169.PREVIOUSLY ANNOUNCED DATE AND TIME:Thursday, January 22, 1998, 10:00 a.m.Meeting open to the public.THE FOLLOWING ITEM HAS BEEN ADDED TOTHE AGENDA: Rulemaking Petition ofNational Reform Party OrganizingCommittee, John J. Wheeling, Treasurer.PERSON TO CONTACT FOR INFORMATION:Mr. Ron Harris, Press Officer,Telephone: (202) 219–4155.Marjorie W. Emmons,Secretary of the Commission.[FR Doc. 98–1286 Filed 1–14–98; 2:48 pm]BILLING CODE 6715–01–M

FEDERAL EMERGENCYMANAGEMENT AGENCY

[FEMA–1193–DR]

Territory of Guam; Amendment toNotice of a Major Disaster Declaration

AGENCY: Federal EmergencyManagement Agency (FEMA).

ACTION: Notice.

SUMMARY: This notice amends the noticeof a major disaster for Territory of Guam(FEMA–1193-DR), dated December 17,1997, and related determinations.

EFFECTIVE DATE: December 21, 1997.

FOR FURTHER INFORMATION CONTACT:Madge Dale, Response and RecoveryDirectorate, Federal EmergencyManagement Agency, Washington, DC20472, (202) 646–3630.

SUPPLEMENTARY INFORMATION: Notice ishereby given that as authorized by thePresident in a letter dated December17,1997, FEMA is extending the timeperiod for Direct Federal assistance at100 percent Federal funding for totaleligible costs approved by FEMAthrough December 23, 1997, for theTerritory of Guam.(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)Lacy E. Suiter,Executive Associate Director, Response andRecovery Directorate.[FR Doc. 98–1142 Filed 1–15–98; 8:45 am]BILLING CODE 6718–02–P


[FEMA–1193–DR]

Territory of Guam; Amendment toNotice of a Major Disaster Declaration

AGENCY: Federal EmergencyManagement Agency (FEMA).

ACTION: Notice.

SUMMARY: This notice amends the noticeof a major disaster for the Territory ofGuam (FEMA–1193–DR), datedDecember 17, 1997, and relateddeterminations.

EFFECTIVE DATE: December 29, 1997.

FOR FURTHER INFORMATION CONTACT:Madge Dale, Response and RecoveryDirectorate, Federal EmergencyManagement Agency, Washington, DC20472, (202) 646–3630.

SUPPLEMENTARY INFORMATION: Notice ishereby given that the incident period forthis disaster is closed effectiveDecember 17, 1997.(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)Lacy E. Suiter,Executive Associate Director, Response andRecovery Directorate.[FR Doc. 98–1144 Filed 1–15–98; 8:45 am]BILLING CODE 6718–02–P



[FEMA–1194–DR]

The Commonwealth of the NorthernMariana Islands; Amendment to Noticeof a Major Disaster Declaration

AGENCY: Federal EmergencyManagement Agency (FEMA).ACTION: Notice.

SUMMARY: This notice amends the noticeof a major disaster for theCommonwealth of the Northern MarianaIslands (FEMA–1194–DR), datedDecember 24, 1997, and relateddeterminations.EFFECTIVE DATE: January 2, 1998.FOR FURTHER INFORMATION CONTACT:Madge Dale, Response and RecoveryDirectorate, Federal EmergencyManagement Agency, Washington, DC20472, (202) 646–3260.SUPPLEMENTARY INFORMATION: Notice ishereby given that the incident period forthis disaster is closed effectiveDecember 17, 1997.(Catalog of Federal Domestic Assistance No.83.516, Disaster Assistance)Lacy E. Suiter,Executive Associate Director, Response andRecovery Directorate.[FR Doc. 98–1143 Filed 1–15–98; 8:45 am]BILLING CODE 6718–02–P

FEDERAL RESERVE SYSTEM


AGENCY HOLDING THE MEETING: Board ofGovernors of the Federal ReserveSystem.TIME AND DATE: 10:00 a.m., Wednesday,January 21, 1998.PLACE: Marriner S. Eccles FederalReserve Board Building, 20th and CStreets, N.W., Washington, D.C. 20551.STATUS: Closed.

MATTERS TO BE CONSIDERED:

1. Personnel actions (appointments,promotions, assignments,reassignments, and salary actions)involving individual Federal ReserveSystem employees.

2. Any matters carried forward from apreviously announced meeting.CONTACT PERSON FOR MORE INFORMATION:Joseph R. Coyne, Assistant to the Board;202–452–3204.SUPPLEMENTARY INFORMATION: You maycall 202–452–3206 beginning atapproximately 5 p.m. two business daysbefore the meeting for a recordedannouncement of bank and bank

holding company applicationsscheduled for the meeting; or you maycontact the Board’s Web site at http://www.bog.frb.fed.us for an electronicannouncement that not only listsapplications, but also indicatesprocedural and other information aboutthe meeting.

Dated: January 14, 1998.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 98–1222 Filed 1–14–98; 11:23 am]BILLING CODE 6210–01–P

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Agency for Health Care Policy andResearch

Meeting of the National AdvisoryCouncil for Health Care Policy,Research, and Evaluation

AGENCY: Agency for Health Care Policyand Research, HHS.ACTION: Notice of public meeting.

SUMMARY: In accordance with section10(a) of the Federal Advisory CommitteeAct, this notice announces a meeting ofthe National Advisory Council forHealth Care Policy, Research, andEvaluation.DATES: The meeting will be held onThursday, February 12, 1998 from 9:00a.m. to 4:00 p.m.ADDRESSES: The meeting will be held atthe Natcher Conference Center, NationalInstitutes of Health, 45 Center Drive,Bethesda, MD 20892.FOR FURTHER INFORMATION CONTACT:Nancy Foster, Coordinator of theAdvisory Council at the Agency forHealth Care Policy and Research, 2101East Jefferson Street, Suite 502,Rockville, MD 20852, (301) 594–1349ext. 1307.

If sign language interpretation or otherreasonable accommodation for adisability is needed, please contactLinda Reeves, Assistant Administratorfor Equal Opportunity, AHCPR, on (301)594–6655 ext. 1055 no later thanFebruary 8, 1998.


I. PurposeSection 921 of the Public Health

Service Act (42 U.S.C. 299c) establishesthe National Advisory Council forHealth Care Policy, Research, andEvaluation. The Council providesadvice to the Secretary and theAdministrator, Agency for Health CarePolicy and Research (AHCPR), onmatters related to AHCPR activities to

enhance the quality, appropriateness,and effectiveness of health care servicesand access to such services throughscientific research and the promotion ofimprovements in clinical practice andin the organization, financing, anddelivery of health care services.

The Council is composed of membersof the public appointed by the Secretaryand Federal ex-officio members.

II. Agenda

On Thursday, February 12, 1998, themeeting will begin at 9:00 a.m., with thecall to order by the Council Chairman.The Administrator, AHCPR, will updatethe status of current Agency funding,programs, and initiatives. The Councilwill then discuss strategic directions forthe Agency, ethical dilemmas in healthservices research, and how to assureAHCPR research is meeting the needs ofclinicians.

The meeting will adjourn at 4:00 p.m.Agenda items are subject to change aspriorities dictate.

Dated: January 9, 1998.John M. Eisenberg,Administrator.[FR Doc. 98–1107 Filed 1–15–98; 8:45 am]BILLING CODE 4160–90–M


Food and Drug Administration

Arthritis Advisory Committee; Noticeof Meeting

AGENCY: Food and Drug Administration,HHS.ACTION: Notice.

This notice announces a forthcomingmeeting of a public advisory committeeof the Food and Drug Administration(FDA). The meeting is open to thepublic.

Name of Committee: ArthritisAdvisory Committee.

General Function of the Committee:To provide advice andrecommendations to the agency on FDAregulatory issues.

Date and Time: The meeting will beheld on February 20, 1998, 8 a.m. to 5p.m.

Location: Holiday Inn, VersaillesBallrooms I and II, 8120 WisconsinAve., Bethesda, MD.

Contact Person: Kathleen R. Reedy orLaNise S. Giles, Center for DrugEvaluation and Research (HFD–21),Food and Drug Administration, 5600Fishers Lane, Rockville, MD 20857,301–443–5455, or FDA AdvisoryCommittee Information Line, 1–800–


741–8138 (301–443–0572 in theWashington, DC area), code 12532.Please call the Information Line for up-to-date information on this meeting.

Agenda: The committee will discusspreliminary planning of a claimsstructure for a future guidance for thedevelopment of drugs, biologics, anddevices for the treatment ofosteoarthritis.

Procedure: Interested persons maypresent data, information, or views,orally or in writing, on issues pendingbefore the committee. Writtensubmissions may be made to the contactperson by February 13, 1998. Oralpresentations from the public will bescheduled between approximately 8a.m. and 9 a.m. Time allotted for eachpresentation may be limited. Thosedesiring to make formal oralpresentations should notify the contactperson before February 13, 1998, andsubmit a brief statement of the generalnature of the evidence or argumentsthey wish to present, the names andaddresses of proposed participants, andan indication of the approximate timerequested to make their presentation.

Notice of this meeting is given underthe Federal Advisory Committee Act (5U.S.C. app. 2).

Dated: January 9. 1998.Michael A. Friedman,Deputy Commissioner for Operations.[FR Doc. 98–1083 Filed 1–15–98; 8:45 am]BILLING CODE 4160–01–F


National Institutes of Health

National Institute on Drug Abuse;Notice of Meeting

Pursuant to Pub. L. 92–463, notice ishereby given of the meeting of theNational Advisory Council on DrugAbuse, National Institute on Drug Abuse(NIDA) on February 3–4, 1998, at theBethesda Marriott Hotel, 5151 PooksHill Road, Bethesda, MD 20814.

On February 3, from 9 a.m. to 4 p.m.,in accordance with provisions set forthin secs. 552b(c)(4) and 552b(c)(6), Title5, U.S.C. and sec. 10(d) of Pub. L. 92–463, this portion of the meeting will beclosed to the public for the review,discussion, and evaluation of grantapplications. These applications and thediscussions could reveal confidentialtrade secrets or commercial propertysuch as patentable material andpersonal information concerningindividuals associated with theapplications, disclosure of which would

constitute a clearly unwarrantedinvasion of personal privacy.

On February 4, from 9 a.m. to 5 p.m.,this portion of the meeting will be opento the public for announcements andreports of administrative, legislative,and program developments in the drugabuse field. Attendance by the publicwill be limited to space available.

A summary of the meeting and aroster of committee members may beobtained from Ms. Camilla L. Holland,NIDA Committee Management Officer,National Institutes of Health, ParklawnBuilding, Room 10–42, 5600 FishersLane, Rockville, MD 20857, (301/443–2755).

Substantive program information maybe obtained from Dr. Teresa Levitin,Room 10–42, Parklawn Building, 5600Fishers Lane, Rockville MD 20857, (301/443–2755).

Individuals who plan to attend andneed special assistance, such as signlanguage interpretation or otherreasonable accommodations, shouldcontact Dr. Levitin in advance of themeeting.(Catalog of Federal Domestic AssistanceProgram Numbers: 93.277, Drug AbuseResearch Scientist Development andResearch Scientist Awards; 93.278, DrugAbuse National Research Service Awards forResearch Training; 93.279, Drug AbuseResearch Programs)

Dated: January 8, 1998.LaVerne Y. Stringfield,Committee Management Officer, NIH.[FR Doc. 98–1121 Filed 1–15–98; 8:45 am]BILLING CODE 4140–01–M



Center for Scientific Review; Notice ofClosed Meetings

Pursuant to Section 10(d) of theFederal Advisory Committee Act, asamended (5 U.S.C. Appendix 2), noticeis hereby given of the following Centerfor Scientific Review Special EmphasisPanel (SEP) meetings:

Purpose/Agenda: To review individualgrant applications.

Name of SEP: Behavioral andNeurosciences.

Date: January 20, 1998.Time: 11:00 a.m.Place: NIH, Rockledge 2, Room 5060;

Telephone Conference.Contact Person: Dr. Samuel Rawlings,

Scientific Review Administrator, 6701Rockledge Drive, Room 5060, Bethesda, MD20892, (301) 435–1243.

Name of SEP: Biological and PhysiologicalSciences.

Date: January 20, 1998.Time: 3:00 p.m.Place: NIH, Rockledge 2, Room 4148;

Telephone Conference.Contact Person: Dr. Philip Perkins,


Name of SEP: Biological and Physiological.Date: January 21, 1998.Time: 12:00 p.m.Place: NIH, Rockledge 2, Room 4150;

Telephone Conference.Contact Person: Dr. Marcia Litwack,



Date: January 8, 1998.Time: 4:00 p.m.Place: NIH, Rockledge 2, Room 4150;

Telephone Conference.Contact Person: Dr. Marcia Litwack,


This notice is being published less than 15days prior to the above meetings due to theurgent need to meet timing limitationsimposed by the grant review and fundingcycle.


Date: February 22, 1998.Time: 6:00 p.m.Place: Hyatt Regency, Bethesda, MD.Contact Person: Dr. Sooja Kim, Scientific

Review Administrator, 6701 Rockledge Drive,Room 5178, Bethesda, MD 20892, (301) 435–1780.

Name of SEP: Biological and Physiological.Date: February 18, 1998.Time: 11:00 a.m.Place: NIH, Rockledge 2, Room 9112.Contact Person: Dr. Mushtaq Khan,



Date: February 23, 1998.Time: 2:00 p.m.Place: NIH, Rockledge 2, Room 6168;

Telephone Conference.Contact Person: Dr. Syed Amir, Scientific

Review Administrator, 6701 Rockledge Drive,Room 6168, Bethesda, MD 20892, (301) 435–1043.


Date: February 24, 1998.Time: 2:00 p.m.Place: NIH, Rockledge 2, Room 4172;

Telephone Conference.Contact Person: Dr. Donald Schneider,


Name of SEP: Multidisciplinary Sciences.Date: March 18–20, 1998.Time: 6:00 p.m.Place: Radisson Hotel, Los Angeles, CA.Contact Person: Dr. Bill Bunnag, Scientific

Review Administrator, 6701 Rockledge Drive,


Room 5212, Bethesda, MD 20892, (301) 435–1177.

The meetings will be closed in accordancewith the provisions set forth in secs. 552(c)(4)and 552b(c)(6), Title 5, U.S.C. Applicationsand/or proposals and the discussions couldreveal confidential trade secrets orcommercial property such as patentablematerial and personal informationconcerning individuals associated with theapplications and/or proposals, the disclosureof which would constitute a clearlyunwarranted invasion of personal privacy.

(Catalog of Federal Domestic AssistanceProgram Nos. 39.306, 93.333, 93.337, 93.393–93.396, 93.837–93.844, 93.846–93.878,93.892, 93,893, National Institutes of Health,HHS)




Center for Scientific Review AdvisoryCommittee Meeting

Pursuant to Pub. L. 92–463, notice ishereby given of the meeting of theCenter for Scientific Review AdvisoryCommittee, February 17–18, 1998,Building 31C, Conference Room 6,National Institutes of Health, Bethesda,MD 20892.

The entire meeting will be open to thepublic from 8:30 a.m. on February 17 toadjournment on February 18. Themeeting will include, among othertopics, a discussion of some recentexperiences and experiments instreamlining the peer review system.Attendance by the public will be limitedto space available.

The Office of CommitteeManagement, Center for ScientificReview, Rockledge 2 Building, Suite3016, National Institutes of Health,Bethesda, MD 20892–7778, telephone(301) 435–1124, will furnish a summaryof the meeting and a roster of thecommittee members.

Dr. Samuel Joseloff, ExecutiveSecretary of the Committee, Rockledge 2Building, Suite 3176, National Institutesof Health, Bethesda, MD 20892–7762,phone (301) 435–0691, will providesubstantive program information uponrequest.

Individuals who plan to attend andneed special assistance, such as signlanguage interpretation or otherreasonable accommodations, shouldcontact the Executive Secretary at leasttwo weeks in advance of the meeting.


DEPARTMENT OF HOUSING ANDURBAN DEVELOPMENT

[Docket No. FR–4235–N–38]

Federal Property Suitable as FacilitiesTo Assist the Homeless

AGENCY: Office of the AssistantSecretary for Community Planning andDevelopment, HUD.ACTION: Notice.

SUMMARY: This Notice identifiesunutilized, underutilized, excess, andsurplus Federal property reviewed byHUD for suitability for possible use toassist the homeless.FOR FURTHER INFORMATION CONTACT:Mark Johnston, room 7256, Departmentof Housing and Urban Development,451 Seventh Street SW, Washington, DC20410; telephone (202) 708–1226; TDDnumber for the hearing- and speech-impaired (202) 708–2565 (thesetelephone numbers are not toll-free), orcall the toll-free Title V information lineat 1–800–927–7588.SUPPLEMENTARY INFORMATION: Inaccordance with 24 CFR part 581 andsection 501 of the Stewart B. McKinneyHomeless Assistance Act (42 U.S.C.11411), as amended, HUD is publishingthis Notice to identify Federal buildingsand other real property that HUD hasreviewed for suitability for use to assistthe homeless. The properties werereviewed using information provided toHUD by Federal landholding agenciesregarding unutilized and underutilizedbuildings and real property controlledby such agencies or by GSA regardingits inventory of excess or surplusFederal property. This Notice is alsopublished in order to comply with theDecember 12, 1998 Court Order inNational Coalition for the Homeless v.Veterans Administration, No. 88–2503–OG (D.C.C.).

Properties reviewed are listed in thisNotice according to the followingcategories. Suitable/available, suitable/unavailable, suitable/to be excess, andunsuitable. The properties listed in thethree suitable categories have beenreviewed by the landholding agencies,and each agency has transmitted toHUD: (1) Its intention to make theproperty available for use to assist thehomeless, (2) its intention to declare theproperty excess to the agency’s needs, or(3) a statement of the reasons that the

property cannot be declared excess ormade available for use as facilities toassist the homeless.

Properties listed as suitable/availablewill be available exclusively forhomeless use for a period of 60 daysfrom the date of this Notice. Homelessassistance providers interested in anysuch property should send a writtenexpression of interest to HHS, addressedto Brian Rooney, Division of PropertyManagement, Program Support Center,HHS, room 5B–41, 5600 Fishers Lane,Rockville, MD 20857; (301) 443–2265.(This is not a toll-free number.) HHSwill mail to the interested provider anapplication packet, which will includeinstructions for completing theapplication. In order to maximize theopportunity to utilize a suitableproperty, providers should submit theirwritten expressions of interests as soonas possible. For complete detailsconcerning the processing ofapplications, the reader is encouraged torefer to the interim rule governing thisprogram, 24 CFR part 581.

For properties listed as suitable/to beexcess, that property may, ifsubsequently accepted as excess byGSA, be made available for use by thehomeless in accordance with applicablelaw, subject to screening for otherFederal use. At the appropriate time,HUD will publish the property in aNotice showing it as either suitable/available or suitable/unavailable.

For properties listed as suitable/unavailable, the landholding agency hasdecided that the property cannot bedeclared excess or made available foruse to assist the homeless, and theproperty will not be available.

Properties listed as unsuitable willnot be made available for any otherpurpose for 20 days from the date of thisNotice. Homeless assistance providersinterested in a review by HUD of thedetermination of unsuitability shouldcall the toll free information line at 1–800–927–7588 for detailed instructionsor write a letter to Mark Johnston at theaddress listed at the beginning of thisNotice. Included in the request forreview should be the property address(including zip code), the date ofpublication in the Federal Register, thelandholding agency, and the propertynumber.

For more information regardingparticular properties identified in thisNotice (i.e., acreage, floor plan, existingsanitary facilities, exact street address),providers should contact theappropriate landholding agencies at thefollowing addresses: ARMY: Mr. JeffHolste, CECPW–FP, U.S. Army Centerfor Public Works, 7701 Telegraph Road,Alexandria, VA 22315; (703) 428–6318;


INTERIOR: Ms. Lola Knight, Departmentof the Interior, 1849 C Street, NW, MailStop 5512–MIB, Washington, DC 20240;(202) 208–4080; GSA: Mr. Brain K.Polly, Assistant Commissioner, GeneralServices Administration, Office ofProperty Disposal, 18th and F Streets,NW, Washington, DC 20405; (202) 501–2059; NAVY: Mr. Charles C. Cocks,Department of the Navy, Director, RealEstate Policy Division, Naval FacilitiesEngineering Command, Code 241A, 200Stovall Street, Alexandria, VA 22332–2300; (703) 325–7342; (These are nottoll-free numbers).

Dated: January 8, 1998.Fred Karnas, Jr.,Deputy Assistant Secretary for EconomicDevelopment.

TITLE V, FEDERAL SURPLUS PROPERTYPROGRAM, FEDERAL REGISTER REPORTFOR 01/16/98

Suitable/Available Properties

Buildings (by State)

Alaska

Bldg. 303Fort RichardsonAnchorage AK 99505–6500Landholding Agency: ArmyProperty Number: 219740272Status: ExcessComment: 13,056 sq. ft., presence of

asbestos/lead paint, most recent use—family housing, off-site use only



Bldgs. 312, 313Fort RichardsonAnchorage AK 99505–6500Landholding Agency: ArmyProperty Number: 219740275Status: ExcessComment: 13,506 sq. ft., presence of


Bldgs. 420, 422, 426, 430Fort RichardsonAnchorage AK 99505–6500Landholding Agency: ArmyProperty Number: 219740276Status: ExcessComment: 13,056 sq. ft., presence of



asbestos/lead paint, most recent use—barracks, off-site use only







Arizona

5 Bldgs.Fort Huachuca73910, 76912, 82014, 82017, 84005Sierra Vista Co: Cochise AZ 85635–Landholding Agency: ArmyProperty Number: 219740281Status: ExcessComment: various sq. ft., presence of

asbestos/lead paint, most recent use—motor pool/admin., off-site use only

California

Vallejo Federal Building823 Marin Ave.Vallejo Co: Solano CALandholding Agency: GSAProperty Number: 549740014Status: ExcessComment: 15,134 sq. ft., most recent use—

office, possible asbestos/lead paint, historicsignificance

GSA Number: 9–G–CA–1502

Hawaii

Bldg. T–105Fort ShafterHonolulu Co: Honolulu HI 96819–Landholding Agency: ArmyProperty Number: 219740282Status: UnutilizedComment: 13,600 sq. ft., needs rehab, most

recent use—offices, off-site use onlyBldg. S–305Fort ShafterHonolulu Co: Honolulu HI 96819–Landholding Agency: ArmyProperty Number: 219740283Status: UnutilizedComment: 3883 sq. ft., needs rehab, most

recent use—housing, off-site use onlyBldg. S–307Fort ShafterHonolulu Co: Honolulu HI 96819–Landholding Agency: ArmyProperty Number: 219740284Status: UnutilizedComment: 2852 sq. ft., needs rehab, most

recent use—housing, off-site use only

Bldgs. T–306, T–308, T–312Fort ShafterHonolulu Co: Honolulu HI 96819–Landholding Agency: ArmyProperty Number: 219740285Status: UnutilizedComment: 400 sq. ft., needs rehab, most

recent use—garages, off-site use only10 Bldgs.Fort ShafterP–604 thru P–613Honolulu Co: Honolulu HI 96819–Landholding Agency: ArmyProperty Number: 219740286Status: UnutilizedComment: 4992 sq. ft., needs rehab, most

recent use—housing, off-site use only11 Bldgs.Fort ShafterP–614 thru P–624Honolulu Co: Honolulu HI 96819–Landholding Agency: ArmyProperty Number: 219740287Status: UnutilizedComment: 4992 sq. ft., needs rehab, most

recent use—housing, off-site use onlyBldg. P–631Fort ShafterHonolulu Co: Honolulu HI 96819–Landholding Agency: ArmyProperty Number: 219740288Status: UnutilizedComment: 5028 sq. ft., needs rehab, most



recent use—housing, off-site use onlyBldg. 691Pearl City Peninsula, Naval StationPearl Harbor Co: Honolulu HI 96860–Landholding Agency: NavyProperty Number: 779810002Status: ExcessComment: 48,581 sq. ft., most recent use—

warehouse, possible asbestos/lead paint,off-site use only

Bldg. 695Pearl City Peninsula, Naval StationPearl Harbor Co: Honolulu HI 96860–Landholding Agency: NavyProperty Number: 779810003Status: ExcessComment: 92,897 sq. ft., most recent use—


Bldg. 696Pearl City Peninsula, Naval StationPearl Harbor Co: Honolulu HI 96860–Landholding Agency: NavyProperty Number: 779810004Status: Excess


Comment: 67,137sq. ft., most recent use—warehouse, possible asbestos/lead paint,off-site use only





Kansas

Bldg. P–355Fort LeavenworthLeavenworth KS 66027–Landholding Agency: ArmyProperty Number: 21974091Status: UnutilizedComment: 3523 sq. ft., most recent use—pole

barn, off-site use onlyBldg. P–356Fort LeavenworthLandholding Agency: ArmyProperty Number: 219740292Status: UnutilizedComment: 2898 sq. ft., most recent use—

quonset barn, off-site use onlyBldg. P–358Fort LeavenworthLeavenworth KS 66027–Landholding Agency: ArmyProperty Number: 219740293Status: UnutilizedComment: 1960 sq. ft., presence of lead based

paint, most recent use—barn, off-site useonly

Bldg. P–389Fort LeavenworthLeavenworth KS 66027–Landholding Agency: ArmyProperty Number: 219740294Status: UnutilizedComment: 576 sq. ft., presence of lead based

paint, most recent use—storage, off-site useonly

Bldg. P–390Fort LeavenworthLeavenworth KS 66027–Landholding Agency: ArmyProperty Number: 219740295Status: UnutilizedComment: 4713 sq. ft., presence of lead based

paint, most recent use—swine house, off-site use only

Bldg. P–411Fort LeavenworthLeavenworth KS 66027–Landholding Agency: ArmyProperty Number: 219740296Status: UnutilizedComment: 2898 sq. ft., most recent use—

barn, off-site use onlyBldg. P–416Fort Leavenworth

Leavenworth KS 66027–Landholding Agency: ArmyProperty Number: 219740297Status: UnutilizedComment: 2760 sq. ft., presence of lead based

paint, most recent use—horse stable, off-site use only

Maryland

Bldg. 4039Aberdeen Proving GroundCo: Harford MD 21005–5001Landholding Agency: ArmyProperty Number: 219740304Status: UnutilizedComment: 249 sq. ft., concrete block,

presence of asbestos/lead paint, mostrecent use—storage

Bldg. 2446Fort George G. MeadeFt. Meade Co: Anne Arundel MD 20755–5115Landholding Agency: ArmyProperty Number: 219740305Status: UnutilizedComment: 4720 sq. ft., presence of asbestos/

lead paint, most recent use—admin., off-site use only




lead paint, most recent use—lab., off-siteuse only



Bldg. 4700Fort George G. MeadeFt. Meade Co: Anne Arundel MD 20755–5115Landholding Agency: ArmyProperty Number: 219740309Status: UnutilizedComment: 36,619 sq. ft., presence of

asbestos/lead paint, most recent use—admin., off-site use only


lead paint, most recent use—lab., off-siteuse only

Massachusetts

Bldgs. T–2011, 2012, 2014

Devens RFTADevens RFTA MA 01432–Landholding Agency: ArmyProperty Number: 219740298Status: UnderutilizedComment: 4890 sq. ft., need rehab, presence

of asbestos/lead paint, most recent use—office

Bldg. T–2013Devens RFTADevens RFTA MA 01432–Landholding Agency: ArmyProperty Number: 219740299Status: UnutilizedComment: 9110 sq. ft., need rehab, presence

of asbestos/lead paint, most recent use—office

Bldg. T–2015Devens RFTADevens RFTA MA 01432–Landholding Agency: ArmyProperty Number: 219740300Status: UnderutilizedComment: 2497 sq. ft., need rehab, presence

of asbestos/lead paint, most recent use—storage

Bldgs. T–2446, 2479Devens RFTADevens RFTA MA 01432–Landholding Agency: ArmyProperty Number: 219740301Status: UnderutilizedComment: 3108 sq. ft., need rehab, presence


Bldg. T–3553Devens RFTADevens RFTA MA 01432–Landholding Agency: ArmyProperty Number: 219740302Status: UnderutilizedComment: 1160 sq. ft., needs rehab, presence


Bldg. T–3555, 3568Devens RFTADevens RFTA MA 01432–Landholding Agency: ArmyProperty Number: 219740303Status: UnderutilizedComment: 7277 sq. ft., needs rehab, presence


Michigan

S. Haven Keeper’s Dwelling91 Michigan Ave.South Haven Co: Van Buren MI 49090–Landholding Agency: GSAProperty Number: 549740012Status: ExcessComment: 3257 sq. ft., 2-story dwelling and

800 sq. ft. garage, presence of asbestos/leadpaint

GSA Number: 1–U–MI–475C

Minnesota

Duluth Duplex Housing725 & 7251⁄2 Lake Ave.Duluth Co: St. Louis MN 55802–Landholding Agency: GSAProperty Number: 549740013Status: ExcessComment: 2-story brick dwelling, possible

lead paint


GSA Number: 1–U–MN–571

Nevada

5 Units, Tonopah Housing (902, 904, 920,922, 927)

Air Force RoadTonopah Co: Nye NV 89049–Landholding Agency: GSAProperty Number: 549810002Status: ExcessComment: 1191–1382 sq. ft., most recent

use—residential, fair condition, presenceof asbestos, possible lead based paint

GSA Number 9–U–NV–467E

New Jersey

Bldg. 22Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740311Status: UnutilizedComment: 4220 sq. ft., needs rehab, most

recent use—machine shop, off-site use onlyBldg. 178Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740312Status: UnutilizedComment: 2067 sq. ft., most recent use—

research, off-site use onlyBldg. 213Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740313Status: UnutilizedComment: 915 sq. ft., most recent use—

explosives research, off-site use onlyBldg. 642Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740314Status: UnutilizedComment: 280 sq. ft., most recent use—

explosives testing, off-site use onlyBldg. 732Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740315Status: UnutilizedComment: 9077 sq. ft., needs rehab, most

recent use—storage, off-site use onlyBldg. 975Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740316Status: UnutilizedComment: 1800 sq. ft., most recent use—

admin., off-site use onlyBldg. 1222DArmament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740317Status: UnutilizedComment: 36 sq. ft., most recent use—

storage, off-site use onlyBldg. 1604Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000

Landholding Agency: ArmyProperty Number: 219740321Status: UnutilizedComment: 8519 sq. ft., most recent use—

loading facility, off-site use onlyBldg. 3117Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740322Status: UnutilizedComment: 100 sq. ft., most recent use—sentry

station, off-site use onlyBldg. 3201Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740324Status: UnutilizedComment: 1360 sq. ft., most recent use—

water treatment plant, off-site use onlyBldg. 3202Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740325Status: UnutilizedComment: 96 sq. ft., most recent use—snack

bar, off-site use onlyBldg. 3219Armament R&D Engineering CenterPicatinny Arsenal Co: Morris NJ 07806–5000Landholding Agency: ArmyProperty Number: 219740326Status: UnutilizedComment: 288 sq. ft., most recent use—snack

bar, off-site use only

New Mexico

4 units—RavennaWhite Sands Missile RangeWhite Sands Co: Dona Ana NM 88002–Landholding Agency: ArmyProperty Number: 219740327Status: UnutilizedComment: 1126 sq. ft., needs rehab, presence

of asbestos, most recent use—housing, off-site use only

17 unitsWhite Sands Missile RangePicatinny, Dart, Hawk, LaCrosseWhite Sands Co: Dona Ana NM 88002–Landholding Agency: ArmyProperty Number: 219740328Status: UnutilizedComment: 1207 sq. ft., needs rehab, presence


2 unitsWhite Sands Missile RangePicatinnyWhite Sands Co: Dona Ana NM 88002–Landholding Agency: ArmyProperty Number: 219740329Status: UnutilizedComment: 1264 sq. ft., needs rehab, presence


30 unitsWhite Sands Missile RangeHawk, LaCrosse, RavennaWhite Sands Co: Dona Ana NM 88002–Landholding Agency: ArmyProperty Number: 219740330Status: Unutilized

Comment: 1426 sq. ft., needs rehab, presenceof asbestos, most recent use—housing, off-site use only

5 unitsWhite Sands Missile RangeDart, HawkWhite Sands Co: Dona Ana NM 88002–Landholding Agency: ArmyProperty Number: 219740331Status: UnutilizedComment: 2080 sq. ft., needs rehab, presence


3 unitsWhite Sands Missile RangeDart, HawkWhite Sands Co: Dona Ana NM 88002–Landholding Agency: ArmyProperty Number: 219740332Status: UnutilizedComment: 2220 sq. ft., needs rehab, presence


North Carolina

Bldg. 1–3151Fort BraggFt. Bragg Co: Cumberland NC 28307–Landholding Agency: ArmyProperty Number: 219740310Status: ExcessComment: 481 sq. ft., presence of asbestos/


Ohio

Keeper’s Dwelling & Shed110 Wall StreetHuron OH 55802–Landholding Agency: GSAProperty Number: 549740015Status: ExcessComment: 5100 sq. ft., single family

residence and a 216 sq. ft. storage shed,possible lead based paint

GSA Number: 1–U–OH–800

Oklahoma

Bldg. P–901Fort SillLawton Co: Comanche OK 73503–5100Landholding Agency: ArmyProperty Number: 219740334Status: UnutilizedComment: 101 sq. ft., concrete, most recent

use—storage, off-site use only

Pennsylvania

Bldg.T–3–52Fort Indiantown GapAnnville Co: Lebanon PA 17003–5000Landholding Agency: ArmyProperty Number: 219740335Status: UnutilizedComment: 2290 sq. ft., most recent use—

dining, off-site use onlyBldg. T–3–86Fort Indiantown GapAnnville Co: Lebanon PA 17003–5000Landholding Agency: ArmyProperty Number: 219740336Status: UnutilizedComment: 4720 sq. ft., most recent use—

barracks, off-site use onlyBldg. T–3–87Fort Indiantown GapAnnville Co: Lebanon PA 17003–5000


Landholding Agency: ArmyProperty Number: 219740337Status: UnutilizedComment: 1144 sq. ft., most recent use—

classroom, off-site use onlyBldg. T–4–3Fort Indiantown GapAnnville Co: Lebanon PA 17003–5000Landholding Agency: ArmyProperty Number: 219740338Status: UnutilizedComment: 1750 sq. ft., most recent use—

admin., off-site use only

Texas

Bldg. 1020Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740339Status: UnutilizedComment: 1505 sq. ft., concrete block, most

recent use—hdgts. bldg., off-site use onlyBldg. 2518Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740340Status: UnutilizedComment: 15,078 sq. ft., needs major rehab,

presence of lead paint, most recent use—vehicle maint. shop, off-site use only

68 Bldgs. (4000 series)Fort BlissEnlisted Unaccompanied Personnel HousingEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740341Status: UnutilizedComment: 4800 sq. ft. each, concrete block,

most recent use—housing, off-site use onlyBldg. 4255Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740342Status: UnutilizedComment: 2880 sq. ft., concrete block, most

recent use—dining facility, off-site useonly

Bldg. 4258Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740343Status: UnutilizedComment: 750 sq. ft., metal shelter, most

recent use—covered training area, off-siteuse only

Bldg. 4574Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740344Status: UnutilizedComment: 11,215 sq. ft., concrete block, most


Bldg. 4575Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740345Status: Unutilized

Comment: 8904 sq. ft., metal shelter, mostrecent use—covered training area, off-siteuse only

Bldg. 4591Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740346Status: UnutilizedComment: 3094 sq. ft., concrete block, most

recent use—hdqts. bldg., off-site use onlyBldg. 4674Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740347Status: UnutilizedComment: 11,217 sq. ft., concrete block, most


Bldgs. 4880–4882, 4884–4890Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740348Status: UnutilizedComment: various sq. ft., metal frame, most

recent use—instruction bldg., off-site useonly

Bldg. 4973Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740349Status: UnutilizedComment: 11,052 sq. ft., concrete block, most


Bldg.4974Fort BlissEl Paso Co: El Paso TX 79916–Landholding Agency: ArmyProperty Number: 219740350Status: UnutilizedComment: 3018 sq. ft., concrete block, most

recent use—hdqts. bldg. off-site use only

Virginia

Bldg. 1520Naval Amphibious Base Little CreekNorfolk VA 23521–2616Landholding Agency: NavyProperty Number: 779810007Status: ExcessComment: 984 sq. ft., most recent use—

storage, off-site use onlyBldg. 2080Naval Amphibious Base Little CreekNorfolk VA 23521–2616Landholding Agency: NavyProperty Number: 779810008Status: ExcessComment: 510 sq. ft., most recent use—

storage, off-site use onlyBldg. 3319Naval Amphibious Base Little CreekNorfolk VA 23521–2616Landholding Agency: NavyProperty Number: 779810009Status: ExcessComment: 9254 sq. ft., most recent use—

maintenance, off-site use onlyBldg. 3551Naval Amphibious Base Little CreekNorfolk VA 23521–2616

Landholding Agency: NavyProperty Number: 779810010Status: ExcessComment: 384 sq. ft., most recent use—bus

waiting station, off-site use only

Washington

Vancouver Info CenterInterstate Rt 5Vancouvr Co: Clark WA 98663–Landholding Agency: GSAProperty Number: 549740011Status: ExcessComment: 1200 sq. ft., most recent use—

visitor info center, excellent condition.GSA Number: 9–GR–WA–514E

Suitable/Unavailable Properties


New York

McGrath USAR CenterRobinson RoadVillage of Massena Co: St. Lawrence NY

13662–2497Landholding Agency: ArmyProperty Number: 219740333Status: UnutilizedComment: 12,930 sq. ft. reserve center and

1325 sq. ft. motor repair shop

Land (by State)

Arizona

0.23 acreRon Burke II/West of 124th StreetScottsdale Co: Maricopa AZ 85259–Landholding Agency: InteriorProperty Number: 619740001Status: ExcessComment: narrow strip

Unsuitable Properties


California

Bldg. 89, Naval StationSan Diego CA 92136–Landholding Agency: NavyProperty Number: 779810001Status: ExcessReason: OtherComment: unsound

Maine

Aircraft Hangar #2Naval Air StationBrunswick Co: Cumberland ME 04011–Landholding Agency: NavyProperty Number: 779810015Status: ExcessReason: Extensive deterioration

Massachusetts

Cook HouseNorth Great RoadLincoln Co: Middlesex, MA 01773–Landholding Agency: InteriorProperty Number: 619810001Status: ExcessReason: Extensive deteriorationGiurleo HouseNorth Great RoadLincoln Co: Middlesex MA 01773–Landholding Agency: InteriorProperty Number: 619810002Status: ExcessReason: Extensive deterioration.


Nevada

Former Weather Service OfficeWinnemucca AirportWinnemucca Co: Humbolt NV 89445–Landholding Agency: GSAPropoerty Number: 549810001Status: ExcessReason: Within airport runway clear zoneGSA Number: 9–C–NV–509

Oregon

Portion, Former Kingsley FieldAir Force BaseArnold Ave. & Joe Wright Rd.Klamath Falls Co: Klamath OR 97603–Landholding Agency: GSAProperty Number: 549810003Status: UnutilizedReason: Within 2000 ft. of flammable or

explosive materialGSA Number: 10–D–OR–434–J

Washington

Bldg. 604, Pier 91Naval Station EverettSeattle Co: King WALandholding Agency: NavyProperty Number: 779810011Status: ExcessReason: Extensive deteriorationBldg. 1008Naval Submarine Base, BangorSilverdale Co: Kitsap WA 98315–1199Landholding Agency: NavyProperty Number: 779810012Status: UnutilizedReason: Extensive deteriorationBldg. 1010Naval Submarine Base, BangorSilverdale Co: Kitsap WA 98315–1199Landholding Agency: NavyProperty Number: 779810013Status: UnutilizedReason: Extensive deteriorationBldg. 6460Naval Submarine Base, BangorSilverdale Co: Kitsap WA 98315–1199Landholding Agency: NavyProperty Number: 779810014Status: UnutilizedReason: Extensive deterioration

Land (by State)

Washington

Tract No. 092902Pasco Co: Franklin WA 99301–Landholding Agency: InteriorProperty Number: 619740008Status: ExcessReason: Within airport runway clear zoneTract No. 092912Pasco Co: Franklin WA 99301–Landholding Agency: InteriorProperty Number: 619740009Status: ExcessReason: Within airport runway clear zoneTract No. 0923022Co: Franklin WA 99301–Landholding Agency: InteriorProperty Number: 619740010Status: ExcessReason: OtherComment: no public accessTract No. 103026

Co: Franklin WA 99301–Landholding Agency: InteriorProperty Number: 619740011Status: ExcessReason: OtherComment: no public accessTract No. 103032Co: Franklin WA 99301–Landholding Agency: InteriorProperty Number: 619740012Status: ExcessReason: OtherComment: no public accessTract No. 132816Co: Franklin WA 99330–Landholding Agency: InteriorProperty Number: 619740013Status: ExcessReason: OtherComment: no public accessTract No. 132929Co: Franklin WA 99330–Landholding Agency: InteriorProperty Number: 619740014Status: ExcessReason: OtherComment: no public accessTract No. 142517Co: Franklin WA 99349–Landholding Agency: InteriorProperty Number: 619740015Status: ExcessReason: OtherComment: no public accessTract No. 172314Co: Grant WA 98950–Landholding Agency: InteriorProperty Number: 619740016Status: ExcessReason: OtherComment: No public accessTract No. 172433Co: Grant WA 99321–Landholding Agency: InteriorProperty Number: 619740017Status: ExcessReason: OtherComment: No public accessTract No. 172833Co: Grant WA 99357–Landholding Agency: InteriorProperty Number: 619740018Status: ExcessReason: OtherComment: No public accessTract No. 182620Co: Grant WA 98824–Landholding Agency: InteriorProperty Number: 619740019Status: ExcessReason: OtherComment: No public accessTract No. 192328Co: Grant WA 98848–Landholding Agency: InteriorProperty Number: 619740020Status: ExcessReason: OtherComment: No public accessTract No. 192332Co: Grant WA 98848–Landholding Agency: Interior

Property Number: 619740021Status: ExcessReason: OtherComment: No public accessTract No. 192520Co: Grant WA 98837–Landholding Agency: InteriorProperty Number: 619740022Status: ExcessReason: OtherComment: No public accessTract No. 192524Co: Grant WA 98837–Landholding Agency: InteriorProperty Number: 619740023Status: ExcessReason: OtherComment: No public accessTract No. 192620bCo: Grant WA 98837–Landholding Agency: InteriorProperty Number: 619740024Status: ExcessReason: OtherComment: No public accessTract No. 192909Co: Grant WA 98837–Landholding Agency: InteriorProperty Number: 619740025Status: ExcessReason: OtherComment: No public accessTract No. 202436Co: Grant WA 98848–Landholding Agency: InteriorProperty Number: 619740026Status: ExcessReason: OtherComment: No public accessTract No. 202529bCo: Grant WA 98823–Landholding Agency: InteriorProperty Number: 619740027Status: ExcessReason: OtherComment: No public accessTract No. 202530Co: Grant WA 98823–Landholding Agency: InteriorProperty Number: 619740028Status: ExcessReason: OtherComment: No public accessTract No. 202635Co: Grant WA 98823–Landholding Agency: InteriorProperty Number: 619740029Status: ExcessReason: OtherComment: No public accessTract No. 212808Co: Grant WA 98837–Landholding Agency: InteriorProperty Number: 619740030Status: ExcessReason: OtherComment: No public access

[FR Doc. 98–824 Filed 1–15–98; 8:45 am]BILLING CODE 4210–29–M



Bureau of Land Management

Notice of Meeting

SUMMARY: The Lower Snake RiverDistrict Resource Advisory Council willmeet in Boise to discuss management ofredband trout and sage grouse insouthwest Idaho, as well asimplementation of new grazingmanagement plans in the Bruneau andOwyhee Resource Areas.DATES: February 26, 1997. The meetingwill begin at 9:00 a.m. Public commentperiods will be held beginning at 9:30a.m. And 3:00 p.m.ADDRESS: The Lower Snake RiverDistrict Office is located at 3948Development Avenue, Boise, Idaho.FOR FURTHER INFORMATION CONTACT:Barry Rose, Lower Snake River DistrictOffice (208–384–3393).

Dated: January 9, 1998.Howard Hedrick,Resource Coordinator.[FR Doc. 98–1088 Filed 1–15–98; 8:45 am]BILLING CODE 4310–GG–P



[OR–050–1020–00: GP8–0076]

Notice of Meeting of John Day-SnakeResource Advisory Council

AGENCY: Bureau of Land Management,Prineville District, Interior.ACTION: Meeting of John Day-SnakeResource Advisory Council: Pendleton,Oregon; February 19 & 20, 1998.

SUMMARY: A meeting of the John Day-Snake Resource Advisory Council willbe held on February 19, 1998 from 1:00p.m. to 5:00 p.m. and on February 20from 8:00 a.m. to noon at the DoubletreeInn, 304 SE Nye Ave., Pendleton,Oregon. The meeting is open to thepublic. Public comments will bereceived at 3:00 p.m. on February 19.Topics to be discussed by the Councilwill include the Interior Columbia BasinEcosystem Management Project,implementation of Standards forRangeland Health and Guidelines forLivestock Grazing on public lands, anupdate on the Oregon Governor’s ForestHealth Advisory Committee and adiscussion of operating agreements forfuture Council meetings. There will bea satellite video conference with theSecretary of the Interior and BLMDirector on February 20.

FOR FURTHER INFORMATION CONTACT:James L. Hancock, Bureau of LandManagement, Prineville District Office,3050 NE Third Street, P.O. Box 550,Prineville, Oregon 97754, or call 541–416–6700.

Dated: January 7, 1998.James L. Hancock,District Manager.[FR Doc. 98–1123 Filed 1–15–98; 8:45 am]BILLING CODE 4310–33–M



[ID–990–1020–00]

Resource Advisory Council Meeting

AGENCY: Bureau of Land Management,Upper Columbia—Salmon ClearwaterDistricts, Idaho.ACTION: Notice of Resource AdvisoryCouncil meeting.

SUMMARY: In accordance with theFederal Land Policy and ManagementAct and the Federal AdvisoryCommittee Act of 1972 (FACA), 5 U.S.C.Appendix, the Bureau of LandManagement (BLM) announces themeeting of the Upper Columbia—Salmon Clearwater Districts ResourceAdvisory Council (RAC) on Friday,February 20, 1998, in Coeur d’Alene,Idaho.

Agenda items include: a videoconference featuring Secretary of theInterior Bruce Babbitt and BLM DirectorPat Shea, reports from the weeds andrecreation subgroups, discussion offuture issues to consider, and otherCouncil business. The meeting willbegin at 8:00 a.m. (PST) and be held atthe BLM Coeur d’Alene Field Office,1808 North Third Street, Coeur d’Alene,Idaho. The public may address theCouncil during the public commentperiod from 2:00 p.m.–2:30 p.m.SUPPLEMENTARY INFORMATION: AllResource Advisory Council meetings areopen to the public. Interested personsmay make oral statements to theCouncil, or written statements may besubmitted for the Council’sconsideration. Depending on thenumber of persons wishing to make oralstatements, a per-person time limit maybe established by the District Manager.

The Council’s responsibilities includeproviding long-range planning andestablishing resource managementpriorities.FOR FURTHER INFORMATION CONTACT: TedGraff (208) 769–5004.


Fritz U. Rennebaum,

District Manager.[FR Doc. 98–1148 Filed 1–15–98; 8:45 am]

BILLING CODE 4130–GG–M



[OR 53130; OR–080–08–7122–00–8977; G8–0077]

Realty Action; ProposedNoncompetitive Lease

The following described parcel ofpublic land is being considered for anoncompetitive lease under theauthority of Section 302 of the FederalLand Policy and Management Act of1976, as amended (43 U.S.C. 1732), atnot less than the appraised fair marketvalue:

Williamette Meridian, Oregon

T. 5 S., R. 4 E.,Sec. 19, a portion of the SW1⁄4NE1⁄4

The above-described parcel containsapproximately 40 acres in Clackamas County.The external boundary of the area will besurveyed and a metes and boundsdescription used for the lease.

The purpose of the lease would be toaccommodate a proposed shooting rangewith three firing lanes and appurtenantfacilities. Since there is no knowninterest to develop the shooting range byanyone else, the land would be offeredfor lease without competition.

The above-described parcel is beingconsidered for lease to the Molalla RifleClub, an Oregon non-profit corporation.The lease would be issued for a term of10 years, with a right to renewal thelease for additional years.

Detailed information concerning thisproposal, including the environmentalassessment, is available for review at theSalem District Office, 1717 Fabry RoadSE, Salem, Oregon 97306.

For a period of 45 days from the dateof this notice, interested parties maysubmit comments regarding theproposed exchange to the Cascades AreaManager at the above address. Anyadverse comments will be reviewed bythe Salem District Manager, who maysustain, vacate, or modify this decision.Richard C. Prather,

Cascades Area Manager.[FR Doc. 98–1146 Filed 1–15–98; 8:45 am]





[OR–050–1110–00:G8–0070]

Prineville District; Shooting Restrictionon Public Lands; Oregon

January 6, 1998.

AGENCY: Bureau of Land Management,Interior.

ACTION: Notice is hereby given that thearea legally described below isseasonally closed to shooting.

LEGAL DESCRIPTION: This closure orderapplies to all areas within Township 15South, Range 11 East, Section 16, SE ofthe SW and SW of the SE; and Section21, NE of the NW and NW of the NE.

Effective immediately, all areas asdescribed above are closed to shootingbetween January 1 and August 31,annually. Shooting is defined as ‘‘thedischarge of firearms’’. A firearm isdefined as ‘‘a weapon, by whatevername know, which is designed to expela projectile by the action of powder andwhich is readily capable of use as aweapon’’. The purpose of this closure isto protect wildlife resources. Morespecifically, this closure is ordered toprotect a nesting pair of golden eagles.Currently, the occurrence of shooting atthis site jeopardizes the persistence andnesting success of the golden eagles atthis location. Exemptions to this closureorder may be made on a case-by-casebasis by the authorized officer. Thisemergency order will be evaluated inthe Urban Interface Amendment to theBrothers/La Pine Resource ManagementPlan of 1989. The authority for thisclosure is 43 CFR 8364.1: Closure andrestriction orders.

FOR FURTHER INFORMATION CONTACT:Sarah Nichols, Wildlife Biologist, BLMPrineville District Office, P.O. Box 550,Prineville, Oregon 97754, telephone(541) 416–6725

SUPPLEMENTARY INFORMATION: Violationof this closure order is punishable by afine not to exceed $1,000 and/orimprisonment not to exceed 12 monthsas provided in 43 CFR 8360.0–7.


James G. Kenna,Deschutes Resource Area Manager, PrinevilleDistrict Office.[FR Doc. 98–1127 Filed 1–15–98; 8:45 am]




[OR–933–4310–00; GP8–0073]

Salem, Eugene, Roseburg, Medfordand Coos Bay Districts and KlamathFalls Resource Area, Oregon; Intent toInitiate Third Year Evaluations ofApproved Resource ManagementPlans

AGENCY: Bureau of Land Management,Interior.ACTION: Notice of intent to collect andanalyze data as part of third yearevaluations for the Salem, Eugene,Roseburg, Medford, Coos Bay, KlamathFalls and Upper Klamath BasinResource Management Plans andinvitation for the public to participate.

SUMMARY: The Bureau of LandManagement (BLM) Salem, Eugene,Roseburg, Medford, and Coos BayDistricts and Klamath Falls ResourceArea (in the Lakeview District) areinitiating the collection of thesupplemental information and analysesrequired for simultaneous ResourceManagement Plan (RMP) evaluations.All of the comprehensive land use planswere completed and approved in 1995and included a commitment toevaluations based on three full years ofimplementation. The seven plans guideand control management actions on over2,560,000 acres of BLM surfaceownership throughout western Oregon.The public is invited to review theavailable annual District programsummary reports and quarterly projectupdate reports, as well as the approvedplans and their plan monitoring andevaluation appendices. The public maycontribute by identifying new sources ofinformation or analyses which may havea bearing on the continued validity ofthe individual or collective plans. Theevaluations will be based on theimplementation actions and plan andproject monitoring from the dates ofapproval through September 30, 1998.BLM staff have already taken actions todetermine if there has been anysignificant change in the related plans ofother federal agencies, state or localgovernments, or Indian tribes, orwhether there is other new data ofsignificance to the plan.EFFECTIVE DATE: There is no specificlegal or regulatory requirement forpublic notification or participation inBLM plan evaluations. This notice,together with similar notices toelectronic and print media in the localareas, initiates a 60-day comment periodending March 17, 1998. During this timeperiod, local BLM staff will be

scheduling open houses or other forumswhere members of the public may visitfield offices and talk directly with keystaff about the annual reports, quarterlyupdates, and RMP monitoring andevaluation schedule. The actualevaluations will be conducted duringfiscal year 1999 (October 1998 throughSeptember 1999) by BLM staff from theOregon State Office. Any supplementalanalyses on regional, provincial,watershed or other level issues will bemade available for public review as theyare completed and approved. Forexample, analyses are expected oncumulative economic and employmenteffects and changes in regionalconditions which may be attributed toBureau natural resource product salesand ecosystem recovery actions, such asstream restoration and road closureprojects. All of the supplementalanalyses and RMP evaluations areexpected to be completed by thesummer of 1999, when they will beavailable for public review, prior toState Director approval. The StateDirector’s findings will indicate whetheror not the plans are individually orcollectively still valid for continuedmanagement direction or require planamendments or revisions, together withthe appropriate environmental analysesand public participation.

FOR FURTHER INFORMATION OR TO SUBMITCOMMENTS, CONTACT ANY OF THEFOLLOWING:Salem District: Mark Lawrence, Assoc.

District Manager, Bureau of LandManagement, 1717 Fabry Road, SE,Salem, OR 97306, (503) 375–5646

Eugene District: Denis Williamson,District Manager, Bureau of LandManagement, 2890 Chad Drive, P.O.Box 10226, Eugene, OR 97440, (541)683–6600

Roseburg District: Cary Osterhaus,District Manager, Bureau of LandManagement, 777 NW Garden ValleyBlvd., Roseburg, OR 97470, (541) 440–4930

Medford District: Van Manning, ActingDistrict Manager, Bureau of LandManagement, 3040 Biddle Road,Medford, OR 97504, (541) 770–2200

Coos Bay District: Neil Middlebrook,Acting Assoc. District Manager,Bureau of Land Management, 1300Airport Lane, North Bend, OR 97459,(541) 756–0100

Klamath Falls Resource Area: BarronBail, Area Manager, 2795 AndersonAvenue, Bldg. 25, Klamath Falls, OR97603, (541) 883–6916

Oregon State Office: William Bradley,Deputy State Director for ResourcePlanning, Use, and Protection, Bureauof Land Management, 1515 SW 5th


Avenue, P.O. Box 2965, Portland, OR97208, (503) 952–6056

SUPPLEMENTARY INFORMATION: TheBureau’s procedures for Monitoring andEvaluation are found at 43 Code ofFederal Regulations 1610.4–9. EachDistrict has distributed annual Districtprogram summaries to report planmonitoring by fiscal year and quarterlyupdates for the applicable approvedRMPs to their lists of known interestedaddressees. There is no fixed publicreview or comment period for theannual and quarterly reports, andcomments or questions may be raised tothe applicable office staff at any time.Interested persons may request copies ofpast reports and to be added to theapplicable mailing lists by contactingthe applicable District offices. EachDistrict has a limited number of theapproved RMPs and the supportingEnvironmental Impact Statementdocument(s) available upon request.Each plan contains an appendix for planmonitoring evaluation, which includesup to 20 pages of specific monitoringquestions which will form the basis forthe specific RMP evaluations. Portionsof the documents listed above may beavailable in an electronic format andsome may be available on Bureauelectronic Internet ‘‘web sites.’’Interested individuals should contactthe individual District offices todetermine availability of planningdocuments and reports in local librariesor in electronic formats. Single copies ofall of the plans and annual reports arealso available for inspection duringnormal working hours in the OregonState Office (7th floor Lands Office) atthe address listed above.

Dated: January 5, 1998.Elaine Y. Zielinski,State Director, Oregon/Washington.[FR Doc. 98–1147 Filed 1–15–98; 8:45 am]BILLING CODE 4310–33–P



[MT–926–08–1420–00]

Montana: Filing of Plat of Survey

AGENCY: Bureau of Land Management,Montana State Office, Interior.ACTION: Notice.

SUMMARY: The plat of survey of thefollowing described land is scheduled tobe officially filed in the Montana StateOffice, Billings, Montana, thirty (30)days from the date of this publication.

Meridian, South DakotaT. 6 S., R. 9 E.

The plat, representing the dependentresurvey of portions of the northboundary and subdivisional lines, andthe adjusted original meanders of theleft bank of the South Fork of theCheyenne River in section 4, and thesubdivision of section 4, and the surveyof the new meanders of a portion of thepresent left bank of the South Fork ofthe Cheyenne River in section 4,Township 6 South, Range 9 East, BlackHills Meridian, South Dakota, wasaccepted December 18, 1997.

This survey was executed at therequest of the U.S. Forest Service,Custer National Forest, and wasnecessary to identify lands administeredby the U.S. Forest Service.

A copy of the preceding describedplat will be immediately placed in theopen files and will be available to thepublic as a matter of information.

If a protest against this survey, asshown on this plat, is received prior tothe date of the official filing, the filingwill be stayed pending consideration ofthe protest. This particular plat will notbe officially filed until the day after allprotests have been accepted ordismissed and become final or appealsfrom the dismissal affirmed.FOR FURTHER INFORMATION CONTACT:Bureau of Land Management, 222 North32nd Street, P.O. Box 36800, Billings,Montana 59107–6800.

Dated: January 8, 1998.Daniel T. Mates,Chief Cadastral Surveyor, Division ofResources.[FR Doc. 98–1128 Filed 1–15–98; 8:45 am]BILLING CODE 4310–33–P



[NV–942–08–1420–00]

Filing of Plats of Survey; Nevada

AGENCY: Bureau of Land Management,Interior.ACTION: Notice.

SUMMARY: The purpose of this notice isto inform the public and interested Stateand local government officials of thefiling of Plats of Survey in Nevada.EFFECTIVE DATES: Filing is effective at10:00 a.m. on the dates indicated below.FOR FURTHER INFORMATION CONTACT:Robert H. Thompson, Acting Chief,Cadastral Survey, Bureau of LandManagement (BLM), Nevada StateOffice, 850 Harvard Way, P.O. Box12000, Reno, Nevada 89520, 702–785–6541.


1. The Plat of Survey of the followingdescribed lands was officially filed atthe Nevada State Office, Reno, Nevadaon December 11, 1997:

The plat, representing the dependentresurvey of a portion of the eastboundary and a portion of thesubdivision-of-section lines of section24, and a metes-and-bounds survey insection 24, Township 19 South, Range60 East, of the Mount Diablo Meridian,in the State of Nevada, under Group No.769, was accepted December 9, 1997.

This survey was executed to meetcertain needs of the Bureau of LandManagement.

2. The Plat of Survey of the followingdescribed lands will be officially filed atthe Nevada State Office, Reno, Nevadaon February 24, 1998:

The plat, representing the dependentresurvey of the Third Standard ParallelNorth, through a portion of Range 22East, a portion of the west boundary anda portion of the subdivisional lines, andthe survey of a portion of thesubdivisional lines, and the subdivisionof section 30, Township 16 North,Range 22 East, of the Mount DiabloMeridian, in the State of Nevada, underGroup No. 761, was accepted January 6,1998.

This survey was executed to meetcertain needs of the Bureau of LandManagement and John Lawrence(Nevada), Inc.

3. Subject to valid existing rights theprovisions of existing withdrawals andclassifications, the requirements ofapplicable laws, and other segregationof record, those lands listed under item2 are open to application, petition, anddisposal, including application underthe mineral leasing laws. All such validapplications received on or prior toFebruary 24, 1998, shall be consideredas simultaneously filed at that time.Those received thereafter shall beconsidered in order of filing.

4. The above-listed surveys are nowthe basic records for describing thelands for all authorized purposes. Thesesurveys have been placed in the openfiles in the BLM Nevada State Officeand are available to the public as amatter of information. Copies of thesurveys and related field notes may befurnished to the public upon payment ofthe appropriate fees.

Dated: January 6, 1998.Robert H. Thompson,Acting Chief Cadastral Surveyor, Nevada.[FR Doc. 98–1087 Filed 1–15–98; 8:45 am]BILLING CODE 4310–HC–P


1 The imported products subject to theseinvestigations consist of certain preservedmushrooms, whether imported whole, sliced, or asstems and pieces. The preserved mushroomscovered under the investigations are of the speciesAgaricus bisporus and Agaricus bitorquis.‘‘Preserved mushrooms’’ refers to mushrooms thathave been prepared or preserved by cleaning,blanching, and sometimes slicing or cutting. Thesemushrooms are then packed and heated incontainers, including but not limited to cans orglass jars, in a suitable liquid medium that mayinclude, but is not limited to, water, brine, or butter(or butter sauce). Preserved mushrooms may beimported whole, sliced, or as stems and pieces.Included within the scope of the petition are‘‘brined’’ mushrooms, which are presalted andpacked in a heavy salt solution to provisionallypreserve them for further processing.

Excluded from the scope of the petition are: (1)all other species of mushroom, including strawmushrooms (HTS statistical reporting number2003.10.0009); (2) all fresh and chilled mushrooms(HTS subheading 0709.51.00), including‘‘refrigerated’’ or ‘‘quick blanched’’ mushrooms; (3)dried mushrooms (HTS subheadings 0712.30.10and 0712.30.20); (4) frozen mushrooms (HTSsubheading 0710.80.20); and (5) ‘‘marinated,’’‘‘acidified,’’ or ‘‘pickled’’ mushrooms, which arepacked with solutions such as oil, vinegar, or aceticacid (HTS subheading 2001.90.39).

INTERNATIONAL TRADECOMMISSION

[Investigations Nos. 731–TA–776–779(Preliminary)]

Certain Preserved Mushrooms FromChile, China, India, and Indonesia

AGENCY: United States InternationalTrade Commission.ACTION: Institution of antidumpinginvestigations and scheduling ofpreliminary phase investigations.

SUMMARY: The Commission hereby givesnotice of the institution of investigationsand commencement of preliminaryphase antidumping investigations Nos.731–TA–776–779 (Preliminary) undersection 733(a) of the Tariff Act of 1930(19 U.S.C. 1673b(a)) (the Act) todetermine whether there is a reasonableindication that an industry in theUnited States is materially injured orthreatened with material injury, or theestablishment of an industry in theUnited States is materially retarded, byreason of imports from Chile, China,India, and Indonesia of certainpreserved mushrooms,1 provided for insubheadings 0711.90.40 and 2003.10.00of the Harmonized Tariff Schedule ofthe United States, that are alleged to besold in the United States at less than fairvalue. Unless the Department ofCommerce extends the time forinitiation pursuant to section732(c)(1)(B) of the Act (19 U.S.C.1673a(c)(1)(B)), the Commission mustreach a preliminary determination inantidumping investigations in 45 days,or in this case by February 20, 1998. TheCommission’s views are due at the

Department of Commerce within fivebusiness days thereafter, or by February27, 1998.

For further information concerningthe conduct of these investigations andrules of general application, consult theCommission’s Rules of Practice andProcedure, part 201, subparts A throughE (19 CFR part 201), and part 207,subparts A and B (19 CFR part 207), asamended in 61 FR 37818 (July 22, 1996).EFFECTIVE DATE: January 6, 1998.FOR FURTHER INFORMATION CONTACT:Olympia DeRosa Hand (202–205–3182),Office of Investigations, U.S.International Trade Commission, 500 EStreet SW., Washington, DC 20436.Hearing-impaired persons can obtaininformation on this matter by contactingthe Commission’s TDD terminal on 202–205–1810. Persons with mobilityimpairments who will need specialassistance in gaining access to theCommission should contact the Officeof the Secretary at 202–205–2000.General information concerning theCommission may also be obtained byaccessing its internet server (http://www.usitc.gov or ftp://ftp.usitc.gov).


Background.—These investigationsare being instituted in response to apetition filed on January 6, 1998, by L.K.Bowman, Inc., Nottingham, PA; ModernMushroom Farms, Inc., Avondale, PA;Monterrey Mushrooms, Inc.,Watsonville, CA; Mount Laurel CanningCorp., Temple, PA; Mushroom CanningCo., Kennett Square, PA; Sunny DellFoods, Inc., Oxford, PA; and UnitedCanning Corp., North Lima, OH.

Participation in the investigations andpublic service list.—Persons (other thanpetitioners) wishing to participate in theinvestigations as parties must file anentry of appearance with the Secretaryto the Commission, as provided insections 201.11 and 207.10 of theCommission’s rules, not later than sevendays after publication of this notice inthe Federal Register. Industrial usersand (if the merchandise underinvestigation is sold at the retail level)representative consumer organizationshave the right to appear as parties inCommission antidumpinginvestigations. The Secretary willprepare a public service list containingthe names and addresses of all persons,or their representatives, who are partiesto this investigation upon the expirationof the period for filing entries ofappearance.

Limited disclosure of businessproprietary information (BPI) under anadministrative protective order (APO)and BPI service list.—Pursuant to

section 207.7(a) of the Commission’srules, the Secretary will make BPIgathered in these investigationsavailable to authorized applicantsrepresenting interested parties (asdefined in 19 U.S.C. 1677(9)) who areparties to the investigations under theAPO issued in the investigations,provided that the application is madenot later than seven days after thepublication of this notice in the FederalRegister. A separate service list will bemaintained by the Secretary for thoseparties authorized to receive BPI underthe APO.

Conference.—The Commission’sDirector of Operations has scheduled aconference in connection with theseinvestigations for 9:30 a.m. on January27, 1998, at the U.S. International TradeCommission Building, 500 E Street SW.,Washington, DC. Parties wishing toparticipate in the conference shouldcontact Olympia DeRosa Hand (202–205–3182) not later than January 23,1998, to arrange for their appearance.Parties in support of the imposition ofantidumping duties in theseinvestigations and parties in oppositionto the imposition of such duties willeach be collectively allocated one hourwithin which to make an oralpresentation at the conference. Anonparty who has testimony that mayaid the Commission’s deliberations mayrequest permission to present a shortstatement at the conference.

Written submissions.—As provided insections 201.8 and 207.15 of theCommission’s rules, any person maysubmit to the Commission on or beforeJanuary 30, 1998, a written briefcontaining information and argumentspertinent to the subject matter of theinvestigations. Parties may file writtentestimony in connection with theirpresentation at the conference no laterthan three days before the conference. Ifbriefs or written testimony contain BPI,they must conform with therequirements of sections 201.6, 207.3,and 207.7 of the Commission’s rules.

In accordance with sections 201.16(c)and 207.3 of the rules, each documentfiled by a party to the investigationsmust be served on all other parties tothe investigations (as identified byeither the public or BPI service list), anda certificate of service must be timelyfiled. The Secretary will not accept adocument for filing without a certificateof service.

Authority: These investigations are beingconducted under authority of title VII of theTariff Act of 1930; this notice is publishedpursuant to section 207.12 of theCommission’s rules.

By order of the Commission.


Issued: January 12, 1998.Donna R. Koehnke,Secretary.[FR Doc. 98–1095 Filed 1–15–98; 8:45 am]BILLING CODE 7020–02–P

DEPARTMENT OF JUSTICE

Notice of Lodging of Consent DecreePursuant to the ComprehensiveEnvironmental Response,Compensation and Liability Act(CERCLA)

In accordance with Departmentalpolicy, 28 CFR 50.7, and with Section122 of CERCLA, 42 U.S.C. 9622, noticeis hereby given that a consent decree inUnited States v. American CyanamidCompany, Inc., et al., Civ. A. No. L–98–27, was lodged on January 7, 1998, withthe United States District Court for theDistrict of Maryland. The consentdecree resolves the claims of the UnitedStates under Sections 106(a), 107(a), and113(g)(2) of the ComprehensiveEnvironmental Response,Compensation, and Liability Act, asamended (‘‘CERCLA’’), forreimbursement of response costsincurred at the Bush Valley LandfillSuperfund Site located in HarfordCounty, Maryland and for declaratoryjudgment as to liability that will bebinding in actions to recover furtherresponse costs related to the Site. Theconsent decree obligates AmericanCyanamid Company, Inc. (formerlyknown as Cytec Industries, Inc.), BataShoe Company, Inc., Browning-Ferris,Inc. (formerly known as EasternDisposal, Inc.), Case-Mason Filling, Inc.,Cello Corporation, the city of Aberdeen,Maryland, the City of Havre de Grace,Maryland, Constar Plastics, Inc.,Covance Preclinical Corporation(formerly known as Corning LifeSciences), Harford County, Maryland,Harford Sanitation Services, Inc., AlcoIndustries, Inc., Maryland StateHighway Administration, andMcCorquodale Process, Inc. to performthe remedial design and remedial actionthe U.S. Environmental ProtectionAgency has selected for the Site.

The Department of Justice willreceive, for a period of thirty (30) daysfrom the date of this publication,comments relating to the proposedconsent decree. Comments should beaddressed to the Assistant AttorneyGeneral for the Environment andNatural Resources Division, Departmentof Justice,Washington, D.C., 20530, andshould refer to United States v.American Cyanamid Company, Inc., etal., DOJ Ref. #90–11–2–1162.

The consent decree may be examinedat the office of the United StatesAttorney, 6625 U.S. Courthouse, 101 W.Lombard Street, Baltimore, Maryland21201; the Region III Office of theEnvironmental Protection Agency, 841Chestnut Street, Philadelphia, PA; andat the Consent Decree Library, 1120 GStreet, NW 4th Floor, Washington, D.C.20005, (202) 624–0892. A copy of theconsent decree may be obtained inperson or by mail from the ConsentDecree Library 1120 G Street, NW, 4thFloor, Washington, D.C. 20005. Inrequesting a copy please refer to thereferenced case and enclose a check inthe amount of $33.75 (25 cents per pagereproduction cost), payable to theConsent Decree library. Attachments tothe consent decree can be obtained foran additional $32.25.Joel M. Gross,Chief, Environmental Enforcement SectionEnvironment and Natural Resources Division.[FR Doc. 98–1092 Filed 1–15–98; 8:45 am]BILLING CODE 4410–15–M


Notice of Lodging of Consent DecreePursuant to the ComprehensiveEnvironmental Response,Compensation and Liability Act, 42U.S.C. 9601 et seq., in United States v.Curtiss-Wright Corp., et al.

In accordance with Section 122(i) ofthe Comprehensive EnvironmentalResponse, Compensation and LiabilityAct (‘‘CERCLA’’), as amended, 42 U.S.C.122(i), and Department policy, 28 CFR50.7 38 FR 19029, notice is hereby giventhat a proposed Consent Decree inUnited States v. Curtiss-Wright Corp., etal., Civil Action No. 98–CV–0014, waslodged in the United States DistrictCourt for the Northern District of NewYork on January 5, 1998. The proposedconsent decree, if entered, will resolvethe liability of eleven defendants,owners and/or operators, under Section106 and 107(a) of CERCLA, 42 U.S.C.9606 and 9607(a), in connection withalleged releases of hazardous substancesat the Malta Rocket Fuel Area (‘‘Site’’),a 165-acre parcel located on Plains Roadin the Towns of Malta and Stillwater,Saratoga County, New York, New York.Under the settlement reflected in theproposed consent decree, defendantswill perform certain remedial design/remedial action work at the Siteimplementing the Record of Decisionissued July 18, 1996 and pay responsecosts of up to $956,581.77 to the UnitedStates.

The Department of Justice willreceive, for a period of thirty (30 days

from the date of publication of thisnotice, written comments relating to theproposed Consent Decree. Commentsshould be addressed to Lois J. Schiffer,Assistant Attorney General of theEnvironment and Natural ResourcesDivision, United States Department ofJustice, Washington, D.C. 20530, andshould refer to United States v. Curtiss-Wright Corp., et al., Department ofJustice No. 90–11–3–1575.

The proposed Consent Decree may beexamined at the office of the UnitedStates Attorney for the Northern Districtof New York, U.S. Courthouse, Room231, 445 Broadway, Albany, New York12207; at Region I office of the UnitedStates Environmental ProtectionAgency, 290 Broadway, New York, NewYork 10007; and at the Consent DecreeLibrary, 1120 G Street, N.W., 4th Floor,Washington, D.C. 20005, 202–624–0892.A copy of the proposed Consent Decreemay be obtained in person or by mailfrom the Consent Decree Library, at theabove address. In requesting a copy,please enclose a check in the amount of$31.25 (25 cents per page reproductioncosts) payable to Consent DecreeLibrary.Joel M. Gross,Chief, Environmental Enforcement Section,Environment and Natural Resources Division.[FR Doc. 98–1094 Filed 1–15–98; 8:45 am]BILLING CODE 4410–15–M


Notice of Lodging of Consent DecreePursuant to the Clean Air Act and theResource Conservation and RecoveryAct

In accordance with 28 CFR 50.7, theDepartment of Justice gives notice thata proposed consent decree in UnitedStates v. Marathon Oil Company, CivilNo. 96–4117–JLF (S.D. Ill.), was lodgedwith the United States District Court forthe Southern District of Illinois onJanuary 5, 1998. The proposed consentdecree would resolve the United States’civil claims against the Marathon OilCompany for certain of its operations atits refinery in Robinson, CrawfordCounty, Illinois, under the Clean AirAct, 42 U.S.C. §§ 7401–7671q, and theResource Conservation and RecoveryAct, 42 U.S.C. 6901–6992k. Under theterms of the proposed consent decree,defendant Marathon Oil Company willpay a civil penalty of $75,000 andperform a supplemental environmentalproject, which will include theimplementation of an early-complianceprogram with projected Clean Air Actregulations for which Marathon Oil


Company will expend not less than$382,000 net after-tax.

The Department of Justice willreceive, for a period of thirty (30) daysfrom the date of this publication,comments relating to the proposedconsent decree. Comments should beaddressed to the Assistant AttorneyGeneral, Environment and NaturalResource Division, United StatesDepartment of Justice, Washington, D.C.20530, and should refer to United Statesv. Marathon Oil Company, Civil No. 96–4117–JLF (S.D. Ill.) and DOJ ReferenceNo. 90–5–2–1–1978.

The proposed consent decree may beexamined at: (1) the Office of the UnitedStates Attorney for the Southern Districtof Illinois, 9 Executive Drive, Suite 300,Fairview Heights, Illinois 62208, 618–628–3700; (2) the United StatesEnvironmental Protection Agency(Region 5), 77 West Jackson Boulevard,Chicago, Illinois 60604–3590 (contactMary T. McAuliffe (312–886–6237); and(3) the U.S. Department of Justice,Environment and Natural ResourcesDivision Consent Decree Library, 1120 GStreet, N.W., 4th Floor, Washington,D.C. 20005, 202–624–0892. A copy ofthe proposed consent decree may beobtained in person or by mail from theConsent Decree Library, 1120 G Street,N.W., 4th Floor, Washington, D.C.20005. In requesting a copy, please referto the referenced case and enclose acheck in the amount of $9.00 (36 pagesat 25 cents per page reproduction costs),made payable to the Consent DecreeLibrary.Joel M. Gross,Chief, Environmental Enforcement Section,Environment and Natural Resources Division.[FR Doc. 98–1093 Filed 1–15–98; 8:45 am]BILLING CODE 4410–15–M


[AAG/A Order No. 147–98]

Privacy Act of 1974; Removal of aSystem of Records

Pursuant to the provisions of thePrivacy Act of 1974 (5 U.S.C. 552a), theImmigration and Naturalization Service(INS), Department of Justice, isremoving Subsystem K., entitled‘‘Microfilmed Manifest Records,’’ fromits ‘‘Immigration and NaturalizationService Index System, Justice/INS–001.’’(Justice/INS–001 was most recentlypublished on October 5, 1993 (58 FR51847).

The removal of Subsystem K. is partof a long-term review initiative of theINS–001 system of records—whichincludes a number of subsystems—in aneffort to improve the reporting accuracy

thereof. During this ongoing review, INSfound that the information identified inSubsystem K. was misidentified initiallyas Privacy Act records, and thus waserroneously reported as part of the INS–001 system. Information in theSubsystem is not retrieved by personalidentifier; rather, the informationconsists of a manifest from whichinformation is retrieved by date of entry,port of entry, ships name, and/or aircraftidentification code.

In addition, not all of these recordsremain in the custody of INS. Recordsdated up through December 1982 havebeen accepted by the National Archivesand Records Administration (NARA) forpermanent retention; only those recordsdated January 1983 to the present havebeen retained by INS.

Accordingly, requests for access tothese records should be made under theFreedom of Information Act (FOIA) andaddressed as follows:

For records dated up throughDecember 1982, address any accessrequests to the NARA, Attention FOIAOfficer, Seventh Street andPennsylvania Avenue, NW.,Washington, DC 20408. For recordsdated January 1983 to the present,address any access requests to theFOIA/Privacy Act Officer at the INSNebraska Service Center, 850 S. Street,Lincoln, NE 68508.

Dated: January 5, 1998.Stephen R. Colgate,Assistant Attorney General forAdministration.[FR Doc. 98–1091 Filed 1–15–98; 8:45 am]BILLING CODE 4410–10–M


Immigration and Naturalization Service

[INS No. 1904–98]

Correction Concerning the SecondMeeting of the New York DistrictAdvisory Council on ImmigrationMatters

AGENCY: Immigration and NaturalizationService, Justice.ACTION: Notice of correction.

SUMMARY: On January 8, 1998, theImmigration and Naturalization Service(Service), published a notice in theFederal Register at 63 FR 1125. Thatnotice announced that the DistrictAdvisory Council on ImmigrationMatters (DACOIM) meeting scheduledfor January 22, 1998, would be held at10:00 A.M. The purpose of this noticeis to correct the time of the meeting.

DATES AND TIMES: The correct time of themeeting will be 1:00 P.M. on January 22,1998.ADDRESSES: The address of the meetinghas not changed. It will still be held at201 Varick Street, New York, New York10278, 11th Floor, Room 1107–A.FOR FURTHER INFORMATION CONTACT:Susan Young, Designated FederalOfficer, Immigration and NaturalizationService, 26 Federal Plaza, Room 14–100,New York, New York 10278, telephone:(212) 264–0736.

Dated: January 13, 1998.Doris Meissner,Commissioner, Immigration andNaturalization Service.[FR Doc. 98–1207 Filed 1–14–98; 1:03 pm]BILLING CODE 4410–10–M

DEPARTMENT OF LABOR

Office of the Secretary

Submission for OMB Review;Comment Request

January 12, 1998.The Department of Labor (DOL) has

submitted the following publicinformation collection requests (ICRs) tothe Office of Management and Budget(OMB) for review and approval inaccordance with the PaperworkReduction Act of 1995 (Pub. L. 104–13,44 U.S.C. Chapter 35). A copy of eachindividual ICR, with applicablesupporting documentation, may beobtained by calling the Department ofLabor, Departmental Clearance Officer,Todd R. Owen, ({202} 219–5096 ext.143) or by E-Mail to [email protected]. Individuals who use atelecommunications device for the deaf(TTY/TDD) may call (202) 219–4720between 1:00 p.m. and 4:00 p.m. Easterntime, Monday—Friday.

Comments should be sent to Office ofInformation and Regulatory Affairs,Attn: OMB Desk Officer for BLS, DM,ESA, ETA, MSHA, OSHA, PWBA, orVETS, Office of Management andBudget, Room 10235, Washington, DC20503 ({202} 395–7316), within 30 daysform the date of this publication in theFederal Register.

The OMB is particularly interested incomments which:

• Evaluate whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the agency, includingwhether the information will havepractical utility;

• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collection of information,


including the validity of themethodology and assumptions used;

• Enhance the quality, utility, andclarity of the information to becollected; and

• Minimize the burden of thecollection of information on those who

are to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,e.g., permitting electronic submission ofresponses.

Agency: Bureau of Labor Statistics.Title: Labor Market Information (LMI)

Cooperative Agreement.OMB Number: 1220–0079

(reinstatement with change).Affected Public: State, Local or Tribal.

Collection forms Number ofrespondents Frequency Total annual

responsesAverage time per

responseTotalhours

Works statements ..................................................................... 55 1 55 1–2 Hours .................. 55–110.Budget Information Form (BIF) (LMI 1A, 1B) ........................... 55 1 55 1–6 Hours .................. 55–330.Quarterly Automated Financial Reports ................................... 48 4 192 10–50 Minutes ........... 32–160.Monthly Automated Status Reports .......................................... 48 *8 384 5–25 Minutes ............. 32–160.BLS Cooperative Statistics Financial Report (LMI 2A) ............ 7 12 84 1–5 Hours .................. 84–420.Quarterly Status Report ............................................................ 1–30 4 4–120 1 Hour ....................... 4–120.

Total Ranges ..................................................................... 1–55 .................... 774–890 .................................... 262–1300.Totals (Average) ................................................................ .................... .................... 832 56.3 Minutes .............. 781.

* Reports are not received for end-of-quarter month, i.e. December, March, June and September.

Total Annualized capital/startupcosts: $0.

Total Annual cost (operating/maintaining systems or purchasingservices): $0.

Description: The Bureau of LaborStatistics awards funds to StateEmployment Security Agencies (SESAs)in the 50 States, the District ofColumbia, Puerto Rico, the VirginIslands, Guam, and American Samoaeach year to assist them in operating oneor more of five LMI cooperativestatistical programs: CurrentEmployment Statistics, Local AreaUnemployment Statistics, OccupationEmployment Statistics, CoveredEmployment and Wages Report, andMass Layoff Statistics. The LMICooperative Agreement includes allinformation needed by the SESAs toapply for these funds and once awarded,report on the status of obligation andexpenditure of these funds, as well asclose out the cooperative agreement.

Agency: Employment StandardsAdministration.

Title: Request for EmploymentInformation (CA–1027).

OMB Number: 1215–0105.Frequency: On Occasion.Affected Public: Business or other for-

profit.Number of Respondents: 1,000.Estimated Time Per Respondent: 15

minutes.Total Burden Hours: 250 hours.Total Annualized capital/startup

costs: 0.Total annual costs (operating/

maintaining systems or purchasingservices): $320.

Description: Payment ofCompensation for partial disability toinjured Federal employees is requiredunder 5 U.S.C. 8106. This section alsorequires the Office of Workers’Compensation to obtain information

regarding a claimant’s earnings during aperiod of eligibility to compensation.The CA–1027 is used to obtain earningsinformation for an individual employedby a private employer and is used ascriteria for determining the claimant’sentitlement to compensation benefits.

Agency: Employment StandardsAdministration.

Title: Notice of Issuance of InsurancePolicy (CM–921).

OMB Number: 1215–0059.Frequency: Annually.Affected Public: Business or other for-

profit; State, Local or TribalGovernment.

Number of Respondents: 60.Estimated Time Per Respondent: 10

minutes.Total Burden Hours: 667 hours.Total Annualized capital/startup

costs: 0.Total annual costs (operating/

maintaining systems or purchasingservices): $1,600.

Description: The CM–921 providesinsurance carriers with the means tosupply the Employment StandardsAdministration with informationshowing that a responsible coal mineoperator is insured against its FederalBlack Lung compensation liabilitypursuant to the requirementsestablished in the Federal Black LungBenefits Act.

Agency: Employment and TrainingAdministration.

Title: Job Training Partnership (JTPA)Title III Biennial State Plan.

OMB Number: 1205–0273.Frequency: Annually.Affected Public: State, Local or Tribal

Government.Number of Respondents: 52.Estimated Time Per Respondent: 20

Hours.Total Burden Hours: 1,040.

Total Annualized capital/startupcosts: 0.

Total annual costs (operating/maintaining systems or purchasingservices): 0.

Description: The State Plan willprovide the Department of Labor with ageneral description of each State’s plansfor the operation of Title III program andits utilization of JTPA funds for thispurpose.Todd R. Owen,Departmental Clearance Officer.[FR Doc. 98–1150 Filed 1–15–98; 8:45 am]BILLING CODE 4510–24–M

DEPARTMENT OF LABOR

Employment and TrainingAdministration

Notice of Availability of Funds andSolicitation for Grant Applications(SGA); Extension of the Closing Datefor Receipt of Applications

AGENCY: Employment and TrainingAdministration, Labor.ACTION: Extension of the closing date forreceipt of applications.

SUMMARY: In the Federal Register ofDecember 9, 1997 (62 FR 64886), theDepartment of Labor published a noticeof availability of funds and SGA forengaging employers in State and localSchool-to-Work (STW) systems throughefforts undertaken by industry groupsand trade associations. This noticeextends the closing date for receipt ofapplications for an additional 30 days.This action is necessary to insureadequate preparation time for receivingquality proposals.DATES: The revised closing date forreceipt of application is February 23,1998.


ADDRESSES: Applications shall bemailed to: U.S. Department of Labor,Employment and TrainingAdministration, Division of Acquisitionand Assistance, Attention: Ms. LauraCesario, Reference: SGA/DAA 98–003,200 Constitution Ave., N.W., Room S–4203, Washington, D.C. 20210.FOR FURTHER INFORMATION CONTACT:Division of Acquisition and Assistance,telephone (202) 219-8694 (this is not atoll free number). This notice will alsobe published on the Internet, on theEmployment and TrainingAdministration’s Home Page at http://www.doleta.gov.

Signed at Washington, D.C., this 12th dayof January, 1998.Laura A. Gesario,Grant Officer.[FR Doc. 98–1106 Filed 1–15–98; 8:45 am]BILLING CODE 4510–30–M

DEPARTMENT OF LABOR

Employment StandardsAdministration/Wage and HourDivision

Minimum Wages for Federal andFederally Assisted Construction;General Wage Determination Decisions

General wage determination decisionsof the Secretary of Labor are issued inaccordance with applicable law and arebased on the information obtained bythe Department of Labor from its studyof local wage conditions and data madeavailable from other sources. Theyspecify the basic hourly wage rates andfringe benefits which are determined tobe prevailing for the described classes oflaborers and mechanics employed onconstruction projects of a similarcharacter and in the localities specifiedtherein.

The determinations in these decisionsof prevailing rates and fringe benefitshave been made in accordance with 29CFR Part 1, by authority of the Secretaryof Labor pursuant to the provisions ofthe Davis-Bacon Act of March 3, 1931,as amended (46 Stat. 1494, as amended,40 U.S.C. 276a) and of other Federalstatutes referred to in 29 CFR Part 1,Appendix, as well as such additionalstatutes as may from time to time beenacted containing provisions for thepayment of wages determined to beprevailing by the Secretary of Labor inaccordance with the Davis-Bacon Act.The prevailing rates and fringe benefitsdetermined in these decisions shall, inaccordance with the provisions of theforegoing statutes, constitute theminimum wages payable on Federal andfederally assisted construction projects

to laborers and mechanics of thespecified classes engaged on contractwork of the character and in thelocalities described therein.

Good cause is hereby found for notutilizing notice and public commentprocedure thereon prior to the issuanceof these determinations as prescribed in5 U.S.C. 553 and not providing for delayin the effective date as prescribed in thatsection, because the necessity to issuecurrent construction industry wagedeterminations frequently and in largevolume causes procedures to beimpractical and contrary to the publicinterest.

General wage determinationdecisions, and modifications andsupersedes decisions thereto, contain noexpiration dates and are effective fromtheir date of notice in the FederalRegister, or on the date written noticeis received by the agency, whichever isearlier. These decisions are to be usedin accordance with the provisions of 29CFR Parts 1 and 5. Accordingly, theapplicable decisions of 29 CFR Parts 1and 5. Accordingly, the applicabledecision, together with anymodifications issued, must be made apart of every contract for performance ofthe described work within thegeographic area indicated as required byan applicable Federal prevailing wagelaw and 29 CFR Part 5. The wage ratesand fringe benefits, notice of which ispublished herein, and which arecontained in the Government PrintingOffice (GPO) document entitled‘‘General Wage Determinations IssuedUnder The Davis-Bacon And RelatedActs,’’ shall be the minimum paid bycontractors and subcontractors tolaborers and mechanics.

Any person, organization, orgovernmental agency having an interestin the rates determined as prevailing isencouraged to submit wage rate andfringe benefit information forconsideration by the Department.Further information and self-explanatory forms for the purpose ofsubmitting this data may be obtained bywriting to the U.S. Department of Labor,Employment Standards Administration,Wage and Hour Division, Division ofWage Determinations, 200 ConstitutionAvenue, N.W., Room S–3014,Washington, D.C. 20210.

Withdrawn General WageDetermination Decision

This is to advise all interested partiesthat the Department of Labor iswithdrawing, from the date of thisnotice, General Wage Determination No.M0970041 dated February 14, 1997.

Agencies with construction projectspending, to which this wage decision

would have been applicable, shouldutilize Wage Decision No. M0970013.Contracts for which bids have beenopened shall not be affected by thisnotice. Also consistent with 29 CFR1.6(c)(2)(i)(A), when the opening of bidsis less than ten (10) days from the dateof this notice, this action shall beeffective unless the agency finds thatthere is insufficient time to notifybidders of the change and the finding isdocumented in the contract file.

Modifications of General WageDetermination Decisions

The number of decisions listed in theGovernment Printing Office documententitled ‘‘General Wage DeterminationsIssued Under the Davis-Bacon andRelated Acts’’ being modified are listedby Volume and State. Dates ofpublication in the Federal Register arein parentheses following the decisionsbeing modified.

Volume I

New Jersey:NJ970002 (Feb. 14, 1997)NJ970003 (Feb. 14, 1997)NJ970007 (Feb. 14, 1997)

Volume II

Maryland:MD970001 (Feb. 14, 1997)MD970002 (Feb. 14, 1997)MD970031 (Feb. 14, 1997)

Virginia:VA970014 (Feb. 14, 1997)VA970064 (Feb. 14, 1997)

Volume III

Alabama:AL970004 (Feb. 14, 1997)AL970006 (Feb. 14, 1997)AL970008 (Feb. 14, 1997)AL970017 (Feb. 14, 1997)AL970033 (Feb. 14, 1997)AL970034 (Feb. 14, 1997)AL970042 (Feb. 14, 1997)

Kentucky:KY970001 (Feb. 14, 1997)KY970002 (Feb. 14, 1997)KY970003 (Feb. 14, 1997)KY970004 (Feb. 14, 1997)KY970006 (Feb. 14, 1997)KY970007 (Feb. 14, 1997)KY970025 (Feb. 14, 1997)KY970029 (Feb. 14, 1997)KY970032 (Feb. 14, 1997)KY970035 (Feb. 14, 1997)

Volume IV

Illinois:IL970001 (Feb. 14, 1997)IL970002 (Feb. 14, 1997)IL970003 (Feb. 14, 1997)IL970004 (Feb. 14, 1997)IL970005 (Feb. 14, 1997)IL970006 (Feb. 14, 1997)


IL970007 (Feb. 14, 1997)IL970008 (Feb. 14, 1997)IL970009 (Feb. 14, 1997)IL970018 (Feb. 14, 1997)IL970023 (Feb. 14, 1997)IL970025 (Feb. 14, 1997)IL970048 (Feb. 14, 1997)IL970057 (Feb. 14, 1997)

Indiana:IN970002 (Feb. 14, 1997)IN970005 (Feb. 14, 1997)IN970006 (Feb. 14, 1997)

Minnesota:MN970007 (Feb. 14, 1997)MN970008 (Feb. 14, 1997)MN970015 (Feb. 14, 1997)MN970061 (Feb. 14, 1997)

Ohio:OH970001 (Feb. 14, 1997)OH970002 (Feb. 14, 1997)OH970003 (Feb. 14, 1997)OH970014 (Feb. 14, 1997)OH970028 (Feb. 14, 1997)OH970029 (Feb. 14, 1997)OH970034 (Feb. 14, 1997)OH970035 (Feb. 14, 1997)

Volume V

Arkansas:AR970001 (Feb. 14, 1997)

Iowa:IA970002 (Feb. 14, 1997)

Lousiana:LA970004 (Feb. 14, 1997)LA970005 (Feb. 14, 1997)LA970009 (Feb. 14, 1997)LA970014 (Feb. 14, 1997)LA970015 (Feb. 14, 1997)LA970017 (Feb. 14, 1997)LA970018 (Feb. 14, 1997)

Missouri:MO970001 (Feb. 14, 1997)MO970003 (Feb. 14, 1997)MO970005 (Feb. 14, 1997)MO970006 (Feb. 14, 1997)MO970007 (Feb. 14, 1997)MO970010 (Feb. 14, 1997)MO970013 (Feb. 14, 1997)MO970043 (Feb. 14, 1997)MO970051 (Feb. 14, 1997)MO970052 (Feb. 14, 1997)MO970056 (Feb. 14, 1997)MO970064 (Feb. 14, 1997)MO970068 (Feb. 14, 1997)MO970069 (Feb. 14, 1997)MO970070 (Feb. 14, 1997)MO970071 (Feb. 14, 1997)MO970073 (Feb. 14, 1997)

Texas:TX970003 (Feb. 14, 1997)TX970007 (Feb. 14, 1997)TX970010 (Feb. 14, 1997)TX970014 (Feb. 14, 1997)TX970015 (Feb. 14, 1997)TX970055 (Feb. 14, 1997)TX970060 (Feb. 14, 1997)TX970061 (Feb. 14, 1997)TX970062 (Feb. 14, 1997)

Volume VI

Idaho:

ID970001 (Feb. 14, 1997)ID970002 (Feb. 14, 1997)ID970003 (Feb. 14, 1997)ID970013 (Feb. 14, 1997)ID970014 (Feb. 14, 1997)

North Dakota:ND970004 (Feb. 14, 1997)

Oregon:OR970001 (Feb. 14, 1997)OR970017 (Feb. 14, 1997)

South Dakota:SD970003 (Feb. 14, 1997)SD970005 (Feb. 14, 1997)SD970006 (Feb. 14, 1997)

Utah:UT970003 (Feb. 14, 1997)UT970011 (Feb. 14, 1997)UT970015 (Feb. 14, 1997)UT970023 (Feb. 14, 1997)UT970024 (Feb. 14, 1997)UT970025 (Feb. 14, 1997)UT970027 (Feb. 14, 1997)UT970028 (Feb. 14, 1997)UT970029 (Feb. 14, 1997)UT970030 (Feb. 14, 1997)UT970031 (Feb. 14, 1997)

Washington:WA970001 (Feb. 14, 1997)WA970002 (Feb. 14, 1997)WA970003 (Feb. 14, 1997)WA970005 (Feb. 14, 1997)WA970007 (Feb. 14, 1997)WA970008 (Feb. 14, 1997)WA970011 (Feb. 14, 1997)WA970013 (Feb. 14, 1997)

Volume VII

None

General Wage DeterminationPublication

General wage determinations issuedunder the Davis-Bacon and related Acts,including those noted above, may befound in the Government Printing Office(GPO) document entitled ‘‘General WageDeterminations Issued Under The Davis-Bacon and Related Acts’’. Thispublication is available at each of the 50Regional Government DepositoryLibraries and many of the 1,400Government Depository Libraries acrossthe country.

The general wage determinationsissued under the Davis-Bacon andrelated Acts are available electronicallyby subscriptions to the FedWorldBulletin Board System of the NationalTechnical Information Service (NTIS) ofthe U.S. Department of Commerce at(703) 487–4630.

Hard-copy subscriptions may bepurchased from: Superintendent ofDocuments, U.S. Government PrintingOffice, Washington, DC 20402, (202)512–1800.

When ordering hard-copysubscription(s), be sure to specify theState(s) of interests, since subscriptions

may be ordered for any or all of theseven separate volumes, arranged byState. Subscriptions include an annualedition (issued in January or February)which includes all current general wagedeterminations for the States covered byeach volume. Throughout the remainderof the year, regular weekly updates aredistributed to subscribers.

Signed at Washington, DC this 9th day ofJanuary 1998.Carl J. Poleskey,Chief, Branch of Construction WageDetermination.[FR Doc. 98–949 Filed 1–15–98; 8:45 am]BILLING CODE 4510–27–M

DEPARTMENT OF LABOR

Mine Safety and Health Administration

Petitions for Modification

The following parties have filedpetitions to modify the application ofmandatory safety standards undersection 101(c) of the Federal MineSafety and Health Act of 1977.

1. Jim Walter Resources, Inc.

[Docket Nos. M–97–128–C and M–97–129–C]Jim Walter Resources, Inc., P.O. Box

133, Brookwood, Alabama 35444 hasfiled a petition to modify theapplication of 30 CFR 75.1002 (locationof trolley wires, trolley feeder wires,high-voltage cables and transformers) toits No. 5 Mine (I.D. No. 01–01322), andits No. 7 Mine (I.D. No. 01–01401) bothlocated in Tuscaloosa County, Alabama.The petitioner requests that paragraph11 of its previous petitions, docketnumbers M–85–45–C and M–85–9–C, beamended to read as follows: Wherehigh-voltage cable that moves duringnormal operation of the longwall isdamaged to the extent that any metalliccomponent of the cable is damaged, thecable shall be repaired and the outerjacket of such repair shall be vulcanizedwith flame-resistant material. Thepetitioner asserts that the proposedalternative method would provide atleast the same measure of protection aswould the mandatory standard.

2. Par L Coal Company

[Docket No. M–97–130–C]Par L Coal Company, R.D. #1, Box

56A, Hegins, Pennsylvania 17938 hasfiled a petition to modify theapplication of 30 CFR 75.364(b) (1), (4),and (5) (weekly examination) to itsTracy Vein Slope (I.D. No. 36–08685)located in Schuylkill County,Pennsylvania. Due to hazardousconditions and roof falls, certain areasof the intake haulage slope and primary


escapeway cannot be traveled safely.The petitioner proposes to examinethese areas from the gunboat/slope carwith an alternative air qualityevaluation at the section’s intake level,and to travel and thoroughly examinethese areas for hazardous conditionsonce a month. The petitioner assertsthat the proposed alternative methodwould provide at least the samemeasure of protection as would themandatory standard.



56A, Hegins, Pennsylvania 17938 hasfiled a petition to modify theapplication of 30 CFR 75.1100–2(quantity and location of firefightingequipment) to its Tracy Vein Slope (I.D.No. 36–08685) located in SchuylkillCounty, Pennsylvania. The petitionerproposes to use only portable fireextinguishers to replace existingrequirements where rock dust, watercars, and other water storage are notpractical. The petitioner asserts that theproposed alternative method wouldprovide at least the same measure ofprotection as would the mandatorystandard.



56A, Hegins, Pennsylvania 17938 hasfiled a petition to modify theapplication of 30 CFR 75.1200 (d) & (i)(mine map) to its Tracy Vein Slope (I.D.No. 36–08685) located in SchuylkillCounty, Pennsylvania. The petitionerproposes to use cross-sections instead ofcontour lines through the intake slope,at locations of rock tunnel connectionsbetween veins, and at 1,000-footintervals of advance from the intakeslope and to limit the required mappingof the mine workings above and belowto those present within 100 feet of theveins being mined except when veinsare interconnected to other veinsbeyond the 100-foot limit through rocktunnels. The petitioner asserts that theproposed alternative method wouldprovide at least the same measure ofprotection as would the mandatorystandard.



56A, Hegins, Pennsylvania 17938 hasfiled a petition to modify theapplication of 30 CFR 75–1400 (hoistingequipment; general) to its Tracy VeinSlope (I.D. No. 36–08685) located inSchuylkill County, Pennsylvania. The

petitioner proposes to use a slopeconveyance (gunboat) in transportingpersons without installing safety catchesor other no less effective devices butinstead use increased rope strength/safety factor and secondary safety ropeconnection in place of such devices.The petitioner asserts that the proposedalternative method would provide atleast the same measure of protection aswould the mandatory standard.



56A, Hegins, Pennsylvania 17938 hasfiled a petition to modify theapplication of 30 CFR 75.1202–1(a)(temporary notations, revisions, andsupplements) to its Tracy Vein Slope(I.D. No. 36–08685) located inSchuylkill County, Pennsylvania. Thepetitioner proposes to revise andsupplement mine maps annuallyinstead of every 6 months, as required,and to update maps daily by handnotations. The petitioner asserts that theproposed alternative method wouldprovide at least the same measure ofprotection as would the mandatorystandard.

7. Turris Coal Company

[Docket No. M–97–135–C]Turris Coal Company, P.O. Box 21,

Elkhart, Illinois 62634 has filed apetition to modify the application of 30CFR 75.332(a)(2) (working sections andworking places) to its Elkhart Mine (I.D.No. 11–02664) located in Logan County,Illinois. The petitioner proposes to usethe gathering arms and conveyor chainof the continuous miner to clean andload the loose rock and coal that is lefton the mine floor after the continuousminer has completed its cut while thesecond continuous miner on the highperformance unit simultaneously startsits cut; and to have the continuousminer maintain the same ventilationand water sprays required during thecut. The petitioner asserts that theproposed alternative method wouldprovide at least the same measure ofprotection as would the mandatorystandard.

8. Jim Walter Resources, Inc.

[Docket No. M–97–136–C]Jim Walter Resources, Inc. P.O. Box

133, Brookwood, Alabama 35444 hasfiled a petition to modify theapplication of 30 CFR 75.1002 (trolleywires, trolley feeder wires, high-voltagecables and transformers) to its No. 3Mine (I.D. No. 01–00758) located inJefferson County, Alabama; and its No.4 Mine (I.D. No. 01–01247) located in

Tuscaloosa County, Alabama. Thepetitioner requests that paragraph 13 ofits previous petition, docket number M–93–209–C, be amended to read asfollows: Where a high-voltage cable thatmoves during normal operation of thelongwall is damaged to the extent thatany metallic component of the cable isdamaged, the cable shall be repairedand the outer jacket of such repair shallbe vulcanized with flame-resistantmaterial. The petitioner asserts that theproposed alternative method wouldprovide at least the same measure ofprotection as would the mandatorystandard.

9. Dominion Coal Corporation

[Docket No. M–97–137–C]

Dominion Coal Corporation, P.O. Box70, Vansant, Virginia 24656 has filed apetition to modify the application of 30CFR 75.360(b)(5) (preshift examination)to its Mine No. 36 (I.D. No. 44–06759)located in Buchanan County, Virginia.The petitioner requests a variance frompreshift of seals along intake air coursessince the intake air passes by both sidesof the seals to ventilate working sectionswhere anyone is scheduled to workduring the oncoming shifts. Thepetitioner asserts that application of themandatory standard would provide atleast the same measure of protection aswould the mandatory standard.

10. Consolidation Coal Company

[Docket No. M–97–138–C]

Consolidation Coal Company, ConsolPlaza, 1800 Washington Road,Pittsburgh, Pennsylvania 15241–1421has filed a petition to modify theapplication of 30 CFR 75.1906(b)(transport of diesel fuel) to its BuchananMine (I.D. No. 44–04856) located inBuchanan County, Virginia. Thepetitioner requests a variance to permittransportation of multiple safety cans ona single vehicle for certain specifiedapplications. The petitioner proposes torefuel equipment involved in longwallmoves; to transport multiple safety cans,not to exceed six, by any one vehiclefrom the portal bottom or undergroundstorage facility to the longwall section torefuel equipment; to equip three 20-pound fire extinguishers on a vehicletransporting more than one safety canfilled with diesel fuel; to equip amanually actuated fire suppressionsystem on a vehicle transporting morethan one safety can filled with dieselfuel; to provide additional fireprotection by a mine-widecomputerized CO detection system; tosecure the safety cans in the vehicle byprotective retaining cylinders; to havethe vehicle transport only miners, and


the vehicle operator while transportingdiesel-filled safety cans; and to transferthe diesel fuel from the safety cans toequipment fuel tanks upon arrival onthe longwall section. The petitionerstates that the safety cans would not bestored on the longwall section; and thatfollowing refueling, the empty safetycans would be returned to the vehicleand transported to the surface orunderground storage facility. Thepetitioner asserts that the proposedalternative method would provide atleast the same measure of protection aswould the mandatory standard.

11. Energy West Mining Company

[Docket No. M–97–139–C]Energy West Mining Company, P.O.

Box 310, Huntington, Utah 84528 hasfiled a petition to modify theapplication of 30 CFR 75.350 (aircourses and belt haulage entries) to itsTrail Mountain Mine (I.D. No. 42–01211) located in Emery County, Utah.The petitioner requests that Item (o) ofthe Proposed Decision and Order for itspreviously granted petition, docketnumber M–94–166–C, be amended toincorporate new language specified inthis petition. The petitioner asserts thatthe proposed alternative method wouldprovide at least the same measure ofprotection as would the mandatorystandard.

12. Energy West Mining Company

[Docket No. M–97–140–C]Energy West Mining Company, P.O.

Box 310, Huntington, Utah 84528 hasfiled a petition to modify theapplication of 30 CFR 75.352 (return aircourses) to its Trail Mountain Mine (I.D.No. 42–01211) located in Emery County,Utah. The petitioner requests that Item(o) of the Proposed Decision and Orderfor its previously granted petition,docket number M–94–167–C, beamended to incorporate new languagespecified in this petition. The petitionerasserts that the proposed alternativemethod would provide at least the samemeasure of protection as would themandatory standard.

13. M & M Anthracite Coal Company

[Docket No. M–97–141–C]M & M Anthracite Coal Company, 245

2nd Street, Tremont, Pennsylvania17981 has filed a petition to modify theapplication of 30 CFR 75.1400 (hoistingequipment; general) to its Little TraceySlope (I.D. No. 36–08693) located inSchuylkill County, Pennsylvania. Thepetitioner proposes to use a slopeconveyance (gunboat) in transportingpersons without installing safety catchesor other no less effective devices but

instead use increased rope strength/safety factor and secondary safety ropeconnection in place of such devices.The petitioner asserts that the proposedalternative method would provide atleast the same measure of protection aswould the mandatory standard.

14. Elk Run Coal Company

[Docket No. M–97–142–C]Elk Run Coal Company, Box 497,

Sylvester, West Virginia 25193 has fileda petition to modify the application of30 CFR 75.503 (permissible electric faceequipment; maintenance) to its LaurelEagle Mine (I.D. No. 46–08181) locatedin Raleigh County, West Virginia; andits Black Knight II Mine (I.D. No. 46–08402) located in Boone County, WestVirginia. The petitioner proposes to usepermanently installed, spring-loadedlocking devices on mobile battery-powered machines to preventunintentional loosening of battery plugsfrom battery receptacles in order toeliminate the hazards associated withdifficult removal of padlocks duringemergency situations, instead of usingpadlocks. The petitioner asserts thatapplication of the mandatory standardwould result in a diminution of safetyto the miners. In addition, the petitionerasserts that the proposed alternativemethod would provide at least the samemeasure of protection as would themandatory standard.

15. Tg Soda Ash, Inc.

[Docket No. M–97–13–M]Tg Soda Ash, Inc., P.O. Box 100,

Granger, Wyoming 82934 has filed apetition to modify the application of 30CFR 57.22305 (approved equipment (IIImines) to its Wyoming Soda Ash TronaMine (I.D. No. 48–00639) located inSweetwater County, Wyoming. Thepetitioner proposes to operate a non-permissible pump in an area of the minethat was previously a shortwall panel.The petitioner proposes to operateapproved equipment in by the last openbreak or in areas where methane mayenter the airstream. The petitionerasserts that the proposed alternativemethod would provide at least the samemeasure of protection as would themandatory standard.

16. Getchell Gold Corporation

[Docket No. M–97–14–M]Getchell Gold Corporation, P.O. Box

220, 28 Miles N.E., Golconda, Nevada89414 has filed a petition to modify theapplication of 30 CFR 57.14130 (roll-over protective structures (ROPS) andseat belts for surface equipment) to itsGetchell Mine (I.D. No. 26–02233)located in Humboldt County, Nevada.

The petitioner requests variance fromthe use of the ROPS portion of themandatory standard for its John DeereModel 570B Grader, serial numberDW570BX5544565 and the CaterpillarD3C Dozer, serial number 6SL0153equipment used primarily underground.The petitioner asserts that using thisequipment underground withoutrollover protection would present aminimum exposure to the miners.

Request for CommentsPersons interested in these petitions

may furnish written comments. Thesecomments must be filed with the Officeof Standards, Regulations, andVariances, Mine Safety and HealthAdministration, Room 627, 4015 WilsonBoulevard, Arlington, Virginia 22203.All comments must be postmarked orreceived in that office on or beforeFebruary 17, 1998. Copies of thesepetitions are available for inspection atthat address.

Dated: January 13, 1998.Patricia W. Silvey,Director, Office of Standards, Regulations,and Variances.[FR Doc. 98–1152 Filed 1–15–98; 8:45 am]BILLING CODE 4510–43–P

DEPARTMENT OF LABOR

Occupational Safety and HealthAdministration

[Docket No. NRTL–1–93]

Wyle Laboratories, Inc., Request forChange of Recognition

AGENCY: Occupational Safety and HealthAdministration (OSHA); Labor.ACTION: Notice of change in recognitionas a Nationally Recognized TestingLaboratory (NRTL).

SUMMARY: This notice announces theAgency’s final decision on the WyleLaboratories’ request to remove arestriction in its recognition as a NRTLunder 29 CFR 1910.7.DATES: The change is effective thisJanuary 16, 1998.FOR FURTHER INFORMATION CONTACT:Bernard Pasquet, Office of VarianceDetermination, NRTL RecognitionProgram, Occupational Safety andHealth Administration, U.S. Departmentof Labor, 200 Constitution Avenue,N.W., Room N3653, Washington, D.C.20210, (202) 219–7056.


Notice of Final Decision

Wyle Laboratories, Inc. (Wyle),previously made application pursuant


to 29 CFR 1910.7, for recognition as aNationally Recognized TestingLaboratory (see 59 FR 783, 1/6/94), andwas so recognized (see 59 FR 37509,7/22/94). As a part of this notice ofrecognition, a condition was imposed byOSHA that Wyle ‘‘will not test certifyany equipment or materials for a clientwhich installs its equipment in anelectronic enclosure cabinetmanufactured or distributed by Wyle.’’This condition stemmed from theownership by Wyle of an ElectronicEnclosures Division, whichmanufactured and distributed electronicenclosures. Wyle Laboratories informedOSHA by letter dated July 15, 1997, thatit has sold its Electronic EnclosureDivision in its entirety to ElectronicEnclosures, Inc., a U.S. subsidiary of theWalker Dickson Group of Edinburgh,Scotland. Wyle also requested thatOSHA remove the previously describedcondition, and notice is hereby giventhat this condition of Wyle’s recognitionis removed. While the sale of Divisionmoots this restriction, a notice isappropriate to amend the public recordof Wyle’s recognition.

The address of the laboratory coveredby this request is: Wyle Laboratories,7800 Highway 20 West, Huntsville,Alabama 35807.

All other conditions and requirementsof Wyle’s recognition remain the same.

Since this request by Wyle does notfall within the public noticerequirements of 29 CFR 1910.7, this isthe only notice that OSHA will publishon this decision. A copy of Wyle’s July15, 1997 letter to OSHA is available forinspection and duplication at theDocket Office, Room N–2634,Occupational Safety and HealthAdministration, U.S. Department ofLabor, 200 Constitution Avenue, N.W.,Washington, D.C. 20210, (Docket No.NRTL–1–93).(Authority: 29 CFR 1910.7)

Signed at Washington, D.C. this 7th day ofJanuary 1998.Charles N. Jeffress,Assistant Secretary.[FR Doc. 98–1151 Filed 1–15–98; 8:45 am]BILLING CODE 4510–26–M

LEGAL SERVICES CORPORATION

Sunshine Act Meeting of the Board ofDirectors

TIME AND DATE: The Legal ServicesCorporation Board of Directors willmeet by teleconference on January 22,1998, at 2:00 p.m. EST.STATUS OF MEETING: Open.

LOCATION: Members of the Board willparticipate by way of telephonicconferencing equipment allowing themall to hear one another. Members of theCorporation’s staff and the public willbe able to hear and participate in themeeting by means of telephonicconferencing equipment set up for thispurpose in the Corporation’s ConferenceRoom, on the 11th floor of 750 FirstStreet, NE., Washington, DC 20002.

MATTERS TO BE CONSIDERED:1. Approval of agenda.2. Consider and act on whether to

reduce the Corporation’s budget mark.3. Consider and act on proposed

appointments to the Vice Presidenciesestablished by the Board on November15, 1997.

4. Consider and act on an individualCorporate officer’s request forpermission to receive compensationfrom a source other than theCorporation while on leave from LSC.

5. Consider and act on other business.CONTACT PERSON FOR INFORMATION:Victor M. Fortuno, General Counsel andSecretary of the Corporation, (202) 336–8810.SPECIAL NEEDS: Upon request, meetingnotices will be made available inalternate formats to accommodate visualand hearing impairments. Individualswho have a disability and need anaccommodation to attend the meetingmay notify JoAnn Gretch, at (202) 336–8810.

Dated: January 14, 1998.Victor M. Fortuno,General Counsel and Secretary of theCorporation.[FR Doc. 98–1242 Filed 1–14–98; 12:04 pm]BILLING CODE 7050–01–P

NUCLEAR REGULATORYCOMMISSION

[Docket No. 50–410]

New York State Electric & GasCorporation, Nine Mile Point NuclearStation, Unit 2; EnvironmentalAssessment and Finding of NoSignificant Impact

The U.S. Nuclear RegulatoryCommission (the Commission) isconsidering the issuance of an Orderapproving, under 10 CFR 50.80, anapplication regarding a proposedindirect transfer of control of ownershipand possessory rights held by New YorkState Electric & Gas Corporation(NYSEG) under the operating license forNine Mile Point Nuclear Station, UnitNo. 2 (NMP2). The indirect transferwould be to a holding company, not yet

named, to be created over NYSEG inaccordance with an executed‘‘Agreement Concerning theCompetitive Rate and RestructuringPlan of New York State Electric & GasCorporation.’’ NYSEG is licensed by theCommission to own and possess an 18-percent interest in NMP2, located in thetown of Scriba, Oswego County, NewYork.

Environmental Assessment

Identification of the Proposed Action

The proposed action would consent tothe indirect transfer of control of thelicense to the extent effected by NYSEGbecoming a subsidiary of the holdingcompany in connection with a proposedplan of restructuring. Under therestructuring plan, the outstandingshares of NYSEG’s common stock (otherthan shares for which appraisal rightsare properly exercised) are to beexchanged for common stock of theholding company on a share-for-sharebasis, such that the holding companywill own all of the outstanding commonstock of NYSEG. NYSEG would divestits interest in coal-fired power plants,but would continue to be an ‘‘electricutility’’ as defined in 10 CFR 50.2,engaged in the transmission,distribution and, in the case of NMP2and hydroelectric facilities, thegeneration of electricity. NYSEG wouldretain its ownership interest in NMP2and continue to be a licensee of NMP2.No direct transfer of the operatinglicense or ownership interests in thestation would result from the proposedrestructuring. The restructuring ofNYSEG would not involve any changeto either the management organizationor technical personnel of NiagaraMohawk Power Corporation (NMPC),which is responsible for operating andmaintaining NMP2 and is not involvedin the restructuring of NYSEG. Theproposed action is in accordance withNYSEG’s application dated September18, 1997, as supplemented October 20and 27, 1997.

The Need for the Proposed Action

The proposed action is required toenable NYSEG to restructure asdescribed above.

Environmental Impacts of the ProposedAction

The Commission has completed itsevaluation of the proposed corporaterestructuring and concludes that therewill be no physical or operationalchanges to NMP2 as a result. Thecorporate restructuring will not affectthe qualifications or organizationalaffiliation of the personnel who operate


and maintain the facility, as NMPC willcontinue to be responsible for themaintenance and operation of NMP2and is not involved in the restructuringof NYSEG.

The change will not increase theprobability or consequences ofaccidents, no changes are being made inthe types of any effluents that may bereleased offsite, and there is nosignificant increase in the allowableindividual or cumulative occupationalradiation exposure. Accordingly, theCommission concludes that there are nosignificant radiological environmentalimpacts associated with the proposedaction.

With regard to potentialnonradiological impacts, therestructuring would not affectnonradiological plant effluents andwould have no other environmentalimpact. Accordingly, the Commissionconcludes that there are no significantnonradiological environmental impactsassociated with the proposed action.

Alternatives to the Proposed Action

Since the Commission has concludedthere are no significant environmentaleffects that would result from theproposed action, any alternatives withequal or greater environmental impactneed not be evaluated.

As an alternative to the proposedaction, the staff considered denial of theproposed action. Denial of theapplication would result in no changein current environmental impacts. Theenvironmental impacts of the proposedaction and the alternative action aresimilar.

Alternative Use of Resources

This action does not involve the useof any resources not previouslyconsidered in the Final EnvironmentalStatements Related to the Operation ofNine Mile Point Nuclear Station, UnitNo. 2, (NUREG–1085) dated May 1985.

Agencies and Persons Contacted

In accordance with its stated policy,on January 12, 1998, the staff consultedwith the New York State official, Mr.Jack Spath, regarding the environmentalimpact of the proposed action. The Stateofficial had no comments.

Finding of No Significant Impact

Based upon the environmentalassessment, the Commission concludesthat the proposed action will not havea significant effect on the quality of thehuman environment. Accordingly, theCommission has determined not toprepare an environmental impactstatement for the proposed action.

For further details with respect to theproposed action, see NYSEG’sapplication dated September 18, assupplemented by letters dated October20 and 27, 1997, and January 6, 1998,which are available for publicinspection at the Commission’s PublicDocument Room, the Gelman Building,2120 L Street, NW., Washington, DC,and at the local public document roomlocated at the Reference and DocumentsDepartment, Penfield Library, StateUniversity of New York, Oswego, NewYork 13126.

Dated at Rockville, Maryland, this 12th dayof January 1998.

For the Nuclear Regulatory Commission.S. Singh Bajwa,Director Project Directorate I–1, Division ofReactor Projects—I/II, Office of NuclearReactor Regulation.[FR Doc. 98–1108 Filed 1–15–98; 8:45 am]BILLING CODE 7590–01–P

POSTAL SERVICE

Sunshine Act Meeting, Board ofGovernors; Notification of Items Addedto Meeting Agenda

DATE OF MEETING: January 5, 1998.STATUS: Closed.PREVIOUS ANNOUNCEMENT: 62 FR 66884,December 22, 1997.CHANGE: At its meeting on January 5,1998, the Board of Governors of theUnited States Postal Service votedunanimously to add two items to theagenda of its closed meeting held onthat date:

1. Performance Measurement.2. Facilities Redevelopment Project.

CONTACT PERSON FOR MORE INFORMATIONCONTACT: Thomas J. Koerber, Secretaryof the Board, U.S. Postal Service, 475L’Enfant Plaza, S.W. Washington, D.C.20260–1000. Telephone (202) 268–4800.Thomas J. Koerber,Secretary.[FR Doc. 98–1190 Filed 1–13–98; 4:39 pm]BILLING CODE 7710–12–M

SECURITIES AND EXCHANGECOMMISSION

[Rel. No. IC–22996; File No. 812–10604]

The Dreyfus Socially ResponsibleGrowth Fund, Inc., and The DreyfusCorporation

January 9, 1998.AGENCY: Securities and ExchangeCommission (the ‘‘SEC’’ or the‘‘Commission’’).ACTION: Notice of application for anorder under Section 6(c) of the

Investment Company Act of 1940 (the‘‘1940 Act’’) for exemptions from theprovisions of Sections 9(a), 13(a), 15(a)and 15(b) of the 1940 Act and Rules 6e–2(b)(15) and 6e–3(T)(b)(15) thereunder.

SUMMARY OF APPLICATION: Applicantsseek an order to permit shares of TheDreyfus Socially Responsible GrowthFund and shares of any otherinvestment company or portfolio thereofthat is designed to fund insuranceproducts and for which The DreyfusCorporation or any of its affiliates mayserve in the future, as investmentadviser, administrator, manager,principal underwriter, or sponsor (suchother investment companies orinvestment portfolios thereof beinghereinafter referred to, individually, asa ‘‘Future Fund’’ and collectively, as the‘‘Future Funds’’) to be sold to and heldby: (1) Separate accounts fundingvariable annuity and variable lifeinsurance contracts issued by bothaffiliated and unaffiliated life insurancecompanies; and (2) qualified pensionand retirement plans outside of theseparate account context.APPLICANTS: The Dreyfus SociallyResponsible Growth Fund, Inc. (the‘‘Fund’’) and The Dreyfus Corporation(‘‘Dreyfus’’).FILING DATE: The application was filedon April 4, 1997, amended and restatedon October 20, 1997, and amended onDecember 16, 1997.HEARING OR NOTIFICATION OF HEARING: Anorder granting the application will beissued unless the Commission orders ahearing. Interested persons may requesta hearing on this application by writingto the Secretary of the SEC and servingApplicants with a copy of the request,in person or by mail. Hearing requestsmust be received by the Commission by5:30 p.m. on February 3, 1998, andaccompanied by proof of service on theApplicants in the form of an affidavit or,for lawyers, a certificate of service.Hearing requests should state the natureof the interest, the reason for the requestand the issues contested. Persons mayrequest notification of the date of ahearing by writing to the Secretary ofthe SEC.ADDRESSES: Secretary, SEC, 450 FifthStreet, N.W., Washington, D.C. 20549.Applicants, 200 Park Avenue, NewYork, NY 10166.FOR FURTHER INFORMATION CONTACT:Zandra Y Bailes, Senior Counsel, orMark C. Amorosi, Branch Chief,Division of Investment Management,Office of Insurance Products, at (202)942–0670.SUPPLEMENTARY INFORMATION: Followingis a summary of the application. The


1 The exemptions provided by Rule 6e–2 also areavailable to the investment adviser, principalunderwriter, and sponsor or depositor of theseparate account.

2 The exemptions provided by Rule 6e–3(T) alsoare available to the investment adviser, principalunderwriter, and sponsor or depositor of theseparate account.

complete application is available for afee from the Public Reference Branch ofthe SEC, 450 Fifth Street, N.W.,Washington, D.C. 20549 (tel. (202) 942–8090).

Applicants’ Representations1. The Fund is a Maryland

corporation and is registered under the1940 Act as an open-end diversifiedmanagement investment company. Itsauthorized capital stock presentlyconsists of one class of stock, but in thefuture the Fund may create one or moreadditional classes of stock, eachcorresponding to a portfolio ofsecurities.

2. Dreyfus, an investment adviserregistered under the InvestmentAdvisers Act of 1940, is the investmentadviser for the Fund. NCM CapitalManagement Group, Inc. is the sub-investment adviser for the Fund andprovides day-to-day management of theFund’s portfolio.

3. The Fund currently offers its sharesto insurance companies as theinvestment vehicle for their separateaccounts that fund variable annuitycontracts and intends to offer its sharesto affiliated and unaffiliated insurancecompanies as the investment vehicle fortheir separate accounts that fundvariable life insurance contracts(together, variable annuity contracts andvariable life insurance contracts arereferred to herein as ‘‘VariableContracts’’). Separate accounts owningshares of the Fund and their insurancecompany depositors are referred toherein as ‘‘Participating SeparateAccounts’’ and ‘‘Participating InsuranceCompanies,’’ respectively.

4. Each Participating InsuranceCompany will enter into a participationagreement with the Fund on behalf of itsParticipating Separate Account. The roleof the Fund under this agreement,insofar as the federal securities laws areapplicable, will consist of offeringshares to the Participating SeparateAccounts and complying with anyconditions that the Commission mayimpose upon granting the orderrequested in the application.

5. Applicants also propose that theFund offer and sell its shares directly toqualified pension and retirement plans(‘‘Qualified Plans’’ or ‘‘Plans’’) outsideof the separate account context.

Applicants’ Legal Analysis1. Section 6(c) of the 1940 Act

authorizes the Commission, by orderupon application, to conditionally orunconditionally exempt any person,security or transaction, or any class orclasses of persons, securities ortransactions from any provisions of the

1940 Act or the rules or regulationsthereunder, if and to the extent thatsuch exemption is necessary orappropriate in the public interest andconsistent with the protection ofinvestors and the purposes fairlyintended by the policy and provisions ofthe 1940 Act.

2. In connection with the funding ofscheduled premium variable lifeinsurance contracts issued through aseparate account registered under the1940 Act as a unit investment trust,Rule 6e–2(b)(15) under the 1940 Actprovides partial exemptions fromSections 9(a), 13(a), 15(a) and 15(b) ofthe 1940 Act. The exemptions grantedby Rule 6e–2(b)(15) are available,however, only where the managementinvestment company underlying theseparate account (‘‘underlying fund’’)offers its shares ‘‘exclusively to variablelife insurance separate accounts of thelife insurer, or of any affiliated lifeinsurance company’’ (emphasissupplied).1 Therefore, the relief grantedby Rule 6e–2(b)(15) is not available withrespect to a scheduled premium variablelife insurance separate account thatowns shares of an underlying fund thatalso offers its shares to a variableannuity or a flexible premium variablelife insurance separate account of thesame company or of any affiliated lifeinsurance company. The use of acommon management investmentcompany as the underlying investmentmedium for both variable annuity andvariable life insurance separate accountsof the same insurance company or ofany affiliated life insurance company isreferred to herein as ‘‘mixed funding.’’In addition, the relief granted by Rule6e–2(b)(15) is not available if shares ofthe underlying management investmentcompany are offered to variable annuityor variable life insurance separateaccounts of unaffiliated life insurancecompanies. The use of a commonmanagement investment company as theunderlying investment medium forseparate accounts of unaffiliated lifeinsurance companies is referred toherein as ‘‘shared funding.’’Furthermore, Rule 6e–2(b)(15) does notcontemplate that shares of theunderlying fund might also be sold toQualified Plans.

3. In connection with the funding offlexible premium variable life insurancecontracts issues through a separateaccount registered under the 1940 Actas a unit investment trust, Rule 6e–3(T)(b)(15) provides partial exemptions

from Sections 9(a), 13(a), 15(a) and 15(b)of the 1940 Act. These exemptions,however, are available only where theseparate account’s underlying fundoffers its shares ‘‘exclusively to separateaccounts of the life insurer, or of anyaffiliated life insurance company,offering either scheduled contracts orflexible contracts, or both; or which alsooffer their shares to variable annuityseparate accounts of the life insurer orof an affiliated life insurance company’’(emphasis supplied).2 Therefore, Rule6e–3(T) permits mixed funding withrespect to a flexible premium variablelife insurance separate account but doesnot permit shared funding. Also, Rule6e–3(T) does not contemplate the sale ofshares of the underlying fund toQualified Plans.

4. Applicants state that changes in thefederal tax law have created theopportunity for the Fund tosubstantially increase its net assets byselling shares to Qualified Plans.Section 817(h) of the Internal RevenueCode of 1986, as amended (the ‘‘Code’’),imposes certain diversificationstandards on the assets underlyingVariable Contracts. The Code providesthat Variable Contracts will not betreated as annuity contracts or lifeinsurance contracts, as the case may be,for any period (or any subsequentperiod) for which the underlying assetsare not, in accordance with regulationsissued by the Treasury Department (the‘‘Regulations’’), adequately diversified.On March 2, 1989, the TreasuryDepartment issued regulations (Treas.Reg. 1.817–5) which established specificdiversification requirements forinvestment portfolios underlyingVariable Contracts. The regulationsgenerally provide that, in order to meetthese diversification requirements, all ofthe beneficial interests in the underlyinginvestment company must be held bythe segregated asset accounts of one ormore life insurance companies.Notwithstanding this, the Regulationsalso contain an exception to thisrequirement that permits trustees of aQualified Plan to hold shares of aninvestment company, the shares ofwhich are also held by insurancecompany segregated asset accounts,without adversely affecting the status ofthe investment company as anadequately diversified underlyinginvestment for Variable Contracts issuedthrough such segregated asset accounts(Treas. Reg. 1.817–5(f)(3)(iii)).


5. Applicants note that if the Fundand Future Funds were to sell theirshares only to Qualified Plans,exemptive relief under Rule 6e–2 andRule 6e–3(T) would not be necessary.The relief provided under Rule 6e–2(b)(15) and Rule 6e–3(T)(b)(15) doesnot relate to qualified pension andretirement plans or to a registeredinvestment company’s ability to sell itsshares to such plans.

6. Applicants also note that thepromulgation of Rules 6e–2(b)(15) and6e–3(T)(b)(15) preceded the issuance ofthe Regulations. Thus, the sale of sharesto both separate accounts and QualifiedPlans was not contemplated at the timeof the adoption of Rules 6e–2(b)(15) and6e–3(T)(b)(15).

7. Section 9(a)(3) of the 1940 Actprovides that it is unlawful for anycompany to serve as investment adviseror principal underwriter of anyregistered open-end investmentcompany if an affiliated person of thatcompany is subject to a disqualificationenumerated in Section 9(a)(1) or (2) ofthe 1940 Act. Rules 6e–2(b)(15)(i) and(ii) and 6e–3(T)(b)(15)(i) and (ii) provideexemptions from Section 9(a) undercertain circumstances, subject to thelimitations on mixed and sharedfunding. These exemptions limit theapplication of the eligibility restrictionsto affiliated individuals or companiesthat directly participate in themanagement of the underlying fund.

8. Applicants state that the partialrelief granted in Rules 6e–2(b)(15) and6e–3(T)(b)(15) from the requirements ofSection 9 of the 1940 Act limits, ineffect, the amount of monitoring of aninsurer’s personnel that wouldotherwise be necessary to ensurecompliance with Section 9 to that whichis appropriate in light of the policy andpurposes of Section 9. Applicants statethat those Rules recognize that it is notnecessary for the protection of investorsor the purposes fairly intended by thepolicy and provisions of the 1940 Act toapply the provisions of Section 9(a) tothe many individuals involved in aninsurance company complex, most ofwhom typically will have noinvolvement in matters pertaining toinvestment companies funding theseparate accounts.

9. Applicants state that neither theParticipating Insurance Companies northe Qualified Plans are expected to playany role in the management oradministration of the Fund or FutureFunds. Those individuals whoparticipate in the management oradministration of the Fund and FutureFunds will remain the same regardlessof which separate accounts, insurancecompanies or Qualified Plans use such

Funds. Applicants maintain thatapplying the requirements of Section9(a) because of investment by otherinsurers’ separate accounts andQualified Plans would be unjustifiedand would not serve any regulatorypurpose. Moreover, Qualified Plans,unlike separate accounts, are notthemselves investment companies, andtherefore are not subject to Section 9 ofthe 1940 Act. Furthermore, it is notanticipated that a Qualified Plan wouldbe deemed to be an affiliated person ofthe Fund or any Future Fund by virtueof its shareholders.

10. Applicants state that Rules 6e–2(b)(15)(iii) and 6e–3(T)(b)(15)(iii) underthe 1940 Act provide exemptions fromthe pass-through voting requirementwith respect to several significantmatters, assuming the limitations onmixed and shared funding are observed.More specifically, Rules 6e–2(b)(15)(iii)(A) and 6e–3(T)(b)(15)(iii)(A)provide that the insurance companymay disregard the voting instructions ofits contractowners with respect to theinvestments of an underlying fund orany contract between a fund and itsinvestment adviser, when required to doso by an insurance regulatory authorityand subject to the provisions ofparagraphs (b)(5)(i) and (b)(7)(ii)(A) ofthe Rules. In addition, Rules 6e–2(b)(15)(iii)(B) and 6e–3(T)(b)(15)(iii)(A)(2) provide that theinsurance company may disregardcontractowner’s voting instructions ifthe contractowners initiate any changein such company’s investment policies,principal underwriter or any investmentadviser (provided that disregarding suchvoting instructions is reasonable andsubject to the other provisions ofparagraphs (b)(5)(ii) and (b)(7)(ii) (B)and (C) of the Rules).

11. Applicants assert that QualifiedPlans, which are not registered asinvestment companies under the 1940Act, have no requirement to passthrough voting rights to planparticipants. Indeed, to the contrary,applicable law expressly reserves votingrights associated with Plan assets tocertain specified persons. Under Section403(a) of the Employee RetirementIncome Security Act (‘‘ERISA’’), sharesof a fund sold to a Qualified Plan mustbe held by the trustees of the Plan.Section 403(a) also provides that thetrustee(s) must have exclusive authorityand discretion to manage and controlthe Plan with two exceptions: (a) Whenthe Plan expressly provides that thetrustees are subject to the direction of anamed fiduciary who is not a trustee, inwhich case the trustees are subject toproper directions made in accordancewith the terms of the Plan and not

contrary to ERISA, and (b) when theauthority to manage, acquire or disposeof assets of the Plan is delegated to oneor more investment managers pursuantto Section 402(c)(3) of ERISA. Unlessone of the above two exceptions statedin Section 403(a) applies, Plan trusteeshave the exclusive authority andresponsibility for voting proxies.

12. Where a named fiduciary to aQualified Plan appoints an investmentmanager, the investment manager hasthe responsibility to vote the shares heldunless the right to vote such shares isreserved to the trustees or the namedfiduciary. The Qualified Plans may havetheir trustee(s) or other fiduciariesexercise voting rights attributable toinvestment securities held by theQualified Plans in their discretion.Some of the Qualified Plans, however,may provide for the trustee(s), aninvestment adviser (or advisers) oranother named fiduciary to exercisevoting rights in accordance withinstructions from participants.

13. Where a Qualified Plan does notprovide participants with the right togive voting instructions, Applicantssubmit that there is no potential formaterial irreconcilable conflicts ofinterest between or among variablecontract holders and Plan investors withrespect to voting of the respectiveFund’s shares. Accordingly, unlike thecase with insurance company separateaccounts, the issue of the resolution ofmaterial irreconcilable conflicts withrespect to voting is not present withrespect to such Qualified Plans since theQualified Plans are not entitled to pass-through voting privileges.

14. Even if a Qualified Plan were tohold a controlling interest in the Fundor a Future Fund, Applicants argue thatsuch control would not disadvantageother investors in such Fund to anygreater extent than is the case when anyinstitutional shareholder holds amajority of the voting securities of anyopen-end management investmentcompany. In this regard, Applicantssubmit that investment in the Fund ora Future Fund by a Plan will not createany of the voting complicationsoccasioned by mixed funding or sharedfunding. Unlike mixed or sharedfunding, Plan investor voting rightscannot be frustrated by veto rights ofinsurers or state regulators.

15. Where a Plan providesparticipants with the right to give votinginstructions, Applicants see no reasonto believe that participants in QualifiedPlans generally or those in a particularPlan, either as a single group or incombination with participants in otherQualified Plans, would vote in a mannerthat would disadvantage variable


contract holders. The purchase of sharesof the Fund or Future Funds byQualified Plans that provide votingrights does not present anycomplications not otherwise occasionedby mixed or shared funding.

16. Applicants submit that theprohibitions on mixed and sharedfunding might reflect some concernwith possible divergent interests amongdifferent classes of investors. Applicantsassert that shared funding does notpresent any issues that do not alreadyexist where a single insurance companyis licensed to do business in several orall states. Where insurers are domiciledin different states, it is possible that theparticular state insurance regulatorybody in a state which one insurancecompany is domiciled could requireaction that is inconsistent with therequirements of insurance regulators ofother states in which other insurancecompanies are domiciled. The fact thata single insurer and its affiliates offertheir insurance products in differentstates does not create a significantlydifferent or enlarged problem.

17. Applicants submit that sharedfunding is, in this respect, no differentthan the use of the same investmentcompany as the funding vehicle foraffiliated insurers, which Rules 6e–2(b)(15) and 6e–3(T)(b)(15) permit undervarious circumstances. Affiliatedinsurers may be domiciled in differentstates and be subject to differing statelaw requirements. Affiliation does notreduce the potential, if any exists, fordifferences in state regulatoryrequirements. In any event, Applicantssubmit that the conditions set forth inthe application and included in thisnotice are designed to safeguard againstand provide procedures for resolvingany adverse effects that differencesamong state regulatory requirementsmay produce. For instance, if aparticular state insurance regulator’sdecision conflicts with the majority ofother state regulators, the affectedinsurer may be required to withdraw itsParticipating Separate Account’sinvestment in the relevant Fund.

18. Applicants assert that the right ofan insurance company under Rules 6e–2(b)(15) and 6e–3(T)(b)(15) to disregardcontractowners’ voting instructions doesnot raise any issues different from thoseraised by the authority of stateinsurance administrators over separateaccounts. Under Rules 6e–2(b)(15) and6e–3(T)(b)(15), an insurer can disregardcontractowner voting instructions onlywith respect to certain specified itemsand under certain specified conditions.Affiliation does not eliminate thepotential, if any exits, for divergentjudgments as to the advisability or

legality of a change in investmentpolicies, principal underwriter, orinvestment adviser initiated bycontractowners. The potential fordisagreement is limited by therequirements in Rules 6e–2 and 6e–3(T)that an insurance company’s disregardof voting instructions be reasonable andbased on specific good faithdeterminations.

19. A particular insurer’s disregard ofvoting instructions nevertheless couldconflict with the majority ofcontractowner voting instructions. Theinsurer’s action could arguably bedifferent from the determination of allor some of the other insurers (includingaffiliated insurers) that thecontractowners’ voting instructionsshould prevail, and could eitherpreclude a majority vote approving thechange or could represent a minorityview. If the insurer’s judgmentrepresents a minority position or wouldpreclude a majority vote, the insurermay be required, at the election of therelevant Fund to withdraw itsParticipating Separate Account’sinvestment in such Fund, and no chargeor penalty would be imposed as a resultof such withdrawal.

20. Applicants submit that there is noreason why the investment policies ofthe Fund or any Future Fund would orshould be materially different from whatthose policies would or should be if theFunds funded only annuity contracts oronly scheduled or flexible premium lifecontracts. In this regard, Applicantsnote that each type of insurance productis designed as a long-term investmentprogram. In addition, Applicantsrepresent that neither the Fund or anyFuture Fund will be managed to favoror disfavor any particular insurer ortype of insurance product.

21. Furthermore, applicants submitthat no one investment strategy can beidentified as appropriate to a particularinsurance product. Each pool of variableannuity and variable life insurancecontractowners is composed ofindividuals of diverse financial status,age, insurance and investment goals. Afund supporting even one type ofinsurance product must accommodatethose factors in order to attract andretain purchasers.

22. Applicants do not believe that thesale of shares of the Fund and FutureFunds to Qualified Plans will increasethe potential for material irreconcilableconflicts of interest between or amongdifferent types of investors. Inparticular, Applicants see very littlepotential for such conflicts beyond thatwhich would otherwise exist betweenvariable annuity and variable lifeinsurance contractowners. Applicants

note that Section 817(h) of the Coderequires that the investments made byvariable annuity and variable lifeinsurance separate accounts be‘‘adequately diversified.’’ TreasuryDepartment Regulations issued underSection 817(h) provide that, in order tomeet the statutory diversificationrequirements, all of the beneficialinterests in the investment companymust be held by the segregated assetaccounts of one or more insurancecompanies. However, the Regulationspecifically permits ‘‘qualified pensionor retirement plans’’ and separateaccounts to invest in the sameunderlying fund. For this reason,Applicants have concluded that neitherthe Code, nor the Treasury Regulationsor Revenue Rulings thereunder, presentany inherent conflicts of interest ifQualified Plans, variable annuityseparate accounts, and variable lifeinsurance separate accounts all invest inthe same underlying fund.

23. Applicants note that while thereare differences in the manner in whichdistributions from Variable Contractsand Qualified Plans are taxed, thesedifferences will have no impact on theFund and Future Funds. Whendistributions are to be made, and aSeparate Account or Qualified Plan isunable to net purchase payments tomake the distributions, the SeparateAccount and Qualified Plan will redeemshares of the Fund and the FutureFunds at their respective net asset value.A Qualified Plan will makedistributions in accordance with theterms of the Plan.

24. Applicants state that they do notsee any greater potential for materialirreconcilable conflicts arising betweenthe interests of participants underQualified Plans and contractowners ofParticipating Separate Accounts frompossible future changes in the federaltax laws than that which already existbetween variable annuitycontractowners and variable lifeinsurance contractowners.

25. With respect to voting rights,Applicants state that it is possible toprovide an equitable means of givingvoting rights to Participating SeparateAccount contractowners and toQualified Plans. Applicants representthat the Fund and Future Funds willinform each shareholder, including eachParticipating Insurance Company andQualified Plan, of information necessaryfor the shareholder meeting, includingtheir respective share of ownership inthe relevant Fund. Each ParticipatingInsurance Company will then solicitvoting instructions in accordance withRules 6e–2 and 6e–3(T), as applicable,and its participation agreement with the


relevant Fund. Shares held by QualifiedPlans will be voted in accordance withapplicable law. The voting rightsprovided to Qualified Plans with respectto shares of the Fund and Future Fundswould be no different from the votingrights that are provided to QualifiedPlans with respect to shares of fundssold to the general public.

26. Applicants submit that there areno conflicts between the contractownersof the Participating Separate Accountsand Qualified Plan participants withrespect to the state insurancecommissioners’ veto powers overinvestment objectives. State insurancecommissioners have been given the vetopower in recognition of the fact thatinsurance companies usually cannotsimply redeem their separate accountsout of one fund and invest in another.Generally, time-consuming complextransactions must be undertaken toaccomplish such redemptions andtransfers. Conversely, the trustees ofQualified Plans or the participants inparticipant-directed Qualified Plans canmake the decision quickly and redeemtheir interest in the Fund and FutureFunds and reinvest in another fundingvehicle without the same regulatoryimpediments faced by separate accountsor, as is the case with most QualifiedPlans, even hold cash pending suitableinvestment. Based on the foregoing,Applicants have concluded that even ifthere should arise issues where theinterests of contractowners and theinterests of Qualified Plans are inconflict, the issues can be almostimmediately resolved since the trusteesof (or participants in) the QualifiedPlans can, on their own, redeem theshares out of the Fund and FutureFunds.

27. Applicants assert that variousfactors have limited the number ofinsurance companies that offer variableannuities and variable life insurancecontracts. These factors include thecosts of organizing and operating afunding medium, the lack of expertisewith respect to investment management(principally with respect to stock andmoney market investments) and the lackof name recognition by the public ofcertain insurers as investment experts.In particular, some smaller lifeinsurance companies may not find iteconomically feasible, or within theirinvestment or administrative expertise,to enter the Variable Contract businesson their own.

28. Applicants contend that the use ofthe Fund and Future Funds as commoninvestment vehicles for VariableContracts would reduce or alleviatethese concerns. Participating InsuranceCompanies will benefit not only from

the investment and administrativeexpertise of the Fund’s and FutureFunds’ investment adviser, but alsofrom the cost efficiencies andinvestment flexibility afforded by a largepool of funds. Therefore, making theFund and Future Funds available formixed and shared funding mayencourage more insurance companies tooffer Variable Contracts, andaccordingly could result in increasedcompetition with respect to bothVariable Contract design and pricing,which can be expected to result in moreproduct variation and lower charges.Applicants state that mixed and sharedfunding would benefit variablecontractowners by eliminating asignificant portion of the costs ofestablishing and administering separatefunds. Applicants also assert that thesale of shares of the Fund and FutureFunds to Qualified Plans in addition toseparate accounts of ParticipatingInsurance Companies will result in anincreased amount of assets available forinvestment by such Funds. This maybenefit variable contractowners bypromoting economies of scale, bypermitting increased safety ofinvestments through greaterdiversification, and by making theaddition of new portfolios more feasible.

Applicants’ ConditionsApplicants have consented to the

following conditions:1. A majority of the Board of each

Fund shall consist of persons who arenot ‘‘interested persons’’ of such Fund,as defined by Section 2(a)(19) of the1940 Act, and the Rules thereunder, asmodified by any applicable orders of theCommission, except that if thiscondition is not met by reason of thedeath, disqualification or bona fideresignation of any Trustee or Director,then the operation of this conditionshall be suspended (a) for a period of 45days if the vacancy or vacancies may befilled by the Board; (b) for a period of60 days if a vote of shareholders isrequired to fill the vacancy or vacancies;or (c) for such longer period as theCommission may prescribe by orderupon application.

2. Each Board will monitor its Fundfor the existence of any materialirreconcilable conflict among theinterests of the contract holders of allParticipating Separate Accounts and ofparticipants of Qualified Plans investingin such Fund and determine whataction, if any, should be taken inresponse to such conflicts. A materialirreconcilable conflict may arise for avariety of reasons, including: (a) Anaction by any state insurance regulatoryauthority; (b) a change in applicable

federal or state insurance, tax orsecurities laws or regulations, or apublic ruling, private letter ruling, no-action or interpretive letter, or anysimilar action by insurance, tax orsecurities regulatory authorities; (c) anadministrative or judicial decision inany relevant proceeding; (d) the mannerin which the investments of such Fundare being managed; (e) a difference invoting instructions given by variableannuity contractowners and variable lifeinsurance contractowners; (f) a decisionby a Participating Insurance Company todisregard the voting instructions ofcontractowners; or (g) if applicable, adecision by a Qualified Plan todisregard the voting instructions of planparticipants.

3. The Participating InsuranceCompanies, Dreyfus, and any QualifiedPlan that executes a fund participationagreement upon becoming an owner of10% or more of the assets of the Fundor a Future Fund (the ‘‘Participants’’)shall report any potential or existingconflicts to the applicable Board.Participants will be responsible forassisting the Board in carrying out itsresponsibilities under these conditionsby providing the Board with allinformation reasonably necessary for theBoard to consider any issues raised.This responsibility includes, but is notlimited to, an obligation by eachParticipating Insurance Company toinform the Board whenever it hasdetermined to disregard contractownersvoting instructions, and, if pass-throughvoting is applicable, an obligation byeach Participant to inform the Boardwhenever it has determined to disregardplan participant voting instructions. Theresponsibility to report such conflictsand information, and to assist the Boardwill be contractual obligations of allParticipants under their agreementsgoverning participation in the Fund andFuture Funds, and such agreements, inthe case of Participating InsuranceCompanies, shall provide that suchresponsibilities will be carried out witha view only to the interests of thecontractowners. The responsibility toreport such information and conflicts,and to assist the Board, also will becontractual obligations of allParticipants, and such agreements willprovide that their responsibilities willbe carried out with a view only to theinterests of plan participants.

4. If it is determined by a majority ofa Board, or a majority of its disinterestedmembers, that a material irreconcilableconflict exists, the relevant Participantsshall, at their expense and to the extentreasonably practicable (as determinedby a majority of the disinterestedmembers of the Board), take whatever


steps are necessary to eliminate thematerial irreconcilable conflict,including: (1) Withdrawing the assetsallocable to some or all of theParticipating Separate Accounts fromthe relevant Fund and reinvesting suchassets in a different investment medium,which may include another portfolio ofsuch Fund, if any, or, in the case ofParticipating Insurance Companies,submitting the question whether suchsegregation should be implemented to avote of all affected contractowners and,as appropriate, segregating the assets ofany appropriate group (i.e., annuitycontractowners, life insurancecontractowners or VariableContractowners of one or moreParticipant) that votes in favor of suchsegregation, or offering to the affectedcontractowners the option of makingsuch a charge; and (2) establishing anew registered management investmentcompany or managed separate account.If a material irreconcilable conflictarises because of a ParticipatingInsurance Company’s decision todisregard contractowners’ votinginstructions and that decisionrepresents a minority position or wouldpreclude a majority vote, suchParticipant may be required, at therelevant Fund’s election, to withdraw itsseparate account’s investment in suchFund and no charge or penalty will beimposed as a result of such withdrawal.If a material irreconcilable conflictarises because of a Qualified Plan’sdecision to disregard Plan participantvoting instructions, if applicable, andthat decision represent a minorityposition or would preclude a majorityvote, the Plan may be required, at theelection of the Fund, to withdraw itsinvestment in such Fund, and no chargeor penalty will be imposed as a resultof such withdrawal.

The responsibility to take remedialaction in the event of a determination bya Board of a material irreconcilableconflict, and to bear the cost of suchremedial action, will be a contractualobligation of all Participants under theiragreements governing participation inthe relevant Fund and thisresponsibility, in the case ofParticipating Insurance Companies, willbe carried out with a view only to theinterest of contractowners and, in thecase of Qualified Plans, will be carriedout with a view only to the interests ofplan participants. A majority of thedisinterested members of the Boardshall determine whether any proposedaction adequately remedies any materialirreconcilable conflict, but in no eventwill the Fund, any Future Fund orDreyfus be required to establish a new

funding medium for any VariableContract. No Participating InsuranceCompany will be required to establish anew funding medium for any VariableContracts if an offer to do so has beendeclined by the vote of a majority ofcontractowners materially and adverselyaffected by the irreconcilable materialconflict. Further, no Qualified Plan willbe required by this condition toestablish a new funding medium for thePlan if: (a) A majority of the planparticipants materially and adverselyaffected by the irreconcilable materialconflict vote to decline such offer, or (b)pursuant to documents governing theQualified Plan, the Plan makes eachdecision without a plan participantvote.

5. The determination by a Board ofthe existence of a material irreconcilableconflict and its implications shall bepromptly made known in writing to allParticipants.

6. Participating Insurance Companieswill provide pass-through votingprivileges to all contractowners to theextent that the Commission continues tointerpret the 1940 Act to require pass-through voting for contractowners.Accordingly, such Participants, whereapplicable, will vote shares of theapplicable Fund held in its ParticipatingSeparate Accounts in a mannerconsistent with voting instructionstimely received from contractowners.Participating Insurance Companies shallbe responsible for assuring that eachParticipating Separate Accountinvesting in a Fund calculates votingprivileges in a manner consistent withother Participants. The obligation tocalculate voting privileges as providedin the application shall be a contractualobligation of all Participating InsuranceCompanies under their agreementgoverning participation in a Fund. EachParticipating Insurance Company willvote shares for which it has not receivedtimely voting instructions as well asshares it owns in the same proportion asit votes those shares for which it hasreceived voting instructions. EachQualified Plan will vote as required byapplicable law government Plandocuments.

7. All reports received by a Boardwith respect to potential or existingconflicts and all Board action withregard to (a) determination of theexistence of a conflict, (b) notification ofParticipants of the existence of a conflictand (c) determination of whether anyproposed action adequately remedies aconflict, will be properly recorded inthe minutes of the meetings of the Boardor other appropriate records, and suchminutes or other records will be made

available to the Commission uponrequest.

8. The Fund and each Future Fundwill notify all Participants that separateaccount prospectus disclosure regardingpotential risks of mixed and sharedfunding may be appropriate. Each Fundshall disclose in its prospectus that: (a)Shares of such Fund may be offered toinsurance company separate accounts ofboth annuity and life insurance variablecontracts, and to Qualified Plans; (b)due to differences of tax treatment andother considerations, the interest ofvarious contractowners participating insuch Fund and the interest of QualifiedPlans investing in such Fund mayconflict; and (c) the Board will monitorsuch Fund for any material conflicts anddetermine what action, if any, should betaken.

9. The Fund and each Future Fundwill comply with all provisions of the1940 Act requiring voting byshareholders (which, for these purposes,shall be the persons having a votinginterest in the shares of such Fund),and, in particular, each Fund will eitherprovide for annual meetings (except tothe extent that the Commission mayinterpret Section 16 of the 1940 Act notto require such meetings) or complywith Section 16(c) of the 1940 Act(although the Fund and Future Fundsare or will not be the type of trustdescribed in Section 16(c) of the 1940Act), as well as with Section 16(a), and,if applicable, Section 16(b) of the 1940Act. Further, each Fund will act inaccordance with the Commission’sinterpretation of the requirements ofSection 16(a) with respect to periodicelections of directors (or trustees) andwith whatever rules the Commissionmay promulgate with respect thereto.

10. If and to the extent Rule 6e–2 or6e–3(T) is amended, or proposed Rule6e–3 is adopted, to provide exemptiverelief from any provision of the 1940Act or the rules promulgated under the1940 Act with respect to mixed andshared funding on terms and conditionsmaterially different from anyexemptions granted in the orderrequested in the application, then theFund and each Future Fund and/or theParticipants, as appropriate, shall takesuch steps as may be necessary tocomply with Rule 6e–2 or 6e–3(T), asamended, or Rule 6e–3, as adopted, tothe extent such rules are applicable.

11. The Participants shall at leastannually submit to the Board of eachFund such reports, materials or data asa Board may reasonably request so thatthe Board may fully carry outobligations imposed upon them by theconditions contained in the application.Such reports, materials and data shall be


1 15 U.S.C. § 78s(b)(1).

2 See Securities Exchange Act Release No.37619A (September 6, 1996), 61 FR 48290(September 12, 1997) (‘‘SEC Limit Order AdoptingRelease’’).

3 See letters from Richard R. Lindsey, Director,Division of Market Regulation, SEC, to Mr. RichardGrasso, Chairman and Chief Executive Officer,NYSE, dated November 22, 1996; to Mr. Richard G.Ketchum, Chief Operating Officer, NASD, datedJanuary 3, 1997; and to Mr. James E Buck, SeniorVice President and Secretary, NYSE, dated January17, 1997.

submitted more frequently if deemedappropriate by the applicable Board.The obligations of the Participants toprovide these reports, materials anddata to a Board when it so reasonablyrequests, shall be a contractualobligation of all Participants under theiragreement governing participation inthe Fund and Future Funds.

12. Neither the Fund nor any FutureFund will accept a purchase order froma Plan if such purchase would make thePlan shareholder or owner of 10% ormore of the assets of such Fund unlesssuch Plan executes a fund participationagreement with the relevant Fund,including the conditions set forth hereinto the extent applicable. A Planshareholder will execute an applicationcontaining an acknowledgment of thiscondition at the time of its initialpurchase of shares of such Fund.

ConclusionFor the reasons summarized above,

Applicants assert that the requestedexemptions are appropriate in thepublic interest and consistent with theprotection of investors and the purposesfairly intended by the policy andprovisions of the 1940 Act.

For the Commission, by the Division ofInvestment Management, pursuant todelegated authority.Jonathan G. Katz,Secretary.[FR Doc. 98–1113 Filed 1–15–98; 8:45 am]BILLING CODE 8010–01–M


[Release No. 34–39540; File No. SR–CHX–97–26]

Self-Regulatory Organizations; Noticeof Filing and Order GrantingAccelerated Approval of ProposedRule Change by the Chicago StockExchange, Inc. Relating to the Displayof Limit Orders

January 12, 1998.Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934(‘‘Act’’),1 notice is hereby given that onOctober 1, 1997, the Chicago StockExchange, Incorporated (‘‘CHX’’ or‘‘Exchange’’) filed with the Securitiesand Exchange Commission(‘‘Commission’’ or ‘‘SEC’’) the proposedrule change, as described in Items I andII below, which Items have beenprepared by the Exchange. TheCommission is publishing this notice tosolicit comments on the proposed rulechange from interested persons and to

grant accelerated approval of theproposed rule change.

I. Self-Regulatory Organization’sStatement of the Terms of Substance ofthe Proposed Rule Change

The Exchange is proposing to amendArticle XX, Rule 7 to expressly providefor the display of customer limit ordersas contained in Rule 11Ac1–4 under theAct and other limit orders. Proposednew language is italicized.

Article XX

Rule 7

. . . Interpretation and Policies

.05 Quotation sizes, unlessotherwise specified, shall be assumed tobe for 100 shares. Where bids or offersare made at the same price the aggregatequotation size of such equal bids oroffers shall be inputted into thequotation system. Such aggregate sizesshall remain firm until withdrawnunless exempted under one of theconditions specified in paragraphs .06–.09 of this Rule. With respect to limitorders received by specialists, eachspecialist shall publish immediately(i.e., as soon as practicable, whichunder normal market conditions meansno later than 30 seconds from time ofreceipt) a bid or offer that reflects:

(i) the price and full size of eachlimit order that is at a price that wouldimprove the specialist’s bid or offer insuch security; and

(ii) the full size of each limit orderthat is priced equal to the specialist’sbid or offer for such security;

The requirements with respect tospecialists’ display of limit orders shallnot apply to any limit order that is:

(i) executed upon receipt of theorder;

(ii) placed by a person or entity whoexpressly requests, either at the time theorder is placed or prior thereto pursuantto an individually negotiated agreementwith respect to such person’s orders,that the order not be displayed;

(iii) and odd-lot order;(iv) delivered immediately upon

receipt to an exchange or association-sponsored system or an electroniccommunications network that complieswith the requirements of Securities andExchange Commission Rule 11Ac1–1(c)(5) under the Securities ExchangeAct with respect to that order;

(v) delivered immediately uponreceipt to another exchange member orover-the-counter market maker thatcomplies with the requirements ofSecurities and Exchange CommissionRule 11Ac1–4 under the SecuritiesExchange Act with respect to that order;or

(vi) an ‘‘all or none’’ order.

II. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

In its filing with the Commission, theExchange included statementsconcerning the purpose of and basis forthe proposed rule change and discussedany comments it received on theproposed rule change. The text of thesestatements may be examined at theplaces specified in Item III below. TheExchange has prepared summaries, setforth in sections A, B, and C below, ofthe most significant aspects of suchstatements.

A. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

1. Purpose

The Commission has recently adoptedRule 11Ac1–4 under the Act 2 which,among other things, requires specialiststo immediately display the price andfull size of any customer limit order thatimproved their quoted bid or offer in asecurity. The proposed amendments toArticle XX, Rule 7 would make Rule 7more consistent with the limit orderdisplay requirements of SEC Rule11Ac1–4 and Commissioninterpretations thereunder.3

2. Statutory Basis

The proposed rule change isconsistent with Section 6(b)(5) of theAct in that it is designed to promote justand equitable principles of trade, toremove impediments to and perfect themechanism of a free and open marketand a national market system and, ingeneral, to protect investors and thepublic interest.

B. Self-Regulatory Organization’sStatement on Burden on Competition

The Exchange does not believe thatthe proposed rule change will imposeany burden on competition.


4 See SEC’s Limit Order Adopting Release.5 See SEC’s Limit Order Adopting Release at note

147.

6 15 U.S.C. § 78f(b)(5).

7 15 U.S.C. § 78s(b)(2).8 17 CFR 200.30–3(a)(12).1 15 U.S.C. 78s(b)(1).

2 This version of the NASD By-Laws wasapproved by the Commission in SecuritiesExchange Act Release No. 39326 (Nov. 14, 1997),62 FR 62385 (Nov. 21, 1997). Additions areitalicized, deletions are bracketed.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants or Others

The Exchange has neither solicitednor received written comments on theproposed rule change.

III. Solicitation of CommentsInterested persons are invited to

submit written data, views, andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, NW.,Washington, DC 20549. Copies of thesubmission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. 552, will beavailable for inspection and copying atthe Commission’s Public ReferenceRoom. Copies of such filing will also beavailable for inspection and copying atthe principal office of the CHX. Allsubmissions should refer to File No.SR–CHX–97–26 and should besubmitted by February 6, 1998.

IV. Commission’s Findings and OrderGranting Accelerated Approval ofProposed Rule Change

The Commission believes that theExchange’s proposal to adopt a limitorder display rule is consistent with thepolicies behind the Commission’s ownLimit Order Display rule.4 TheCommission recognizes that theExchange’s proposal has the additionalrequirements that CHX specialistsdisplay all limit orders, not justcustomer limit orders, unless a specifiedexception exists. In addition, a CHXspecialist, under the Exchange’sproposal, must increase the size of itsquote upon receipt of a limit order evenif such order creates a de minimisincrease. The Commission recognized,in adopting the Limit Order DisplayRule, that SRO’s may impose morestringent standards.5

The Commission finds that theExchange’s proposal is consistent withthe requirements of the Act and therules and regulations thereunderapplicable to a national securitiesexchange. Specifically, the Commission

finds that the proposed rule change isconsistent with Section 6(b)(5) of theAct,6 which requires an exchange tohave rules designed to preventfraudulent and manipulative acts andpractices, to promote just and equitableprinciples of trade, to removeimpediments to and perfect themechanism of a free and open marketand a national market system, and, ingeneral, to protect investors and thepublic interest.

The Commission therefore finds goodcause for approving the proposed rulechange (SR–CHX–97–26) prior to thethirtieth day after date of publication ofnotice thereof ion the Federal Register.

It is therefore ordered, pursuant toSection 19(b)(2) of the Act,7 that theproposed rule change be, and hereby is,approved.

For the Commission, by the Division ofMarket Regulation, pursuant to delegatedauthority.8

Margaret H. McFarland,Deputy Secretary.[FR Doc. 98–1111 Filed 1–15–98; 8:45 am]



[Release No. 34–39539; File No. SR–NASD–97–92]

Self-Regulatory Organizations; Noticeof Filing of Proposed Rule Change byNational Association of SecuritiesDealers, Inc. Relating to By-LawAmendment to Require Members ToUpdate Firm Contact InformationElectronically, To Maintain ElectronicMail Account, and for Other Purposes

January 12, 1998.

Pursuant to Section 19(b)(1) of theSecurities Exchange Act of 1934(‘‘Act’’),1 notice is hereby given that onDecember 19, 1997, the NationalAssociation of Securities Dealers, Inc.(‘‘NASD’’ or ‘‘Association’’) filed withthe Securities and ExchangeCommission (‘‘Commission’’) theproposed rule change as described inItems I, II, and III below, which Itemshave been prepared by the NASD. TheCommission is publishing this notice tosolicit comments on the proposed rulechange from interested persons.


The Association is proposing thefollowing changes to its by-laws, torequire its members to update firmcontact information electronically, tomaintain an electronic mail (e-mail)address, and to make certain othertechnical changes:

By-Laws of the National Association ofSecurities Dealers, Inc.2

Article IV—Executive RepresentativeSec. 3. Each member shall appoint

and certify to the Secretary of the NASDone ‘‘executive representative’’ whoshall represent, vote, and act for themember in all the affairs of the NASD,except that other executives of amember may also hold office in theNASD, serve on the Board orcommittees appointed under Article IX,Section 1 or otherwise take part in theaffairs of the NASD. A member maychange its executive representativeupon giving notice thereof via electronicprocess or such other process the NASDmay prescribe to the Secretary, or may,when necessary, appoint, by notice viaelectronic process to the Secretary, asubstitute for its executiverepresentative. An executiverepresentative of a member or asubstitute shall be a member of seniormanagement and registered principal ofthe member. Not later than January 1,1999, each executive representativeshall maintain an Internet electronicmail account for communication withthe NASD and shall update firm contactinformation via the NASD RegulationWeb Site or such other means asprescribed by the NASD.* * * * *

Article VII—Board of Governors

* * * * *Sec. 9. (b) The National Nominating

Committee shall consist of no fewerthan six and no more than ninemembers. The number of [Industry]Non-Industry committee members shallequal or exceed the number of [Non-Industry] Industry committee members.If the National Nominating Committeeconsists of six members, at least twoshall be Public committee members. Ifthe National Nominating Committeeconsists of seven or more members, atleast three shall be Public committeemembers. No officer or employee of theAssociation shall serve as a member of


3 See Securities Exchange Act Release No. 39326(Nov. 14, 1997), 62 FR 62385 (Nov. 21, 1997).

4 Securities Exchange Act Release No. 37538(Aug. 8, 1996) (SEC Order Instituting PublicProceedings Pursuant to Section 19(h)(1) of theSecurities Exchange Act of 1934, Making Findingsand Imposing Remedial Sanctions, In the Matter ofNational Association of Securities Dealers, Inc.,Administrative Proceeding File No. 3–9056).

the National Nominating Committee inany voting or non-voting capacity. Nomore than three of the NationalNominating Committee members and nomore than two of the Industrycommittee members shall be currentmembers of the NASD Board.


In its filing with the Commission, theNASD included statements concerningthe purpose of and basis for theproposed rule change and discussed anycomments it received on the proposedrule change. The text of these statementsmay be examined at the places specifiedin Item IV below. The NASD hasprepared summaries, set forth inSections A, B, and C below, of the mostsignificant aspects of such statements.


1. Purpose

(a) Amendment to Article IV, Section3. On August 5, 1997, the MembershipCommittee of the NASD Regulation, Inc.(‘‘NASD Regulation’’) Board of Directorsrecommended the adoption of anamendment to the NASD By-Laws torequire each executive representative,beginning not later than January 1, 1999,to maintain an Internet electronic mailaccount for communication with theNASD and to update firm contactinformation via the NASD RegulationWeb Site. The NASD Regulation Boardapproved the recommendation at itsSeptember 23, 1997 meeting. The NASDBoard of Governors approved theamendment at its December 11, 1997meeting.

The NASD has long wrestled withhow to collect and administer in aneffective manner the names of members,executive representatives and otherindividuals who hold positions ofsignificant responsibility withinmember firms. This information is usedby the NASD Corporate Secretary formember balloting. Member Regulationfor compliance purposes, and CorporateCommunications in identifying Keyindividuals for use in target mailings.The current method for acquiring thisinformation is through the filing of anNASD form entitled ‘‘NASD MemberFirm Contact Questionnaire’’ (NMFCQ).

The data requested on the NMFCQ isnot required on any other form filing(e.q., Form BD or U–4). The data isavailable in the Central RegistrationDepository (‘‘CRD’’), but in a text form

that renders it nearly impossible tointerface to another system. Thus,members are required to file theNMFCQ with the CRD, where theinformation is data captured into theMember Profile System, an adjunct tothe existing CRD system. The data isthen viewable throughout theorganization via the Member ProfileSystem and is interfaced to regulatoryand finance systems as well as theexisting corporate mailing system foruse in distributing publications, reports,voting ballots, and mail.

A new procedure for collectingNMFCQ information in the future isnecessary for two reasons. First, theCRD modernization effort does notinclude rebuilding this function, soanother alternative is required. Second,members are rarely updating thesefilings. Because the informationsolicited via the form is very importantto support the NASD’s business, theNASD must have a more efficient meansfor firms to update this information,thereby encouraging them to do so moreregularly.

The proposed By-Law change willimprove the data collection process byrequiring a firm to access its NMFCQ viathe NASD Regulation Web Site andupdate it on a periodic basis. (A firmwould be able to access only its ownNMFCQ; the information would bepassword-protected to prevent anypublic access.) The information thenwould be interfaced to the internalNASD Regulation systems requiring thisset of data. Further, the By-Law alsowould require each member to maintainan Internet electronic mail address onbehalf of its executive representative.This electronic mail address would beused proactively to send messagesreminding the member to review andupdate its contact information.

There are other reasons the staff isinterested in member Internet accessand electronic mail. Once established, itopens up many options for timelycommunications with members andassociated cost savings. It also can assistmembers with timely internaldistribution of NASD information,notices, and publications. Otherpotential initiatives include eliminatingor reducing printed publications,sending more timely announcementsand notices, and providing value-addedservices to members.

The NASD is proposing a one-yeartransition period to accommodate smallfirms that may not currently haveInternet access or electronic mailaccounts.

(b) Technical Amendment to ArticleVII, Section 9(b). The NASD alsoproposes a technical amendment to

Article VII, Section 9(b) of the NASDBy-Laws. In Special Notice to Members97–75, the NASD proposed acomprehensive revision to its By-Lawsto provide for a more streamlinedcorporate structure. The membershipapproved these changes on November13, 1997, and the Securities andExchange Commission (‘‘Commission’’)approved them on November 14, 1997.3Article VII, Section 9(b) contained atypographical error that provided thatthe number of Industry committeemembers on the National NominatingCommittee should equal or exceed thenumber of Non-Industry committeemembers. The terms ‘‘Industry’’ and‘‘Non-Industry’’ were transported.Section 9(b) should provide that thenumber of Non-Industry committeemembers should equal or exceed thenumber of Industry committeemembers. The National NominatingCommittee is required to be composedin such a manner by the Undertakingsagreed to by the NASD on August 8,1996.4

2. Statutory BasisThe NASD believes the proposed rule

change is consistent with Section15A(b)(2) in that the proposed rulechange will assist the NASD in carryingout the purposes of the Act and toenforce compliance with the Act, therules and regulations thereunder, andthe Rules of the Association.


The NASD does not believe theproposed rule change will result in anyburden on competition that is notnecessary or appropriate in furtheranceof the purposes of the Act, as amended.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants, or Others

Written comments were neithersolicited nor received.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

Within 35 days of the date ofpublication of this notice in the FederalRegister or within such longer period (i)as the Commission may designate up to90 days of such date if it finds such


5 17 CFR 200.30–3(a)(12).1 15 U.S.C. § 78s(b)(1).2 17 CFR 240.19b–4.

3 The MFI is an electronic order delivery andreporting system that allows member firms to routeorders for execution by the automatic executionfeature of POETS as well as to route limit ordersto the Options Public Limit Order Book. Orders thatdo not reach those two destinations are defaultedto a member firm booth. MFI also provides memberfirms with instant confirmation of transactions totheir systems. Member firms may access POETS byestablishing an MFI mainframe-to-mainframeconnection.

4 Orders entered via MFI are delivered to one ofthree destinations: (a) to Auto-Ex, where they areautomatically executed at the disseminated bid oroffering price; (b) to Auto-Book which maintainsnon-marketable limit orders based on limit priceand time of receipt; or (c) to a Member Firm’sdefault destination—a particular firm booth orremote entry site—if the order fails to meet theeligibility criteria necessary for either Auto-Ex orAuto-Book or if the Member Firm requests suchdefault for its orders. See generally Exchange ActRelease No. 27633 (January 18, 1990), 55 FR 2466(‘‘POETS Approval Order’’).

5 In that regard, the Exchange is proposing to adda new Rule 6.88(a), which provides: ‘‘Members andMember Organizations may send orderselectronically through the Exchange’s Member FirmInterface and route them directly to POETS, to aMember Firm booth on the Options Floor, to a FloorBroker Hand-Held Terminal located on the OptionsFloor, or to any other location designated by theExchange, provided that the Member or MemberOrganization has been approved by the Exchange todo so.’’

6 The Exchange notes that there will be noappreciable delay in order entry due to thetransmission of orders through the Server. TheExchange also notes that if a Member Firm routesan order to POETS via MFI for automatic executionor maintenance in Auto-Book, the order will not besent through the Server. Only orders to betransmitted through the Hand-Held Terminalsystem will be sent through the Server.

7 The Exchange will submit a separate rule filingto the Commission to establish these fees.

longer period to be appropriate andpublishes its reasons for so finding or(ii) as to which the self-regulatoryorganization consents, the Commissionwill by order approve such proposedrule change, or institute proceedings todetermine whether the proposed rulechange should be disapproved.

The NASD proposes to make the rulechange effective upon Commissionapproval.

IV. Solicitation of CommentsInterested persons are invited to

submit written data, views, andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, N.W.,Washington, D.C. 20549. Copies of thesubmission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. § 552, will beavailable for inspection and copying inthe Commission’s Public ReferenceRoom. Copies of such filing will also beavailable for inspection and copying atthe principal office of the NASD. Allsubmissions should refer to file numberSR–NASD–97–92 and should besubmitted by February 6, 1998.


Margaret H. McFarland,Deputy Secretary.[FR Doc. 98–1110 Filed 1–15–98; 8:45 am]BILLING CODE 8010–01–M


[Release No. 34–39532; File No. SR–PCX–97–28]

Self-Regulatory Organizations; Noticeof Filing of Proposed Rule Change andAmendment No. 1 Thereto by thePacific Exchange, Inc. Relating toExchange-Sponsored Hand-HeldTerminals for Options Floor Brokers

January 9, 1998.Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 3,1997 and December 12, 1997,respectively, the Pacific Exchange, Inc.(‘‘PCX’’ or ‘‘Exchange’’) filed with theSecurities and Exchange Commission(‘‘SEC’’ or ‘‘Commission’’) the proposedrule change and amendment No. 1 to theproposed rule change as described inItems I, II, and III below, which Itemshave been prepared by the self-regulatory organization. TheCommission is publishing this notice tosolicit comments on the proposed rulechange, as amended, from interestedpersons.


The Exchange is proposing to adopt anew program to allow floor brokers onthe Options Floor to use Exchange-sponsored hand-held terminals toreceive orders sent electronically byMember Firms located off the floor. Theproposal will also establish newprocedures for electronic order flowhandling, routing, execution and tradereporting under the program. The test ofthe proposed rule change is available atthe Office of the Secretary, the Exchangeand at the Commission.


In its filing with the Commission, theself-regulatory organization includedstatements concerning the purpose ofand basis for the proposed rule changeand discussed any comments it receivedon the proposed rule change. The test ofthese statements may be examined atthe places specified in Item IV below.The self-regulatory organization hasprepared summaries, set forth inSections A, B, and C below, of the mostsignificant aspects of such statements.


1. PurposeGeneral Description. The Exchange’s

Member Firm Interface (‘‘MFI’’) 3

currently permits Exchange MemberFirms to use an electronic link with the

Exchange to send their option ordersdirectly to the Exchange for delivery toPOETS (Pacific Option ExchangeTrading System).4 Under the proposal,member firms would be able to use theMFI connection to route orders directlyto the member firm booth (not bydefault) or to a floor broker’s hand-heldterminal located in the trading crowd.5

Under the program, Member Firmswill be permitted to send their orderselectronically to the Exchange via MFIand route them to one of threedestinations on the trading floor: (a) Toa floor broker standing in the tradingcrowd; (b) to a Member Firm boothlocation on the trading floor; or (c) toPOETS, where they will beautomatically executed by Auto-Ex ormaintained in Auto-Book. All orders sotransmitted will first be sent through theServer.6 Orders sent to a Member Firmbooth via the Server may be sentsubsequently either to POETS or to afloor broker in the trading crowd.Orders sent via the Server to a floorbroker in the trading crowd maysubsequently be transmitted to aMember Firm booth, to POETS, or toanother floor broker on the trading floor.

The Exchange intends to furnishhand-held terminals to be used by floorbrokers under the program. In addition,the Exchange will supply booth devicesthat will have the capability to retrieveand display all orders that weresubmitted through the device. TheExchange intends to assess users amonthly rental fee for such use.7


8 See, e.g., PCX Rules 5.1(e), 6.43–6.48 andOptions Floor Procedure Advices A–1–A–11 andG–1–G12.

9 See PCX Rule 6.69.10 The Exchange notes that the Commission has

previously approved rule change proposals thatprohibit the use of floor-broker hand-held terminalsfrom performing a market maker function. See, eg.,Securities Exchange Act Release No. 38054 (Dec.16, 1996), 61 FR 67365 (Dec. 20, 1996) (OrderApproving SR–CBOE–95–48). The PCX has filed asimilar proposal, which is currently pending withthe Commission. See Securities Exchange ActRelease No. 38270 (Feb. 11, 1997), 62 FR 7286 (Feb.18, 1997) (Notice of filing of SR–PSE–97–02).

11 Factors will include the nature of order flow(retail or institutional), the nature of the issue(lightly-traded or heavily-traded), nature of the floorbrokerage operation, time of application, limitationsin the number of participants who may participate,and other such factors.

12 The term ‘‘qualified Floor Member or off-floorMember’’ refers to the requirement that all floorbrokers and order flow providers who participate inthe program must be approved by the Exchange todo so. Floor brokers are eligible to participate ifthey are registered with the Exchange as floorbrokers pursuant to Rule 6.44 and have arrangedwith a member firm to receive order flow throughthe system. Member firms are eligible to participatein the program if they have made arrangementswith a floor broker for the transmission andexecution of orders. Moreover, program participantswill be required to pay the Exchange a fee in anamount to be specified in a rule change proposalto be filed with the Commission.

13 The Exchange notes that a rule filing to permitExchange floor brokers to use proprietary orderrouting terminals on the Options Trading Floor iscurrently pending before the Commission. SeeSecurities Exchange Act Release No. 38270 (Feb. 11,1997), 62 FR 7286 (Feb. 18, 1997) (Notice of filingof SR–PSE–97–02).

14 The term ‘‘interfere’’ refers to electronicinterference that may occur between a member’sproprietary device and another electronic system orpiece of equipment on the Trading Floor. Forexample, if the use of a proprietary device on thefloor caused the POETS automatic execution to halt,or if it disrupted telephonic communications on thefloor, or if it prevented another member firm frombeing able to receive electronic orders throughanother order-routing system, then the devicecausing the interference could not be used on thefloor until it was rendered compatible with theorder electronic systems in use.

15 15 U.S.C. § 78f(b).16 15 U.S.C. § 78f(b)(5).

Exchange rules on orderrepresentation and order execution willgenerally be unchanged under theprogram.8 However, the Exchange isproposing to modify its rules on ordersto provide that an order sentelectronically through MFI will bedeemed to be a ‘‘written order’’ forpurposes of Rule 6.67. The orderinformation that must be reported to theExchange in connection with eachtransaction that is executed on thetrading floor will be also unchangedunder the program.9

Prohibition of Market MakingFunction. The Exchange is proposing toadopt new Rule 6.88(b) providing thatno Floor Broker may knowingly use aFloor Broker Hand-Held Terminal, on aregular and continuous basis, tosimultaneously represent orders to buyand sell options contracts in the sameseries for the account of the samebeneficial holder. The rule furtherprovides that if the Exchangedetermines that a person or entity hasbeen sending, on a regular andcontinuous basis, orders tosimultaneously buy and sell optioncontracts in the same series for theaccount of the same beneficial holder,the Exchange may prohibit orders forthe account of such person or entityfrom being sent through the Exchange’sMember Firm Interface for such periodof time as the Exchange deemsappropriate.10

Implementation. The Exchange isproposing a two-phase approach tointegrating the new hand-heldtechnology into the floor environment.In Phase I, the Exchange will allowlimited implementation of the programto evaluate the use of hand-heldterminals and to identify and correctany problems that may arise. In thisregard, the Exchange will select arepresentative cross-section of floormembers and off-floor members for theexecution of various types of order flowin both lightly-traded and heavily-traded issues. Phase I will last for aboutfour months. It will involveapproximately two off-floor MemberFirms, two Member Firm booth devices

and 12 floor broker hand-held terminals.The Exchange, in conjunction with itsOptions Floor Trading Committee, willselect Members and Member Firms toparticipate in Phase I on an objectivebasis.11 During Phase I, floor brokerswill not be permitted to transmit ordersto other floor brokers (they will belimited to transmitting orders either toPOETS or to a Member Firm booth).

In Phase II, the Exchange will roll outthe program on a floor-wide basis,allowing any qualified Floor Member oroff-floor Member who wishes toparticipate in the program to do so.12

Order Tickets. Under the proposal,initially, floor brokers using terminalswill not need to write up order ticketsbecause the trade-related floor brokerterminal information will be passedelectronically to POETS and then toPOPS (Pacific Options ProcessingInformation) for clearing purposes. Yetthe party on the other side of the trade,if it is executed by a market maker of afloor broker not using a terminal, willhave to submit a paper order ticket tothe Exchange for processing. Later,when advancements in technologyallow for it, no paper tickets will berequired because all market makers andfloor brokers will be able to interfacewith each other through hand-heldterminals—but that change will be thesubject of another filing. With regard toproprietary hand held terminals, theorder ticket requirement would be thesame as with the Exchange-sponsoredterminals, i.e., if the trade information isnot sent to the Exchange electronically,it will have to be conveyed by means ofa written order ticket.

Clearing and Trade Reporting. Oncean order has been executed, the Hand-Held Terminal system will route tradeinformation to POETS, which, in turn,will route the information to a computerfor trade match and clearing purposes.At the same time, the Exchange willsend a trade report to the Member Firmthat entered the order. In addition, the

Exchange will transmit tradeinformation to OCC, OPRA and certainvendors.

Audit Trail. Order information sentthrough the Hand-Held Terminal systemwill become audit trail information thatis available to the Exchange forregulatory purposes. However, if anorder is routed to the Member Firmbooth by telephone or wire, and notthrough MFI, and the order is then sentto POETS or to a floor broker in thecrowd, the audit trail information willcommence when the order is sent fromthe booth. An audit trail of all actionstaken by the hand-held terminal thatresult in an interaction with the Serverwill be maintained. Upon receipt of anorder in the Server from POETS or abooth device, the order will be timestamped and retained in the Server’sdatabase. When orders are executed at ahand-held device, they will be timestamped upon receipt by the Server. TheExchange believes that the audit trailinformation will be more accurate thancurrent information, which is recordedmanually on order tickets.

System Capacity. The Exchangebelieves, based upon extensive analysisand testing, that implementation of theprogram will not adversely affectPOETS system capacity or functionality.

Use of Other Hand-Held TerminalDevices. The Exchange will not prohibitfloor brokers from using proprietaryhand-held terminals 13 for order entryon the Options Floor as long as they donot interfere with any Exchange-sponsored hand-held terminals, withPOETS or with other equipment on thefloor.14

2. Statutory BasisThe Exchange represents that the

proposal is consistent with Section 6(b)of the Act,15 in general, and Section6(b)(5) of the Act,16 in particular, is thatit is designed to promote just andequitable principles of trade; to foster


17 17 CFR 200.30–3(a)(12).

cooperation and coordination withpersons engaged in regulating,processing information with respect to,and facilitating transactions insecurities; to remove impediments toand perfect the mechanism of free andopen market and a national marketsystem; to protect investors and thepublic interest; and is not designed topermit unfair discrimination betweencustomer, issuers, brokers or dealers.


The Exchange does not believe thatthe proposed rule change will imposeany inappropriate burden oncompetition.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants, or Others

No written comments were eithersolicited or received.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

Within 35 days of the publication ofthis notice in the Federal Register orwithin such longer period (i) as theCommission may designate up to 90days of such date if it finds such longerperiod to be appropriate and publishesits reasons for so finding or (ii) as towhich the self-regulatory organizationconsents, the Commission will:

(A) By order approve the proposedrule change, or

(B) Institute proceedings to determinewhether the proposed rule changeshould be disapproved.

IV. Solicitation of Comments

Interested persons are invited tosubmit written data, views, andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, N.W.,Washington, D.C. 20549. Copies of thesubmission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. § 552, will beavailable for inspection and copying atthe Commission’s Public ReferenceRoom. Copies of such filing will also beavailable for inspection and copying at

the principal office of the Exchange. Allsubmissions should refer to File No. SR-PCX–97–28 and should be submitted byFebruary 6, 1998.


Jonathan G. Katz,Secretary.[FR Doc. 98–1112 Filed 1–15–98; 8:45 am]BILLING CODE 8010–01–M


Aviation Proceedings, AgreementsFiled During the Week Ending January9, 1998

The following Agreements were filedwith the Department of Transportationunder the provisions of 49 U.S.C. 412and 414. Answers may be filed within21 days of date of filing.

Docket Number: OST–98–3300.Date Filed: January 5, 1998.Parties: Members of the International

Air Transport Association.Subject: PTC3 Telex Mail Vote 904,

Korea-Japan/China fares, Intendedeffective date: February 1, 1998.



Chile-Brazil PEX fares, Intendedeffective date: January 15, 1998.


Air Transport Association.Subject: PTC23 AFR–TC3 0028 dated

December 5, 1997, Africa TC3 Resos r1–40, Minutes—PTC23 AFR–TC3 0029,dated December 23, 1997, Tables—PTC23 AFR–TC3 Fares 0012, datedDecember 19, 1997, Intended effectivedate: April 1, 1998.



Japan-China fares, Intended effectivedate: January 15, 1998.


Air Transport Association.Subject: PSC/Reso/090 dated

December 1, 1997, Finally AdoptedResolutions r1–r52, Minutes—PSC/

Minutes/004 dated December 1, 1997,Intended effective date: June 1, 1998.


Air Transport Association.Subject: PTC12 NMS–ME 0036 dated

December 19, 1997, r1–17, PTC12 NMS–ME 0037 dated December 19, 1997, r18–r35, Minutes—PTC NMS–ME 0035dated December 19, 1997, Table—PTC12 NMS–ME Fares 0016 datedJanuary 6, 1998, Intended effective date:April 1, 1998.Paulette V. Twine,Documentary Services.[FR Doc. 98–1166 Filed 1–15–98; 8:45 am]BILLING CODE 4910–62–P


Notice of Application for Certificates ofPublic Convenience and Necessity andForeign Air Carrier Permits Filed UnderSubpart Q During the Week EndingJanuary 9, 1998

The following Applications forCertificates of Public Convenience andNecessity and Foreign Air CarrierPermits were filed under Subpart Q ofthe Department of Transportation’sProcedural Regulations (see 14 CFR302.1701 et seq.). The due date forAnswers, Conforming Applications, orMotions to Modify Scope are set forthbelow for each Application. Followingthe Answer period DOT may process theapplication by expedited procedures.Such procedures may consist of theadoption of a show-cause order, atentative order, or, in appropriate cases,a final order without furtherproceedings.

Docket Number: OST–95–495.Date Filed: January 7, 1998.Due Date for Answers, Conforming

Applications, or Motion to ModifyScope: February 4, 1998.

Description: Amendment No. 2 to theApplication of United Air Lines, Inc.pursuant to 49 U.S.C. Section 40103 andSubpart Q of the Rules (14 CFR302.1701, et seq.) to realign Segment 1of its Certificate of Public Convenienceand Necessity for Route 632 by addingto the route the following coterminalpoints in South America: Colombia (tobe substituted for Barranquilla,Colombia), Ecuador, Peru, Bolivia, andParaguay.Paulette V. Twine,Documentary Services.[FR Doc. 98–1165 Filed 1–15–98; 8:45 am]BILLING CODE 4910–62–P




Aviation Rulemaking AdvisoryCommittee Meeting on AircraftCertification Procedures Issues

AGENCY: Federal AviationAdministration (FAA), DOT.

ACTION: Notice of meeting cancellation.

SUMMARY: The FAA is issuing this noticeto advise the public that the January 22meeting of the Federal AviationAdministration Aviation RulemakingAdvisory Committee, scheduled todiscuss Aircraft Certification ProceduresIssues (63 FR 122), has been cancelled.

FOR FURTHER INFORMATION CONTACT:Ms. Angela O. Anderson, (202) 267–9681, Office of Rulemaking (ARM–200),800 Independence Avenue, SW.,Washington, DC 20591.

Issued in Washington, DC, on January 12,1998.Brian Yanez,Assistant Executive Director for AircraftCertification Procedures Issues, AviationRulemaking Advisory Committee.[FR Doc. 98–1129 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M



Aviation Rulemaking AdvisoryCommittee; Meeting Cancellation

AGENCY: Federal AviationAdministration, DOT.

ACTION: Notice of meeting cancellation.

SUMMARY: The FAA is issuing this noticeto advise the public that the January 22,1998, meeting of the AviationRulemaking Advisory Committee(ARAC) scheduled to discuss generalaviation operations issues (63 FR 122,January 2, 1998) has been cancelled.

FOR FURTHER INFORMATION CONTACT:Noreen Hannigan, Office of Rulemaking(ARM–106), Federal AviationAdministration, 800 IndependenceAve., SW, Washington, DC 20591;telephone (202) 267–7476; fax (202)267–5075.

Issued in Washington, DC, on January 13,1998.Louis C. Cusimano,Assistant Executive Director for GeneralAviation Operations, Aviation RulemakingAdvisory Committee.[FR Doc. 98–1223 Filed 1–14–98; 1:03 pm]BILLING CODE 4910–13–M



Notice of Intent to Rule on Application(98–06–C–00–PHL) To Impose and Usethe Revenue From a Passenger FacilityCharge (PFC) at PhiladephiaInternational Airport, Philadelphia, PA

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Correction to Notice of Intent toRule on Application to impose and usethe revenue from a Passenger FacilityCharge (PFC) at PhiladelphiaInternational Airport, Philadelphia, PA.

SUMMARY: This notice corrects theapplication number which waserroneously identified as 98–05–C–00–PHL in the previously published notice.

In notice document 97–33286beginning on page 66886 in the issue ofMonday, December 22, 1997, on thesecond column under Notice of IntentTo Rule on Application, change thenumber in parenthesis from 98–05C–00–PHL to 98–06–C–00–PHL. Inaddition on the third column last, onthe paragraph, after Applicationnumber: Change from 98–05C–00–PHLto 98–06–C–00–PHLFOR FURTHER INFORMATION CONTACT:Thomas Felix, Manager Planning &Programming Branch, Fitzgerald FederalBuilding, John F. Kennedy InternationalAirport, Jamacia, NY 11430.

Issued in Jamaica, NY, on January 8, 1998.Thomas Felix,Manager, Planning & Programming Branch,Airports Division, Eastern Region.[FR Doc. 98–1103 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M



Notice of Intent To Rule on ApplicationNo. 97–03–C–00–ICT To Impose andUse the Revenue From a PassengerFacility Charge (PFC) at Wichita Mid-Continent Airport, Wichita, KS

AGENCY: Federal AviationAdministration, (FAA), DOT.ACTION: Notice of intent to rule onapplication.

SUMMARY: The FAA proposes to rule andinvites public comment on theapplication to impose and use therevenue from a PFC at Wichita Mid-Continent Airport under the provisionsof the Aviation Safety and CapacityExpansion Act of 1990 (Title IX of theOmnibus Budget Reconciliation Act of1990) (Public Law 101–508) and Part

158 of the Federal Aviation Regulations(14 CFR Part 158).DATES: Comments must be received onor before February 17, 1998.ADDRESSES: Comments on thisapplication may be mailed or deliveredin triplicate to the FAA at the followingaddress: Federal AviationAdministration, Central Region,Airports Division, 601 E. 12th Street,Kansas City, MO 64106.

In addition, one copy of anycomments submitted to the FAA mustbe mailed or delivered to Mr. Bailis F.Bell, Director of Airports, at thefollowing address: Wichita AirportAuthority, 2173 Air Cargo Road,Wichita, KS 67277–0130.

Air carriers and foreign air carriersmay submit copies of written commentspreviously provided to the WichitaAirport Authority, under section 158.23of Part 158.FOR FURTHER INFORMATION CONTACT:Lorna Sandridge, PFC Program Manager,FAA, Central Region, 601 E. 12th Street,Kansas City, MO 64106, (816) 426–4730.The application may be reviewed inperson at this same location.SUPPLEMENTARY INFORMATION: The FAAproposes to rule and invites publiccomment on the application to imposeand use the revenue from a PFC at theWichita Mid-Continent Airport underthe provisions of the Aviation Safetyand Capacity Expansion Act of 1990(Title IX of the Omnibus BudgetReconciliation Act of 1990) (Public Law101–508) and Part 158 of the FederalAviation Regulations (14 CFR Part 158).

On December 23, 1997, the FAAdetermined that the application toimpose and use the revenue from a PFCsubmitted by the Wichita AirportAuthority, was substantially completewithin the requirements of section158.25 of Part 158. The FAA willapprove or disapprove the application,in whole or in part, no later than March25, 1998.

The following is a brief overview ofthe application.

Level of the proposed PFC: $3.00.Proposed charge effective date: April

1, 1998.Proposed charge expiration date: July

31, 2004.Total estimated PFC revenue:

$10,839,500.Brief description of proposed projects:

Airfield pavement program; airfieldsafety improvements (Phase III);terminal building modifications; andaircraft rescue and firefighting facilitiesimprovements.

Any person may inspect theapplication in person at the FAA officelisted above under FOR FURTHERINFORMATION CONTACT.


In addition, any person may, uponrequest, inspect the application, noticeand other documents germane to theapplication in person at the WichitaMid-Continent Airport.

Issued in Kansas City, MO, on December23, 1997.Michael J. Faltermeier,Acting Manager, Airports Division, CentralRegion.[FR Doc. 98–1096 Filed 1–15–98; 8:45 am]BILLING CODE 4910–13–M


Federal Highway Administration

[FHWA Docket No. 3240]

Notice of Request for Reinstatement ofan Expired Information Collection;Federal Motor Carrier SafetyRegulations, Accident RecordkeepingRequirements

AGENCY: Federal HighwayAdministration (FHWA), DOT.ACTION: Notice and request forcomments.

SUMMARY: In accordance with thePaperwork Reduction Act of 1995 (44U.S.C. 3051, 3506(c) (2) (A)), the FHWAis requesting public comment on itsintent to ask the Office of Managementand Budget (OMB) to reinstate theexpired information collection thatdocuments information on commercialmotor vehicle crashes (accidents)collected and maintained by motorcarriers.DATES: Comments must be submitted onor before March 17, 1998.ADDRESSES: Signed, written commentsshould refer to the docket number thatappears at the top of this document andmust be submitted to the Docket Clerk,U.S. DOT Dockets, Room PL–401, 400Seventh Street, SW., Washington, DC20590–0001. All comments receivedwill be available for examination at theabove address between 10 a.m. and 5p.m., e.t., Monday through Friday,except Federal holidays. Those desiringnotification of receipt of comments mustinclude a self-addressed, stampedenvelope or postcard.FOR FURTHER INFORMATION CONTACT: Ms.Deborah M. Freund, Office of MotorCarrier Research and Standards, (202)366–4009, Department ofTransportation, Federal HighwayAdministration, 400 Seventh Street,SW., Washington, DC 20590. Officehours are from 7:45 a.m. to 4:15 p.m.,e.t., Monday through Friday, exceptFederal holidays.


Electronic Availability

Internet users can access allcomments received by the U.S. DOTDockets, Room PL–401, by using theuniversal resource locator (URL): http://dms.dot.gov. It is available 24 hourseach day, 365 days each year. Anelectronic copy of this document may bedownloaded using a modem andsuitable communications software fromthe Federal Register electronic bulletinboard service (telephone number: 202–512–1661). Internet users may reach theFederal Register’s home page at: http://www.nara.gov/nara/fedreg and theGovernment Printing Office’s databaseat: http://www.access.gpo.gov/suldocs.

Title: Accident RecordkeepingRequirements.

OMB Number: 2125–0526Background: Title 49 of the Code of

Federal Regulations, Section 390.15 ofthe Federal Motor Carrier SafetyRegulations (FMCSRs), requires motorcarriers to make all records andinformation pertaining to crashes(accidents) available to an authorizedrepresentative or special agent of theFederal Highway Administration(FHWA) upon request or as part of aninquiry. For the purposes of § 390.15,‘‘accident’’ is defined as an occurrenceinvolving a commercial motor vehicleoperating on a public road in interstateor intrastate commerce which results in(1) A fatality; (2) bodily injury to aperson who, as a result of the injury,receives medical treatment away fromthe scene of the accident; or (3) one ormore motor vehicles incurring disablingdamage as a result of the accident,requiring the motor vehicle to betransported away from the scene by atow truck or other motor vehicle (49CFR 390.5). Occurrences involving onlyboarding and alighting from a stationarymotor vehicle or involving only theloading or unloading of cargo are notincluded in the definition.

Motor carriers are required tomaintain an accident register for oneyear after the date of the accident. Theregister must include a list of eachaccident. The information for eachaccident must include, at a minimum,the following elements: date of accident;city or town in which or most nearwhere the accident occurred and theState in which the accident occurred;driver name; number of injuries;number of fatalities; and whetherhazardous materials, other than fuelspilled from the fuel tanks of motorvehicles involved in the accident, werereleased. In addition, the register mustcontain copies of all accident reports

required by State or other governmentalentities or insurers.

There are no prescribed forms. Therecords are used by the FHWA and itsrepresentatives as a source ofinformation for investigations or specialstudies, and to assess the effectivenessof motor carriers’ safety managementcontrols.

Respondents: Motor carriers.Estimated Total Annual Burden Per

Record: The FHWA estimatesapproximately 129,000 accidentsinvolving trucks and 16,000 accidentsinvolving buses as defined in Section390.5 of the FMCSRs occur annually(source: Truck and Bus Crash Factbook,1995). Of these, approximately 75percent involve trucks and busesoperated by interstate motor carriers.About 80 percent of the buses involvedin crashes are school or transit busesand are not subject to this recordkeepingrequirement. The number of accidents istherefore estimated to be(0.75×129,000)+(0.75×0.20×16,000)=99,150 .

The agency estimates it takesapproximately two minutes forinterstate motor carriers to collect andrecord the seven elements ofinformation on the accident register.Based on these assumptions, the agencyestimates a time burden of 3,305 hoursper year for accident report registerinformation.

Interested parties are invited to sendcomments regarding any aspect of theseinformation collections, including, butnot limited to: (1) Whether thecollection of information is necessaryfor the proper performance of thefunctions of the FHWA, includingwhether the information has practicalutility; (2) the accuracy of the estimatedburden; (3) ways to enhance the quality,utility, and clarity of the collectedinformation; and (4) ways to minimizethe collection burden without reducingthe quality of the collected information.

Authority: 49 U.S.C. 31136, 31141, and31502 and 49 CFR 1.48.

Issued on: January 7, 1998.George S. Moore,Associate Administrator for Administration.[FR Doc. 98–1130 Filed 1–15–98; 8:45 am]BILLING CODE 4910–22–P


Federal Highway Administration

Environmental Impact Statement: Cityof Lawrence, Douglas County, Kansas

AGENCY: Federal HighwayAdministration (FHWA), DOT.


ACTION: Notice of Intent cancellation.

SUMMARY: The FHWA is issuing thisnotice to advise the public that a Noticeof Intent (NOI) to prepare anEnvironmental Impact Statement (EIS)for a proposed highway project locatedin the City of Lawrence, DouglasCounty, Kansas, is cancelled. The NOIwas originally published in the FederalRegister on November 5, 1993. Thecancellation is based on a decision notto proceed with the project at this time.FOR FURTHER INFORMATION CONTACT:Johnny R. Dahl, P.E., OperationsEngineer, FHWA, 3300 South TopekaBoulevard, Suite 1, Topeka, Kansas66611–2237, Telephone: (785) 267–7284. Warren L. Sick, P.E., Chief ofBureau of Design, Kansas Department ofTransportation (KDOT), Docking StateOffice Building, Topeka, Kansas 66612,Telephone: (785) 296–2270. GeorgeWilliams, Director of the Department ofPublic Works, City of Lawrence, Box708, Lawrence, Kansas 66044–0708,Telephone: (785) 832–3124.SUPPLEMENTARY INFORMATION: TheLawrence Eastern ParkwayEnvironmental Impact Study wasinitiated by the City of Lawrence in1989. In 1997, the City elected towithdraw its support and sponsorshipof the Lawrence Eastern Parkway EIS.The City has directed that their staffbring closure to the study effort. The EISdocumentation compiled to date for theproposed Lawrence Eastern Parkwaywill become a resource document andwill not be considered a completedstudy document. There is agreementthat there will be transportation needsthat warrant this improvement in thefuture. Comments and questionsconcerning this proposed action and theEIS should be directed to the FHWA,KDOT, or the City of Lawrence at theaddresses provided.

Issued on: January 9, 1998.David R. Geiger,Division Administrator, Kansas Division,Federal Highway Administration, Topeka,Kansas.[FR Doc. 98–1126 Filed 1–5–98; 8:45 am]BILLING CODE 4910–22–M


Federal Railroad Administration

[Docket No. RSAC–96–1, Notice No. 8]

Railroad Safety Advisory Committee;Notice of Meeting

AGENCY: Federal RailroadAdministration (FRA), Department ofTransportation (DOT).

ACTION: Notice of Railroad SafetyAdvisory Committee (‘‘RSAC’’) meeting.

SUMMARY: FRA announces the nextmeeting of the RSAC, a FederalAdvisory Committee that developsrailroad safety regulations through aconsensus process. The meeting willaddress a wide range of topics,including possible adoption of specificrecommendations for regulatory action.DATES: The meeting of the RSAC isscheduled to commence at 9:30 a.m. andconclude at 4:00 p.m. on Tuesday,January 27, 1998.ADDRESSES: The meeting of the RSACwill be held at The Westin Hotel, 1400M Street, NW, Washington, DC. Themeeting is open to the public on a first-come, first-served basis and is accessibleto individuals with disabilities. Signlanguage interpreters will be availablefor individuals with hearingimpediments.FOR FURTHER INFORMATION CONTACT:Vicky McCully, RSAC Coordinator,FRA, 400 7th Street, SW, Washington,DC 20590, (202) 632–3330, GradyCothen, Deputy Associate Administratorfor Safety Standards and ProgramDevelopment, FRA, 400 7th Street, SW,Washington, DC 20590, (202) 632–3309,or Lisa Levine, Office of Chief Counsel,FRA, 400 7th Street, SW, Washington,DC 20590, (202) 632–3189.SUPPLEMENTARY INFORMATION:. Pursuantto section 10(a)(2) of the FederalAdvisory Committee Act (Pub. L. 92–463), FRA is giving notice of a meetingof the Railroad Safety AdvisoryCommittee (‘‘RSAC’’). The meeting isscheduled to begin at 9:30 a.m. andconclude at 4:00 p.m. on Tuesday,January 27, 1998. The meeting will beheld at The Westin Hotel, 1400 MStreet, NW, Washington, DC. All timesnoted are Eastern Standard Time.

RSAC was established to provideadvice and recommendations to theFRA on railroad safety matters. TheCommittee consists of 48 individualrepresentatives, drawn from among 27organizations representing various railindustry perspectives, and 2 associatenon-voting representatives from theagencies with railroad safety regulatoryresponsibility in Canada and Mexico.Staff of the National TransportationSafety Board and Federal TransitAdministration also participate in anadvisory capacity.

During this meeting, the RSAC willreceive status reports, containingprogress information, from theLocomotive Crashworthiness WorkingGroup, the Locomotive Cab WorkingConditions Working Group, and theEvent Recorder Working Group.

In addition, the Committee willreceive a status report from the recentlyconstituted Positive Train Control (PTC)Working Group, tasked with: (1)Facilitating understanding of currentPTC technologies, definitions, andcapabilities; (2) addressing issuesregarding the feasibility ofimplementing fully integrated PTCsystems; and (3) facilitatingimplementation of software based signaland operating systems throughconsideration of revisions to the Rules,Standards and Instructions to addressprocessor-based technology andcommunication-based architectures.

Finally, the Committee may be askedto consider for approval the Tourist andHistoric Railroad working group’sproposal for the revision of the steamlocomotive inspection and testingstandards contained in 49 CFR part 230.

Please refer to the notice published inthe Federal Register on March 11, 1996(61 FR 9740) for more information aboutthe RSAC.George A. Gavalla,Acting Associate Administrator for Safety.[FR Doc. 98–784 Filed 1–15–98; 8:45 am]BILLING CODE 4910–06–P



[STB Docket No. MC–F–20913]

Peter Pan Bus Lines, Inc.—Pooling—Greyhound Lines, Inc.

AGENCY: Surface Transportation Board.ACTION: Notice of proposed poolingapplication.

SUMMARY: Applicants, Peter Pan BusLines, Inc., of Springfield, MA, andGreyhound Lines, Inc., of Dallas, TX,jointly seek approval under 49 U.S.C.14302 of a pooling agreement to governtheir motor passenger and expressoperations (but not the revenues earnedfrom those operations) between Albany,NY, and Boston, MA.DATES: Comments are due by February17, 1998, and, if comments are filed,applicants’ rebuttal statement is due byMarch 9, 1998.ADDRESSES: Send an original and 10copies of any comments referring to STBDocket No. MC-F–20913 to: SurfaceTransportation Board, Office of theSecretary, Case Control Unit, 1925 KStreet, N.W., Washington, DC 20423–0001. Also, send one copy of commentsto each of applicants’ representatives:(1) Jeremy Kahn, Suite 810, 1730 RhodeIsland Avenue, N.W., Washington, DC20036; (2) Fritz R. Kahn, Suite 750 West,


1 Applicants have already received authority topool their operations and revenues for their motorpassenger and express transportation servicebetween Philadelphia, PA, and New York, NY, inPeter Pan Bus Lines, Inc.—Pooling—GreyhoundLines, Inc., STB Docket No. MC-F–20904 (STBserved June 30, 1997). A similar request involvingoperations between New York City andWashington, DC, is pending in Peter Pan Bus Lines,Inc.—Pooling—Greyhound Lines, Inc., STB DocketNo. MC-F–20908. A third request involvingoperations between Boston and New York City, andbetween Springfield, MA, and New York City, isalso pending in Peter Pan Bus Lines, Inc.—Pooling—Greyhound Lines, Inc., STB Docket No.MC-F–20912. According to applicants, the instantapplication is a logical extension of their otherpooling agreements. Applicants state that theyconsider the four agreements to be interrelated andintend to implement them simultaneously afterapproval by the Board. We note that the UnitedStates Department of Justice, Antitrust Division, hasfiled comments in STB Docket No. MC-F–20908,recommending that the Board find that there is asubstantial likelihood that the proposed pooling ofoperations between New York City and Washingtonwould unduly restrain competition.

2 Applicants state that each bus line will set itsown passenger fares and express rates, and eachwill retain its individual revenues from operationson the pooled routes.

1 IC will continue to serve the Sewerage andWater Board track near Oak Street.

1100 New York Avenue, N.W.,Washington, DC 20005–3934.FOR FURTHER INFORMATION CONTACT:Joseph H. Dettmar, (202) 565–1600.[TDD for the hearing impaired: (202)565–1695.]SUPPLEMENTARY INFORMATION:Applicants are competitors on certainintercity routes between Albany, NY,and Boston, MA. They seek to poolportions of their passenger and expressservices over routes which they bothoperate.1 They will not, however, sharethe revenues derived from theiroperations over these routes.2Applicants state that their servicesbetween these points overlap and thatexcess schedules are operated becauseof the need to protect their respectivemarket shares. According to applicants,this has resulted in unacceptably lowload factors, an over-served market, andinefficient operations.

Applicants submit that the poolingagreement will allow them to reduceexcess bus capacity, cement theirbusiness relationship, and allow them toshare in the financial vicissitudes of thepooled-route operations. They claimpublic benefits that will include: (1)rationalization of schedules, eliminatingsome duplicative departures whileadding some departures at other timesof the day, resulting in more frequentbus service over a broader time period;(2) consolidation of terminals andcoordination of ticketing at Boston, MA,Newton, MA, Worcester, MA,Springfield, MA, and Albany, NY,resulting in greater flexibility forpassengers to use buses, tickets, andterminals; (3) capital improvements; and

(4) continued bus service by more soundand financially stable carriers. Inaddition, they assert that approval of thepooling agreement will not significantlyaffect either the quality of the humanenvironment or the conservation ofenergy resources. Rather, they claim thatthe reduction in the number ofschedules each carrier operates willresult in a salutary effect on theenvironment.

Applicants state that competition willnot be unreasonably restrained. Theyargue that: (1) the pooled service issubject to substantial intermodalcompetitive pressure from Amtrak, theairlines, and private automobiles; and(2) other motor passenger carriers mayeasily enter and compete in the market.

Copies of the application may beobtained free of charge by contactingapplicants’ representatives. A copy ofthis notice will be served on theDepartment of Justice, AntitrustDivision, 10th Street & PennsylvaniaAvenue, N.W., Washington, DC 20530.

Decided: January 7, 1998.By the Board, Chairman Morgan and Vice

Chairman Owen.Vernon A. Williams,Secretary.[FR Doc. 98–1117 Filed 1–15–98; 8:45 am]BILLING CODE 4915–00–P



[STB Finance Docket No. 33533]

Illinois Central Railroad Company andNew Orleans Public Belt Railroad—Joint Relocation Project Exemption—in New Orleans, LA

On December 23, 1997, IllinoisCentral Railroad Company (IC) and NewOrleans Public Belt Railroad (NOPB)jointly filed a notice of exemption under49 CFR 1180.2(d)(5) to reconfigure ICand NOPB operations over theiradjacent track. The proposed transactionwas scheduled to be consummated on orafter the December 30, 1997 effectivedate of the exemption.

IC is a Class I railroad operatingapproximately 2,600 miles of rail line insix states, and NOPB is a Class IIIterminal switching railroad owned bythe City of New Orleans, LA. NOPBoperates approximately 25 miles of railline in and around New Orleans.

Within the City of New Orleans, ICand NOPB own and operate adjacentmainlines. Under the joint project, ICand NOPB propose the followingtransactions: (1) NOPB will grant ICnon-exclusive bridge trackage rights

over 3.4 miles of NOPB’s Main Line andSiding Track between milepost JO.3, atLampert Junction, and milepost 3.4, atNashville Avenue; 1 (2) IC will relocateits operation to NOPB trackage and willabandon its adjacent Main Line trackagebetween milepost 917.77, at NashvilleAvenue, and milepost 921.13, atLampert Junction, a distance ofapproximately 3.36 miles; (3) IC willgrant NOPB non-exclusive bridgetrackage rights over approximately 5,568feet of IC’s Main Line from Station120+00.00, at Nashville Avenue, toStation 175+68.09, at Valence Street;and (4) IC and NOPB will perform suchincidental relocation of signals andpower switches as necessary tocomplete the proposed reconfigurationof operations contemplated by theexemption.

The transaction will simplify railoperations in the area and will reducethe number of unnecessary tracks onstreet right-of-way and reduce thenumber of tracks in grade crossings inthe area. The joint project will notchange service to shippers, expand theoperations of IC or NOPB into newterritory, or alter the existingcompetitive situation.

The Board will exercise jurisdictionover the abandonment or constructioncomponents of a relocation project, andrequire separate approval or exemption,only where the removal of track affectsservice to shippers or the constructionof new track involves expansion intonew territory. See City of Detroit v.Canadian National Ry. Co., et al., 9I.C.C.2d 1208 (1993), aff’d sub nom.,Detroit/Wayne County Port Authority v.ICC, 59 F.3d 1314 (D.C. Cir. 1995). Linerelocation projects may embracetrackage rights transactions such as theone involved here. See D.T.&I.R.—Trackage Rights, 363 I.C.C. 878 (1981).Under these standards, the incidentalabandonment, construction, andtrackage rights components require noseparate approval or exemption whenthe relocation project, as here, will notdisrupt service to shippers and thusqualifies for the class exemption at 49CFR 1180.2(d)(5).

As a condition to this exemption, anyemployees affected by the trackagerights will be protected by theconditions imposed in Norfolk andWestern Ry. Co.—Trackage Rights—BN,354 I.C.C. 605 (1978), as modified inMendocino Coast Ry., Inc.—Lease andOperate, 360 I.C.C. 653 (1980).

If the notice contains false ormisleading information, the exemptionis void ab initio. Petitions to revoke the


1 UP states that it filed this notice of exemptionto extend the trackage rights it received from SP inSTB Finance Docket No. 33128 (STB served Oct. 8,1996), which included, among others, theBakersfield Line between Dike (MP 481.0) and WestColton (MP 494.2).

exemption under 49 U.S.C. 10502(d)may be filed at any time. The filing ofa petition to revoke will notautomatically stay the transaction.

An original and 10 copies of allpleadings, referring to STB FinanceDocket No. 33533, must be filed withthe Surface Transportation Board, Officeof the Secretary, Case Control Unit, 1925K Street, N.W., Washington, DC 20423–0001. In addition, a copy of eachpleading must be served on (1) Anne E.Keating, Esq., Illinois Central RailroadCompany, 455 North Cityfront PlazaDrive, Chicago, IL 60611–5504, and (2)A. J. Waechter, Esq., Jones, Walker,Waechter, Portevent, Carrere andDenegre, 202 St. Charles Avenue, 50thFloor, New Orleans, LA 70170–5100.

Decided: January 9, 1998.By the Board, David M. Konschnik,

Director, Office of Proceedings.Vernon A. Williams,Secretary.[FR Doc. 98–1118 Filed 1–15–98; 8:45 am]BILLING CODE 4915–00–P




Maumee & Western RailroadCorporation—Operation Exemption—Maumee & Western, L.L.C.

Maumee & Western RailroadCorporation, a noncarrier, has filed averified notice of exemption under 49CFR 1150.31 to acquire operating rightsover a line of railroad owned byMaumee & Western, L.L.C., from LibertyCenter, OH (milepost TN–28.0), toWoodburn, IN (milepost 79.0), adistance of approximately 51 routemiles.

The transaction was scheduled to beconsummated on or after December 31,1997.

If the verified notice contains false ormisleading information, the exemptionis void ab initio. Petitions to reopen theproceeding to revoke the exemptionunder 49 U.S.C. 10502(d) may be filedat any time. The filing of a petition torevoke will not automatically stay thetransaction.

An original and 10 copies of allpleadings, referring to STB FinanceDocket No. 33535, must be filed withthe Surface Transportation Board, Officeof the Secretary, Case Control Unit, 1925

K Street, N.W., Washington, DC 20423–0001. In addition, a copy of eachpleading must be served on Richard R.Wilson, Esq., 1126 Eighth Avenue, Suite403, Altoona, PA 16602.



FR–4915–00–P




Union Pacific Railroad Company—Trackage Rights Exemption—SouthernPacific Transportation Company

Southern Pacific TransportationCompany (SP) has agreed to grantoverhead trackage rights to UnionPacific Transportation Company (UP)over SP’s tracks known as theBakersfield Line from milepost 479.1near Keenbrook to milepost 481.0 nearDike, a distance of 1.9 miles, in thevicinity of Los Angeles, CA. 1

The transaction was expected to beconsummated on or as soon as possibleafter January 7, 1998, the effective dateof the exemption.

As a condition to this exemption, anyemployees affected by the trackagerights will be protected by theconditions imposed in Norfolk andWestern Ry. Co.—Trackage Rights—BN,354 I.C.C. 605 (1978), as modified inMendocino Coast Ry., Inc.—Lease andOperate, 360 I.C.C. 653 (1980).

This notice is filed under 49 CFR1180.2(d)(7). If the notice contains falseor misleading information, theexemption is void ab initio. Petitions torevoke the exemption under 49U.S.C.10502(d) may be filed at any time.The filing of a petition to revoke willnot automatically stay the transaction.

An original and 10 copies of allpleadings, referring to STB FinanceDocket No. 33449, must be filed withthe Surface Transportation Board, Office

of the Secretary, Case Control Unit, 1925K Street, N.W., Washington, DC 20423–0001. In addition, a copy of eachpleading must be served on: Joseph D.Anthofer, General Attorney, 1416 DodgeStreet, #830, Omaha, NE 19381–0796.






Wabash Central RailroadCorporation—Operation Exemption—Wabash Central, L.L.C.

Wabash Central Railroad Corporation,a noncarrier, has filed a verified noticeof exemption under 49 CFR 1150.31 toacquire operating rights over a line ofrailroad owned by Wabash Central,L.L.C., from Craigsville, IN (milepost117.8), to Van Buren, IN (milepost108.6), a distance of approximately 26.4miles of rail line and incidental trackagerights.

The transaction was scheduled to beconsummated on or after December 31,1997.

If the verified notice contains false ormisleading information, the exemptionis void ab initio. Petitions to reopen theproceeding to revoke the exemptionunder 49 U.S.C. 10502(d) may be filedat any time. The filing of a petition torevoke will not automatically stay thetransaction.

An original and 10 copies of allpleadings, referring to STB FinanceDocket No. 33536, must be filed withthe Surface Transportation Board, Officeof the Secretary, Case Control Unit, 1925K Street, N.W., Washington, DC 20423–0001. In addition, a copy of eachpleading must be served on Richard R.Wilson, Esq., 1126 Eighth Avenue, Suite403, Altoona, PA 16602.






[STB Docket No. AB–32 (Sub–No. 83)] and[STB Docket No. AB–355 (Sub-No. 23)]

Boston and Maine Corporation—Abandonment and SpringfieldTerminal Railway Company—Discontinuance of Service—in Hartfordand New Haven Counties, CT

On December 29, 1997, the Bostonand Maine Corporation (B&M) andSpringfield Terminal Railway Company(ST) (referred to collectively asapplicants) filed with the SurfaceTransportation Board (Board),Washington, DC 20423, an applicationfor permission for B&M to abandon andST to discontinue service on a line ofrailroad known as the Canal Branchextending from milepost 14.50 inCheshire, CT, to milepost 24.00 inSouthington, CT, a distance ofapproximately 9.50 miles, in Hartfordand New Haven Counties, CT. The linetraverses U.S. Postal Service ZIP Codes06410, 06467, 06479, and 06489.Applicants have indicated that there areno agency stations located on the line.

The line does not contain federallygranted rights-of-way. Anydocumentation in B&M’s possessionwill be made available promptly tothose requesting it. The applicants’entire case for abandonment anddiscontinuance was filed with theapplication.

The line of railroad has appeared onB&M’s system diagram map or has beenincluded in its narrative in category 1since February 28, 1997.

The interest of railroad employeeswill be protected by Oregon Short LineR. Co.—Abandonment—Goshen, 360I.C.C. 91 (1979).

Any interested person may file withthe Board written comments concerningthe proposed abandonment anddiscontinuance or protests (includingthe protestant’s entire opposition case),by February 12, 1998. All interestedpersons should be aware that followingany abandonment of rail service andsalvage of the line, the line may besuitable for other public use, includinginterim trail use. Any request for apublic use condition under 49 U.S.C.10905 (49 CFR 1152.28 of the Board’srules) and any request for a trail usecondition under 16 U.S.C. 1247(d) (49CFR 1152.29 of the Board’s rules) mustbe filed by February 12, 1998. Personswho may oppose the abandonment ordiscontinuance but who do not wish toparticipate fully in the process byappearing at any oral hearings or bysubmitting verified statements of

witnesses containing detailed evidenceshould file comments. Personsinterested only in seeking public use ortrail use conditions should also filecomments. Persons opposing theproposed abandonment ordiscontinuance that do wish toparticipate actively and fully in theprocess should file a protest.

In addition, a commenting party orprotestant may provide:

(i) An offer of financial assistance,pursuant to 49 U.S.C. 10904 (due 120days after the application is filed or 10days after the application is granted bythe Board, whichever occurs sooner);

(ii) Recommended provisions forprotection of the interests of employees;

(iii) A request for a public usecondition under 49 U.S.C. 10905; and

(iv) A statement pertaining toprospective use of the right-of-way forinterim trail use and rail banking under16 U.S.C. 1247(d) and 49 CFR 1152.29.

Parties seeking informationconcerning the filing of protests shouldrefer to 49 CFR 1152.25.

Written comments and protests,including all requests for public use andtrail use conditions, must indicate theproceeding designation STB Nos. AB–32(Sub-No. 83) and AB–355 (Sub-No. 23)and should be filed with the Secretary,Surface Transportation Board,Washington, DC 20423, no later thanFebruary 12, 1998. Interested personsmay file a written comment or protestwith the Board to become a party to thisproceeding. A copy of each writtencomment or protest shall be servedupon the applicants’ representative,John R. Nadolny, General Counsel, LawDepartment, Boston and MaineCorporation, Iron Horse Park, N.Billerica, MA 01862. The original and10 copies of all comments or protestsshall be filed with the Board with acertificate of service. Except asotherwise set forth in part 1152, everydocument filed with the Board must beserved on all parties to the proceeding.49 CFR 1104.12(a).

The line sought to be abandoned anddiscontinued will be available forsubsidy or sale for continued rail use, ifthe Board decides to permit theabandonment and discontinuance, inaccordance with applicable laws andregulations (49 U.S.C. 10904 and 49 CFR1152.27). No subsidy arrangementapproved under 49 U.S.C. 10904 shallremain in effect for more than 1 yearunless otherwise mutually agreed by theparties (49 U.S.C. 10904(f)(4)(B)).Applicants will promptly provide uponrequest to each interested party anestimate of the subsidy and minimumpurchase price required to keep the linein operation. The carriers’

representative to whom inquiries maybe made concerning sale or subsidyterms is set forth above.

Persons seeking further informationconcerning abandonment proceduresmay contact the Board or refer to the fullabandonment or discontinuanceregulations at 49 CFR part 1152.Questions concerning environmentalissues may be directed to the Board’sSection of Environmental Analysis(SEA).

An environmental assessment (EA) (orenvironmental impact statement (EIS), ifnecessary) prepared by SEA will beserved upon all parties of record andupon any agencies or other persons whocommented during its preparation. Anyother persons who would like to obtaina copy of the EA (or EIS) may contactSEA. EAs in abandonment proceedingsnormally will be made available within33 days of the filing of the application.The deadline for submission ofcomments on the EA will generally bewithin 30 days of its service. Thecomments received will be addressed inthe Board’s decision. A supplementalEA or EIS may be issued whereappropriate.




Departmental Offices; DebtManagement Advisory Committee;Meeting

Notice is hereby given, pursuant to 5U.S.C. App. § 10(a)(2), that a meetingwill be held at the U.S. TreasuryDepartment, 15th and PennsylvaniaAvenue, N.W., Washington, D.C., onFebruary 3, 1998, of the following debtmanagement advisory committee:The Bond Market AssociationTreasury Borrowing Advisory Committee

The agenda for the meeting providesfor a technical background briefing byTreasury staff, followed by a charge bythe Secretary of the Treasury or hisdesignate that the committee discussparticular issues, and a working session.Following the working session, thecommittee will present a written reportof its recommendations.

The background briefing by Treasurystaff will be held at 9:30 a.m. Easterntime and will be open to the public. Theremaining sessions and the committee’sreporting session will be closed to the


public, pursuant to 5 U.S.C. App.§ 10(d).

This notice shall constitute mydetermination, pursuant to the authorityplaced in heads of departments by 5U.S.C. App. § 10(d) and vested in me byTreasury Department Order No. 101–05,that the closed portions of the meetingare concerned with information that isexempt from disclosure under 5 U.S.C.§ 552b(c)(9)(A). The public interestrequires that such meetings be closed tothe public because the TreasuryDepartment requires frank and fulladvice from representatives of thefinancial community prior to making itsfinal decision on major financingoperations. Historically, this advice hasbeen offered by debt managementadvisory committees established by theseveral major segments of the financialcommunity. When so utilized, such acommittee is recognized to be anadvisory committee under 5 U.S.C. App.§ 3.

Although the Treasury’s finalannouncement of financing plans maynot reflect the recommendationsprovided in reports of the advisorycommittee, premature disclosure of thecommittee’s deliberations and reportswould be likely to lead to significantfinancial speculation in the securitiesmarket. Thus, these meetings fall withinthe exemption covered by 5 U.S.C.§ 552b(c)(9)(A).

The Office of the Assistant Secretaryfor Financial Markets is responsible formaintaining records of debtmanagement advisory committeemeetings and for providing annualreports setting forth a summary ofcommittee activities and such othermatters as may be informative to thepublic consistent with the policy of 5U.S.C. § 552b.Gary Gensler,Assistant Secretary (Financial Markets).[FR Doc. 98–736 Filed 1–15–98; 8:45 am]BILLING CODE 4810–25–M


Internal Revenue Service

Proposed Collection; CommentRequest for Form 8800

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Notice and request forcomments.

SUMMARY: The Department of theTreasury, as part of its continuing effortto reduce paperwork and respondentburden, invites the general public andother Federal agencies to take this

opportunity to comment on proposedand/or continuing informationcollections, as required by thePaperwork Reduction Act of 1995,Public Law 104–13 (44 U.S.C.3506(c)(2)(A)). Currently, the IRS issoliciting comments concerning Form8800, Application for AdditionalExtension of Time To File U.S. Returnfor a Partnership, REMIC, or for CertainTrusts.DATES: Written comments should bereceived on or before March 17, 1998 tobe assured of consideration.ADDRESSES: Direct all written commentsto Garrick R. Shear, Internal RevenueService, room 5571, 1111 ConstitutionAvenue NW., Washington, DC 20224.FOR FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the form and instructionsshould be directed to Martha R. Brinson,(202) 622–3869, Internal RevenueService, room 5571, 1111 ConstitutionAvenue NW., Washington, DC 20224.


Title: Application for AdditionalExtension of Time To File U.S. Returnfor a Partnership, REMIC, or for CertainTrusts.

OMB Number: 1545–1057Form Number: 8800Abstract: Form 8800 is used by

partnerships, REMICs, and by certaintrusts to request an additional extensionof time (up to 3 months) to file Form1065, Form 1041, or Form 1066. Form8800 contains data needed by the IRS todetermine whether or not a taxpayerqualifies for such an extension.

Current Actions: There are no changesbeing made to the form at this time.

Type of Review: Extension of acurrently approved collection.

Affected Public: Business or other for-profit organizations and farms.

Estimated Number of Respondents:20,000

Estimated Time Per Respondent: 13min.

Estimated Total Annual BurdenHours: 4,210

The following paragraph applies to allof the collections of information coveredby this notice:

An agency may not conduct orsponsor, and a person is not required torespond to, a collection of informationunless the collection of informationdisplays a valid OMB control number.Books or records relating to a collectionof information must be retained as longas their contents may become materialin the administration of any internalrevenue law. Generally, tax returns andtax return information are confidential,as required by 26 U.S.C. 6103.

Request for Comments

Comments submitted in response tothis notice will be summarized and/orincluded in the request for OMBapproval. All comments will become amatter of public record. Comments areinvited on: (a) Whether the collection ofinformation is necessary for the properperformance of the functions of theagency, including whether theinformation shall have practical utility;(b) the accuracy of the agency’s estimateof the burden of the collection ofinformation; (c) ways to enhance thequality, utility, and clarity of theinformation to be collected; (d) ways tominimize the burden of the collection ofinformation on respondents, includingthrough the use of automated collectiontechniques or other forms of informationtechnology; and (e) estimates of capitalor start-up costs and costs of operation,maintenance, and purchase of servicesto provide information.

Approved: January 8, 1998.Garrick R. Shear,IRS Reports Clearance Officer.[FR Doc. 98–1079 Filed 1–15–98; 8:45 am]BILLING CODE 4830–01–U



Proposed Collection; CommentRequest for Forms 8038, 8038–G, and8038–GC

AGENCY: Internal Revenue Service (IRS),Treasury.

ACTION: Notice and request forcomments.

SUMMARY: The Department of theTreasury, as part of its continuing effortto reduce paperwork and respondentburden, invites the general public andother Federal agencies to take thisopportunity to comment on proposedand/or continuing informationcollections, as required by thePaperwork Reduction Act of 1995,Public Law 104–13 (44 U.S.C.3506(c)(2)(A)).

Currently, the IRS is solicitingcomments concerning Forms 8038,Information Return for Tax-ExemptPrivate Activity Bond Issues, 8083–G,Information Return for Tax-ExemptGovernmental Obligations, and 8038–GC, Information Return for Small Tax-Exempt Governmental Bond Issues,Leases, and Installment Sales.

DATES: Written comments should bereceived on or before March 17, 1998 tobe assured of consideration.


ADDRESSES: Direct all written commentsto Garrick R. Shear, Internal RevenueService, room 5571, 1111 ConstitutionAvenue NW., Washington, DC 20224.FOR FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the form and instructionsshould be directed to Martha R. Brinson,(202) 622–3869, Internal RevenueService, room 5571, 1111 ConstitutionAvenue NW., Washington, DC 20224.


Title: Information Return for Tax-Exempt Private Activity Bond Issues(Form 8038), Information Return forTax-Exempt Governmental Obligations(Form 8038–G), and Information Returnfor Small Tax-Exempt GovernmentalBond Issues, Leases and InstallmentSales (Form 8038–GC).

OMB Number: 1545–0720.Form Number: 8038, 8038–G, and

8038–GC.Abstract: Issuers of state or local

bonds must comply with certaininformation reporting requirementscontained in Internal Revenue Codesection 149 to qualify for tax exemption.The information must be reported by theissuers about bonds issued by themduring each preceding calendar quarter.Forms 8038, 8038–G, and 8038–GC areused to provide the IRS with theinformation required by Code section149 and to monitor the requirements ofCode sections 141 through 150.

Current Actions: There are no changesbeing made to the forms at this time.


Affected Public: State, local or tribalgovernments and not-for-profitinstitutions.

Estimated Number of Respondents:14,500.

Estimated Time Per Respondent: 59hr., 7 min.

Estimated Total Annual BurdenHours: 857,140.




Comments submitted in response tothis notice will be summarized and/or

included in the request for OMBapproval. All comments will become amatter of public record. Comments areinvited on: (a) Whether the collection ofinformation is necessary for the properperformance of the functions of theagency, including whether theinformation shall have practical utility;(b) the accuracy of the agency’s estimateof the burden of the collection ofinformation; (c) ways to enhance thequality, utility, and clarity of theinformation to be collected; (d) ways tominimize the burden of the collection ofinformation on respondents, includingthrough the use of automated collectiontechniques or other forms of informationtechnology; and (e) estimates of capitalor start-up costs and costs of operation,maintenance, and purchase of servicesto provide information.




Proposed Collection; CommentRequest for Form 1024

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Notice and request forcomments.

SUMMARY: The Department of theTreasury, as part of its continuing effortto reduce paperwork and respondentburden, invites the general public andother Federal agencies to take thisopportunity to comment on proposedand/or continuing informationcollections, as required by thePaperwork Reduction Act of 1995,Public Law 104–13 (44 U.S.C.3506(c)(2)(A)). Currently, the IRS issoliciting comments concerning Form1024, Application for Recognition ofExemption Under Section 501(a).DATES: Written comments should bereceived on or before March 17, 1998 tobe assured of consideration.ADDRESSES: Direct all written commentsto Garrick R. Shear, Internal RevenueService, room 5571, 1111 ConstitutionAvenue NW., Washington, DC 20224.FOR FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the form and instructionsshould be directed to Martha R. Brinson,(202) 622–3869, Internal RevenueService, room 5571, 1111 ConstitutionAvenue NW., Washington, DC 20224.


Title: Application for Recognition ofExemption Under Section 501(a).

OMB Number: 1545–0057.Form Number: 1024.Abstract: Organizations seeking

exemption from Federal income taxunder Internal Revenue Code section501(a) as an organization described inmost paragraphs of section 501(c) mustuse Form 1024 to apply for exemption.The information collected is used todetermine whether the organizationqualifies for tax-exempt status.

Current Actions: There are no changesbeing made to the form at this time.


Affected Public: Not-for-profitinstitutions.

Estimated Number of Respondents:4,718.

Estimated Time Per Respondent: 61hr., 32 min.

Estimated Total Annual BurdenHours: 290,290.




Comments submitted in response tothis notice will be summarized and/orincluded in the request for OMBapproval. All comments will become amatter of public record. Comments areinvited on: (a) Whether the collection ofinformation is necessary for the properperformance of the functions of theagency, including whether theinformation shall have practical utility;(b) the accuracy of the agency’s estimateof the burden of the collection ofinformation; (c) ways to enhance thequality, utility, and clarity of theinformation to be collected; (d) ways tominimize the burden of the collection ofinformation on respondents, includingthrough the use of automated collectiontechniques or other forms of informationtechnology; and (e) estimates of capitalor start-up costs and costs of operation,maintenance, and purchase of servicesto provide information.





1998 Electronic Filing: Low-IncomeHousing Credit Forms

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Low-Income Housing Creditforms.

SUMMARY: The Internal Revenue Serviceis planning to conduct an automatedpilot program during 1998 for filingLow-Income Housing Credit forms to befiled electronically (via modem tomodem). This pilot program will beavailable without geographic limitation,although all processing is centralized atthe Internal Revenue Service Center inPhiladelphia, Pennsylvania. Participantsmust have secured prior authorizationfrom the Internal Revenue Service.Interested parties can obtaininformation by writing or calling theIRS. Comments on the program arewelcome.

DATES: Application can be submittedyear round.ADDRESSES: Internal Revenue Service,Philadelphia Service Center, MagneticMedia Project Office, D.P. 115, 11601Roosevelt Blvd., Philadelphia, PA19154. Telephone: (800) 829–6945 or(215) 516–7533 (not a toll-free number).SUPPLEMENTARY INFORMATION: The IRS isreceiving an increasing number ofcomputer-prepared forms, and isexploring methods to use the flexibilityprovided by computer preparation toachieve processing efficiencies.Electronic filing eliminates most of themanual processes required by IRS tohandle paper documents, which willincrease the quality of the final product,speed up the processing and reduceunnecessary correspondence.

Generally, the procedures forelectronic filing will require all the datacurrently supplied on the paper formincluding attachments which usuallyaccompany the form. Additionally,filers will be required to test beforeacceptance into the program. The LIHCpilot program is being offered to StateHousing Agencies and softwaredevelopers.Joseph H. Cloonan,Director, Philadelphia Service Center.[FR Doc. 98–1078 Filed 1–15–98; 8:45 am]BILLING CODE 4830–01–U

UNITED STATES INFORMATIONAGENCY

U.S. Advisory Commission on PublicDiplomacy meeting; Notice

SUMMARY: The U.S. AdvisoryCommission on Public Diplomacy willmeet on January 21 in Room 600, 3014th Street, S.W., Washington, D.C., from10:00 a.m. to 11:00 a.m.

The Commission will meet with Mr.Kevin Klose, Director, InternationalBureau of Broadcasting, to discusstelevision policies, programs, andpotential in U.S. internationalbroadcasting.

FOR FURTHER INFORMATION: Please callBetty Hayes, (202) 619–4468, if you areinterested in attending the meeting.Space is limited and entrance to thebuilding is controlled.


Rose Royal,Management Analyst, Federal RegisterLiaison.[FR Doc. 98–1149 Filed 1–15–98; 8:45 am]


This section of the FEDERAL REGISTERcontains editorial corrections of previouslypublished Presidential, Rule, Proposed Rule,and Notice documents. These corrections areprepared by the Office of the FederalRegister. Agency prepared corrections areissued as signed documents and appear inthe appropriate document categorieselsewhere in the issue.

Corrections Federal Register

2723

Vol. 63, No. 11



Commodity Credit Corporation

Title I, P.L. 480 Agreements With thePrivate Trade

Correction

In notice document 97–31480beginning on page 63694, in the issue ofTuesday, December 2, 1997, make thefollowing correction:

On page 63694, in the second column,in the DATES section, in the secondline, ‘‘February 2, 1997’’ should read‘‘February 2, 1998’’.BILLING CODE 1505-01-D


12 CFR Part 226

[Regulation Z; Docket No. R-0960]

Truth in Lending

Correction

In rule document 97–31087 beginningon page 63441, in the issue of Monday,December 1, 1997, make the followingcorrection:

Appendix H to Part 226 [Corrected]

On page 63444, in the third column,in appendix H to part 226, the heading‘‘Example’’ should read ‘‘[Example’’.BILLING CODE 1505-01-D



26 CFR Parts 513 and 602

[TD 8734]

RIN 1545-AU43; 1545-AT77

General Revision of RegulationsRelating to Withholding of Tax onCertain U.S. Source Income Paid toForeign Persons and RelatedCollection, Refunds, and Credits;Revision of Information Reporting andBackup Withholding Regulations; andRemoval of Regulations Under Part35a and of Certain Regulations UnderIncome Tax Treaties

Correction

In rule document 97–25998,beginning on page 53387, in the issue ofTuesday, October 14, 1997, make thefollowing correction:

§ 513.2 [Corrected]

1. On page 53497, in the first column,in § 513.2, in the fifth line, ‘‘does’’should read ‘‘does not’’.

§ 602.101 [Corrected]

2. On page 53498, in the secondcolumn, in § 602.101(c), in the last table,in the third line, ‘‘11.1441–8’’ shouldread ‘‘1.1441–8’’.BILLING CODE 1505-01-D

fede

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egiste

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2725

FridayJanuary 16, 1998

Part II

EnvironmentalProtection Agency40 CFR Part 81Identification of Ozone Areas Attainingthe 1-Hour Standard and to Which the 1-Hour Standard is No Longer Applicable;Final and Proposed Rules



40 CFR Part 81

[FRL–5945–7]

Identification of Ozone Areas Attainingthe 1-Hour Standard and to Which the1-Hour Standard Is No LongerApplicable

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Direct final rule.

SUMMARY: The EPA is taking actiontoday to identify ozone areas where the1-hour standard is no longer applicable.Therefore, the 40 CFR part 81 for ozoneis being amended to reflect suchchanges. Today’s regulation is beingpublished in direct response to thePresident’s memorandum of July 16,1997. The President’s memo directedEPA to publish within 90 days an actionidentifying ozone areas to which the 1-hour standard will cease to applybecause they have not measured acurrent violation of the 1-hour standard.For all other areas, the 1-hour standardwill continue to apply. Furthermore,this action is being done to assist in thephasing-out of the 1-hour standard sincethe recently promulgated new 8-hourstandard is now in effect and is moreprotective of public health than the 1-hour ozone standard. The goal is tomove toward implementation of thenew 8-hour standard. Following today’saction, the Agency intends to publish,in early 1998, a subsequent documentwhich takes similar action to revoke the1-hour standard in additional areas thathave air quality that does not violate the1-hour standard. Furthermore, theAgency will publish, on an annualbasis, similar actions identifying areaswhere the 1-hour standard is no longerapplicable.DATES: This regulation will becomeeffective on March 17, 1998 unlessadverse comments are received duringthe public comment period. Writtencomments on this rulemaking must belimited to addressing the technicalcorrectness of these determinations. Allcomments must be received on or beforeFebruary 17, 1998. If adverse commentsare timely received on any provision ofthe direct final rule, that provision willbe withdrawn and only those provisionson which no such adverse comments arereceived will become effective on March17, 1998.ADDRESSES: Documents relevant to thisrulemaking are available for inspectionat the Air and Radiation Docket andInformation Center (6101), Attention:

Docket No. A–97–42, U.S.Environmental Protection Agency, 401M Street SW, Room M-1500,Washington, DC 20460, telephone (202)260–7548, between 8:00 a.m. and 4:00p.m., Monday through Friday, excludinglegal holidays. A reasonable fee may becharged for copying. Comments anddata may also be submittedelectronically by following theinstructions under SUPPLEMENTARYINFORMATION of this document. NoConfidential Business Information (CBI)should be submitted through e-mail.FOR FURTHER INFORMATION CONTACT:Questions concerning this notice shouldbe addressed to Annie Nikbakht (policy)or Barry Gilbert (air quality data), Officeof Air Quality Planning and Standards,Air Quality Strategies and StandardsDivision, Ozone Policy and StrategiesGroup, MD–15, Research Triangle Park,NC 27711, telephone (919) 541–5246/5238. In addition, the followingRegional Contacts may be called forindividual information regardingmonitoring data and policy mattersspecific for each Regional Office’sgeographic area:Region I—Richard P. Burkhart, (617)

565–3578Region II—Ray Werner, (212) 637–3706Region III—Marcia Spink, (215) 566–

2104Region IV—Kay Prince, (404) 562–9026Region V—Todd Nettesheim, (312) 353–

9153Region VI—Lt. Mick Cote, (214) 665–

7219Region VII—Royan Teter, (913) 551–

7609Region VIII—Tim Russ, (303) 312–6479Region IX—Morris Goldberg,(AIR 7),

(415) 744–1296Region X—William Puckett, (206) 553–

1702SUPPLEMENTARY INFORMATION: ElectronicAvailability—The official record for thisrulemaking, as well as the publicversion, has been established underdocket number A–97–42 (includingcomments and data submittedelectronically as described below). Apublic version of this record, includingprinted, paper versions of electroniccomments, which does not include anyinformation claimed as CBI, is availablefor inspection from 8:00 a.m. to 4:00p.m., Monday through Friday, excludinglegal holidays. The official rulemakingrecord is located at the address inADDRESSES at the beginning of thisdocument. Electronic comments can besent directly to EPA at: [email protected]. Electroniccomments must be submitted as anASCII file avoiding the use of specialcharacters and any form of encryption.

Comments and data will also beaccepted on disks in WordPerfect in 5.1file format or ASCII file format. Allcomments and data in electronic formmust be identified by the docket numberA–97–42. Electronic comments on thisdirect final rule may be filed online atmany Federal Depository Libraries.

If adverse comments are timelyreceived on any provision of this directfinal rule, all such comments will beaddressed in a subsequent final rulebased on those provisions of theproposed rule contained in theProposed Rules Section of this FederalRegister that is identical to this directfinal rule. Such provisions will bewithdrawn from the Direct Final Rule.

Table of ContentsI. BackgroundII. Summary of Today’s ActionIII. Analysis of Air Quality DataIV. TablesV. Other Regulatory Requirements

A. Executive Order 12866B. Regulatory Flexibility ActC. Unfunded MandatesD. Submission to Congress and the General

Accounting OfficeE. Petitions for Judicial Review

I. BackgroundOn November 6, 1991, the Agency

issued a rulemaking (56 FR 56694)which set forth the attainment status,including designations andclassifications, for selected areasaffected by ozone, carbon monoxide,particulate matter, and lead nationalambient air quality standards (NAAQS).That rulemaking established on a State-by-State, pollutant-by-pollutant basis,the attainment status of the above-mentioned NAAQS. Such air qualitydata used in the determinations for therulemaking were submitted by theappropriate States; the data wereapproved and the areas were thendesignated and classified by the EPA.Subsequent to the November 6, 1991action, on November 30, 1992, theAgency issued corrections (57 FR56762) to the tables for some of thedesignations, boundaries, andclassifications as provided for undersection 110(k)(6) of the Clean Air Act(CAA).

Under the CAA, designations can bechanged if sufficient data are availableto warrant such changes and if certainother requirements are met (see CAAsection 107(d)(3)(D)). Section107(d)(3)(E) of the CAA provides thatthe Administrator may promulgate aredesignation of a nonattainment area toattainment if certain criteria are met.Such has been the case for several ozonenonattainment areas which have beenredesignated to attainment over the


course of years following the CAAAmendments of 1990. The Agency haspromulgated these redesignations toattainment in the Federal Register andthus has amended 40 CFR parts 52 and81 accordingly.

On July 16, 1997, the President issueda memorandum (62 FR 38421, July 18,1997) to the Administrator of the EPAwhich indicates that within 90 days ofpromulgation of the new 8-hourstandard, the EPA will publish an actionidentifying ozone areas to which the 1-hour standard will cease to apply. Thememorandum states that for areas wherethe air quality does not currently attainthe 1-hour standard, the 1-hour standardwill continue in effect. The provisionsof subpart 2 of title I of the CAA wouldalso apply to currently designatednonattainment areas until such time aseach area has air quality meeting the 1-hour standard.

On July 18, 1997 (62 FR 38856), EPApromulgated a regulation replacing the1-hour ozone standard with an 8-hourstandard at a level of 0.08 parts permillion (ppm). The form of the 8-hourstandard is based on the 3-year averageof the annual fourth-highest dailymaximum 8-hour average ozoneconcentrations measured at eachmonitor within an area. The newprimary standard which becameeffective on September 16, 1997 willprovide increased protection to thepublic, especially children and other at-risk populations. On July 18, 1997, EPAalso announced that revocation of the 1-hour ozone NAAQS would be delayeduntil areas achieved attainment of the 1-hour NAAQS. This was done in order tofacilitate continuity in public healthprotection during the transition to thenew NAAQS.

II. Summary of Today’s Action

The purpose of this document is torevoke the 1-hour standard in thoseareas that EPA has determined are notviolating the 1-hour standard. For allother areas the 1-hour standard willcontinue in effect. The purpose ofretaining the current standard for suchareas is to ensure a smooth transition tothe new standard. When the areas notmeeting the 1-hour standard have airquality that meets the 1-hour standard,as determined by EPA, then the Agencywill likewise revoke the 1-hour standardfor such areas.

In the immediate future, the Agencyintends to issue guidance regarding theregulatory implications of today’s action(revoking the 1-hour standard) as relatedto those areas where the 1-hour standardis no longer applicable.

III. Analysis of Air Quality DataThis action, revoking the 1-hour

standard in selected areas, is basedupon analysis of quality-assured,ambient air quality monitoring datashowing no violations of the 1-hourozone standard. The method fordetermining attainment of the ozoneNAAQS is contained in 40 CFR part50.9 and Appendix H to that section.The level of the 1-hour primary andsecondary NAAQS for ozone is 0.12ppm.

The 1-hour standard no longer appliesto an area once EPA determines that thearea has air quality not violating the 1-hour standard. Determinations for thisnotice were based upon the most recentdata available, generally 1994-1996 data.The Agency did use 1997 air qualitydata where violations were documentedduring the early portion of the 1997ozone season. In order to revoke the 1-hour standard based upon 1995–1997air quality data, measurementsencompassing the complete ozoneseason would need to be available andexamined. Therefore, after today’saction, the Agency intends to publish,in early 1998, a subsequent noticewhich takes similar action to revoke the1-hour standard in additional areas thathave air quality data for 1995–1997 thatdo not violate the 1-hour standard.Detailed air quality data informationused for today’s determinations iscontained in the Technical SupportDocument (TSD) to Docket No. A–97–42.

IV. TablesThe ozone tables codified in today’s

action are significantly different fromthe tables now included in 40 CFR part81. The current 40 CFR part 81designation listings (revised as ofNovember 6, 1991) include, by State andNAAQS pollutant, a brief description ofareas within the State and theirrespective designation. Today’s actionincludes completely new tables forozone which indicate areas where the 1-hour standard no longer applies, as wellas where the 1-hour standard remains ineffect.

V. Other Regulatory Requirements

A. Executive Order 12866The Office of Management and Budget

(OMB) has exempted this regulatoryaction from Executive Order 12866review.

B. Regulatory Flexibility ActUnder the Regulatory Flexibility Act,

5 U.S.C. 600 et seq., EPA must preparea regulatory flexibility analysisassessing the impact of any proposed or

final rule on small entities (5 U.S.C. 603and 604). Alternatively, EPA may certifythat the rule will not have a significantimpact on a substantial number of smallentities. Small entities include smallbusinesses, small not-for-profitenterprises, and government entitieswith jurisdiction over populations ofless than 50,000. The EPA is certifyingthat this rule will not have a significantimpact on a substantial number of smallentities.

C. Unfunded MandatesUnder Section 202 of the Unfunded

Mandates Reform Act of 1995(‘‘Unfunded Mandates Act’’), signedinto law on March 22, 1995, EPA mustprepare a budgetary impact statement toaccompany any proposed or final rulethat includes a Federal mandate thatmay result in estimated costs to State,local, or tribal governments in theaggregate; or to private sector, of $100million or more. Under Section 205,EPA must select the most cost-effectiveand least burdensome alternative thatachieves the objectives of the rule andis consistent with statutoryrequirements. Section 203 requires EPAto establish a plan for informing andadvising any small governments thatmay be significantly or uniquelyimpacted by the rule.

The EPA has determined that theapproval action promulgated does notinclude a Federal mandate that mayresult in estimated costs of $100 millionor more to either State, local, or tribalgovernments in the aggregate, or to theprivate sector. This Federal actionimposes no new requirements.Accordingly, no additional costs toState, local, or tribal governments, or tothe private sector, result from thisaction.

D. Submission to Congress and theGeneral Accounting Office

Under 5 U.S.C. 801(a)(1)(A), as addedby the Small Business RegulatoryEnforcement Fairness Act of 1996, EPAsubmitted a report containing this ruleand other required information to theU.S. Senate, the U.S. House ofRepresentatives and the ComptrollerGeneral of the General AccountingOffice prior to publication of the rule intoday’s Federal Register. This rule isnot a ‘‘major rule’’ as defined by 5U.S.C. 804(2).

E. Petitions for Judicial ReviewUnder section 307(b)(1) of the CAA,

petitions for judicial review of thisaction must be filed in the United StatesCourt of Appeals for the appropriatecircuit by May 18, 1998. Filing apetition for reconsideration by the


Administrator of this final rule does notaffect the finality of this rule for thepurposes of judicial review nor does itextend the time within which a petitionfor judicial review may be filed, andshall not postpone the effectiveness ofsuch rule or action. This action may not

be challenged later in proceedings toenforce its requirements (see section307(b)(2)).


Air pollution control, National parks,Wilderness areas.

Dated: December 29, 1997.Carol M. Browner,Administrator.

For the reasons set out in thepreamble, title 40, chapter I of the Codeof Federal Regulations is amended asfollows:

PART 81—[AMENDED]

1. The authority citation for part 81 continues to read as follows:Authority: 42 U.S.C. 7401–7671q.

2. In § 81.301, the table entitled ‘‘Alabama—Ozone’’ is revised to read as follows:

§ 81.301 Alabama.* * * * *

ALABAMA—OZONE (1-HOUR STANDARD)

Designated areaDesignation Classification

Date1 Type Date1 Type

Birmingham Area:Jefferson County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Marginal.Shelby County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Marginal.

Rest of State ............................................................................ .................... 1 hr. std. N.A.2Autauga CountyBaldwin CountyBarbour CountyBibb CountyBlount CountyBullock CountyButler CountyCalhoun CountyChambers CountyChilton CountyChoctaw CountyClarke CountyClay CountyCleburne CountyCoffee CountyColbert CountyConecuh CountyCoosa CountyCovington CountyCrenshaw CountyCullman CountyDale CountyDallas CountyDe Kalb CountyElmore CountyEscambia CountyEtowah CountyFayette CountyFranklin CountyGeneva CountyGreene CountyHale CountyHenry CountyHouston CountyJackson CountyLamar CountyLauderdale CountyLawrence CountyLee CountyLimestone CountyLowndes CountyMacon CountyMadison CountyMarengo CountyMarion CountyMarshall CountyMobile County


ALABAMA—OZONE (1-HOUR STANDARD)—Continued



Monroe CountyMontgomery CountyMorgan CountyPerry CountyPickens CountyPike CountyRandolph CountyRussell CountySt. Clair CountySumter CountyTalladega CountyTallapoosa CountyTuscaloosa CountyWalker CountyWashington CountyWilcox CountyWinston County

1 This date is March 17, 1998, unless otherwise noted.2 1 hour standard Not Applicable.

* * * * * * *3. In § 81.302, the table entitled ‘‘Alaska—Ozone’’ is revised to read as follows:

§ 81.302 Alaska.* * * * * * *

ALASKA—OZONE (1-HOUR STANDARD)


Date 1 Type 2 Date 1 Type 2

AQCR 08 Cook Inlet Intrastate ............................................... .................... 1 hr. std. N.A.2Anchorage Election DistrictKenai Penninsula Election DistrictMatanuska-Susitna Election DistrictSeward Election District

AQCR 09 Northern Alaska Intrastate ...................................... .................... 1 hr. std. N.A.2Barrow Election DistrictFairbanks Election DistrictKobuk Election DistrictNome Election DistrictNorth Slope Election DistrictNorthwest Arctic BoroughSoutheast Fairbanks Election DistrictUpper Yukon Election DistrictYukon-Koyukuk Election District

AQCR 10 South Central Alaska Intrastate .............................. .................... 1 hr. std. N.A.2Aleutian Islands Election DistrictAleutians East BoroughAleutians West CensusBethel Election DistrictBristol Bay Borough Election DistrictBristol Bay Election DistrictCordova-McCarthy Election DistrictDillingham Election DistrictKodiak Island Election DistrictKuskokwim Election DistrictValdez-Cordova Election DistrictWade Hampton Election District

AQCR 11 Southeastern Alaska Intrastate .............................. .................... 1 hr. std. N.A.2Angoon Election DistrictHaines Election DistrictJuneau Election DistrictKetchikan Election DistrictOuter Ketchikan Election DistrictPrince Of Wales Election DistrictSitka Election District


ALASKA—OZONE (1-HOUR STANDARD)—Continued


Date 1 Type 2 Date 1 Type 2

Skagway-Yakutat Election DistrictWrangell-Petersburg Election District


* * * * * * *

4. In § 81.303, the table entitled ‘‘Arizona—Ozone’’ is revised to read as follows:

§ 81.303 Arizona.

* * * * * * *

ARIZONA-OZONE (1-HOUR STANDARD)


Date 1 Type Date 1 Type

Phoenix Area:Maricopa County (part) .................................................... 11/15/90 Nonattainment ............... 12/08/97 Serious.The Urban Planning Area of the Maricopa Association of

Governments is bounded as follows:1. Commencing at a point which is at the intersec-

tion of the eastern line of Range 7 East, Gila andSalt River Baseline and Meridian, and the south-ern line of Township 2 South, said point is thesoutheastern corner of the Maricopa Associationof Governments Urban Planning Area, which isthe point of beginning;

2. thence, proceed northerly along the eastern lineof Range 7 East, which is the common boundarybetween Maricopa and Pinal Counties, as de-scribed in Arizona Revised Statute Section 11–109, to a point where the eastern line of Range 7East intersects the northern line of Township 1North, said point is also the intersection of theMaricopa County Line and the Tonto NationalForest Boundary, as established by ExecutiveOrder 869 dated July 1, 1908, as amended andshown on the U.S. Forest Service 1969 Plani-metric Maps;

3. thence, westerly along the northern line of Town-ship 1 North to approximately the southwest cor-ner of the southeast quarter of Section 35, Town-ship 2 North, Range 7 East, said point being theboundary of the Tonto National Forest and UseryMountain Semi- Regional Park;

4. thence, northerly along the Tonto National ForestBoundary, which is generally the western line ofthe east half of Sections 26 and 35 of Township2 North, Range 7 East, to a point which is wherethe quarter section line intersects with the north-ern line of Section 26, Township 2 North, Range7 East, said point also being the northeast cornerof the Usery Mountain Semi-Regional Park;

5. thence, westerly along the Tonto National ForestBoundary, which is generally the south line ofSections 19, 20, 21 and 22 and the southern lineof the west half of Section 23, Township 2 North,Range 7 East, to a point which is the southwestcorner of Section 19, Township 2 North, Range 7East;

6. thence, northerly along the Tonto National ForestBoundary to a point where the Tonto NationalForest Boundary intersects with the easternboundary of the Salt River Indian Reservation,generally described as the center line of the SaltRiver Channel;


ARIZONA-OZONE (1-HOUR STANDARD)—Continued



7. thence, northeasterly and northerly along thecommon boundary of the Tonto National Forestand the Salt River Indian Reservation to a pointwhich is the northeast corner of the Salt River In-dian Reservation, and the southeast corner of theFort McDowell Indian Reservation, as shown onthe plat dated July 22, 1902, and recorded withthe U.S. Government on June 15, 1902;

8. thence, northeasterly along the common bound-ary between the Tonto National Forest and theFort McDowell Indian Reservation to a pointwhich is the northeast corner of the FortMcDowell Indian Reservation;

9. thence, southwesterly along the northern bound-ary of the Fort McDowell Indian Reservation,which line is a common boundary with the TontoNational Forest, to a point where the boundaryintersects with the eastern line of Section 12,Township 4 North, Range 6 East;

10. thence, northerly along the eastern line ofRange 6 East to a point where the eastern line ofRange 6 East intersects with the southern line ofTownship 5 North, said line is the boundary be-tween the Tonto National Forest and the eastboundary of the McDowell Mountain RegionalPark;

11. thence, westerly along the southern line ofTownship 5 North to a point where the southernline intersects with the eastern line of Range 5East which line is the boundary of Tonto NationalForest and the north boundary of McDowellMountain Regional Park;

12. thence, northerly along the eastern line ofRange 5 East to a point where the eastern line ofRange 5 East intersects with the northern line ofTownship 5 North, which line is the boundary ofthe Tonto National Forest;

13. thence, westerly along the northern line ofTownship 5 North to a point where the northernline of Township 5 North intersects with the eas-terly line of Range 4 East, said line is the bound-ary of the Tonto National Forest;

14. thence, northerly along the eastern line ofRange 4 East to a point where the eastern line ofRange 4 East intersects with the northern line ofTownship 6 North, which line is the boundary ofthe Tonto National Forest;

15. thence, westerly along the northern line ofTownship 6 North to a point of intersection withthe Maricopa-Yavapai County line, which is gen-erally described in Arizona Revised Statute Sec-tion 11–109 as the center line of the Aqua FriaRiver (Also the north end of Lake Pleasant);

16. thence, southwesterly and southerly along theMaricopa-Yavapai County line to a point which isdescribed by Arizona Revised Statute Section11–109 as being on the center line of the AquaFria River, two miles southerly and below themouth of Humbug Creek;

17. thence, southerly along the center line of theAqua Fria River to the intersection of the centerline of the Aqua Fria River and the center line ofBeardsley Canal, said point is generally in thenortheast quarter of Section 17, Township 5North, Range 1 East, as shown on the U.S. Geo-logical Survey’s Baldy Mountain, Arizona Quad-rangle Map, 7.5 Minute series (Topographic),dated 1964;





18. thence, southwesterly and southerly along thecenter line of Beardsley Canal to a point which isthe center line of the Beardsley Canal where itintersects with the center line of Indian SchoolRoad;

19. thence, westerly along the center line of WestIndian School Road to a point where the centerline of West Indian School Road intersects withthe center line of North Jackrabbit Trail;

20. thence, southerly along the center line of Jack-rabbit Trail approximately nine and three-quartermiles to a point where the center line of Jack-rabbit Trail intersects with the Gila River, saidpoint is generally on the north-south quarter sec-tion line of Section 8, Township 1 South, Range 2West;

21. thence, northeasterly and easterly up the GilaRiver to a point where the Gila River intersectswith the northern extension of the western bound-ary of Estrella Mountain Regional Park, whichpoint is generally the quarter corner of the north-ern line of Section 31, Township 1 North, Range1 West;

22. thence, southerly along the extension of thewestern boundary and along the western bound-ary of Estrella Mountain Regional Park to a pointwhere the southern extension of the westernboundary of Estrella Mountain Regional Parkintersects with the southern line of Township 1South;

23. thence, easterly along the southern line ofTownship 1 South to a point where the south lineof Township 1 South intersects with the westernline of Range 1 East, which line is generally thesouthern boundary of Estrella Mountain RegionalPark;

24. thence, southerly along the western line ofRange 1 East to the southwest corner of Section18, Township 2 South, Range 1 East, said line isthe western boundary of the Gila River IndianReservation;

25. thence, easterly along the southern boundary ofthe Gila River Indian reservation, which is thesouthern line of Sections 13, 14, 15, 16, 17 and18, Township 2 South, Range 1 East, to theboundary between Maricopa and Pinal Countiesas described in Arizona Revised Statutes Section11–109 and 11–113, which is the eastern line ofRange 1 East;

26. thence, northerly along the eastern boundary ofRange 1 East, which is the common boundarybetween Maricopa and Pinal Counties, to a pointwhere the eastern line of Range 1 East intersectsthe Gila River;

27. thence, southerly up the Gila River to a pointwhere the Gila River intersects with the southernline of Township 2 South; and.

28. thence, easterly along the southern line ofTownship 2 South to the point of beginning whichis a point where the southern line of Township 2South intersects with the eastern line of Range 7East.

Tucson Area:Pima County (part)

Tuscon area .............................................................. .................... 1 hr. std. N.A.2Rest of State .................................................................... .................... 1 hr. std. N.A.2

Apache CountyCochise CountyCoconino CountyGila County





Graham CountyGreenlee CountyLa Paz CountyMaricopa County (part)

area outside of PhoenixMohave CountyNavajo CountyPima County (part)

Remainder of countyPinal CountySanta Cruz CountyYavapai CountyYuma County


* * * * * * *5. In § 81.304, the table entitled ‘‘Arkansas—Ozone’’ is revised to read as follows:

§ 81.304 Arkansas.* * * * * * *

ARKANSAS—OZONE (1-HOUR STANDARD)



AQCR 016 Central Arkansas Intrastate (part) .................... 1 hr. std. N.A.2Pulaski County

AQCR 016 Central Arkansas Intrastate (Remainder of) .................... 1 hr. std. N.A.2Chicot CountyClark CountyCleveland CountyConway CountyDallas CountyDesha CountyDrew CountyFaulkner CountyGarland CountyGrant CountyHot Spring CountyJefferson CountyLincoln CountyLonoke CountyPerry CountyPope CountySaline CountyYell County

AQCR 017 Metropolitan Fort Smith Interstate .................... 1 hr. std. N.A.2Benton CountyCrawford CountySebastian CountyWashington County

AQCR 018 Metropolitan Memphis Interstate .................... 1 hr. std. N.A.2Crittenden County

AQCR 019 Monroe-El Dorado Interstate .................... 1 hr. std. N.A.2Ashley CountyBradley CountyCalhoun CountyNevada CountyOuachita CountyUnion County

AQCR 020 Northeast Arkansas Intrastate .................... 1 hr. std. N.A.2Arkansas CountyClay CountyCraighead CountyCross CountyGreene CountyIndependence County


ARKANSAS—OZONE (1-HOUR STANDARD)—Continued



Jackson CountyLawrence CountyLee CountyMississippi CountyMonroe CountyPhillips CountyPoinsett CountyPrairie CountyRandolph CountySharp CountySt. Francis CountyWhite CountyWoodruff County

AQCR 021 Northwest Arkansas Intrastate .................... 1 hr. std. N.A.2Baxter CountyBoone CountyCarroll CountyCleburne CountyFranklin CountyFulton CountyIzard CountyJohnson CountyLogan CountyMadison CountyMarion CountyMontgomery CountyNewton CountyPike CountyPolk CountyScott CountySearcy CountyStone CountyVan Buren County

AQCR 022 Shreveport-Texarkana-Tyler Interstate .................... 1 hr. std. N.A.2Columbia CountyHempstead CountyHoward CountyLafayette CountyLittle River CountyMiller CountySevier County


* * * * * * *

6. In 81.305, the table entitled ‘‘California—Ozone’’ is revised to read as follows:

§ 81.305 California.

* * * * * * *

CALIFORNIA—OZONE (1-HOUR STANDARD)



Amador County Area ............................................................... 11/15/90 Unclassifiable/Attainment 11/15/90Calaveras County Area:

Calaveras County ............................................................. 11/15/90 Unclassifiable/Attainment 11/15/90Chico Area:

Butte County ..................................................................... .................... 1 hr. std. N.A.2Imperial County Area:

Imperial County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Sec. 185A Area.3Los Angeles-South Coast Air Basin Area:

Los Angeles County (part)—that portion of Los AngelesCounty which lies south and west of a line describedas follows.

11/15/90 Nonattainment ............... 11/15/90 Extreme.


CALIFORNIA—OZONE (1-HOUR STANDARD)—Continued



1. Beginning at the Los Angeles-San BernardinoCounty boundary and running west along theTownship line common to Township 3 North andTownship 2 North, San Bernardino Base and Me-ridian;

2. then north along the range line common toRange 8 West and Range 9 West;

3. then west along the Township line common toTownship 4 North and Township 3 North;

4. then north along the range line common toRange 12 West and Range 13 West to the south-east corner of Section 12, Township 5 North andRange 13 West;

5. then west along the south boundaries of Sections12, 11, 10, 9, 8, and 7, Township 5 North andRange 13 West to the boundary of the AngelesNational Forest which is collinear with the rangeline common to Range 13 West and Range 14West;

6. then north and west along the Angeles NationalForest boundary to the point of intersection withthe Township line common to Township 7 Northand Township 6 North (point is at the northwestcorner of Section 4 in Township 6 North andRange 14 West);



9. then along the south boundaries of Sections 13,14, 15, 16, 17, and 18, Township 7 North andRange 16 West;

10. then north along the range line common toRange 16 West and Range 17 West to the northboundary of the Angeles National Forest (collin-ear with the Township line common to Township8 North and Township 7 North);

11. then west along the Angeles National Forestboundary to the point of intersection with thesouth boundary of the Rancho La Liebre LandGrant;

12. then west and north along this land grantboundary to the Los Angeles-Kern County bound-ary.

Orange County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Extreme.Riverside County (part)—that portion of Riverside Coun-

ty which lies to the west of a line described as follows.11/15/90 Nonattainment ............... 11/15/90 Extreme.

1. Beginning at the Riverside-San Diego Countyboundary and running north along the range linecommon to Range 4 East and Range 3 East, SanBernardino Base and Meridian;

2. then east along the Township line common toTownship 8 South and Township 7 South;

3. then north along the range line common toRange 5 East and Range 4 East;

4. then west along the Township line common toTownship 6 South and Township 7 South to thesouthwest corner of Section 34, Township 6South, Range 4 East;

5. then north along the west boundaries of Sections34, 27, 22, 15, 10, and 3, Township 6 South,Range 4 East;

6. then west along the Township line common toTownship 5 South and Township 6 South;






8. then west along the south boundaries of Sections13, 14, 15, 16, 17, and 18, Township 5 South,Range 3 East;


10. then west along the Township line common toTownship 4 South and Township 3 South to theintersection of the southwest boundary of partialSection 31, Township 3 South, Range 1 West;

11. then northwest along that line to the intersectionwith the range line common to Range 2 West andRange 1 West;

12. then north to the Riverside-San BernardinoCounty line,

San Bernardino County (part)—that portion of SanBernardino County which lies south and west of a linedescribed as follows.

11/15/90 Nonattainment ............... 11/15/90 Extreme.

1. Beginning at the San Bernardino-Riverside Coun-ty boundary and running north along the rangeline common to Range 3 East and Range 2 East,San Bernardino Base and Meridian;

2. then west along the Township line common toTownship 3 North and Township 2 North to theSan Bernardino-Los Angeles County boundary.

Monterey Bay Area:Monterey County .............................................................. .................... 1 hr. std. N.A.2San Benito County ........................................................... .................... 1 hr. std. N.A.2Santa Cruz County ........................................................... .................... 1 hr. std. N.A.2

Sacramento Metro Area:El Dorado County (part) ................................................... 11/15/90 Nonattainment ............... 6/1/95 Severe-15.All portions of the county except that portion of El Do-

rado County within the drainage area naturally tribu-tary to Lake Tahoe including said Lake.

Placer County (part) ......................................................... 11/15/90 Nonattainment ............... 6/1/95 Severe-15.All portions of the county except that portion of Placer

County within the drainage area naturally tributary toLake Tahoe including said Lake, plus that area in thevicinity of the head of the Truckee River described asfollows: commencing at the point common to theaforementioned drainage area crestline and the linecommon to Townships 15 North and 16 North, MountDiablo Base and Meridian (M.D.B.&M.), and followingthat line in a westerly direction to the northwest cornerof Section 3, Township 15 North, Range 16 East,M.D.B.&M., thence south along the west line of Sec-tions 3 and 10, Township 15 North, Range 16 East,M.D.B.&M., to the intersection with the said drainagearea crestline, thence following the said drainage areaboundary in a southeasterly, then northeasterly direc-tion to and along the Lake Tahoe Dam, thence follow-ing the said drainage area crestline in a northeasterly,then northwesterly direction to the point of beginning.

Sacramento County .......................................................... 11/15/90 Nonattainment ............... 6/1/95 Severe-15.Solano County (part) That portion of Solano County

which lies north and east of a line described as fol-lows.

11/15/90 Nonattainment ............... 6/1/95 Severe-15.





Description of boundary in Solano County betweenSan Francisco and Sacramento: Beginning at theintersection of the westerly boundary of SolanoCounty and the 1⁄4 section line running east andwest through the center of Section 34; T. 6 N., R.2 W., M.D.B.&M., thence east along said 1⁄4 sec-tion line to the east boundary of Section 36, T. 6N., R. 2 W., thence south 1⁄2 mile and east 2.0miles, more or less, along the west and southboundary of Los Putos Rancho to the northwestcorner of Section 4, T. 5 N., R. 1 W., thence eastalong a line common to T. 5 N. and T. 6 N. to thenortheast corner of Section 3, T. 5 N., R. 1 E.,thence south along section lines to the southeastcorner of Section 10, T. 3 N., R. 1 E., thenceeast along section lines to the south 1⁄4 corner ofSection 8, T. 3 N., R. 2 E., thence east to theboundary between Solano and SacramentoCounties.

Sutter County (part—southern portion) ............................ 11/15/90 Nonattainment ............... 6/1/95 Severe-15.South of a line connecting the northern border of

Yolo Co. to the SW tip of Yuba Co. and continu-ing along the southern Yuba County border toPlacer County.

Yolo County ...................................................................... 11/15/90 Nonattainment ............... 6/1/95 Severe-15.San Diego Area:

San Diego County ............................................................ 2/21/95 Nonattainment ............... 2/21/95 Serious.San Francisco-Bay Area:

Alameda County ............................................................... 6/21/95 AttainmentContra Costa County ........................................................ 6/21/95 AttainmentMarin County .................................................................... 6/21/95 AttainmentNapa County .................................................................... 6/21/95 AttainmentSan Francisco County ...................................................... 6/21/95 AttainmentSan Clara County ............................................................. 6/21/95 AttainmentSan Mateo County ........................................................... 6/21/95 AttainmentSolano County (part) ........................................................ 6/21/95 Attainment

That portion of the county that lies south and westof the line described that follows: Description ofboundary in Solano County between San Fran-cisco and Sacramento: Beginning at the intersec-tion at the westerly boundary of Solano Countyand the 1⁄4 section line running east and westthrough the center of Section 34; T. 6 N., R. 2W., M.D.B.&M., thence east along said 1⁄2 sectionline to the east boundary of Section 36, T. 6 N.,R. 2 W., thence south 1⁄2 mile and east 2.0 miles,more or less, along the west and south boundaryof Los Putos Rancho to the northwest corner ofSection 4, T. 5 N., R. 1 W, thence east along aline common to T. 5 N., and T. 6 N. to the north-east corner of Section 3, T. 5 N., R. 1 E., thencesouth along section lines to the southeast cornerof Section 10 T. 3 N., R. 1 E., thence east alongsection lines to the south 1⁄4 corner of Section 8T. 3 N., R. 2 E., thence east to the boundary be-tween Solano and Sacramento Counties.

Sonoma County (part) ...................................................... 6/21/95 AttainmentSan Joaquin Valley Area:

Fresno County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Kern County ..................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Kings County .................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Madera County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Merced County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.San Joaquin County ......................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Stanislaus County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.Tulare County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.

Santa Barbara-Santa Maria-Lompoc Area:Santa Barbara County ...................................................... 11/15/90 Nonattainment ............... 1/09/98 Serious.

Southeast Desert Modified AQMA Area:





Los Angeles County (part)—that portion of Los AngelesCounty which lies north and east of a line describedas follows.


1. Beginning at the Los Angeles-San BernardinoCounty boundary and running west along theTownship line common to Township 3 North andTownship 2 North, San Bernardino Base and Me-ridian;

2. then north along the range line common toRange 8 West and Range 9 West;



5. then west along the south boundaries of Sections12, 11, 10, 9, 8, and 7, Township 5 North andRange 13 West to the boundary of the AngelesNational Forest which is collinear with the rangeline common to Range 13 West and Range 14West;

6. then north and west along the Angeles NationalForest boundary to the point of intersection withthe Township line common to Township 7 Northand Township 6 North (point is at the northwestcorner of Section 4 in Township 6 North andRange 14 West);



9. then along the south boundaries of Sections 13,14, 15, 16, 17, and 18, Township 7 North andRange 16 West;

10. then north along the range line common toRange 16 West and Range 17 West to the northboundary of the Angeles National Forest (collin-ear with the Township line common to Township8 North and Township 7 North);

11. then west along the Angeles National Forestboundary to the point of intersection with thesouth boundary of the Rancho La Liebre LandGrant;

12. then west and north along this land grantboundary to the Los Angeles-Kern County bound-ary.

Riverside County (part)—that portion of Riverside Coun-ty which lies to the east of a line described as follows.


1. Beginning at the Riverside-San Diego Countyboundary and running north along the range linecommon to Range 4 East and Range 3 East, SanBernardino Base and Meridian;

2. then east along the Township line common toTownship 8 South and Township 7 South;


4. then west along the Township line common toTownship 6 South and Township 7 South to thesouthwest corner of Section 34, Township 6South, Range 4 East;

5. then north along the west boundaries of Sections34, 27, 22, 15, 10, and 3, Township 6 South,Range 4 East;

6. then west along the Township line common toTownship 5 South and Township 6 South;






8. then west along the south boundaries of Sections13, 14, 15, 16, 17, and 18, Township 5 South,Range 3 East;


10. then west along the Township line common toTownship 4 South and Township 3 South to theintersection of the southwest boundary of partialSection 31, Township 3 South, Range 1 West;

11. then northwest along that line to the intersectionwith the range line common to Range 2 West andRange 1 West;

12. then north to the Riverside-San BernardinoCounty line, and that portion of Riverside Countywhich lies to the west of a line described as fol-lows:

13. beginning at the northeast corner of Section 4,Township 2 South, Range 5 East, a point on theboundary line common to Riverside and SanBernardino Counties;

14. then southerly along section lines to the center-line of the Colorado River Aquaduct;

15. then southeasterly along the centerline of saidColorado River Aquaduct to the southerly line ofSection 36, Township 3 South, Range 7 East;

16. then easterly along the Township line to thenortheast corner of Section 6, Township 4 South,Range 9 East;

17. then southerly along the easterly line of Section6 to the southeast corner thereof;

18. then easterly along section lines to the north-east corner of Section 10, Township 4 South,Range 9 East;

19. then southerly along section lines to the south-east corner of Section 15, Township 4 South,Range 9 East;

20. then easterly along the section lines to thenortheast corner of Section 21, Township 4South, Range 10 East;

21. then southerly along the easterly line of Section21 to the southeast corner thereof;

22. then easterly along the northerly line of Section27 to the northeast corner thereof;

23. then southerly along section lines to the south-east corner of Section 34, Township 4 South,Range 10 East;

24. then easterly along the Township line to thenortheast corner of Section 2, Township 5 South,Range 10 East;

25. then southerly along the easterly line of Section2, to the southeast corner thereof;

26. then easterly along the northerly line of Section12 to the northeast corner thereof;

27. then southerly along the range line to the south-west corner of Section 18, Township 5 South,Range 11 East;

28. then easterly along section lines to the north-east corner of Section 24, Township 5 South,Range 11 East;

29. then southerly along the range line to the south-east corner of Section 36, Township 8 South,Range 11 East, a point on the boundary linecommon to Riverside and San Diego Counties.

San Bernadino County (part)—that portion of SanBernardino County which lies north and east of a linedescribed as follows.


1. Beginning at the San Bernardino-Riverside Coun-ty boundary and running north along the rangeline common to Range 3 East and Range 2 East,San Bernardino Base and Meridian;





2. then west along the Township line common toTownship 3 North and Township 2 North to theSan Bernardino-Los Angeles County boundary;and that portion of San Bernardino County whichlies south and west of a line described as follows:

3. latitude 35 degrees, 10 minutes north and lon-gitude 115 degrees, 45 minutes west.

Ventura County Area:Ventura County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-15.

Yuba City Area:Sutter County (part—northern portion).

North of a line connecting the northern border ofYolo County to the SW tip of Yuba County andcontinuing along the southern Yuba County bor-der to Placer County

.................... 1 hr. std. N.A.2

Yuba County ..................................................................... .................... 1 hr. std. N.A.2Great Basin Valleys Air Basin ................................................. .................... 1 hr. std. N.A.2

Alpine CountyInyo CountyMono County

Lake County Air Basin ............................................................. .................... 1 hr. std. N.A.2Lake County

Lake Tahoe Air Basin .............................................................. .................... 1 hr. std. N.A.2El Dorado County (part)

Lake Tahoe Area: As described under 40 CFR81.275.

Placer County (part)Lake Tahoe Area: As described under 40 CFR

81.275.Mountain Counties Air Basin (Remainder of):

Mariposa County .............................................................. .................... 1 hr. std. N.A.2Nevada County ................................................................. .................... 1 hr. std. N.A.2Plumas County ................................................................. .................... 1 hr. std. N.A.2Sierra County ................................................................... .................... 1 hr. std. N.A.2Tuolumne County ............................................................. .................... 1 hr. std. N.A.2

North Coast Air Basin .............................................................. .................... 1 hr. std. N.A.2Del Norte CountyHumboldt CountyMendocino CountySonoma County (part)

Remainder of CountyTrinity County

Northeast Plateau Air Basin .................................................... .................... 1 hr. std. N.A.2Lassen CountyModoc CountySiskiyou County

Sacramento Valley Air Basin (Remainder of):Colusa County .................................................................. .................... 1 hr. std. N.A.2Glenn County ................................................................... .................... 1 hr. std. N.A.2Shasta County .................................................................. .................... 1 hr. std. N.A.2Tehama County ................................................................ .................... 1 hr. std. N.A.2

South Central Coast Air Basin (Remainder of):Channel Islands ................................................................ .................... 1 hr. std. N.A.2San Luis Obispo County .................................................. .................... 1 hr. std. N.A.2

Southeast Desert NON-AQMA:Riverside County (part)

Remainder of County ................................................ .................... 1 hr. std. N.A.2San Bernadino County (part).

Remainder of County ................................................ .................... 1 hr. std. N.A.2

1 This date is March 17, 1998, unless otherwise noted.2 1 hour standard Not Applicable.3 An area designated as an ozone nonattainment area as of the date of enactment of the CAAA of 1990 that did not violate the ozone NAAQS

during the period of 1987–1989.

* * * * * * *

7. In § 81.306, the table entitled ‘‘Colorado—Ozone’’ is revised to read as follows:

§ 81.306 Colorado.

* * * * * * *


COLORADO—OZONE (1-HOUR STANDARD)

Designation areaDesignation Classification


Denver—Boulder Area:Adams County (part)

West of Kiowa Creek ................................................ .................... 1 hr. std. N.A.2Arapahoe County (part) .

West of Kiowa Creek ................................................ .................... 1 hr. std. N.A.2Boulder County (part)

excluding Rocky Mtn. National Park ......................... .................... 1 hr. std. N.A. 2

Denver County ................................................................. .................... 1 hr. std. N.A.2Douglas County ................................................................ .................... 1 hr. std. N.A.2Jefferson County .............................................................. .................... 1 hr. std. N.A.2

State AQCR 01 ........................................................................ .................... 1 hr. std. N.A. 2

Logan CountyMorgan CountyPhillips CountySedgwick CountyWashington CountyYuma County


Larimer CountyWeld County

State AQCR 03 (Remainder of) .............................................. .................... 1 hr. std. N.A. 2

Adams County (part)East of Kiowa Creek

Arapahoe County (part)East of Kiowa Creek

Boulder County (part)Rocky Mtn. National Park Only

Clear Creek CountyGilpin County


Garfield CountyMesa CountyMoffat CountyRio Blanco County

Rest of State ............................................................................ .................... 1 hr. std. N.A. 2

Alamosa CountyArchuleta CountyBaca CountyBent CountyChaffee CountyCheyenne CountyConejos CountyCostilla CountyCrowley CountyCuster CountyDelta CountyDolores CountyEagle CountyEl Paso CountyElbert CountyFremont CountyGrand CountyGunnison CountyHinsdale CountyHuerfano CountyJackson CountyKiowa CountyKit Carson CountyLa Plata CountyLake CountyLas Animas CountyLincoln CountyMineral CountyMontezuma CountyMontrose CountyOtero CountyOuray CountyPark CountyPitkin CountyProwers County


COLORADO—OZONE (1-HOUR STANDARD)—Continued



Pueblo CountyRio Grande CountyRoutt CountySaguache CountySan Juan CountySan Miguel CountySummit CountyTeller County


* * * * * * *

8. In § 81.307, the table entitled ‘‘Connecticut—Ozone’’ is revised to read as follows:

§ 81.307 Connecticut.

* * * * * * *

CONNECTICUT—OZONE (1-HOUR STANDARD)



Greater Connecticut Area:Fairfield County (part) ...................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.

Shelton CityHartford County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.Litchfield County (part) ..................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.

all cities and townships except:Bridgewater Town, New Milford Town

Middlesex County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.New Haven County .......................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.New London County ......................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Tolland County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Windham County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.

New York-N. New Jersey-Long Island Area:Fairfield County (part). ..................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.

all cities and towns except Shelton CityLitchfield County (part) ..................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.

Bridgewater Town, New Milford Town

1 This date is March 17, 1998, unless otherwise noted.

* * * * * * *

9. In § 81.308, the table entitled ‘‘Delaware—Ozone’’ is revised to read as follows:

§ 81.308 Delaware.

* * * * * * *

DELAWARE—OZONE (1-HOUR STANDARD)



Philadelphia-Wilmington-Trenton Area:Kent County ...................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-15.New Castle County .......................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-15.

Sussex County Area:Sussex County ................................................................. .................... 1 hr. std. N.A.2

1 This date is March 17, 1998, unless otherwise noted.2 1 hour standard not applicable.

* * * * * * *

10. In Section 81.309, the table entitled ‘‘District of Columbia—Ozone’’ is revised to read as follows:

§ 81.309 District of Columbia.

* * * * * * *


DISTRICT OF COLUMBIA—OZONE (1-HOUR STANDARD)



Washington Area:Washington

Entire Area ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.


* * * * * * *11. In § 81.310, the table entitled ‘‘Florida—Ozone’’ is revised to read as follows:

§ 81.310 Florida.* * * * * * *

FLORIDA—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Alachua CountyBaker CountyBay CountyBradford CountyBrevard CountyBroward CountyCalhoun CountyCharlotte CountyCitrus CountyClay CountyCollier CountyColumbia CountyDade CountyDe Soto CountyDixie CountyDuval CountyEscambia CountyFlagler CountyFranklin CountyGadsden CountyGilchrist CountyGlades CountyGulf CountyHamilton CountyHardee CountyHendry CountyHernando CountyHighlands CountyHillsborough CountyHolmes CountyIndian River CountyJackson CountyJefferson CountyLafayette CountyLake CountyLee CountyLeon CountyLevy CountyLiberty CountyMadison CountyManatee CountyMarion CountyMartin CountyMonroe CountyNassau CountyOkaloosa CountyOkeechobee CountyOrange CountyOsceola CountyPalm Beach CountyPasco CountyPinellas County


FLORIDA—OZONE (1-HOUR STANDARD)—Continued



Polk CountyPutnam CountySanta Rosa CountySarasota CountySeminole CountySt. Johns CountySt. Lucie CountySumter CountySuwannee CountyTaylor CountyUnion CountyVolusia CountyWakulla CountyWalton CountyWashington County


* * * * * * *12. In § 81.311, the table entitled ‘‘Georgia—Ozone’’ is revised to read as follows:

§ 81.311 Georgia.* * * * * * *

GEORGIA—OZONE (1-HOUR STANDARD)



Atlanta Area:Cherokee County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Clayton County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Cobb County .................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Coweta County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.De Kalb County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.Douglas County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.Fayette County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Forsyth County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Fulton County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Gwinnett County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Henry County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Paulding County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Rockdale County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.

Spalding County Area:Spalding County ............................................................... 11/15/90 Unclassifiable/Attainment 11/15/90

Rest of State ............................................................................ .................... 1 hr. std. N.A.2Appling CountyAtkinson CountyBacon CountyBaker CountyBaldwin CountyBanks CountyBarrow CountyBartow CountyBen Hill CountyBerrien CountyBibb CountyBleckley CountyBrantley CountyBrooks CountyBryan CountyBulloch CountyBurke CountyButts CountyCalhoun CountyCamden CountyCandler CountyCarroll CountyCatoosa County


GEORGIA—OZONE (1-HOUR STANDARD)—Continued



Charlton CountyChatham CountyChattahoochee CountyChattooga CountyClarke CountyClay CountyClinch CountyCoffee CountyColquitt CountyColumbia CountyCook CountyCrawford CountyCrisp CountyDade CountyDawson CountyDecatur CountyDodge CountyDooly CountyDougherty CountyEarly CountyEchols CountyEffingham CountyElbert CountyEmanuel CountyEvans CountyFannin CountyFloyd CountyFranklin CountyGilmer CountyGlascock CountyGlynn CountyGordon CountyGrady CountyGreene CountyHabersham CountyHall CountyHancock CountyHaralson CountyHarris CountyHart CountyHeard CountyHouston CountyIrwin CountyJackson CountyJasper CountyJeff Davis CountyJefferson CountyJenkins CountyJohnson CountyJones CountyLamar CountyLanier CountyLaurens CountyLee CountyLiberty CountyLincoln CountyLong CountyLowndes CountyLumpkin CountyMacon CountyMadison CountyMarion CountyMcDuffie CountyMcIntosh CountyMeriwether CountyMiller CountyMitchell CountyMonroe CountyMontgomery CountyMorgan County


GEORGIA—OZONE (1-HOUR STANDARD)—Continued



Murray CountyMuscogee CountyNewton CountyOconee CountyOglethorpe CountyPeach CountyPickens CountyPierce CountyPike CountyPolk CountyPulaski CountyPutnam CountyQuitman CountyRabun CountyRandolph CountyRichmond CountySchley CountyScreven CountySeminole CountyStephens CountyStewart CountySumter CountyTalbot CountyTaliaferro CountyTattnall CountyTaylor CountyTelfair CountyTerrell CountyThomas CountyTift CountyToombs CountyTowns CountyTreutlen CountyTroup CountyTurner CountyTwiggs CountyUnion CountyUpson CountyWalker CountyWalton CountyWare CountyWarren CountyWashington CountyWayne CountyWebster CountyWheeler CountyWhite CountyWhitfield CountyWilcox CountyWilkes CountyWilkinson CountyWorth County


* * * * * * *13. In § 81.312, the table entitled ‘‘Hawaii—Ozone’’ is revised to read as follows:

§ 81.312 Hawaii.* * * * * * *

HAWAII—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Hawaii CountyHonolulu County


HAWAII—OZONE (1-HOUR STANDARD)—Continued



KalawaoKauai CountyMaui County


* * * * * * *14. In § 81.313, the table entitled ‘‘Idaho—Ozone’’ is revised to read as follows:

§ 81.313 Idaho.* * * * * * *

IDAHO—OZONE (1-HOUR STANDARD)



AQCR 61 Eastern Idaho Intrastate ......................................... .................... 1 hr. std. N.A.2Bannock CountyBear Lake CountyBingham CountyBonneville CountyButte CountyCaribou CountyClark CountyFranklin CountyFremont CountyJefferson CountyMadison CountyOneida CountyPower CountyTeton County

AQCR 62 E Washington-N Idaho Interstate ........................... .................... 1 hr. std. N.A.2 ............... ....................Benewah CountyKootenai CountyLatah CountyNez Perce CountyShoshone County

AQCR 63 Idaho Intrastate ....................................................... .................... 1 hr. std. N.A.2 ............... ....................Adams CountyBlaine CountyBoise CountyBonner CountyBoundary CountyCamas CountyCassia CountyClearwater CountyCuster CountyElmore CountyGem CountyGooding CountyIdaho CountyJerome CountyLemhi CountyLewis CountyLincoln CountyMinidoka CountyOwyhee CountyPayette CountyTwin Falls CountyValley CountyWashington County

AQCR 64 Metropolitan Boise Interstate .................................. .................... 1 hr. std. N.A.2Ada CountyCanyon County


* * * * * * *


15. In § 81.314, the table entitled ‘‘Illinois—Ozone’’ is revised to read as follows:

§ 81.314 Illinois.

* * * * * * *

ILLINOIS—OZONE (1-HOUR STANDARD)



Chicago-Gary-Lake County Area:Cook County ..................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Du Page County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Grundy County (part):

Aux Sable Township ................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Goose Lake Township .............................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.

Kane County ..................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Kendall County (part):

Oswego Township ..................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Lake County ..................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.McHenry County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Will County ....................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.

Jersey County Area:Jersey County .................................................................. .................... 1 hr. std. N.A.2

St. Louis Area:Madison County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.Monroe County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Moderate.St. Clair County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Moderate.

Adams County ......................................................................... .................... 1 hr. std. N.A.2Alexander County .................................................................... .................... 1 hr. std. N.A.2Bond County ............................................................................ .................... 1 hr. std. N.A.2Boone County .......................................................................... .................... 1 hr. std. N.A.2Brown County .......................................................................... .................... 1 hr. std. N.A.2Bureau County ......................................................................... .................... 1 hr. std. N.A.2Calhoun County ....................................................................... .................... 1 hr. std. N.A.2Carroll County .......................................................................... .................... 1 hr. std. N.A.2Cass County ............................................................................ .................... 1 hr. std. N.A.2Champaign County .................................................................. .................... 1 hr. std. N.A.2Christian County ...................................................................... .................... 1 hr. std. N.A.2Clark County ............................................................................ .................... 1 hr. std. N.A.2Clay County ............................................................................. .................... 1 hr. std. N.A.2Clinton County ......................................................................... .................... 1 hr. std. N.A.2Coles County ........................................................................... .................... 1 hr. std. N.A.2Crawford County ...................................................................... .................... 1 hr. std. N.A.2Cumberland County ................................................................. .................... 1 hr. std. N.A.2De Kalb County ....................................................................... .................... 1 hr. std. N.A.2De Witt County ........................................................................ .................... 1 hr. std. N.A.2Douglas County ....................................................................... .................... 1 hr. std. N.A.2Edgar County ........................................................................... .................... 1 hr. std. N.A.2Edwards County ...................................................................... .................... 1 hr. std. N.A.2Effingham County .................................................................... .................... 1 hr. std. N.A.2Fayette County ........................................................................ .................... 1 hr. std. N.A.2Ford County ............................................................................. .................... 1 hr. std. N.A.2Franklin County ....................................................................... .................... 1 hr. std. N.A.2Fulton County .......................................................................... .................... 1 hr. std. N.A.2Gallatin County ........................................................................ .................... 1 hr. std. N.A.2Greene County ........................................................................ .................... 1 hr. std. N.A.2Grundy County (part):

All townships except Aux Sable and Goose Lake ........... .................... 1 hr. std. N.A.2Hamilton County ...................................................................... .................... 1 hr. std. N.A.2Hancock County ...................................................................... .................... 1 hr. std. N.A.2Hardin County .......................................................................... .................... 1 hr. std. N.A.2Henderson County ................................................................... .................... 1 hr. std. N.A.2Henry County ........................................................................... .................... 1 hr. std. N.A.2Iroquois County ....................................................................... .................... 1 hr. std. N.A.2Jackson County ....................................................................... .................... 1 hr. std. N.A.2Jasper County ......................................................................... .................... 1 hr. std. N.A.2Jefferson County ..................................................................... .................... 1 hr. std. N.A.2Jo Daviess County .................................................................. .................... 1 hr. std. N.A.2Johnson County ....................................................................... .................... 1 hr. std. N.A.2Kankakee County .................................................................... .................... 1 hr. std. N.A.2Kendall County (part):

All townships except Oswego .......................................... .................... 1 hr. std. N.A.2Knox County ............................................................................ .................... 1 hr. std. N.A.2


ILLINOIS—OZONE (1-HOUR STANDARD)—Continued



La Salle County ....................................................................... .................... 1 hr. std. N.A.2Lawrence County ..................................................................... .................... 1 hr. std. N.A.2Lee County .............................................................................. .................... 1 hr. std. N.A.2Livingston County .................................................................... .................... 1 hr. std. N.A.2Logan County .......................................................................... .................... 1 hr. std. N.A.2Macon County ......................................................................... .................... 1 hr. std. N.A.2Macoupin County ..................................................................... .................... 1 hr. std. N.A.2Marion County ......................................................................... .................... 1 hr. std. N.A.2Marshall County ....................................................................... .................... 1 hr. std. N.A.2Mason County ......................................................................... .................... 1 hr. std. N.A.2Massac County ........................................................................ .................... 1 hr. std. N.A.2McDonough County ................................................................. .................... 1 hr. std. N.A.2McLean County ....................................................................... .................... 1 hr. std. N.A.2Menard County ........................................................................ .................... 1 hr. std. N.A.2Mercer County ......................................................................... .................... 1 hr. std. N.A.2Montgomery County ................................................................ .................... 1 hr. std. N.A.2Morgan County ........................................................................ .................... 1 hr. std. N.A.2Moultrie County ....................................................................... .................... 1 hr. std. N.A.2Ogle County ............................................................................. .................... 1 hr. std. N.A.2Peoria County .......................................................................... .................... 1 hr. std. N.A.2Perry County ............................................................................ .................... 1 hr. std. N.A.2Piatt County ............................................................................. .................... 1 hr. std. N.A.2Pike County ............................................................................. .................... 1 hr. std. N.A.2Pope County ............................................................................ .................... 1 hr. std. N.A.2Pulaski County ......................................................................... .................... 1 hr. std. N.A.2Putnam County ........................................................................ .................... 1 hr. std. N.A.2Randolph County ..................................................................... .................... 1 hr. std. N.A.2Richland County ...................................................................... .................... 1 hr. std. N.A.2Rock Island County ................................................................. .................... 1 hr. std. N.A.2Saline County .......................................................................... .................... 1 hr. std. N.A.2Sangamon County ................................................................... .................... 1 hr. std. N.A.2Schuyler County ...................................................................... .................... 1 hr. std. N.A.2Scott County ............................................................................ .................... 1 hr. std. N.A.2Shelby County ......................................................................... .................... 1 hr. std. N.A.2Stark County ............................................................................ .................... 1 hr. std. N.A.2Stephenson County ................................................................. .................... 1 hr. std. N.A.2Tazewell County ...................................................................... .................... 1 hr. std. N.A.2Union County ........................................................................... .................... 1 hr. std. N.A.2Vermilion County ..................................................................... .................... 1 hr. std. N.A.2Wabash County ....................................................................... .................... 1 hr. std. N.A.2Warren County ........................................................................ .................... 1 hr. std. N.A.2Washington County ................................................................. .................... 1 hr. std. N.A.2Wayne County ......................................................................... .................... 1 hr. std. N.A.2White County ........................................................................... .................... 1 hr. std. N.A.2Whiteside County .................................................................... .................... 1 hr. std. N.A.2Williamson County ................................................................... .................... 1 hr. std. N.A.2Winnebago County .................................................................. .................... 1 hr. std. N.A.2Woodford County ..................................................................... .................... 1 hr. std. N.A.2


* * * * * * *16. In § 81.315, the table entitled ‘‘Indiana—Ozone’’ is revised to read as follows:

§ 81.315 Indiana.* * * * * * *

INDIANA-OZONE (1-HOUR STANDARD)



Chicago-Gary-Lake County Area:Lake County ..................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Porter County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.

Evansville Area:Vanderburgh County ........................................................ .................... 1 hr. std. N.A.2

Indianapolis Area:Marion County .................................................................. .................... 1 hr. std. N.A.2


INDIANA-OZONE (1-HOUR STANDARD)—Continued



La Porte County Area:La Porte County ............................................................... 11/15/90 Unclassifiable/Attainment 11/15/90

Louisville Area:Clark County ..................................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.Floyd County .................................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.

South Bend-Elkhart Area:Elkhart County .................................................................. .................... 1 hr. std. N.A.2St. Joseph County ............................................................ .................... 1 hr. std. N.A.2

Warrick County Area:Warrick County ................................................................. 11/15/90 Unclassifiable/Attainment 11/15/90

Allen County ............................................................................ .................... 1 hr. std. N.A.2Adams County ......................................................................... .................... 1 hr. std. N.A.2Bartholomew County ............................................................... .................... 1 hr. std. N.A.2Benton County ......................................................................... .................... 1 hr. std. N.A.2Blackford County ..................................................................... .................... 1 hr. std. N.A.2Boone County .......................................................................... .................... 1 hr. std. N.A.2Brown County .......................................................................... .................... 1 hr. std. N.A.2Carroll County .......................................................................... .................... 1 hr. std. N.A.2Cass County ............................................................................ .................... 1 hr. std. N.A.2Clay County ............................................................................. .................... 1 hr. std. N.A.2Clinton County ......................................................................... .................... 1 hr. std. N.A.2Crawford County ...................................................................... .................... 1 hr. std. N.A.2Daviess County ....................................................................... .................... 1 hr. std. N.A.2De Kalb County ....................................................................... .................... 1 hr. std. N.A.2Dearborn County ..................................................................... .................... 1 hr. std. N.A.2Decatur County ........................................................................ .................... 1 hr. std. N.A.2Delaware County ..................................................................... .................... 1 hr. std. N.A.2Dubois County ......................................................................... .................... 1 hr. std. N.A.2Fayette County ........................................................................ .................... 1 hr. std. N.A.2Fountain County ...................................................................... .................... 1 hr. std. N.A.2Franklin County ....................................................................... .................... 1 hr. std. N.A.2Fulton County .......................................................................... .................... 1 hr. std. N.A.2Gibson County ......................................................................... .................... 1 hr. std. N.A.2Grant County ........................................................................... .................... 1 hr. std. N.A.2Greene County ........................................................................ .................... 1 hr. std. N.A.2Hamilton County ...................................................................... .................... 1 hr. std. N.A.2Hancock County ...................................................................... .................... 1 hr. std. N.A.2Harrison County ....................................................................... .................... 1 hr. std. N.A.2Hendricks County .................................................................... .................... 1 hr. std. N.A.2Henry County ........................................................................... .................... 1 hr. std. N.A.2Howard County ........................................................................ .................... 1 hr. std. N.A.2Huntington County ................................................................... .................... 1 hr. std. N.A.2Jackson County ....................................................................... .................... 1 hr. std. N.A.2Jasper County ......................................................................... .................... 1 hr. std. N.A.2Jay County ............................................................................... .................... 1 hr. std. N.A.2Jefferson County ..................................................................... .................... 1 hr. std. N.A.2Jennings County ...................................................................... .................... 1 hr. std. N.A.2Johnson County ....................................................................... .................... 1 hr. std. N.A.2Knox County ............................................................................ .................... 1 hr. std. N.A.2Kosciusko County .................................................................... .................... 1 hr. std. N.A.2Lagrange County ..................................................................... .................... 1 hr. std. N.A.2Lawrence County ..................................................................... .................... 1 hr. std. N.A.2Madison County ....................................................................... .................... 1 hr. std. N.A.2Marshall County ....................................................................... .................... 1 hr. std. N.A.2Martin County .......................................................................... .................... 1 hr. std. N.A.2Miami County ........................................................................... .................... 1 hr. std. N.A.2Monroe County ........................................................................ .................... 1 hr. std. N.A.2Montgomery County ................................................................ .................... 1 hr. std. N.A.2Morgan County ........................................................................ .................... 1 hr. std. N.A.2Newton County ........................................................................ .................... 1 hr. std. N.A.2Noble County ........................................................................... .................... 1 hr. std. N.A.2Ohio County ............................................................................. .................... 1 hr. std. N.A.2Orange County ........................................................................ .................... 1 hr. std. N.A.2Owen County ........................................................................... .................... 1 hr. std. N.A.2Parke County ........................................................................... .................... 1 hr. std. N.A.2Perry County ............................................................................ .................... 1 hr. std. N.A.2Pike County ............................................................................. .................... 1 hr. std. N.A.2Posey County .......................................................................... .................... 1 hr. std. N.A.2Pulaski County ......................................................................... .................... 1 hr. std. N.A.2Putnam County ........................................................................ .................... 1 hr. std. N.A.2


INDIANA-OZONE (1-HOUR STANDARD)—Continued



Randolph County ..................................................................... .................... 1 hr. std. N.A.2Ripley County .......................................................................... .................... 1 hr. std. N.A.2Rush County ............................................................................ .................... 1 hr. std. N.A.2Scott County ............................................................................ .................... 1 hr. std. N.A.2Shelby County ......................................................................... .................... 1 hr. std. N.A.2Spencer County ....................................................................... .................... 1 hr. std. N.A.2Starke County .......................................................................... .................... 1 hr. std. N.A.2Steuben County ....................................................................... .................... 1 hr. std. N.A.2Sullivan County ........................................................................ .................... 1 hr. std. N.A.2Switzerland County .................................................................. .................... 1 hr. std. N.A.2Tippecanoe County ................................................................. .................... 1 hr. std. N.A.2Tipton County .......................................................................... .................... 1 hr. std. N.A.2Union County ........................................................................... .................... 1 hr. std. N.A.2Vermillion County .................................................................... .................... 1 hr. std. N.A.2Vigo County ............................................................................. .................... 1 hr. std. N.A.2Wabash County ....................................................................... .................... 1 hr. std. N.A.2Warren County ........................................................................ .................... 1 hr. std. N.A.2Washington County ................................................................. .................... 1 hr. std. N.A.2Wayne County ......................................................................... .................... 1 hr. std. N.A.2Wells County ........................................................................... .................... 1 hr. std. N.A.2White County ........................................................................... .................... 1 hr. std. N.A.2Whitley County ........................................................................ .................... 1 hr. std. N.A.2


* * * * * * *17. In § 81.316, the table entitled ‘‘Iowa—Ozone’’ is revised to read as follows:

§ 81.316 Iowa.* * * * * * *

IOWA—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Adair CountyAdams CountyAllamakee CountyAppanoose CountyAudubon CountyBenton CountyBlack Hawk CountyBoone CountyBremer CountyBuchanan CountyBuena Vista CountyButler CountyCalhoun CountyCarroll CountyCass CountyCedar CountyCerro Gordo CountyCherokee CountyChickasaw CountyClarke CountyClay CountyClayton CountyClinton CountyCrawford CountyDallas CountyDavis CountyDecatur CountyDelaware CountyDes Moines CountyDickinson CountyDubuque CountyEmmet County


IOWA—OZONE (1-HOUR STANDARD)—Continued



Fayette CountyFloyd CountyFranklin CountyFremont CountyGreene CountyGrundy CountyGuthrie CountyHamilton CountyHancock CountyHardin CountyHarrison CountyHenry CountyHoward CountyHumboldt CountyIda CountyIowa CountyJackson CountyJasper CountyJefferson CountyJohnson CountyJones CountyKeokuk CountyKossuth CountyLee CountyLinn CountyLouisa CountyLucas CountyLyon CountyMadison CountyMahaska CountyMarion CountyMarshall CountyMills CountyMitchell CountyMonona CountyMonroe CountyMontgomery CountyMuscatine CountyO’Brien CountyOsceola CountyPage CountyPalo Alto CountyPlymouth CountyPocahontas CountyPolk CountyPottawattamie CountyPoweshiek CountyRinggold CountySac CountyScott CountyShelby CountySioux CountyStory CountyTama CountyTaylor CountyUnion CountyVan Buren CountyWapello CountyWarren CountyWashington CountyWayne CountyWebster CountyWinnebago CountyWinneshiek CountyWoodbury CountyWorth CountyWright County


* * * * * * *


4. In § 81.317, the table entitled ‘‘Kansas—Ozone’’ is revised to read as follows:

§ 81.317 Kansas.* * * * * * *

KANSAS—OZONE (1-HOUR STANDARD)



Kansas City Area:Johnson County ............................................................... 7/23/92 Attainment.Wyandotte County ............................................................ 7/23/92 Attainment.

Allen County ............................................................................ .................... 1 hr. std. N.A.2Anderson County ..................................................................... .................... 1 hr. std. N.A.2Atchison County ...................................................................... .................... 1 hr. std. N.A.2Barber County ......................................................................... .................... 1 hr. std. N.A.2Barton County .......................................................................... .................... 1 hr. std. N.A.2Bourbon County ....................................................................... .................... 1 hr. std. N.A.2Brown County .......................................................................... .................... 1 hr. std. N.A.2Butler County ........................................................................... .................... 1 hr. std. N.A.2Chase County .......................................................................... .................... 1 hr. std. N.A.2Chautauqua County ................................................................. .................... 1 hr. std. N.A.2Cherokee County ..................................................................... .................... 1 hr. std. N.A.2Cheyenne County .................................................................... .................... 1 hr. std. N.A.2Clark County ............................................................................ .................... 1 hr. std. N.A.2Clay County ............................................................................. .................... 1 hr. std. N.A.2Cloud County ........................................................................... .................... 1 hr. std. N.A.2Coffey County .......................................................................... .................... 1 hr. std. N.A.2Comanche County ................................................................... .................... 1 hr. std. N.A.2Cowley County ........................................................................ .................... 1 hr. std. N.A.2Crawford County ...................................................................... .................... 1 hr. std. N.A.2Decatur County ........................................................................ .................... 1 hr. std. N.A.2Dickinson County ..................................................................... .................... 1 hr. std. N.A.2Doniphan County ..................................................................... .................... 1 hr. std. N.A.2Douglas County ....................................................................... .................... 1 hr. std. N.A.2Edwards County ...................................................................... .................... 1 hr. std. N.A.2Elk County ............................................................................... .................... 1 hr. std. N.A.2Ellis County .............................................................................. .................... 1 hr. std. N.A.2Ellsworth County ...................................................................... .................... 1 hr. std. N.A.2Finney County ......................................................................... .................... 1 hr. std. N.A.2Ford County ............................................................................. .................... 1 hr. std. N.A.2Franklin County ....................................................................... .................... 1 hr. std. N.A.2Geary County .......................................................................... .................... 1 hr. std. N.A.2Gove County ............................................................................ .................... 1 hr. std. N.A.2Graham County ....................................................................... .................... 1 hr. std. N.A.2Grant County ........................................................................... .................... 1 hr. std. N.A.2Gray County ............................................................................ .................... 1 hr. std. N.A.2Greeley County ........................................................................ .................... 1 hr. std. N.A.2Greenwood County .................................................................. .................... 1 hr. std. N.A.2Hamilton County ...................................................................... .................... 1 hr. std. N.A.2Harper County ......................................................................... .................... 1 hr. std. N.A.2Harvey County ......................................................................... .................... 1 hr. std. N.A.2Haskell County ........................................................................ .................... 1 hr. std. N.A.2Hodgeman County ................................................................... .................... 1 hr. std. N.A.2Jackson County ....................................................................... .................... 1 hr. std. N.A.2Jefferson County ..................................................................... .................... 1 hr. std. N.A.2Jewell County .......................................................................... .................... 1 hr. std. N.A.2Kearny County ......................................................................... .................... 1 hr. std. N.A.2Kingman County ...................................................................... .................... 1 hr. std. N.A.2Kiowa County .......................................................................... .................... 1 hr. std. N.A.2Labette County ........................................................................ .................... 1 hr. std. N.A.2Lane County ............................................................................ .................... 1 hr. std. N.A.2Leavenworth County ................................................................ .................... 1 hr. std. N.A.2Lincoln County ......................................................................... .................... 1 hr. std. N.A.2Linn County ............................................................................. .................... 1 hr. std. N.A.2Logan County .......................................................................... .................... 1 hr. std. N.A.2Lyon County ............................................................................ .................... 1 hr. std. N.A.2Marion County ......................................................................... .................... 1 hr. std. N.A.2Marshall County ....................................................................... .................... 1 hr. std. N.A.2McPherson County .................................................................. .................... 1 hr. std. N.A.2Meade County ......................................................................... .................... 1 hr. std. N.A.2Miami County ........................................................................... .................... 1 hr. std. N.A.2Mitchell County ........................................................................ .................... 1 hr. std. N.A.2Montgomery County ................................................................ .................... 1 hr. std. N.A.2


KANSAS—OZONE (1-HOUR STANDARD)—Continued



Morris County .......................................................................... .................... 1 hr. std. N.A.2

Morton County ......................................................................... .................... 1 hr. std. N.A.2

Nemaha County ....................................................................... .................... 1 hr. std. N.A.2

Neosho County ........................................................................ .................... 1 hr. std. N.A.2

Ness County ............................................................................ .................... 1 hr. std. N.A.2

Norton County ......................................................................... .................... 1 hr. std. N.A.2

Osage County .......................................................................... .................... 1 hr. std. N.A.2

Osborne County ...................................................................... .................... 1 hr. std. N.A.2

Ottawa County ......................................................................... .................... 1 hr. std. N.A.2

Pawnee County ....................................................................... .................... 1 hr. std. N.A.2

Phillips County ......................................................................... .................... 1 hr. std. N.A.2

Pottawatomie County .............................................................. .................... 1 hr. std. N.A.2

Pratt County ............................................................................. .................... 1 hr. std. N.A.2

Rawlins County ........................................................................ .................... 1 hr. std. N.A.2

Reno County ............................................................................ .................... 1 hr. std. N.A.2

Republic County ...................................................................... .................... 1 hr. std. N.A.2

Rice County ............................................................................. .................... 1 hr. std. N.A.2

Riley County ............................................................................ .................... 1 hr. std. N.A.2

Rooks County .......................................................................... .................... 1 hr. std. N.A.2

Rush County ............................................................................ .................... 1 hr. std. N.A.2

Russell County ........................................................................ .................... 1 hr. std. N.A.2

Saline County .......................................................................... .................... 1 hr. std. N.A.2

Scott County ............................................................................ .................... 1 hr. std. N.A.2

Sedgwick County ..................................................................... .................... 1 hr. std. N.A.2

Seward County ........................................................................ .................... 1 hr. std. N.A.2

Shawnee County ..................................................................... .................... 1 hr. std. N.A.2

Sheridan County ...................................................................... .................... 1 hr. std. N.A.2

Sherman County ...................................................................... .................... 1 hr. std. N.A.2

Smith County ........................................................................... .................... 1 hr. std. N.A.2

Stafford County ........................................................................ .................... 1 hr. std. N.A.2

Stanton County ........................................................................ .................... 1 hr. std. N.A.2

Stevens County ....................................................................... .................... 1 hr. std. N.A.2

Sumner County ........................................................................ .................... 1 hr. std. N.A.2

Thomas County ....................................................................... .................... 1 hr. std. N.A.2

Trego County ........................................................................... .................... 1 hr. std. N.A.2

Wabaunsee County ................................................................. .................... 1 hr. std. N.A.2

Wallace County ....................................................................... .................... 1 hr. std. N.A.2

Washington County ................................................................. .................... 1 hr. std. N.A.2

Wichita County ........................................................................ .................... 1 hr. std. N.A.2

Wilson County ......................................................................... .................... 1 hr. std. N.A.2

Woodson County ..................................................................... .................... 1 hr. std. N.A.2


* * * * *

19. In § 81.318, the table entitled ‘‘Kentucky—Ozone’’ is revised to read as follows:

§ 81.318 Kentucky.

* * * * *

KENTUCKY—OZONE (1-HOUR STANDARD)



Cincinnati-Hamilton Area:Boone County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.Campbell County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Moderate.Kenton County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Moderate.

Edmonson County Area:Edmonson County ............................................................ .................... 1 hr. std. N.A.2

Louisville Area:Bullitt County (part) .......................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.


KENTUCKY—OZONE (1-HOUR STANDARD)—Continued



The area boundary is as follows: Beginning at theintersection of Ky 1020 and the Jefferson-BullittCounty Line proceeding to the east along thecounty line to the intersection of county road 567and the Jefferson-Bullitt County Line; proceedingsouth on county road 567 to the junction with Ky1116 (also known as Zoneton Road); proceedingto the south on Ky 1116 to the junction with He-bron Lane; proceeding to the south on HebronLane to Cedar Creek; proceeding south on CedarCreek to the confluence of Floyds Fork turningsoutheast along a creek that meets Ky 44 at Stal-lings Cemetery; proceeding west along Ky 44 tothe eastern most point in the Shepherdsville citylimits; proceeding south along the Shepherdsvillecity limits to the Salt River and west to a pointacross the river from Mooney Lane; proceedingsouth along Mooney Lane to the junction of Ky480; proceeding west on Ky 480 to the junctionwith Ky 2237; proceeding south on Ky 2237 tothe junction with Ky 61 and proceeding north onKy 61 to the junction with Ky 1494; proceedingsouth on Ky 1494 to the junction with the perim-eter of the Fort Knox Military Reservation; pro-ceeding north along the military reservation pe-rimeter to Castleman Branch Road; proceedingnorth on Castleman Branch Road to Ky 44; pro-ceeding a very short distance west on Ky 44 to ajunction with Ky 2723; proceeding north on Ky2723 to the junction of Chillicoop Road; proceed-ing northeast on Chillicoop Road to the junctionof KY 2673; proceeding north on KY 2673 to thejunction of KY 1020; proceeding north on KY1020 to the beginning; unless a road or intersec-tion of two or more roads defines the nonattain-ment boundary, the area shall extend outward750 feet from the center of the road or intersec-tion.

Jefferson County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Moderate.Oldham County (part) ....................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.





The area boundary is as follows: Beginning at theintersection of the Oldham-Jefferson County Linewith the southbound lane of Intestate 71; pro-ceeding to the northeast along the southboundlane of Interstate 71 to the intersection of Ky 329and the southbound lane of Interstate 71; pro-ceeding to the northwest on Ky 329 to the inter-section of Zaring Road and Ky 329; proceedingto the east-northeast on Zaring Road to the junc-tion of Cedar Point Road and Zaring Road; pro-ceeding to the north-northeast on Cedar PointRoad to the junction of Ky 393 and Cedar PointRoad; proceeding to the south-southeast on Ky393 to the junction of (the access road on thenorth side of Reformatory Lake and the Reform-atory); proceeding to the east-northeast on theaccess road to the junction with Dawkins Laneand the access road; proceeding to follow anelectric power line east-northeast across from thejunction of county road 746 and Dawkins Lane tothe east-northeast across Ky 53 on to the LaGrange Water Filtration Plant; proceeding on tothe east-southeast along the power line thensouth across Fort Pickens Road to a power sub-station on Ky 146; proceeding along the powerline south across Ky 146 and the Seaboard Sys-tem Railroad track to adjoin the incorporated citylimits of La Grange; then proceeding east thensouth along the La Grange city limits to a pointabutting the north side of Ky 712; proceedingeast-southeast on Ky 712 to the junction ofMassie School Road and Ky 712; proceeding tothe south-southwest on Massie School Road tothe intersection of Massie School Road and ZaleSmith Road; proceeding northeast on Zale SmithRoad to the junction of KY 53 and Zale SmithRoad; proceeding on Ky 53 to the north-north-west to the junction of New Moody Lane and Ky53; proceeding on New Moody Lane to the south-southwest until meeting the city limits of LaGrange; then briefly proceeding north followingthe La Grange city limits to the intersection of thenorthbound lane of Interstate 71 and the LaGrange city limits; proceeding southwest on thenorth-bound lane of Interstate 71 until inter-secting with the North Fork of Currys Fork; pro-ceeding south-southwest beyond the confluenceof Currys Fork to the south-southwest beyond theconfluence of Floyds Fork continuing on to theOldham-Jefferson County Line; proceeding north-west along the Oldham-Jefferson County Line tothe beginning; unless a road or intersection oftwo or more roads defines the nonattainmentboundary, the area shall extend outward 750 feetfrom the center of the road or intersection.

Owensboro Area:Daviess County ................................................................ .................... 1 hr. std. N.A.2

Hancock County ............................................................... .................... 1 hr. std. N.A.2

The area boundary is as follows: Beginning at theIntersection of U.S. 60 and the Hancock-DaviessCounty Line; proceeding east along U.S. 60 tothe intersection of Yellow Creek and U.S. 60; pro-ceeding north and west along Yellow Creek tothe confluence of the Ohio River; proceedingwest along the Ohio River to the confluence ofBlackford Creek; proceeding south and eastalong Blackford Creek to the beginning.

Morgan County Area:Morgan County ................................................................. 11/15/90 Unclassifiable/Attainment 11/15/90





Adair County ............................................................................ .................... 1 hr. std. N.A.2Allen County ............................................................................ .................... 1 hr. std. N.A.2Anderson County ..................................................................... .................... 1 hr. std. N.A.2Ballard County ......................................................................... .................... 1 hr. std. N.A.2Barren County ......................................................................... .................... 1 hr. std. N.A.2Bath County ............................................................................. .................... 1 hr. std. N.A.2Bell County .............................................................................. .................... 1 hr. std. N.A.2Bourbon County ....................................................................... .................... 1 hr. std. N.A.2Boyd County ............................................................................ .................... 1 hr. std. N.A.2Boyle County ........................................................................... .................... 1 hr. std. N.A.2Bracken County ....................................................................... .................... 1 hr. std. N.A.2Breathitt County ....................................................................... .................... 1 hr. std. N.A.2Breckinridge County ................................................................ .................... 1 hr. std. N.A.2Bullitt County (part):

Remainder of County ....................................................... .................... 1 hr. std. N.A.2Butler County ........................................................................... .................... 1 hr. std. N.A.2Caldwell County ....................................................................... .................... 1 hr. std. N.A.2Calloway County ...................................................................... .................... 1 hr. std. N.A.2Carlisle County ........................................................................ .................... 1 hr. std. N.A.2Carroll County .......................................................................... .................... 1 hr. std. N.A.2Carter County .......................................................................... .................... 1 hr. std. N.A.2Casey County .......................................................................... .................... 1 hr. std. N.A.2Christian County ...................................................................... .................... 1 hr. std. N.A.2Clark County ............................................................................ .................... 1 hr. std. N.A.2Clay County ............................................................................. .................... 1 hr. std. N.A.2Clinton County ......................................................................... .................... 1 hr. std. N.A.2Crittenden County .................................................................... .................... 1 hr. std. N.A.2Cumberland County ................................................................. .................... 1 hr. std. N.A.2Elliott County ........................................................................... .................... 1 hr. std. N.A.2Estill County ............................................................................. .................... 1 hr. std. N.A.2Fayette County ........................................................................ .................... 1 hr. std. N.A.2Fleming County ....................................................................... .................... 1 hr. std. N.A.2Floyd County ........................................................................... .................... 1 hr. std. N.A.2Franklin County ....................................................................... .................... 1 hr. std. N.A.2Fulton County .......................................................................... .................... 1 hr. std. N.A.2Gallatin County ........................................................................ .................... 1 hr. std. N.A.2Garrard County ........................................................................ .................... 1 hr. std. N.A.2Grant County ........................................................................... .................... 1 hr. std. N.A.2Graves County ......................................................................... .................... 1 hr. std. N.A.2Grayson County ....................................................................... .................... 1 hr. std. N.A.2Green County .......................................................................... .................... 1 hr. std. N.A.2Greenup County ...................................................................... .................... 1 hr. std. N.A.2Hancock County (part):

Remainder of County ....................................................... .................... 1 hr. std. N.A.2Hardin County .......................................................................... .................... 1 hr. std. N.A.2Harlan County .......................................................................... .................... 1 hr. std. N.A.2Harrison County ....................................................................... .................... 1 hr. std. N.A.2Hart County ............................................................................. .................... 1 hr. std. N.A.2Henderson County ................................................................... .................... 1 hr. std. N.A.2Henry County ........................................................................... .................... 1 hr. std. N.A.2Hickman County ...................................................................... .................... 1 hr. std. N.A.2Hopkins County ....................................................................... .................... 1 hr. std. N.A.2Jackson County ....................................................................... .................... 1 hr. std. N.A.2Jessamine County ................................................................... .................... 1 hr. std. N.A.2Johnson County ....................................................................... .................... 1 hr. std. N.A.2Knott County ............................................................................ .................... 1 hr. std. N.A.2Knox County ............................................................................ .................... 1 hr. std. N.A.2Larue County ........................................................................... .................... 1 hr. std. N.A.2Laurel County .......................................................................... .................... 1 hr. std. N.A.2Lawrence County ..................................................................... .................... 1 hr. std. N.A.2Lee County .............................................................................. .................... 1 hr. std. N.A.2Leslie County ........................................................................... .................... 1 hr. std. N.A.2Letcher County ........................................................................ .................... 1 hr. std. N.A.2Lewis County ........................................................................... .................... 1 hr. std. N.A.2Lincoln County ......................................................................... .................... 1 hr. std. N.A.2Livingston County .................................................................... .................... 1 hr. std. N.A.2Logan County .......................................................................... .................... 1 hr. std. N.A.2Lyon County ............................................................................ .................... 1 hr. std. N.A.2Madison County ....................................................................... .................... 1 hr. std. N.A.2Magoffin County ...................................................................... .................... 1 hr. std. N.A.2





Marion County ......................................................................... .................... 1 hr. std. N.A.2Marshall County ....................................................................... .................... 1 hr. std. N.A.2Martin County .......................................................................... .................... 1 hr. std. N.A.2Mason County ......................................................................... .................... 1 hr. std. N.A.2McCracken County .................................................................. .................... 1 hr. std. N.A.2McCreary County ..................................................................... .................... 1 hr. std. N.A.2McLean County ....................................................................... .................... 1 hr. std. N.A.2Meade County ......................................................................... .................... 1 hr. std. N.A.2Menifee County ....................................................................... .................... 1 hr. std. N.A.2Mercer County ......................................................................... .................... 1 hr. std. N.A.2Metcalfe County ....................................................................... .................... 1 hr. std. N.A.2Monroe County ........................................................................ .................... 1 hr. std. N.A.2Montgomery County ................................................................ .................... 1 hr. std. N.A.2Muhlenberg County ................................................................. .................... 1 hr. std. N.A.2Nelson County ......................................................................... .................... 1 hr. std. N.A.2Nicholas County ...................................................................... .................... 1 hr. std. N.A.2Ohio County ............................................................................. .................... 1 hr. std. N.A.2Oldham County (part):

Remainder of County ....................................................... .................... 1 hr. std. N.A.2Owen County ........................................................................... .................... 1 hr. std. N.A.2Owsley County ........................................................................ .................... 1 hr. std. N.A.2Pendleton County .................................................................... .................... 1 hr. std. N.A.2Perry County ............................................................................ .................... 1 hr. std. N.A.2Pike County ............................................................................. .................... 1 hr. std. N.A.2Powell County .......................................................................... .................... 1 hr. std. N.A.2Pulaski County ......................................................................... .................... 1 hr. std. N.A.2Robertson County .................................................................... .................... 1 hr. std. N.A.2Rockcastle County ................................................................... .................... 1 hr. std. N.A.2Rowan County ......................................................................... .................... 1 hr. std. N.A.2Russell County ........................................................................ .................... 1 hr. std. N.A.2Scott County ............................................................................ .................... 1 hr. std. N.A.2Shelby County ......................................................................... .................... 1 hr. std. N.A.2Simpson County ...................................................................... .................... 1 hr. std. N.A.2Spencer County ....................................................................... .................... 1 hr. std. N.A.2Taylor County .......................................................................... .................... 1 hr. std. N.A.2Todd County ............................................................................ .................... 1 hr. std. N.A.2Trigg County ............................................................................ .................... 1 hr. std. N.A.2Trimble County ........................................................................ .................... 1 hr. std. N.A.2Union County ........................................................................... .................... 1 hr. std. N.A.2Warren County ........................................................................ .................... 1 hr. std. N.A.2Washington County ................................................................. .................... 1 hr. std. N.A.2Wayne County ......................................................................... .................... 1 hr. std. N.A.2Webster County ....................................................................... .................... 1 hr. std. N.A.2Whitley County ........................................................................ .................... 1 hr. std. N.A.2Wolfe County ........................................................................... .................... 1 hr. std. N.A.2Woodford County ..................................................................... .................... 1 hr. std. N.A.2


* * * * * * *4. In § 81.319, the table entitled ‘‘Louisiana—Ozone’’ is revised to read as follows:

§ 81.319 Louisiana.* * * * * * *

LOUISIANA—OZONE (1-HOUR STANDARD)



Baton Rouge Area:Ascension Parish .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.East Baton Rouge Parish ................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Iberville Parish .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Livingston Parish .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.West Baton Rouge Parish ................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.

Beauregard Parish Area:Beauregard Parish ........................................................... .................... 1 hr. std. N.A.2

Grant Parish Area:


LOUISIANA—OZONE (1-HOUR STANDARD)—Continued



Grant Parish ..................................................................... .................... 1 hr. std. N.A.2Lafayette Area:

Lafayette Parish ............................................................... .................... 1 hr. std. N.A.2Lafourche Parish Area:

Lafourche Parish .............................................................. 1/05/98 Nonattainment ............... 1/05/98 Incomplete DataLake Charles Area:

Calcasieu Parish .............................................................. .................... 1 hr. std. N.A.2New Orleans Area:

Jefferson Parish ............................................................... .................... 1 hr. std. N.A.2Orleans Parish .................................................................. .................... 1 hr. std. N.A.2St. Bernard Parish ............................................................ .................... 1 hr. std. N.A.2St. Charles Parish ............................................................ .................... 1 hr. std. N.A.2

Pointe Coupee Area:Pointe Coupee Parish ...................................................... .................... 1 hr. std. N.A.2

St. James Parish Area:St. James Parish .............................................................. .................... 1 hr. std. N.A.2

St. Mary Parish Area:St. Mary Parish ................................................................. .................... 1 hr. std. N.A.2AQCR 019 Monroe-El Dorado Interstate ......................... .................... 1 hr. std. N.A.2

Caldwell ParishCatahoula ParishConcordia ParishEast Carroll ParishFranklin ParishLa Salle ParishMadison ParishMorehouse ParishOuachita ParishRichland ParishTensas ParishUnion ParishWest Carroll Parish

AQCR 022 Shreveport-Texarkana-Tyler Inters. ............... .................... 1 hr. std. N.A.2Bienville ParishBossier ParishCaddo ParishClaiborne ParishDe Soto ParishJackson ParishLincoln ParishNatchitoches ParishRed River ParishSabine ParishWebster ParishWinn Parish

AQCR 106 S. Louisiana-S.E. Texas Interstate ................ .................... 1 hr. std. N.A.2St. John The Baptist Parish

AQCR 106 S. Louisiana-S.E. Texas Interstate ................ .................... 1 hr. std. N.A.2Acadia ParishAllen ParishAssumption ParishAvoyelles ParishCameron ParishEast Feliciana ParishEvangeline ParishIberia ParishJefferson Davis ParishPlaquemines ParishRapides ParishSt. Helena ParishSt. Landry ParishSt. Martin ParishSt. Tammany ParishTangipahoa ParishTerrebonne ParishVermilion ParishVernon ParishWashington ParishWest Feliciana Parish



2 1 hour standard Not Applicable.

* * * * *21. In § 81.320, the table entitled ‘‘Maine—Ozone’’ is revised to read as follows:

§ 81.320 Maine.* * * * *

MAINE—OZONE (1-HOUR STANDARD)



Franklin County Area:Franklin County (part) ...................................................... .................... 1 hr. std. N.A.3

Hancock County and Waldo County Area:Hancock County ............................................................... .................... 1 hr. std. N.A.3Waldo County ................................................................... .................... 1 hr. std. N.A.3

Knox County and Lincoln County Area:Knox County ..................................................................... .................... 1 hr. std. N.A.3Lincoln County .................................................................. .................... 1 hr. std. N.A.3

Lewiston-Auburn Area:Androscoggin County ....................................................... .................... 1 hr. std. N.A.3Kennebec County ............................................................. .................... 1 hr. std. N.A.3

Oxford County Area:Oxford County (part) ........................................................ .................... 1 hr. std. N.A.3

Portland Area:Cumberland County ......................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.2Sagadahoc County ........................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.2York County ...................................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.2

Somerset County Area:Somerset County (part) .................................................... .................... 1 hr. std. N.A.3

AQCR 108 Aroostook Intrastate .............................................. .................... 1 hr. std. N.A.3Aroostook County (part)

see 40 CFR 81.179AQCR 109 Down East Intrastate ............................................ .................... 1 hr. std. N.A.3

Penobscot County (part), as described under 40 CFR81.181.

Piscataquis County (part)see 40 CFR 81.181

Washington CountyAQCR 111 Northwest Maine Intrastate ................................... .................... 1 hr. std. N.A.3

(Remainder of)see 40 CFR 81.182

Aroostook CountyFranklin County (part)Oxford County (part)Penobscot County (part)Piscataquis County (part)Somerset County (part)

1 This date is March 17, 1998, unless otherwise noted.2 Attainment date extended to November 15, 1997.3 1 hour standard Not Applicable.

* * * * * * *22. In § 81.321, the table entitled ‘‘Maryland—Ozone’’ is revised to read as follows:

§ 81.321 Maryland.* * * * * * *

MARYLAND—OZONE (1-HOUR STANDARD)



Baltimore Area:Anne Arundel County ....................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-15.City of Baltimore ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Baltimore County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Carroll County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Harford County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Howard County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-15.

Kent County and Queen Anne’s County Area:Kent County ...................................................................... 1/6/92 Nonattainment ............... 1/6/92 Marginal.


MARYLAND—OZONE (1-HOUR STANDARD)—Continued



Queen Anne’s County ...................................................... 1/6/92 Nonattainment ............... 1/6/92 Marginal.Philadelphia-Wilmington-Trenton Area:

Cecil County ..................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Washington, DC Area:

Calvert County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Charles County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Frederick County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Montgomery County ......................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Prince George’s County ................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.

AQCR 113 Cumberland-Keyser Interstate .............................. .................... 1 hr. std. N.A.2Allegany CountyGarrett CountyWashington County

AQCR 114 Eastern Shore Interstate (Remainder of) ............. .................... 1 hr. std. N.A.2Caroline CountyDorchester CountySomerset CountyTalbot CountyWicomico CountyWorcester County

AQCR 116 Southern Maryland Intrastate (Remainder of) ...... .................... 1 hr. std. N.A.2St. Mary’s County


* * * * * * *23. In § 81.322, the table entitled ‘‘Massachusetts—Ozone’’ is revised to read as follows:

§ 81.322 Massachusetts.* * * * * * *

MASSACHUSETTS—OZONE (1-HOUR STANDARD)



Boston-Lawrence-Worcester (E. Mass) Area:Barnstable County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.Bristol County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Dukes County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Essex County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Middlesex County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Nantucket County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Norfolk County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Plymouth County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Suffolk County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Worcester County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.

Springfield (W. Mass) Area:Berkshire County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Franklin County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.Hampden County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Hampshire County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.


* * * * * * *24. In § 81.323, the table entitled ‘‘Michigan—Ozone’’ is revised to read as follows:

§ 81.323 Michigan.* * * * * * *

MICHIGAN—OZONE (1-HOUR STANDARD)



Allegan County Area:Allegan County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Incomplete Data.


MICHIGAN—OZONE (1-HOUR STANDARD)—Continued



Barry County Area:Barry County .................................................................... .................... 1 hr. std. N.A.2

Battle Creek Area:Calhoun County ................................................................ .................... 1 hr. std. N.A.2

Benton Harbor Area:Berrien County ................................................................. .................... 1 hr. std. N.A.2

Branch County Area:Branch County .................................................................. .................... 1 hr. std. N.A.2

Cass County Area:Cass County ..................................................................... .................... 1 hr. std. N.A.2

Detroit-Ann Arbor Area:Livingston County ............................................................. 4/6/95 Attainment.Macomb County ............................................................... 4/6/95 Attainment.Monroe County ................................................................. 4/6/95 Attainment.Oakland County ................................................................ 4/6/95 Attainment.St. Clair County ................................................................ 4/6/95 Attainment.Washtenaw County .......................................................... 4/6/95 Attainment.Wayne County .................................................................. 4/6/95 Attainment.

Flint Area:Genesee County .............................................................. .................... 1 hr. std. N.A.2

Grand Rapids Area:Kent County ...................................................................... 6/21/96 Attainment.Ottawa County .................................................................. 6/21/96 Attainment.

Gratiot County Area:Gratiot County .................................................................. .................... 1 hr. std. N.A.2

Hillsdale County Area:Hillsdale County ............................................................... .................... 1 hr. std. N.A.2

Huron County Area:Huron County ................................................................... .................... 1 hr. std. N.A.2

Ionia County Area:Ionia County ..................................................................... .................... 1 hr. std. N.A.2

Jackson Area:Jackson County ................................................................ .................... 1 hr. std. N.A.2

Kalamazoo Area:Kalamazoo County ........................................................... .................... 1 hr. std. N.A.2

Lansing-East Lansing Area:Clinton County .................................................................. .................... 1 hr. std. N.A.2Eaton County .................................................................... .................... 1 hr. std. N.A.2Ingham County ................................................................. .................... 1 hr. std. N.A.2

Lapeer County Area:Lapeer County .................................................................. .................... 1 hr. std. N.A.2

Lenawee County Area:Lenawee County .............................................................. .................... 1 hr. std. N.A.2

Mason County Area:Mason County .................................................................. 11/15/90 Unclassifiable/Attainment 11/15/90

Montcalm Area:Montcalm County ............................................................. .................... 1 hr. std. N.A.2

Muskegon Area:Muskegon County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Moderate.

Saginaw-Bay City-Midland Area:Bay County ....................................................................... .................... 1 hr. std. N.A.2Midland County ................................................................ .................... 1 hr. std. N.A.2Saginaw County ............................................................... .................... 1 hr. std. N.A.2

Sanilac County Area:Sanilac County ................................................................. .................... 1 hr. std. N.A.2

Shiawassee County Area:Shiawassee County .......................................................... .................... 1 hr. std. N.A.2

St. Joseph County Area:St. Joseph County ............................................................ .................... 1 hr. std. N.A.2

Tuscola County Area:Tuscola County ................................................................ .................... 1 hr. std. N.A.2

Van Buren County Area:Van Buren County ............................................................ .................... 1 hr. std. N.A.2

AQCR 122 Central Michigan Intrastate (Remainder of) ......... .................... 1 hr. std. N.A.2Arenac CountyClare CountyGladwin CountyIosco CountyIsabella CountyLake County


MICHIGAN—OZONE (1-HOUR STANDARD)—Continued



Mecosta CountyNewaygo CountyOceana CountyOgemaw CountyOsceola CountyRoscommon County

AQCR 126 Upper Michigan Intrastate (part):Marquette County ............................................................. .................... 1 hr. std. N.A.2

AQCR 126 Upper Michigan Intrastate (Remainder of) ........... .................... 1 hr. std. N.A.2Alcona CountyAlger CountyAlpena CountyAntrim CountyBaraga CountyBenzie CountyCharlevoix CountyCheboygan CountyChippewa CountyCrawford CountyDelta CountyDickinson CountyEmmet CountyGogebic CountyGrand Traverse CountyHoughton CountyIron CountyKalkaska CountyKeweenaw CountyLeelanau CountyLuce CountyMackinac CountyManistee CountyMenominee CountyMissaukee CountyMontmorency CountyOntonagon CountyOscoda CountyOtsego CountyPresque Isle CountySchoolcraft CountyWexford County


* * * * * * *25. In § 81.324, the table entitled ‘‘Minnesota—Ozone’’ is revised to read as follows:

§ 81.324 Minnesota.* * * * * * *

MINNESOTA—OZONE (1-HOUR STANDARD)



Minneapolis-Saint Paul Area:Anoka County ................................................................... .................... 1 hr. std. N.A.2Carver County .................................................................. .................... 1 hr. std. N.A.2Dakota County .................................................................. .................... 1 hr. std. N.A.2Hennepin County .............................................................. .................... 1 hr. std. N.A.2Ramsey County ................................................................ .................... 1 hr. std. N.A.2Scott County ..................................................................... .................... 1 hr. std. N.A.2Washington County .......................................................... .................... 1 hr. std. N.A.2

Aitkin County ........................................................................... .................... 1 hr. std. N.A.2Becker County ......................................................................... .................... 1 hr. std. N.A.2Beltrami County ....................................................................... .................... 1 hr. std. N.A.2Benton County ......................................................................... .................... 1 hr. std. N.A.2Big Stone County .................................................................... .................... 1 hr. std. N.A.2Blue Earth County ................................................................... .................... 1 hr. std. N.A.2


MINNESOTA—OZONE (1-HOUR STANDARD)—Continued



Brown County .......................................................................... .................... 1 hr. std. N.A.2Carlton County ......................................................................... .................... 1 hr. std. N.A.2Cass County ............................................................................ .................... 1 hr. std. N.A.2Chippewa County .................................................................... .................... 1 hr. std. N.A.2Chisago County ....................................................................... .................... 1 hr. std. N.A.2Clay County ............................................................................. .................... 1 hr. std. N.A.2Clearwater County ................................................................... .................... 1 hr. std. N.A.2Cook County ............................................................................ .................... 1 hr. std. N.A.2Cottonwood County ................................................................. .................... 1 hr. std. N.A.2Crow Wing County .................................................................. .................... 1 hr. std. N.A.2Dodge County .......................................................................... .................... 1 hr. std. N.A.2Douglas County ....................................................................... .................... 1 hr. std. N.A.2Faribault County ...................................................................... .................... 1 hr. std. N.A.2Fillmore County ....................................................................... .................... 1 hr. std. N.A.2Freeborn County ...................................................................... .................... 1 hr. std. N.A.2Goodhue County ..................................................................... .................... 1 hr. std. N.A.2Grant County ........................................................................... .................... 1 hr. std. N.A.2Houston County ....................................................................... .................... 1 hr. std. N.A.2Hubbard County ...................................................................... .................... 1 hr. std. N.A.2Isanti County ............................................................................ .................... 1 hr. std. N.A.2Itasca County ........................................................................... .................... 1 hr. std. N.A.2Jackson County ....................................................................... .................... 1 hr. std. N.A.2Kanabec County ...................................................................... .................... 1 hr. std. N.A.2Kandiyohi County .................................................................... .................... 1 hr. std. N.A.2Kittson County ......................................................................... .................... 1 hr. std. N.A.2Koochiching County ................................................................. .................... 1 hr. std. N.A.2Lac qui Parle County ............................................................... .................... 1 hr. std. N.A.2Lake County ............................................................................ .................... 1 hr. std. N.A.2Lake of the Woods County ...................................................... .................... 1 hr. std. N.A.2Le Sueur County ..................................................................... .................... 1 hr. std. N.A.2Lincoln County ......................................................................... .................... 1 hr. std. N.A.2Lyon County ............................................................................ .................... 1 hr. std. N.A.2Mahnomen County .................................................................. .................... 1 hr. std. N.A.2Marshall County ....................................................................... .................... 1 hr. std. N.A.2Martin County .......................................................................... .................... 1 hr. std. N.A.2McLeod County ....................................................................... .................... 1 hr. std. N.A.2Meeker County ........................................................................ .................... 1 hr. std. N.A.2Mille Lacs County .................................................................... .................... 1 hr. std. N.A.2Morrison County ...................................................................... .................... 1 hr. std. N.A.2Mower County ......................................................................... .................... 1 hr. std. N.A.2Murray County ......................................................................... .................... 1 hr. std. N.A.2Nicollet County ........................................................................ .................... 1 hr. std. N.A.2Nobles County ......................................................................... .................... 1 hr. std. N.A.2Norman County ....................................................................... .................... 1 hr. std. N.A.2Olmsted County ....................................................................... .................... 1 hr. std. N.A.2Otter Tail County ..................................................................... .................... 1 hr. std. N.A.2Pennington County .................................................................. .................... 1 hr. std. N.A.2Pine County ............................................................................. .................... 1 hr. std. N.A.2Pipestone County .................................................................... .................... 1 hr. std. N.A.2Polk County ............................................................................. .................... 1 hr. std. N.A.2Pope County ............................................................................ .................... 1 hr. std. N.A.2Red Lake County ..................................................................... .................... 1 hr. std. N.A.2Redwood County ..................................................................... .................... 1 hr. std. N.A.2Renville County ....................................................................... .................... 1 hr. std. N.A.2Rice County ............................................................................. .................... 1 hr. std. N.A.2Rock County ............................................................................ .................... 1 hr. std. N.A.2Roseau County ........................................................................ .................... 1 hr. std. N.A.2Saint Louis County .................................................................. .................... 1 hr. std. N.A.2Sherburne County ................................................................... .................... 1 hr. std. N.A.2Sibley County .......................................................................... .................... 1 hr. std. N.A.2Stearns County ........................................................................ .................... 1 hr. std. N.A.2Steele County .......................................................................... .................... 1 hr. std. N.A.2Stevens County ....................................................................... .................... 1 hr. std. N.A.2Swift County ............................................................................ .................... 1 hr. std. N.A.2Todd County ............................................................................ .................... 1 hr. std. N.A.2Traverse County ...................................................................... .................... 1 hr. std. N.A.2Wabasha County ..................................................................... .................... 1 hr. std. N.A.2Wadena County ....................................................................... .................... 1 hr. std. N.A.2Waseca County ....................................................................... .................... 1 hr. std. N.A.2Watonwan County ................................................................... .................... 1 hr. std. N.A.2


MINNESOTA—OZONE (1-HOUR STANDARD)—Continued



Wilkin County ........................................................................... .................... 1 hr. std. N.A.2Winona County ........................................................................ .................... 1 hr. std. N.A.2Wright County .......................................................................... .................... 1 hr. std. N.A.2Yellow Medicine County .......................................................... .................... 1 hr. std. N.A.2


* * * * * * *26. In Section 81.325, the table entitled ‘‘Mississippi—Ozone’’ is revised to read as follows:

§ 81.325 Mississippi.* * * * * * *

MISSISSIPPI—OZONE (1-HOUR STANDARD)



Memphis:DeSota County ................................................................. 11/15/90 Unclassifiable/Attainment 11/15/90

Rest of State ............................................................................ .................... 1 hr. std. N.A.2Adams CountyAlcorn CountyAmite CountyAttala CountyBenton CountyBolivar CountyCalhoun CountyCarroll CountyChickasaw CountyChoctaw CountyClaiborne CountyClarke CountyClay CountyCoahoma CountyCopiah CountyCovington CountyForrest CountyFranklin CountyGeorge CountyGreene CountyGrenada CountyHancock CountyHarrison CountyHinds CountyHolmes CountyHumphreys CountyIssaquena CountyItawamba CountyJackson CountyJasper CountyJefferson CountyJefferson Davis CountyJones CountyKemper CountyLafayette CountyLamar CountyLauderdale CountyLawrence CountyLeake CountyLee CountyLeflore CountyLincoln CountyLowndes CountyMadison CountyMarion CountyMarshall CountyMonroe CountyMontgomery County


MISSISSIPPI—OZONE (1-HOUR STANDARD)—Continued



Neshoba CountyNewton CountyNoxubee CountyOktibbeha CountyPanola CountyPearl River CountyPerry CountyPike CountyPontotoc CountyPrentiss CountyQuitman CountyRankin CountyScott CountySharkey CountySimpson CountySmith CountyStone CountySunflower CountyTallahatchie CountyTate CountyTippah CountyTishomingo CountyTunica CountyUnion CountyWalthall CountyWarren CountyWashington CountyWayne CountyWebster CountyWilkinson CountyWinston CountyYalobusha CountyYazoo County


* * * * * * *27. In § 81.326, the table entitled ‘‘Missouri—Ozone’’ is revised to read as follows:

§ 81.326 Missouri.* * * * * * *

MISSOURI—OZONE (1-HOUR STANDARD)



Kansas City Area:Clay County ...................................................................... 7/23/92 Attainment.Jackson County ................................................................ 7/23/92 Attainment.Platte County .................................................................... 7/23/92 Attainment.

St. Louis Area:Franklin County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Moderate.Jefferson County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Moderate.St. Charles County ........................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.St. Louis ........................................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.St. Louis County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.

AQCR 094 Metro Kansas City Interstate (Remainder of) ....... .................... 1 hr. std. N.A.2Buchanan CountyCass CountyRay County

AQCR 137 N. Missouri Intrastate (part):Pike County ...................................................................... .................... 1 hr. std. N.A.2Ralls County ..................................................................... .................... 1 hr. std. N.A.2

AQCR 137 N. Missouri Intrastate (Remainder of) .................. .................... 1 hr. std. N.A.2Adair CountyAndrew CountyAtchison CountyAudrain County


MISSOURI—OZONE (1-HOUR STANDARD)—Continued



Boone CountyCaldwell CountyCallaway CountyCarroll CountyChariton CountyClark CountyClinton CountyCole CountyCooper CountyDaviess CountyDe Kalb CountyGentry CountyGrundy CountyHarrison CountyHolt CountyHoward CountyKnox CountyLewis CountyLincoln CountyLinn CountyLivingston CountyMacon CountyMarion CountyMercer CountyMoniteau CountyMonroe CountyMontgomery CountyNodaway CountyOsage CountyPutnam CountyRandolph CountySaline CountySchuyler CountyScotland CountyShelby CountySullivan CountyWarren CountyWorth County

Rest of State ............................................................................ .................... 1 hr. std. N.A.2Barry CountyBarton CountyBates CountyBenton CountyBollinger CountyButler CountyCamden CountyCape Girardeau CountyCarter CountyCedar CountyChristian CountyCrawford CountyDade CountyDallas CountyDent CountyDouglas CountyDunklin CountyGasconade CountyGreene CountyHenry CountyHickory CountyHowell CountyIron CountyJasper CountyJohnson CountyLaclede CountyLafayette CountyLawrence CountyMadison CountyMaries CountyMcDonald County


MISSOURI—OZONE (1-HOUR STANDARD)—Continued



Miller CountyMississippi CountyMorgan CountyNew Madrid CountyNewton CountyOregon CountyOzark CountyPemiscot CountyPerry CountyPettis CountyPhelps CountyPolk CountyPulaski CountyReynolds CountyRipley CountyScott CountyShannon CountySt. Clair CountySt. Francois CountySte. Genevieve CountyStoddard CountyStone CountyTaney CountyTexas CountyVernon CountyWashington CountyWayne CountyWebster CountyWright County


* * * * * * *28. In § 81.327, the table entitled ‘‘Montana—Ozone’’ is revised to read as follows:

§ 81.327 Montana.* * * * * * *

MONTANA—OZONE (1-HOUR STANDARD)



Beaverhead County ................................................................. .................... 1 hr. std. N.A.Big Horn County (part) excluding Crow, Northern Cheyenne

Indian Reservations..................... 1 hr. std. N.A.2

Blaine County (part) excluding Fort Belknap Indian Reserva-tion.

.................... 1 hr. std. N.A.2

Broadwater County .................................................................. .................... 1 hr. std. N.A.2Carbon County ........................................................................ .................... 1 hr. std. N.A.2Carter County .......................................................................... .................... 1 hr. std. N.A.2Cascade County ...................................................................... .................... 1 hr. std. N.A.2Chouteau County (part) excluding Rocky Boy Indian Res-

ervation..................... 1 hr. std. N.A.2

Custer County .......................................................................... .................... 1 hr. std. N.A.2Daniels County (part) excluding Fort Peck Indian Reserva-

tion..................... 1 hr. std. N.A.2

Dawson County ....................................................................... .................... 1 hr. std. N.A.2Deer Lodge County ................................................................. .................... 1 hr. std. N.A.2Fallon County .......................................................................... .................... 1 hr. std. N.A.2Fergus County ......................................................................... .................... 1 hr. std. N.A.2Flathead County (part) excluding Flathead Indian Reserva-

tion..................... 1 hr. std. N.A.2

Gallatin County ........................................................................ .................... 1 hr. std. N.A.2Garfield County ........................................................................ .................... 1 hr. std. N.A.2Glacier County (part) excluding Blackfeet Indian Reservation .................... 1 hr. std. N.A.2Golden Valley County .............................................................. .................... 1 hr. std. N.A.2Granite County ........................................................................ .................... 1 hr. std. N.A.2Hill County (part) excluding Rocky Boy Indian Reservation ... .................... 1 hr. std. N.A.2


MONTANA—OZONE (1-HOUR STANDARD)—Continued



Jefferson County ..................................................................... .................... 1 hr. std. N.A.2Judith Basin County ................................................................ .................... 1 hr. std. N.A.2Lake County (part) excluding Flathead Indian Reservation .... .................... 1 hr. std. N.A.2Lewis and Clark County .......................................................... .................... 1 hr. std. N.A.2Liberty County ......................................................................... .................... 1 hr. std. N.A.2Lincoln County ......................................................................... .................... 1 hr. std. N.A.2Madison County ....................................................................... .................... 1 hr. std. N.A.2McCone County ....................................................................... .................... 1 hr. std. N.A.2Meagher County ...................................................................... .................... 1 hr. std. N.A.2Mineral County ........................................................................ .................... 1 hr. std. N.A.2Missoula County (part) excluding Flathead Indian Reserva-

tion..................... 1 hr. std. N.A.2

Musselshell County ................................................................. .................... 1 hr. std. N.A.2Park County ............................................................................. .................... 1 hr. std. N.A.2Petroleum County .................................................................... .................... 1 hr. std. N.A.2Phillips County (part) excluding Fort Belknap Indian Res-

ervation..................... 1 hr. std. N.A.2

Pondera County (part) excluding Blackfeet Indian Reserva-tion.

.................... 1 hr. std. N.A.2

Powder River County .............................................................. .................... 1 hr. std. N.A.2Powell County .......................................................................... .................... 1 hr. std. N.A.2Prairie County .......................................................................... .................... 1 hr. std. N.A.2Ravalli County ......................................................................... .................... 1 hr. std. N.A.2Richland County ...................................................................... .................... 1 hr. std. N.A.2Roosevelt County (part) excluding Fort Peck Indian Reserva-

tion..................... 1 hr. std. N.A.2

Rosebud County (part) excluding Northern Cheyenne IndianReservation.

.................... 1 hr. std. N.A.2

Sanders County (part) excluding Flathead Indian Reserva-tion.

.................... 1 hr. std. N.A.2

Sheridan County (part) excluding Fort Peck Indian Reserva-tion.

.................... 1 hr. std. N.A.2

Silver Bow County ................................................................... .................... 1 hr. std. N.A.2Stillwater County ...................................................................... .................... 1 hr. std. N.A.2Sweet Grass County ............................................................... .................... 1 hr. std. N.A.2Teton County ........................................................................... .................... 1 hr. std. N.A.2Toole County ........................................................................... .................... 1 hr. std. N.A.2Treasure County ...................................................................... .................... 1 hr. std. N.A.2Valley County (part) excluding Fort Peck Indian Reservation .................... 1 hr. std. N.A.2Wheatland County ................................................................... .................... 1 hr. std. N.A.2Wibaux County ........................................................................ .................... 1 hr. std. N.A.2Yellowstone County (part) excluding Crow Indian Reserva-

tion..................... 1 hr. std. N.A.2

Yellowstone Natl Park ............................................................. .................... 1 hr. std. N.A.2Blackfeet Indian Reservation ................................................... .................... 1 hr. std. N.A.2

Glacier County (part) area inside Blackfeet ReservationPondera County (part) area inside Blackfeet Reservation

Crow Indian Reservation ......................................................... .................... 1 hr. std. N.A.2Bighorn County (part) area inside Crow ReservationYellowstone (part) area inside Crow Reservation

Flathead Indian Reservation ................................................... .................... 1 hr. std. N.A.2Flathead County (part) area inside Flathead ReservationLake County (part) area inside Flathead ReservationMissoula County (part) area inside Flathead ReservationSanders County (part) area inside Flathead Reservation

Fort Belknap Indian Reservation ............................................. .................... 1 hr. std. N.A.2Blaine County (part) area inside Fort Belknap Reserva-

tionPhillips County (part) area inside Fort Belknap Reserva-

tionFort Peck Indian Reservation .................................................. .................... 1 hr. std. N.A.2

Daniels County (part) area inside Fort Peck ReservationRoosevelt County (part) area inside Fort Peck Reserva-

tionSheridan County (part) area inside Fort Peck Reserva-

tionValley County (part) area inside Fort Peck Reservation

Northern Cheyenne Indian Reservation .................................. .................... 1 hr. std. N.A.2Bighorn County (part) area inside Northern Cheyenne

Reservation


MONTANA—OZONE (1-HOUR STANDARD)—Continued



Rosebud County (part) area inside Northern CheyenneReservation

Rocky Boy Indian Reservation ................................................ .................... 1 hr. std. N.A.2Chouteau County (part) area inside Rocky Boy Reserva-

tionHill County (part) area inside Rocky Boy Reservation

.


* * * * * * *29. In § 81.328, the table entitled ‘‘Nebraska—Ozone’’ is revised to read as follows:

§ 81.328 Nebraska.* * * * * * *

NEBRASKA—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Adams CountyAntelope CountyArthur CountyBanner CountyBlaine CountyBoone CountyBox Butte CountyBoyd CountyBrown CountyBuffalo CountyBurt CountyButler CountyCass CountyCedar CountyChase CountyCherry CountyCheyenne CountyClay CountyColfax CountyCuming CountyCuster CountyDakota CountyDawes CountyDawson CountyDeuel CountyDixon CountyDodge CountyDouglas CountyDundy CountyFillmore CountyFranklin CountyFrontier CountyFurnas CountyGage CountyGarden CountyGarfield CountyGosper CountyGrant CountyGreeley CountyHall CountyHamilton CountyHarlan CountyHayes CountyHitchcock CountyHolt CountyHooker CountyHoward County


NEBRASKA—OZONE (1-HOUR STANDARD)—Continued



Jefferson CountyJohnson CountyKearney CountyKeith CountyKeya Paha CountyKimball CountyKnox CountyLancaster CountyLincoln CountyLogan CountyLoup CountyMadison CountyMcPherson CountyMerrick CountyMorrill CountyNance CountyNemaha CountyNuckolls CountyOtoe CountyPawnee CountyPerkins CountyPhelps CountyPierce CountyPlatte CountyPolk CountyRed Willow CountyRichardson CountyRock CountySaline CountySarpy CountySaunders CountyScotts Bluff CountySeward CountySheridan CountySherman CountySioux CountyStanton CountyThayer CountyThomas CountyThurston CountyValley CountyWashington CountyWayne CountyWebster CountyWheeler CountyYork County


* * * * * * *30. In § 81.329, the table entitled ‘‘Nevada—Ozone’’ is revised to read as follows:

§ 81.329 Nevada.* * * * * * *

NEVADA—OZONE (1-HOUR STANDARD)



Reno Area ............................................................................... .................... 1 hr. std. N.A.2Washoe County

Rest of State ............................................................................ .................... 1 hr. std. N.A.2Carson CityChurchill CountyClark CountyDouglas CountyElko CountyEsmeralda County


NEVADA—OZONE (1-HOUR STANDARD)—Continued



Eureka CountyHumboldt CountyLander CountyLincoln CountyLyon CountyMineral CountyNye CountyPershing CountyStorey CountyWhite Pine County


* * * * * * *31. In § 81.330, the table entitled ‘‘New Hampshire—Ozone’’ is revised to read as follows:

§ 81.330 New Hampshire.* * * * * * *

NEW HAMPSHIRE—OZONE (1-HOUR STANDARD)



Belknap County Area:Belknap County ................................................................ .................... 1 hr. std. N.A.2

Boston-Lawrence-Worcester Area:Hillsborough County (part) ............................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.

Pelham Town, Amherst Town, Brookline Town, Hol-lis Town, Hudson Town, Litchfield Town,Merrimack Town, Milford Town, Mont VernonTown, Nashua City, Wilton Town.

Rockingham County (part) ............................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Atkinson Town, Brentwood Town, Danville Town,

Derry Town, E. Kingston Town, HampsteadTown, Hampton Falls Town, Kensington Town,Kingston Town, Londonderry Town, NewtonTown, Plaistow Town, Salem Town, SandownTown, Seabrook Town, South Hampton Town,Windham Town.

Cheshire County Area:Cheshire County ............................................................... .................... 1 hr. std. N.A.2

Manchester Area:Hillsborough County (part) ............................................... .................... 1 hr. std. N.A.2

Antrim Town, Bedford Town, Bennington Town,Deering Town, Francestown Town, GoffstownTown, Greenfield Town, Greenville Town, Han-cock Town, Hillsborough Town, LyndeboroughTown, Manchester city, Mason Town, New Bos-ton Town, New Ipswich Town, PetersboroughTown, Sharon Town, Temple town, Weare Town,Windsor Town.

Merrimack County ............................................................ .................... 1 hr. std. N.A.2 ....................Rockingham County (part) ............................................... .................... 1 hr. std. N.A.2

Auburn Town, Candia Town, Chester Town, Deer-field Town, Epping Town, Fremont Town, North-wood Town, Nottingham Town, Raymond Town.

Portsmouth-Dover-Rochester Area:Rockingham County (part) ............................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.

Exeter Town, Greenland Town, Hampton Town,New Castle Town, Newfields Town, NewingtonTown, Newmarket Town, North Hampton Town,Portsmouth City, Rye Town, Stratham Town.

Strafford County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Sullivan County Area:

Sullivan County ................................................................ .................... 1 hr. std. N.A.2AQCR 107 Androscoggin Valley Interstate:

Coos County ..................................................................... .................... 1 hr. std. N.A.2AQCR 149 Central New Hampshire Interstate:


NEW HAMPSHIRE—OZONE (1-HOUR STANDARD)—Continued



Carroll County .................................................................. .................... 1 hr. std. N.A.2Grafton County ................................................................. .................... 1 hr. std. N.A.2


* * * * * * *32. In § 81.331, the table entitled ‘‘New Jersey—Ozone’’ is revised to read as follows:

§ 81.331 New Jersey.* * * * * * *

NEW JERSEY—OZONE (1-HOUR STANDARD)



Allentown-Bethlehem Easton Area:Warren County ................................................................. .................... 1 hr. std. N.A.2

Atlantic City Area:Atlantic County ................................................................. .................... 1 hr. std. N.A.2Cape May County ............................................................ .................... 1 hr. std. N.A.2

New York-N. New Jersey-Long Island Area:Bergen County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Essex County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Hudson County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Hunterdon County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Middlesex County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Monmouth County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Morris County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Ocean County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Passaic County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Somerset County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Sussex County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Union County .................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.

Philadelphia-Wilmington-Trenton Area:Burlington County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Camden County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Cumberland County ......................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Gloucester County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Mercer County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-15.Salem County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-15.

1This date is March 17, 1998, unless otherwise noted.21 hour standard Not Applicable.

* * * * * * *33. In § 81.332, the table entitled ‘‘New Mexico—Ozone’’ is revised to read as follows:

§ 81.332 New Mexico.* * * * * * *

NEW MEXICO—OZONE (1-HOUR STANDARD)



AQCR 012 New Mexico-Southern Border Intrastate .............. .................... 1 hr. std. N.A.2Grant CountyHidalgo CountyLuna County

AQCR 014 Four Corners Interstate ........................................ .................... 1 hr. std. N.A.2see 40 CFR 81.121

McKinley County (part)Rio Arriba County (part)San Juan CountySandoval County (part)Valencia County (part)

AQCR 152 Albuquerque-Mid Rio Grande Intrastate ............... .................... 1 hr. std. N.A.2


NEW MEXICO—OZONE (1-HOUR STANDARD)—Continued



Bernalillo County (part)AQCR 152 Albuquerque-Mid Rio Grande ............................... .................... 1 hr. std. N.A.2

Sandoval County (part)see 40 CFR 81.83

Valencia Countysee 40 CFR 81.83

AQCR 153 El Paso-Las Cruces-Alamogordo ......................... 7/12/95 Nonattainment ............... 7/12/95 Marginal.Dona Ana County (part)-(Sunland Park Area) The area

bounded by the New Mexico-Texas State line on theeast, the New Mexico-Mexico international line on thesouth, Range 3E-Range 2E, line on the west, and theN3200 latitude line on the north

Dona Ana County (remainder of) ..................................... .................... 1 hr. std. N.A.2Lincoln County .................................................................. .................... 1 hr. std. N.A.2Otero County .................................................................... .................... 1 hr. std. N.A.2Sierra County. .................................................................. .................... 1 hr. std. N.A.2

AQCR 154 Northeastern Plains Intrastate .............................. .................... 1 hr. std. N.A.2Colfax CountyGuadalupe CountyHarding CountyMora CountySan Miguel CountyTorrance CountyUnion County

AQCR 155 Pecos-Permian Basin Intrastate ........................... .................... 1 hr. std. N.A.2Chaves CountyCurry CountyDe Baca CountyEddy CountyLea CountyQuay CountyRoosevelt County

AQCR 156 SW Mountains-Augustine Plains .......................... .................... 1 hr. std. N.A.2Catron CountyCibola CountyMcKinley County (part)

see 40 CFR 81.241Socorro CountyValencia County (part)

see 40 CFR 81.241AQCR 157 Upper Rio Grande Valley Intrastate ..................... .................... 1 hr. std. N.A.2

Los Alamos CountyRio Arriba County (part)

see 40 CFR 81.239Santa Fe CountyTaos County


* * * * * * *34. In § 81.333, the table entitled ‘‘New York—Ozone’’ is revised to read as follows:

§ 81.333 New York.* * * * * * *

NEW YORK—OZONE (1-HOUR STANDARD)



Albany-Schenectady-Troy Area:Albany County .................................................................. .................... 1 hr. std. N.A.3Greene County ................................................................. .................... 1 hr. std. N.A.3Montgomery County ......................................................... .................... 1 hr. std. N.A.3Rensselaer County ........................................................... .................... 1 hr. std. N.A.3Saratoga County .............................................................. .................... 1 hr. std. N.A.3Schenectady County ........................................................ .................... 1 hr. std. N.A.3

Buffalo-Niagara Falls Area:Erie County ....................................................................... .................... 1 hr. std. N.A.3


NEW YORK—OZONE (1-HOUR STANDARD)—Continued



Niagara County ................................................................ .................... 1 hr. std. N.A.3Essex County Area:

Essex County (part) ......................................................... .................... 1 hr. std. N.A.3The portion of Whiteface Mountain above 4500 feet

in elevation in Essex CountyJefferson County Area:

Jefferson County .............................................................. .................... 1 hr. std. N.A.3New York-Northern New Jersey-Long Island Area:

Bronx County .................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Kings County .................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Nassau County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.New York County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Orange County (part) ....................................................... 1/15/92 Nonattainment ............... 1/15/92 Severe-17.

Blooming Grove, Chester, Highlands, Monroe, Tux-edo, Warwick, and Woodbury

Queens County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Richmond County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Rockland County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Suffolk County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Westchester County ......................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.

Poughkeepsie Area:Dutchess County .............................................................. 1/6/92 Nonattainment ............... 11/7/94 Moderate.Orange County (remainder) ............................................. 2 4/21/94 Nonattainment ............... 2 11/7/94 Moderate.Putnam County ................................................................. 1/15/92 Nonattainment ............... 11/7/94 Moderate.

AQCR 158 Central New York Intrastate (Remainder of) ........ .................... 1 hr. std. N.A.3Cayuga CountyCortland CountyHerkimer CountyLewis CountyMadison CountyOneida CountyOnondaga CountyOswego County

AQCR 159 Champlain Valley Interstate (Remainder of) ........ .................... 1 hr. std. N.A.3Clinton CountyEssex CountyFranklin CountyHamilton CountySt. Lawrence CountyWarren CountyWashington County

AQCR 160 Genessee-Finger Lakes Intrastate ....................... .................... 1 hr. std. N.A.3Genesee CountyLivingston CountyMonroe CountyOntario CountyOrleans CountySeneca CountyWayne CountyWyoming CountyYates County

AQCR 161 Hudson Valley Intrastate (Remainder of) ............. .................... 1 hr. std. N.A.3Columbia CountyFulton CountySchoharie CountyUlster County

AQCR 163 Southern Tier East Intrastate ............................... .................... 1 hr. std. N.A.3Broome CountyChenango CountyDelaware CountyOtsego CountySullivan CountyTioga County

AQCR 164 Southern Tier West Intrastate .............................. .................... 1 hr. std. N.A.3Allegany CountyCattaraugus CountyChautauqua CountyChemung CountySchuyler CountySteuben County


NEW YORK—OZONE (1-HOUR STANDARD)—Continued



Tompkins County

1 This date is March 17, 1998, unless otherwise noted.2 However, the effective date is November 15, 1990, for purposes of determining the scope of a ‘‘covered area’’ under section 211(k)(10)(D),

opt-in under section 211(k)(6), and the baseline determination of the 15% reduction in volatile organic compounds under section 182(b)(1).3 1 hour standard Not Applicable.

* * * * * * *35. In § 81.334, the table entitled ‘‘North Carolina—Ozone’’ is revised to read as follows:

§ 81.334 North Carolina.* * * * * * *

NORTH CAROLINA—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Alamance CountyAlexander CountyAlleghany CountyAnson CountyAshe CountyAvery CountyBeaufort CountyBertie CountyBladen CountyBrunswick CountyBuncombe CountyBurke CountyCabarrus CountyCaldwell CountyCamden CountyCarteret CountyCaswell CountyCatawba CountyChatham CountyCherokee CountyChowan CountyClay CountyCleveland CountyColumbus CountyCraven CountyCumberland CountyCurrituck CountyDare CountyDavidson CountyDavie CountyDurham CountyDuplin CountyEdgecombe CountyForsyth CountyFranklin CountyGaston CountyGates CountyGraham CountyGranville CountyGreene CountyGuilford CountyHalifax CountyHarnett CountyHaywood CountyHenderson CountyHertford CountyHoke CountyHyde CountyIredell CountyJackson CountyJohnston County


NORTH CAROLINA—OZONE (1-HOUR STANDARD)—Continued



Jones CountyLee CountyLenoir CountyLincoln CountyMcDowell CountyMacon CountyMadison CountyMartin CountyMecklenburg CountyMitchell CountyMontgomery CountyMoore CountyNash CountyNew Hanover CountyNorthhampton CountyOnslow CountyOrange CountyPamlico CountyPasquotank CountyPender CountyPerquimans CountyPerson CountyPitt CountyPolk CountyRandolph CountyRichmond CountyRobeson CountyRockingham CountyRowan CountyRutherford CountySampson CountyScotland CountyStanly CountyStokes CountySurry CountySwain CountyTransylvania CountyTyrrell CountyUnion CountyVance CountyWake CountyWarren CountyWashington CountyWatauga CountyWayne CountyWilkes CountyWilson CountyYadkin CountyYancey County


* * * * * * *36. In § 81.335, the table entitled ‘‘North Dakota—Ozone’’ is revised to read as follows:

§ 81.335 North Dakota.* * * * * * *

NORTH DAKOTA—OZONE (1-HOUR STANDARD)



AQCR 130 Metropolitan Fargo-Moorhead:Interstate ........................................................................... .................... 1 hr. std. N.A.2Cass County

Rest of State, AQCR 172 ........................................................ .................... 1 hr. std. N.A.2Adams CountyBarnes County


NORTH DAKOTA—OZONE (1-HOUR STANDARD)—Continued



Benson CountyBillings CountyBottineau CountyBowman CountyBurke CountyBurleigh CountyCavalier CountyDickey CountyDivide CountyDunn CountyEddy CountyEmmons CountyFoster CountyGolden Valley CountyGrand Forks CountyGrant CountyGriggs CountyHettinger CountyKidder CountyLa Moure CountyLogan CountyMcHenry CountyMcIntosh CountyMcKenzie CountyMcLean CountyMercer CountyMorton CountyMountrail CountyNelson CountyOliver CountyPembina CountyPierce CountyRamsey CountyRansom CountyRenville CountyRichland CountyRolette CountySargent CountySheridan CountySioux CountySlope CountyStark CountySteele CountyStutsman CountyTowner CountyTraill CountyWalsh CountyWard CountyWells CountyWilliams County


* * * * * * *37. In § 81.336, the table entitled ‘‘Ohio—Ozone’’ is revised to read as follows:

§ 81.336 Ohio.* * * * * * *

OHIO—OZONE (1-HOUR STANDARD)



Canton Area:Stark County ..................................................................... .................... 1 hr. std. N.A.2

Cincinnati-Hamilton Area:Butler County .................................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.Clermont County .............................................................. 11/15/90 Nonattainment ............... 11/15/90 Moderate.


OHIO—OZONE (1-HOUR STANDARD)—Continued



Hamilton County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Moderate.Warren County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Moderate.

Cleveland-Akron-Lorain Area:Ashtabula County ............................................................. .................... 1 hr. std. N.A.2Cuyahoga County ............................................................. .................... 1 hr. std. N.A.2Geauga County ................................................................ .................... 1 hr. std. N.A.2Lake County ..................................................................... .................... 1 hr. std. N.A.2Lorain County ................................................................... .................... 1 hr. std. N.A.2Medina County ................................................................. .................... 1 hr. std. N.A.2Portage County ................................................................ .................... 1 hr. std. N.A.2Summit County ................................................................. .................... 1 hr. std. N.A.2

Clinton County Area:Clinton County .................................................................. .................... 1 hr. std. N.A.2

Columbiana County Area:Columbiana County .......................................................... .................... 1 hr. std. N.A.2

Columbus Area:Delaware County .............................................................. .................... 1 hr. std. N.A.2Franklin County ................................................................ .................... 1 hr. std. N.A.2Licking County .................................................................. .................... 1 hr. std. N.A.2

Dayton-Springfield Area:Clark County ..................................................................... 7/5/95 Attainment.Greene County ................................................................. 7/5/95 Attainment.Miami County ................................................................... 7/5/95 Attainment.Montgomery County ......................................................... 7/5/95 Attainment.

Preble County Area:Preble County ................................................................... .................... 1 hr. std. N.A.2

Steubenville Area:Jefferson County .............................................................. .................... 1 hr. std. N.A.2

Toledo Area:Lucas County ................................................................... .................... 1 hr. std. N.A.2Wood County .................................................................... .................... 1 hr. std. N.A.2

Youngstown-Warren-Sharon Area:Mahoning County ............................................................. .................... 1 hr. std. N.A.2Trumbull County ............................................................... .................... 1 hr. std. N.A.2

Adams County ......................................................................... .................... 1 hr. std. N.A.2Allen County ............................................................................ .................... 1 hr. std. N.A.2Ashland County ....................................................................... .................... 1 hr. std. N.A.2Athens County ......................................................................... .................... 1 hr. std. N.A.2Auglaize County ...................................................................... .................... 1 hr. std. N.A.2Belmont County ....................................................................... .................... 1 hr. std. N.A.2Brown County .......................................................................... .................... 1 hr. std. N.A.2Carroll County .......................................................................... .................... 1 hr. std. N.A.2Champaign County .................................................................. .................... 1 hr. std. N.A.2Coshocton County ................................................................... .................... 1 hr. std. N.A.2Crawford County ...................................................................... .................... 1 hr. std. N.A.2Darke County ........................................................................... .................... 1 hr. std. N.A.2Defiance County ...................................................................... .................... 1 hr. std. N.A.2Erie County .............................................................................. .................... 1 hr. std. N.A.2Fairfield County ....................................................................... .................... 1 hr. std. N.A.2Fayette County ........................................................................ .................... 1 hr. std. N.A.2Fulton County .......................................................................... .................... 1 hr. std. N.A.2Gallia County ........................................................................... .................... 1 hr. std. N.A.2Guernsey County ..................................................................... .................... 1 hr. std. N.A.2Hancock County ...................................................................... .................... 1 hr. std. N.A.2Hardin County .......................................................................... .................... 1 hr. std. N.A.2Harrison County ....................................................................... .................... 1 hr. std. N.A.2Henry County ........................................................................... .................... 1 hr. std. N.A.2Highland County ...................................................................... .................... 1 hr. std. N.A.2Hocking County ....................................................................... .................... 1 hr. std. N.A.2Holmes County ........................................................................ .................... 1 hr. std. N.A.2Huron County .......................................................................... .................... 1 hr. std. N.A.2Jackson County ....................................................................... .................... 1 hr. std. N.A.2Knox County ............................................................................ .................... 1 hr. std. N.A.2Lawrence County ..................................................................... .................... 1 hr. std. N.A.2Logan County .......................................................................... .................... 1 hr. std. N.A.2Madison County ....................................................................... .................... 1 hr. std. N.A.2Marion County ......................................................................... .................... 1 hr. std. N.A.2Meigs County ........................................................................... .................... 1 hr. std. N.A.2Mercer County ......................................................................... .................... 1 hr. std. N.A.2Monroe County ........................................................................ .................... 1 hr. std. N.A.2


OHIO—OZONE (1-HOUR STANDARD)—Continued



Morgan County ........................................................................ .................... 1 hr. std. N.A.2Morrow County ........................................................................ .................... 1 hr. std. N.A.2Muskingum County .................................................................. .................... 1 hr. std. N.A.2Noble County ........................................................................... .................... 1 hr. std. N.A.2Ottawa County ......................................................................... .................... 1 hr. std. N.A.2Paulding County ...................................................................... .................... 1 hr. std. N.A.2Perry County ............................................................................ .................... 1 hr. std. N.A.2Pickaway County ..................................................................... .................... 1 hr. std. N.A.2Pike County ............................................................................. .................... 1 hr. std. N.A.2Putnam County ........................................................................ .................... 1 hr. std. N.A.2Richland County ...................................................................... .................... 1 hr. std. N.A.2Ross County ............................................................................ .................... 1 hr. std. N.A.2Sandusky County .................................................................... .................... 1 hr. std. N.A.2Scioto County .......................................................................... .................... 1 hr. std. N.A.2Seneca County ........................................................................ .................... 1 hr. std. N.A.2Shelby County ......................................................................... .................... 1 hr. std. N.A.2Tuscarawas County ................................................................. .................... 1 hr. std. N.A.2Union County ........................................................................... .................... 1 hr. std. N.A.2Van Wert County ..................................................................... .................... 1 hr. std. N.A.2Vinton County .......................................................................... .................... 1 hr. std. N.A.2Washington County ................................................................. .................... 1 hr. std. N.A.2Wayne County ......................................................................... .................... 1 hr. std. N.A.2Williams County ....................................................................... .................... 1 hr. std. N.A.2Wyandot County ...................................................................... .................... 1 hr. std. N.A.2


* * * * * * *38. In § 81.331, the table entitled ‘‘Oklahoma—Ozone’’ is revised to read as follows:

§ 81.337 Oklahoma.* * * * * * *

OKLAHOMA—OZONE (1-HOUR STANDARD)



AQCR 017 Metropolitan Fort Smith Interstate ........................ .................... 1 hr. std. N.A.2Adair CountyCherokee CountyLe Flore CountySequoyah County

AQCR 022 Shreveport-Texarkana-Tyler:Intrastate ........................................................................... .................... 1 hr. std. N.A.2McCurtain County

AQCR 184 Central Oklahoma Intrastate (part) ....................... .................... 1 hr. std. N.A.2Cleveland CountyOklahoma County

AQCR 184 Central Oklahoma Intrastate (Remainder of) ....... .................... 1 hr. std. N.A.2Canadian CountyGrady CountyKingfisher CountyLincoln CountyLogan CountyMcClain CountyPottawatomie County

AQCR 185 North Central Oklahoma Intrastate ....................... .................... 1 hr. std. N.A.2Garfield CountyGrant CountyKay CountyNoble CountyPayne County

AQCR 186 Northeastern Oklahoma Intrastate. ...................... .................... 1 hr. std. N.A.2Craig CountyCreek CountyDelaware CountyMayes CountyMuskogee County


OKLAHOMA—OZONE (1-HOUR STANDARD)—Continued



Nowata CountyOkmulgee CountyOsage CountyOttawa CountyPawnee CountyRogers CountyTulsa CountyWagoner CountyWashington County

AQCR 187 Northwestern Oklahoma Intrastate ....................... .................... 1 hr. std. N.A.2

Alfalfa CountyBeaver CountyBlaine CountyCimarron CountyCuster CountyDewey CountyEllis CountyHarper CountyMajor CountyRoger Mills CountyTexas CountyWoods CountyWoodward County

AQCR 188 Southeastern Oklahoma Intrastate ....................... .................... 1 hr. std. N.A.2.Atoka CountyBryan CountyCarter CountyChoctaw CountyCoal CountyGarvin CountyHaskell CountyHughes CountyJohnston CountyLatimer CountyLove CountyMarshall CountyMcIntosh CountyMurray CountyOkfuskee CountyPittsburg CountyPontotoc CountyPushmataha CountySeminole County

AQCR 189 Southwestern Oklahoma Intrastate ...................... .................... 1 hr. std. N.A.2

Beckham CountyCaddo CountyComanche CountyCotton CountyGreer CountyHarmon CountyJackson CountyJefferson CountyKiowa CountyStephens CountyTillman CountyWashita County


* * * * * * *

39. In § 81.338, the table entitled ‘‘Oregon—Ozone’’ is revised to read as follows:

§ 81.338 Oregon.

* * * * * * *


OREGON—OZONE (1-HOUR STANDARD)



Portland-Vancouver AQMA Area:Air Quality Maintenance Area:

Clackamas County (part) .......................................... .................... 1 hr. std. N.A.2Multnomah County (part) .......................................... .................... 1 hr. std. N.A.2Washington County (part) ......................................... .................... 1 hr. std. N.A.2

Salem Area:Salem Area Transportation Study:

Marion County (part) ................................................. .................... 1 hr. std. N.A.2Polk County (part) ..................................................... .................... 1 hr. std. N.A.2

AQCR 190 Central Oregon Intrastate (Remainder of) ............ .................... 1 hr. std. N.A.2Crook CountyDeschutes CountyHood River CountyJefferson CountyKlamath CountyLake CountySherman CountyWasco County

AQCR 191 Eastern Oregon Intrastate .................................... .................... 1 hr. std. N.A.2Baker CountyGilliam CountyGrant CountyHarney CountyMalheur CountyMorrow CountyUmatilla CountyUnion CountyWallowa CountyWheeler County

AQCR 192 Northwest Oregon Intrastate ................................ .................... 1 hr. std. N.A.2Clatsop CountyLincoln CountyTillamook County

AQCR 193 Portland Interstate (part) ....................................... .................... 1 hr. std. N.A.2Lane County (part)Eugene Springfield Air Quality Maintenance Area

AQCR 193 Portland Interstate (Remainder of) ....................... .................... 1 hr. std. N.A.2Benton CountyClackamas County (part)

Remainder of countyColumbia CountyLane County (part)

Remainder of countyLinn CountyMarion County (part)

area outside the Salem Area Transportation Study.Multnomah County (part)

Remainder of countyPolk County (part)

area outside the Salem Area Transportation Study.Washington County (part)

Remainder of countyYamhill County

AQCR 194 Southwest Oregon Intrastate (part):Jackson County (part):

Medford-Ashland Air Quality Maintenance Area .................... 1 hr. std. N.A.2AQCR 194 Southwest Oregon Intrastate (Remainder of) ...... .................... 1 hr. std. N.A.2

Coos CountyCurry CountyDouglas CountyJackson County (part)

Remainder of countyJosephine County


* * * * * * *40. In § 81.339, the table entitled ‘‘Pennsylvania—Ozone’’ is revised to read as follows:

§ 81.339 Pennsylvania.* * * * * * *


PENNSYLVANIA—OZONE (1-HOUR STANDARD)

Designated areaDesignation Type

Classification Date(1) Date(1) Type

Allentown-Bethlehem-Easton Area:Carbon County .............................. 1 hr. std. N.A.3Lehigh County .............................. 1 hr. std. N.A.3Northampton County .............................. 1 hr. std. N.A.3

Altoona Area:Blair County .............................. 1 hr. std. N.A.3

Crawford County Area:Crawford County .............................. 1 hr. std. N.A.3

Erie Area:Erie County .............................. 1 hr. std. N.A.3

Franklin County Area:Franklin County: .............................. 1 hr. std. N.A.3

Greene County Area:Greene County: .............................. 1 hr. std. N.A.3

Harrisburg-Lebanon-Carlisle Area:Cumberland County .............................. 1 hr. std. N.A.3Dauphin County .............................. 1 hr. std. N.A.3Lebanon County .............................. 1 hr. std. N.A.3Perry County .............................. 1 hr. std. N.A.3

Johnstown Area:Cambria County .............................. 1 hr. std. N.A.3Somerset County .............................. 1 hr. std. N.A.3

Juniata County Area:Juniata County .............................. 1 hr. std. N.A.3

Lancaster Area:Lancaster County 11/15/90 Nonattainment ............... 11/15/90 Marginal

Lawrence County Area:Lawrence County .............................. 1 hr.std.N.A.3

Northumberland County Area:Northumberland County .............................. 1 hr.std.N.A. 3

Philadelphia-Wilmington-Trenton Area:Bucks County 11/15/90 Nonattainment ............... 11/15/90 Severe-15Chester County 11/15/90 Nonattainment ............... 11/15/90 Severe-15Delaware County 11/15/90 Nonattainment ............... 11/15/90 Severe-15Montgomery County 11/15/90 Nonattainment ............... 11/15/90 Severe-15Philadelphia County 11/15/90 Nonattainment ............... 11/15/90 Severe-15

Pike County Area:Pike County .............................. 1 hr.std.N.A.3

Pittsburgh-Beaver Valley Area:Allegheny County 11/15/90 Nonattainment ............... 11/15/90 Moderate.2Armstrong County 11/15/90 Nonattainment ............... 11/15/90 Moderate.2Beaver County 11/15/90 Nonattainment ............... 11/15/90 Moderate.2Butler County 11/15/90 Nonattainment ............... 11/15/90 Moderate.2Fayette County 11/15/90 Nonattainment ............... 11/15/90 Moderate.2Washington County 11/15/90 Nonattainment ............... 11/15/90 Moderate.2Westmoreland County 11/15/90 Nonattainment ............... 11/15/90 Moderate.2

Reading Area:Berks County .............................. 1 hr. std. N.A.3

Schuylkill County Area:Schuylkill County .............................. 1 hr. std. N.A.3

Scranton-Wilkes-Barre Area:Columbia County .............................. 1 hr. std. N.A.3Lackawanna County .............................. 1 hr. std. N.A.3Luzerne County .............................. 1 hr. std. N.A.3Monroe County .............................. 1 hr. std. N.A.3Wyoming County .............................. 1 hr. std. N.A.3

Snyder County Area:Snyder County .............................. 1 hr. std. N.A.3

Susquehanna County Area:Susquehanna County .............................. 1 hr. std. N.A.3

Warren County Area:Warren County .............................. 1 hr. std. N.A.3

Wayne County Area:Wayne County .............................. 1 hr. std. N.A.3

York Area:Adams County .............................. 1 hr. std. N.A.3York County .............................. 1 hr. std. N.A.3

Youngstown-Warren-Sharon Area:Mercer County .............................. 1 hr. std. N.A.3

AQCR 151 NE Pennsylvania Intrastate (Remainderof)..


PENNSYLVANIA—OZONE (1-HOUR STANDARD)—Continued

Designated areaDesignation Type

Classification Date(1) Date(1) Type

Bradford County .............................. 1 hr. std. N.A.3Sullivan County .............................. 1 hr. std. N.A.3Tioga County .............................. 1 hr. std. N.A.3

AQCR 178 NW Pennsylvania Interstate (Remainderof).

Cameron County .............................. 1 hr. std. N.A.3Clarion County .............................. 1 hr. std. N.A.3Clearfield County .............................. 1 hr. std. N.A.3Elk County .............................. 1 hr. std. N.A.3Forest County .............................. 1 hr. std. N.A.3Jefferson County .............................. 1 hr. std. N.A.3McKean County .............................. 1 hr. std. N.A.3Potter County .............................. 1 hr. std. N.A.3Venango County .............................. 1 hr. std. N.A.3

AQCR 195 Central Pennsylvania Intrastate (Remain-der of).

Bedford County .............................. 1 hr. std. N.A.3Centre County .............................. 1 hr. std. N.A.3Clinton County .............................. 1 hr. std. N.A.3Fulton County .............................. 1 hr. std. N.A.3Huntingdon County .............................. 1 hr. std. N.A.3Lycoming County .............................. 1 hr. std. N.A.3Mifflin County .............................. 1 hr. std. N.A.3Montour County .............................. 1 hr. std. N.A.3Union County .............................. 1 hr. std. N.A.3

AQCR 197 SW Pennsylvania Intrastate (Remainderof):.

Indiana County .............................. 1 hr. std. N.A.3

1 This date is March 17, 1998, unless otherwise noted.2 Attainment date extended to 11/15/97.3 1 hour standard Not Applicable.

* * * * * * *41. In § 81.340, the table entitled ‘‘Rhode Island—Ozone’’ is revised to read as follows:

§ 81.340 Rhode Island.* * * * * * *

RHODE ISLAND—OZONE (1-HOUR STANDARD)



Providence (all of RI) Area:Bristol County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Kent County ...................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Newport County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.Providence County ........................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Washington County .......................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.

1 This date is March 17, 1998 unless otherwise noted.

* * * * * * *42. In § 81.341, the table entitled ‘‘South Carolina—Ozone’’ is revised to read as follows:

§ 81.341 South Carolina.* * * * * * *

SOUTH CAROLINA—OZONE (O3). (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Abbeville CountyAiken CountyAllendale CountyAnderson County


SOUTH CAROLINA—OZONE (O3). (1-HOUR STANDARD)—Continued



Bamberg CountyBarnwell CountyBeaufort CountyBerkeley CountyCalhoun CountyCharleston CountyCherokee CountyChester CountyChesterfield CountyClarendon CountyColleton CountyDarlington CountyDillon CountyDorchester CountyEdgefield CountyFairfield CountyFlorence CountyGeorgetown CountyGreenville CountyGreenwood CountyHampton CountyHorry CountyJasper CountyKershaw CountyLancaster CountyLaurens CountyLee CountyLexington CountyManon CountyMarlboro CountyMcCormick CountyNewberry CountyOconee CountyOrangeburg CountyPickens CountyRichland CountySaloda CountySpartanburg CountySumter CountyUnion CountyWilliamsburg CountyYork County

1 This date is March 17, 1998 unless otherwise noted.2 1 hour standard Not Applicable.

* * * * * * *43. In § 81.342, the table entitled ‘‘South Dakota—Ozone’’ is revised to read as follows:

§ 81.342 South Dakota.* * * * * * *

SOUTH DAKOTA—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Aurora CountyBeadle CountyBennett CountyBon Homme CountyBrookings CountyBrown CountyBrule CountyBuffalo CountyButte CountyCampbell CountyCharles Mix CountyClark County


SOUTH DAKOTA—OZONE (1-HOUR STANDARD)—Continued



Clay CountyCodington CountyCorson CountyCuster CountyDavison CountyDay CountyDeuel CountyDewey CountyDouglas CountyEdmunds CountyFall River CountyFaulk CountyGrant CountyGregory CountyHaakon CountyHamlin CountyHand CountyHanson CountyHarding CountyHughes CountyHutchinson CountyHyde CountyJackson CountyJerauld CountyJones CountyKingsbury CountyLake CountyLawrence CountyLincoln CountyLyman CountyMarshall CountyMcCook CountyMcPherson CountyMeade CountyMellette CountyMiner CountyMinnehaha CountyMoody CountyPennington CountyPerkins CountyPotter CountyRoberts CountySanborn CountyShannon CountySpink CountyStanley CountySully CountyTodd CountyTripp CountyTurner CountyUnion CountyWalworth CountyYankton CountyZiebach County


* * * * * * *44. In § 81.343, the table entitled ‘‘Tennessee—Ozone’’ is revised to read as follows:

§ 81.343 Tennessee.* * * * * * *

TENNESSEE—OZONE (1-HOUR STANDARD)



Jefferson County Area:


TENNESSEE—OZONE (1-HOUR STANDARD)—Continued



Jefferson County .............................................................. 11/15/90 Unclassifiable/Attainment 11/15/90Memphis Area:

Shelby County .................................................................. 2/16/95 Attainment.Rest of State ............................................................................ .................... 1 hr.std.N.A. 2

Anderson CountyBedford CountyBenton CountyBledsoe CountyBlount CountyBradley CountyCampbell CountyCannon CountyCarroll CountyCarter CountyCheatham CountyChester CountyClaiborne CountyClay CountyCocke CountyCoffee CountyCrockett CountyCumberland CountyDeKalb CountyDecatur CountyDickson CountyDavidson CountyDyer CountyFayette CountyFentress CountyFranklin CountyGibson CountyGiles CountyGrainger CountyGreene CountyGrundy CountyHamblen CountyHamilton CountyHancock CountyHardeman CountyHardin CountyHawkins CountyHaywood CountyHenderson CountyHenry CountyHickman CountyHouston CountyHumphreys CountyJackson CountyJohnson CountyKnox CountyLake CountyLauderdale CountyLawrence CountyLewis CountyLincoln CountyLoudon CountyMacon CountyMadison CountyMarion CountyMarshall CountyMaury CountyMcMinn CountyMcNairy CountyMeigs CountyMonroe CountyMontgomery CountyMoore CountyMorgan CountyObion CountyOverton County


TENNESSEE—OZONE (1-HOUR STANDARD)—Continued



Perry CountyPickett CountyPolk CountyPutnam CountyRhea CountyRoane CountyRobertson CountyRutherford CountyScott CountySequatchie CountySevier CountySmith CountyStewart CountySullivan CountySumner CountyTipton CountyTrousdale CountyUnicoi CountyUnion CountyVan Buren CountyWarren CountyWashington CountyWayne CountyWeakley CountyWhite CountyWilliamson CountyWilson County


* * * * * * *45. In § 81.344, the table entitled ‘‘Texas—Ozone’’ is revised to read as follows:

§ 81.344 Texas.* * * * * * *

TEXAS—OZONE (1-HOUR STANDARD)

Designated AreaDesignation Classification


Beaumont/Port Arthur Area:Hardin County .................................................................. 11/15/90 Nonattainment ............... 6/3/96 ModerateJefferson County .............................................................. 11/15/90 Nonattainment ............... 6/3/96 ModerateOrange County ................................................................. 11/15/90 Nonattainment ............... 6/3/96 Moderate

Dallas-Fort Worth Area:Collin County .................................................................... 11/15/90 Nonattainment ............... 11/15/90 ModerateDallas County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 ModerateDenton County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 ModerateTarrant County ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Moderate

El Paso Area:El Paso County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious

Houston-Galveston-Brazoria Area:Brazoria County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-17Chambers County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-17Fort Bend County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17Galveston County ............................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17Harris County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17Liberty County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17Montgomery County ......................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17Waller County ................................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17

Longview Area:Gregg County ................................................................... 11/15/90 Unclassifiable /Attain-

ment.11/15/90

Victoria Area:Victoria County ................................................................. .................... 1 hr. std. N.A.2

AQCR 022 Shreveport-Texarkana-Tyler ................................. .................... 1 hr. std. N.A.2Anderson CountyBowie County


TEXAS—OZONE (1-HOUR STANDARD)—Continued



Camp CountyCass CountyCherokee CountyDelta CountyFranklin CountyHarrison CountyHenderson CountyHopkins CountyLamar CountyMarion CountyMorris CountyPanola CountyRains CountyRed River CountyRusk CountySmith CountyTitus CountyUpshur CountyVan Zandt CountyWood County

AQCR 106 S Louisiana-SE Texas Interstate (Remainder of) .................... 1 hr. std. N.A.2Angelina CountyHouston CountyJasper CountyNacogdoches CountyNewton CountyPolk CountySabine CountySan Augustine CountySan Jacinto CountyShelby CountyTrinity CountyTyler CountyWalker County

AQCR 153 El Paso-Las Cruces-Alamogordo ......................... .................... 1 hr. std. N.A.2Brewster CountyCulberson CountyHudspeth CountyJeff Davis CountyPresidio County

AQCR 210 Abilene-Wichita Falls Intrastate ............................ .................... 1 hr. std. N.A.2Archer CountyBaylor CountyBrown CountyCallahan CountyChildress CountyClay CountyCoke CountyColeman CountyComanche CountyConcho CountyCottle CountyEastland CountyFisher CountyFoard CountyHardeman CountyHaskell CountyJack CountyJones CountyKent CountyKnox CountyMcCulloch CountyMenard CountyMitchell CountyMontague CountyNolan CountyRunnels CountyScurry CountyShackelford CountyStephens County





Stonewall CountyTaylor CountyThrockmorton CountyWichita CountyWilbarger CountyYoung County

AQCR 211 Amarillo-Lubbock Intrastate .................................. .................... 1 hr. std. N.A.2Armstrong CountyBailey CountyBriscoe CountyCarson CountyCastro CountyCochran CountyCollingsworth CountyCrosby CountyDallam CountyDeaf Smith CountyDickens CountyDonley CountyFloyd CountyGarza CountyGray CountyHale CountyHall CountyHansford CountyHartley CountyHemphill CountyHockley CountyHutchinson CountyKing CountyLamb CountyLipscomb CountyLubbock CountyLynn CountyMoore CountyMotley CountyOchiltree CountyOldham CountyParmer CountyPotter CountyRandall CountyRoberts CountySherman CountySwisher CountyTerry CountyWheeler CountyYoakum County

AQCR 212 Austin-Waco Intrastate ......................................... .................... 1 hr. std. N.A.2Bastrop CountyBell CountyBlanco CountyBosque CountyBrazos CountyBurleson CountyBurnet CountyCaldwell CountyCoryell CountyFalls CountyFayette CountyFreestone CountyGrimes CountyHamilton CountyHays CountyHill CountyLampasas CountyLee CountyLeon CountyLimestone CountyLlano CountyMadison County





McLennan CountyMilam CountyMills CountyRobertson CountySan Saba CountyTravis CountyWashington CountyWilliamson County

AQCR 213 Brownsville-Laredo Intrastate ............................... .................... 1 hr. std. N.A.2Cameron CountyHidalgo CountyJim Hogg CountyStarr CountyWebb CountyWillacy CountyZapata County

AQCR 214 Corpus Christi-Victoria Intrastate (Remainder of) .................... 1 hr.std.N.A. 2

Aransas CountyBee CountyBrooks CountyCalhoun CountyDe Witt CountyDuval CountyGoliad CountyJackson CountyJim Wells CountyKenedy CountyKleberg CountyLavaca CountyLive Oak CountyMcMullen CountyRefugio CountySan Patricio County

AQCR 214 Corpus Christi-Victoria Intrastate (part) ................ .................... 1 hr. std. N.A.2Nueces County

AQCR 215 Metro Dallas-Fort Worth Intrastate (Remainderof).

.................... 1 hr.std.N.A. 2.

Cooke CountyEllis CountyErath CountyFannin CountyGrayson CountyHood CountyHunt CountyJohnson CountyKaufman CountyNavarro CountyPalo Pinto CountyParker CountyRockwall CountySomervell CountyWise County

AQCR 216 Metro Houston-Galveston Intrastate (Remainderof).

.................... 1 hr.std.N.A. 2

Austin CountyColorado CountyMatagorda CountyWharton County

AQCR 217 Metro San Antonio Intrastate (part) ...................... .................... 1 hr. std. N.A.2Bexar County

AQCR 217 Metro San Antonio Intrastate (Remainder of) ...... .................... 1 hr.std.N.A. 2

Atascosa CountyBandera CountyComal CountyDimmit CountyEdwards CountyFrio CountyGillespie CountyGonzales CountyGuadalupe County





Karnes CountyKendall CountyKerr CountyKimble CountyKinney CountyLa Salle CountyMason CountyMaverick CountyMedina CountyReal CountyUvalde CountyVal Verde CountyWilson CountyZavala County

AQCR 218 Midland-Odessa-San Angelo Intrastate (part). ..... .................... 1 hr.std.N.A. 2

Ector CountyAQCR 218 Midland-Odessa-San Angelo Intrastate (Remain-

der of)..................... 1 hr.std.N.A. 2

Andrews CountyBorden CountyCrane CountyCrockett CountyDawson CountyGaines CountyGlasscock CountyHoward CountyIrion CountyLoving CountyMartin CountyMidland CountyPecos CountyReagan CountyReeves CountySchleicher CountySterling CountySutton CountyTerrell CountyTom Green CountyUpton CountyWard CountyWinkler County


* * * * * * *46. In § 81.345, the table entitled ‘‘Utah—Ozone’’ is revised to read as follows:

§ 81.345 Utah.* * * * * * *

UTAH—OZONE (1-HOUR STANDARD)



Salt Lake City Area:Davis County .................................................................... .................... 1 hr. std. N.A.2Salt Lake County .............................................................. .................... 1 hr. std. N.A.2

Rest of State ............................................................................ .................... 1 hr. std. N.A.2Beaver CountyBox Elder CountyCache CountyCarbon CountyDaggett CountyDuchesne CountyEmery CountyGarfield CountyGrand CountyIron County


UTAH—OZONE (1-HOUR STANDARD)—Continued



Juab CountyKane CountyMillard CountyMorgan CountyPiute CountyRich CountySan Juan CountySanpete CountySevier CountySummit CountyTooele CountyUintah CountyUtah CountyWasatch CountyWashington CountyWayne CountyWeber County


* * * * * * *47. In § 81.346, the table entitled ‘‘Vermont—Ozone’’ is revised to read as follows:

§ 81.346 Vermont.* * * * * * *

VERMONT—OZONE (1-HHOUR STANDARD)



AQCR 159 Champlain Calley Interstate (part) ........................ .................... 1 hr. std. N.A.2Addison CountyChittenden County

AQCR 159 Champlain Calley Interstate (Remainder of) ........ .................... 1 hr. std. N.A.2Franklin CountyGrand Isle CountyRutland County

AQCR 221 Vermont Intrastate (part). ..................................... .................... 1 hr. std. N.A.2Windsor County

AQCR 221 Vermont Intrastate (Remainder of) ....................... .................... 1 hr. std. N.A.2Bennington CountyCaledonia CountyEssex CountyLamoille CountyOrange CountyOrleans CountyWashington CountyWindham County


* * * * * * *48. In Section 81.347, the table entitled ‘‘Virginia—Ozone’’ is revised to read as follows:

§ 81.347 Virginia.* * * * * * *

VIRGINIA—OZONE (1-HOUR STANDARD)



Norfolk-Virginia Beach-Newport News (Hampton Roads)Area:

Chesapeake ..................................................................... .................... 1 hr. std. N.A.2Hampton ........................................................................... .................... 1 hr. std. N.A.2


VIRGINIA—OZONE (1-HOUR STANDARD)—Continued



James City County ........................................................... .................... 1 hr. std. N.A.2Newport News .................................................................. .................... 1 hr. std. N.A.2Norfolk .............................................................................. .................... 1 hr. std. N.A.2Poquoson ......................................................................... .................... 1 hr. std. N.A.2Portsmouth ....................................................................... .................... 1 hr. std. N.A.2Suffolk ............................................................................... .................... 1 hr. std. N.A.2Virginia Beach .................................................................. .................... 1 hr. std. N.A.2Williamsburg ..................................................................... .................... 1 hr. std. N.A.2York County ...................................................................... .................... 1 hr. std. N.A.2

Richmond Area:Charles City County (part) ............................................... .................... 1 hr. std. N.A.2

Beginning at the intersection of State Route 156and the Henrico Charles City County Line, pro-ceeding south along State Route 5/156 to theintersection with State Route 106/156, proceedingsouth along Route 106/156 to the intersectionwith the Prince George/Charles City County line,proceeding west along the Prince George/CharlesCity County line to the intersection with the Ches-terfield/Charles City County line, proceeding northalong the Chesterfield/Charles City County line tothe intersection with the Henrico/Charles CityCounty line, proceeding north along the Henrico/Charles City County line to State Route 156.

Chesterfield County .......................................................... .................... 1 hr. std. N.A.2Colonial Heights ............................................................... .................... 1 hr. std. N.A.2Hanover County ............................................................... .................... 1 hr. std. N.A.2Henrico County ................................................................. .................... 1 hr. std. N.A.2Hopewell ........................................................................... .................... 1 hr. std. N.A.2Richmond ......................................................................... .................... 1 hr. std. N.A.2

Smyth County Area:Smyth County (part) ......................................................... .................... 1 hr. std. N.A.2

The portion of White Top Mountain above the 4,500foot elevation in Smyth County.

Washington Area:Alexandria ......................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Arlington County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Fairfax ............................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Fairfax County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Falls Church ..................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Loudoun County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Manassas ......................................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Manassas Park ................................................................. 11/15/90 Nonattainment ............... 11/15/90 Serious.Prince William County ...................................................... 11/15/90 Nonattainment ............... 11/15/90 Serious.Stafford County ................................................................ 11/15/90 Nonattainment ............... 11/15/90 Serious.

AQCR 207 Eastern Tennessee—SW Virginia Interstate (Re-mainder of).

.................... 1 hr. std. N.A.2

Bland CountyBristolBuchanan CountyCarroll CountyDickenson CountyGalaxGrayson CountyLee CountyNortonRussell CountyScott CountySmyth County (part)

Remainder of countyTazewell CountyWashington CountyWise CountyWythe County

AQCR 222 Central Virginia Intrastate ..................................... .................... 1 hr. std. N.A.2Amelia CountyAmherst CountyAppomattox CountyBedfordBedford County





Brunswick CountyBuckingham CountyCampbell CountyCharlotte CountyCumberland CountyDanvilleFranklin CountyHalifax CountyHenry CountyLunenburg CountyLynchburgMartinsvilleMecklenburg CountyNottoway CountyPatrick CountyPittsylvania CountyPrince Edward CountySouth Boston

AQCR 223 Hampton Roads Intrastate (Remainder of) .......... .................... 1 hr. std. N.A.2FranklinIsle Of Wight CountySouthampton County

AQCR 224 NE Virginia Intrastate (Remainder of) .................. .................... 1 hr. std. N.A.2Accomack CountyAlbemarle CountyCaroline CountyCharlottesvilleCulpeper CountyEssex CountyFauquier CountyFluvanna CountyFredericksburgGloucester CountyGreene CountyKing And Queen CountyKing George CountyKing William CountyLancaster CountyLouisa CountyMadison CountyMathews CountyMiddlesex CountyNelson CountyNorthampton CountyNorthumberland CountyOrange CountyRappahannock CountyRichmond CountySpotsylvania CountyWestmoreland County

AQCR 225 State Capital Intrastate (Remainder of) ................ .................... 1 hr. std. N.A.2Charles City County (part)

Remainder of countyDinwiddie CountyEmporiaGoochland CountyGreensville CountyNew Kent CountyPetersburgPowhatan CountyPrince George CountySurry CountySussex County

AQCR 226 Valley of Virginia Intrastate ................................... .................... 1 hr. std. N.A.2Alleghany CountyAugusta CountyBath CountyBotetourt CountyBuena VistaClarke County





Clifton ForgeCovingtonCraig CountyFloyd CountyFrederick CountyGiles CountyHarrisonburgHighland CountyLexingtonMontgomery CountyPage CountyPulaski CountyRadfordRoanokeRoanoke CountyRockbridge CountyRockingham CountySalemShenandoah CountyStauntonWarren CountyWaynesboroWinchester


* * * * * * *

49. In § 81.348, the table entitled ‘‘Washington—Ozone’’ is revised to read as follows:

§ 81.348 Washington.

* * * * * * *

WASHINGTON—OZONE (1-HOUR STANDARD)



Portland—Vancouver AQMA Area:Clark County (part)

Air Quality Maintenance Area ................................... .................... 1 hr.std. N.A.2Seattle-Tacoma Area:


WASHINGTON—OZONE (1-HOUR STANDARD)—Continued



The following boundary includes all of Pierce County, and allof King County except a small portion on the north-eastcorner and the western portion of Snohomish County:Starting at the mouth of the Nisqually River extend north-westerly along the Pierce County line to the southernmostpoint of the west county line of King County; thence north-erly along the county line to the southermost point of thewest county line of Snohomish County; thence northerlyalong the county line to the intersection with SR 532;thence easterly along the north line of SR 532 to the inter-section of I–5, continuing east along the same road nowidentified as Henning Rd., to the intersection with SR 9 atBryant; thence continuing easterly on Bryant East Rd. andRock Creek Rd., also identified as Grandview Rd., ap-proximately 3 miles to the point at which it is crossed bythe existing BPA electrical transmission line; thence south-easterly along the BPA transmission line approximately 8miles to point of the crossing of the south fork of theStillaguamish River; thence continuing in a southeasterlydirection in a meander line following the bed of the Riverto Jordan Road; southerly along Jordan Road to the northcity limits of Granite Falls; thence following the north andeast city limits to 92nd St. N.E. and Menzel Lake Rd;thence south-southeasterly along the Menzel Lake Rd.and the Lake Roesiger Rd. a distance of approximately 6miles to the northernmost point of Lake Roesiger; thencesoutherly along a meander line following the middle of theLake and Roesiger Creek to Woods Creek; thence south-erly along a meander line following the bed of the Creekapproximately 6 miles to the point the Creek is crossed bythe existing BPA electrical transmission line; thence eas-terly along the BPA transmission line approximately 0.2miles; thence southerly along the BPA Chief Joseph-Cov-ington electrical transmission line approximately 3 miles tothe north line of SR 2; thence southeasterly along SR 2 tothe intersection with the east county line of King County;thence south along the county line to the northernmostpoint of the east county line of Pierce County; thencealong the county line to the point of beginning at themouth of the Nisqually River.

.................... 1 hr. std. N.A.2

AQCR 062 E Washington-N Idaho Interstate (part) ............... .................... 1 hr. std. N.A.2Spokane County

AQCR 062 E Washington-N Idaho Interstate (Remainder of) .................... 1 hr. std. N.A.2Adams CountyAsotin CountyColumbia CountyGarfield CountyGrant CountyLincoln CountyWhitman County

AQCR 193 Portland Interstate (Remainder of) ....................... .................... 1 hr. std. N.A.2Clark County (part)

Remainder of CountyCowlitz CountyLewis CountySkamania CountyWahkiakum County

AQCR 227 Northern Washington Intrastate ............................ .................... 1 hr. std. N.A.2Chelan CountyDouglas CountyFerry CountyOkanogan CountyPend Oreille CountyStevens County

AQCR 228 Olympic,-Northwest Washington Intrastate .......... .................... 1 hr. std. N.A.2Clallam CountyGrays Harbor CountyIsland CountyJefferson CountyMason County


WASHINGTON—OZONE (1-HOUR STANDARD)—Continued



Pacific CountySan Juan CountySkagit CountyThurston CountyWhatcom County

AQCR 229 Puget Sound Intrastate (Remainder of) ............... .................... 1 hr. std. N.A.2King County (Part)

Remainder of CountyKitsap CountySnohomish County (Part)

Remainer of CountyAQCR 230 South Central Washington Intrastate ................... .................... 1 hr. std. N.A.2

Benton CountyFranklin CountyKittitas CountyKlickitat CountyWalla Walla CountyYakima County


* * * * * * *50. In § 81.349, the table entitled ‘‘West Virginia—Ozone’’ is revised to read as follows:

§ 81.349 West Virginia.* * * * * * *

WEST VIRGINIA—OZONE (1-HOUR STANDARD)



Charleston area:Kanawha County .............................................................. .................... 1 hr. std. N.A.2Putnam County ................................................................. .................... 1 hr. std. N.A.2

Greenbrier Area:Greenbrier County ............................................................ .................... 1 hr. std. N.A.2

Huntington-Ashland Area:Cabell County. .................................................................. .................... 1 hr. std. N.A.2Wayne County .................................................................. .................... 1 hr. std. N.A.2

Parkersburg-Marietta Area:Wood County .................................................................... .................... 1 hr. std. N.A.2

Rest of State ............................................................................ .................... 1 hr. std. N.A.2Barbour CountyBerkeley CountyBoone CountyBraxton CountyBrooke CountyCalhoun CountyClay CountyDoddridge CountyFayette CountyGilmer CountyGrant CountyHampshire CountyHancock CountyHardy CountyHarrison CountyJackson CountyJefferson CountyLewis CountyLincoln CountyLogan CountyMarion CountyMarshall CountyMason CountyMcDowell CountyMercer CountyMineral County


WEST VIRGINIA—OZONE (1-HOUR STANDARD)—Continued



Mingo CountyMonongalia CountyMonroe CountyMorgan CountyNicholas CountyOhio CountyPendleton CountyPleasants CountyPocahontas CountyPreston CountyRaleigh CountyRandolph CountyRitchie CountyRoane CountySummers CountyTaylor CountyTucker CountyTyler CountyUpshur CountyWebster CountyWetzel CountyWirt CountyWyoming County


* * * * * * *51. In § 81.350, the table entitled ‘‘Wisconsin—Ozone’’ is revised to read as follows:

§ 81.350 Wisconsin.* * * * * * *

WISCONSIN—OZONE (1-HOUR STANDARD)

Designation areaDesignated Classification


Door County Area:Door County ..................................................................... 1/6/92 Nonattainment ............... 1/6/92 Rural Transport (Mar-

ginal).Kewaunee County Area:

Kewaunee County ............................................................ .................... 1 hr. std. N.A.2Manitowoc County Area:

Manitowoc County ............................................................ 1/6/92 Nonattainment ............... 1/6/92 Moderate.Milwaukee-Racine Area:

Kenosha County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Milwaukee County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Ozaukee County ............................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Racine County .................................................................. 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Washington County .......................................................... 11/15/90 Nonattainment ............... 11/15/90 Severe-17.Waukesha County ............................................................ 11/15/90 Nonattainment ............... 11/15/90 Severe-17.

Sheboygan County Area:Sheboygan County ........................................................... .................... 1 hr. std. N.A.2

Walworth County Area:Walworth County .............................................................. .................... 1 hr. std. N.A.2

Adams County ......................................................................... .................... 1 hr. std. N.A.2Ashland County ....................................................................... .................... 1 hr. std. N.A.2Barron County ......................................................................... .................... 1 hr. std. N.A.2Bayfield County ....................................................................... .................... 1 hr. std. N.A.2Brown County .......................................................................... .................... 1 hr. std. N.A.2Buffalo County ......................................................................... .................... 1 hr. std. N.A.2Burnett County ......................................................................... .................... 1 hr. std. N.A.2Calumet County ....................................................................... .................... 1 hr. std. N.A.2Chippewa County .................................................................... .................... 1 hr. std. N.A.2Clark County ............................................................................ .................... 1 hr. std. N.A.2Columbia County ..................................................................... .................... 1 hr. std. N.A.2Crawford County ...................................................................... .................... 1 hr. std. N.A.2Dane County ............................................................................ .................... 1 hr. std. N.A.2Dodge County .......................................................................... .................... 1 hr. std. N.A.2


WISCONSIN—OZONE (1-HOUR STANDARD)—Continued

Designation areaDesignated Classification


Douglas County ....................................................................... .................... 1 hr. std. N.A.2Dunn County ............................................................................ .................... 1 hr. std. N.A.2Eau Claire County ................................................................... .................... 1 hr. std. N.A.2Florence County ...................................................................... .................... 1 hr. std. N.A.2Fond du Lac County ................................................................ .................... 1 hr. std. N.A.2Forest County .......................................................................... .................... 1 hr. std. N.A.2Grant County ........................................................................... .................... 1 hr. std. N.A.2Green County .......................................................................... .................... 1 hr. std. N.A.2Green Lake County ................................................................. .................... 1 hr. std. N.A.2Iowa County ............................................................................. .................... 1 hr. std. N.A.2Iron County .............................................................................. .................... 1 hr. std. N.A.2Jackson County ....................................................................... .................... 1 hr. std. N.A.2Jefferson County ..................................................................... .................... 1 hr. std. N.A.2Juneau County ........................................................................ .................... 1 hr. std. N.A.2La Crosse County .................................................................... .................... 1 hr. std. N.A.2Lafayette County ..................................................................... .................... 1 hr. std. N.A.2Langlade County ..................................................................... .................... 1 hr. std. N.A.2Lincoln County ......................................................................... .................... 1 hr. std. N.A.2Marathon County ..................................................................... .................... 1 hr. std. N.A.2Marinette County ..................................................................... .................... 1 hr. std. N.A.2Marquette County .................................................................... .................... 1 hr. std. N.A.2Menominee County ................................................................. .................... 1 hr. std. N.A.2Monroe County ........................................................................ .................... 1 hr. std. N.A.2Oconto County ......................................................................... .................... 1 hr. std. N.A.2Oneida County ......................................................................... .................... 1 hr. std. N.A.2Outagamie County ................................................................... .................... 1 hr. std. N.A.2Pepin County ........................................................................... .................... 1 hr. std. N.A.2Pierce County .......................................................................... .................... 1 hr. std. N.A.2Polk County ............................................................................. .................... 1 hr. std. N.A.2Portage County ........................................................................ .................... 1 hr. std. N.A.2Price County ............................................................................ .................... 1 hr. std. N.A.2Richland County ...................................................................... .................... 1 hr. std. N.A.2Rock County ............................................................................ .................... 1 hr. std. N.A.2Rusk County ............................................................................ .................... 1 hr. std. N.A.2St. Croix County ...................................................................... .................... 1 hr. std. N.A.2Sauk County ............................................................................ .................... 1 hr. std. N.A.2Sawyer County ........................................................................ .................... 1 hr. std. N.A.2Shawano County ..................................................................... .................... 1 hr. std. N.A.2Taylor County .......................................................................... .................... 1 hr. std. N.A.2Trempealeau County ............................................................... .................... 1 hr. std. N.A.2Vernon County ......................................................................... .................... 1 hr. std. N.A.2Vilas County ............................................................................ .................... 1 hr. std. N.A.2Washburn County .................................................................... .................... 1 hr. std. N.A.2Waupaca County ..................................................................... .................... 1 hr. std. N.A.2Waushara County .................................................................... .................... 1 hr. std. N.A.2Winnebago County .................................................................. .................... 1 hr. std. N.A.2Wood County ........................................................................... .................... 1 hr. std. N.A.2


* * * * * * *52. In § 81.351, the table entitled ‘‘Wyoming—Ozone’’ is revised to read as follows:

§ 81.351 Wyoming.* * * * * * *

WYOMING—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Albany CountyBig Horn CountyCampbell CountyCarbon CountyConverse CountyCrook CountyFremont County


WYOMING—OZONE (1-HOUR STANDARD)—Continued



Goshen CountyHot Springs CountyJohnson CountyLaramie CountyLincoln CountyNatrona CountyNiobrara CountyPark CountyPlatte CountySheridan CountySublette CountySweetwater CountyTeton CountyUinta CountyWashakie CountyWeston County


* * * * * * *53. In § 81.352, the table entitled ‘‘American Samoa—Ozone’’ is revised to read as follows:

§ 81.352 American Samoa.* * * * * * *

AMERICAN SAMOA—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2


* * * * * * *54. In § 81.353, the table entitled ‘‘Guam—Ozone’’ is revised to read as follows:

§ 81.353 Guam.* * * * * * *

GUAM—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2


* * * * * * *55. In Section 81.354, the table entitled ‘‘Northern Mariana Islands—Ozone’’ is revised to read as follows:

§ 81.354 Northern Mariana Islands.* * * * * * *

NORTHERN MARIANA ISLANDS—OZONE (1-HOUR STANDARD)



Whole State ............................................................................. .................... 1 hr. std. N.A.2


* * * * * * *56. In § 81.355, the table entitled ‘‘Puerto Rico—Ozone’’ is revised to read as follows:


§ 81.355 Puerto Rico.* * * * * * *

PUERTO RICO—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2Adjuntas MunicipioAguada MunicipioAguadilla MunicipioAguas Buenas MunicipioAibonito MunicipioAnasco MunicipioArecibo MunicipioArroyo MunicipioBarceloneta MunicipioBarranquitas Munic.Bayamon CountyCaba Rojo MunicipioCaguas MunicipioCamuy MunicipioCanovanas MunicipioCarolina MunicipioCatano CountyCayey MunicipioCeiba MunicipioCiales MunicipioCidra MunicipioCoama MunicipioComeria MunicipioCorozal MunicipioCulebra MunicipioDorado MunicipioFajardo MunicipioFlorida MunicipioGuanica MunicipioGuayama MunicipioGuayanilla MunicipioGuaynabo CountyGurabo MunicipioHatillo MunicipioHormigueros MunicipioHumacao MunicipioIsabela MunicipioJayuya MunicipioJuana Diaz MunicipioJuncos MunicipioLajas MunicipioLares MunicipioLas Marias MunicipioLas Piedras MunicipioLoiza MunicipioLuquillo MunicipioManati MunicipioMaricao MunicipioMaunabo MunicipioMayaguez MunicipioMoca MunicipioMorovis MunicipioNaguabo MunicipioNaranjito MunicipioOrocovis MunicipioPatillas MunicipioPenuelas MunicipioPonce MunicipioQuebradillas MunicipioRincon MunicipioRio Grande MunicipioSabana Grande MunicipioSalinas MunicipioSan German MunicipioSan Juan MunicipioSan Lorenzo Municipio


PUERTO RICO—OZONE (1-HOUR STANDARD)—Continued



San Sebastian MunicipioSanta Isabel MunicipioToa Alta MunicipioToa Baja CountyTrujilla Alto MunicipioUtuado MunicipioVega Alta MunicipioVega Baja MunicipioVieques MunicipioVillalba MunicipioYabucoa MunicipioYauco Municipio


* * * * * * *

57. In § 81.356, the table entitled ‘‘Virgin Islands—Ozone’’ is revised to read as follows:

§ 81.356 Virgin Islands.

* * * * * * *

VIRGIN ISLANDS—OZONE (1-HOUR STANDARD)



Statewide ................................................................................. .................... 1 hr. std. N.A.2St. CroixSt. JohnSt. Thomas


* * * * * * *




40 CFR Part 81

[FRL–5945–6]

Identification of Ozone Areas Attainingthe 1-Hour Standard and to Which the1-Hour Standard is No LongerApplicable

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Proposed rule.

SUMMARY: The EPA proposes to approvethe identification of ozone areasattaining the 1-hour standard and towhich the 1-hour standard is no longerapplicable. In the final rules section ofthis Federal Register, the EPA isapproving the amendment to 40 CFRpart 81 to reflect ozone areas where the1-hour standard will cease to applybecause they have not measured acurrent violation of the 1-hour standard.For all other areas, the 1-hour standardwill continue to apply; such ozone areaswill also be shown in 40 CFR part 81.

Because the Agency views such actionas a noncontroversial amendment andanticipates no adverse comments, theEPA is approving the amendment to 40part 81 as a direct final rule withoutprior proposal. Today’s regulation isbeing promulgated in direct response tothe President’s memorandum of July 16,1997 which directed the EPA to publishwithin 90 days this action. A detailedrationale for this action is set forth inthe direct final rule. If no adversecomments are received in response tothat direct final rule, no further activityis contemplated in relation to thisproposed rule. If EPA receives adversecomments, the direct final rule will bewithdrawn and all public commentsreceived will be addressed in asubsequent final rule based on thisproposed rule. The EPA will notinstitute a second comment period onthis document.DATES: To be considered, commentsmust be received on or before February17, 1998.ADDRESSES: Written comments shouldbe addressed to: Annie Nikbakht(policy) or Barry Gilbert (air quality

data), Office of Air Quality Planning andStandards, Air Quality Strategies andStandards Division, Ozone Policy andStrategies Group, MD–15, ResearchTriangle Park, NC 27711. Electroniccomments can be sent directly to EPAat: [email protected] comments must be submittedas an ASCII file avoiding the use ofspecial characters and any form ofencryption. Comments and data willalso be accepted on disks inWordPerfect in 5.1 file format or ASCIIfile format. All comments and data inelectronic form must be identified bythe docket number A–97–42. Electroniccomments on this proposed rule may befiled online at many Federal DepositoryLibraries.

SUPPLEMENTARY INFORMATION: Foradditional information see the directfinal rule which is published in therules section of this Federal Register.

Dated: December 29, 1997.Carol M. Browner,Administrator.[FR Doc. 98–934 Filed 1–15–98; 8:45 am]BILLING CODE 6560–50–P

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2805


Part III

Federal ReserveSystem12 CFR Parts 207, 220, 221, 224, and 265Securities Credit Transactions; Borrowingby Brokers and Dealers; Final Rule

12 CFR Parts 207, 220, 221, 224, and 265

Securities Credit Transactions; ProposedRule


1 Pub. L. 104–290, 110 Stat. 3416.


12 CFR Parts 207, 220, 221, 224 and265

[Regulations G, T, U and X; Docket Nos.R–0905, R–0923 and R–0944]

Securities Credit Transactions;Borrowing by Brokers and Dealers

AGENCY: Board of Governors of theFederal Reserve System.ACTION: Final rule.

SUMMARY: The Board is adopting finalamendments to Regulations G, T and U,the Board’s securities credit regulations.These amendments are based onproposed amendments issued forcomment by the Board in December1995 (Docket R–0905), April 1996(Docket R–0923) and November 1996(Docket R–0944). The final amendmentsinclude the extension of Regulation U tocover lenders formerly subject toRegulation G and the elimination ofRegulation G. The amendments reduceregulatory distinctions between broker-dealers, banks, and other lenders andimplement changes to the Board’ssecurities credit regulations to reflectchanges to the Board’s statutoryauthority under the Securities ExchangeAct of 1934, as amended by the NationalSecurities Markets Improvement Act of1996. Conforming changes are alsomade to Regulation X, ‘‘Borrowers ofSecurities Credit’’ and the Board’s RulesRegarding Delegation of Authority.DATES: Effective date: April 1, 1998.

Compliance date: Compliance withthe revised Regulation T (12 CFR part220) is optional until July 1, 1998.FOR FURTHER INFORMATION CONTACT:Oliver Ireland, Associate GeneralCounsel (202) 452–3625; Scott Holz,Senior Attorney (202) 452–2966, JeanAnderson, Staff Attorney, (202) 452–3707, Legal Division; for the hearingimpaired only, TelecommunicationsDevice for the Deaf (TDD), Diane Jenkins(202) 452-3544.SUPPLEMENTARY INFORMATION: Discussedbelow are final amendments to theBoard’s securities credit regulationsbased on three requests for commentissued in 1995 and 1996. The December1995 request (Docket R–0905; 60 FR63660, Dec. 12, 1995) covered onlyRegulation U and dealt with mixedcollateral loans and the financing ofpurchases effected on a delivery-versus-payment basis. The April 1996 request(Docket R–0923; 61 FR 20399, May 6,1996) dealt primarily with creditextended to customers by broker-dealersand other lenders, such as loan value forsecurities under Regulations G, T and U

and the account structure of RegulationT. The November 1996 request (DocketR–0944; 61 FR 60168, Nov. 26, 1996)was issued in response to the changesin the Board’s margin authoritycontained in the National SecuritiesMarkets Improvement Act of 1996(NSMIA) and dealt primarily withborrowing by broker-dealers from anylender and the borrowing and lending ofsecurities by broker-dealers.

The statutory changes from NSMIAregarding borrowing by broker-dealersrequire parallel amendments to theBoard’s various margin regulations andare discussed first. The second sectiondeals with amendments to Regulation Tand the third section with amendmentsto Regulations G and U. The finalsection describes a conforming changeto Regulation X.

In a separate document publishedelsewhere in today’s Federal Registerthe Board is issuing an advance noticeof proposed rulemaking to solicit viewson any further amendments to itsmargin regulations that should beproposed to complete the Board’speriodic review of these regulations.

Table of ContentsI. Borrowing by Broker-Dealers

A. All Regulations: Implementation ofNSMIA

1. Scope section vs. the definition ofcustomer

2. Appropriateness of adopting a‘‘substantial’’ test

3. Test for determining ‘‘substantial’’customer business

a. Description of testb. ‘‘Safe harbor’’ status of testc. Burden of proof for exempt borrower

status4. Borrowing exemption for other broker-

dealersB. Regulations G and U1. Need for separate regulations2. Special purpose loans to broker-dealers3. Board interpretationsC. Regulation Ta. Broker-dealer accountsb. Borrowing and lending of securities a.

Collateral test b. Purpose test(1) Foreign securities exception(2) ‘‘Pre-borrowing’’(3) Dividend reinvestment and purchase

plansc. Exempted borrowers

II. Regulation TA. Debt Securities and Portfolio Margining1. Loan valuea. Good faith loan value for all non-equity

securitiesb. ‘‘Equity-linked’’ and preferred securities2. Good faith accounta. Appropriatenessb. Prohibition on transactions causing a

deficitc. Money market and other financial

instrumentsd. Merging non-equity account into other

accounts

3. Portfolio margininga. Portfolio margining as an alternative to

Regulation Tb. Definition of good faith marginc. Separation of accountsd. Retention of the special memorandum

accountB. Equity Securities and Options1. Domestic stocks2. Foreign stocks3. Options: short sales and arbitrage

transactionsC. Miscellaneous Issues1. Foreign Issuesa. Credit by foreign branches of U.S.

broker-dealersb. Foreign currency2. Technical amendmentsa. Definition of covered option transactionb. Definition of margin equity securityc. Definition of current market value3. Cash account: 90-day freeze4. Board interpretations

III. Regulations G AND UA. Loan Value1. Over-the-counter stocks2. Options3. Money market mutual fundsB. Financing of Securities Purchased on a

DVP BasisC. Mixed Collateral Loans

IV. Regulation XV. Regulatory Flexibility ActVI. Paperwork Reduction Act

I. Borrowing By Broker-Dealers

A. All Regulations: Implementation ofNSMIA

The National Securities MarketsImprovement Act of 1996 (‘‘NSMIA’’) 1

repealed section 8(a) of the SecuritiesExchange Act of 1934 (the ‘‘’34 Act’’)and exempted the extension of credit tocertain broker-dealers from the Board’smargin regulations. Section 8(a) of the’34 Act had required broker-dealersobtaining credit against the collateral ofexchange-traded equity securities toborrow from only other broker-dealers,banks that were members of the FederalReserve System, or banks that agreed toabide by certain restrictions applicableto member banks. After the enactment ofNSMIA, the Board proposed to delete§ 220.15 of Regulation T and § 221.4 ofRegulation U, the regulatory sectionsthat implemented section 8(a) of the ’34Act. No adverse comments werereceived, and the Board is deleting thesections as proposed. The Board is alsodeleting the definition of nonmemberbank from § 220.2 of Regulation Tbecause the term was used only in§ 220.15 of Regulation T. Finally, theBoard is deleting its delegation ofauthority to the Reserve Banks to acceptagreements filed under section 8(a) ofthe ’34 Act.

NSMIA amended section 7 of the ’34Act to grant a transactional exemption


2 All SEC-registered broker-dealers belong to oneor more SRO, such as the New York StockExchange, Chicago Board Options Exchange, or theNational Association of Securities Dealers. If abroker-dealer belongs to more than one SRO, oneof the SROs is designated as its examining authorityand becomes its primary regulator at the SRO level.‘‘Examining authority’’ is defined in § 220.2 ofRegulation T.

3 SEC Rule 17a–5(d); 17 CFR 240.17a–5(d).4 Section 3(a)(18) of the§’34 Act, 15 U.S.C.

78c(a)(18).5 See Section 220.3(j) of the revised Regulation T

and § 221.3(e) of the revised Regulation U.

for credit extended to a broker-dealer‘‘to finance its activities as a marketmaker or an underwriter.’’ NSMIA alsogranted a status exemption for allborrowing by broker-dealers ‘‘asubstantial portion of whose businessconsists of transactions with personsother than brokers or dealers.’’ Thesestatutory exemptions apply toborrowers, although the Board’s marginregulations generally apply to lenders. Itis therefore necessary for the Board toamend Regulations G, T and U toprovide uniform treatment for broker-dealers whose borrowings are exemptedfrom the Board rules under NSMIA.

1. Scope Section vs. the Definition ofCustomer

The Board sought comment onwhether broker-dealers who qualify foran exemption from the Board’s marginregulations when borrowing (‘‘exemptedborrowers’’) should be excluded fromthe scope provisions in the first sectionof each regulation or the definition ofcustomer in the second section of eachregulation. All but two of the responsivecommenters preferred the use of thescope section. The Board is amendingthe scope section to exclude loans to an‘‘exempted borrower’’ and adding adefinition of ‘‘exempted borrower’’ tocover those broker-dealers who have asubstantial portion of their businessconducted with persons other thanbroker-dealers (when they borrow forany purpose). The Board is alsoexcluding an ‘‘exempted borrower’’from the definition of ‘‘customer’’ ineach regulation.

2. Appropriateness of Adopting a‘‘Substantial’’ Test

The Board sought comment onwhether it needs to provide a test toidentify exempted borrowers. Only onecommenter expressed its belief that a‘‘substantial’’ test was not needed. TheBoard is adopting several safe harbortests to provide guidance to lenders asto those broker-dealers who qualifyunder NSMIA for exempted borrowerstatus.

One commenter stated that once theBoard has decided on an appropriatetest, but before it is implemented, theself regulatory organizations (SROs) 2

should survey their member firms toascertain how many would be qualified.The Board is not adopting this

suggestion as the Board believes that itwould delay unnecessarily the ability ofsome exempted borrowers to takeadvantage of the Board’simplementation of the NSMIA.

3. Test for Determining ‘‘Substantial’’Customer Business

a. Description of test: The Board isadopting three alternative tests forbroker-dealers to qualify as exemptedborrowers. Exempted borrowers arebeing defined to include registeredbrokers or dealers or members of anational securities exchange who haveat least: (1) 1000 active accounts forpersons other than brokers, dealers, orpersons associated with a broker ordealer; or (2) $10 million in annualgross revenues from transactions withsuch persons; or (3) 10 percent of theirannual gross revenues derived fromtransactions with such persons. Thesetests will be included in the definitionof ‘‘exempted borrower’’ in §§ 220.2 ofRegulation T and 221.2 of Regulation U.The Board believes that these testsshould not be excessively onerous tosatisfy or monitor, but they shouldexceed the levels that an entity is likelyto be willing or able to achieveartificially merely to obtain exemptcredit. The first test provides astraightforward mechanism for large,customer-oriented firms to determinethat they meet the substantial customerbusiness requirement. The second testcovers large firms that have made asubstantial commitment to transactingbusiness with persons other thanbroker-dealers, but do not have a largenumber of customer accounts. The thirdtest compares the relative size of abroker-dealer’s customer-relatedsecurities business to its overallsecurities business.

The Board believes these tests meetthe statutory standard that a substantialportion of an exempted borrower’sbusiness consist of transactions withpersons other than brokers or dealers.The Board believes that 10 percent ofgross revenues is a substantial portion ofa broker-dealer’s business. Similarly, theBoard believes that 1000 customeraccounts is a substantial number ofaccounts, and therefore broker-dealerswith this many customer accounts havea substantial portion of their businesswith persons other than broker-dealers.Finally, the Board believes that having$10 million in gross customer revenuesis a substantial amount of revenue, andtherefore these broker-dealers have asubstantial portion of their businesswith customers.

Two of the three tests adopted by theBoard today refer to ‘‘revenue.’’ Twocommenters suggested that the Board

adopt its own definition of ‘‘revenue,’’although one of these commenterssuggested that the Board build upon thedefinition of ‘‘gross revenues from thesecurities business’’ in section 16(9) ofthe Securities Investor Protection Act of1970. The Board believes it would bemore appropriate for broker-dealers todetermine ‘‘revenue’’ in accordancewith generally accepted accountingprinciples (GAAP). This should beeasier than a new standard becausebroker-dealers are required under SECrules to file annual reports that havebeen audited by an independent publicaccountant 3 and these reports areprepared according to GAAP. Althoughthe Board is not specifying amethodology for comparing customerrevenues to gross revenues, it expectsthat broker-dealers will developappropriate methods for doing so andapply them consistently over time.

The Board believes that the statutoryrequirement that a substantial portion ofan exempted borrower’s business mustconsist of transactions with personsother than ‘‘brokers or dealers’’ shouldbe interpreted to require that thesetransactions also be effected withpersons other than ‘‘persons associatedwith a broker or dealer’’ as defined inthe ’34 Act.4 This exclusion is includedin the Board’s definition of ‘‘exemptedborrower’’ and will prevent a firm fromqualifying as an exempted borrower byengaging in transactions only withrelated persons and corporate entities.

Several commenters responding to theBoard’s request for appropriate tests toidentify exempted borrowers focused onthe appropriate period of time overwhich to measure whether a broker-dealer has a substantial customerbusiness. Some commenters suggested abroker-dealer should be deemed to havea substantial customer business if itmeets one of the Board’s tests on anannual basis while others suggestedusing a six month period. The Boardbelieves an annual test is appropriate.Therefore, to meet any one of the tests,a broker-dealer must have met the teston average for a 12 month period.However, the Board will permit a newlyregistered broker-dealer to qualify as anexempted borrower if it meets one of theBoard’s tests after six months.5

The Board believes that broker-dealerswith exempt borrowing status shouldreevaluate their status on an annualbasis. If a broker-dealer determines thatit is no longer an exempted borrower, it


6 See Section 220.3(j) of the revised Regulation Tand § 221.3(e) of the revised Regulation U.

7 This language was found in the definitionalsection of each regulation (§ 207.2 of Regulation Gand § 221.2 of Regulation U).

8 Although CBOE refers to these member firms as‘‘market makers,’’ the firms qualify as ‘‘specialists’’under the ’34 Act.

should notify its lenders beforeobtaining additional credit. Once abroker-dealer ceases to be an exemptedborrower, credit obtained in reliance onthe exempted borrower exceptioncannot be rolled over or renewed andthe lines of credit should be adjustedappropriately as positions areliquidated. If the borrowing broker-dealer maintains its positions, thelender can continue to maintain thecredit extended on an exempt basis.Once a borrowing broker-dealer is nolonger an exempted borrower any newsecurities transactions requiringfinancing must be effected in conformitywith the provisions of the Board’smargin regulations other than theexempted borrower exception.6

b. ‘‘Safe harbor’’ status of test: Theterm exempted borrower will be definedto ‘‘include’’ the three tests describedabove. Each of the three alternativestherefore will be a non-exclusive safeharbor. This will allow broker-dealerswho meet any one of the three tests toborrow on an exempt basis, but will notpreclude the possibility ofdemonstrating a substantial customerbusiness in other ways.

c. Burden of proof for exemptedborrower status: A commenter statedthat a lender should be able to rely ona borrowing broker-dealer’srepresentation of its exempted status‘‘irrespective of what additional factsare known by the lender.’’ Two othercommenters recommended that lendersbe able to use a ‘‘good faith’’ standardin accepting a borrowing broker-dealer’srepresentation of its exempted status.The Board believes lenders should berequired to apply a ‘‘good faith’’standard in determining whether theBoard’s margin regulations apply toborrowings by specific broker-dealers.Under former Regulations G and U,‘‘good faith’’ in accepting arepresentation required a lender to be‘‘alert to the circumstances surroundingthe credit, and if in possession ofinformation that would cause a prudentperson not to accept the notice orcertification without inquiry,investigates and is satisfied that it istruthful.’’ 7 The Board believes that incertain situations a lender may be ableto determine whether a broker-dealerqualifies as an exempted borrowerwithout requiring a statement from theborrower. Therefore, the Board ismodifying the definition of good faith in§ 221.2 of Regulation U (which will also

cover lenders formerly subject toRegulation G) in a way that will allowlenders to use their judgment as towhether a statement is necessary. TheBoard is adopting the same definition ofgood faith in § 220.2 of Regulation T sothat all lenders will be subject to auniform standard.

4. Borrowing Exemption for OtherBroker-Dealers

CBOE requested the creation of aborrowing exception in Regulations Gand U for broker-dealers whose businessconsists of financing and carrying theaccounts of registered market makers.8CBOE noted that while some broker-dealers that carry the accounts of marketmakers also engage in a generalcustomer business and may qualify forthe exempted borrower exceptioncreated under NSMIA, there are a fewclearing firms virtually all of whosebusiness consists of carrying theaccounts of options market makers.CBOE explained that it has encouragedthese firms to refrain from carrying theaccounts of public customers so thatsuch firms would not be subject toliquidation proceedings under SIPA,which CBOE believes would make thetransfer of market maker accounts toother clearing firms more difficult.CBOE stated its belief that failure ofthese firms to obtain an exemptborrowing status under Regulations Gand U will have negative consequencesfor the safety and liquidity of theoptions markets.

The Board is adopting an exceptionfrom certain of its margin rules forbroker-dealers whose nonproprietarybusiness is limited to transactions withmarket makers and specialists. Thisexemption will be found in§ 221.5(c)(10) of Regulation U (which isbeing amended to cover all lendersother than brokers and dealers) and notin Regulation T. This means that broker-dealers who qualify for the exceptionwill not be limited by the Board’smargin regulations if they borrow froma lender other than another broker-dealer, but borrowings from broker-dealers will be subject to the provisionsof Regulation T. CBOE did not requestan exemption in Regulation T for loansto market maker clearing firms and theBoard’s authority to grant exemptionsunder Regulations G and U is greaterthan its ability to grant exemptionsunder Regulation T. NSMIA amendedsection 7(d) of the ’34 Act (the sectionwhich applies to lenders other thanbroker-dealers and under which the

Board has adopted Regulations G and U)to allow the Board to exempt such credit‘‘as it may deem necessary orappropriate in the public interest or forthe protection of investors.’’ The Boardbelieves that establishing a Regulation Uborrowing exception for broker-dealersactively engaged in clearing andcarrying the accounts of market makersis appropriate in the public interest byenhancing market liquidity andprotecting that liquidity in times ofmarket volatility.

B. Regulations G and U

1. Need for Separate Regulations

The Board noted last year that thecurrent structure of its marginregulations is based in part on therequirements of recently repealedsection 8(a) of the ’34 Act. Section 8(a)mandated a distinction between bankand nonbank lenders with respect toloans to broker-dealers. In light of therepeal of section 8(a), the Board soughtcomment on whether it is stillappropriate to distinguish betweenRegulation G and Regulation U lendersand whether the regulations should becombined. No commenters believedthere is a need for differing substantiveregulation of banks and Regulation Glenders. The Board is mergingRegulation G into Regulation U. Exceptas otherwise noted, substantiveprovisions of Regulation G have beenincorporated into Regulation U.

On a technical level, the title ofRegulation U is being changed to reflectits coverage of persons other than banks,brokers and dealers. Entities that wereknown as ‘‘lenders’’ under Regulation Gwill be known as ‘‘nonbank lenders’’under Regulation U and the term‘‘lender’’ will be used in Regulation Uto refer to banks and former RegulationG lenders collectively. Similar but notidentical provisions, such as thedefinition of ‘‘affiliate’’ in § 221.2 andthe requirements for obtaining apurpose statement in § 221.3(c), havebeen left with their differences intact.The Board is soliciting comment via anadvance notice of proposed rulemakingpublished elsewhere in today’s FederalRegister to determine whether and howto harmonize further the treatment ofbank and nonbank lenders. The Board isalso amending its rules regardingdelegation of authority to eliminatereferences to Regulation G.

2. Special Purpose Loans to Broker-Dealers

Regulation U has always included anexemption for loans to broker-dealers in


9 See Section 221.5(c) of Regulation U.10 These loans were described in paragraphs

(c)(6), (7), (10), (11), (12) and (13) of former § 221.5of Regulation U.

11 The Regulation G citations for theseinterpretations were 12 CFR 207.102, 207.103,207.106, 207.108, 207.110, 207.113, and 207.114.

12 Section 220.8(c) of Regulation T.13 Former § 220.11(a)(1) of Regulation T.14 For a description of ‘‘prime-broker’’

arrangements, see SEC no-action letter of January

25, 1994, reprinted in CCH Fed. Sec. L Rptr ¶76,819.

15 See 220.12(b)(2)(ii) of former Regulation Tprovided that the margin for the purchase or shortsale of a security that does not qualify as a specialistor permitted offset position shall be the marginrequired by the Supplement. Purchases on creditand short sales of such securities by specialists willhenceforth be required to be effected in the marginor good faith account.

16 See the discussion in section II. A. 2. d of theSupplementary Information.

specific circumstances.9 In response tothe Board’s request for appropriateamendments to Regulation U to reflectthe broader exemption for broker-dealerborrowing contained in the NSMIA, twocommenters stated their belief that thefollowing special purpose loans tobrokers and dealers found in § 221.5(c)of Regulation U no longer need to belisted separately: loans to specialists,OTC market makers, third marketmakers, block positioners, and odd-lotdealers; and distribution loans.10 TheBoard is deleting these provisions asunnecessarily detailed in light of theNSMIA amendments to section 7 of the’34 Act and replacing them with ageneral exclusion for market makers,specialists and underwriters in§§ 221.5(c)(6) and 221.5(c)(7) ofRegulation U based on the language ofNSMIA. Lenders formerly subject toRegulation G will also be able to extendspecial-purpose loans to broker-dealersunder all of the exemptions containedin § 221.5(c) of Regulation U. Asproposed, the Board is adding thedefinition of examining authoritycurrently found only in Regulation T to§ 221.2 of Regulation U because the termappears in § 221.5(c)(9) of Regulation U.

3. Board InterpretationsBefore its merger into Regulation U,

Regulation G contained 14 Boardinterpretations codified as 12 CFR207.101–207.114. Seven of theseinterpretations 11 were already codifiedin Regulations T or U as well and willbe unaffected by the elimination ofRegulation G. The interpretationconcerning credit extended to purchasemutual shares before July 8, 1969,which has been codified at 12 CFR207.107 (and 12 CFR 221.119), is beingdeleted as obsolete. The remaining sixRegulation G interpretations are beingmoved to Regulation U.

The Board has reviewed the 25interpretations in Regulation U (at 12CFR 221.101–125) and decided to deletesix of them. As noted in the previousparagraph, the interpretation at 12 CFR221.119 is being deleted as obsolete.The same is true of the interpretation at12 CFR 221.111, which deals with‘‘retention requirements’’ eliminated bythe Board the last time the marginregulations were comprehensivelyrevised. The interpretations at 12 CFR221.102 and 221.121 are being deletedbecause they have been superceded by

NSMIA. Deletion of the interpretation at12 CFR 221.123 (also codified inRegulation T at 12 CFR 220.126) isdiscussed below in the Regulation Tsection on the use of options in shortsales and arbitrage transactions (Seesection II. B. 3). The interpretation at 12CFR 221.124 (‘‘Application of thesingle-credit rule to loanparticipations’’) is being deleted becausethe Board amended the single-creditrule (§ 221.3(d) of Regulation U) in 1996to incorporate this interpretation. Thesix remaining Regulation Ginterpretations will replace the sixRegulation U interpretations beingdeleted today.

C. Regulation T

1. Broker-Dealer Accounts

The former Regulation T required thatall financial relations between a broker-dealer and its customer (which mayinclude another broker-dealer) berecorded in one of the eight accountsdescribed in the regulation. The Boardrequested comment on whether theNSMIA eliminated the need for thefollowing Regulation T accounts thatwere generally limited to broker-dealers:omnibus account (former § 220.10),broker-dealer credit account (former§ 220.11), and the market functionsaccount (former § 220.12). Mostcommenters requested retention of theomnibus account, which allowsfinancing of a broker-dealer’s customers’positions, for broker-dealers who do nothave a ‘‘substantial’’ customer businessbut nevertheless finance some customertransactions. Most commenters alsorequested retention of the broker-dealercredit account, which permits certainextensions of credit to SEC-registeredbroker-dealers and allows certain othertransactions to be effected withoutregard to the ‘‘90-day freeze’’ provisioncontained in the cash account.12 Insupport of their request to retain thebroker-dealer credit account,commenters cited the provisions of theaccount that may be used by personswho are not SEC-registered broker-dealers (and therefore not affected bythe NSMIA) and stated their belief thatthe Board should not eliminate theability of these persons to availthemselves of the account. Theseprovisions allow foreign broker-dealersto buy and sell securities on a delivery-versus-payment (DVP) basis 13 andallow the use of this account for ‘‘prime-broker’’ customers.14 Most commenters

recommended repeal of the marketfunctions account, which permits goodfaith credit to be extended to broker-dealers who perform a market functionsuch as acting as a specialist, as long asthe Board indicates that its action isbased on its belief that the NSMIAexemptions covers all transactionspreviously recorded in this account.

The Board is eliminating the marketfunctions account because thetransactions previously permittedtherein have been exempted from Boardregulation by the NSMIA, with oneexception.15 The Board is also deletingthe definitions of in or at the money, inthe money, overlying option, permittedoffset, and specialist joint account from§ 220.2 of Regulation T because theterms were used only in the marketfunctions account. Consistent with itsaction regarding customer accounts,16

the Board believes that additionalflexibility for broker-dealers can beachieved by merging the omnibusaccount into the broker-dealer creditaccount. The different types of credit aredescribed in separate paragraphs; theSEC and/or the SROs may require thatbroker-dealers keep separate recordswithin this account, for example tosegregate omnibus credit (for customers)from other types of (proprietary) broker-dealer credit. The provision allowingcertain ‘‘prime broker’’ transactions tobe effected in the broker-dealer creditaccount will be moved to the new goodfaith account to reflect the fact thatthese transactions are effected on behalfof non-broker-dealer customers. Former§ 220.11(b), which defined the termaffiliated corporation, is being moved tothe definitional section of the regulation(§ 220.2).

A commenter recommended that theBoard allow foreign broker-dealers toopen omnibus accounts at U.S. broker-dealers. This practice was permittedunder Regulation T until 1969, as longas the foreign broker-dealer certifiedthat it made its customers margin theirtransactions in conformity with therequirements of Regulation T. TheBoard then amended Regulation T torequire that the broker-dealer obtainingomnibus credit be registered with theSEC and therefore subject to thejurisdiction of the SEC and SROs to


17 Borrowing and lending of government(exempted) securities has been permitted in thegovernment securities account without regard to theborrowing and lending of securities provision ofRegulation T.

18 The regulatory loan value of a security is thedifference between 100 percent and the marginrequired by the Supplement to Regulation T(formerly § 220.18, now § 220.12).

19 When the foreign securities exception wasadopted, it permitted the use of any legal collateral,but required that the collateral’s value be at alltimes at least equal to the value of the securitiesbeing lent. The requirement for 100 percentcollateral against a loan of these securities is beingeliminated in conjunction with the Board’selimination of the collateral test for all securitieslending transactions.

ensure Regulation T compliance forcustomer margin transactions. TheBoard believes that it is extremelydifficult to ensure that an unregulatedentity complies with its regulations anddoes not believe it is appropriate toimpose Regulation T on foreign broker-dealers’ transactions with customers.Therefore, the Board is not amendingthe omnibus account at this time.

In response to the Board’s request forcomment on appropriate amendments toRegulation T to reflect the changescontained in the NSMIA, onecommenter recommended incorporationof § 221.5 of Regulation U (‘‘Specialpurpose loans to brokers and dealers’’)into Regulation T, so that broker-dealersmay make loans to other broker-dealerson the same basis as other lenders. TheBoard is adding those portions of§ 221.5 of Regulation U that are notalready in Regulation T to the broker-dealer credit account. These provisionsallow the following types of creditwithout regard to other Regulation Trequirements: credit to finance thepurchase or sale of securities for promptdelivery or to finance securities intransit, if the credit is to be repaid uponcompletion of the transaction, andintraday credit. The broker-dealer creditaccount is also being amended to allowits use for loans to exempted borrowers,market makers, specialists, andunderwriters for those broker-dealerswho wish to record such credit in aRegulation T account.

2. Borrowing and Lending of SecuritiesThe Board has regulated the

borrowing and lending of securities toprevent a customer from evading themargin requirements by recharacterizinga margin loan from the broker-dealer tothe customer (which requires a depositof 50 percent of the stock’s value by thecustomer) as the lending of securities bythe customer to the broker-dealer (inreturn for which the customer canreceive 100 percent of the stock’s valuein cash from the broker-dealer). Withthe exception of U.S. governmentsecurities,17 former Regulation T on itsface applied to any loan of securities inwhich a creditor was either borrowingor lending. The Regulation T provisionthat covers borrowing and lendingsecurities (formerly § 220.16; now§ 220.10) has traditionally containedcollateral requirements (the ‘‘collateraltest’’) and limited the situations forwhich securities may be borrowed orlent (the ‘‘purpose test’’). With the

adoption of the good faith account,Regulation T restrictions on theborrowing and lending of securities willonly apply to those securities notentitled to good faith loan value.

a. Collateral test: Regulation T hasreflected industry practice by requiring100 percent collateral against aborrowing of securities, with thecollateral limited to cash and cashequivalents. Although the Boardbelieves requiring 100 percent liquidcollateral is consistent with prudentsecurities lending practices, it soughtcomment on whether the existingcollateral requirements are necessary forRegulation T purposes and proposedthree alternatives. Two of thealternatives would retain the 100percent collateral requirement. Of thosetwo alternatives, one would allow anysecurity as collateral as long as it wasvalued at its regulatory loan value 18 andthe other would allow any collateralwithout specifying limits as to how thecollateral is to be valued. The thirdalternative would eliminate thecollateral requirements in their entirety.

No commenter opposed an expansionof the types of collateral permitted forborrowing and lending securities. Twocommenters supported allowing allsecurities at their regulatory loan valueand three commenters supportedallowing all collateral. Total eliminationof collateral requirements in connectionwith the borrowing and lending ofsecurities was explicitly supported byfour commenters (including two whoalso supported one of the otheralternatives) and specifically opposedby two commenters. One of theopposing commenters gave no reasonfor its opposition, while the otherexpressed dissatisfaction with thepurpose test and suggested that thecollateral test was necessary to make upthis deficiency. Commenters supportingelimination of the collateralrequirements stated that the purposetest adequately limits circumvention ofthe margin requirements by limiting thesituations in which securities may belent. The commenters stated that thecurrent collateral requirement of 100 isat odds with the 50 percent requirementfor margin loans on equity securities.Commenters also noted that the SEC’scustomer protection rule specifiesacceptable collateral for securitieslending transactions conducted bybroker-dealers with customers. TheBoard notes that in addition to the SEC’scustomer protection rules and the

reasons cited above, the SROs maychoose to impose safety and soundnessrequirements on the borrowing andlending of securities by their memberfirms. The Board is eliminating thecollateral requirements for borrowingand lending securities.

b. Purpose test: In addition to thecollateral test, Regulation T alsocontains a ‘‘purpose test’’ generallylimiting the borrowing or lending ofsecurities by broker-dealers to situationsinvolving short sales or ‘‘fails’’ toreceive securities needed for delivery.Although the Board did not specificallypropose to amend the purpose test,several commenters recommendedmodifications to the purpose test. Theserecommendations included: (1)Broadening the exception added lastyear for foreign securities to cover thosethat trade in the United States, (2)broadening the exception added lastyear to permit borrowing of securitiesbefore a short sale has occurred to coverfail transactions and to allow more timeto borrow foreign securities, and (3)expanding the purpose test to coverdividend reinvestment plans.

(1) Foreign Securities Exception

Last year the Board created anexception to its general rule regardingthe borrowing and lending of securitiesfor certain foreign securities. Underformer § 220.16(b) of Regulation T,foreign securities that are not publiclytraded in the United States could be lentto foreign persons without regard to thepurpose test and on any collateral.19

Although several commentersresponding to the Board’s proposal ofthis exception in 1995 objected to thefact that it did not cover foreignsecurities listed on a U.S. securitiesexchange or the Nasdaq Stock Market,other commenters, including U.S.securities exchanges, stressed theimportance of equal treatment in thisarea for all securities that are publiclytraded in the United States. Onecommenter responding to last year’srequest for public comment repeated itsearlier comment requesting that theBoard eliminate this limitation on theforeign security exception and added analternative request that the Boardnarrow this limitation to U.S. tradedforeign securities being lent for shortsales effected in the United States. The


20 The phrase ‘‘standard settlement cycle’’ refersto SEC Rule 15c6–1 (17 CFR 240.17c6–1) whichcurrently sets this period at three business days.

21 From 1934 until 1968, exchange-listed debtsecurities were subject to the same marginrequirements as exchange-listed equity securities.Since 1968, marginable debt securities have beensubject to a good faith margin requirement.

22 Many investment-grade debt securities werealready covered under the existing definition of‘‘OTC margin bond.’’ However, some classes of debtsecurities, such as domestic debt securities exemptfrom SEC registration, were unable to qualify underthe existing definition.

23 Formerly, debt securities met the definition ofmargin security and were entitled to good faith loanvalue only if they were registered on a nationalsecurities exchange, rated investment-grade, orotherwise qualified as OTC margin bonds.

commenter pointed out that (1) theforeign securities exception only appliesto securities lent to foreign persons andtherefore ‘‘equal treatment’’ for all U.S.traded securities is already assured forsecurities lent to U.S. persons; (2)denying the foreign securities exceptionto U.S. traded foreign securities couldcreate a disincentive to foreigncompanies considering a dual listingarrangement in the United States; and(3) U.S. broker-dealers aredisadvantaged vis-a-vis foreign broker-dealers if their ability to lend foreignsecurities is curtailed once thosesecurities are listed for trading in theUnited States. In light of theseconsiderations, the Board is amendingthe foreign securities exception from thepurpose test to cover all foreignsecurities without regard to whether thesecurities are traded in the UnitedStates.

(2) ‘‘Pre-borrowing’’

Last year the Board also amendedRegulation T to allow the borrowing ofa security up to one standard settlementcycle 20 in advance of the trade date ofa short sale. Two commenters requestedthat the Board allow creditors to borrowsecurities three days before the tradedate of a transaction they reasonablyanticipate will result in a fail to deliver.The Board sees no reason to maintain adifferent time frame for borrowings toaccommodate fails versus short sales, aslong as the fail is not intended to evadethe requirements of Regulation T. Thelast sentence of § 220.10(a) of RegulationT (former § 220.16(a)) is therefore beingamended to cover fails as well as shortsales.

Three commenters also requested thatthe Board allow creditors to borrowforeign securities with extendedsettlement periods (i.e., more than threebusiness days) up to one foreignsettlement period in advance of thetrade date of a short sale or fail todeliver transaction. The Board is notadopting such an amendment. The threeday period adopted by the Board lastyear was an attempt to balance the needto complete short sales and failtransactions while guarding against thepotential for manipulative transactionssuch as squeezes. The Board does notbelieve there is a compelling reason totreat foreign securities differently.

(3) Dividend Reinvestment andPurchase Plans

Last year, the Board declined to adopta suggestion by commenters that the

purpose test for borrowing and lendingsecurities be expanded to allowcreditors to borrow securities in order totake advantage of dividend reinvestmentprograms. Three commenters in thisdocket repeated the suggestion. TheBoard continues to believe that allowinga broker-dealer to borrow customersecurities to take advantage of adividend reinvestment and purchaseplan could allow customers to obtaingreater credit than could be obtained viaa conventional margin loan and unlikeborrowing to cover a short sale or fail isnot necessary for efficient functioningand clearing of transactions in thesecurities market. Therefore, the Boardis not amending Regulation T toaccommodate dividend reinvestmentand purchase plans.

c. Exempted borrowers: In its requestfor comment on appropriateamendments to implement the changescontained in the NSMIA, the Boardstated that it appeared that RegulationT’s requirements for borrowing andlending securities no longer applied tothe borrowing and lending of securitiesbetween two exempted borrowers. TheBoard requested comment on how toamend the rules regarding borrowingand lending of securities to reflect theNSMIA. Although the SROs thatcommented responded by stating theirbelief that borrowing and lending ofsecurities by brokers and dealers shouldstill be subject to a ‘‘purpose test,’’ allother responsive commenters supportedthe Board’s view that Regulation T nolonger appears to apply to securitieslending transactions between exemptbroker-dealers. Three commenterssuggested that Regulation T also shouldnot apply when only one party to thesecurities lending transaction is anexempt broker-dealer; however, thecommenters were not in agreement as tohow this principal should be applied.Following the Board’s stated logic thatRegulation T has covered the borrowingand lending of securities to prevent acustomer from lending securities against100 percent cash in order to evade the50 percent maximum otherwiseallowed, the Board is amendingRegulation T by adding a new paragraph(c) to the section entitled ‘‘Borrowingand lending securities’’ (§ 220.10) toexclude a broker-dealer that is anexempted borrower from the restrictionsof Regulation T if it is lendingsecurities, but not if it is borrowingsecurities. In order to preventcircumvention of the Board’s marginrules for nonexempted equity securities,a broker-dealer that is an exemptedborrower and is therefore entitled tolend securities without regard to

Regulation T will not be permitted toborrow securities from a customer or abroker-dealer that is not an exemptedborrower in order to relend them unlessthe relending is for a permitted purposesuch as a short sale or fail transaction.

II. Regulation T

A. Debt Securities and PortfolioMargining

1. Loan Value

Debt securities listed on a nationalsecurities exchange have always hadloan value under Regulation T.21

Beginning in 1978, the Board createdthe concept of an ‘‘OTC (over-the-counter) margin bond’’ to allow loanvalue for unlisted debt securities thatmeet Board established criteria. Thesecriteria have been expanded over theyears. Nevertheless, not all OTC debtsecurities qualify as ‘‘OTC marginbonds.’’ Debt securities that are neitherexchange-listed nor OTC margin bondshave no loan value in a margin account.

a. Good faith loan value for all non-equity securities: Last year, the Boardamended Regulation T to include allinvestment-grade debt securities underthe definition of OTC margin bond andtherefore ensured good faith loan valuefor these securities.22 At the same time,the Board proposed to grant good faithloan value to all non-equity securities.23

The Board noted that banks and otherlenders are not subject to the Board’smargin requirements when extendingcredit on non-equity securities.

The Board’s proposal was supportedby all responsive commenters except forone commenter. This commenter arguedthat broker-dealers have a ‘‘salesman’sstake’’ not shared by non-broker-dealerlenders and this difference justifies thecontinuation of denying loan value tocertain non-investment-grade debtsecurities. On the other hand, anothercommenter stated that there is no policyjustification for distinguishing betweenbroker-dealers and other U.S. lendersand several commenters noted thatallowing good faith loan value for non-equity securities would increase the


24 The Supplement, which contains the marginrequirements for various securities transactions, isthe last section of each of the Board’s marginregulations. The Supplement was formerly § 220.18;the Supplement under the revised Regulation Tadopted today is § 220.12.

25 The term equity security is defined in section3(a)(11) of the Securities Exchange Act of 1934 (15U.S.C. 78(c)(a)(11)).

26 Some of these commenters includedconvertible debt securities in their discussion of thetypes of ‘‘equity-linked’’ securities they believeshould be subject to equity margin requirements.The Board has always treated convertible debtsecurities as equity securities because section3(a)(11) of the Securities Exchange Act of 1934defines ‘‘equity security’’ to include a securityconvertible into an equity security.

27 ‘‘Purpose credit’’ is defined as credit for thepurpose of buying, carrying, or trading in securities.

ability of U.S. broker-dealers to competewith other domestic and foreign lenders.

The Board is amending Regulation Tas proposed to permit broker-dealers toextend good faith credit against all non-equity securities. Broker-dealers shouldbe no less competent to determine theloan value of non-investment-grade debtsecurities than a bank or other lenderwould be. In addition, self regulatoryorganizations (SROs) such as the NewYork Stock Exchange will still be ableto set margin requirements for non-equity security transactions effected bytheir member brokerage firms. Toimplement this change, the Board isamending § 220.2 of Regulation T bydeleting the definition of OTC marginbond, replacing paragraph (3) of thedefinition of margin security (currently‘‘any OTC margin bond’’) with ‘‘anynon-equity security’’ and changing theSupplement 24 that provides good faithloan value for these securities to refer toany ‘‘non-equity security’’ where theregulation currently specifies‘‘registered nonconvertible debt securityor OTC margin bond.’’ The Board is alsoadding the word ‘‘equity’’ to paragraph(e) of the Supplement to make clear thatthe only securities that have no loanvalue under Regulation T are nonmarginnonexempted equity securities.

b. ‘‘Equity-linked’’ and preferredsecurities: The Board proposed to definenon-equity security as ‘‘a security that isnot an equity security.’’ 25 Under theproposed definition, debt securities thatare equity-linked securities still wouldbe afforded good faith loan value. TheBoard also sought comment on whetherit should modify this proposeddefinition to exclude ‘‘equity-linkedsecurities,’’ and if so, what securitiesshould be excluded. Modification of theproposed definition of non-equitysecurity to exclude ‘‘equity-linked’’securities would result in their beingtreated as equity securities and thereforesubject to either a 50 percent or 100percent margin requirement.

Comment on the appropriatetreatment of equity-linked securitieswas mixed. Several commenters statedthat equity-linked securities trade likeequity securities and are often priced inreliance on equity securities andtherefore should be subject to the samemargin requirements as equity

securities.26 Other commenters statedthat it was unnecessary for the Board toexclude equity-linked securities from itsproposed definition of non-equitysecurity in light of the SEC’s authorityto elaborate on the definition of ‘‘equitysecurity’’ under the ’34 Act to addressquestions that may arise regarding novelor hybrid products whose status mightotherwise be unclear. Staff of the SECcommented that equity-linkedsecurities, because they present many ofthe same type of risks as equitysecurities, should be treated as equitysecurities for purposes of the Board’smargin regulations. SEC staff furthercommented that they view a equity-linked security as one under which anypart of the issuer’s obligations iscontingent upon, or requires thedelivery on an optional or forward basisof, an equity security or group or indexof equity securities. The Board isadopting the definition of the term non-equity security that was proposed, withthe result that equity-linked securitieswhich do not meet the ’34 Actdefinition of equity security will beentitled to good faith loan value. TheBoard will defer to the SEC on theappropriate definition of equity security.

One commenter suggested thatpreferred stock be margined at a goodfaith level because its dividend rate isgenerally tied to current interest rates.Another commenter soughtconfirmation that the term non-equitysecurity would include all mortgage andother asset-backed securities, includingdebt instruments, trust certificates, orpartnership/participation interests. Asnoted above, the Board is deferring tothe SEC on the exact parameters of thedefinition of equity security.

2. Good Faith Account

a. Appropriateness: In addition toproposing good faith loan value for allnon-equity securities, the Boardproposed creating an account separatefrom the margin account described in§ 220.4 of Regulation T to effecttransactions involving these securities.The new account would allowpurchases and sales of non-equitysecurities on a credit or cash basis,repurchase and reverse repurchaseagreements on non-equity securities andthe purchase or sale of options on non-equity securities. All commenters

supporting good faith loan value for alldebt securities supported creation of anew account. The Board is adopting itsproposal for a non-equity account and,as discussed below, is merging it withthe government securities account andother accounts and naming it the ‘‘goodfaith account.’’ The good faith accountreplaces the government securitiesaccount formerly found in § 220.6 ofRegulation T.

b. Prohibition on transactions causinga deficit: The Board has generallyviewed section 7 of the ’34 Act asprohibiting broker-dealers fromextending purpose credit 27 that is eitherunsecured or secured by collateral otherthan securities. In proposing to create anew non-equity account, the Boardincluded a prohibition on transactionsthat would cause the account toliquidate to a deficit (i.e., cause themarket value of the collateral to fallbelow the customer’s debit balance).This proposed provision was includedto prevent broker-dealers fromextending unsecured purpose credit,which might be an evasion of the goodfaith margin requirement. Commentersgenerally opposed the proposal toprohibit transactions that would causethe account to liquidate to a deficit,stating that the restriction wouldseriously undermine the usefulness ofthe proposed account for transactions infixed-income securities because itwould present substantial uncertaintywith respect to bilateral extensions ofcredit such as reverse repurchaseagreements, which may liquidate to adeficit, and would continue to placebroker-dealers at a disadvantage vis-a-vis banks and other lenders.

Several commenters argued thatsection 7(c)(1)(B)(ii) of the ’34 Act doesnot prohibit unsecured credit if thecredit is either ‘‘not for the purpose ofpurchasing or carrying securities’’ or notextended for the purpose of ‘‘evading orcircumventing’’ the Board’s rulesregarding credit secured by securities.This reading of the statute allowsbroker-dealers to extend unsecuredpurpose credit if the Board concludesthat such credit is not for the purposeof evading or circumventing its rulesregarding secured credit. The Boardbelieves that this interpretation isconsistent with the statute and thereforeis eliminating the proposed ‘‘liquidateto a deficit’’ prohibition for the goodfaith account. The Board believes thatpermitting transactions in a non-equitysecurities account to liquidate to adeficit is not necessarily an evasion orcircumvention of the rules permitting


28 Money market and other financial instrumentsthat may not meet the definition of ‘‘security’’ in the’34 Act are currently valued at good faith whenused as collateral for nonpurpose credit in thenonsecurities credit account. These instrumentscurrently have no loan value when used in a marginaccount.

29 The arbitrage account was formerly found in§ 220.7 of Regulation T.

30 This provision was formerly found in§ 220.11(a)(5) of Regulation T. ‘‘Prime brokerage’’ isan arrangement involving a customer and at leasttwo broker-dealers, one of whom is the ‘‘primebroker.’’ Transactions on behalf of the customer areeffected by the non-prime broker-dealer (known asan ‘‘executing broker’’) and immediately sent to theprime broker. The prime broker enforces RegulationT vis-a-vis the customer for all transactions,wherever executed. The broker-dealer creditaccount is used by the executing broker to recordthe customers transactions because recordkeepingrequirements are less onerous than if thetransaction were recorded in a cash or marginaccount. The new good faith account will eliminatethe need to record these customer transactions inthe broker-dealer credit account.

31 Customers who are broker-dealers will be ableto have a fourth possible account if they takeadvantage of the broker-dealer credit account.

32 The Board is not modifying the scope oftransactions that may be effected as ‘‘bona fidearbitrage.’’ One commenter suggested permittingmargin-free arbitrage that is not based on locking ina profit from a current disparity in the prices of thetwo securities, and lesser or no margin ontransactions that would qualify as arbitrage if theyhad been effected simultaneously. The Board is notadopting these two suggestions, as they do notcomport with the underlying policy of the arbitrageaccount of allowing special credit for transactionsthat perform a market function by eliminating real-time disparities in pricing between identical orclosely related securities. 33 Section 220.1(b) of Regulation T.

good faith loan credit for thesesecurities as a lender extending goodfaith credit may consider factors otherthan the immediate liquidation value ofthe collateral.

c. Money market and other financialinstruments: In commenting on theBoard’s proposal to grant good faith loanvalue to non-equity securities, manycommenters sought good faith loanvalue for money market and otherfinancial instruments such as bankersacceptances, certificates of deposit, andcommercial paper when used in amargin account.28 In effect, commentersargued that broker-dealers should beable to consider the collateral value ofthese financial instruments in extendinggood faith credit on non-equitysecurities. The Board believes section 7of the ’34 Act permits the extension ofunsecured purpose credit if the Boardconcludes that such credit is not for thepurpose of evading or circumventing itsrules regarding credit collateralized bysecurities. This reasoning also applies topurpose credit secured by collateral thatmay not meet the definition of a‘‘security’’ in the ’34 Act. The Boardbelieves that allowing good faith loanvalue for all assets other than equitysecurities in the new good faith accountdoes not evade or circumvent its rulesrequiring good faith margin fortransactions involving non-equitysecurities. The Board therefore isexpressly allowing the inclusion of suchassets in the good faith accountdescribed below.

d. Merging non-equity account intoother accounts: The Board soughtcomment on merging the non-equityaccount into the government securitiesaccount (former § 220.6) and/or thenonsecurities credit account (former§ 220.9). Several commenters supportedmerging the proposed non-equityaccount into the government securitiesaccount. One commenter opposedmerging the new account into anyexisting account because it believestransactions in the proposed non-equityaccount should be subject to arequirement for timely payment, arequirement not imposed for the othertwo accounts suggested by the Board. Asecond commenter opposed allowingpurpose and non-purpose credit in thesame account, although anothercommenter noted that purpose andnonpurpose credit could be segregatedwithin the account.

In order to provide maximumflexibility, the Board is merging all threeaccounts for purposes of Regulation T.The new account will be called the‘‘good faith account’’ and will bedescribed in § 220.6 of the revisedRegulation T. Creditors may keepseparate records for each type of creditextended within the account. Inaddition, the Board is amendingRegulation T to allow other customertransactions for which the Board doesnot specify margin or paymentrequirements to be effected in the goodfaith account. These include alltransactions currently effected in thearbitrage account 29 and thosetransactions effected in the broker-dealer credit account pursuant to a‘‘prime brokerage’’ arrangement.30 Thismerger of accounts will leave mostcustomers with three possible accounts:a cash account, a margin account (withthe possibility of a linked specialmemorandum account) and a good faithaccount.31 The good faith account couldbe used for transactions involvingsecurities entitled to good faith margin(including the borrowing and lendingthereof), as well as nonpurpose credit,bona fide arbitrage,32 and prime brokertransactions. Rules of the SROs andindividual brokerage firms may requireseparation of specific types of creditwithin the new account for their ownadministrative or regulatory purposes,but this would not be required byRegulation T. All credit extended by a

broker-dealer to a non-broker-dealercustomer that is either subject to goodfaith margin or not specifically subjectto any Regulation T margin requirementcould be recorded in the new account.Transactions formerly effected in themargin account could continue to beeffected there, and the restrictionscontained in the margin account, suchas the requirement for timely deposit ofpayment or margin, would continue toapply to transactions conducted in thataccount.

3. Portfolio MarginingRegulation T prescribes margin

requirements for each security held in amargin account. Certain positionsinvolving more than one security, suchas a long position in a convertible bondcoupled with a short position in theunderlying security, are defined as asingle position and given lower marginrequirements than would be requiredindividually. Any combination ofsecurities not specifically identified inRegulation T must be margined withoutregard to any possible offsettingpositions. The Board noted last year thatcommenters have requested greaterflexibility to engage in cross-margining(using financial futures to offsetsecurities margin requirements) andmore broadly ‘‘portfolio’’ or ‘‘risk-based’’ margining of customer assets.The Board identified several provisionsin Regulation T that are impediments tothe possible adoption of a portfoliomargining system. These include: thedefinition of good faith margin, therequirement that items in one accountnot be considered in meetingrequirements in another account (see§ 220.3(b), ‘‘Separation of accounts’’),and the special memorandum account(SMA).

a. Portfolio margining as analternative to Regulation T: The Boardsought comment on any implementationproblems that might arise with a partialor complete move to portfoliomargining, including the need fordelaying the effective date of any finalrule in order to allow the SROs time toamend their rules. A commentersuggested an amendment to RegulationT that would permit a creditor, in lieuof compliance with Regulation T, tocomply with any portfolio marginingsystem permitted by an SRO under SEC-approved rules. This would not requirea delay between Board action and SROimplementation. The Board is amendingthe scope provision of Regulation T 33 toallow portfolio margining to bedeveloped by the industry and approvedby the SEC as an alternative to


34 Margin is the amount of equity a customer musthave against a given position and the complementof the security’s loan value. A margin requirementof 60 percent for a security is the same as assigningit a loan value of 40 percent. In determining goodfaith margin, a broker-dealer is assigning a ‘‘goodfaith’’ loan value to a specific non-equity security.

35 The Board proposed to modify the currentdefinition to read as follows: ‘‘good faith marginmeans the amount of margin which a creditorwould require in exercising sound creditjudgment.’’

36 An exception is provided for maintaining aspecial memorandum account (SMA) with a marginaccount.

37 The Board allows multiple margin accounts fora single customer under conditions found in§ 220.4(a)(2) of Regulation T. These marginaccounts may be operated with separate SMAs.

38 Stocks that are not traded in the United Statesare subject to Regulation T (although they are notcovered by Regulations G and U) and their marginstatus is discussed in section II.B.2 of theSupplementary Information.

39 Although section 7 of the ’34 Act instructs theBoard to limit the amount of credit that can beextended against nonexempted securities, it doesnot require the Board to make individualizeddeterminations for every security.

Section 7 originally mandated that the Boardprescribe rules with respect to the amount of creditthat may be extended on ‘‘any security (other than

compliance with Regulation T bybroker-dealers.

b. Definition of good faith margin: TheBoard stated that a revised definition ofgood faith margin 34 is a necessaryprerequisite to eventual implementationof a portfolio margining system. TheBoard requested comment on aproposed amendment that wouldmodify the definition of good faithmargin by deleting references to aspecific security and eliminating therequirement that the credit be extendedwithout regard to the customer’s otherassets.35 This change would facilitateportfolio margining on good faith basis.Almost all of the responsivecommenters supported this proposal.One commenter suggested that theBoard determine what type of portfoliomargining systems should be adoptedbefore modifying the definition of goodfaith. The Board believes that broker-dealers will be afforded greaterflexibility by changing the definition ofgood faith at this time while permittingportfolio margining to be developed andimplemented at a later date when agreedupon by the SEC and SROs. The Boardtherefore is adopting a definition of‘‘good faith with respect to margin’’ in§ 220.2 of Regulation T thatsubstantially follows the proposal.

The Board also sought comment onwhether an amended definition of goodfaith should be limited to the proposednon-equity account or made applicablefor all accounts. All of the commentersexpressing an opinion supportedmodifying the definition of good faithfor all accounts. The new definition of‘‘good faith with respect to margin’’ in§ 220.2 of Regulation T will covertransactions recorded in the good faithaccount. The Board is retaining therequirements of the former definition ofgood faith margin for transactionsrecorded in the margin account byadding a new paragraph, ‘‘sound creditjudgment’’ (§ 220.4(b)(8)), to theprovisions concerning the marginaccount. Allowing a broker-dealer todetermine margin requirements bytaking into account the customer’s otherunrelated assets or securities positionsis inconsistent with limiting the loanvalue of equity securities to 50 percentof its current market value. Therefore,

securities entitled to ‘‘good faith’’margin treatment, if used in a marginaccount, must be valued without regardto the customer’s other assets andsecurities positions held in connectionwith unrelated transactions.

c. Separation of accounts: Section220.3(b) of Regulation T, ‘‘Separation ofaccounts,’’ generally provides thatrequirements for an account may not bemet by considering items in any otheraccount.36 Consistent with its action lastyear to allow financial futures to servein lieu of margin for securities optionspursuant to SRO rules, the Boardproposed to modify the separation ofaccounts provision to allowcommodities and foreign exchangepositions in the nonsecurities creditaccount to be considered in calculatingmargin for any securities transaction inthe proposed good faith account fornon-equity securities transactions or themargin account for any securitiestransaction. Responsive commenterssupported the Board’s proposal. TheBoard is adopting the amendment to§ 220.3(b) of Regulation T as proposed.

The Board also invited comment onwhether it should modify further theseparation of accounts provision in§ 220.3(b) of Regulation T to facilitateportfolio margining. Severalcommenters pointed out that theseparation of accounts provision willhave to be relaxed if portfolio marginingis made part of Regulation T. Onecommenter supported completeelimination of the separation ofaccounts provision, while two othercommenters did not believe broker-dealers should be required to linkaccounts, but should be permitted to doso if they wish. The Board is not takingany additional action with respect to§ 220.3(b) of Regulation T at this time,as the development of portfoliomargining systems can beaccommodated as an alternative tocompliance with the account-basedsystem contained within Regulation T,as is provided in § 220.1(b)(3)(i) of therevised regulation. Further, the Boardnotes that the reduction in the numberof customer accounts resulting fromcombining the proposed good faithaccount with the arbitrage, governmentsecurities, nonsecurities credit andprime brokerage portion of the broker-dealer credit account will result infewer situations in which the separationof accounts provision of Regulation Twill apply.

d. Retention of the specialmemorandum account: Section 220.5 of

Regulation T provides that a broker-dealer may maintain a specialmemorandum account (SMA) for acustomer in conjunction with thecustomer’s margin account and use theSMA to hold customer moneys notrequired to be maintained in the marginaccount. The Board sought comment oneliminating the SMA in conjunctionwith adoption of a portfolio marginingsystem. Several commenters expressedsupport for retaining the SMA and onecommenter noted that the SMA could berecreated by use of the cash account,which it believes would be lessefficient. This commenter also pointedout that the concept of the SMA wouldnot be necessary under a portfoliomargining system because initial andmaintenance margin requirementswould be the same. Another commenterwanted broker-dealers to be able toestablish multiple margin accounts forthe same person in cases other thanthose identified in Regulation T 37 andoperate separate SMAs for each account.

The Board is not making any changesto the SMA at this time. The SMA willcontinue to be available for use inconjunction with a margin account, butwill not be available for use inconjunction with a good faith account.The concept of locking in ‘‘buyingpower’’ from the appreciated value ofsecurities held in an account or moniesnot required by Regulation T isinconsistent with the revised definitionof ‘‘good faith with respect to margin’’which is based on the creditor’sjudgment of the customer’screditworthiness and collateral at agiven time. The issue of using an SMAin connection with adoption of portfoliomargining systems may be addressed bythe SEC, SROs and securities industry.

B. Equity Securities and Options

1. Domestic StocksPrior to the adoption of today’s

amendments, the following UnitedStates traded stocks 38 were subject tothe Board’s 50 percent marginrequirement: 39 (1) Stocks traded on a


an exempted security) registered on a nationalsecurities exchange.’’ The Board originallysubjected all securities registered on a nationalsecurities exchange to the same marginrequirement. It later established different marginrequirements for convertible and nonconvertibledebt securities, but at no time denied loan value(i.e., required 100 percent margin) to exchange-listed securities (with the exception of options).

In 1968, Congress amended section 7 of the ’34Act to delete the reference to exchange listedsecurities so that the Board is now instructed toprescribe rules with respect to the amount of creditthat may be extended on ‘‘any security (other thanan exempted security).’’ The Board chose toimplement this authority to establish marginrequirements for securities not traded on a nationalsecurities exchange by subjecting every over-the-counter stock to a set of Board-established criteriaand publishing a list of those OTC securities whichmeet these criteria. However, in 1983 the Boarddeferred to the listing requirements of Nasdaq’sNational Market tier as an additional method ofqualifying as a margin security. Thereafter,domestic stocks that were not listed on a nationalsecurities exchange qualified for margin treatmenteither by being listed on Nasdaq’s National Markettier or by appearing on the Board’s List ofMarginable OTC Stocks after meeting the Board’scriteria formerly found in § 220.17 of Regulation T.

40 Lenders other than broker-dealers and banksare responsible for applying Federal Reserve marginrequirements only after they have extended marginstock secured credit in an amount that surpassesone of two dollar thresholds: $200,000 in creditextended in one calendar quarter or $500,000 incredit outstanding at any time.

41 17 CFR 240.15c3–1, ‘‘Net capital requirementsfor brokers or dealers.’’

42 The SmallCap tier of the Nasdaq Stock Marketcontains over 1800 stocks, of which approximately442 are currently marginable at broker-dealers.

43 Although the term ‘‘national securitiesexchange’’ is not defined in the Board’s marginregulations or section 3(a) of the ’34 Act (whenceterms are incorporated by reference into the Board’smargin regulations), the Board has alwaysunderstood the term to mean a securities exchangeregistered with the SEC under section 6 of the ’34Act (‘‘National securities exchanges,’’ 15 U.S.C.78f). In a separate document published elsewherein today’s Federal Register, the Board is requestingcomment on whether it should propose toincorporate this definition into its marginregulations.

44 The Board definition of OTC margin stock inthe second (definitional) section of Regulations G,T and U referred to stock ‘‘that the Board hasdetermined has the degree of national investorinterest, the depth and breadth of market, theavailability of information respecting the securityand its issuer, and the character and permanence ofthe issuer to warrant being treated like an equitysecurity traded on a national securities exchange.’’

45 SEC approval was received on August 22, 1997.

46 The definition of margin security formerlyincluded ‘‘any OTC security designated as qualifiedfor trading in the national market system under adesignation plan approved by the Securities andExchange Commission (NMS security)’’ as well as‘‘any OTC margin stock.’’ The former referred toNasdaq listed stocks trading in the National Markettier, while the latter referred to those Nasdaq listedstocks trading in the SmallCap tier that the Boardidentified on a quarterly basis as meeting therequirements found in § 207.6 of Regulation G,§ 220.17 of Regulation T, and § 221.7 of RegulationU. These two paragraphs have been replaced witha reference to ‘‘any security listed on the NasdaqStock Market.’’

47 For a discussion of the effect of the eliminationof the OTC List for lenders other than broker-dealers, see section III. A. 1. In the SupplementaryInformation.

48 17 CFR 240.15c3–1.49 See, 58 FR 44310; August 20, 1993.

national securities exchange, (2) stocksin the National Market tier of theNasdaq Stock Market (‘‘NMS’’securities), and (3) stocks in the SmallCapitalization (‘‘SmallCap’’ securities)tier of the Nasdaq Stock Market that areidentified by the Board as ‘‘OTC marginstocks.’’ These stocks were subject to thesame margin requirements regardless ofwhether the lender is a broker-dealer,bank, or other lender.40

In its request for comment issued lastyear, the Board noted that although thedefinition and treatment of domesticmargin stocks is currently the same inRegulations G, T and U, nonmarginstocks are treated differently at broker-dealers (where they have no loan value)than at banks and other lenders (wherethe Board’s margin rules do not limittheir value). The Board sought commenton the possibility of expanding thetypes of securities with loan value atbroker-dealers by amending thedefinition of margin security in § 220.2of Regulation T to cover all domesticequity securities that have a ‘‘readymarket’’ for purposes of the SEC’s netcapital rule.41 This would cover allNasdaq SmallCap stocks 42 andthousands of additional over-the-counter (‘‘OTC’’) stocks not traded onNasdaq. In light of the disparatetreatment of nonmargin stock at broker-

dealers versus other lenders, the Boardalso sought comment on the appropriatedefinition of margin stock underRegulations G and U and on possiblesolutions to the current structure of itsmargin regulations that results in anincrease in burden for lenders otherthan broker-dealers whenever burden isreduced for broker-dealers. The Boardsuggested its regulations might beamended to cover more securities forbroker-dealers and fewer securities forbanks and other lenders.

The proposal to make all domestic‘‘ready market’’ stocks marginable underRegulation T was supported by fourcommenters and opposed by fourcommenters, while another commenterstated its belief that further clarificationis needed before such an amendmentcould be adopted. Three commenterssuggested expanding the definition ofOTC margin stock at least to cover allstocks listed on the Nasdaq StockMarket.

Regulation T has always included allsecurities (other than options) registeredon any national securities exchange asmargin securities.43 In allowing loanvalue for certain over-the-countersecurities, the Board has attemptedthrough its criteria to ensure similarlevels of liquidity and transparency.44

The NASD has recently raised listingrequirements for both the NationalMarket and SmallCap tiers of theNasdaq Stock Market.45 The minimumstandards for listing on Nasdaq (i.e., theSmallCap tier) generally equal or exceedthose of the American, Boston, Chicago,Pacific, and Philadelphia StockExchanges. The Board believes thatNasdaq SmallCap issues, which meet orexceed many national securitiesexchange requirements, should not bedenied margin status solely becausethey are not traded on an ‘‘exchange.’’Therefore the Board is including allNasdaq listed issues in its definition of

margin security.46 The Board’s quarterlyOTC List will no longer be necessary forbroker-dealers because the Board willno longer choose which Nasdaq stocksare marginable, but will instead rely onNasdaq listing standards to the sameextent it relies on the listing standardsof U.S. securities exchanges.

SEC staff have asked for a delay in theeffective date of the amendment giving50 percent loan value to all Nasdaqsecurities to address possible salespractice issues. The Board is delayingthe effectiveness of this provision untilJanuary 1, 1999 and will ceasepublication of its quarterly OTC List forU.S. traded securities after publicationof the November 1998 list.47 The Boardmay revisit the issue of allowing crediton other equity securities at a later date.

2. Foreign StocksThe Board has been identifying those

foreign equity securities that are eligiblefor margin at broker-dealers since 1990by publishing a List of Foreign MarginStocks (‘‘Foreign List’’) on a quarterlybasis. As in the case of OTC marginstocks, the Board has based its decisionson criteria aimed at ensuring liquidityand price transparency for all marginsecurities. Last year, the Board amendedits criteria for foreign margin stocks toencompass foreign stocks deemed tohave a ‘‘ready market’’ under the SEC’snet capital rule.48 This action allowedthe inclusion of hundreds of additionalforeign stocks on the Foreign List, basedon a ‘‘no action’’ position from the SECthat effectively treats all stocks on theFinancial Times/Standard & Poor’sWorld Actuaries Indices (‘‘FT/S&PIndices’’) as having a ‘‘ready market’’ forcapital purposes.49 Although there wasconsiderable overlap between stocks onthe FT/S&P Indices and the Board’sForeign List, there were also asignificant number of foreign stocks thatappeared on the Foreign List but not theFT/S&P Indices. The Board soughtcomment on whether it should phase


50 In this regard, the Board is confirming thatbroker-dealers may rely on written ‘‘no action’’ orinterpretative letters issued by the SEC or its staffregarding its ‘‘ready market’’ criteria.

51 12 CFR 220.126 and 12 CFR 221.123, reprintedin the Federal Reserve Regulatory Service at 5–488.

52 American style options are exercisable on anybusiness day until expiration. European styleoptions may be exercised only at expiration.

53 See Section 220.1(b)(3)(i) of the revisedRegulation T.

54 See e.g., §§ 220.4(b)(9) and 220.12(b)(6) of theformer Regulation T.

55 See Section 220.1(b)(3)(iv) of the revisedRegulation T.

out its original criteria and Foreign Listand rely exclusively on the SEC’s‘‘ready market’’ test.

Most commenters opposed the idea ofphasing out the Board’s originaleligibility requirements for foreignmargin stocks in favor of reliance on theFT/S&P Indices or the SEC’s ‘‘readymarket’’ concept because they did notwant to eliminate the marginability ofstocks that appear on the Board’sForeign List but that may not meet theother tests. The Board therefore isretaining its Foreign List to identifythose foreign stocks that have beenfound to meet the Board’s originaleligibility and continued listingrequirements and amending thedefinition of foreign margin stock in§ 220.2 of Regulation T to include bothsecurities on the Board’s Foreign Listand those deemed to have a ‘‘readymarket’’ for capital purposes, asdetermined by the SEC. This will allowa stock appearing on the FT/S&P Indicesto qualify as a margin security withoutthe need to be included on the Board’sForeign List, a request made by severalcommenters. Several other commentersalso requested the ability to have broker-dealers make their own determinationthat a specific foreign stock has a ‘‘readymarket’’ and should therefore be amargin security. The Board views theprocess of increasing the coverage of itsdefinition of margin security as anincremental one and believes it isappropriate at this time to limit themargin status of foreign stocks to thosethat either meet the Board’s originalcriteria for foreign margin stock andtherefore appear on the Board’s ForeignList or are deemed by the SEC to havea ‘‘ready market’’ for purposes of theirnet capital rule.50

3. Options: Short Sales and ArbitrageTransactions

When options first began trading on anational securities exchange in 1973,the Board issued an interpretationconcluding that options may not beconsidered securities ‘‘exchangeable orconvertible into other securities, within90 calendar days, without restrictionother than the payment of money.’’ 51

The quoted language appears in thebona fide arbitrage provision of the goodfaith account (§ 220.6(b) of Regulation T,formerly the arbitrage account in§ 220.7) and in the Supplement(§ 220.12 of Regulation T, formerly§ 220.18) under the margin required for

short sales. The effect of theinterpretation was to preclude thepossibility of effecting ‘‘bona fidearbitrage’’ (which requires no marginunder Regulation T) between optionsand their underlying securities and topreclude the use of an option in lieu ofthe 50 percent margin required for shortsales in addition to the short saleproceeds. Last year, the Board proposedto rescind the 1973 interpretation. Amajority of commenters supported thisproposal, although the TreasuryDepartment commented that this mayhave merit for certain options but ispremature until an approach is morefully developed.

The Board is rescinding itsinterpretation that options are notconvertible securities and amending theSupplement of Regulation T to allow alisted call option to serve as partialmargin for short sales of the underlyingsecurity. To ensure that a call optionadequately covers a customer’sobligation in a short sale, theSupplement of Regulation T requiresthat a call option serving in lieu of partof the required margin is an Americanstyle option 52 issued by a registeredclearing corporation and traded on anational securities exchange with anexercise (strike) price that is not greaterthan the price at which the underlyingsecurity was sold short. This will ensurethat the short sale proceeds and optioncan be used to cover the short positionin the underlying security if necessary.In addition, rescission of the Boardinterpretation will allow ‘‘bona fide’’arbitrage between options and theirunderlying securities to be effectedwithout further regulatory changes inthe good faith account on the same basisas other convertible securities such asconvertible bonds.

In response to the Board’s request forcomment on using long calls to offsetsome of the required margin for a shortsale, several commenters also suggestedthat the Board should not requiremargin for the long purchase of asecurity if the customer has a long puton that security. The Board believes theuse of a put option in lieu of margin forthe purchase of a security may beappropriate in the context of a futureportfolio margining system, which ispermitted as an alternative to RegulationT.53

When the Board adopted amendmentsto Regulation T in 1996, it made severalprovisions of the regulation concerning

options effective only until June 1,1997.54 These provisions have beenreplaced with SRO rules and the Boardis deleting the provisions from therevised Regulation T.

C. Miscellaneous Issues

1. Foreign Issuesa. Credit by foreign branches of U.S.

broker-dealers: The Board proposed toamend Regulation T to exempt creditextended by foreign branches of U.S.broker-dealers if the credit is extendedto foreign persons against foreignsecurities. This proposal was supportedby all responsive commenters, althoughone commenter expressed concernabout foreign securities whose principaltrading market is in the United Statesand another commenter suggestedexempting all credit extended by U.S.broker-dealers outside the United States.The Board is adopting its proposal andamending the scope section ofRegulation T to exclude financialrelations between a foreign branch of aU.S. broker-dealer and a foreign personinvolving foreign securities. 55 This willremove restrictions from foreignbranches of U.S. broker-dealers that arenot imposed on foreign branches of U.S.banks or foreign affiliates of U.S.lenders.

b. Foreign currency: The Board ismoving former § 220.4(b)(8) ofRegulation T, which permits a creditorto extend credit in a margin accountdenominated in any freely convertibleforeign currency, to the generalprovisions section of the regulation(specifically, § 220.3(i)). This will makeclear that creditors may also extendcredit denominated in any freelyconvertible currency in the good faithaccount and the broker-dealer creditaccount.

2. Technical AmendmentsThere were no negative comments on

the first two technical amendmentsdescribed below, which were proposedby the Board in April 1996. The thirdamendment is also technical in natureand was suggested by a commenter.

a. Definition of covered optiontransaction: The Board proposed toamend the definition of covered optiontransaction in § 220.2 of Regulation T toshorten the list of permissible optionstransactions in the cash account byreferring to SRO rules generically. Theserules were most recently amended inJune of this year and the Board’s actionshould result in a shorter and simpler


56 12 CFR 220.119, reprinted in the FRRS at 5–490.

57 12 CFR 220.131, reprinted in the FRRS at 5–470.1.

58 As proposed in 1996, the Board is moving thearranging provision from former § 220.13 ofRegulation T to the general provisions found in§ 220.3.

59 Approximately 442 SmallCap issues qualify as‘‘OTC margin stock’’ under the Board’s criteriaformerly found in § 221.7 of Regulation U. If today’samendments were adopted with an immediateeffective date, these stocks would no longer besubject to a 50 percent loan value limitation whenused as collateral for purpose loans. The number ofstocks that will actually be affected when the newregulation goes into effect is likely to be somewhatsmaller once the new Nasdaq listing requirementsare fully phased in.

Regulation T without having asubstantive effect for broker-dealers.The Board is adopting the amendmentas proposed.

b. Definition of margin equitysecurity: The Board proposed to add adefinition of the term margin equitysecurity, which appears in theSupplement to Regulation T. No adversecomments were received. Thedefinition, which is being adopted asproposed, states that a margin equitysecurity means a margin security (asdefined in Regulation T) that is anequity security (as defined in section3(a) of the ’34 Act, whence definitionsare incorporated into the Board’s marginregulations if not otherwise defined bythe Board).

c. Definition of current market value:Regulations G and U each contained adefinition of the phrase ‘‘current marketvalue’’ used to determine the loan valueof margin securities. Regulation T didnot contain a definition of currentmarket value but addressed the sameissue in former § 220.3(g), ‘‘Valuingsecurities.’’ One commenter noted thatwhile Regulation T contains severalreferences to a security’s ‘‘currentmarket value,’’ it does not contain adefinition of this term as do RegulationsG and U. The Board is adding adefinition of current market value to§ 220.2 of Regulation T that is theequivalent of former § 220.3(g) and isdeleting former § 220.3(g) fromRegulation T. This action will have nosubstantive effect, but will make thestructure of the Board’s marginregulations more consistent.

3. Cash Account: 90-Day FreezeCustomers who do not have sufficient

funds in their cash account to pay for asecurity on trade date must agree to payfor the security before selling it.According to § 220.8(c)(1) of RegulationT, if a nonexempted security ‘‘is sold ordelivered to another broker or dealerwithout having been previously paid forin full by the customer, the privilege ofdelaying payment beyond the trade dateshall be withdrawn for 90 calendardays.’’ This is known as a ‘‘90-dayfreeze.’’ However, § 220.8(c)(2) says thefreeze ‘‘shall not apply’’ if full paymentis received within the required paymentperiod and the proceeds from the saleare not withdrawn before payment isreceived. In response to requests forclarification from commenters, theBoard is of the view that when acustomer sells or delivers out securitiesthat have not been paid for, the 90-dayfreeze contained in § 220.8(c) ofRegulation T need not be applied untilthe permissible payment period haspassed.

4. Board InterpretationsThe Board is reviewing its

interpretations of Regulation T as part ofits periodic review. In 1996, the Boarddeleted eleven interpretations that hadeither been incorporated directly intothe regulation or had become moot dueto subsequent amendments. Asdiscussed above in section II.B.3, theBoard is deleting an additionalinterpretation today that prevented theuse of options as margin for short salesof the underlying security andprevented the use of the bona fidearbitrage provision for transactionsinvolving options and their underlyingsecurities.

In an advance notice of proposedrulemaking published elsewhere intoday’s Federal Register, the Board isalso specifically soliciting comment onwhether it should propose amendmentsto incorporate and broaden twoadditional interpretations: a 1962interpretation 56 regarding the retirementof stock by an issuer and a 1990interpretation 57 regarding theapplication of the arranging provision 58

to broker-dealer activities under SECRule 144A.

III. Regulations G and U

A. Loan Value

1. Over-the-Counter StocksPrior to the adoption of today’s

amendments, all of the Board’ssecurities credit regulations permitted50 percent loan value for: (1) Stockstraded on a national securitiesexchange, (2) stocks in the NationalMarket tier of the Nasdaq Stock Market(‘‘NMS’’ securities), and (3) stocks in theSmall Capitalization (‘‘SmallCap’’securities) tier of the Nasdaq StockMarket that are identified by the Boardas ‘‘OTC margin stocks.’’

In its request for comment issued lastyear, the Board noted that although thedefinition and treatment of domesticmargin stocks is currently the same inRegulations G, T and U, nonmarginstocks are treated differently at broker-dealers (where they have no loan value)than at banks and other lenders (wherethe Board’s margin rules do not limittheir value). In light of the disparatetreatment of nonmargin stock at broker-dealers versus other lenders, the Boardsought comment on the appropriatedefinition of margin stock under

Regulations G and U and on possiblesolutions to the current structure of itsmargin regulations. This structureresults in an increase in burden forlenders other than broker-dealerswhenever burden is reduced for broker-dealers if the definition of margin stockin Regulations G and U is expandedwhenever the definition of marginsecurity is expanded in Regulation T.The Board suggested its regulationsmight be amended to cover moresecurities for broker-dealers and fewersecurities for banks and other lenders.

Although three commenters arguedfor uniform coverage of equity securitiesunder the Board’s margin regulations,most commenters opposed increasingthe coverage of Regulations G and U ifRegulation T is amended to permitbroker-dealers to extend credit againstmore securities. Because banks andother lenders already have experience invaluing smaller issues, the Boardbelieves that definition of margin stockin Regulation U (which incorporatesRegulation G) can be amended toexclude stocks trading in the SmallCaptier of the Nasdaq Stock Market.59 TheBoard’s quarterly OTC List will nolonger be required for banks and othernonbroker lenders because the Boardwill no longer choose which Nasdaqstocks qualify as a margin stock forpurposes of Regulation U. These lenderscan determine whether an OTC stock isin Nasdaq’s National Market tier byconsulting a newspaper, contacting theNASD or SEC, or checking the NASD’sweb site at http://www.nasdaq.com. TheBoard is therefore deleting therequirements for inclusion on the OTCList formerly found in § 221.7 ofRegulation U, the definition of OTCmargin stock in § 221.2 of Regulation U,and the provision concerning ‘‘lack ofnotice of NMS security designation’’formerly found in § 221.3(j) ofRegulation U.

2. Options

Options, whether traded on anexchange (also known as listed options)or over-the-counter (also known asunlisted options), have traditionally hadno loan value under the Board’s margin


60 Listed options were the only securities deniedloan value by the Board under all of its securitiescredit regulations, in spite of the fact that theyqualify as margin stock because they are listed ona national securities exchange. Although unlistedoptions do not qualify as margin stock and mostnonmargin stock has good faith loan value underRegulation U, unlisted options have no loan valueif the loan is a purpose credit secured at least inpart by margin stock. Of course, Regulations G andU by their terms would not cover a loan that wassolely secured by an unlisted option.

61 The Regulation T proposal for broker-dealerswas part of Docket No. R–0772 and appeared at 60FR 33763 (June 29, 1995). The Regulation Uproposal for banks was part of Docket No. R–0905and appeared at 60 FR 63660 (December 12, 1995).

62 The final action on Regulation T and revisedproposal for Regulations G and U appeared at 61 FR20385 (May 6, 1996).

63 Section 221.2 of Regulation U excludes fromthe definition of ‘‘margin stock’’ any security issuedby an investment company registered under section8 of the Investment Company Act of 1940 ‘‘whichhas at least 95 percent of its assets continuouslyinvested in exempted securities.’’

64 Regulation T was amended last year to providesimilar treatment for money market mutual funds.The Board is using the same definition used at thattime, i.e., a security issued by a registeredinvestment company that is considered a moneymarket fund under SEC Rule 2a–7 (17 CFR 270.2a–7, ‘‘Money market funds’’).

65 In response to banks who argued that they wererelying on the sale proceeds of the unpaid-forsecurity, Board staff opined that reliance on saleproceeds is tantamount to reliance on the securityitself.

regulations. 60 In 1995, the Boardproposed giving listed options 50percent loan value at broker-dealers(under Regulation T) and banks (underRegulation U).61 Based on commentsreceived in connection with theproposed amendments to Regulation T,the Board decided in 1996 toincorporate rules of the optionsexchanges (also known as self-regulatory organizations or SROs)regarding options loan value intoRegulation T instead of the 50 percentrequirement it had proposed. At thesame time, the Board proposed toamend Regulations G and U to allowthese lenders to extend credit againstlisted options to the extent permitted bythe rules of the options exchanges. TheBoard sought comment on thepracticality of requiring banks andothers to comply with rules of SROs ofwhich they are not members.62 Fivecommenters supported uniform marginrequirements for all lenders, while fourother commenters opposed makinglenders who are not broker-dealers, andtherefore not members of a securitiesSRO, comply with SRO rules. The SROmargin rules for options are complexand the Board does not believe it ispractical to require banks to complywith the rules of national securitiesexchanges of which they are notmembers, nor to expect bank examinersto be familiar with these rules inverifying compliance with Regulation U.The Board is therefore adopting theoriginal 1995 Regulation U proposal andamending the Supplement to RegulationU to allow lenders other than broker-dealers to extend 50 percent loan valueagainst listed options. Unlisted optionscontinue to have no loan value whenused as part of a mixed-collateral loan.However, banks and other lenders canextend credit against unlisted options ifthe loan is not subject to Regulation U.The Board is requesting comment on thefuture status of unlisted options underRegulation U in an advance notice of

proposed rulemaking publishedelsewhere in today’s Federal Register.

3. Money Market Mutual FundsAlthough Regulation U treats most

mutual funds as margin stock subject to50 percent loan value, it has alwaysallowed good faith loan value formutual funds whose portfolios consistof exempted securities.63 In 1995, theBoard proposed to extend this treatmentto all money market mutual funds underboth Regulations T and U. Allresponsive commenters supported thisproposal, which was adopted forRegulation T purposes in 1996. TheBoard is therefore amending thedefinition of margin stock in RegulationU to exclude money market mutualfunds. This will have the effect ofpermitting good faith loan value forthese securities when they are used ascollateral for a purpose loan that issecured in part by margin stock.64

B. Financing of Securities Purchased ona DVP Basis

Banks may act as custodians for theircustomers’ securities. These securitiesare often purchased at registered broker-dealers and delivered to the bank on adelivery-versus-payment (DVP) basis. Inthe late 1980s and early 1990s, FederalReserve System examiners and staff ofthe SEC alleged that certain banks wereaccepting the delivery of customermargin securities without having thecustomer’s full payment on hand,thereby extending purpose credit inexcess of the Regulation U marginrequirements. In many cases, paymentfor the customer’s purchase was madein reliance on the proceeds of the saleof the same security.65

The purchase and same-day sale of asecurity without independent funds topay for the purchase is prohibited at abroker-dealer if effected in a cashaccount (where it is known as ‘‘free-riding’’), because the customer isobtaining intraday credit from thebroker-dealer to pay for the security soit can own the security in order to sell

it. This practice, however, is notprohibited at a broker-dealer if effectedin a margin account, because the broker-dealer has entered into a creditrelationship with the customer beforeextending credit to cover the purchase.In order to allow banks to extend creditin a manner similar to broker-dealersusing a margin account, the Boardproposed to amend the existingprovision in § 221.3(c) of Regulation Ufor revolving credit agreements toinclude such credit. The Board stated itsbelief that applying the revolving creditprovision would ensure that banksfinancing customer securitiestransactions establish credit limits fortheir customers, including limits onintraday trading.

Ten commenters, including fiveReserve Banks, supported the Board’sproposal. Two bank trade associationsopposed the proposal. The tradeassociations made similar arguments.Each acknowledged that in providingcustodial services banks sometimesextend credit to pay for customersecurities and this credit may beintraday or extend for a longer period oftime. The trade associations stated thatthis credit is extended by a bank in itsown discretion and not pursuant to anagreement with their customer. Thetrade associations stated banks do nothave written agreements with theircustomers because they do not want tobe required to extend this type of credit.The trade associations stated thatcustodial banks generally have a lienonly on the assets in a customer’saccount, and they believed it would beinconsistent for a bank to demand thata customer post additional assets tocover overdraft extensions of credit. Thetrade associations were also concernedthat the Board’s proposal might be seenas superseding staff opinions in thisarea permitting some overdrafts whenbanks carefully monitor their customer’stransactions.

As an alternative to the Board’sproposal to cover extensions of creditused to finance a customer’s purchase ofsecurities on a DVP basis under theprovision for revolving lines of credit,the trade associations suggestedexempting these transactions byamending § 221.6(f) of Regulation U.Section 221.6(f) provides that a bankmay extend and maintain purpose creditwithout regard to the requirements ofRegulation U if the credit is to‘‘temporarily finance the purchase orsale of securities for prompt delivery, ifthe credit is to be repaid in the ordinarycourse of business upon completion ofthe transaction.’’ The Board proposed toamend this section to restore languageinadvertently deleted in 1983 that


66 The mixed-collateral loan provision does notapply to nonpurpose loans.

makes clear the exception cannot beused to finance the purchase ofsecurities at a broker-dealer (see, e.g.staff opinions at FRRS 5–884.68 and 5–942.2). The trade associations suggestedthat if the Board’s primary concern inthis area is preventing banks fromaiding and abetting free-ridingviolations by their customers, § 221.6(f)of Regulation U should be amended notby restating that it cannot be used tofinance transactions effected at a broker-dealer, but by stating that the exceptionis not available if the bank ‘‘knowingly’’relies on the proceeds of a security’ssale as a source of payment for thesecurity.

The Board is amending the revolvingcredit agreement provision in§ 221.3(c)(2)(iii)(B) of Regulation U asproposed to require a lender to call foradditional collateral when the lender isrelying on margin stock which isinsufficient to cover an extension ofpurpose credit. This will clarify that alender who has an agreement with itscustomer covering credit extended inconnection with custodial or clearingservices is properly secured or trulyunsecured and should therefore be freefrom allegations of aiding and abettingcustomer free-riding violations. TheBoard is also readopting the languageinadvertently dropped from § 221.6(f) ofRegulation U, as proposed. Theexemption in § 221.6(f) of Regulation Uhas never been available to cover thesame-day purchase and sale of asecurity bought in a cash account at abroker-dealer, and the restoration of theformer language will eliminate anyambiguity. Finally, the Board notes thatits action is not intended to supersedethe staff opinions in this area.

In the advance notice of proposedrulemaking published elsewhere intoday’s Federal Register, the Board issoliciting comment on proposals toaddress the supervisory and creditimplications of free-riding.

C. Mixed Collateral LoansRegulation U does not apply to

extensions of securities credit that arenot secured at least in part by marginstock. Purpose loans secured in part bymargin stock and in part by othercollateral are known as ‘‘mixed-collateral’’ loans and Regulation U hasalways required some kind of separationfor these types of loans.66 Section221.3(e) of Regulation U provided thatmixed collateral loans ‘‘shall be treatedas two separate loans.’’ This wasintended to prevent a bank frominflating the value of nonmargin stock

collateral to make up for the 50 percentlimitation for purpose loans secured bymargin stock.

The provision for mixed collateralloans did not present a problem whenapplied at the time the loancommitment is made, as it merelyrequired a bank to determine the loanvalue of margin stock collateral andthen verify that the other collateral hasa good faith loan value sufficient tomake up the difference between the loanvalue of the margin stock and theamount of credit being extended andallocate the credit secured by eachtranche.

The Board has received a number ofinquiries about the interplay of theprovision for mixed-collateral loans and§ 221.3(f) of Regulation U, which coverswithdrawals and substitution ofcollateral. For example, if the value ofa customer’s nonmargin stock collateralhas increased since a mixed collateralloan was made, but the value of themargin stock has stayed the same, thecustomer cannot withdraw margin stockeven though the overall value of thecollateral has increased, because the‘‘separate’’ loan secured by margin stockdoes not have excess value that wouldpermit its withdrawal. In other words,changes in collateral value in onetranche have no effect on the other.

Noting that the separationrequirement for mixed collateral loansmakes collateral management extremelydifficult, the Board proposed to modifythe provision on mixed-collateral loansso that instead of separating marginstock from all other collateral, a bankwould separate margin stock and otherfinancial instruments such asnonmargin stock, bonds, and cashequivalents. This collateral wouldsecure one loan and nonfinancialinstruments (such as real estate), if any,would be treated as securing a‘‘separate’’ loan. The Board noted thatfinancial instruments generally havereadily available prices and aretherefore less susceptible to beingassigned an inflated value to offset the50 percent loan value limitation formargin stock. The Board also invitedcomment on the continuing need forseparation of financial and nonfinancialcollateral.

Ten commenters supported theBoard’s proposal and no commenterexpressed a preference for maintainingthe status quo. One commentersuggested providing additionalflexibility by amending the regulation toprovide that margin stock and otherfinancial instruments may be treated asa single loan. Three commenterssupported complete elimination of anyseparation requirements.

The Board is deleting the mixedcollateral loan provision in former§ 221.3(e) of Regulation U. Banks willstill be required to make a good faithdetermination that nonmargin stockcollateral, if any, has sufficient goodfaith loan value to make up thedifference between the regulatory loanvalue of margin stock and the amount ofcredit extended for a purpose loan.Although nonfinancial instruments areoften more difficult to value thansecurities, the Board believes therequirement of good faith on the part ofthe lender is sufficient to guard againstcircumvention of the Board’s marginrequirements for equity securities. Withthe elimination of the requirement toseparate purpose loans secured bymargin stock from other purpose loanswill allow a bank to release any type ofcollateral if the overall loan value of thepool of collateral is greater than theamount required under Regulation U.

IV. Regulation XRegulation X (‘‘Borrowers of securities

credit’’) applies the Board’s marginregulations to United States persons andrelated parties who obtain credit outsidethe United States to purchase or carryUnited States securities. Borrowers mustconform the credit they receive with oneof the Board’s other margin regulations,according to the lender involved. Theregulation also applies to borrowerswho obtain credit within the UnitedStates to purchase or carry any securityif the borrower willfully causes thecredit to be extended in contraventionof the Board’s other margin regulations.Both of these provisions refer toRegulation G. The Board is amendingRegulation X to remove the references toRegulation G. Borrowers obtainingcredit outside the United States whowere formerly required to conform theircredit to Regulation G will now berequired to conform their credit toRegulation U as it applies to nonbanklenders.

V. Regulatory Flexibility ActThe amendments being adopted are

intended to accomplish two goals. Asdiscussed in the preamble, some of theamendments have been developed toimplement the National SecuritiesMarkets Improvement Act (Pub. L. 104–290), which reduced the scope of theBoard’s statutory authority for marginregulation. The others are intended tosimplify regulatory requirements andeliminate restrictions currently imposedon broker-dealers, other lenders ofsecurities credit, and their customers.For example, smaller companies whosestock is listed on Nasdaq’s SmallCapitalization market will no longer be


subject to Regulation G registration andreporting requirements if they extendcredit to employees secured bycompany stock. The Board believes theamendments will not have a substantialadverse effect on a significant number ofsmall lenders.

VI. Paperwork Reduction Act

In accordance with the PaperworkReduction Act of 1995 (44 U.S.C. 3506;5 CFR 1320 Appendix A.1), the Boardreviewed the rule under the authoritydelegated to the Board by the Office ofManagement and Budget. The FederalReserve may not conduct or sponsor,and an organization is not required torespond to, an information collectionunless it displays a currently valid OMBcontrol number. The OMB controlnumbers are listed below.

The collections of information thatmay be affected by this rulemaking arefound in 12 CFR 207 and 12 CFR 221.These information collections aremandatory (15 U.S.C. 78g and 78w). Therespondents and recordkeepers are for-profit financial institutions, including

banks and nonbank lenders. The FederalReserve collects the information inorder to identify lenders subject toRegulation G, to verify compliance withRegulation G, and to monitor the size ofthe market for margin credit. Thepurpose statements collect informationon the amount and purpose of the loanssecured by margin stock. The burdenassociated with the FR U–1 and the FRG–3 is recordkeeping burden. Becausethe records would be maintained byrespondents and are not provided to theFederal Reserve, no issue ofconfidentiality under the Freedom ofInformation Act arises. The FR G–2 doesnot contain confidential information.The information in the FR G–1 and theFR G–4 are given confidential treatmentunder the Freedom of Information Act(5 U.S.C. § 552 (b)(4)).

In a separate document publishedelsewhere in today’s Federal Register,the Board is soliciting comment on thedisposition of certain reporting formscurrently used by Regulation G lenders,the FR G–1, FR G–2, and FR G–4, andon further amendments to Regulation U

that would affect the margin credit‘‘purpose statements,’’ the FR G–3 andthe FR U–1. Accordingly, until theBoard has collected and analyzed suchcomments as may be forthcoming, itwill extend for three years, withoutrevision, under delegated authority bythe Office of Management and Budget,the following collections of information:FR G–1 (OMB No. 7100–0011), FR G–2(OMB No. 7100–0011), FR G–3 (OMBNo. 7100–0018), FR G–4 (OMB No.7100–0011), and FR U–1 (OMB No.7100–0115). The Board anticipates thatthese information collections will berevised before the full three-year periodhas ended.

In proposed amendments issued forcomment by the Board in December1995 (Docket R–0905), April 1996(Docket R–0923), and November 1996(Docket R-0944), no commentsspecifically addressing the burdenestimates for these informationcollections were received.

The estimated annual burden forthese information collections issummarized in the table below.

Estimatednumber of re-

spondents

Annual fre-quency

Estimated av-erage hoursper response

Estimated an-nual burden

hours

FR G–1 ............................................................................................................. 81 1 2.50 203FR G–2 ............................................................................................................. 68 1 0.25 17FR G–3 ............................................................................................................. 700 20 0.16 2,240FR G–4 ............................................................................................................. 629 1 2.00 1,258FR U–1 ............................................................................................................. 10,637 212 0.07 157,853

Total ....................................................................................................... ........................ ........................ ........................ 161,571

The Federal Reserve has a continuinginterest in the public’s opinions of ourcollections of information. At any time,comments regarding the burdenestimate, or any other aspect of thiscollection of information, includingsuggestions for reducing the burden,may be sent to: Secretary, Board ofGovernors of the Federal ReserveSystem, 20th and C Streets, N.W.,Washington, DC 20551; and to theOffice of Management and Budget,Paperwork Reduction Projects (7100–0011, 7100–0018, and 7100–0115),Washington, DC 20503.

List of Subjects

12 CFR Part 207

Banks, banking, Credit, FederalReserve System, Reporting andrecordkeeping requirements, Securities.

12 CFR Part 220

Banks, banking, Brokers, Credit,Federal Reserve System, Reporting andrecordkeeping requirements, Securities.

12 CFR Part 221


12 CFR Part 224


12 CFR Part 265

Authority delegations (Governmentagencies), Banks, banking, FederalReserve System.

For the reasons set out in thepreamble, and under the authority of 12U.S.C. 78c, 78g, 78q, and 78w, 12 CFRchapter II is amended as follows:

PART 207—[REMOVED]

1. Part 207 is removed.

PART 220—CREDIT BY BROKERSAND DEALERS (REGULATION T)


Authority: 15 U.S.C. 78c, 78g, 78q, and78w.

3. Sections 220.1 through 220.12 arerevised to read as follows:

§ 220.1 Authority, purpose, and scope.

(a) Authority and purpose. RegulationT (this part) is issued by the Board ofGovernors of the Federal ReserveSystem (the Board) pursuant to theSecurities Exchange Act of 1934 (theAct) (15 U.S.C.78a et seq.). Its principalpurpose is to regulate extensions ofcredit by brokers and dealers; it alsocovers related transactions within theBoard’s authority under the Act. Itimposes, among other obligations,initial margin requirements andpayment rules on certain securitiestransactions.

(b) Scope. (1) This part provides amargin account and four specialpurpose accounts in which to record allfinancial relations between a customerand a creditor. Any transaction notspecifically permitted in a special


purpose account shall be recorded in amargin account.

(2) This part does not preclude anyexchange, national securitiesassociation, or creditor from imposingadditional requirements or taking actionfor its own protection.

(3) This part does not apply to:(i) Financial relations between a

customer and a creditor to the extentthat they comply with a portfoliomargining system under rules approvedor amended by the SEC;

(ii) Credit extended by a creditorbased on a good faith determination thatthe borrower is an exempted borrower;

(iii) Financial relations between acustomer and a broker or dealerregistered only under section 15C of theAct; and

(iv) Financial relations between aforeign branch of a creditor and aforeign person involving foreignsecurities.

§ 220.2 Definitions.The terms used in this part have the

meanings given them in section 3(a) ofthe Act or as defined in this section asfollows:

Affiliated corporation means acorporation of which all the commonstock is owned directly or indirectly bythe firm or general partners andemployees of the firm, or by thecorporation or holders of the controllingstock and employees of the corporation,and the affiliation has been approved bythe creditor’s examining authority.

Cash equivalent means securitiesissued or guaranteed by the UnitedStates or its agencies, negotiable bankcertificates of deposit, bankersacceptances issued by bankinginstitutions in the United States andpayable in the United States, or moneymarket mutual funds.

Covered option transaction means anytransaction involving options orwarrants in which the customer’s risk islimited and all elements of thetransaction are subject tocontemporaneous exercise if:

(1) The amount at risk is held in theaccount in cash, cash equivalents, or viaan escrow receipt; and

(2) The transaction is eligible for thecash account by the rules of theregistered national securities exchangeauthorized to trade the option orwarrant or by the rules of the creditor’sexamining authority in the case of anunregistered option, provided that allsuch rules have been approved oramended by the SEC.

Credit balance means the cashamount due the customer in a marginaccount after debiting amountstransferred to the special memorandumaccount.

Creditor means any broker or dealer(as defined in sections 3(a)(4) and3(a)(5) of the Act), any member of anational securities exchange, or anyperson associated with a broker ordealer (as defined in section 3(a)(18) ofthe Act), except for business entitiescontrolling or under common controlwith the creditor.

Current market value of:(1) A security means:(i) Throughout the day of the

purchase or sale of a security, thesecurity’s total cost of purchase or thenet proceeds of its sale including anycommissions charged; or

(ii) At any other time, the closing saleprice of the security on the precedingbusiness day, as shown by any regularlypublished reporting or quotationservice. If there is no closing sale price,the creditor may use any reasonableestimate of the market value of thesecurity as of the close of business onthe preceding business day.

(2) Any other collateral means a valuedetermined by any reasonable method.

Customer excludes an exemptedborrower and includes:

(1) Any person or persons actingjointly:

(i) To or for whom a creditor extends,arranges, or maintains any credit; or

(ii) Who would be considered acustomer of the creditor according to theordinary usage of the trade;

(2) Any partner in a firm who wouldbe considered a customer of the firmabsent the partnership relationship; and

(3) Any joint venture in which acreditor participates and which wouldbe considered a customer of the creditorif the creditor were not a participant.

Debit balance means the cash amountowed to the creditor in a margin accountafter debiting amounts transferred to thespecial memorandum account.

Delivery against payment, Paymentagainst delivery, or a C.O.D. transactionrefers to an arrangement under which acreditor and a customer agree that thecreditor will deliver to, or accept from,the customer, or the customer’s agent, asecurity against full payment of thepurchase price.

Equity means the total current marketvalue of security positions held in themargin account plus any credit balanceless the debit balance in the marginaccount.

Escrow agreement means anyagreement issued in connection with acall or put option under which a bankor any person designated as a controllocation under paragraph (c) of SECRule 15c3–3 (17 CFR 240.15c3–3(c)),holding the underlying asset or requiredcash or cash equivalents, is obligated todeliver to the creditor (in the case of a

call option) or accept from the creditor(in the case of a put option) theunderlying asset or required cash orcash equivalent against payment of theexercise price upon exercise of the callor put.

Examining authority means:(1) The national securities exchange

or national securities association ofwhich a creditor is a member; or

(2) If a member of more than one self-regulatory organization, the organizationdesignated by the SEC as the examiningauthority for the creditor.

Exempted borrower means a memberof a national securities exchange or aregistered broker or dealer, a substantialportion of whose business consists oftransactions with persons other thanbrokers or dealers, and includes aborrower who:

(1) Maintains at least 1000 activeaccounts on an annual basis for personsother than brokers, dealers, and personsassociated with a broker or dealer;

(2) Earns at least $10 million in grossrevenues on an annual basis fromtransactions with persons other thanbrokers, dealers, and persons associatedwith a broker or dealer; or

(3) Earns at least 10 percent of itsgross revenues on an annual basis fromtransactions with persons other thanbrokers, dealers, and persons associatedwith a broker or dealer.

Exempted securities mutual fundmeans any security issued by aninvestment company registered undersection 8 of the Investment CompanyAct of 1940 (15 U.S.C. 80a-8), providedthe company has at least 95 percent ofits assets continuously invested inexempted securities (as defined insection 3(a)(12) of the Act).

Foreign margin stock means a foreignsecurity that is an equity security that:

(1) Appears on the Board’speriodically published List of ForeignMargin Stocks; or

(2) Is deemed to have a ‘‘readymarket’’ under SEC Rule 15c3–1 (17CFR 240.15c3–1) or a ‘‘no-action’’position issued thereunder.

Foreign person means a person otherthan a United States person as definedin section 7(f) of the Act.

Foreign security means a securityissued in a jurisdiction other than theUnited States.

Good faith with respect to:(1) Margin means the amount of

margin which a creditor would requirein exercising sound credit judgment;

(2) Making a determination oraccepting a statement concerning aborrower means that the creditor is alertto the circumstances surrounding thecredit, and if in possession ofinformation that would cause a prudent


person not to make the determination oraccept the notice or certificationwithout inquiry, investigates and issatisfied that it is correct.

Margin call means a demand by acreditor to a customer for a deposit ofadditional cash or securities toeliminate or reduce a margin deficiencyas required under this part.

Margin deficiency means the amountby which the required margin exceedsthe equity in the margin account.

Margin equity security means amargin security that is an equitysecurity (as defined in section 3(a)(11)of the Act).

Margin excess means the amount bywhich the equity in the margin accountexceeds the required margin. When themargin excess is represented bysecurities, the current value of thesecurities is subject to the percentagesset forth in § 220.12 (the Supplement).

Margin security means:(1) Any security registered or having

unlisted trading privileges on a nationalsecurities exchange;

(2) After January 1, 1999, any securitylisted on the Nasdaq Stock Market;

(3) Any non-equity security;(4) Any security issued by either an

open-end investment company or unitinvestment trust which is registeredunder section 8 of the InvestmentCompany Act of 1940 (15 U.S.C. 80a–8);

(5) Any foreign margin stock;(6 ) Any debt security convertible into

a margin security;(7) Until January 1, 1999, any OTC

margin stock; or(8) Until January 1, 1999, any OTC

security designated as qualified fortrading in the national market systemunder a designation plan approved bythe Securities and ExchangeCommission (NMS security).

Money market mutual fund meansany security issued by an investmentcompany registered under section 8 ofthe Investment Company Act of 1940(15 U.S.C. 80a–8) that is considered amoney market fund under SEC Rule 2a–7 (17 CFR 270.2a–7).

Non-equity security means a securitythat is not an equity security (as definedin section 3(a)(11) of the Act).

Nonexempted security means anysecurity other than an exemptedsecurity (as defined in section 3(a)(12)of the Act).

OTC margin stock means any equitysecurity traded over the counter that theBoard has determined has the degree ofnational investor interest, the depth andbreadth of market, the availability ofinformation respecting the security andits issuer, and the character andpermanence of the issuer to warrantbeing treated like an equity security

treaded on a national securitiesexchange. An OTC stock is notconsidered to be an OTC margin stockunless it appears on the Board’speriodically published list of OTCmargin stocks.

Payment period means the number ofbusiness days in the standard securitiessettlement cycle in the United States, asdefined in paragraph (a) of SEC Rule15c6–1 (17 CFR 240.15c6–1(a)), plustwo business days.

Purpose credit means credit for thepurpose of:

(1) Buying, carrying, or trading insecurities; or

(2) Buying or carrying any part of aninvestment contract security whichshall be deemed credit for the purposeof buying or carrying the entire security.

Short call or short put means a calloption or a put option that is issued,endorsed, or guaranteed in or for anaccount.

(1) A short call that is not cash-settledobligates the customer to sell theunderlying asset at the exercise priceupon receipt of a valid exercise noticeor as otherwise required by the optioncontract.

(2) A short put that is not cash-settledobligates the customer to purchase theunderlying asset at the exercise priceupon receipt of a valid exercise noticeor as otherwise required by the optioncontract.

(3) A short call or a short put that iscash-settled obligates the customer topay the holder of an in the money longput or long call who has, or has beendeemed to have, exercised the optionthe cash difference between the exerciseprice and the current assigned value ofthe option as established by the optioncontract.

Underlying asset means:(1) The security or other asset that

will be delivered upon exercise of anoption; or

(2) In the case of a cash-settled option,the securities or other assets whichcomprise the index or other measurefrom which the option’s value isderived.

§ 220.3 General provisions.(a) Records. The creditor shall

maintain a record for each accountshowing the full details of alltransactions.

(b) Separation of accounts—(1) Ingeneral. The requirements of oneaccount may not be met by consideringitems in any other account. Ifwithdrawals of cash or securities arepermitted under this part, writtenentries shall be made when cash orsecurities are used for purposes ofmeeting requirements in anotheraccount.

(2) Exceptions. Notwithstandingparagraph (b)(1) of this section:

(i) For purposes of calculating therequired margin for a security in amargin account, assets held in the goodfaith account pursuant to § 220.6(e)(1)(i)or (ii) may serve in lieu of margin;

(ii) Transfers may be effected betweenthe margin account and the specialmemorandum account pursuant to§§ 220.4 and 220.5.

(c) Maintenance of credit. Except asprohibited by this part, any creditinitially extended in compliance withthis part may be maintained regardlessof:

(1) Reductions in the customer’sequity resulting from changes in marketprices;

(2) Any security in an account ceasingto be margin or exempted; or

(3) Any change in the marginrequirements prescribed under this part.

(d) Guarantee of accounts. Noguarantee of a customer’s account shallbe given any effect for purposes of thispart.

(e) Receipt of funds or securities. (1)A creditor, acting in good faith, mayaccept as immediate payment:

(i) Cash or any check, draft, or orderpayable on presentation; or

(ii) Any security with sight draftattached.

(2) A creditor may treat a security,check or draft as received upon writtennotification from another creditor thatthe specified security, check, or drafthas been sent.

(3) Upon notification that a check,draft, or order has been dishonored orwhen securities have not been receivedwithin a reasonable time, the creditorshall take the action required by thispart when payment or securities are notreceived on time.

(4) To temporarily finance acustomer’s receipt of securities pursuantto an employee benefit plan registeredon SEC Form S–8 or the withholdingtaxes for an employee stock award plan,a creditor may accept, in lieu of thesecurities, a properly executed exercisenotice, where applicable, andinstructions to the issuer to deliver thestock to the creditor. Prior toacceptance, the creditor must verify thatthe issuer will deliver the securitiespromptly and the customer mustdesignate the account into which thesecurities are to be deposited.

(f) Exchange of securities. (1) Toenable a customer to participate in anoffer to exchange securities which ismade to all holders of an issue ofsecurities, a creditor may submit forexchange any securities held in amargin account, without regard to theother provisions of this part, provided


the consideration received is depositedinto the account.

(2) If a nonmargin, nonexemptedsecurity is acquired in exchange for amargin security, its retention,withdrawal, or sale within 60 daysfollowing its acquisition shall be treatedas if the security is a margin security.

(g) Arranging for loans by others. Acreditor may arrange for the extensionor maintenance of credit to or for anycustomer by any person, provided thecreditor does not willfully arrange creditthat violates parts 221 or 224 of thischapter.

(h) Innocent mistakes. If any failure tocomply with this part results from amistake made in good faith in executinga transaction or calculating the amountof margin, the creditor shall not bedeemed in violation of this part if,promptly after the discovery of themistake, the creditor takes appropriatecorrective action.

(i) Foreign currency. (1) Freelyconvertible foreign currency may betreated at its U.S. dollar equivalent,provided the currency is marked-to-market daily.

(2) A creditor may extend creditdenominated in any freely convertibleforeign currency.

(j) Exempted borrowers. (1) A memberof a national securities exchange or aregistered broker or dealer that has beenin existence for less than one year maymeet the definition of exemptedborrower based on a six-month period.

(2) Once a member of a nationalsecurities exchange or registered brokeror dealer ceases to qualify as anexempted borrower, it shall notify itslender of this fact before obtainingadditional credit. Any new extensionsof credit to such a borrower, includingrollovers, renewals, and additionaldraws on existing lines of credit, aresubject to the provisions of this part.

§ 220.4 Margin account.(a) Margin transactions. (1) All

transactions not specifically authorizedfor inclusion in another account shall berecorded in the margin account.

(2) A creditor may establish separatemargin accounts for the same person to:

(i) Clear transactions for othercreditors where the transactions areintroduced to the clearing creditor byseparate creditors; or

(ii) Clear transactions through othercreditors if the transactions are clearedby separate creditors; or

(iii) Provide one or more accountsover which the creditor or a third partyinvestment adviser has investmentdiscretion.

(b) Required margin—(1)Applicability. The required margin for

each long or short position in securitiesis set forth in § 220.12 (the Supplement)and is subject to the followingexceptions and special provisions.

(2) Short sale against the box. A shortsale ‘‘against the box’’ shall be treated asa long sale for the purpose of computingthe equity and the required margin.

(3) When-issued securities. Therequired margin on a net long or netshort commitment in a when-issuedsecurity is the margin that would berequired if the security were an issuedmargin security, plus any unrealizedloss on the commitment or less anyunrealized gain.

(4) Stock used as cover. (i) When ashort position held in the account servesin lieu of the required margin for a shortput, the amount prescribed byparagraph (b)(1) of this section as theamount to be added to the requiredmargin in respect of short sales shall beincreased by any unrealized loss on theposition.

(ii) When a security held in theaccount serves in lieu of the requiredmargin for a short call, the security shallbe valued at no greater than the exerciseprice of the short call.

(5) Accounts of partners. If a partnerof the creditor has a margin accountwith the creditor, the creditor shalldisregard the partner’s financialrelations with the firm (as shown in thepartner’s capital and ordinary drawingaccounts) in calculating the margin orequity of the partner’s margin account.

(6) Contribution to joint venture. If amargin account is the account of a jointventure in which the creditorparticipates, any interest of the creditorin the joint account in excess of theinterest which the creditor would haveon the basis of its right to share in theprofits shall be treated as an extensionof credit to the joint account and shallbe margined as such.

(7) Transfer of accounts. (i) A marginaccount that is transferred from onecreditor to another may be treated as ifit had been maintained by the transfereefrom the date of its origin, if thetransferee accepts, in good faith, asigned statement of the transferor (or, ifthat is not practicable, of the customer),that any margin call issued under thispart has been satisfied.

(ii) A margin account that istransferred from one customer toanother as part of a transaction, notundertaken to avoid the requirements ofthis part, may be treated as if it had beenmaintained for the transferee from thedate of its origin, if the creditor acceptsin good faith and keeps with thetransferee account a signed statement ofthe transferor describing thecircumstances for the transfer.

(8) Sound credit judgment. Inexercising sound credit judgment todetermine the margin required in goodfaith pursuant to § 220.12 (theSupplement), the creditor shall make itsdetermination for a specified securityposition without regard to thecustomer’s other assets or securitiespositions held in connection withunrelated transactions.

(c) When additional margin isrequired—(1) Computing deficiency. Alltransactions on the same day shall becombined to determine whetheradditional margin is required by thecreditor. For the purpose of computingequity in an account, security positionsare established or eliminated and acredit or debit created on the trade dateof a security transaction. Additionalmargin is required on any day when theday’s transactions create or increase amargin deficiency in the account andshall be for the amount of the margindeficiency so created or increased.

(2) Satisfaction of deficiency. Theadditional required margin may besatisfied by a transfer from the specialmemorandum account or by a deposit ofcash, margin securities, exemptedsecurities, or any combination thereof.

(3) Time limits. (i) A margin call shallbe satisfied within one payment periodafter the margin deficiency was createdor increased.

(ii) The payment period may beextended for one or more limitedperiods upon application by the creditorto its examining authority unless theexamining authority believes that thecreditor is not acting in good faith orthat the creditor has not sufficientlydetermined that exceptionalcircumstances warrant such action.Applications shall be filed and actedupon prior to the end of the paymentperiod or the expiration of anysubsequent extension.

(4) Satisfaction restriction. Anytransaction, position, or deposit that isused to satisfy one requirement underthis part shall be unavailable to satisfyany other requirement.

(d) Liquidation in lieu of deposit. Ifany margin call is not met in full withinthe required time, the creditor shallliquidate securities sufficient to meetthe margin call or to eliminate anymargin deficiency existing on the daysuch liquidation is required, whicheveris less. If the margin deficiency createdor increased is $1000 or less, no actionneed be taken by the creditor.

(e) Withdrawals of cash or securities.(1) Cash or securities may be withdrawnfrom an account, except if:

(i) Additional cash or securities arerequired to be deposited into the


account for a transaction on the same ora previous day; or

(ii) The withdrawal, together withother transactions, deposits, andwithdrawals on the same day, wouldcreate or increase a margin deficiency.

(2) Margin excess may be withdrawnor may be transferred to the specialmemorandum account (§ 220.5) bymaking a single entry to that accountwhich will represent a debit to themargin account and a credit to thespecial memorandum account.

(3) If a creditor does not receive adistribution of cash or securities whichis payable with respect to any securityin a margin account on the day it ispayable and withdrawal would not bepermitted under this paragraph (e), awithdrawal transaction shall be deemedto have occurred on the day thedistribution is payable.

(f) Interest, service charges, etc. (1)Without regard to the other provisionsof this section, the creditor, in its usualpractice, may debit the following itemsto a margin account if they areconsidered in calculating the balance ofsuch account:

(i) Interest charged on creditmaintained in the margin account;

(ii) Premiums on securities borrowedin connection with short sales or toeffect delivery;

(iii) Dividends, interest, or otherdistributions due on borrowedsecurities;

(iv) Communication or shippingcharges with respect to transactions inthe margin account; and

(v) Any other service charges whichthe creditor may impose.

(2) A creditor may permit interest,dividends, or other distributionscredited to a margin account to bewithdrawn from the account if:

(i) The withdrawal does not create orincrease a margin deficiency in theaccount; or

(ii) The current market value of anysecurities withdrawn does not exceed10 percent of the current market valueof the security with respect to whichthey were distributed.

§ 220.5 Special memorandum account.(a) A special memorandum account

(SMA) may be maintained inconjunction with a margin account. Asingle entry amount may be used torepresent both a credit to the SMA anda debit to the margin account. A transferbetween the two accounts may beeffected by an increase or reduction inthe entry. When computing the equityin a margin account, the single entryamount shall be considered as a debit inthe margin account. A payment to thecustomer or on the customer’s behalf or

a transfer to any of the customer’s otheraccounts from the SMA reduces thesingle entry amount.

(b) The SMA may contain thefollowing entries:

(1) Dividend and interest payments;(2) Cash not required by this part,

including cash deposited to meet amaintenance margin call or to meet anyrequirement of a self-regulatoryorganization that is not imposed by thispart;

(3) Proceeds of a sale of securities orcash no longer required on any expiredor liquidated security position that maybe withdrawn under § 220.4(e); and

(4) Margin excess transferred from themargin account under § 220.4(e)(2).

§ 220.6 Good faith account.In a good faith account, a creditor may

effect or finance customer transactionsin accordance with the followingprovisions:

(a) Securities entitled to good faithmargin—(1) Permissible transactions. Acreditor may effect and financetransactions involving the buying,carrying, or trading of any securityentitled to ‘‘good faith’’ margin as setforth in § 220.12 (the Supplement).

(2) Required margin. The requiredmargin is set forth in § 220.12 (theSupplement).

(3) Satisfaction of margin. Requiredmargin may be satisfied by a transferfrom the special memorandum accountor by a deposit of cash, securitiesentitled to ‘‘good faith’’ margin as setforth in § 220.12 (the Supplement), anyother asset that is not a security, or anycombination thereof. An asset that is nota security shall have a margin valuedetermined by the creditor in good faith.

(b) Arbitrage. A creditor may effectand finance for any customer bona fidearbitrage transactions. For the purposeof this section, the term ‘‘bona fidearbitrage’’ means:

(1) A purchase or sale of a security inone market together with an offsettingsale or purchase of the same security ina different market at as nearly the sametime as practicable for the purpose oftaking advantage of a difference inprices in the two markets; or

(2) A purchase of a security which is,without restriction other than thepayment of money, exchangeable orconvertible within 90 calendar days ofthe purchase into a second securitytogether with an offsetting sale of thesecond security at or about the sametime, for the purpose of takingadvantage of a concurrent disparity inthe prices of the two securities.

(c) ‘‘Prime broker’’ transactions. Acreditor may effect transactions for acustomer as part of a ‘‘prime broker’’

arrangement in conformity with SECguidelines.

(d) Credit to ESOPs. A creditor mayextend and maintain credit to employeestock ownership plans without regard tothe other provisions of this part.

(e) Nonpurpose credit. (1) A creditormay:

(i) Effect and carry transactions incommodities;

(ii) Effect and carry transactions inforeign exchange;

(iii) Extend and maintain secured orunsecured nonpurpose credit, subject tothe requirements of paragraph (e)(2) ofthis section.

(2) Every extension of credit, exceptas provided in paragraphs (e)(1)(i) and(e)(1)(ii) of this section, shall be deemedto be purpose credit unless, prior toextending the credit, the creditoraccepts in good faith from the customera written statement that it is not purposecredit. The statement shall conform tothe requirements established by theBoard.

§ 220.7 Broker-dealer credit account.(a) Requirements. In a broker-dealer

credit account, a creditor may effect orfinance transactions in accordance withthe following provisions.

(b) Purchase or sale of security againstfull payment. A creditor may purchaseany security from or sell any security toanother creditor or person regulated bya foreign securities authority under agood faith agreement to promptlydeliver the security against full paymentof the purchase price.

(c) Joint back office. A creditor mayeffect or finance transactions of any ofits owners if the creditor is a clearingand servicing broker or dealer ownedjointly or individually by othercreditors.

(d) Capital contribution. A creditormay extend and maintain credit to anypartner or stockholder of the creditor forthe purpose of making a capitalcontribution to, or purchasing stock of,the creditor, affiliated corporation oranother creditor.

(e) Emergency and subordinatedcredit. A creditor may extend andmaintain, with the approval of theappropriate examining authority:

(1) Credit to meet the emergencyneeds of any creditor; or

(2) Subordinated credit to anothercreditor for capital purposes, if the othercreditor:

(i) Is an affiliated corporation orwould not be considered a customer ofthe lender apart from the subordinatedloan; or

(ii) Will not use the proceeds of theloan to increase the amount of dealingin securities for the account of the


creditor, its firm or corporation or anaffiliated corporation.

(f) Omnibus credit (1) A creditor mayeffect and finance transactions for abroker or dealer who is registered withthe SEC under section 15 of the Act andwho gives the creditor written noticethat:

(i) All securities will be for theaccount of customers of the broker ordealer; and

(ii) Any short sales effected will beshort sales made on behalf of thecustomers of the broker or dealer otherthan partners.

(2) The written notice required byparagraph (f)(1) of this section shallconform to any SEC rule on thehypothecation of customers’ securitiesby brokers or dealers.

(g) Special purpose credit. A creditormay extend the following types of creditwith good faith margin:

(1) Credit to finance the purchase orsale of securities for prompt delivery, ifthe credit is to be repaid uponcompletion of the transaction.

(2) Credit to finance securities intransit or surrendered for transfer, if thecredit is to be repaid upon completionof the transaction.

(3) Credit to enable a broker or dealerto pay for securities, if the credit is tobe repaid on the same day it isextended.

(4) Credit to an exempted borrower.(5) Credit to a member of a national

securities exchange or registered brokeror dealer to finance its activities as amarket maker or specialist.

(6) Credit to a member of a nationalsecurities exchange or registered brokeror dealer to finance its activities as anunderwriter.

§ 220.8 Cash account.(a) Permissible transactions. In a cash

account, a creditor, may:(1) Buy for or sell to any customer any

security or other asset if:(i) There are sufficient funds in the

account; or(ii) The creditor accepts in good faith

the customer’s agreement that thecustomer will promptly make full cashpayment for the security or asset beforeselling it and does not contemplateselling it prior to making such payment;

(2) Buy from or sell for any customerany security or other asset if:

(i) The security is held in the account;or

(ii) The creditor accepts in good faiththe customer’s statement that thesecurity is owned by the customer or thecustomer’s principal, and that it will bepromptly deposited in the account;

(3) Issue, endorse, or guarantee, or sellan option for any customer as part of acovered option transaction; and

(4) Use an escrow agreement in lieuof the cash, cash equivalents orunderlying asset position if:

(i) In the case of a short call or a shortput, the creditor is advised by thecustomer that the required securities,assets or cash are held by a personauthorized to issue an escrow agreementand the creditor independently verifiesthat the appropriate escrow agreementwill be delivered by the personpromptly; or

(ii) In the case of a call issued,endorsed, guaranteed, or sold on thesame day the underlying asset ispurchased in the account and theunderlying asset is to be delivered to aperson authorized to issue an escrowagreement, the creditor verifies that theappropriate escrow agreement will bedelivered by the person promptly.

(b) Time periods for payment;cancellation or liquidation. (1) Full cashpayment. A creditor shall obtain fullcash payment for customer purchases:

(i) Within one payment period of thedate:

(A) Any nonexempted security waspurchased;

(B) Any when-issued security wasmade available by the issuer for deliveryto purchasers;

(C) Any ‘‘when distributed’’ securitywas distributed under a published plan;

(D) A security owned by the customerhas matured or has been redeemed anda new refunding security of the sameissuer has been purchased by thecustomer, provided:

(1) The customer purchased the newsecurity no more than 35 calendar daysprior to the date of maturity orredemption of the old security;

(2) The customer is entitled to theproceeds of the redemption; and

(3) The delayed payment does notexceed 103 percent of the proceeds ofthe old security.

(ii) In the case of the purchase of aforeign security, within one paymentperiod of the trade date or within oneday after the date on which settlementis required to occur by the rules of theforeign securities market, provided thisperiod does not exceed the maximumtime permitted by this part for deliveryagainst payment transactions.

(2) Delivery against payment. If acreditor purchases for or sells to acustomer a security in a delivery againstpayment transaction, the creditor shallhave up to 35 calendar days to obtainpayment if delivery of the security isdelayed due to the mechanics of thetransaction and is not related to thecustomer’s willingness or ability to pay.

(3) Shipment of securities, extension.If any shipment of securities isincidental to consummation of a

transaction, a creditor may extend thepayment period by the number of daysrequired for shipment, but not by morethan one additional payment period.

(4) Cancellation; liquidation;minimum amount. A creditor shallpromptly cancel or otherwise liquidatea transaction or any part of a transactionfor which the customer has not madefull cash payment within the requiredtime. A creditor may, at its option,disregard any sum due from thecustomer not exceeding $1000.

(c) 90 day freeze. (1) If a nonexemptedsecurity in the account is sold ordelivered to another broker or dealerwithout having been previously paid forin full by the customer, the privilege ofdelaying payment beyond the trade dateshall be withdrawn for 90 calendar daysfollowing the date of sale of the security.Cancellation of the transaction otherthan to correct an error shall constitutea sale.

(2) The 90 day freeze shall not applyif:

(i) Within the period specified inparagraph (b)(1) of this section, fullpayment is received or any check ordraft in payment has cleared and theproceeds from the sale are notwithdrawn prior to such payment orcheck clearance; or

(ii) The purchased security wasdelivered to another broker or dealer fordeposit in a cash account which holdssufficient funds to pay for the security.The creditor may rely on a writtenstatement accepted in good faith fromthe other broker or dealer that sufficientfunds are held in the other cashaccount.

(d) Extension of time periods;transfers. (1) Unless the creditor’sexamining authority believes that thecreditor is not acting in good faith orthat the creditor has not sufficientlydetermined that exceptionalcircumstances warrant such action, itmay upon application by the creditor:

(i) Extend any period specified inparagraph (b) of this section;

(ii) Authorize transfer to anotheraccount of any transaction involving thepurchase of a margin or exemptedsecurity; or

(iii) Grant a waiver from the 90 dayfreeze.

(2) Applications shall be filed andacted upon prior to the end of thepayment period, or in the case of thepurchase of a foreign security within theperiod specified in paragraph (b)(1)(ii)of this section, or the expiration of anysubsequent extension.


§ 220.9 Clearance of securities, options,and futures.

(a) Credit for clearance of securities.The provisions of this part shall notapply to the extension or maintenanceof any credit that is not for more thanone day if it is incidental to theclearance of transactions in securitiesdirectly between members of a nationalsecurities exchange or association orthrough any clearing agency registeredwith the SEC.

(b) Deposit of securities with aclearing agency. The provisions of thispart shall not apply to the deposit ofsecurities with an option or futuresclearing agency for the purpose ofmeeting the deposit requirements of theagency if:

(1) The clearing agency:(i) Issues, guarantees performance on,

or clears transactions in, any security(including options on any security,certificate of deposit, securities index orforeign currency); or

(ii) Guarantees performance ofcontracts for the purchase or sale of acommodity for future delivery oroptions on such contracts;

(2) The clearing agency is registeredwith the Securities and ExchangeCommission or is the clearing agency fora contract market regulated by theCommodity Futures TradingCommission; and

(3) The deposit consists of any marginsecurity and complies with the rules ofthe clearing agency that have beenapproved by the Securities andExchange Commission or theCommodity Futures TradingCommission.

§ 220.10 Borrowing and lending securities.(a) Without regard to the other

provisions of this part, a creditor mayborrow or lend securities for thepurpose of making delivery of thesecurities in the case of short sales,failure to receive securities required tobe delivered, or other similar situations.If a creditor reasonably anticipates ashort sale or fail transaction, suchborrowing may be made up to onestandard settlement cycle in advance oftrade date.

(b) A creditor may lend foreignsecurities to a foreign person (or borrowsuch securities for the purpose ofrelending them to a foreign person) forany purpose lawful in the country inwhich they are to be used.

(c) A creditor that is an exemptedborrower may lend securities withoutregard to the other provisions of thispart and a creditor may borrowsecurities from an exempted borrowerwithout regard to the other provisions ofthis part.

§ 220.11 Requirements for the list ofmarginable OTC stocks and the list offoreign margin stocks.

(a) Requirements for inclusion on thelist of marginable OTC stocks. Except asprovided in paragraph (f) of this section,OTC margin stock shall meet thefollowing requirements:

(1) Four or more dealers stand willingto, and do in fact, make a market in suchstock and regularly submit bona fidebids and offers to an automatedquotations system for their ownaccounts;

(2) The minimum average bid price ofsuch stock, as determined by the Board,is at least $5 per share;

(3) The stock is registered undersection 12 of the Act, is issued by aninsurance company subject to section12(g)(2)(G) of the Act, is issued by aclosed-end investment managementcompany subject to registrationpursuant to section 8 of the InvestmentCompany Act of 1940 (15 U.S.C. 80a-8),is an American Depository Receipt(ADR) of a foreign issuer whosesecurities are registered under section12 of the Act, or is a stock of an issuerrequired to file reports under section15(d) of the Act;

(4) Daily quotations for both bid andasked prices for the stock arecontinously available to the generalpublic;

(5) The stock has been publicly tradedfor at least six months;

(6) The issuer has at least $4 millionof capital, surplus, and undividedprofits;

(7) There are 400,000 or more sharesof such stock outstanding in addition toshares held beneficially by officers,directors or beneficial owners of morethan 10 percent of the stock;

(8) There are 1,200 or more holders ofrecord, as defined in SEC Rule 12g5–1(17 CFR 240.12g5–1), of the stock whoare not officers, directors or beneficialowners of 10 percent or more of thestock, or the average daily tradingvolume of such stock as determined bythe Board, is at least 500 shares; and

(9) The issuer or a predecessor ininterest has been in existence for at leastthree years.

(b) Requirements for continuedinclusion on the list of marginable OTCstocks. Except as provided in paragraph(f) of this section, OTC margin stockshall meet the following requirements:

(1) Three or more dealers standwilling to, and do in fact, make a marketin such stock and regularly submit bonafide bids and offers to an automatedquotations system for their ownaccounts;

(2) The minimum average bid price ofsuch stocks, as determined by theBoard, is at least $2 per share;

(3) The stock is registered as specifiedin paragraph (a)(3) of this section;

(4) Daily quotations for both bid andasked prices for the stock arecontinuously available to the generalpublic; ;

(5) The issuer has at least $1 millionof capital, surplus, and undividedprofits;

(6) There are 300,000 or more sharesof such stock outstanding in addition toshares held beneficially by officers,directors, or beneficial owners of morethan 10 percent of the stock; and

(7) There continue to be 800 or moreholders of record, as defined in SECRule 12g5–1 (17 CFR 240.12g5–1), of thestock who are not officers, directors, orbeneficial owners of 10 percent or moreof the stock, or the average daily tradingvolume of such stock, as determined bythe Board, is at least 300 shares.

(c) Requirements for inclusion on thelist of foreign margin stocks. Except asprovided in paragraph (f) of this section,a foreign security shall meet thefollowing requirements before beingplaced on the List of Foreign MarginStocks:

(1) The security is an equity securitythat is listed for trading on or throughthe facilities of a foreign securitiesexchange or a recognized foreignsecurities market and has been tradingon such exchange or market for at leastsix months;

(2) Daily quotations for both bid andasked or last sale prices for the securityprovided by the foreign securitiesexchange or foreign securities market onwhich the security is traded arecontinuously available to creditors inthe United States pursuant to anelectronic quotation system;

(3) The aggregate market value ofshares, the ownership of which isunrestricted, is not less than $1 billion;

(4) The average weekly tradingvolume of such security during thepreceding six months is either at least200,000 shares or $1 million; and

(5) The issuer or a predecessor ininterest has been in existence for at leastfive years.

(d) Requirements for continuedinclusion on the list of foreign marginstocks. Except as provided in paragraph(f) of this section, a foreign securityshall meet the following requirements toremain on the List of Foreign MarginStocks:

(1) The security continues to meet therequirements specified in paragraphs (c)(1) and (2) of this section;

(2) The aggregate market value ofshares, the ownership of which is


unrestricted, is not less than $500million; and

(3) The average weekly tradingvolume of such security during thepreceding six months is either at least100,000 shares or $500,000.

(e) Removal from the list. The Boardshall periodically remove from the listsany stock that:

(1) Ceases to exist or of which theissuer ceases to exist; or

(2) No longer substantially meets theprovisions of paragraphs (b) or (d) ofthis section or the definition of OTCmargin stock.

(f) Discretionary authority of Board.Without regard to other paragraphs ofthis section, the Board may add to, oromit or remove from the list ofmarginable OTC stocks and the list offoreign margin stocks an equity security,if in the judgment of the Board, suchaction is necessary or appropriate in thepublic interest.

(g) Unlawful representations. It shallbe unlawful for any creditor to make, orcause to be made, any representation tothe effect that the inclusion of a securityon the list of marginable OTC stocks orthe list of foreign margin stocks isevidence that the Board or the SEC hasin any way passed upon the merits of,or given approval to, such security orany transactions therein. Any statementin an advertisement or other similarcommunication containing a referenceto the Board in connection with the listsor stocks on those lists shall be anunlawful representation.

§ 220.12 Supplement: Marginrequirements.

The required margin for each securityposition held in a margin account shallbe as follows:

(a) Margin equity security, except foran exempted security, money marketmutual fund or exempted securitiesmutual fund, warrant on a securitiesindex or foreign currency or a longposition in an option: 50 percent of thecurrent market value of the security orthe percentage set by the regulatoryauthority where the trade occurs,whichever is greater.

(b) Exempted security, non-equitysecurity, money market mutual fund orexempted securities mutual fund: Themargin required by the creditor in goodfaith or the percentage set by theregulatory authority where the tradeoccurs, whichever is greater.

(c) Short sale of a nonexemptedsecurity, except for a non-equitysecurity:

(1) 150 percent of the current marketvalue of the security; or

(2) 100 percent of the current marketvalue if a security exchangeable or

convertible within 90 calendar dayswithout restriction other than thepayment of money into the security soldshort is held in the account, providedthat any long call to be used as marginin connection with a short sale of theunderlying security is an American-style option issued by a registeredclearing corporation and listed or tradedon a registered national securitiesexchange with an exercise price thatdoes not exceed the price at which theunderlying security was sold short.

(d) Short sale of an exempted securityor non-equity security: 100 percent ofthe current market value of the securityplus the margin required by the creditorin good faith.

(e) Nonmargin, nonexempted equitysecurity: 100 percent of the currentmarket value.

(f) Put or call on a security, certificateof deposit, securities index or foreigncurrency or a warrant on a securitiesindex or foreign currency:

(1) In the case of puts and calls issuedby a registered clearing corporation andlisted or traded on a registered nationalsecurities exchange or a registeredsecurities association and registeredwarrants on a securities index or foreigncurrency, the amount, or other positionspecified by the rules of the registerednational securities exchange or theregistered securities associationauthorized to trade the option orwarrant, provided that all such ruleshave been approved or amended by theSEC; or

(2) In the case of all other puts andcalls, the amount, or other position,specified by the maintenance rules ofthe creditor’s examining authority.

§§ 220.13—220.18 [Removed]4. Sections 220.13 through 220.18 are

removed.

§ 220.126 [Removed and Reserved]5. Section 220.126 is removed and

reserved.6. Part 221 is revised to read as

follows:

PART 221—CREDIT BY BANKS ANDPERSONS OTHER THAN BROKERSOR DEALERS FOR THE PURPOSE OFPURCHASING OR CARRYING MARGINSTOCK (REGULATION U)

Sec.221.1 Authority, purpose, and scope.221.2 Definitions.221.3 General requirements.221.4 Employee stock option, purchase, and

ownership plans.221.5 Special purpose loans to brokers and

dealers.221.6 Exempted transactions.221.7 Supplement: Maximum loan value of

margin stock and other collateral.

Interpretations

221.101 Determination and effect ofpurpose of loan.

221.102 Application to committed creditwhere funds are disbursed thereafter.

221.103 Loans to brokers or dealers.221.104 Federal credit unions.221.105 Arranging for extensions of credit

to be made by a bank.221.106 Reliance in ‘‘good faith’’ on

statement of purpose of loan.221.107 Arranging loan to purchase open-

end investment company shares.221.108 Effect of registration of stock

subsequent to making of loan.221.109 Loan to open-end investment

company.221.110 Questions arising under this part.221.111 Contribution to joint venture as

extension of credit when thecontribution is disproportionate to thecontributor’s share in the venture’sprofits or losses.

221.112 Loans by bank in capacity astrustee.

221.113 Loan which is secured indirectlyby stock.

221.114 Bank loans to purchase stock ofAmerican Telephone and TelegraphCompany under Employees’ Stock Plan.

221.115 Accepting a purpose statementthrough the mail without benefit of face-to-face interview.

221.116 Bank loans to replenish workingcapital used to purchase mutual fundshares.

221.117 When bank in ‘‘good faith’’ has notrelied on stock as collateral.

221.118 Bank arranging for extension ofcredit by corporation.

221.119 Applicability of plan-lenderprovisions to financing of stock optionsand stock purchase rights qualified orrestricted under Internal Revenue Code.

221.120 Allocation of stock collateral topurpose and nonpurpose credits to samecustomer.

221.121 Extension of credit in certain stockoption and stock purchase plans.

221.122 Applicability of marginrequirements to credit in connectionwith Insurance Premium FundingPrograms.

221.123 Combined credit for exercisingemployee stock options and payingincome taxes incurred as a result of suchexercise.

221.124 Purchase of debt securities tofinance corporate takeovers.

221.125 Credit to brokers and dealers.Authority: 15 U.S.C. 78c, 78g, 78q, and

78w.

§ 221.1 Authority, purpose, and scope.

(a) Authority. Regulation U (this part)is issued by the Board of Governors ofthe Federal Reserve System (the Board)pursuant to the Securities Exchange Actof 1934 (the Act) (15 U.S.C. 78a et seq.).

(b) Purpose and scope. (1) This partimposes credit restrictions upon personsother than brokers or dealers(hereinafter lenders) that extend creditfor the purpose of buying or carrying


margin stock if the credit is secureddirectly or indirectly by margin stock.Lenders include ‘‘banks’’ (as defined in§ 221.2) and other persons who arerequired to register with the Boardunder § 221.3(b). Lenders may notextend more than the maximum loanvalue of the collateral securing suchcredit, as set by the Board in § 221.7 (theSupplement).

(2) This part does not apply toclearing agencies regulated by theSecurities and Exchange Commission orthe Commodity Futures TradingCommission that accept deposits ofmargin stock in connection with:

(i) The issuance of, or guarantee of, orthe clearance of transactions in, anysecurity (including options on anysecurity, certificate of deposit, securitiesindex or foreign currency); or

(ii) The guarantee of contracts for thepurchase or sale of a commodity forfuture delivery or options on suchcontracts.

(3) This part does not apply to creditextended to an exempted borrower.

(c) Availability of forms. The formsreferenced in this part are available fromthe Federal Reserve Banks.

§ 221.2 Definitions.

The terms used in this part have themeanings given them in section 3(a) ofthe Act or as defined in this section asfollows:

Affiliate means:(1) For banks:(i) Any bank holding company of

which a bank is a subsidiary within themeaning of the Bank Holding CompanyAct of 1956, as amended (12 U.S.C.1841(d));

(ii) Any other subsidiary of such bankholding company; and

(iii) Any other corporation, businesstrust, association, or other similarorganization that is an affiliate asdefined in section 2(b) of the BankingAct of 1933 (12 U.S.C. 221a(c));

(2) For nonbank lenders, affiliatemeans any person who, directly orindirectly, through one or moreintermediaries, controls, or is controlledby, or is under common control with thelender.

Bank. (1) Bank. Has the meaninggiven to it in section 3(a)(6) of the Act(15 U.S.C. 78c(a)(6)) and includes:

(i) Any subsidiary of a bank;(ii) Any corporation organized under

section 25(a) of the Federal Reserve Act(12 U.S.C. 611); and

(iii) Any agency or branch of a foreignbank located within the United States.

(2) Bank does not include:(i) Any savings and loan association;(ii) Any credit union;

(iii) Any lending institution that is aninstrumentality or agency of the UnitedStates; or

(iv) Any member of a nationalsecurities exchange.

Carrying credit is credit that enablesa customer to maintain, reduce, or retireindebtedness originally incurred topurchase a security that is currently amargin stock.

Current market value of:(1) A security means:(i) If quotations are available, the

closing sale price of the security on thepreceding business day, as appearing onany regularly published reporting orquotation service; or

(ii) If there is no closing sale price, thelender may use any reasonable estimateof the market value of the security as ofthe close of business on the precedingbusiness day; or

(iii) If the credit is used to finance thepurchase of the security, the total costof purchase, which may include anycommissions charged.

(2) Any other collateral means a valuedetermined by any reasonable method.

Customer excludes an exemptedborrower and includes any person orpersons acting jointly, to or for whom alender extends or maintains credit.

Examining authority means:(1) The national securities exchange

or national securities association ofwhich a broker or dealer is a member;or

(2) If a member of more than one self-regulatory organization, the organizationdesignated by the Securities andExchange Commission as the examiningauthority for the broker or dealer.

Exempted borrower means a memberof a national securities exchange or aregistered broker or dealer, a substantialportion of whose business consists oftransactions with persons other thanbrokers or dealers, and includes aborrower who:

(1) Maintains at least 1000 activeaccounts on an annual basis for personsother than brokers, dealers, and personsassociated with a broker or dealer;

(2) Earns at least $10 million in grossrevenues on an annual basis fromtransactions with persons other thanbrokers, dealers, and persons associatedwith a broker or dealer; or

(3) Earns at least 10 percent of itsgross revenues on an annual basis fromtransactions with persons other thanbrokers, dealers, and persons associatedwith a broker-dealer.

Good faith with respect to:(1) The loan value of collateral means

that amount (not exceeding 100 per centof the current market value of thecollateral) which a lender, exercisingsound credit judgment, would lend,

without regard to the customer’s otherassets held as collateral in connectionwith unrelated transactions.

(2) Making a determination oraccepting a statement concerning aborrower means that the lender or itsduly authorized representative is alert tothe circumstances surrounding thecredit, and if in possession ofinformation that would cause a prudentperson not to make the determination oraccept the notice or certificationwithout inquiry, investigates and issatisfied that it is correct;

In the ordinary course of businessmeans occurring or reasonably expectedto occur in carrying out or furtheringany business purpose, or in the case ofan individual, in the course of anyactivity for profit or the management orpreservation of property.

Indirectly secured. (1) Includes anyarrangement with the customer underwhich:

(i) The customer’s right or ability tosell, pledge, or otherwise dispose ofmargin stock owned by the customer isin any way restricted while the creditremains outstanding; or

(ii) The exercise of such right is ormay be cause for accelerating thematurity of the credit.

(2) Does not include such anarrangement if:

(i) After applying the proceeds of thecredit, not more than 25 percent of thevalue (as determined by any reasonablemethod) of the assets subject to thearrangement is represented by marginstock;

(ii) It is a lending arrangement thatpermits accelerating the maturity of thecredit as a result of a default orrenegotiation of another credit to thecustomer by another lender that is notan affiliate of the lender;

(iii) The lender holds the margin stockonly in the capacity of custodian,depositary, or trustee, or under similarcircumstances, and, in good faith, hasnot relied upon the margin stock ascollateral; or

(iv) The lender, in good faith, has notrelied upon the margin stock ascollateral in extending or maintainingthe particular credit.

Lender means:(1) Any bank; or(2) Any person subject to the

registration requirements of this part.Margin stock means:(1) Any equity security registered or

having unlisted trading privileges on anational securities exchange;

(2) Any OTC security designated asqualified for trading in the NationalMarket System under a designation planapproved by the Securities andExchange Commission (NMS security);


(3) Any debt security convertible intoa margin stock or carrying a warrant orright to subscribe to or purchase amargin stock;

(4) Any warrant or right to subscribeto or purchase a margin stock; or

(5) Any security issued by aninvestment company registered undersection 8 of the Investment CompanyAct of 1940 (15 U.S.C. 80a–8), otherthan:

(i) A company licensed under theSmall Business Investment CompanyAct of 1958, as amended (15 U.S.C.661); or

(ii) A company which has at least 95percent of its assets continuouslyinvested in exempted securities (asdefined in 15 U.S.C. 78c(a)(12)); or

(iii) A company which issues face-amount certificates as defined in 15U.S.C. 80a–2(a)(15), but only withrespect of such securities; or

(iv) A company which is considereda money market fund under SEC Rule2a–7 (17 CFR 270.2a–7).

Maximum loan value is thepercentage of current market valueassigned by the Board under § 221.7 (theSupplement) to specified types ofcollateral. The maximum loan value ofmargin stock is stated as a percentage ofits current market value. Puts, calls andcombinations thereof that do not qualifyas margin stock have no loan value. Allother collateral has good faith loanvalue.

Nonbank lender means any personsubject to the registration requirementsof this part.

Purpose credit is any credit for thepurpose, whether immediate,incidental, or ultimate, of buying orcarrying margin stock.

§ 221.3 General requirements.(a) Extending, maintaining, and

arranging credit—(1) Extending credit.No lender, except a plan-lender, asdefined in § 221.4(a), shall extend anypurpose credit, secured directly orindirectly by margin stock, in anamount that exceeds the maximum loanvalue of the collateral securing thecredit.

(2) Maintaining credit. A lender maycontinue to maintain any credit initiallyextended in compliance with this part,regardless of:

(i) Reduction in the customer’s equityresulting from change in market prices;

(ii) Change in the maximum loanvalue prescribed by this part; or

(iii) Change in the status of thesecurity (from nonmargin to margin)securing an existing purpose credit.

(3) Arranging credit. No lender mayarrange for the extension ormaintenance of any purpose credit,

except upon the same terms andconditions under which the lender itselfmay extend or maintain purpose creditunder this part.

(b) Registration of nonbank lenders;termination of registration; annualreport—(1) Registration. Every personother than a person subject to part 220of this chapter or a bank who, in theordinary course of business, extends ormaintains credit secured, directly orindirectly, by any margin stock shallregister on Federal Reserve Form FR G–1 (OMB control number 7100–0011)within 30 days after the end of anycalendar quarter during which:

(i) The amount of credit extendedequals $200,000 or more; or

(ii) The amount of credit outstandingat any time during that calendar quarterequals $500,000 or more.

(2) Deregistration. A registerednonbank lender may apply to terminateits registration, by filing Federal ReserveForm FR G–2 (OMB control number7100–0011), if the lender has not,during the preceding six calendarmonths, had more than $200,000 ofsuch credit outstanding. Registrationshall be deemed terminated when theapplication is approved by the Board.

(3) Annual report. Every registerednonbank lender shall, within 30 daysfollowing June 30 of every year, fileForm FR G–4 (OMB control number7100–0011).

(4) Where to register and fileapplications and reports. Registrationstatements, applications to terminateregistration, and annual reports shall befiled with the Federal Reserve Bank ofthe district in which the principal officeof the lender is located.

(c) Purpose statement—(1) Generalrule—(i) Banks. Except for creditextended under paragraph (c)(2) of thissection, whenever a bank extends creditsecured directly or indirectly by anymargin stock, in an amount exceeding$100,000, the bank shall require itscustomer to execute Form FR U–1 (OMBNo. 7100–0115), which shall be signedand accepted by a duly authorizedofficer of the bank acting in good faith.

(ii) Nonbank lenders. Except for creditextended under paragraph (c)(2) of thissection or § 221.4, whenever a nonbanklender extends credit secured directly orindirectly by any margin stock, thenonbank lender shall require itscustomer to execute Form FR G–3 (OMBcontrol number 7100–0018), which shallbe signed and accepted by a dulyauthorized representative of thenonbank lender acting in good faith.

(2) Purpose statement for revolving-credit or multiple-draw agreements orfinancing of securities purchases on apayment-against-delivery basis—(i)

Banks. If a bank extends credit, secureddirectly or indirectly by any marginstock, in an amount exceeding $100,000,under a revolving-credit or othermultiple-draw agreement, Form FR U–1must be executed at the time the creditarrangement is originally establishedand must be amended as described inparagraph (c)(2)(iv) of this section foreach disbursement if all of the collateralfor the agreement is not pledged at thetime the agreement is originallyestablished.

(ii) Nonbank lenders. If a nonbanklender extends credit, secured directlyor indirectly by any margin stock, undera revolving-credit or other multiple-draw agreement, Form FR G–3 must beexecuted at the time the creditarrangement is originally establishedand must be amended as described inparagraph (c)(2)(iv) of this section foreach disbursement if all of the collateralfor the agreement is not pledged at thetime the agreement is originallyestablished.

(iii) Collateral. If a purpose statementexecuted at the time the creditarrangement is initially made indicatesthat the purpose is to purchase or carrymargin stock, the credit will be deemedin compliance with this part if:

(A) The maximum loan value of thecollateral at least equals the aggregateamount of funds actually disbursed; or

(B) At the end of any day on whichcredit is extended under the agreement,the lender calls for additional collateralsufficient to bring the credit intocompliance with § 221.7 (theSupplement).

(iv) Amendment of purposestatement. For any purpose creditdisbursed under the agreement, thelender shall obtain and attach to theexecuted Form FR U–1 or FR G–3 acurrent list of collateral whichadequately supports all credit extendedunder the agreement.

(d) Single credit rule. (1) All purposecredit extended to a customer shall betreated as a single credit, and all thecollateral securing such credit shall beconsidered in determining whether ornot the credit complies with this part,except that syndicated loans need not beaggregated with other unrelated purposecredit extended by the same lender.

(2) A lender that has extendedpurpose credit secured by margin stockmay not subsequently extend unsecuredpurpose credit to the same customerunless the combined credit does notexceed the maximum loan value of thecollateral securing the prior credit.

(3) If a lender extended unsecuredpurpose credit to a customer prior to theextension of purpose credit secured bymargin stock, the credits shall be


combined and treated as a single creditsolely for the purposes of thewithdrawal and substitution provisionof paragraph (f) of this section.

(4) If a lender extends purpose creditsecured by any margin stock and non-purpose credit to the same customer, thelender shall treat the credits as twoseparate loans and may not rely uponthe required collateral securing thepurpose credit for the nonpurposecredit.

(e) Exempted borrowers. (1) Anexempted borrower that has been inexistence for less than one year maymeet the definition of exemptedborrower based on a six-month period.

(2) Once a member of a nationalsecurities exchange or registered brokeror dealer ceases to qualify as anexempted borrower, it shall notify itslenders of this fact. Any new extensionsof credit to such a borrower, includingrollovers, renewals, and additionaldraws on existing lines of credit, aresubject to the provisions of this part.

(f) Withdrawals and substitutions. (1)A lender may permit any withdrawal orsubstitution of cash or collateral by thecustomer if the withdrawal orsubstitution would not:

(i) Cause the credit to exceed themaximum loan value of the collateral; or

(ii) Increase the amount by which thecredit exceeds the maximum loan valueof the collateral.

(2) For purposes of this section, themaximum loan value of the collateral onthe day of the withdrawal orsubstitution shall be used.

(g) Exchange offers. To enable acustomer to participate in areorganization, recapitalization orexchange offer that is made to holdersof an issue of margin stock, a lendermay permit substitution of the securitiesreceived. A nonmargin, nonexemptedsecurity acquired in exchange for amargin stock shall be treated as if it ismargin stock for a period of 60 daysfollowing the exchange.

(h) Renewals and extensions ofmaturity. A renewal or extension ofmaturity of a credit need not beconsidered a new extension of credit ifthe amount of the credit is increasedonly by the addition of interest, servicecharges, or taxes with respect to thecredit.

(i) Transfers of credit. (1) A transfer ofa credit between customers or betweenlenders shall not be considered a newextension of credit if:

(i) The original credit was extendedby a lender in compliance with this partor by a lender subject to part 207 of thischapter in effect prior to April 1, 1998,(See part 207 appearing in the 12 CFRparts 200 to 219 edition revised as of

January 1, 1997), in a manner thatwould have complied with this part;

(ii) The transfer is not made to evadethis part;

(iii) The amount of credit is notincreased; and

(iv) The collateral for the credit is notchanged.

(2) Any transfer between customers atthe same lender shall be accompaniedby a statement by the transferorcustomer describing the circumstancesgiving rise to the transfer and shall beaccepted and signed by a representativeof the lender acting in good faith. Thelender shall keep such statement withits records of the transferee account.

(3) When a transfer is made betweenlenders, the transferee shall obtain acopy of the Form FR U–1 or Form FRG–3 originally filed with the transferorand retain the copy with its records ofthe transferee account. If no form wasoriginally filed with the transferor, thetransferee may accept in good faith astatement from the transferor describingthe purpose of the loan and thecollateral securing it.

(j) Action for lender’s protection.Nothing in this part shall require a bankto waive or forego any lien or preventa bank from taking any action it deemsnecessary in good faith for itsprotection.

(k) Mistakes in good faith. A mistakein good faith in connection with theextension or maintenance of credit shallnot be a violation of this part.

§ 221.4 Employee stock option, purchase,and ownership plans.

(a) Plan-lender; eligible plan. (1) Plan-lender means any corporation,(including a wholly-owned subsidiary,or a lender that is a thrift organizationwhose membership is limited toemployees and former employees of thecorporation, its subsidiaries or affiliates)that extends or maintains credit tofinance the acquisition of margin stockof the corporation, its subsidiaries oraffiliates under an eligible plan.

(2) Eligible plan. An eligible planmeans any employee stock option,purchase, or ownership plan adopted bya corporation and approved by itsstockholders that provides for thepurchase of margin stock of thecorporation, its subsidiaries, oraffiliates.

(b) Credit to exercise rights under orfinance an eligible plan. (1) If a plan-lender extends or maintains creditunder an eligible plan, any margin stockthat directly or indirectly secured thatcredit shall have good faith loan value.

(2) Credit extended under this sectionshall be treated separately from credit

extended under any other section of thispart except § 221.3(b)(1) and (b)(3).

(c) Credit to ESOPs. A nonbank lendermay extend and maintain purpose creditwithout regard to the provisions of thispart, except for § 221.3(b)(1) and (b)(3),if such credit is extended to anemployee stock ownership plan (ESOP)qualified under section 401 of theInternal Revenue Code, as amended (26U.S.C. 401).

§ 221.5 Special purpose loans to brokersand dealers.

(a) Special purpose loans. A lendermay extend and maintain purpose creditto brokers and dealers without regard tothe limitations set forth in §§ 221.3 and221.7, if the credit is for any of thespecific purposes and meets theconditions set forth in paragraph (c) ofthis section.

(b) Written notice. Prior to extendingcredit for more than a day under thissection, the lender shall obtain andaccept in good faith a written notice orcertification from the borrower as to thepurposes of the loan. The written noticeor certification shall be evidence ofcontinued eligibility for the specialcredit provisions until the borrowernotifies the lender that it is no longereligible or the lender has informationthat would cause a reasonable person toquestion whether the credit is beingused for the purpose specified.

(c) Types of special purpose credit.The types of credit that may beextended and maintained on a goodfaith basis are as follows:

(1) Hypothecation loans. Creditsecured by hypothecated customersecurities that, according to writtennotice received from the broker ordealer, may be hypothecated by thebroker or dealer under Securities andExchange Commission (SEC) rules.

(2) Temporary advances in payment-against-delivery transactions. Credit tofinance the purchase or sale of securitiesfor prompt delivery, if the credit is to berepaid upon completion of thetransaction.

(3) Loans for securities in transit ortransfer. Credit to finance securities intransit or surrendered for transfer, if thecredit is to be repaid upon completionof the transaction.

(4) Intra-day loans. Credit to enable abroker or dealer to pay for securities, ifthe credit is to be repaid on the sameday it is extended.

(5) Arbitrage loans. Credit to financeproprietary or customer bona fidearbitrage transactions. For the purposeof this section bona fide arbitragemeans:

(i) Purchase or sale of a security inone market, together with an offsetting


sale or purchase of the same security ina different market at nearly the sametime as practicable, for the purpose oftaking advantage of a difference inprices in the two markets; or

(ii) Purchase of a security that is,without restriction other than thepayment of money, exchangeable orconvertible within 90 calendar days ofthe purchase into a second security,together with an offsetting sale of thesecond security at or about the sametime, for the purpose of takingadvantage of a concurrent disparity inthe price of the two securities.

(6) Market maker and specialist loans.Credit to a member of a nationalsecurities exchange or registered brokeror dealer to finance its activities as amarket maker or specialist.

(7) Underwriter loans. Credit to amember of a national securitiesexchange or registered broker or dealerto finance its activities as anunderwriter.

(8) Emergency loans. Credit that isessential to meet emergency needs ofthe broker-dealer business arising fromexceptional circumstances.

(9) Capital contribution loans. Capitalcontribution loans include:

(i) Credit that Board has exempted byorder upon a finding that the exemptionis necessary or appropriate in the publicinterest or for the protection ofinvestors, provided the SecuritiesInvestor Protection Corporation certifiesto the Board that the exemption isappropriate; or

(ii) Credit to a customer for thepurpose of making a subordinated loanor capital contribution to a broker ordealer in conformity with the SEC’s netcapital rules and the rules of thebroker’s or dealer’s examining authority,provided:

(A) The customer reduces the creditby the amount of any reduction in theloan or contribution to the broker ordealer; and

(B) The credit is not used to purchasesecurities issued by the broker or dealerin a public distribution.

(10) Credit to clearing brokers ordealers. Credit to a member of a nationalsecurities exchange or registered brokeror dealer whose nonproprietarybusiness is limited to financing andcarrying the accounts of registeredmarket makers.

§ 221.6 Exempted transactions.A bank may extend and maintain

purpose credit without regard to theprovisions of this part if such credit isextended:

(a) To any bank;(b) To any foreign banking institution;(c) Outside the United States;

(d) To an employee stock ownershipplan (ESOP) qualified under section 401of the Internal Revenue Code (26 U.S.C.401);

(e) To any plan lender as defined in§ 221.4(a) to finance an eligible plan asdefined in § 221.4(b), provided the bankhas no recourse to any securitiespurchased pursuant to the plan;

(f) To any customer, other than abroker or dealer, to temporarily financethe purchase or sale of securities forprompt delivery, if the credit is to berepaid in the ordinary course ofbusiness upon completion of thetransaction and is not extended toenable the customer to pay for securitiespurchased in an account subject to part220 of this chapter;

(g) Against securities in transit, if thecredit is not extended to enable thecustomer to pay for securities purchasedin an account subject to part 220 of thischapter; or

(h) To enable a customer to meetemergency expenses not reasonablyforeseeable, and if the extension ofcredit is supported by a statementexecuted by the customer and acceptedand signed by an officer of the bankacting in good faith. For this purpose,emergency expenses include expensesarising from circumstances such as thedeath or disability of the customer, orsome other change in circumstancesinvolving extreme hardship, notreasonably foreseeable at the time thecredit was extended. The opportunity torealize monetary gain or to avoid loss isnot a ‘‘change in circumstances’’ for thispurpose.

§ 221.7 Supplement: Maximum loan valueof margin stock and other collateral.

(a) Maximum loan value of marginstock. The maximum loan value of anymargin stock is fifty per cent of itscurrent market value.

(b) Maximum loan value ofnonmargin stock and all othercollateral. The maximum loan value ofnonmargin stock and all other collateralexcept puts, calls, or combinationsthereof is their good faith loan value.

(c) Maximum loan value of options.Except for options that qualify as marginstock, puts, calls, and combinationsthereof have no loan value.

Interpretations

§ 221.101 Determination and effect ofpurpose of loan.

(a) Under this part the originalpurpose of a loan is controlling. In otherwords, if a loan originally is not for thepurpose of purchasing or carryingmargin stock, changes in the collateralfor the loan do not change its exemptedcharacter.

(b) However, a so-called increase inthe loan is necessarily on an entirelydifferent basis. So far as the purpose ofthe credit is concerned, it is a new loan,and the question of whether or not it issubject to this part must be determinedaccordingly.

(c) Certain facts should also bementioned regarding the determinationof the purpose of a loan. Section221.3(c) provides in that whenever alender is required to have its customerexecute a ‘‘Statement of Purpose for anExtension of Credit Secured by MarginStock,’’ the statement must be acceptedby the lender ‘‘acting in good faith.’’ Therequirement of ‘‘good faith’’ is of vitalimportance here. Its application willnecessarily vary with the facts of theparticular case, but it is clear that thebank must be alert to the circumstancessurrounding the loan. For example, ifthe loan is to be made to a customerwho is not a broker or dealer insecurities, but such a broker or dealer isto deliver margin stock to secure theloan or is to receive the proceeds of theloan, the bank would be put on noticethat the loan would probably be subjectto this part. It could not accept in goodfaith a statement to the contrary withoutobtaining a reliable and satisfactoryexplanation of the situation.

(d) Furthermore, the purpose of a loanmeans just that. It cannot be altered bysome temporary application of theproceeds. For example, if a borrower isto purchase Government securities withthe proceeds of a loan, but is soonthereafter to sell such securities andreplace them with margin stock, theloan is clearly for the purpose ofpurchasing or carrying margin stock.

§ 221.102 Application to committed creditwhere funds are disbursed thereafter.

The Board has concluded that thedate a commitment to extend creditbecomes binding should be regarded asthe date when the credit is extended,since:

(a) On that date the parties should beaware of law and facts surrounding thetransaction; and

(b) Generally, the date of contract iscontrolling for purposes of marginregulations and Federal securities law,regardless of the delivery of cash orsecurities.

§ 221.103 Loans to brokers or dealers.Questions have arisen as to the

adequacy of statements received bylending banks under § 221.3(c),‘‘Purpose Statement,’’ in the case ofloans to brokers or dealers secured bymargin stock where the proceeds of theloans are to be used to finance customertransactions involving the purchasing or


carrying of margin stock. While somesuch loans may qualify for exemptionunder §§ 221.1(b)(2), 221.4, 221.5 or221.6, unless they do qualify for such anexemption they are subject to this part.For example, if a loan so secured ismade to a broker to furnish cashworking capital for the conduct of hisbrokerage business (i.e., for purchasingand carrying securities for the accountof customers), the maximum loan valueprescribed in § 221.7 (the Supplement)would be applicable unless the loanshould be of a kind exempted under thispart. This result would not be affectedby the fact that the margin stock givenas security for the loan was or includedmargin stock owned by the brokeragefirm. In view of the foregoing, thestatement referred to in § 221.3(c) whichthe lending bank must accept in goodfaith in determining the purpose of theloan would be inadequate if the form ofstatement accepted or used by the bankfailed to call for answers which wouldindicate whether or not the loan was ofthe kind discussed elsewhere in thissection.

§ 221.104 Federal credit unions.

For text of the interpretation onFederal credit unions, see 12 CFR220.110.

§ 221.105 Arranging for extensions ofcredit to be made by a bank.

For text of the interpretation onArranging for extensions of credit to bemade by a bank, see 12 CFR 220.111.

§ 221.106 Reliance in ‘‘good faith’’ onstatement of purpose of loan.

(a) Certain situations have arisen fromtime to time under this part wherein itappeared doubtful that, in thecircumstances, the lending banks mayhave been entitled to rely upon thestatements accepted by them indetermining whether the purposes ofcertain loans were such as to cause theloans to be not subject to the part.

(b) The use by a lending bank of astatement in determining the purpose ofa particular loan is, of course, providedfor by § 221.3(c). However, under thatparagraph a lending bank may acceptsuch statement only if it is ‘‘acting ingood faith.’’ As the Board stated in theinterpretation contained in § 221.101,the ‘‘requirement of ‘good faith’ is ofvital importance’’; and, to fulfill suchrequirement, ‘‘it is clear that the bankmust be alert to the circumstancessurrounding the loan.’’

(c) Obviously, such a statement wouldnot be accepted by the bank in ‘‘goodfaith’’ if at the time the loan was madethe bank had knowledge, from anysource, of facts or circumstances which

were contrary to the natural purport ofthe statement, or which were sufficientreasonably to put the bank on notice ofthe questionable reliability orcompleteness of the statement.

(d) Furthermore, the samerequirement of ‘‘good faith’’ is to beapplied whether the statement acceptedby the bank is signed by the borroweror by an officer of the bank. In eithercase, ‘‘good faith’’ requires the exerciseof special diligence in any instance inwhich the borrower is not personallyknown to the bank or to the officer whoprocesses the loan.

(e) The interpretation set forth in§ 221.101 contains an example of theapplication of the ‘‘good faith’’ test.There it was stated that ‘‘if the loan isto be made to a customer who is not abroker or dealer in securities, but sucha broker or dealer is to deliver marginstock to secure the loan or is to receivethe proceeds of the loan, the bankwould be put on notice that the loanwould probably be subject to this part.It could not accept in good faith astatement to the contrary withoutobtaining a reliable and satisfactoryexplanation of the situation’’.

(f) Moreover, and as also stated by theinterpretation contained in § 221.101,the purpose of a loan, of course, ‘‘cannotbe altered by some temporaryapplication of the proceeds. Forexample, if a borrower is to purchaseGovernment securities with theproceeds of a loan, but is soon thereafterto sell such securities and replace themwith margin stock, the loan is clearly forthe purpose of purchasing or carryingmargin stock’’. The purpose of a loantherefore, should not be determinedupon a narrow analysis of theimmediate use to which the proceeds ofthe loan are put. Accordingly, a bankacting in ‘‘good faith’’ should carefullyscrutinize cases in which there is anyindication that the borrower isconcealing the true purpose of the loan,and there would be reason for specialvigilance if margin stock is substitutedfor bonds or nonmargin stock soon afterthe loan is made, or on more than oneoccasion.

(g) Similarly, the fact that a loan madeon the borrower’s signature only, forexample, becomes secured by marginstock shortly after the disbursement ofthe loan usually would affordreasonable grounds for questioning thebank’s apparent reliance upon merely astatement that the purpose of the loanwas not to purchase or carry marginstock.

(h) The examples in this section are,of course, by no means exhaustive. Theysimply illustrate the fundamental factthat no statement accepted by a lender

is of any value for the purposes of thispart unless the lender accepting thestatement is ‘‘acting in good faith’’, andthat ‘‘good faith’’ requires, among otherthings, reasonable diligence to learn thetruth.

§ 221.107 Arranging loan to purchaseopen-end investment company shares.

For text of the interpretation onArranging loan to purchase open-endinvestment company shares, see 12 CFR220.112.

§ 221.108 Effect of registration of stocksubsequent to making of loan.

(a) The Board recently was askedwhether a loan by a bank to enable theborrower to purchase a newly issuednonmargin stock during the initial over-the-counter trading period prior to thestock becoming registered (listed) on anational securities exchange would besubject to this part. The Board repliedthat, until such stock qualifies as marginstock, this would not be applicable tosuch a loan.

(b) The Board has now been askedwhat the position of the lending bankwould be under this part if, after thedate on which the stock should becomeregistered, such bank continued to holda loan of the kind just described. It isassumed that the loan was in an amountgreater than the maximum loan valuefor the collateral specified in this part.

(c) If the stock should becomeregistered, the loan would then be forthe purpose of purchasing or carrying amargin stock, and, if secured directly orindirectly by any margin stock, wouldbe subject to this part as from the datethe stock was registered. Under thispart, this does not mean that the bankwould have to obtain reduction of theloan in order to reduce it to an amountno more than the specified maximumloan value. It does mean, however, thatso long as the loan balance exceeded thespecified maximum loan value, the bankcould not permit any withdrawals orsubstitutions of collateral that wouldincrease such excess; nor could the bankincrease the amount of the loan balanceunless there was provided additionalcollateral having a maximum loan valueat least equal to the amount of theincrease. In other words, as from thedate the stock should become a marginstock, the loan would be subject to thispart in exactly the same way, forexample, as a loan subject to this partthat became under-margined because ofa decline in the current market value ofthe loan collateral or because of adecrease by the Board in the maximumloan value of the loan collateral.


§ 221.109 Loan to open-end investmentcompany.

In response to a question regarding apossible loan by a bank to an open-endinvestment company that customarilypurchases stocks registered on anational securities exchange, the Boardstated that in view of the general natureand operations of such a company, anyloan by a bank to such a companyshould be presumed to be subject to thispart as a loan for the purpose ofpurchasing or carrying margin stock.This would not be altered by the factthat the open-end company had used, orproposed to use, its own funds orproceeds of the loan to redeem some ofits own shares, since mere applicationof the proceeds of a loan to some otheruse cannot prevent the ultimate purposeof a loan from being to purchase or carryregistered stocks.

§ 221.110 Questions arising under thispart.

(a) This part governs ‘‘any purposecredit’’ extended by a lender ‘‘secureddirectly or indirectly by margin stock’’and defines ‘‘purpose credit’’ as ‘‘anycredit for the purpose, whetherimmediate, incidental, or ultimate, ofbuying or carrying margin stock, ‘‘ withcertain exceptions, and provides thatthe maximum loan value of such marginstock shall be a fixed percentage ‘‘of itscurrent market value.’’

(b) The Board of Governors has hadoccasion to consider the application ofthe language in paragraph (a) of thissection to the two following questions:

(1) Loan secured by stock. First, is aloan to purchase or carry margin stocksubject to this part where made inunsecured form, if margin stock issubsequently deposited as security withthe lender, and surroundingcircumstances indicate that the partiesoriginally contemplated that the loanshould be so secured? The Boardanswered that in a case of this kind, theloan would be subject to this part, forthe following reasons:

(i) The Board has long held, in theclosely related purpose area, that theoriginal purpose of a loan should not bedetermined upon a narrow analysis ofthe technical circumstances underwhich a loan is made. Instead, thefundamental purpose of the loan isconsidered to be controlling. Indeed,‘‘the fact that a loan made on theborrower’s signature only, for example,becomes secured by registered stockshortly after the disbursement of theloan’’ affords reasonable grounds forquestioning whether the bank wasentitled to rely upon the borrower’sstatement as to the purpose of the loan.

1953 Fed. Res. Bull. 951 (See,§ 221.106).

(ii) Where security is involved,standards of interpretation should beequally searching. If, for example, theoriginal agreement between borrowerand lender contemplated that the loanshould be secured by margin stock, andsuch stock is in fact delivered to thebank when available, the transactionmust be regarded as fundamentally asecured loan. This view is strengthenedby the fact that this part applies to aloan ‘‘secured directly or indirectly bymargin stock.’’

(2) Loan to acquire controlling shares.(i) The second question is whether thispart governs a margin stock-securedloan made for the business purpose ofpurchasing a controlling interest in acorporation, or whether such a loanwould be exempt on the ground thatthis part is directed solely towardpurchases of stock for speculative orinvestment purposes. The Boardanswered that a margin stock-securedloan for the purpose of purchasing orcarrying margin stock is subject to thispart, regardless of the reason for whichthe purchase is made.

(ii) The answer is required, in theBoard’s view, since the language of thispart is explicitly inclusive, covering‘‘any purpose credit, secured directly orindirectly by margin stock.’’ Moreover,the withdrawal in 1945 of the originalsection 2(e) of this part, whichexempted ‘‘any loan for the purpose ofpurchasing a stock from or through aperson who is not a member of anational securities exchange . . .’’plainly implies that transactions of thesort described are now subject to thegeneral prohibition of § 221.3(a).

§ 221.111 Contribution to joint venture asextension of credit when the contribution isdisproportionate to the contributor’s sharein the venture’s profits or losses.

(a) The Board considered the questionwhether a joint venture, structured sothat the amount of capital contributionto the venture would bedisproportionate to the right ofparticipation in profits or losses,constitutes an ‘‘extension of credit’’ forthe purpose of this part.

(b) An individual and a corporationplan to establish a joint venture toengage in the business of buying andselling securities, including marginstock. The individual would contribute20 percent of the capital and receive 80percent of the profits or losses; thecorporate share would be the reverse. Incomputing profits or losses, eachparticipant would first receive interestat the rate of 8 percent on his respectivecapital contribution. Although

purchases and sales would be mutuallyagreed upon, the corporation couldliquidate the joint portfolio if theindividual’s share of the losses equaledor exceeded his 20 percent contributionto the venture. The corporation wouldhold the securities, and upontermination of the venture, the assetswould first be applied to repayment ofcapital contributions.

(c) In general, the relationship of jointventure is created when two or morepersons combine their money, property,or time in the conduct of someparticular line of trade or someparticular business and agree to sharejointly, or in proportion to capitalcontributed, the profits and losses of theundertaking.

(d) The incidents of the joint venturedescribed in paragraph (b) of thissection, however, closely parallel thoseof an extension of margin credit, withthe corporation as lender and theindividual as borrower. The corporationsupplies 80 percent of the purchaseprice of securities in exchange for a netreturn of 8 percent of the amountadvanced plus 20 percent of any gain.Like a lender of securities credit, thecorporation is insulated against loss byretaining the right to liquidate thecollateral before the securities decline inprice below the amount of itscontribution. Conversely, theindividual—like a customer whoborrows to purchase securities—puts uponly 20 percent of their cost, is entitledto the principal portion of anyappreciation in their value, bears theprincipal risk of loss should that valuedecline, and does not stand to gain orlose except through a change in value ofthe securities purchased.

(e) The Board is of the opinion thatwhere the right of an individual to sharein profits and losses of such a jointventure is disproportionate to hiscontribution to the venture:

(1) The joint venture involves anextension of credit by the corporation tothe individual;

(2) The extension of credit is topurchase or carry margin stock, and iscollateralized by such margin stock; and

(3) If the corporation is not a brokeror dealer subject to Regulation T (12CFR part 220), the credit is of the kinddescribed by § 221.3(a).

§ 221.112 Loans by bank in capacity astrustee.

(a) The Board’s advice has beenrequested whether a bank’s activities inconnection with the administration ofan employees’ savings plan are subjectto this part.

(b) Under the plan, any regular, full-time employee may participate by


authorizing the sponsoring company todeduct a percentage of his salary andwages and transmit the same to the bankas trustee. Voluntary contributions bythe company are allocated among theparticipants. A participant may directthat funds held for him be invested bythe trustee in insurance, annuitycontracts, Series E Bonds, or in one ormore of three specified securities whichare listed on a stock exchange. Loans topurchase the stocks may be made toparticipants from funds of the trust,subject to approval of the administrativecommittee, which is composed of fiveparticipants, and of the trustee. Thebank’s right to approve is said to berestricted to the mechanics of makingthe loan, the purpose being to avoidcumbersome procedures.

(c) Loans are secured by the creditbalance of the borrowing participants inthe savings fund, including stock, butexcluding (in practice) insurance andannuity contracts and governmentsecurities. Additional stocks may be,but, in practice, have not been pledgedas collateral for loans. Loans are notmade, under the plan, from bank funds,and participants do not borrow from thebank upon assignment of theparticipants’ accounts in the trust.

(d) It is urged that loans under theplan are not subject to this part becausea loan should not be considered ashaving been made by a bank where thebank acts solely in its capacity oftrustee, without exercise of anydiscretion.

(e) The Board reviewed this questionupon at least one other occasion, andfull consideration has again been givento the matter. After considering thearguments on both sides, the Board hasreaffirmed its earlier view that, inconformity with an interpretation notpublished in the Code of FederalRegulations which was published atpage 874 of the 1946 Federal ReserveBulletin (See 12 CFR 261.10(f) forinformation on how to obtain Boardpublications.), this part applies to theactivities of a bank when it is acting inits capacity as trustee. Although thebank in that case had at best a limiteddiscretion with respect to loans made byit in its capacity as trustee, the Boardconcluded that this fact did not affectthe application of the regulation to suchloans.

§ 221.113 Loan which is secured indirectlyby stock.

(a) A question has been presented tothe Board as to whether a loan by a bankto a mutual investment fund is ‘‘secured* * * indirectly by margin stock’’ withinthe meaning of § 221.(3)(a), so that the

loan should be treated as subject to thispart.

(b) Briefly, the facts are as follows.Fund X, an open-end investmentcompany, entered into a loan agreementwith Bank Y, which was (and still is)custodian of the securities whichcomprise the portfolio of Fund X. Theagreement includes the following terms,which are material to the questionbefore the Board:

(1) Fund X agrees to have an ‘‘assetcoverage’’ (as defined in the agreements)of 400 percent of all its borrowings,including the proposed borrowing, atthe time when it takes down any part ofthe loan.

(2) Fund X agrees to maintain an‘‘asset coverage’’ of at least 300 percentof its borrowings at all times.

(3) Fund X agrees not to amend itscustody agreement with Bank Y, or tosubstitute another custodian withoutBank Y’s consent.

(4) Fund X agrees not to mortgage,pledge, or otherwise encumber any of itsassets elsewhere than with Bank Y.

(c) In § 221.109 the Board stated thatbecause of ‘‘the general nature andoperations of such a company’’, any‘‘loan by a bank to an open-endinvestment company that customarilypurchases margin stock * * * should bepresumed to be subject to this part as aloan for the purpose of purchasing orcarrying margin stock’’ (purpose credit).The Board’s interpretation went on tosay that: ‘‘this would not be altered bythe fact that the open-end company hadused, or proposed to use, its own fundsor proceeds of the loan to redeem someof its own shares * * *.’’

(d) Accordingly, the loan by Bank Yto Fund X was and is a ‘‘purposecredit’’. However, a loan by a bank isnot subject to this part unless: it is apurpose credit; and it is ‘‘secureddirectly or indirectly by margin stock’’.In the present case, the loan is not‘‘secured directly’’ by stock in theordinary sense, since the portfolio ofFund X is not pledged to secure thecredit from Bank Y. But the word‘‘indirectly’’ must signify some form ofsecurity arrangement other than the‘‘direct’’ security which arises from theordinary ‘‘transaction that givesrecourse against a particular chattel orland or against a third party on anobligation’’ described in the AmericanLaw Institute’s Restatement of the Lawof Security, page 1. Otherwise the word‘‘indirectly’’ would be superfluous, anda regulation, like a statute, must beconstrued if possible to give meaning toevery word.

(e) The Board has indicated its viewthat any arrangement under whichmargin stock is more readily available as

security to the lending bank than toother creditors of the borrower mayamount to indirect security within themeaning of this part. In aninterpretation published at § 221.110 itstated: ‘‘The Board has long held, in the* * * purpose area, that the originalpurpose of a loan should not bedetermined upon a narrow analysis ofthe technical circumstances underwhich a loan is made * * * . Wheresecurity is involved, standards ofinterpretation should be equallysearching.’’ In its pamphlet issued forthe benefit and guidance of banks andbank examiners, entitled ‘‘Questionsand Answers Illustrating Application ofRegulation U’’, the Board said: ‘‘Indetermining whether a loan is‘‘indirectly’’ secured, it should be bornein mind that the reason the Board hasthus far refrained * * * from regulatingloans not secured by stock has been tosimplify operations under theregulation. This objective of simplifyingoperations does not apply to loans inwhich arrangements are made to retainthe substance of stock collateral whilesacrificing only the form’’.

(f) A wide variety of arrangements asto collateral can be made between bankand borrower which will serve, to someextent, to protect the interest of the bankin seeing that the loan is repaid, withoutgiving the bank a conventional direct‘‘security’’ interest in the collateral.Among such arrangements which havecome to the Board’s attention are thefollowing:

(1) The borrower may deposit marginstock in the custody of the bank. Anarrangement of this kind may not, it istrue, place the bank in the position ofa secured creditor in case of bankruptcy,or even of conflicting claims, but it islikely effectively to strengthen thebank’s position. The definition ofindirectly secured in § 221.2, whichprovides that a loan is not indirectlysecured if the lender ‘‘holds the marginstock only in the capacity of custodian,depositary or trustee, or under similarcircumstances, and, in good faith hasnot relied upon the margin stock ascollateral,’’ does not exempt a deposit ofthis kind from the impact of theregulation unless it is clear that the bank‘‘has not relied’’ upon the margin stockdeposited with it.

(2) A borrower may not deposit hismargin stock with the bank, but agreenot to pledge or encumber his assetselsewhere while the loan is outstanding.Such an agreement may be difficult topolice, yet it serves to some extent toprotect the interest of the bank if onlybecause the future credit standing andbusiness reputation of the borrower willdepend upon his keeping his word. If


the assets covered by such an agreementinclude margin stock, then, the credit is‘‘indirectly secured’’ by the marginstock within the meaning of this part.

(3) The borrower may deposit marginstock with a third party who agrees tohold the stock until the loan has beenpaid off. Here, even though the partiesmay purport to provide that the stock isnot ‘‘security’’ for the loan (for example,by agreeing that the stock may not besold and the proceeds applied to thedebt if the borrower fails to pay), themere fact that the stock is out of theborrower’s control for the duration ofthe loan serves to some extent to protectthe bank.

(g) The three instances described inparagraph (f) of this section are merelyillustrative. Other methods, orcombinations of methods, may serve asimilar purpose. The conclusion thatany given arrangement makes a credit‘‘indirectly secured’’ by margin stockmay, but need not, be reinforced by factssuch as that the stock in question waspurchased with proceeds of the loan,that the lender suggests or insists uponthe arrangement, or that the loan wouldprobably be subject to criticism bysupervisory authorities were it not forthe protective arrangement.

(h) Accordingly, the Board concludesthat the loan by Bank Y to Fund X isindirectly secured by the portfolio of thefund and must be treated by the bank asa regulated loan.

§ 221.114 Bank loans to purchase stock ofAmerican Telephone and TelegraphCompany under Employees’ Stock Plan.

(a) The Board of Governorsinterpreted this part in connection withproposed loans by a bank to personswho are purchasing shares of stock ofAmerican Telephone and TelegraphCompany pursuant to its Employees’Stock Plan.

(b) According to the current offeringunder the Plan, an employee of theAT&T system may purchase sharesthrough regular deductions from his payover a period of 24 months. At the endof that period, a certificate for theappropriate number of shares will beissued to the participating employee byAT&T. Each employee is entitled topurchase, as a maximum, shares thatwill cost him approximately three-fourths of his annual base pay. Since theprogram extends over two years, itfollows that the payroll deductions forthis purpose may be in theneighborhood of 38 percent of base payand a larger percentage of ‘‘take-homepay.’’ Deductions of this magnitude arein excess of the saving rate of manyemployees.

(c) Certain AT&T employees, whowish to take advantage of the currentoffering under the Plan, are the ownersof shares of AT&T stock that theypurchased under previous offerings. Abank proposed to receive such stock ascollateral for a ‘‘living expenses’’ loanthat will be advanced to the employeein monthly installments over the 24-month period, each installment being inthe amount of the employee’s monthlypayroll deduction under the Plan. Theaggregate amount of the advances overthe 24-month period would besubstantially greater than the maximumloan value of the collateral as prescribedin § 221.7 (the Supplement).

(d) In the opinion of the Board ofGovernors, a loan of the kind describedwould violate this part if it exceeded themaximum loan value of the collateral.The regulation applies to any marginstock-secured loan for the purpose ofpurchasing or carrying margin stock(§ 221.3(a)). Although the proposed loanwould purport to be for living expenses,it seems quite clear, in view of therelationship of the loan to theEmployees’ Stock Plan, that its actualpurpose would be to enable theborrower to purchase AT&T stock,which is margin stock. At the end of the24-month period the borrower wouldacquire a certain number of shares ofthat stock and would be indebted to thelending bank in an amountapproximately equal to the amount hewould pay for such shares. In thesecircumstances, the loan by the bankmust be regarded as a loan ‘‘for thepurpose of purchasing’’ the stock, andtherefore it is subject to the limitationsprescribed by this part. This conclusionfollows from the provisions of this part,and it may also be observed that acontrary conclusion could largely defeatthe basic purpose of the marginregulations.

(e) Accordingly, the Board concludedthat a loan of the kind described maynot be made in an amount exceeding themaximum loan value of the collateral, asprescribed by the current § 221.7 (theSupplement).

§ 221.115 Accepting a purpose statementthrough the mail without benefit of face-to-face interview.

(a) The Board has been asked whetherthe acceptance of a purpose statementsubmitted through the mail by a lendersubject to the provisions of this part willmeet the good faith requirement of§ 221.3(c). Section 221.3(c) states that inconnection with any credit secured bycollateral which includes any marginstock, a nonbank lender must obtain apurpose statement executed by theborrower and accepted by the lender in

good faith. Such acceptance requiresthat the lender be alert to thecircumstances surrounding the creditand if further information suggestsinquiry, he must investigate and besatisfied that the statement is truthful.

(b) The lender is a subsidiary of aholding company which also hasanother subsidiary which serves asunderwriter and investment advisor tovarious mutual funds. The sole businessof the lender will be to make ‘‘non-purpose’’ consumer loans toshareholders of the mutual funds, suchloans to be collateralized by the fundshares. Most mutual funds shares aremargin stock for purposes of this part.Solicitation and acceptance of theseconsumer loans will be done principallythrough the mail and the lender wishesto obtain the required purpose statementby mail rather than by a face-to-faceinterview. Personal interviews are notpracticable for the lender becauseshareholders of the funds are scatteredthroughout the country. In order toprovide the same safeguards inherent inface-to-face interviews, the lender hasdeveloped certain procedures designedto satisfy the good faith acceptancerequirement of this part.

(c) The purpose statement will besupplemented with several additionalquestions relevant to the prospectiveborrower’s investment activities such aspurchases of any security within the last6 months, dollar amount, andobligations to purchase or pay forprevious purchases; present plans topurchase securities in the near future,participations in securities purchaseplans, list of unpaid debts, and presentincome level. Some questions have beenmodified to facilitate understanding butno questions have been deleted. Ifadditional inquiry is indicated by theanswers on the form, a loan officer ofthe lender will interview the borrowerby telephone to make sure the loan is‘‘non-purpose’’. Whenever the loanexceeds the ‘‘maximum loan value’’ ofthe collateral for a regulated loan, atelephone interview will be done as amatter of course.

(d) One of the stated purposes ofRegulation X (12 CFR part 224) was toprevent the infusion of unregulatedcredit into the securities markets byborrowers falsely certifying the purposeof a loan. The Board is of the view thatthe existence of Regulation X (12 CFRpart 224), which makes the borrowerliable for willful violations of themargin regulations, will allow a lendersubject to this part to meet the goodfaith acceptance requirement of§ 221.3(c) without a face-to-faceinterview if the lender adopts aprogram, such as the one described in


paragraph (c) of this section, whichrequires additional detailed informationfrom the borrower and properprocedures are instituted to verify thetruth of the information received.Lenders intending to embark on asimilar program should discussproposed plans with their districtFederal Reserve Bank. Lenders mayhave existing or future loans with theprospective customers which couldcomplicate the efforts to determine thetrue purpose of the loan.

§ 221.116 Bank loans to replenish workingcapital used to purchase mutual fundshares.

(a) In a situation considered by theBoard of Governors, a business concern(X) proposed to purchase mutual fundshares, from time to time, with proceedsfrom its accounts receivable, thenpledge the shares with a bank in orderto secure working capital. The bank wasprepared to lend amounts equal to 70percent of the current value of theshares as they were purchased by X. Ifthe loans were subject to this part, only50 percent of the current market valueof the shares could be lent.

(b) The immediate purpose of theloans would be to replenish X’s workingcapital. However, as time went on, Xwould be acquiring mutual fund sharesat a cost that would exceed the netearnings it would normally haveaccumulated, and would becomeindebted to the lending bank in anamount approximately 70 percent of theprices of said shares.

(c) The Board held that the loans werefor the purpose of purchasing theshares, and therefore subject to thelimitations prescribed by this part. Aspointed out in § 221.114 with respect toa similar program for putting a highproportion of cash income into stock,the borrowing against the margin stockto meet needs for which the cash wouldotherwise have been required, acontrary conclusion could largely defeatthe basic purpose of the marginregulations.

(d) Also considered was an alternativeproposal under which X would depositproceeds from accounts receivable in atime account for 1 year, before usingthose funds to purchase mutual fundshares. The Board held that thisprocedure would not change thesituation in any significant way. Oncethe arrangement was established, theproceeds would be flowing into the timeaccount at the same time that similaramounts were released to purchase theshares, and over any extended period oftime the result would be the same.Accordingly, the Board concluded thatbank loans made under the alternative

proposal would similarly be subject tothis part.

§ 221.117 When bank in ‘‘good faith’’ hasnot relied on stock as collateral.

(a) The Board has received questionsregarding the circumstances in which anextension or maintenance of credit willnot be deemed to be ‘‘indirectlysecured’’ by stock as indicated by thephrase, ‘‘if the lender, in good faith, hasnot relied upon the margin stock ascollateral,’’ contained in paragraph(2)(iv) of the definition of indirectlysecured in § 221.2.

(b) In response, the Board noted thatin amending this portion of theregulation in 1968 it was indicated thatone of the purposes of the change wasto make clear that the definition ofindirectly secured does not apply tocertain routine negative covenants inloan agreements. Also, while thequestion of whether or not a bank hasrelied upon particular stock as collateralis necessarily a question of fact to bedetermined in each case in the light ofall relevant circumstances, someindication that the bank had not reliedupon stock as collateral would seem tobe afforded by such circumstances asthe fact that:

(1) The bank had obtained areasonably current financial statementof the borrower and this statement couldreasonably support the loan; and

(2) The loan was not payable ondemand or because of fluctuations inmarket value of the stock, but insteadwas payable on one or more fixedmaturities which were typical ofmaturities applied by the bank to loansotherwise similar except for notinvolving any possible question of stockcollateral.

§ 221.118 Bank arranging for extension ofcredit by corporation.

(a) The Board considered thequestions whether:

(1) The guaranty by a corporation ofan ‘‘unsecured’’ bank loan to exercise anoption to purchase stock of thecorporation is an ‘‘extension of credit’’for the purpose of this part;

(2) Such a guaranty is given ‘‘in theordinary course of business’’ of thecorporation, as defined in § 221.2; and

(3) The bank involved took part inarranging for such credit on better termsthan it could extend under theprovisions of this part.

(b) The Board understood that anyofficer or employee included under thecorporation’s stock option plan whowished to exercise his option couldobtain a loan for the purchase price ofthe stock by executing an unsecurednote to the bank. The corporation would

issue to the bank a guaranty of the loanand hold the purchased shares ascollateral to secure it against loss on theguaranty. Stock of the corporation isregistered on a national securitiesexchange and therefore qualifies as‘‘margin stock’’ under this part.

(c) A nonbank lender is subject to theregistration and other requirements ofthis part if, in the ordinary course of hisbusiness, he extends credit on collateralthat includes any margin stock in theamount of $200,000 or more in anycalendar quarter, or has such creditoutstanding in any calendar quarter inthe amount of $500,000 or more. TheBoard understood that the corporationin question had sufficient guarantiesoutstanding during the applicablecalendar quarter to meet the dollarthresholds for registration.

(d) In the Board’s judgment a personwho guarantees a loan, and therebybecomes liable for the amount of theloan in the event the borrower shoulddefault, is lending his credit to theborrower. In the circumstancesdescribed, such a lending of credit mustbe considered an ‘‘extension of credit’’under this part in order to preventcircumvention of the regulation’slimitation on the amount of credit thatcan be extended on the security ofmargin stock.

(e) Under § 221.2, the term in theordinary course of business means‘‘occurring or reasonably expected tooccur in carrying out or furthering anybusiness purpose. * * *’’ In general,stock option plans are designed toprovide a company’s employees with aproprietary interest in the company inthe form of ownership of the company’sstock. Such plans increase thecompany’s ability to attract and retainable personnel and, accordingly,promote the interest of the company andits stockholders, while at the same timeproviding the company’s employeeswith additional incentive to worktoward the company’s future success.An arrangement whereby participatingemployees may finance the exercise oftheir options through an unsecuredbank loan guaranteed by the company,thereby facilitating the employees’acquisition of company stock, islikewise designed to promote thecompany’s interest and is, therefore, infurtherance of a business purpose.

(f) For the reasons indicated, theBoard concluded that under thecircumstances described a guaranty bythe corporation constitutes creditextended in the ordinary course ofbusiness under this part, that thecorporation is required to registerpursuant to § 221.3(b), and that suchguaranties may not be given in excess of


the maximum loan value of thecollateral pledged to secure theguaranty.

(g) Section 221.3(a)(3) provides that‘‘no lender may arrange for theextension or maintenance of anypurpose credit, except upon the sameterms and conditions on which thelender itself may extend or maintainpurpose credit under this part’’. Sincethe Board concluded that the giving ofa guaranty by the corporation to securethe loan described above constitutes anextension of credit, and since the use ofa guaranty in the manner describedcould not be effectuated without theconcurrence of the bank involved, theBoard further concluded that the banktook part in ‘‘arranging’’ for theextension of credit in excess of themaximum loan value of the marginstock pledged to secure the guaranties.

§ 221.119 Applicability of plan-lenderprovisions to financing of stock optionsand stock purchase rights qualified orrestricted under Internal Revenue Code.

(a) The Board has been asked whetherthe plan-lender provisions of § 221.4(a)and (b) were intended to apply to thefinancing of stock options restricted orqualified under the Internal RevenueCode where such options or the optionplan do not provide for such financing.

(b) It is the Board’s experience that insome nonqualified plans, particularlystock purchase plans, the creditarrangement is distinct from the plan.So long as the credit extended, andparticularly, the character of the plan-lender, conforms with the requirementsof the regulation, the fact that optionand credit are provided for in separatedocuments is immaterial. It should beemphasized that the Board does notexpress any view on the preferability ofqualified as opposed to nonqualifiedoptions; its role is merely to preventexcessive credit in this area.

(c) Section 221.4(a) provides that aplan-lender may include a wholly-owned subsidiary of the issuer of thecollateral (taking as a whole, corporategroups including subsidiaries andaffiliates). This clarifies the Board’sintent that, to qualify for specialtreatment under that section, the lendermust stand in a special employer-employee relationship with theborrower, and a special relationship ofissuer with regard to the collateral. Thefact that the Board, for convenience andpractical reasons, permitted theemploying corporation to act through asubsidiary or other entity should not beinterpreted to mean the Board intendedthe lender to be other than an entitywhose overriding interests werecoextensive with the issuer. An

independent corporation, withindependent interests was neverintended, regardless of form, to be at thebase of exempt stock-plan lending.

§ 221.120 Allocation of stock collateral topurpose and nonpurpose credits to samecustomer.

(a) A bank proposes to extend twocredits (Credits A and B) to its customer.Although the two credits are proposedto be extended at the same time, eachwould be evidenced by a separateagreement. Credit A would be extendedfor the purpose of providing thecustomer with working capital(nonpurpose credit), collateralized bymargin stock. Credit B would beextended for the purpose of purchasingor carrying margin stock (purposecredit), without collateral or oncollateral other than stock.

(b) This part allows a bank to extendpurpose and nonpurpose creditssimultaneously or successively to thesame customer. This rule is expressed in§ 221.3(d)(4) which provides insubstance that for any nonpurposecredit to the same customer, the lendershall in good faith require as muchcollateral not already identified to thecustomer’s purpose credit as the lenderwould require if it held neither thepurpose loan nor the identifiedcollateral. This rule in § 221.3(d)(4) alsotakes into account that the lender wouldnot necessarily be required to holdcollateral for the nonpurpose credit if,consistent with good faith bankingpractices, it would normally make thiskind of nonpurpose loan withoutcollateral.

(c) The Board views § 221.3(d)(4),when read in conjunction with§ 221.3(c) and (f), as requiring thatwhenever a lender extends two creditsto the same customer, one a purposecredit and the other nonpurpose, anymargin stock collateral must first beidentified with and attributed to thepurpose loan by taking into account themaximum loan value of such collateralas prescribed in § 221.7 (theSupplement).

(d) The Board is further of the opinionthat under the foregoing circumstancesCredit B would be indirectly secured bystock, despite the fact that there wouldbe separate loan agreements for bothcredits. This conclusion flows from thecircumstance that the lender wouldhold in its possession stock collateral towhich it would have access with respectto Credit B, despite any ostensibleallocation of such collateral to Credit A.

§ 221.121 Extension of credit in certainstock option and stock purchase plans.

Questions have been raised as towhether certain stock option and stockpurchase plans involve extensions ofcredit subject to this part when theparticipant is free to cancel hisparticipation at any time prior to fullpayment, but in the event ofcancellation the participant remainsliable for damages. It thus appears thatthe participant has the opportunity togain and bears the risk of loss from thetime the transaction is executed andpayment is deferred. In some casesbrought to the Board’s attentiondamages are related to the market priceof the stock, but in others, there may beno such relationship. In either of thesecircumstances, it is the Board’s viewthat such plans involve extensions ofcredit. Accordingly, where the securitybeing purchased is a margin securityand the credit is secured, directly orindirectly, by any margin security, thecreditor must register and the creditmust conform with either the regularmargin requirements of § 221.3(a) or thespecial ‘‘plan-lender’’ provisions setforth in § 221.4, whichever isapplicable. This assumes, of course, thatthe amount of credit extended is suchthat the creditor is subject to theregistration requirements of § 221.3(b).

§ 221.122 Applicability of marginrequirements to credit in connection withInsurance Premium Funding Programs.

(a) The Board has been askednumerous questions regarding purposecredit in connection with insurancepremium funding programs. Theinquiries are included in a set ofguidelines in the format of questionsand answers. (The guidelines areavailable pursuant to the Board’s RulesRegarding Availability of Information,12 CFR part 261.) A glossary of termscustomarily used in connection withinsurance premium funding creditactivities is included in the guidelines.Under a typical insurance premiumfunding program, a borrower acquiresmutual fund shares for cash, or takesfund shares which he already owns, andthen uses the loan value (currently 50percent as set by the Board) to buyinsurance. Usually, a funding company(the issuer) will sell both the fundshares and the insurance through eitherindependent broker/dealers orsubsidiaries or affiliates of the issuer. Atypical plan may run for 10 or 15 yearswith annual insurance premiums due.To illustrate, assuming an annualinsurance premium of $300, theparticipant is required to put up mutualfund shares equivalent to 250 percent ofthe premium or $600 ($600 x 50 percent


loan value equals $300 the amount ofthe insurance premium which is alsothe amount of the credit extended).

(b) The guidelines referenced inparagraph (a) of this section also:

(1) Clarify an earlier 1969 Boardinterpretation to show that the publicoffering price of mutual fund shares(which includes the front load, or salescommission) may be used as a measureof their current market value when theshares serve as collateral on a purposecredit throughout the day of thepurchase of the fund shares; and

(2) Relax a 1965 Board position inconnection with accepting purposestatements by mail.

(c) It is the Board’s view that when itis clearly established that a purposestatement supports a purpose creditthen such statement executed by theborrower may be accepted by mail,provided it is received and alsoexecuted by the lender before the creditis extended.

§ 221.123 Combined credit for exercisingemployee stock options and paying incometaxes incurred as a result of such exercise.

(a) Section 221.4(a) and (b), whichprovides special treatment for creditextended under employee stock optionplans, was designed to encourage theiruse in recognition of their value ingiving an employee a proprietaryinterest in the business. Taking aposition that might discourage theexercise of options because of taxcomplications would conflict with thepurpose of § 221.4(a) and (b).

(b) Accordingly, the Board hasconcluded that the combined loans forthe exercise of the option and thepayment of the taxes in connectiontherewith under plans complying with§ 221.4(a)(2) may be regarded as purposecredit within the meaning of § 221.2.

§ 221.124 Purchase of debt securities tofinance corporate takeovers.

(a) Petitions have been filed with theBoard raising questions as to whetherthe margin requirements in this partapply to two types of corporateacquisitions in which debt securities areissued to finance the acquisition ofmargin stock of a target company.

(b) In the first situation, the acquiringcompany, Company A, controls a shellcorporation that would make a tenderoffer for the stock of Company B, whichis margin stock (as defined in § 221.2).The shell corporation has virtually nooperations, has no significant businessfunction other than to acquire and holdthe stock of Company B, and hassubstantially no assets other than themargin stock to be acquired. To financethe tender offer, the shell corporation

would issue debt securities which, bytheir terms, would be unsecured. If thetender offer is successful, the shellcorporation would seek to merge withCompany B. However, the tender offerseeks to acquire fewer shares ofCompany B than is necessary understate law to effect a short form mergerwith Company B, which could beconsummated without the approval ofshareholders or the board of directors ofCompany B.

(c) The purchase of the debt securitiesissued by the shell corporation tofinance the acquisition clearly involvespurpose credit (as defined in § 221.2). Inaddition, such debt securities would bepurchased only by sophisticatedinvestors in very large minimumdenominations, so that the purchasersmay be lenders for purposes of this part.See § 221.3(b). Since the debt securitiescontain no direct security agreementinvolving the margin stock, applicabilityof the lending restrictions of this partturns on whether the arrangementconstitutes an extension of credit that issecured indirectly by margin stock.

(d) As the Board has recognized,indirect security can encompass a widevariety of arrangements between lendersand borrowers with respect to marginstock collateral that serve to protect thelenders’ interest in assuring that a creditis repaid where the lenders do not havea conventional direct security interest inthe collateral. See § 221.124. However,credit is not ‘‘indirectly secured’’ bymargin stock if the lender in good faithhas not relied on the margin stock ascollateral extending or maintainingcredit. See § 221.2.

(e) The Board is of the view that, inthe situation described in paragraph (b)of this section, the debt securities wouldbe presumed to be indirectly secured bythe margin stock to be acquired by theshell acquisition vehicle. The staff haspreviously expressed the view thatnominally unsecured credit extended toan investment company, a substantialportion of whose assets consist ofmargin stock, is indirectly secured bythe margin stock. See Federal ReserveRegulatory Service 5–917.12. (See 12CFR 261.10(f) for information on how toobtain Board publications.) Thisopinion notes that the investmentcompany has substantially no assetsother than margin stock to supportindebtedness and thus credit could notbe extended to such a company in goodfaith without reliance on the marginstock as collateral.

(f) The Board believes that thisrationale applies to the debt securitiesissued by the shell corporationdescribed in paragraph (b) of thissection. At the time the debt securities

are issued, the shell corporation hassubstantially no assets to support thecredit other than the margin stock thatit has acquired or intends to acquire andhas no significant business functionother than to hold the stock of the targetcompany in order to facilitate theacquisition. Moreover, it is possible thatthe shell may hold the margin stock fora significant and indefinite period oftime, if defensive measures by the targetprevent consummation of theacquisition. Because of the difficulty inpredicting the outcome of a contestedtakeover at the time that credit iscommitted to the shell corporation, theBoard believes that the purchasers of thedebt securities could not, in good faith,lend without reliance on the marginstock as collateral. The presumptionthat the debt securities are indirectlysecured by margin stock would notapply if there is specific evidence thatlenders could in good faith rely onassets other than margin stock ascollateral, such as a guaranty of the debtsecurities by the shell corporation’sparent company or another companythat has substantial non-margin stockassets or cash flow. This presumptionwould also not apply if there is a mergeragreement between the acquiring andtarget companies entered into at thetime the commitment is made topurchase the debt securities or in anyevent before loan funds are advanced. Inaddition, the presumption would notapply if the obligation of the purchasersof the debt securities to advance fundsto the shell corporation is contingent onthe shell’s acquisition of the minimumnumber of shares necessary underapplicable state law to effect a mergerbetween the acquiring and targetcompanies without the approval ofeither the shareholders or directors ofthe target company. In these twosituations where the merger will takeplace promptly, the Board believes thelenders could reasonably be presumedto be relying on the assets of the targetfor repayment.

(g) In addition, the Board is of theview that the debt securities describedin paragraph (b) of this section areindirectly secured by margin stockbecause there is a practical restrictionon the ability of the shell corporation todispose of the margin stock of the targetcompany. Indirectly secured is definedin § 221.2 to include any arrangementunder which the customer’s right orability to sell, pledge, or otherwisedispose of margin stock owned by thecustomer is in any way restricted whilethe credit remains outstanding. Thepurchasers of the debt securities issuedby a shell corporation to finance a


takeover attempt clearly understand thatthe shell corporation intends to acquirethe margin stock of the target companyin order to effect the acquisition of thatcompany. This understandingrepresents a practical restriction on theability of the shell corporation todispose of the target’s margin stock andto acquire other assets with the proceedsof the credit.

(h) In the second situation, CompanyC, an operating company withsubstantial assets or cash flow, seeks toacquire Company D, which issignificantly larger than Company C.Company C establishes a shellcorporation that together with CompanyC makes a tender offer for the shares ofCompany D, which is margin stock. Tofinance the tender offer, the shellcorporation would obtain a bank loanthat complies with the margin lendingrestrictions of this part and Company Cwould issue debt securities that wouldnot be directly secured by any marginstock. The Board is of the opinion thatthese debt securities should not bepresumed to be indirectly secured bythe margin stock of Company D, since,as an operating business, Company Chas substantial assets or cash flowwithout regard to the margin stock ofCompany D. Any presumption wouldnot be appropriate because thepurchasers of the debt securities may berelying on assets other than marginstock of Company D for repayment ofthe credit.

§ 221.125 Credit to brokers and dealers.(a) The National Securities Markets

Improvement Act of 1996 (Pub. L. 104–290, 110 Stat. 3416) restricts the Board’smargin authority by repealing section8(a) of the Securities Exchange Act of1934 (the Exchange Act) and amendingsection 7 of the Exchange Act (15 U.S.C.78g) to exclude the borrowing by amember of a national securities

exchange or a registered broker or dealer‘‘a substantial portion of whose businessconsists of transactions with personsother than brokers or dealers’’ andborrowing by a member of a nationalsecurities exchange or a registeredbroker or dealer to finance its activitiesas a market maker or an underwriter.Notwithstanding this exclusion, theBoard may impose such rules andregulations if it determines they are‘‘necessary or appropriate in the publicinterest or for the protection ofinvestors.’’

(b) The Board has not found that it isnecessary or appropriate in the publicinterest or for the protection of investorsto impose rules and regulationsregarding loans to brokers and dealerscovered by the National SecuritiesMarkets Improvement Act of 1996.

PART 224—BORROWERS OFSECURITIES CREDIT (REGULATION X)


Authority: 15 U.S.C. 78g.

§ 224.1 [Amended]8. Section 224.1 is amended as

follows:a. Remove ‘‘G,’’ and ‘‘207,’’ from the

last sentence in paragraph (a).b. Remove ‘‘G,’’ from paragraph (b)(1).


removing ‘‘G,’’ from the introductorytext.

10. Section 224.3 is revised to read asfollows:

§ 224.3 Margin regulations to be appliedby nonexempted borrowers.

(a) Credit transactions outside theUnited States. No borrower shall obtainpurpose credit from outside the UnitedStates unless it conforms to thefollowing margin regulations:

(1) Regulation T (12 CFR part 220) ifthe credit is obtained from a foreignbranch of a broker-dealer;

(2) Regulation U (12 CFR part 221), asit applies to banks, if the credit isobtained from a foreign branch of abank, except for the requirement of apurpose statement (12 CFR 221.3(c)(1)(i)and (c)(2)(i)); and

(3) Regulation U (12 CFR part 221), asit applies to nonbank lenders, if thecredit is obtained from any other lenderoutside the United States, except for therequirement of a purpose statement (12CFR 221.3(c)(1)(ii) and (c)(2)(ii)).

(b) Credit transactions within theUnited States. Any borrower whowillfully causes credit to be extended incontravention of Regulations T and U(12 CFR parts 220 and 221), and who,therefore, is not exempted by§ 224.1(b)(1), must conform the credit tothe margin regulation that applies to thelender.

PART 265—RULES REGARDINGDELEGATION OF AUTHORITY


Authority: 12 U.S.C. 248(i) and (k).

12. Section 265.11(f) is revised to readas follows:

§ 265.11 Functions delegated to FederalReserve Banks.

* * * * *(f) Securities. To approve applications

by a registered lender for termination ofthe registration under § 221.3(b)(2) ofRegulation U (12 CFR 221.3(b)(2)).* * * * *

By order of the Board of Governors of theFederal Reserve System, January 8, 1998.William W. Wiles,Secretary of the Board.[FR Doc. 98–871 Filed 1–15–98; 8:45 am]BILLING CODE 6210–01–P


1 12 CFR Part 220.2 12 CFR Part 221.3 12 CFR Part 224.


12 CFR Parts 220, 221 and 224

[Regulations T, U and X; Docket No. R–0995]

Securities Credit Transactions

AGENCY: Board of Governors of theFederal Reserve System.ACTION: Advance notice of proposedrulemaking and request for comment.

SUMMARY: In 1995 and 1996, the Boardproposed three sets of amendments toits securities credit or marginregulations (Regulations G, T and U).These amendments were proposed inpart based on a review of the marginregulations the Board is conductingpursuant to its internal policy ofperiodically reviewing its regulationsand section 303 of the RiegleCommunity Redevelopment andRegulatory Improvement Act of 1994and in part on statutory amendments tothe Board’s margin authority under theSecurities Exchange Act of 1934 (the ’34Act) contained in the NationalSecurities Markets Improvement Act of1996. In a separate document publishedelsewhere in today’s Federal Register,the Board is adopting final amendmentsto Regulations G, T and U in responseto the three proposals. The finalamendments include the extension ofRegulation U to cover lenders formerlysubject to Regulation G and theelimination of Regulation G.

In the course of the comment processfor the Board’s 1995–1996 proposals,commenters raised a number of issuesnot addressed by the Board in theproposals. In order to complete theperiodic review of its marginregulations, the Board is publishing thisadvance notice and request for commentfor Regulations T, U and X. Afterreviewing the comments, the Board mayissue specific proposed amendments forpublic comment.DATES: Comments should be received byApril 1, 1998.ADDRESSES: Comments should refer toDocket No. R–0995 and may be mailedto William W. Wiles, Secretary, Board ofGovernors of the Federal ReserveSystem, 20th Street and ConstitutionAvenue, N.W., Washington, DC 20551.Comments also may be delivered toRoom B–2222 of the Eccles Buildingbetween 8:45 a.m. and 5:15 p.m.weekdays, or to the guard station in theEccles Building courtyard on 20thStreet, N.W. between ConstitutionAvenue and C Street, N.W. at any time.Comments received will be available forinspection in Room MP–500 of the

Martin Building between 9:00 a.m. and5:00 p.m. weekdays, except as providedin 12 CFR 261.14 of the Board’s rulesregarding availability of information.FOR FURTHER INFORMATION CONTACT:Oliver Ireland, Associate GeneralCounsel (202) 452–3625; Scott Holz,Senior Attorney (202) 452–2966; or JeanAnderson, Staff Attorney (202) 452–2966, Legal Division; for the hearingimpaired only, TelecommunicationsDevice for the Deaf (TDD), Diane Jenkins(202) 452–3544.SUPPLEMENTARY INFORMATION: Pursuantto its authority under sections 3, 7, 17and 23 of the Securities Exchange Actof 1934, the Board is requestingcomment on its securities credit ormargin regulations: Regulation T(‘‘Credit by brokers and dealers’’),1Regulation U (‘‘Credit by banks andlenders other than brokers or dealers forthe purpose of purchasing or carryingmargin stock’’) 2 and Regulation X(‘‘Borrowers of securities credit’’).3 TheBoard is soliciting comment on allaspects of these regulations, includingissues stemming from the consolidationof Regulation G into Regulation U andissues that have been raised bycommenters in the past two years andnot addressed in the Board’s earlieramendments. The Board is solicitingcomment on whether and how toaddress these issues. Any additionalamendments would be proposed forpublic comment before adoption.

Table of ContentsI. Regulation T

A. Definitions1. Current market value2. Good faith3. Margin securityB. Margin account1. Guarantees as collateral2. Cashless exercise of employee benefit

securitiesC. Cash account: net settlement and free

ridingD. Lending foreign securities to foreign

branches of U.S. banksE. Broker-dealer purchases of privately

placed debt securitiesF. Presumption of purpose credit

II. Regulation UA. Forms1. Purpose statement2. Other forms and registration

requirementsa. Use of Regulation G forms under

Regulation Ub. Registration requirements(1) Dollar thresholds(2) Nonpurpose lendersB. Loan Value1. Options2. Mutual funds

C. Exempted transactionsIII. Regulation X

A. National Securities MarketsImprovement Act

B. Periodic ReviewIV. All Regulations

A. Definition of national securitiesexchange

B. Purpose statements as model formsC. Repurchase of securities by issuerD. Forward transactions

I. Regulation T

A. Definitions

1. Current Market ValueThe Board’s margin requirement for

an equity security is a percentage of thesecurity’s current market value. As atechnical amendment contained in aseparate document published elsewherein today’s Federal Register, the Boardadopted a Regulation T definition of thephrase current market value thatincorporates former § 220.3(g) ofRegulation T (‘‘Valuing securities’’).This definition is not exactly the sameas the definition in Regulation U. Underthe Regulation T definition, a broker-dealer must use the cost of a security orthe proceeds of its sale to compute thecurrent market value of a security ontrade date. Under the Regulation Udefinition, a lender other than a broker-dealer extending credit on trade datemay use either the security’s cost or theclosing price of the security on thepreceding day. The Board is solicitingcomment on whether the definitions ofcurrent market value in the tworegulations should be harmonized.

2. Good FaithThe Board is requesting comment on

whether it should propose to replace thecurrent definition of good faith found in§ 220.2 of Regulation T with a simpler,more universal definition. For example,the Uniform Commercial Code defines‘‘good faith’’ in § 3–103(a)(4) as‘‘honesty in fact and the observance ofreasonable commercial standards of fairdealing.’’ The Board seeks comment onwhether this definition would beappropriate in the context of marginregulation.

3. Margin SecurityLast year, the Board amended the

definition of margin security to include‘‘any debt security convertible into amargin security.’’ The Board stated thatthis would mirror the treatment ofconvertible bonds in Regulations G andU. The actual language of Regulation U(which now covers banks and lendersformerly subject to Regulation G) issomewhat broader: ‘‘any debt securityconvertible into a margin stock orcarrying a warrant or right to subscribe


4 The primary SROs for broker-dealers in this areaare the New York Stock Exchange and the NationalAssociation of Securities Dealers.

5 See § 220.8(c) of Regulation T.6 Formerly § 220.16, now § 220.10 of Regulation

T.

7 The Board interpretation is codified at 12 CFR220.131 and reprinted in the Federal ReserveRegulatory Service at 5–470.1. SEC Rule 144A,‘‘Private resales of securities to institutions’’ iscodified at 17 CFR 230.144A.

8 The Board interpretation described the broker-dealer’s role as an ‘‘investment banking service’’because the version of Regulation T in effect at thetime had limited exceptions to the general arrangingprohibition. The Board has since amended thearranging section in Regulation T to broadenpermissible activities and in the process haseliminated the need for a specific investmentbanking services exception.

to or purchase a margin stock.’’ TheBoard is soliciting comment on whetherit should propose to use the sameregulatory language in Regulation T.The Board is also soliciting comment onwhether it should propose to furtheramend Regulation T’s definition ofmargin security to include ‘‘any warrantor right to subscribe to or purchase amargin stock,’’ as this language is alsofound in Regulation U. Finally, theBoard is soliciting comment on whetherit should propose to broaden thecoverage of convertible securities underthe Regulation T definition of marginsecurity to include any securityconvertible into a margin security. Thislast change would allow loan value fornonmargin equity securities which areconvertible into a margin security.

B. Margin Account

1. Guarantees as CollateralGuarantees are currently given no

effect for purposes of meeting federalmargin requirements pursuant to§ 220.3(d) of Regulation T, butguaranteed accounts are permitted bythe rules of some self-regulatoryorganizations (SROs) 4 for maintenancemargin purposes. These SRO ruleseffectively allow two or more customerswith accounts at a single broker-dealerto ‘‘cross-guarantee’’ some or all of theiraccounts. The guarantee must be inwriting and allow the broker-dealer touse the money and securities in theguaranteeing account without restrictionto carry the guaranteed account or payany deficit therein. The Board issoliciting comment on whether itshould propose an amendment toRegulation T to allow broker-dealers torecognize guarantees to the extentpermitted by their SROs.

2. Cashless Exercise of EmployeeBenefit Securities

Section 220.3(e)(4) of Regulation Twas adopted in 1988 to allow broker-dealers to temporarily finance theexercise of their customers’ employeestock options. This procedure has cometo be known as ‘‘cashless exercise.’’ In1995, the Board proposed new languagefor § 220.3(e)(4) to expand its coverageto other types of employee benefitsecurities, such as employee stockwarrants. The proposed amendment,which was adopted in 1996substantially in the form proposed,changed the reference in § 220.3(e)(4) ofRegulation T from ‘‘a stock optionissued by the customer’s employer’’ tosecurities received ‘‘pursuant to an

employee benefit plan registered on SECForm S–8.’’ After adoption of theamendment, the Board received severalcomments which noted that theamended provision in some respectscovers fewer securities than the originalversion in that it no longer coveredemployee stock options not registeredon SEC Form S–8. The Board issoliciting comment on whether itshould propose further amendments to§ § 220.3(e)(4) to ensure that broker-dealers may use the provision to help allcustomers who need short-termfinancing to acquire employee benefitsecurities. Comment is invited onwhether the Board should define whatis meant by the phrase ‘‘employeebenefit securities.’’

C. Cash Account: Net Settlement andFree Riding

All transactions in a margin accounton a given day are combined todetermine whether additional margin isrequired. In contrast, transactions in thecash account are generally settled on atransaction-by-transaction basis.Although net settlement in the cashaccount would be more efficient thancurrent practice, the requirement thatsecurities be paid for before being soldand the 90-day freeze 5 on delayingpayment beyond trade date forcustomers who have sold securitiesbefore paying therefor have beenadopted to prevent ‘‘free riding,’’ thepurchase of a security that is paid forwith the proceeds of its sale. The Boardbelieves that free riding raisessupervisory as well as credit issues andis soliciting comment on whether itwould be appropriate to modify the cashaccount to encourage efficiencies whilestill preventing free riding and if so,how. The Board is also solicitingcomment on whether it should leave theissue of free riding to the broker-dealers’supervisory authorities: the Securitiesand Exchange Commission (SEC) andSROs. The Board is also solicitingcomment on appropriate methods foraddressing free riding in Regulation U.

D. Lending Foreign Securities to ForeignBranches of U.S. Banks

The Regulation T section onborrowing and lending securities 6 wasamended in 1996 to allow broker-dealers to lend most foreign securities toforeign persons without many of therestrictions applied to loans of U.S.securities. Three commenters pointedout that the term ‘‘foreign persons’’ doesnot include foreign branches of U.S.

banks. The Board is soliciting commenton whether it should propose anamendment to allow foreign branches ofU.S. banks to qualify as foreign personsfor purposes of Regulation T’srequirements for borrowing and lendingequity securities.

E. Broker-Dealer Purchases of PrivatelyPlaced Debt Securities

The Board views the purchase of aprivately placed debt security as anextension of credit to the issuer. Broker-dealers who wish to purchase privatelyplaced debt securities (generally forresale) whose proceeds will be used bythe issuer to purchase or carry securitieshave been unable to do so if the debtsecurities are unsecured or secured bycollateral other than margin andexempted securities because the Boardhad interpreted section 7 of the ’34 Actto prohibit the extension of purposecredit that is unsecured or secured bycollateral other than securities valued inaccordance with Regulation T. Banksand persons other than broker-dealerswho purchase these privately placedsecurities have not had the sameproblem as they have never beenrestricted in their ability to makepurpose loans that are unsecured orsecured by collateral other thansecurities.

In 1990, the Board issued aninterpretation of the arranging provisionin Regulation T to address purchases bybroker-dealers of debt securities issuedpursuant to SEC Rule 144A.7 Under theinterpretation, the purchase of aprivately placed debt security whoseproceeds will be used by the issuer topurchase, carry, or trade securities ispermitted for a broker-dealer if thesecurity is issued pursuant to SEC Rule144A on the theory that the broker-dealer is arranging for the ultimatepurchaser to acquire the security.8

The Board is soliciting comment onwhether it should propose anyamendments to Regulation T to allowbroker-dealers to purchase privatelyplaced securities that either complywith or are not covered by RegulationsU and X. Possible amendments couldaddress this issue as one of extending


9 The $200,000 threshold is based on the amountof credit secured by margin stock extended in anycalendar quarter. Lenders who extend less than$200,000 in credit secured by margin stock in anycalendar quarter are required to register with theBoard if they have $500,000 in credit secured bymargin stock outstanding during any calendarquarter.

10 Unlisted or OTC options are not margin stockas defined in § 221.2 of Regulation U. Therefore, aloan secured by OTC options and other nonmarginstock collateral would not be subject to RegulationU. However, a purpose loan secured in part bymargin stock (a ‘‘mixed collateral loan’’) would besubject to Regulation U and any OTC options thatsecure such a loan have no loan value under thecurrent version of Regulation U.

rather than arranging credit and couldcover debt securities beyond thosecovered in the Board’s 1990interpretation.

F. Presumption of Purpose Credit

Section 220.6(f)(2) of Regulation T(formerly § 220.9(b)) states that everyextension of credit (aside from thoseeffected to carry transactions incommodities or foreign exchange) isdeemed to be purpose credit unless thebroker-dealer obtains in good faith awritten statement from its customer thatthe credit is not purpose credit. TheBoard is soliciting comment on whetherit should propose to modify or eliminatethis presumption and if so, how toassure compliance with the Board’smargin requirements in Regulation T.

II. Regulation U

A. Forms

1. Purpose Statement

Both Regulation G and Regulation Urequire lenders to obtain a writtenstatement from their customers as to thepurpose of a loan if the credit is securedby margin stock. This form is known asa ‘‘purpose statement’’ and is designatedas the FR G–3 and FR U–1, respectively.Although the margin requirementsapply to all purpose loans secured bymargin stock, banks are not required toobtain a purpose statement for loansthat do not exceed $100,000. Nonbanklenders, who are not required to registerwith the Board until they have extendedat least $200,000 in margin stocksecured credit,9 must obtain a purposestatement for every loan they make afterreaching the registration threshold. TheBoard is soliciting comment on whetherit would be appropriate to amendRegulation U to provide uniformrequirements for purpose statements,including possible elimination of theform.

2. Other Forms and RegistrationRequirements

a. Use of Regulation G forms underRegulation U: The FR G–1 (‘‘RegistrationStatement For Persons Who ExtendCredit Secured by Margin Stock (OtherThan Banks, Brokers or Dealers)’’), FRG–2 (‘‘Deregistration Statement ForPersons Registered Pursuant toRegulation G’’) and FR G–4 (‘‘AnnualReport’’) were retained as part of

Regulation U when it was extended tocover lenders formerly subject toRegulation G. These forms’ approvalfrom the Office of Management andBudget expires on July 31, 1998.Pending review of the commentsreceived in response to this request forcomment, the Board intends toredesignate these forms as Regulation Uforms and is soliciting comment onways to improve the reportingrequirements and eliminate unnecessaryburden, including possible eliminationof the forms.

b. Registration requirements: Theregistration requirements for lendersformerly subject to Regulation G havebeen moved to § 221.3(b) of RegulationU. Nonbank lenders who extend creditsecured by margin stock for any purposeare required to register with the FederalReserve within 30 days after anycalendar quarter in which the lendereither: (1) Extends $200,000 or more incredit secured by margin stock; or (2)has a total of $500,000 or more in creditsecured by margin stock outstanding.Persons other than banks and broker-dealers who extend securities creditbelow these thresholds are not subject tothe registration requirements and arenot limited by the Board’s 50 percentmargin requirement for purpose loanssecured by margin stock.

(1) Dollar thresholds: WhenRegulation G was first adopted in 1968,the Board established dollar thresholdsfor registration so that lenders otherthan banks and broker-dealers whoextended small amounts of creditsecured by margin stock would not beregulated. These thresholds wereinitially $50,000 in margin stocksecured credit extended or arranged inone calendar quarter or $100,000 insuch credit outstanding at any time.These thresholds were last raised in1983 to $200,000 and $500,000 and thescope of the regulation was reduced atthat time to eliminate coverage ofpersons who arranged, but did notextend, securities credit.

The Board is soliciting comment onwhether it should propose changes tothe $200,000 and $500,000 thresholdsfor nonbank lenders.

(2) Nonpurpose lenders: WhenRegulation G was first proposed by theBoard in 1967, lenders other than banksand broker-dealers were to be subject tothe regulation only if they extended orarranged purpose credit (which wasproposed to mean credit to purchase orcarry an exchange traded security).Regulation G lenders who extended orarranged nonpurpose credit would nothave been required to register with theFederal Reserve System even if thecollateral for the loan included

exchange-traded securities. WhenRegulation G was adopted the followingyear, the collateral coverage of theregulation was reduced to eliminatedebt securities but the registrationrequirement was broadened to includeany lender other than a bank or broker-dealer involved in a loan secured bymargin equity securities, regardless ofthe purpose of the loan. Although theBoard was originally concerned with thedifficulty of assuring that previouslyunregulated lenders understood theconcept of ‘‘purpose credit’’ (i.e. creditfor the purpose of purchasing orcarrying securities covered by Boardregulation), the passage of time mayhave reduced the need to registernonpurpose lenders solely to determinethat the registrants are not extendingcredit that is subject to the marginrequirements.

The Board is soliciting comment onwhether it should propose changes tothe registration requirements for lendersother than banks and broker-dealerswho do not extend purpose credit, suchas eliminating the need for registrationor establishing higher dollar thresholds.An example of a nonpurpose lenderwould be a mortgage finance companythat extends only purchase moneymortgage loans but occasionally takesmargin stock as collateral in addition tomortgages.

B. Loan Value

1. Options

In a separate document publishedelsewhere in today’s Federal Register,the Board is eliminating the RegulationU prohibition on loan value forexchange-traded options. When theBoard first proposed this change in1995, it did not propose to remove theprohibition on loan value for unlisted orover-the-counter (OTC) options.10 Sincethat proposal however, the Board hasamended Regulation T to allowsecurities self-regulatory organizationssuch as the New York Stock Exchangeto adopt SEC-approved rules grantingloan value to all options, both exchange-traded and over-the-counter. The Boardis soliciting comment on whether itshould propose to modify theprohibition on loan value for OTCoptions currently contained inRegulation U.


11 The definition of margin stock is found in§ 221.2 of Regulation U.

12 In contrast, the Board’s other marginregulations were adopted under the authority ofsections 7(c) and 7(d) of the ’34 Act and apply tolenders of securities credit.

13 Definitions found in section 3(a) of the ’34 Actare incorporated by cross-reference in the Board’smargin regulations.

14 12 CFR 220.119, reprinted in the FederalReserve Regulatory Service at 5–490.

2. Mutual Funds

Although most mutual funds arecovered by the definition of marginstock in Regulation U, the Board haslong excluded mutual funds that have atleast 95 percent of its assetscontinuously invested in exemptedsecurities.11 In a separate documentpublished elsewhere in today’s FederalRegister, the Board is excluding moneymarket mutual funds from the definitionof margin stock in Regulation U as well.The Board is soliciting comment onwhether it should propose additionalexclusions from the definition of marginstock for mutual funds which investalmost exclusively in securities entitledto good faith loan value underRegulation T, such as corporate bondfunds.

C. Exempted Transactions

The Board extended Regulation U tocover lenders formerly subject toRegulation G because the NationalSecurities Market Improvement Acteliminated the distinction between bankand nonbank lenders with respect toloans to broker-dealers. The Board nowpermits bank and nonbank lenders tomake loans to broker-dealers on thesame basis, including the exemptionscontained in § 221.5, ‘‘Special purposeloans to brokers and dealers.’’ Banks arealso permitted to make unregulatedloans to persons other than broker-dealers pursuant to § 221.6, ‘‘Exemptedtransactions.’’ The only one of the eightexemptions listed in § 221.6 wascontained in former Regulation G: loansto employee stock ownership plans(ESOPs) qualified under section 401 ofthe Internal Revenue Code. Thisexemption, formerly found in § 207.5(c)of Regulation G, has been retained fornonbank lenders in § 221.4(c) ofRegulation U. The Board is solicitingcomment on whether it should proposeto extend the exemptions for banks in§ 221.6 of Regulation U to nonbanklenders as well. The Board seekscomment on whether it should proposeto consolidate the exemption for loansto ESOPs with loans to ‘‘plan lenders’’as defined in § 221.4(b) of Regulation U.

III. Regulation X

Regulation X (‘‘Borrowers of securitiescredit’’) implements section 7(f) of the’34 Act, which applies the marginrequirements to borrowers.12 Most of thelanguage in Regulation X is taken

directly from the statute. If the Boardwere to repeal Regulation X, section 7(f)would still apply to borrowers ofsecurities credit. The only substantivereason for the Board’s adoption of aregulation covering borrowers is toexercise its authority under section7(f)(3) of the ’34 Act to exempt personsfrom the application of section 7(f).These exemptions are found in§§ 224.1(b)(1), (b)(2) and (b)(3) ofRegulation X.

A. National Securities MarketsImprovement Act

In response to the Board’s request forcomment on appropriate amendments toits margin regulations to reflect thestatutory changes contained in NSMIA,two commenters expressed concern thatforeign affiliates of exempt U.S. broker-dealers continue to be subject toRegulation X (because they are ‘‘foreignpersons controlled by a U.S. person’’)and their borrowings therefore have tocomply with Regulation U, while theborrowings of their parent would not besubject to Board regulation. Thecommenters urged the Board to exemptforeign broker-dealer affiliates of exemptU.S. broker-dealers from Regulation X.The Board seeks comment on whether itshould propose such an amendment.

B. Periodic Review

In conjunction with its periodicreview of the margin regulations, andthe requirements of section 303 of theRiegle Community Redevelopment andRegulatory Improvement Act of 1994,the Board is requesting comment onother appropriate amendments toRegulation X to reduce unnecessaryregulatory burden.

IV. All Regulations

A. Definition of National SecuritiesExchange

The Board’s margin regulations havealways covered all equity securitiesregistered on a national securitiesexchange. Although the phrase‘‘national securities exchange’’ is notdefined in the Board’s marginregulations or section 3(a) of theSecurities Exchange Act of 1934,13 theBoard has understood the term to meana securities exchange registered with theSecurities and Exchange Commission(SEC) under section 6 of the ’34 Act(‘‘National securities exchanges;’’ 15U.S.C. 78f). The Board is solicitingcomment on whether it should proposeto add a definition of the phrase

‘‘national securities exchange’’ intoRegulations T and U.

B. Purpose Statements as Model Forms

The Board has established threepurpose statements (FR G–3, FR T–4,and FR U–1) for the three types oflenders covered under its securitiescredit regulations. Lenders other thanbroker-dealers are specifically requiredby the Board’s regulation to obtain theFR G–3 and FR U–1 in certaincircumstances. However, Regulation Tdoes not refer to the FR T–4 and statesonly that in certain circumstances abroker-dealer shall accept ‘‘a writtenstatement’’ that ‘‘shall conform to therequirements established by the Board.’’

The Board is requesting comment onthe continuing need for purposestatements, the form of which isprescribed by regulation, or whethermodel forms would serve the Board’spurposes, or whether the form of thestatement should be left to the affectedinstitution or its regulatory supervisors.

C. Repurchase of Securities by Issuer

The Board held in 1962 that creditextended to an issuer to repurchase itsown securities for immediate retirementis not purpose credit subject to theBoard’s margin requirements.14 The1962 interpretation states that ‘‘[i]tshould not be regarded as governing anyother situations; for example, theinterpretation does not deal with caseswhere securities are being transferred* * * to the issuer for a purpose otherthan immediate retirement. Whether themargin requirements are inapplicable toany such situations would depend uponthe relevant facts of actual casespresented.’’ Three commentersrequested that this interpretation beexpanded to cover all credit extended toan issuer to repurchase its securities.While the interpretation requiresimmediate retirement of the securitiesrepurchased, this limitation can becircumvented by having the issuer retirethe securities it repurchases and thenreissue those or similar securities later.The Board is soliciting comment onwhether it should propose toincorporate its 1962 interpretation intoRegulations T and U and whether thecoverage of the interpretation should bebroadened.

D. Forward Transactions

Commenters in earlier dockets andmembers of the securities bar andindustry have requested guidance fromthe Board on the proper treatment offorward purchases and sales of


securities. Forwards on nonequity andexempted securities are permitted in thegood faith account in Regulation T andare not covered by Regulation U. TheBoard is soliciting comment on whetherand how it should amend Regulations Tand U to address transactions involvingforward purchases and sales of equitysecurities.

By order of the Board of Governors of theFederal Reserve System, December 18, 1997.William W. Wiles,Secretary of the Board.[FR Doc. 98–885 Filed 1–15–98; 8:45 am]BILLING CODE 6210–01–P

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Part IV

Department ofAgricultureAgricultural Marketing Service

7 CFR Parts 997 and 998Peanuts Marketed in the United States;Relaxation of Handling Regulations; FinalRule



Agricultural Marketing Service

7 CFR Parts 997 and 998

[Docket Nos. FV97–997–1 IFR and FV97–998–1 IFR]

Peanuts Marketed in the United States;Relaxation of Handling Regulations

AGENCY: Agricultural Marketing Service(AMS), USDA.ACTION: Interim final rule with requestfor comments.

SUMMARY: This rule relaxes, for 1997and subsequent crop peanuts, severalprovisions regulating the handling ofdomestically produced peanutsmarketed in the United States. Therelaxation includes: Eliminating needfor approval of certain facilities;allowing minimum grade requirementsfor lots of splits to correspond withgrade standards; allowing certain lots tobe custom blanched; providing thatunder the Agreement, all lots of ediblequality peanuts be eligible forindemnification benefits; providing thatpeanuts which have been certified asmeeting the minimum graderequirements, but fail on aflatoxin, maybe roasted prior to being certified asmeeting the latter; and allowing rejectedpeanuts to be placed in ‘‘suitablecontainers’’, not just ‘‘bagged’’. This rulewill improve efficiency and reduceprogram costs resulting in a similarreduction in assessment rates chargedAgreement signer and non-signerhandlers.DATES: Effective January 20, 1998;comments received by March 17, 1998will be considered prior to issuance ofa final rule.ADDRESSES: Interested persons areinvited to submit written commentsconcerning this rule. Comments must besent in triplicate to the Docket Clerk,Fruit and Vegetable Programs, AMS,USDA, room 2525–S, P.O. Box 96456,Washington, DC 20090–6456; Fax: (202)205–6632. All comments shouldreference the docket numbers, the dateand page number of this issue of theFederal Register and will be madeavailable for public inspection in theOffice of the Docket Clerk during regularbusiness hours.FOR FURTHER INFORMATION CONTACT:George J. Kelhart or Jim Wendland,Marketing Order AdministrationBranch, Fruit and Vegetable Programs,AMS, USDA, P.O. Box 96456, room2525–S, Washington, DC 20090–6456;telephone: (202) 720–2491, Fax: (202)205–6632. Small businesses may requestinformation on compliance with this

regulation by contacting: Jay Guerber,Marketing Order AdministrationBranch, Fruit and Vegetable Programs,AMS, USDA, P.O. Box 96456, room2525-S, Washington, D.C., 20090–6456;telephone: (202) 720–2491, Fax: (202)205–6632.SUPPLEMENTARY INFORMATION: This ruleis issued under Marketing AgreementNo. 146 (7 CFR Part 998) and theAgricultural Marketing Agreement Actof 1937, as amended (7 U.S.C. 601–674),hereinafter referred to as the ‘‘Act.’’ Themarketing agreement and theregulations issued thereunder (7 CFRPart 998) and the non-signatory peanuthandler regulations (7 CFR Part 997)regulate the quality of domesticallyproduced peanuts.

The Department of Agriculture(Department) is issuing this rule inconformance with Executive Order12866.

This rule has been reviewed underExecutive Order 12988, Civil JusticeReform. This rule is not intended tohave retroactive effect. This rule willnot preempt any State or local laws,regulations, or policies, unless theypresent an irreconcilable conflict withthis rule. There are no administrativeprocedures which must be exhaustedprior to any judicial challenge to theprovisions of this rule.

Following explanation of each changeto the Agreement’s regulation, thecorresponding change to the non-signatory regulation is discussed.

Incoming RegulationsFarmers Stock Storage and Handling

Facilities: The Committee recommendedamending § 998.100 Incoming qualityregulation for 1995 and subsequent croppeanuts by removing paragraph (g)Farmers Stock Storage and HandlingFacilities which currently regulates thecondition of such facilities andauthorizes Committee inspection. TheCommittee recommended the change tosave approximately $450,000, byeliminating the positions of the sevenfieldmen whose specified dutiesthrough last crop year includedspending an estimated 60–65 percent oftheir time inspecting and approvingsuch facilities. The vote was 17 ‘‘For’’and 1 ‘‘Against’’, with the dissentingvoter contending that the fieldmen wereproviding valuable services and theirpositions should not be eliminated andthat inspection and approval of suchfacilities by the Committee staff wasimportant. Handlers contend they arealready paying their own employees todo facilities inspections and the cost ofsuch duplication of effort needs to beeliminated. Also, this cost-cutting willnot adversely affect quality since

peanuts must still meet the OutgoingQuality Regulation.

Elimination of the regulatoryprovision will allow the Committee toreduce its non-headquarters staff fromseven to one compliance officer in eachof the three production areas and reducethe current ‘‘fieldmen’’ staffing costs tozero. The compliance officers willconduct compliance audits ofAgreement signers similar to AMSapproved non-signer programcompliance plan procedures whereAMS Compliance Staff auditors checknon-signers’ records. A revised 1997–98compliance plan from the Committeeincludes this new procedure. AMSbelieves this will continue to assurecompliance under the Agreement.

The non-signer regulation contains nosimilar requirements for inspection andapproval of such facilities, so no changeis needed.

Outgoing RegulationsThe Committee unanimously

recommended that § 998.200(a) beamended to provide that minimumgrade requirements for lots of ‘‘splits’’(the separated halves of peanut kernels)be modified to correspond with ‘‘UnitedStates Standards For Grades Of: (1)Cleaned Virginia Type Peanuts In TheShell; or (2) Shelled Runner TypePeanuts; or (3) Shelled Spanish TypePeanuts; or (4) Shelled Virginia TypePeanuts’’ (7 CFR Part 51: Sections51.1235–1242; 51.2710-2721; 51.2730–2741; and 51.2750–2763, respectively.This increase to 2.00 percent from thecurrent 1.50 percent for unshelledpeanuts and damaged kernels is neededto provide consistency with the gradestandards. Under the current regulation,a handler could have a lot of peanutswhich met U.S. Grade Standards forU.S. Splits, but failed to meetAgreement requirements for ediblequality. It was expected that this changemight reduce the number of lots whichwill need to be remilled to meetoutgoing quality requirements.Although this reduction was roughlyestimated at something less than 10percent in an average year, this year’scrop has been stressed by droughtconditions and virtually all peanutproducing States have expressed havingproblems with quality. Thus, thischange could still result in significantreductions in costs for handlers.

Another modification to § 998.200(a)will remove Table 2.—INDEMNIFIABLEGRADES. The Committee had originallyestablished this table in its regulationsto qualify higher grade peanut lots forits indemnification program covered in§ 998.300. However, coverage under thisprovision has been greatly reduced by


recent Committee action, to the pointthat the table is no longer deemednecessary. The Department agrees thatTable 2 is not needed and its removalwill simplify the Agreement regulationsand therefore it is hereby removed.

Similar changes are made to thecorresponding § 997.30(a) of the non-signer regulation.

The Committee unanimouslyrecommended that § 998.200(h)(1) beamended to allow lots of peanuts whichfail edible quality requirements, due toexcessive fall through, to be customblanched. However, such lots will haveto be certified as meeting minimum ‘‘fallthrough’’ requirements after blanching.The change eliminates the currentrequirement that prior to movement ofsuch peanuts, handlers have to submita form to the Committee and receiveauthorization for movement andblanching of each such lot.

Section 997.40(d) of the non-signerregulation currently does not requiresuch handlers to submit a request to theDepartment and receive authorizationfor movement and blanching of eachsuch lot. Therefore, no similar change tothat provision is needed. However, it isbeing amended to add ‘‘fall through’’ tothe category of items allowed in the firstand third sentences.

The Committee also unanimouslyrecommended a further change toparagraph (h), specifically thatsubparagraphs (h)(1) and (h)(2) befurther amended to provide that rejectpeanuts may be placed in suitablecontainers acceptable to the Committee.The current requirement specifies‘‘bagged,’’ which refers to the olderstandard-sized burlap bags. It does notinclude the many newer and moreefficient containers which are easier tohandle such as tote bags, corrugatedcontainers (including those withcapacities of over a ton), Super Sacks,and other various company containersused by individual peanut productmanufacturers. The change will allowhandlers to use more efficientcontainers or those desired by theircustomers. For purposes of thisprovision, most any container thathandlers use other than bulk loads—i.e.,those in which peanuts are not in anytype of receptacle other than the vehicletransporting them—will be consideredsuitable.

Section 997.40(c) of the non-signerregulation currently provides for ‘‘inbulk or bags or other suitablecontainers.’’ To make it consistent withthe Agreement’s amended regulation,the words ‘‘in bulk or’’ are beingremoved. Paragraphs (d) and (e) are alsobeing amended by removing the word

‘‘bagged’’ and replacing it with thewords ‘‘placed in suitable containers.’’

The Committee also unanimouslyrecommended that § 998.200 Outgoingquality regulation and § 998.300 Termsand conditions of indemnification . . .be amended to make all lots of ediblequality peanuts indemnifiable, forfreight reimbursement, when rejected onappeal after being certified ‘‘negative’’as to aflatoxin. Under provisionsspecified in § 998.300, product claimlots of edible quality peanuts will nowalso be indemnifiable. This involves lotswhere a handler sustained a loss as aresult of a buyer withholding fromhuman consumption any or all of theproduct made from a lot of peanutswhich had been determined to beunwholesome due to aflatoxin aftersuch lot had originally been certified‘‘negative’’ as to aflatoxin. This changewill provide consistency by treating alledible quality peanuts equally, whetherappeal claims or product claims.Although these changes should furtherreduce costs and will promoteuniformity in the handling ofindemnification of all edible qualitypeanuts, there is no way to accuratelyquantify how much these reductionswould be, because the savings would bedifferent for each handler. However, thetotal savings would be significantly lessthan the projected approximately$200,000 total 1996 cropindemnification costs.

The non-signer enabling legislationdoes not provide authority forindemnification. Therefore, no similarchange is being made in the non-signerregulation.

The Committee further unanimouslyrecommended that § 998.200(h)(3) beamended to provide that peanuts whichhave been certified as meetingminimum grade requirements specifiedin § 998.200(a)(1), but fail to meetrequirements for aflatoxin, may beroasted while being blanched prior tobeing certified as meeting the aflatoxinrequirements. After roasting, suchpeanuts must be sampled and assayedfor aflatoxin content but do not have tobe re-sampled and analyzed for gradeagain. This simplified process isrecommended by the Committeebecause blanched peanuts, aftercertification, often are placed back intoblancher for additional heating.Removing the blanched peanuts short ofthe complete roasting process forsampling and aflatoxin analysis, andthen reinserting them back into theblancher adds costs to the roastingprocess and usually causes additional,unintentional damage due to the extrahandling of the kernels. Also, theroasting will enhance the blanching

efforts to eliminate aflatoxin, thusimproving the wholesomeness, qualityand value of such shelled peanuts. Thesavings involved in blanching androasting in one step should far outweighthe approximately $40 per hour costs ofhaving an inspector present during thisprocess to maintain needed positive lotidentification. Any residual peanuts,excluding skins and hearts, resultingfrom this roasting process, must be redtagged and disposed of to non-ediblepeanut outlets. A similar change isbeing made to § 997.40(d) of the non-signer regulation.

The unchanged portions of theincoming and outgoing regulationscurrently in effect for 1996 andsubsequent crop peanuts will remain ineffect for 1997 and subsequent croppeanuts.

Pursuant to the requirements set forthin the Regulatory Flexibility Act (RFA),the Agricultural Marketing Service(AMS) has considered the economicimpact of this action on small entities.Accordingly, AMS has prepared thisinitial regulatory flexibility analysis.

There are approximately 27 signatoryand 30 non-signatory peanut handlerswho are currently subject to regulationsunder the Agreement and non-signerprogram respectively and approximately25,000 commercial peanut producers inthe 16-State production area. Smallagricultural service firms, whichinclude handlers, have been defined bythe Small Business Administration (13CFR 121.601) as those having annualreceipts of less than $5,000,000, andsmall agricultural producers are definedas those having annual receipts of lessthan $500,000. Approximately 25percent of the signatory handlers,virtually all of the non-signers, and mostof the producers may be classified assmall entities. This action will befavorable to the industry by tending toimprove efficiency, reducing costs andincreasing returns.

The relaxations to handlingregulations specified in this rule willsimplify requirements and enablehandlers, both large and small, to cutcosts and more efficiently handle theirpeanut supplies, without jeopardizingsafeguard requirements in the currentregulations.

The relaxations include: 1. Theelimination of the requirement forinspection and approval of farmersstock storage and handling facilities willsave approximately $450,000 byeliminating the positions of the sevenfieldmen, who had performed thisactivity through last crop year. Handlerscontend they already paid their ownemployees to do this and the duplicatecost should be eliminated;


2. Relaxing the minimum graderequirements for ‘‘splits’’ to correspondwith U.S. grade standards might reducethe number of lots which need to beremilled this year by 10 percent due tostressed growing conditions in virtuallyall areas. This should result insignificant reductions in costs forhandlers;

3. Another relaxation is to providethat all lots of edible quality peanuts,whether appeal claims or productclaims, will be eligible for handlerindemnification benefits. Thus,handlers with product claim lots willnow also be eligible for reimbursementof most transportation expenses on suchlots. Such additional reimbursementwas not publicly quantified by theCommittee, but would be less than theprojected approximately $200,000 total1996 crop indemnification costs;

4. The revised provision to allow lotswhich fail edible quality requirements,due to excessive fall through, to becustom blanched eliminates the currentrequirement that handlers have tosubmit a form to the Committee andreceive authorization for movement andblanching of each such lot. Thisrelaxation will eliminate unnecessarypaperwork and save time for all affectedhandlers;

5. Relaxing the requirement thatpeanuts be ‘‘bagged’’ (i.e., placed only inolder standard-size burlap bags) byallowing the use of suitable containers,will permit use of the many newer andmore efficient containers or thosedesired by handlers’ customers; and

6. Another relaxation will allowpeanuts which have been certified asmeeting the minimum graderequirements, but fail to meetrequirements for aflatoxin, to be roastedwhile being blanched prior to beingcertified as meeting the latterrequirements. This simplified processeliminates reinserting such peanutsback into the blancher, which doublesthe processing costs and tends to lowerthe peanuts’ quality and value bycausing additional damage to them.Such savings should far outweigh theapproximately $40 per hour expense ofhaving an inspector present to maintainneeded positive lot identification.

The relaxed requirements willsignificantly improve efficiency andhave enabled the Committee to cut inhalf for the 1997–98 and subsequentcrops years its administrative costs andassessment rate charged Agreementsigner and non-signer handlers tofinance their respective programs.Further, the rate of assessment lastseason was $0.70 per net ton ofassessable peanuts. The rate for the1997–98 crop year has been reduced to

$0.35 per net ton by another rulemakingaction, as published in the September17, 1997, issue of the Federal Register(62 FR 48749). This will save regulateddomestic handlers approximately$500,000 in administrative assessmentcosts which should, to a great extent,also correspond to the savings from thisrelaxation action.

The specifics of each change and whythey will tend to increase returns tohandlers were covered in detail near thebeginning of this rule under thediscussion starting with ‘‘Incomingregulations.’’. These changes will relaxrequirements on regulated domesticpeanut handlers, improve theirefficiency and cut costs, to benefit thepeanut industry, manufacturers, andconsumers, while still assuring qualityof all peanuts in domestic humanconsumption markets.

As with all Federal marketingagreement and order programs, reportsand forms are periodically reviewed toreduce information requirements andduplication by industry and publicsectors. Consistent with the PaperworkReduction Act (44 U.S.C. Chapter 35),the Committee unanimouslyrecommended greatly reducingreporting and recordkeepingrequirements on both large and smalldomestic peanut handlers regulatedunder these two programs. It willeliminate 20 of the 21 Committee formscurrently approved by OMB that mightaccompany peanut shipments, to onlyrequire use of the Form PAC–1. ThePAC–1 is mailed to handlers on amonthly basis and is used to reportreceipts and acquisitions of farmersstock peanuts and to remit assessments.It is estimated this will eliminate 95percent (or about 2,291 hours andassuming $10 per hour, would saverespondents nearly $23,000 in costs) ofthe current estimated 2,417 hours oftotal reporting burden on Agreementsigners, including small businesses, anda proportional, smaller reduction innon-signer reporting burden. A notice ofthe proposed revision was published inthe July 31, 1997, issue of the FederalRegister (62 FR 41021). Sixty days wereallowed for comments. One commentwas received, from the American PeanutShellers Association, supporting thereduced burdens. This informationcollection package has been submittedto the Office of Management and Budget(OMB) for approval.

In addition, the Department has notidentified any Federal rules thatduplicate, overlap or conflict with thisrule.

Further, the Committee’s meeting waswidely publicized throughout thepeanut industry and all interested

persons were invited to attend themeeting and participate in theCommittee’s deliberations. Like allCommittee meetings, the April 29–30,1997, meeting was a public meeting andall entities, both large and small, wereable to express their views on the issues.The 18-member Committee is composedof an equal number of peanut handlersand producers, the majority of whomare small entities.

Also, the Committee has a number ofappointed subcommittees to reviewcertain issues and makerecommendations to the Committee.The Committee’s Regulations,Indemnification and QualitySubcommittee and ‘‘New Concept’’Subcommittee met on January 28, 1997,and discussed these issues in detail. OnMarch 25, 1997, the Committee held aninformational meeting to hear apresentation by the National PeanutCouncil’s Peanut Industry RevitalizationProject Steering Committee and discussthose issues there and back with theirindustry peers before voting on thoseissues at the April Committee meeting.The Committee’s Administrative BudgetSubcommittee also meet March 25,1997, to discuss budgetrecommendations. These meetings werealso public meetings and both large andsmall entities were able to participateand express their views. Finally,interested persons are invited to submitinformation on the regulatory andinformational impacts of this action onsmall businesses.

An objective of the two domesticprograms is to ensure that only highquality and wholesome peanuts enterhuman consumption markets in theUnited States. About 70 percent ofdomestic handlers, handlingapproximately 95 percent of the cropvolume, have signed the Agreement.The remaining 30 percent are non-signatory handlers handling theremaining 5 percent of domesticproduction.

Under these regulations, farmers stockpeanuts with visible Aspergillus flavusmold (the principal source of aflatoxin)are required to be diverted to inedibleuses. Each lot of milled peanuts must besampled and the samples chemicallyanalyzed for aflatoxin content. Costs toadminister the Agreement and toreimburse the Department for oversightof the non-signatory program are paidby an assessment levied on handlers inthe respective programs.

The 18-member Committee, which iscomposed of an equal number of peanutproducers and handlers, meets at leastannually to review the Agreement’srules and regulations, which areeffective on a continuous basis from one


year to the next. Committee meetingsare open to the public, and interestedpersons may express their views at thesemeetings. The Department assessesCommittee recommendations, as well asinformation from other sources, prior tomaking any recommended changes tothe regulations under the Agreement.

Section 608b of the Act was amendedin 1989 to require that all peanutshandled by persons who have notentered into the Agreement (non-signers) be subject to the same qualityand inspection requirements to the sameextent and manner as are required underthe Agreement. Section 608b wasfurther amended in 1993 to imposesimilar requirements regardingadministrative assessments. The non-signatory handler regulations have beenamended several times thereafter andare published in 7 CFR part 997.

Thus, the Committee’s recommendedchanges to the Agreement regulation, asestablished in this rule, also areestablished for the Agreement non-signers. This interim final rule identifiesthe corresponding change to the non-signer regulation for each change to theAgreement regulation.

According to the Committee, thedomestic peanut industry is undergoinga period of great change. The Committeebases its view, in part, on findings in arecent study entitled ‘‘United StatesPeanut Industry Revitalization Project’’developed by the National PeanutCouncil and the Department’sAgricultural Research Service (May1996).

According to the study, the U.S.peanut industry has been in a period ofdramatic economic decline since 1991because: (1) Per capita peanutconsumption has steadily declined atotal of 11 percent; (2) harvested acreagehas declined 25 percent; (3) productionhas declined 30 percent and farm valuedropped 29 percent; and (4) imports ofpeanuts and peanut products haveincreased from insignificant quantitiesto 48,736 raw farmer stock tons in 1995and 55,536 in 1996.

The study points to recent increasesin the duty-free import quota for rawpeanuts due to the North American FreeTrade Agreement (NAFTA) and theUruguay Round Agreements under theGeneral Agreement on Tariffs and Trade(GATT). Under Section 22 import quotaprovisions, the volume of U.S. peanutimports had been limited to about 2.3million pounds, in-shell basis, annually.Thus, imports have historicallyrepresented about one-tenth of 1 percentof U.S. food use of peanuts. UnderNAFTA, Mexico has been granted aminimum access level for duty-freeentry of peanuts of about 10 million

pounds, in-shell basis. This level willincrease about 3 percent annuallythrough 2008, when quantitative limitswill cease. Mexico’s 1998 duty-freequota will total 8.4 million pounds.Under GATT, the 1995 quota was 74.5million pounds. This year it is 86.8million pounds, will increase to 96.7million pounds (Argentina 81.2 and allother 15.5) in 1998, and can grow toabout 155 million pounds (about 4percent of U.S. disappearance) in 2000.

The study also projects that farmproduction costs and revenue will beequal by the year 2000, as will handlercosts and revenue, leaving no profit.

In addition, the modification of theFederal farm peanut poundage quotaregulations implemented under theAgricultural Market Transition Act of1996 (1996 Act) has resulted in thedomestic industry undergoingsignificant changes scheduled tocontinue through the year 2002. Thepeanut support price has been reducedfrom $670 per ton in 1995 to $610 perton through 2002. The USDA’s FarmService Agency final rule implementingthe Act was published May 9, 1997 (62FR 25433). That rule indicates thateconomic impacts of the 1996 Actinclude expected reductions indomestic peanut producers’ revenue of$1.25 billion from 1996 through 2002.Quota lease holders could absorb a lossof about $40 million annually becauseof reduced leasing rates due to the lowerpeanut price support. Also, capitalizedvalue of quotas could decline $200 to$300 million, thus reducing land valuesand the tax base of rural communities.

The Committee agrees that all of thesefactors combined show that thedomestic peanut industry had been indecline and that the outlook was notexpected to change without somepositive intervention by the industry.

World supply and demand are lessimportant for peanuts than most U.S.farm commodities. Much of worldpeanut production is for non-food uses,although production for food use mightincrease a little if there were no U.S.import restrictions. Also, import quotas,though increased recently, still are set atrelatively low levels.

Domestic peanut production in 1996was approximately 3.66 billion pounds,with a farm value of slightly under $1billion. The Department’s November 1forecast pegs the 1997 peanut cropproduction at 3.5 billion pounds, downapproximately 4 percent from last year.Harvested acreage for 1997 is forecast tobe 1.384 million acres, up 4,500 acresfrom a year ago. The U.S. average yieldper acre for the 1997 crop is forecast at2,528 pounds, down 11 pounds per acrefrom the 1996 crop.

Production is expected to graduallyincrease from 1996 to 2002 becausedomestic food use is projected to riseabout 1.5 percent annually. Imports areexpected to remain at a relatively smallpercentage of total U.S. peanut use.

Estimated exports of 750 millionpounds in Marketing Year (MY) 1997are below the average for the prior 3years, but are 11 percent more than ayear earlier. Peanut oil prices areexpected to average about 38 cents apound of oil in MY 1997, 6 percentlower than MY 1996 as vegetable oilsupplies return to more normal levels.Peanut meal prices for MY 1997 areexpected to decline to $175 a ton, down25 percent from MY 1996 because oflarger soybean meal supplies.

The season average price of farmerstock peanuts for MY 1997 may remainunchanged from the 28.5 cents perpound average for 1996. This was thelowest price of the last two years andreflects the adjustment to the reducedquota support level and an unexpectedchange in the proportions of quota andadditionals in 1997 production. Averageprices to growers are expected toincrease, but will remain below 1995prices because of the lower quota pricesupport level. The value of farmproduction is expected to gradually riseand surpass that of 1995 by 2000/01.

The Committee recommended thechanges in this rulemaking to theAgreement’s Incoming and Outgoingregulations for 1997 and subsequentcrop peanuts at its April 30, 1997,public meeting.

Alternative Actions ConsideredAlthough the Committee could have

recommended no changes or lesschanges to the current regulations, itunanimously concluded that those werenot satisfactory solutions. It believesthat all possible simplification and cost-cutting should be done and that theseregulations should focus more onoutgoing quality and less on the shellingand milling processes necessary to meetthe outgoing, human consumptionrequirements. Newer, high technologymilling and blanching equipment enablehandlers to recondition failing peanutlots that could not have beeneconomically reconditioned when theregulations were first promulgated.Therefore, it is no longer necessary toimpose restrictions that hinder theefficiency of handling operations andresult in the loss of potentially goodquality peanuts. Thus, the Committeebelieves these changes will tend toimprove the returns to growers andhandlers, while still maintainingconsumer safeguard provisions in thecurrent domestic regulations, because


all peanuts intended for humanconsumption must still be inspectedand certified acceptable for such use.

After review of the recommendations,the Department concurs that therecommended changes will tend toimprove returns to the industry and bein the public interest. Expected benefitsof the changes were included in theprevious discussion of each individualchange.

In accordance with the PaperworkReduction Act of 1995 (44 U.S.C.Chapter 35) information collectionrequirements that are contained in thisrule have been previously approved bythe Office of Management and Budget(OMB) and have been assigned OMBNos. 0581–0067 (for Agreement signers)and 0581–0163 (for non-signers).

After consideration of all relevantmaterial presented, including theCommittee’s recommendations, andother information, it is found that thisinterim final rule, as hereinafter setforth, will tend to effectuate thedeclared policy of the Act.

This rule invites comments onchanges to the quality regulationscurrently prescribed under theAgreement and the non-signersprogram. All written comments timely

received will be considered prior tofinalization of this rule.

Pursuant to 5 U.S.C. 553, it is alsofound and determined upon good causethat it is impracticable, unnecessary,and contrary to the public interest togive preliminary notice prior to puttingthis rule into effect and that good causeexists for not postponing the effectivedate of this rule until 30 days afterpublication in the Federal Registerbecause: (1) This rule relaxesrequirements currently in effect; (2) the1997 peanut crop year began July 1,1997, and the changes should beeffective as soon as possible to allow theindustry to receive the benefits for asmuch of the remainder of the crop yearas possible; (3) the Committeeunanimously recommended thesechanges at a public meeting and allentities, both large and small, were ableto express views on these issues; (4) thisrule provides a 60-day opportunity forcomment, and all written commentstimely received will be considered priorto finalization of the rule.

List of Subjects

7 CFR Part 997Food grades and standards, Peanuts,

Reporting and recordkeepingrequirements.

7 CFR Part 998

Marketing agreements, Peanuts,Reporting and recordkeepingrequirements.

For the reasons set forth in thepreamble, 7 CFR parts 997 and 998 areamended as follows:

PART 997—PROVISIONSREGULATING THE QUALITY OFDOMESTICALLY PRODUCEDPEANUTS HANDLED BY PERSONSNOT SUBJECT TO THE PEANUTMARKETING AGREEMENT

1. The authority citation for 7 CFRpart 997 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 997.30 is amended byrevising paragraph (a), to read asfollows:

Quality Regulations

§ 997.30 Outgoing Regulation.

(a) Shelled peanuts. (1) No handlershall dispose of shelled peanuts forhuman consumption unless suchpeanuts are positive lot identified,certified ‘‘negative’’ as to aflatoxin andcertified as meeting the followingrequirements:

MAXIMUM LIMITATIONS

Type and gradecategory

Unshelledpeanuts and

damaged ker-nels (percent)

Unshelledpeanuts, dam-aged kernelsand minor de-fects (percent)

Fall through

Foreign mate-rial (percent)

Moisture (per-cent)Sound split and

broken kernelsSound whole

kernels Total

Excluding lots of‘‘splits’’

Runner ............... 1.50 2.50 3.00%; 17⁄64 inchround screen.

3.00%; 16⁄64×3⁄4inch slotscreen.

4.00%; bothscreens.

.20 9.00

Virginia (exceptNo. 2).

1.50 2.50 3.00%; 17⁄64 inchround screen.

3.00%; 15⁄64×1inch slotscreen.

4.00%; bothscreens.

.20 9.00

Spanish and Va-lencia.



4.00%; bothscreens.

.20 9.00

No. 2 Virginia ..... 1.50 3.00 6.00%; 17⁄64 inchround screen.


6.00%; bothscreens.

.20 9.00

Lots of ‘‘splits’’

Runner (notmore than 4%sound wholekernels).



4.00%; bothscreens.

.20 9.00

Virginia (not lessthan 90%splits).



4.00%; bothscreens.

.20 9.00

Spanish and Va-lencia (notmore than 4%sound wholekernels).



4.00% bothscreens.

.20 9.00


(2) The term fall through, as used inthis paragraph, shall mean sound splitand broken kernels and whole kernelswhich pass through specified screens.Prior to shipment, appropriate samplesfor pretesting shall be drawn inaccordance with paragraph (c) of thissection from each lot of peanuts. For thecurrent crop year, ‘‘negative’’ aflatoxincontent means 15 parts per billion (ppb)or less for peanuts which have beencertified as meeting edible quality graderequirements.* * * * *

3. In § 997.40, paragraph (c)introductory text is amended byremoving the words ‘‘bulk or’’,paragraph (e) is amended by removingthe word ‘‘bagged’’ and adding in itsplace the words ‘‘placed in suitablecontainers acceptable to AMS’’,paragraph (d) is amended by removingthe word ‘‘bagged’’ and adding in itsplace the words ‘‘placed in suitablecontainers acceptable to AMS’’, andadding after the last sentence, 5additional sentences, to read as follows:

§ 997.40 Reconditioning and disposition ofpeanuts failing quality requirements.* * * * *

(d) * * * Handlers may contract withCommittee approved blanchers forroasting positive lot identified shelledpeanuts, which originated from

Segregation 1 peanuts, that meet thegrade requirements of paragraph (a) ofthis section but are positive as toaflatoxin. Lots of peanuts moved underthese provisions must be accompaniedby a valid grade inspection certificateand a valid aflatoxin certificate. To beeligible for disposal into humanconsumption outlets, such peanuts afterroasting, shall have had the positive lotidentity maintained and beaccompanied by a negative aflatoxincertificate. The residual peanuts,excluding skins and hearts, resultingfrom roasting under these provisions,shall be placed in suitable containersacceptable to AMS and red tagged anddisposition shall be that such peanutsare returned to the handler for furtherdisposition; or that in the alternative,such residuals shall be positive lotidentified by a Federal or Federal-StateInspection Service, and shall bedisposed of, by the blancher, to handlerswho are crushers, or to crushers who arenot handlers under the Agreement onlyon the condition that they agree tocomply with the terms of paragraph (c)of this section and all other applicablerequirements of this regulation. Roastingunder the provisions of this paragraphshall be performed only by blancherswho are approved by the Committee.* * * * *

PART 998—MARKETING AGREEMENTREGULATING THE QUALITY OFDOMESTICALLY PRODUCEDPEANUTS

1. The authority citation for 7 CFRpart 998 continues to read as follows:

Authority: 7 U.S.C. 601–674.

§ 998.100 [Amended]

2. Section 998.100 is amended byremoving paragraph (g), redesignatingparagraphs (h) and (i) as paragraphs (g)and (h), and removing the number‘‘1996’’ in the section heading andadding in its place the number ‘‘1997’’.

3. In § 998.200, the section headingand paragraphs (a), (h)(1) and (h)(2) arerevised and a new paragraph (h)(3) isadded to read as follows:

§ 998.200 Outgoing quality regulation for1997 and subsequent crop peanuts.

* * * * *(a) Shelled peanuts. (1) No handler

shall dispose of shelled peanuts forhuman consumption unless suchpeanuts are positive lot identified,certified ‘‘negative’’ as to aflatoxin, andcertified as meeting the followingrequirements:

MAXIMUM LIMITATIONS

Type and gradecategory

Unshelledpeanuts and

damaged ker-nels

(percent)

Unshelledpeanuts, dam-aged kernelsand minor de-fects (percent)

Fall through

Foreign mate-rials (percent)

Moisture(percent)Sound split and

broker kernelsSound whole

kernels Total

Excluding lots of‘‘splits’’

Runner ............... 1.50 2.50 3.00%; 17⁄64 inchround screen.

3.00% 16⁄64 × 3⁄4inch slotscreen.

4.00%; bothscreens.

.20 9.00

Virginia (exceptNo. 2.


3.00%; 15⁄64 × 1inch slotscreen.

4.00%; bothscreens.

.20 9.00

Spanish and Va-lencia.


3.00%; 15⁄64 × 3⁄4inch slotscreen.

4.00% bothscreens.

.20 9.00

No. 2 Virginia 1.50 3.00 6.00%; 17⁄64 inchround screen.


6.00%; bothscreens.

.20 9.00

Lots of ‘‘splits’’Runner (not

more than 4%sound wholekernels.



4.00%; bothscreens.

.20 9.00

Virginia (not lessthan 90% splits.



4.00%; bothscreens.

.20 9.00

Spanish and Va-lencia (notmore than 4%sound wholekernels).



4.00%; bothscreens.

.20 9.00


(2) The term fall through, as used inthis paragraph, shall mean sound splitand broken kernels and whole kernelswhich pass through specified screens.* * * * *

(h) * * * (1) Handlers may blanch orcause to have blanched positive lotidentified shelled peanuts, whichoriginated from Segregation 1 peanuts,that fail to meet the requirements ofparagraph (a) of this section. Lots ofpeanuts which are moved under theseprovisions must be accompanied by avalid grade inspection certificate andthe title shall be retained by the handleruntil the peanuts are blanched andcertified by an inspector of the Federalor Federal-State Inspection Service asmeeting the requirements for disposalinto human consumption outlets. To beeligible for disposal into humanconsumption outlets, such peanuts afterblanching, must meet specifications aslisted in paragraph (a) of this sectionand be accompanied by an aflatoxincertificate determined to be negative bythe Committee. Lots of peanuts whichhave been certified as meeting fallthrough requirements as specified inparagraph (a) of this section, prior toblanching, shall be exempt from fallthrough requirements after blanching.The residual peanuts, excluding skinsand hearts, resulting from blanchingunder these provisions, shall be placedin suitable containers acceptable to theCommittee and red tagged anddisposition shall be that such peanutsare returned to the handler for furtherdisposition; or, in the alternative, suchresiduals shall be positive lot identifiedby the Federal or Federal-StateInspection Service, and shall bedisposed of, by the blancher, to handlerswho are crushers, or to crushers who arenot handlers under the Agreement onlyon the condition that they agree tocomply with the terms of paragraph (g)of this section and all other applicablerequirements of the Agreement.Blanching under the provisions of thisparagraph shall be performed only by

those firms who agree to proceduresacceptable to the Committee and whoare approved by the Committee to dosuch blanching.

(2) Handlers may contract withCommittee approved remillers forremilling shelled peanuts, whichoriginated from Segregation 1 peanuts,that fail to meet the requirements fordisposition to human consumptionoutlets heretofore specified in paragraph(a) of this section: Provided, That suchlots of peanuts contain not in excess of10 percent fall through. Lots of peanutsmoved under these provisions must beaccompanied by a valid gradeinspection certificate and must bepositive lot identified and the title ofsuch peanuts shall be retained by thehandler until the peanuts have beenremilled and certified by the Federal orFederal-State Inspection Service asmeeting the requirements fordisposition to human consumptionoutlets specified in paragraph (a) of thissection, and be accompanied by anaflatoxin certificate determined to benegative by the Committee. Remillingunder these provisions may includecomposite remilling of more than onesuch lot of peanuts owned by the samehandler. However, such peanuts ownedby one handler shall be held andremilled separate and apart from allother peanuts. The residual peanutsresulting from remilling under theseprovisions, shall be placed in suitablecontainers acceptable to the Committeeand red tagged and disposition shall bethat such peanuts are returned to thehandler for further disposition; or, inthe alternative, such residuals shall bepositive lot identified by the Federal orFederal-State Inspection Service, andshall be disposed of, by the remiller, tohandlers who are crushers, or tocrushers who are not handlers under theAgreement only on the condition thatthey agree to comply with the terms ofparagraph (g) of this section and allother applicable requirements of theAgreement. Remilling under the

provisions of this paragraph shall beperformed only by those firms whoagree to procedures acceptable to theCommittee and who are approved by theCommittee to do such remilling.

(3) Handlers may contract withCommittee approved blanchers forroasting positive lot identified shelledpeanuts, which originated fromSegregation 1 peanuts, that meet thegrade requirements of paragraph (a) ofthis section but are positive as toaflatoxin. Lots of peanuts moved underthese provisions must be accompaniedby a valid grade inspection certificateand a valid aflatoxin certificate. To beeligible for disposal into humanconsumption outlets, such peanuts afterroasting, shall have had the positive lotidentity maintained and beaccompanied by an aflatoxin certificatedetermined to be negative by theCommittee. The residual peanuts,excluding skins and hearts, resultingfrom roasting under these provisions,shall be placed in suitable containersacceptable to the Committee and redtagged and disposition shall be thatsuch peanuts are returned to the handlerfor further disposition; or in thealternative, such residuals shall bepositive lot identified by a Federal orFederal-State Inspection Service, andshall be disposed of, by the blancher, tohandlers who are crushers, or tocrushers who are not handlers under theAgreement only on the condition thatthey agree to comply with the terms ofparagraph (g) of this section and allother applicable requirements of theAgreement. Roasting under theprovisions of this paragraph shall beperformed only by blanchers who areapproved by the Committee.* * * * *

Dated: January 9, 1998.Sharon Bomer Lauritsen,Acting Deputy Administrator, Fruit andVegetable Programs.[FR Doc. 98–1052 Filed 1–15–98; 8:45 am]BILLING CODE 3410–02–P

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2853


Part V

Securities andExchangeCommission17 CFR Part 240Amendments to Beneficial OwnershipReporting Requirements; Final Rule


1 Rules 13d–1, 13d–2, 13d–3, and 13d–7 [17 CFR240.13d–1, 240.13d–2, 240.13d–3, and 240.13d–7].

2 K 17 CFR 240.13d–101 and 240.240.13d–102.3 17 CFR 240.16a–1.

4 See fn. 9, infra.5 Schedules 13D and 13G are not required to be

filed electronically with respect to securities offoreign private issuers. See Note to paragraph (c)(4)to 17 CFR 232.901.

6 Exchange Act Release No. 37403 (July 7, 1996)(‘‘Reproposing Release’’). The comment letters, as

well as a summary of the comments, are availablefrom the Commission’s Public Reference Room (FileNo. S7–16–96).

7 The institutional investors include a broker ordealer registered under Section 15(b) of theExchange Act [15 U.S.C. 78o(b)], a bank as definedin Section 3(a)(6) of the Exchange Act [15 U.S.C.78c(a)(6)], an insurance company as defined inSection 3(a)(19) of the Exchange Act [15 U.S.C.78c(a)(19)], an investment company registeredunder Section 8 of the Investment Company Act of1940 [15 U.S.C. 80a–8], an investment adviserregistered under Section 203 of the InvestmentAdvisers Act of 1940 [15 U.S.C. 80b–1 et seq.], anemployee benefit plan or pension fund that issubject to the provisions of the EmployeeRetirement Income Security Act of 1974 [codifiedprincipally in 29 U.S.C. 1001–1461], and relatedholding companies and groups (collectively,‘‘institutional investors’’). Rule 13d–1(b)(1)(ii) [17CFR 240.13d–1(b)(1)(ii)].

8 The term ‘‘Exempt Investors’’ refers to personsholding more than five percent of a class of subjectsecurities at the end of the calendar year, but whohave not made an acquisition subject to Section13(d). For example, persons who acquire all theirsecurities prior to the issuer registering the subjectsecurities under the Exchange Act are not subjectto Section 13(d) and persons who acquire not morethan two percent of a class of subject securitieswithin a 12-month period are exempted fromSection 13(d) by Section 13(d)(6)(B), but in bothcases are subject to Section 13(g). Section13(d)(6)(A) exempts acquisitions of subjectsecurities acquired in a stock-for-stock exchangewhich is registered under the Securities Act of1933.

9 The term ‘‘Passive Investors’’ is used in thisrelease to refer to shareholders beneficially owningmore than five percent of the class of subjectsecurities and who can certify that the subjectsecurities were not acquired or held for the purposeof and do not have the effect of changing orinfluencing the control of the issuer of suchsecurities and were not acquired in connection withor as a participant in any transaction having suchpurpose or effect. See Rule 13d–1(c) and revisedItem 10 of Schedule 13G. Shareholders that areunable to certify to this effect are considered tohave, for purposes of this release, a ‘‘disqualifyingpurpose or effect’’.

10 Rule 13d–1(c).


17 CFR Part 240

[Release No. 34–39538; File No. S7–16–96;International Series—1111]

RIN 3235–AG81

Amendments to Beneficial OwnershipReporting Requirements

AGENCY: Securities and ExchangeCommission.ACTION: Final rule.

SUMMARY: The Securities and ExchangeCommission is today adoptingamendments to its rules relating to thereporting of beneficial ownership inpublicly held companies. Theseamendments make the short-formSchedule 13G available, in lieu ofSchedule 13D, to all investorsbeneficially owning less than 20 percentof the outstanding class that have notacquired and do not hold the securitiesfor the purpose of or with the effect ofchanging or influencing the control ofthe issuer of the securities. Thepurposes of the amendments are toimprove the effectiveness of thebeneficial ownership reporting schemeand to reduce the reporting obligationsof passive investors.EFFECTIVE DATE: The amendments areeffective February 17, 1998.FOR FURTHER INFORMATION CONTACT:Dennis O. Garris, Chief, Office ofMergers and Acquisitions, Division ofCorporation Finance, Securities andExchange Commission at (202) 942–2920, 450 Fifth Street N.W.,Washington, D.C. 20549.SUPPLEMENTARY INFORMATION: TheSecurities and Exchange Commission(‘‘Commission’’) is adoptingamendments to Regulation 13D–G 1 andSchedules 13D and 13G.2 In addition,the Commission is adopting conformingamendments to Rule 16a–1 3 under theSecurities Exchange Act of 1934(‘‘Exchange Act’’).

I. Executive Summary

Today, for the first time, theCommission is permitting certain largeshareholders to use the short-formSchedule 13G, rather than the long-formSchedule 13D, to report accumulationsand changes in stock holdings. Thisexpanded eligibility to file on Schedule13G applies only to persons not seekingto acquire or influence ‘‘control’’ of the

issuer and who own less than 20percent of the class of securities(‘‘Passive Investor’’).4 The existingreporting scheme imposed unnecessarydisclosure obligations on persons whoseacquisitions do not affect the control ofissuers. The amendments adopted todaywill reduce the reporting obligations ofthese Passive Investors. Theamendments also will improve theeffectiveness of the beneficialownership reporting scheme. Thereduced number of Schedule 13D filingswill allow the marketplace, as well asthe staff of the Commission, to focusmore quickly on acquisitions involvingthe potential to change or influencecontrol.

Since a control purpose reflects thestate of mind of a filing person and thereare incentives to disclose lessinformation, the Commission isimposing some safeguards on this newclass of short-form filers:

• Initial Schedule 13G must be filedwithin 10 days (instead of year end);

• Prompt amendments are requiredevery time the Passive Investor acquiresmore than an additional five percent;

• Loss of Schedule 13G-eligibilityoccurs when Passive Investor acquires20 percent or more of the class; and,

• If the person no longer passivelyholds their shares or the person acquires20 percent or more of the class, aSchedule 13D is due within ten daysand the person is not permitted to votethe shares or acquire more shares duringthe period of time beginning from thechange in investment purpose or theacquisition of 20 percent or more untilten days after the Schedule 13D is filed.

The Commission also is adoptingrelated and clarifying amendmentsincluding the simplification of theSchedule 13G disseminationrequirements to reflect the readyavailability of those reports on theCommission’s EDGAR system.Schedules 13G will no longer berequired to be sent to the exchanges,since all Schedules 13D and 13G mustnow be filed electronically with theCommission.5

II. Amendments to Regulation 13D–G

A. Expansion of the Class of InvestorsEligible To Report on Schedule 13G

The Commission proposed theamendments adopted today on July 3,1996.6 The amendments are being

adopted substantially as proposed withsome important modifications. Inaddition to the two existing categories ofSchedule 13G filers (‘‘QualifiedInstitutional Investors’’ 7 and ‘‘ExemptInvestors’’ 8), today’s amendments createa third category (‘‘Passive Investors’’),9significantly expanding the classes ofpersons eligible to file on the short form.Under the amendments, all PassiveInvestors are permitted to use the short-form Schedule 13G.10 Passive Investorschoosing to report on Schedule 13G willfile that schedule within 10 calendardays after acquiring beneficialownership of more than five percent ofa class of subject securities. Personsunable or unwilling to certify that theydo not have a disqualifying purpose oreffect because, for example, thepossibility exists that they may seek toexercise or influence control, would beineligible to file a Schedule 13G andwould be required to file a Schedule


11 The Commission has revised, as proposed, thecertification on the Schedule 13G for QualifiedInstitutional Investors to provide that suchinvestors certify that the securities were acquiredand are held in the ordinary course of business andwere not acquired and are not held for the purposeof and do not have the effect of changing orinfluencing the control of the issuer of suchsecurities and were not acquired and are not heldin connection with or as a participant in anytransaction having such purpose or effect (emphasisadded). This amendment to the certification is toconform the language of the certification toamended Rule 13d–1(e).

12 Amended Rule 13d–2(b) requires QualifiedInstitutional Investors to amend Schedule 13G 45days after the end of each calendar year if, as of theend of such calendar year, there are any changes inthe information reported in the previous filing onthat Schedule. Further, under amended Rule 13d–2(c) if their beneficial ownership exceeds 10percent of the class at the end of any month, anamendment would be required to be filed within 10days after the end of that month, as well as within

10 days after the end of any month in which theirownership increases or decreases by more than fivepercent of such class.

13 See Sections II.C. and II.D. infra.

14 The determination of what constitutes‘‘promptly’’ under Regulation 13D–G is based uponthe facts and circumstances surrounding themateriality of the change in information triggeringthe filing obligation and the filing person’s previousdisclosures. Any delay beyond the date the filingreasonably can be filed may not be prompt. See Inthe Matter of Cooper Laboratories, Inc., Release No.34–22171 (June 26, 1985).

15 Rule 13d–1(e).

13D.11 Qualified Institutional Investorsremain eligible to file the short-formreport on Schedule 13G within 45calendar days after the calendar yearend. Exempt Investors also willcontinue to file their initial Schedule13G within 45 calendar days after thecalendar year in which they becamesubject to Section 13(g) and new Rule13d–1(d).

Even though a Passive Investor mayreport on Schedule 13G, it will bepermitted to file a Schedule 13Dinstead. The fact that an investor canrepresent that it does not have adisqualifying purpose or effect butnevertheless chooses to file on aSchedule 13D may provide importantinformation concerning the filingperson’s investment purpose.

B. Filing Periods for Passive InvestorsFiling on Schedule 13G

As adopted, Passive Investorschoosing to file a Schedule 13G will filethe initial schedule within 10 calendardays of crossing the five percentthreshold. Requiring the filing within 10days, rather than the 45 days followingyear end as is currently applicable toQualified Institutional Investors andExempt Investors, will provide moretimely notice to the market and toinvestors of the existence of votingblocks that have the potential ofaffecting or influencing control of theissuer.

Although the Commission is adoptingthe initial reporting obligations forPassive Investors as proposed that aremore stringent than those for QualifiedInstitutional Investors, the Commissionis adopting a more liberal approach foramending Schedule 13G. The rulepermits Passive Investors to amend in amanner similar, but more promptlythan, Qualified Institutional Investorsreporting on Schedule 13G.12

As proposed, Passive Investors wouldhave been subject to the more stringentamendment requirements that currentlyapply to Schedule 13D filers. Sevencommenters specifically addressed theproposed amendment requirements andfive commenters believed that theproposals were too complex and overlycautious. Those commenters believedthat the application of the morestringent amendment requirements toPassive Investors would significantlydiminish the benefits of the proposalsoverall to Passive Investors and wouldbe inconsistent with the Commission’sintent to reduce the reportingobligations of Passive Investors. Onecommenter noted that if the PassiveInvestors have no intent to influence orchange control of the issuer, then thereis no substantially greater need to trackthe percentage changes in holdings ofPassive Investors, and therefore theyshould be treated no differently thanQualified Institutional Investors. Incontrast, other commenters argued thatthe proposed accelerated filing of theseSchedule 13G amendments for PassiveInvestors is necessary to provide noticeto investors, issuers, and to the marketof voting blocks of securities that havethe potential of affecting or influencingcontrol of the issuer.

While the Commission appreciatesthat the beneficial ownership rules arealready complex, separate amendmentrequirements for Passive Investorsappear to be necessary to address thesecompeting concerns raised by thecommenters. The views of thecommenters on the amendment issuesuggest that neither the current 13D nor13G approach would be appropriate. Byrequiring prompt reporting of more thanfive percent changes in position, theCommission believes that sufficientinformation will be provided toinvestors, issuers, and to the marketregarding the changes in percentageownership of Passive Investors. Tofurther prevent any possible abuse inthe use of Schedule 13G by investorsthat have a disqualifying purpose oreffect, the Commission is adopting, asproposed, the ‘‘cooling-off’’ period upona change in investment purpose and thesame ‘‘cooling-off’’ period will applyupon acquiring 20 percent or more ofthe class.13

Accordingly, as adopted, PassiveInvestors must amend the Schedule 13Gwithin 45 calendar days after the end ofthe calendar year to report any changein the information previously reported.

Passive Investors also will amend theSchedule 13G during the year if theyacquire greater than 10 percent of thesubject securities. This amendment willbe required to be filed ‘‘promptly’’ 14

upon acquiring greater than 10 percent.Between 10 percent and less than 20percent, Passive Investors will berequired to file additional amendments‘‘promptly’’ during the year if theyincrease or decrease their beneficialownership by more than five percent ofthe class.

These new amendment requirementsfor Passive Investors that acquire greaterthan 10 percent of the class are differentthan the amendment requirements forQualified Institutional Investors thatacquire greater than 10 percent.Qualified Institutional Investors haveuntil 10 days after the month in whichthey acquired greater than ten percent toamend their Schedule 13G. QualifiedInstitutional Investors holding morethan 10 percent have until 10 days afterthe month in which they increased ordecreased their beneficial ownership bymore than five percent. In each case, theQualified Institutional Investor’sbeneficial ownership is computed as ofthe last day of the month. The QualifiedInstitutional Investors are permittedgreater flexibility in filing amendmentsin recognition of the fact that QualifiedInstitutional Investors routinely buy andsell securities in the ordinary course ofbusiness and are less likely to abuse theprocess.

C. 13D Filing Requirement and Cooling-Off Period for Changes in InvestmentPurpose or Effect

When Qualified InstitutionalInvestors and Passive Investorsdetermine they hold the subjectsecurities with a disqualifying purposeor effect, they must file a Schedule 13Dno later than 10 calendar days after thechange in investment purpose.15 TheCommission is adopting, as proposed, a‘‘cooling-off’’ period that will begin withthe change in investment purpose andlast until the expiration of the tenthcalendar day from the date of the filingof a Schedule 13D. During the cooling-off period, the reporting person isprohibited from voting or directing thevoting of the subject securities oracquiring additional beneficialownership of any equity securities of


16 The sooner the Schedule 13D filing is made,the sooner the cooling-off period will end, since thecooling-off period ends 10 calendar days from thedate the Schedule 13D is filed.

17 Upon reaching the 20 percent limit, theinvestor is not required to amend its Schedule 13Gin addition to filing the Schedule 13D.

18 Rule 13d-1(f).19 The ‘‘standstill’’ period would have

commenced upon acquiring 20 percent or more ofthe class and terminated upon the filing of theSchedule 13D. During the standstill period, theinvestor would have been prohibited from voting itssecurities or acquiring additional equity securitiesin the issuer.

20 As stated in the Reproposing Release, theCommission does not intend these new rules tocreate a presumption that beneficial ownership of20 percent or more indicates control or a controlpurpose. Further, no presumption is intended thatbeneficial ownership below 20 percent cannotindicate control or a control purpose. Indeed, theCommission believes that it would be unusual foran investor to be able to make the necessarycertification of a passive investment purpose whenbeneficial ownership approaches 20 percent.

21 Rule 13d–1(h).22 Rule 13d–1(b).23 The Schedule 13G would be filed as an initial

Schedule 13G as opposed to an amendment evenif the reporting person had reported on Schedule13G before losing its Schedule 13G-eligibility.

24 See Exchange Act Release No. 14692 (April 21,1978) [43 FR 18484].

the issuer or any person controlling theissuer.

Seven commenters specificallyaddressed the proposals regarding theSchedule 13D filing requirement upon achange in investment purpose or effectand the related cooling-off period. Threeof those commenters supported theSchedule 13D filing requirement andcooling-off period as proposed. Theother four commenters supported theconcept of a cooling-off period butthought the period should be shortened.However, in light of the changes beingadopted today to liberalize theamendment requirements for PassiveInvestors reporting on Schedule 13G,the Commission believes the 10 daycooling-off period, as adopted, isnecessary and appropriate. The earliercommencement of the cooling-off periodwill encourage the prompt filing of aSchedule 13D.16 The cooling-off periodwill prevent further acquisitions or thevoting of the subject securities until themarket and investors have been giventime to react to the information in theSchedule 13D filing.

D. Twenty-Percent Limit on OwnershipInterest Reportable on Schedule 13Gand Related Cooling-Off Period

Under today’s amendments, PassiveInvestor status is limited to holders ofless than 20 percent of the class ofsubject securities. Upon acquiring 20percent or more, the investor mustreport the acquisition on Schedule 13Dwithin 10 calendar days.17 Additionally,the investor will be subject to a‘‘cooling-off’’ period commencing fromthe time the investor reaches the 20percent threshold until ten calendardays after the filing of the Schedule13D.18 During this period, the investorwill be prohibited from voting ordirecting the voting of the subjectsecurities and from acquiring additionalbeneficial ownership in any equitysecurities of the issuer. This cooling-offperiod is the same period that applies toPassive Investors and QualifiedInstitutional Investors when theychange their investment purpose. TheCommission proposed a standstill 19

period upon the acquisition of 20percent or more of the class. TheCommission is adopting the cooling-offperiod in lieu of the standstill period atthe 20 percent threshold in order tofurther prevent abuse of the liberalamendment requirements adopted todayfor Passive Investors and to simplifyRegulation 13D–G.

Six commenters specificallyaddressed the proposal regarding the 20percent limitation and related standstillperiod. A majority of those commenterssupported the 20 percent limitation.One commenter believed the ownershiplimit should be lowered to 10%. Threecommenters supported the standstillperiod as proposed. Two commentersbelieved that it would be unfair toPassive Investors to impose a limit onbeneficial ownership reportable onSchedule 13G and to apply anystandstill period. Those commentersbelieved that if an investor can make thepassive certification, then it should betreated the same as QualifiedInstitutional Investors. The Commissionbelieves that the 20 percent limitationand the cooling-off period adoptedtoday are necessary and appropriate forprompt disclosure of sizeable blocks ofsecurities because of the inherentcontrol implications corresponding tosuch ownership positions held bypersons that do not purchase securitiesin the ordinary course of business.20

The 20 percent limit applies onlywith respect to Passive Investorsreporting on Schedule 13G pursuant tonew Rule 13d–1(c). QualifiedInstitutional Investors and ExemptInvestors are not subject to the 20percent limitation because theCommission recognizes that institutionsthat purchase securities in the ordinarycourse of business may be burdened bya limitation on the amount of securitiesthat can be reported on the short-formSchedule 13G. Further, the Commissionbelieves that Schedule 13G strikes anappropriate balance between furnishingdisclosure to the market and theburdens placed on such institutions.

E. Re-establishing Schedule 13GEligibility

The amended rules allow personswho have lost their eligibility to file onSchedule 13G to re-establish their

Schedule 13G-eligibility and againreport on Schedule 13G.21 Specifically,a Qualified Institutional Investor thathas lost its Schedule 13G eligibility,because it is no longer a qualified entityunder Rule 13d–1(b)(1)(ii) or cannotmake the required certification, isallowed to switch back to Schedule 13Gpursuant to the Qualified InstitutionalInvestor provision 22 once it re-establishes its status under Rule 13d–1(b)(1)(ii) or can again make thenecessary certification. Similarly, aPassive Investor that has lost itsSchedule 13G-eligibility under Rule13d–1(c), because it can no longercertify that it does not have adisqualifying purpose or effect orbecause it reached the 20 percentthreshold, is able to switch back toSchedule 13G when it can once againmake the certification or when itsbeneficial ownership falls below 20percent. The Commission believes thatinvestors and the market will be betterinformed if reporting persons are able toswitch back to Schedule 13G after re-establishing their eligibility, since thefiling of a Schedule 13D will be a clearerindicator of investors that currentlyhave a disqualifying purpose or effect orinvestors that hold 20 percent or moreof the class.

Once a Schedule 13D reportingperson decides to switch to a Schedule13G, the Schedule 13G would be filedto reflect that decision.23 The filing ofthe Schedule 13G will be deemed toamend the Schedule 13D. Therefore, noformal amendment to the Schedule 13Dwill be required.

F. Expansion of the Class of QualifiedInstitutional Investors

1. Foreign Institutional Investors

Under the amended rules, the use ofthe short-form Schedule 13G pursuantto the Qualified Institutional Investorprovisions of Rule 13d–1(b) willcontinue to be limited essentially toinstitutions such as brokers, dealers,investment companies, and investmentadvisers registered with theCommission, or regulated banks orinsurance companies. The use ofSchedule 13G by similar non-domesticinstitutions has been limited in the pastto those institutions that have obtainedan exemptive order from theCommission 24 or, under the current


25 See Section II.B. above.

26 Title V, Section 508.27 Rule 13d–1(b)(1)(ii)(G). This amendment

codifies the no-action position set forth in WarrenE. Buffet & Berkshire Hathaway, Inc., (availableDecember 5, 1986). Two commenters addressed thisproposal and both commenters supported theproposal.

28 This amendment under Section 16 codifies theinterpretive position set forth in Edward C. Johnson3d., (available August 20, 1991).

29 Since state takeover statutes and shareholderrights provisions are triggered by certain ‘‘beneficialownership’’ or ‘‘voting power’’ thresholds—andmay even use the beneficial ownership definitionunder Rule 13d–3—there is a concern that reportingownership on an aggregate basis may trigger someof those provisions.

30 Likewise, under these circumstances,attribution may not be required under Rule 16a–1(a)(1).

practice, a no-action position from theDivision of Corporation Finance. Theno-action relief was based on therequester’s undertaking to grant theCommission access to information thatwould otherwise be disclosed in aSchedule 13D and the comparability ofthe foreign regulatory scheme applicableto the particular category of institutionalinvestor.

The Commission is not expanding thelist of qualified institutional investors toinclude foreign institutions. The PassiveInvestor provisions adopted today makeSchedule 13G available to all investorsthat do not have a disqualifying purposeor effect, including foreign investors.These new provisions have more lenientfiling requirements for amendments toSchedule 13G than as originallyproposed.25 Therefore, foreigninstitutional investors wanting to reporton Schedule 13G should be able to relyon the passive investor provisionswithout significant difficulty. Anyforeign institutional investor that wouldrather report on Schedule 13G as aQualified Institutional Investor and doesnot want to rely on the Passive Investorprovisions may continue to seek no-action relief from the staff under currentpractices.

2. State and Local GovernmentalEmployee Benefit Plans

The Commission is expanding the listof Qualified Institutional Investorsunder Rule 13d–1(b)(1)(ii) to allowemployee benefit plans maintainedprimarily for the benefit of state or localgovernment employees to report onSchedule 13G. The Commissionbelieves that these plans are nowgenerally subject to fiduciary obligationsand standards for investment that aresubstantially similar to those imposedby Employee Retirement IncomeSecurity Act of 1974 (‘‘ERISA’’). TheCommission has revised the language inRule 13d–1(b)(1)(ii)(F) to eliminate thephrase ‘‘pension fund’’ because suchentities are included in the definition ofemployee benefit plan in Section 3(3) ofERISA.

The Commission is making aconforming change to the beneficialowner definition under Section 16 byamending Rule 16a–1(a)(1)(vi) toinclude state and local governmentemployee benefit plans in the list ofpersons that are not deemed to be thebeneficial owners of securities held forthe benefit of third parties.

3. Savings AssociationsBased upon the suggestions of

commenters, the Commission is

expanding the list of QualifiedInstitutional Investors under Rule 13d–1(b)(1)(ii) by adding new paragraph (H)to allow savings associations to reporton Schedule 13G. Adding savingsassociations to the list of QualifiedInstitutional Investors codifies the staffno-action relief granted to ColumbiaSavings and Loan (June 15, 1987).

The Commission is making aconforming change to the Section 16rules by adding new Rule 16a–1(a)(1)(viii) to include savingsassociations in the list of persons thatare not deemed to be the beneficialowners of securities held for the benefitof third parties.

4. Church PlansAlso upon the suggestion of

commenters, the Commission isexpanding the list of QualifiedInstitutional Investors under Rule 13d–1(b)(1)(ii) by adding new paragraph (I)to allow church employee benefit plansto report on Schedule 13G. Addingchurch plans to the list of QualifiedInstitutional Investors is consistent withthe treatment of church plans under theNational Securities MarketsImprovement Act of 1996 26 whichexempts such plans from most federalsecurities regulation.

The Commission is making aconforming change to the Section 16rules by adding new Rule 16a–1(a)(1)(ix)to include church plans in the list ofpersons that are not deemed to be thebeneficial owners of securities held forthe benefit of third parties.

5. Control Persons of QualifiedInstitutional Investors

The Commission is expanding the listof Qualified Institutional Investorsunder Rule 13d–1(b)(1)(ii) to allowcontrol persons of QualifiedInstitutional Investors to report indirectbeneficial ownership through thecontrolled entity on Schedule 13G. Inorder to use Schedule 13G, the controlperson must not own directly, orindirectly through an ineligible entity oraffiliate, more than one percent of thesubject company’s stock and is notseeking to change or influence control ofthe subject company.27

The Commission is making aconforming change to the Section 16rules by amending Rule 16a–1(a)(1)(vii)to include control persons of qualifiedinstitutions in the list of persons that are

not deemed to be beneficial owners ofsecurities held for the benefit of thirdparties.28

Four commenters have requestedsome form of relief or guidance on whenbeneficial ownership under Rule 13d–3should be attributed among entitiesunder common control. This issue arisesin the case of a consolidated group ofcorporations under common control orin the case of a single entity that hasseparately managed businesses withinthe same legal entity. The Commissionrecognizes that certain organizationalgroups are comprised of many differentbusiness units that operateindependently of each other. They maynevertheless have to aggregate beneficialownership for Regulation 13D–Greporting purposes.29 The need toaggregate may have the effect ofrequiring diverse business units to sharesensitive information, when it isotherwise not necessary for businesspurposes.

Because the Rule 13d–3(a) definitionof beneficial ownership includespersons who have both direct andindirect, as well as shared, voting andinvestment power, beneficial ownershipby the business units, divisions orsubsidiaries that hold the securitiesnormally should be attributed to theparent entities that are in a controlrelationship to the shareholder entity. Inthose instances where the organizationalstructure of the parent and relatedentities are such that the voting andinvestment powers over the subjectsecurities are exercised independently,attribution may not be required for thepurposes of determining whether afiling threshold has been exceeded andthe aggregate amount owned by thecontrolling persons.30

The determination as to whether thevoting and investment powers areexercised independently from theparent and other related entities is basedon the facts and circumstances. Onecircumstance in which beneficialownership may not be required to beattributed to the parent entities is whenthese entities have in place certaininformational barriers that ensure thatthe voting and investment powers areexercised independently from parent


31 The Commission adopted a similar approach inmodifying the definition of ‘‘affiliated purchaser’’under Regulation M. See Exchange Act Release No.38067 (December 20, 1996) [62 FR 520]. Althoughinformational barriers may serve to prevent theattribution of beneficial ownership to the parententities, a group under Rule 13d–5(b) can still beformed among commonly controlled entities orwith the parent entity that otherwise own securitiesin the issuer if these persons agree to act togetherfor the purpose of acquiring, holding, voting ordisposing of the subject securities. See e.g., In theMatter of the Gabelli Group, Inc., et al, ExchangeAct Rel. No. 26005 (August 17, 1988).

32 To the extent the informational barrier iscrossed, beneficial ownership of that class ofsecurity should be reported on an aggregate basisby the entities sharing the information.

33 The entities may have common officers,directors, and employees but those persons mustnot be involved in the exercise of the voting andinvestment powers or otherwise made aware ofspecific securities positions which are not publiclyavailable. This factor would ensure that personsinvolved in the exercise of the voting andinvestment powers are not the same persons thatwould exercise such powers for the parent entityand therefore no information concerning theexercise of such powers would pass through theinformational barrier.

34 Pub. L. No. 104–290, 110 Stat. 3416 (1996)(codified in scattered sections of the United StatesCode).

and affiliated entities.31 This approachassumes that there will not be arbitraryor artificial separation of business units.One factor militating against separationwould be participation in a commoncompensation pool that may alignvoting and investment decisions.

When informational barriers are reliedupon to avoid attributing beneficialownership to the parent entities, thevarious companies or groups shouldmaintain and enforce written policiesand procedures reasonably designed toprevent the flow of information to andfrom the other business units, divisionsand entities that relate to the voting andinvestment powers over the securities.Those companies or groups also shouldobtain an annual, independentassessment of the operation of thepolicies and procedures established toprevent the flow of information amongthe related entities. The frequency inwhich an informational barrier iscrossed with respect to a particularsecurity (and therefore beneficialownership would be attributed for thatsecurity) would raise questionsregarding the efficacy of theinformational barrier overall. However,an isolated instance in which thisoccurs would not necessarily impact theownership treatment of securities ofother issuers held by the reportingperson.32

Finally, the parent entities shouldhave no officers or directors (or personsperforming similar functions) oremployees (other than clerical,ministerial, or support personnel) whoare involved in the exercise of thevoting and investment powers incommon with the shareholder.33 For

example, the existence of anindependent investment committeewould be evidence of an effectiveseparation between the parent and theaffiliated entities.

6. Investment Advisers Prohibited FromRegistering Under the InvestmentAdvisers Act of 1940 Pursuant toSection 203A of That Act

Since the issuance of the ReproposingRelease, Congress passed the NationalSecurities Markets Improvement Act of1996.34 Among other things, the Actamended the Investment Advisers Actof 1940 (the ‘‘Advisers Act’’) by addingSection 203A, which prohibits certaininvestment advisers from registeringwith the Commission. For the most part,only advisers that have ‘‘assets undermanagement’’ of $25 million or more,that advise registered investmentcompanies, or that meet one of severalexemptions from the prohibition onregistration will be registered with theCommission. Other advisers will beregulated by state securities authorities.Currently, Rule 13d–1(b)(1)(ii)(E)restricts the use of Schedule 13G toinvestment advisers registered underSection 203 of the Advisers Act. Todaythe Commission is amending this rule toallow those investment advisers that areprohibited from registering under theAdvisers Act pursuant to Section 203Aof that Act to report on Schedule 13Gas a Qualified Institutional Investor.Although these persons will not besubject to the federal regulatory regimefor investment advisers, they willcontinue to buy and sell securities inthe ordinary course of business andtheir businesses will be regulated bystate law.

The Commission is making aconforming change to the Section 16rules by amending Rule 16a–1(a)(1)(v) toinclude these investment advisers in thelist of persons that are not deemed to bethe beneficial owners of securities heldfor the benefit of third parties.

G. Shareholder Communications andBeneficial Ownership Reporting

The Commission requested commentas to whether the Section 13(d)reporting obligations restrict ashareholder’s ability to engage in proxyrelated activities including the ability touse the proxy rule exemptions that wereadopted in 1992 to facilitatecommunications among shareholders.The Commission asked whether relief,in addition to that adopted today, fromSchedule 13D filing obligations with

respect to soliciting activities isnecessary and appropriate.

Only seven commenters responded tothis request for comment. Twocommenters believed that the Section13(d) reporting obligations do notrestrict the use of the proxy ruleexemptions. The other five commentersbelieved that the reporting obligationsdo restrict the use of the proxy ruleexemptions and all those commentersrequested the Commission to providevarious forms of relief or guidance onthe matter. The two primary concernsraised by the five commenters are thatactivities exempt from the rules:

(i) May constitute the formation of a‘‘group’’ under Rule 13d–5(b); or

(ii) May be construed as having thepurpose or effect of changing orinfluencing the control of the issuer,and therefore would disqualify a personfrom eligibility to use Schedule 13G.

Although the Commission agrees thatit can provide some further guidance inthis area as discussed below, theCommission does not believe that thecurrent beneficial ownership and groupconcepts unduly interfere with the typeof shareholder communicationscontemplated by the proxy ruleexemptions. The Commission believesthat no further relief from the Section13(d) filing obligations is required.

Specifically, the Commission believesthat a shareholder who is a passiverecipient of soliciting activities, withoutmore, would not be deemed a memberof a group under Rule 13d–5(b)(1) withpersons conducting the solicitation.This would be true even where thesoliciting activities result in theshareholder granting a revocable proxy.Similarly, when a shareholder solicitsand receives revocable proxy authority(subject to the discretionary limits ofRule 14a–4), without more, thatshareholder does not obtain beneficialownership under Section 13(d) in theshares underlying the proxy.

The eligibility to use Schedule 13G bya shareholder who submits, supports, orengages in exempt soliciting activity infavor of a shareholder proposalsubmitted pursuant to Rule 14a–8, willdepend on whether that activity wasengaged in with the purpose or effect ofchanging or influencing control of thecompany. That determination normallywould be based upon the specific factsand circumstances accompanying thesolicitation and the vote. For thatreason, the Commission is not able toprovide extensive guidance on thisissue.

In some cases the subject matter of theproposal or solicitation may bedispositive. For example, mostsolicitations regarding social or public


35 Rule 13d–1(h).36 On September 18, 1997, the Commission

proposed amending Rule 14a–8 to provide anoverride mechanism from the exclusion of theshareholder proposal under Rule 14a–8 (c)(5) and(c)(7). See Release No. 34–39093. The 13G-eligibility of a shareholder who would use theproposed override mechanism to submit ashareholder proposal would be determined in thesame manner as discussed in this section.

37 Schedules 13D will, however, continue to besent to each exchange on which the security istraded, which is a statutory requirement.

38 See Exchange Act Release No. 7331 (September24, 1996).

interest issues (e.g., environmentalpolicies, apartheid, etc.) would not havethe purpose or effect of changing orinfluencing control of the company.Corporate governance proposals,however, may or may not be controlrelated. Proposals and soliciting activityrelating to matters such as executivecompensation, director pensions, andconfidential voting normally would notprevent the use of a Schedule 13G. Evencorporate governance issues that arepresumably control related (e.g.,removal of a poison pill, opting out ofstate takeover statutes, or removal ofstaggered boards) might not have adisqualifying purpose or effect,depending on the circumstances. Incontrast, most solicitations in support ofa proposal specifically calling for achange of control of the company (e.g.,a proposal to seek a buyer for thecompany or a contested election ofdirectors or a sale of a significantamount of assets or a restructuring of acorporation) would clearly have thatpurpose and effect. Some relevantfactors to consider in assessing thepurpose and effect of the type ofproposal and related soliciting activityinclude:

(1) Does the filing person purchasesecurities in the ordinary course ofbusiness and by its nature does not seekto acquire control of companies?

(2) Was the proposal submitted orsolicitation undertaken based upon thefiling person’s investment policiesregarding good corporate governance forall the filer’s portfolio companies, ratherthan to foster a control transaction forthe particular company?

(3) Was the proposal submitted, orsolicitation commenced, undercircumstances where, given the subjectmatter of the particular proposal, it islikely to have the effect of facilitating achange of control of that particularcompany by another person or group(for example, the submission of aproposal to eliminate a staggered boardthat may facilitate a non-managementsolicitation, even by an unrelated thirdparty)?

(4) Did the filing person commence anindependent solicitation, exempt orotherwise, in favor of a proposal (themere submission of a proposal underRule 14a–8, without any independentsoliciting activity, would be less likelyto have a disqualifying purpose oreffect)?

(5) Was the activity undertaken inopposition to a proposal put forth bymanagement for shareholder approval,

rather than in support of a proposalsubmitted by the filing person or someother shareholder?

Some proxy-related activities, by theirnature, will have only limited effect oncontrol of the company, and thereforeshould normally not cause ashareholder to lose its 13G eligibility.For example, voting in favor of aninsurgent or making a votingannouncement under Rule 14a–1(l)(2)(iv) in favor of a corporategovernance proposal, without more,would not cause the loss of Schedule13G eligibility, regardless of the subjectmatter. This is true even if the votingannouncement supports a non-management shareholder proposal.

Although in many instances thesedeterminations will be difficult and factintensive, the Commission believes thatthe amendment adopted today thatallows a person to re-establish itsSchedule 13G eligibility 35 should serveto lessen the concern that a Schedule13G filing person may lose its eligibilityto report on Schedule 13G by engagingin or being a part of soliciting activities.Under new Rule 13d–1(h), if a reportingperson loses its Schedule 13G eligibilitydue to its soliciting activities and isrequired to then report on Schedule13D, the reporting person can switchback to Schedule 13G when thereporting person is no longer involvedin the soliciting activities and can makethe necessary certifications.36

H. Related and Clarifying Amendments

The Commission also has eliminatedthe redundancies that existed inRegulation 13D–G regarding the filingand dissemination requirements bysetting forth such requirements in onerule, Rule 13d–7(b). The Commissionbelieves that Schedule 13G will becomethe primary reporting document forbeneficial ownership, since a majority ofinvestors will now file Schedule 13G inlieu of Schedule 13D. For this reason,the Commission proposed that theoriginal and amendments to Schedules13G be provided to each exchangewhere the security is traded as iscurrently required for Schedules 13D.

However, since these filings will bemade by persons without adisqualifying purpose or effect and arenow required to be filed electronicallyon the Commission’s Electronic DataGathering and Retrieval System andtherefore available in the electronicmedia, including on the Commission’sWorld Wide Web site (http://www.sec.gov), the Commission is notadopting this proposal. Likewise, due tothe electronic availability of Schedules13D, the Commission is not adoptingthe proposal that a copy of the Schedule13D and amendments thereto beprovided to the National Association ofSecurities Dealers for securities quotedon the National Association ofSecurities Dealers Automated QuotationSystem (‘‘NASDAQ’’).37

Additionally, because of theelectronic availability of filings and thefact that Schedules 13G do not representcontrol transactions, the Commission isfurther simplifying the disseminationrequirements for all Schedule 13G filersby eliminating the requirement thatSchedules 13G be sent to the exchanges.Accordingly, copies of all initialSchedules 13G and amendments filedwith the Commission by PassiveInvestors, Qualified InstitutionalInvestors, and Exempt Investors willonly be required to be sent to the issuerand will not be required to be sent toany exchange or automated quotationsystem on which the securities aretraded.

The amendments clarify the numberof copies required to be filed to theextent paper filings may be made. TheCommission notes that paper filingswould be relatively rare, since allSchedules 13D and 13G must be filed inelectronic format, unless they relate tothe securities of a foreign private issueror the filer has received a hardshipexemption. Additionally, the rules havebeen revised to eliminate languageregarding filing fees for Schedules 13Dand 13G since such fees have beenpreviously eliminated.38 Finally,technical amendments to Schedules 13Dand 13G have been made to conform theschedules to the proposed rules and toamend the filing deadlines and thenumber of copies in the instruction.BILLING CODE 8010–01–P


BILLING CODE 8010–01–C


38 See Exchange Act Release No. 7331 (September24, 1996).

39 The sample included 100 Schedules 13D filedfrom May 21, 1997 to June 2, 1997.

40 In an earlier survey discussed in theReproposing Release, 110 Schedules 13D filed inNovember and December 1994 were surveyed and76 percent disclosed a passive investment purpose.Of the total surveyed, 63 percent disclosed apassive investment purpose and held less than 20percent of the class of securities and wouldtherefore be eligible to use Schedule 13G as PassiveInvestors.

41 This estimated number of respondents is basedupon the number of Schedules 13D filed in fiscalyear 1996 and assumes no increase each year. Thisrepresents an estimated 53 percent reduction fromthe 3,503 Schedules 13D filed in fiscal year 1996.The estimated 53 percent reduction in Schedule13D filings is based upon the sample data providedby the Office of Economic Analysis.

42 Total annual burden hours are determined bymultiplying the estimated average burden hours forcompleting the particular schedule by the estimatednumber of respondents that file that schedule.

43 This number of respondents is based upon thenumber of Schedules 13G filed in fiscal year 1996(7,187) plus the additional 1,857 respondents thatare expected to file on Schedule 13G under theproposed rules and assumes no increase each year.

IV. Final Regulatory FlexibilityAnalysis

A Final Regulatory FlexibilityAnalysis (‘‘FRFA’’) has been prepared inaccordance with 5 U.S.C. 604concerning the amendments to thebeneficial ownership rules of Regulation13D–G and related Schedules 13D and13G and the amendments to Rule 16a–1(a)(1). The analysis notes that theprincipal effect of the revisions toRegulation 13D–G will be to reduce thedisclosure obligations and associatedcosts to a majority of persons, includingsmall entities, required to reportbeneficial ownership under Sections13(d) and 13(g) of the Exchange Act andwould eliminate the reportingobligations under Section 16 of theExchange Act of certain governmentalemployee benefit plans, church plans,savings associations, investmentadvisers registered with the state andcertain control persons of QualifiedInstitutional Investors. The analysis alsoindicates that there are no currentfederal rules that duplicate, overlap orconflict with the rules and forms to beamended.

As stated in the analysis, alternativesto the proposed amendments wereconsidered, including, among otherthings, changing or simplifying thecompliance or reporting requirementsfor small entities or exempting smallentities from all requirements to file theschedules under Regulation 13D–G. Asdiscussed in the analysis, there is noless restrictive alternative to theamendments that would serve thepurposes of the beneficial ownershipprovisions of the Exchange Act. Asoriginally proposed, Passive Investorswould have been subject to morestringent amendment requirements thatwould have required amendments to befiled upon every one percent change intheir beneficial ownership. However, inorder to further reduce the reportingburdens of Passive Investors, theCommission is not adopting theproposed amendment requirements.Under the adopted rules, PassiveInvestors will only file amendments totheir Schedules 13G upon greater thanfive percent changes in their beneficialownership, as well as the annualamendment. Further, the Commissionoriginally proposed that a copy of theSchedule 13G be sent to each exchangeon which the security is traded and toNASDAQ if the security trades there.However, in order to simplify thedissemination requirements, copies ofthe Schedule 13G will not be required

to be sent to any exchange or NASDAQand will only continue to be sent to theissuer, as well as being filed with theCommission.

The Commission received nocomments on the Initial RegulatoryFlexibility Analysis (‘‘IRFA’’) preparedin connection with the proposingrelease. Five commenters indicated thatthe amendments would improve theeffectiveness of the beneficialownership reporting system and wouldreduce the reporting burdens of PassiveInvestors.

A copy of the FRFA may be obtainedby contacting Dennis O. Garris in theOffice of Mergers and Acquisitions,Division of Corporation Finance,Securities and Exchange Commission,450 Fifth Street, N.W., Washington, D.C.20549.

V. Paperwork Reduction ActThe beneficial ownership reporting

requirements are intended to provideinvestors and the subject issuer withinformation about accumulations ofsecurities that may have the ability tochange or influence control of theissuer. Before the amendments adoptedtoday, Regulation 13D–G required thatmost persons file a detailed disclosurestatement on the long-form Schedule13D upon acquiring more than fivepercent of the subject securities. Certainqualified institutions (QualifiedInstitutional Investors) and persons whohave not made an acquisition subject toSection 13(d) (Exempt Investors) mayfile the short-form disclosure statementSchedule 13G which requires lessdetailed disclosure than Schedule 13D.

The amendments make Schedule 13Gavailable, in lieu of Schedule 13D, to allPassive Investors beneficially owningless than 20 percent. The Commissionanticipates that the amendments willreduce the existing informationcollection requirements associated withRegulation 13D–G and Schedules 13Dand 13G. The amendments will allowmore individuals and non-institutionalinvestors to file the short-form Schedule13G. An important change from theproposed rules is that Passive Investorsfiling on Schedule 13G will be subjectto the more liberal filing requirementswith respect to amending the Schedule13G. This change further reduces thereporting obligations of PassiveInvestors. Under the amended rules,Passive Investors must amend theSchedule 13G within 45 calendar daysafter the end of the calendar year toreport any change in the informationpreviously reported. Passive Investorsalso will promptly amend the Schedule13G during the year if they acquiregreater than 10 percent of the subject

securities and thereafter upon anincrease or decrease of greater than fivepercent. Further, in order to reduce thedissemination requirements for allpersons filing Schedules 13G, theCommission is not adopting theproposed requirement that Schedules13G be sent to each exchange on whichthe security is traded and to NASDAQif the security trades on its system. Asadopted, Schedules 13G will only berequired to be sent to the issuer as wellas being filed with the Commission.

In a recent study performed by theOffice of Economic Analysis,39 63percent of the Schedules 13D surveyeddisclosed a passive investment purpose.Of the total surveyed, 53 percentdisclosed a passive investment purposeand held less than 20 percent of theclass of equity securities and thereforewould be eligible to file on Schedule13G under the new rules as PassiveInvestors.40 It is estimated that 1646Schedules 13D will be filed each yearunder the new rules.41 Each Schedule13D would impose an estimated burdenof 14.75 hours for a total annual burdenof 24,278.50 hours.42 It is estimated that9,044 Schedules 13G will be filed eachyear under the new rules.43 EachSchedule 13G would impose anestimated burden of 10 hours for a totalannual burden of 90,440 hours.

The Commission did not receive anyPaper Work Reduction Act comments.Providing the information required bySchedules 13D and 13G is mandatoryunder Sections 13(d) and 13(g) andRegulation 13D–G of the Exchange Act.The information will not be keptconfidential. Unless a currently validOMB control number is displayed onthe Schedules 13D and 13G, theCommission may not sponsor or


44 However, eight commenters expressed generalviews as to the costs and benefits associated withthe amendments, without attempting to quantifyeither the costs or benefits. Five commenters statedthat the proposed amendments would reducepassive filers’ reporting burdens and associatedcosts. Seven commenters expressed concern thatthe proposed 20 percent limitation upon theavailability of Schedule 13G to institutionalinvestors that are passive would impose increasedcompliance burdens and costs without providingany useful information to the public. Finally, threecommenters believed that requiring Schedule 13Gfilers to provide each exchange upon which thesecurity is traded a copy of the Schedule would beoverly burdensome because such information is notreadily available. The proposal to provide copies ofSchedule 13G to each exchange is not beingadopted.

45 The sample included 100 Schedules 13D filedfrom May 21, 1997 to June 2, 1997.

conduct or require response to aninformation collection. The OMBcontrol number is 3235–0145. Thecollection is in accordance with theclearance requirements of 44 U.S.C.§ 3507.

VI. Cost-Benefit AnalysisNo specific data was provided in

response to the Commission’s requestregarding the costs and benefitsassociated with amending the filingrequirements under Regulation 13D–G.44 Making Schedule 13G available toall Passive Investors holding less than20 percent of subject securities shouldsignificantly reduce the reporting costsincurred by those investors. Regulation13D–G applies to any person thatacquires more than five percent of aclass of equity securities. Theamendments will decrease thedisclosure obligations of a significantnumber of persons currently required tofile the long-form Schedule 13D. Basedupon data provided by theCommission’s Office of EconomicAnalysis, 53 percent of Schedules 13Dstudied by that office disclosed apassive investment purpose and heldless than 20 percent of the class ofsecurities and, therefore, would beeligible to file on Schedule 13G asPassive Investors under theamendments adopted today.45

An important change from theproposed rules is that Passive Investorsfiling on Schedule 13G will be subjectto the more liberal filing requirementswith respect to amending the Schedule13G. This change further reduces thereporting obligations of PassiveInvestors. Commenters believed that theamendment requirements, as proposed,were too burdensome and that thepotential benefit of the proposals toPassive Investors would have beensubstantially outweighed by the costs ofmonitoring their holdings and reportingthe changes. Under the amended rules,Passive Investors must amend the

Schedule 13G within 45 calendar daysafter the end of the calendar year toreport any change in the informationpreviously reported. Passive Investorsalso will promptly amend the Schedule13G during the year if they acquiregreater than 10 percent of the subjectsecurities and thereafter upon anincrease or decrease of greater than fivepercent. Further, in order to reduce thedissemination requirements for allpersons filing Schedules 13G, theCommission is not adopting theproposed requirement that Schedules13G be sent to each exchange on whichthe security is traded and to NASDAQif the security trades on its system. Asadopted, Schedules 13G will only berequired to be sent to the issuer as wellas being filed with the Commission.

The Commission does not believe thatthe amendments adopted today willhave any burden on competition orcapital formation since the purpose ofthe Regulation 13D–G filingrequirements is only to report beneficialownership in public companies. Theamendments adopted today willincrease market efficiency because withthe reduced number of Schedule 13Dfilings the market will be able to focusmore quickly on acquisitions involvingthe potential to change or influencecontrol.

VII. Statutory Basis and Text ofAmendments

The amendments to Rules 13d–1,13d–2, 13d–3 and 13d–7 and Schedules13D and 13G and Rule 16a–1 are beingadopted pursuant to the authority setforth in Sections 3(b), 13, 16 and 23 ofthe Securities Exchange Act of 1934.

Lists of Subjects in 17 CFR Part 240Reporting and recordkeeping

requirements, Securities.

Text of AmendmentsIn accordance with the foregoing,

Title 17, Chapter II of the Code ofFederal Regulations is amended asfollows:

PART 240—GENERAL RULES ANDREGULATIONS, SECURITIESEXCHANGE ACT OF 1934

1. The authority citation for Part 240continues to read, in part, as follows:

Authority: 15 U.S.C. 77c, 77d, 77g, 77j,77s, 77z–2, 77eee, 77ggg, 77nnn, 77sss, 77ttt,78c, 78d, 78f, 78i, 78j, 78k, 78k–1, 78l, 78m,78n, 78o, 78p, 78q, 78s, 78u–5, 78w, 78x,78ll(d), 79q, 79t, 80a–20, 80a–23, 80a–29,80a–37, 80b–3, 80b–4 and 80b–11, unlessotherwise noted.

* * * * *2. By amending § 240.13d–1 to revise

paragraph (a), the introductory text of

paragraph (b)(1), paragraphs (b)(1)(ii)and (b)(2), to remove paragraphs (b)(3)and (b)(4) and to redesignate paragraphs(c), (d), (e) and (f) as paragraphs (d), (i),(j) and (k), revise newly designatedparagraph (d) and to add paragraphs (c),(e), (f), (g) and (h) to read as follows:

§ 240.13d–1 Filing of schedules 13D and13G.

(a) Any person who, after acquiringdirectly or indirectly the beneficialownership of any equity security of aclass which is specified in paragraph (i)of this section, is directly or indirectlythe beneficial owner of more than fivepercent of the class shall, within 10days after the acquisition, file with theCommission, a statement containing theinformation required by Schedule 13D(§ 240.13d–101).

(b)(1) A person who would otherwisebe obligated under paragraph (a) of thissection to file a statement on Schedule13D (§ 240.13d–101) may, in lieuthereof, file with the Commission, ashort-form statement on Schedule 13G(§ 240.13d–102), Provided, That:

(i) * * *(ii) Such person is:(A) A broker or dealer registered

under section 15 of the Act (15 U.S.C.78o);

(B) A bank as defined in section3(a)(6) of the Act (15 U.S.C. 78c);

(C) An insurance company as definedin section 3(a)(19) of the Act (15 U.S.C.78c);

(D) An investment companyregistered under section 8 of theInvestment Company Act of 1940 (15U.S.C. 80a–8);

(E) Any person registered as aninvestment adviser under Section 203 ofthe Investment Advisers Act of 1940 (15U.S.C. 80b–3) or under the laws of anystate;

(F) An employee benefit plan asdefined in Section 3(3) of the EmployeeRetirement Income Security Act of 1974,as amended, 29 U.S.C. 1001 et seq.(‘‘ERISA’’) that is subject to theprovisions of ERISA, or any such planthat is not subject to ERISA that ismaintained primarily for the benefit ofthe employees of a state or localgovernment or instrumentality, or anendowment fund;

(G) A parent holding company orcontrol person, provided the aggregateamount held directly by the parent orcontrol person, and directly andindirectly by their subsidiaries oraffiliates that are not persons specifiedin § 240.13d–1(b)(1)(ii)(A) through (I),does not exceed one percent of thesecurities of the subject class;

(H) A savings association as definedin Section 3(b) of the Federal DepositInsurance Act (12 U.S.C. 1813);


(I) A church plan that is excludedfrom the definition of an investmentcompany under section 3(c)(14) of theInvestment Company Act of 1940 (15U.S.C. 80a–3); and

(J) A group, provided that all themembers are persons specified in§ 240.13d–1(b)(1)(ii)(A) through (I); and

(iii) * * *(2) The Schedule 13G filed pursuant

to paragraph (b)(1) of this section shallbe filed within 45 days after the end ofthe calendar year in which the personbecame obligated under paragraph (b)(1)of this section to report the person’sbeneficial ownership as of the last dayof the calendar year, Provided, That itshall not be necessary to file a Schedule13G unless the percentage of the classof equity security specified in paragraph(i) of this section beneficially owned asof the end of the calendar year is morethan five percent; However, if theperson’s direct or indirect beneficialownership exceeds 10 percent of theclass of equity securities prior to the endof the calendar year, the initial Schedule13G shall be filed within 10 days afterthe end of the first month in which theperson’s direct or indirect beneficialownership exceeds 10 percent of theclass of equity securities, computed asof the last day of the month.

(c) A person who would otherwise beobligated under paragraph (a) of thissection to file a statement on Schedule13D (§ 240.13d–101) may, in lieuthereof, file with the Commission,within 10 days after an acquisitiondescribed in paragraph (a) of thissection, a short-form statement onSchedule 13G (§ 240.13d–102).Provided, That the person:

(1) Has not acquired the securitieswith any purpose, or with the effect of,changing or influencing the control ofthe issuer, or in connection with or asa participant in any transaction havingthat purpose or effect, including anytransaction subject to § 240.13d–3(b);

(2) Is not a person reporting pursuantto paragraph (b)(1) of this section; and

(3) Is not directly or indirectly thebeneficial owner of 20 percent or moreof the class.

(d) Any person who is or becomesdirectly or indirectly the beneficialowner of more than five percent of anyequity security of a class specified inparagraph (i) of this section and who isnot required to file a statement underparagraph (a) of this section by virtue ofthe exemption provided by Section13(d)(6)(A) or (B) of the Act (15 U.S.C.78m(d)(6)(A) or 78m(d)(6)(B)), orbecause the beneficial ownership wasacquired prior to December 22, 1970, orbecause the person otherwise (except forthe exemption provided by Section

13(d)(6)(C) of the Act (15 U.S.C.78m(d)(6)(C))) is not required to file astatement, shall file with theCommission, within 45 days after theend of the calendar year in which theperson became obligated to report underthis paragraph (d), a statementcontaining the information required bySchedule 13G (§ 240.13d–102).

(e)(1) Notwithstanding paragraphs (b)and (c) of this section and § 240.13d–2(b), a person that has reported that itis the beneficial owner of more than fivepercent of a class of equity securities ina statement on Schedule 13G(§ 240.13d–102) pursuant to paragraph(b) or (c) of this section, or is requiredto report the acquisition but has not yetfiled the schedule, shall immediatelybecome subject to §§ 240.13d–1(a) and240.13d–2(a) and shall file a statementon Schedule 13D (§ 240.13d–101)within 10 days if, and shall remainsubject to those requirements for so longas, the person:

(i) Has acquired or holds thesecurities with a purpose or effect ofchanging or influencing control of theissuer, or in connection with or as aparticipant in any transaction havingthat purpose or effect, including anytransaction subject to § 240.13d–3(b);and

(ii) Is at that time the beneficial ownerof more than five percent of a class ofequity securities described in§ 240.13d–1(i).

(2) From the time the person hasacquired or holds the securities with apurpose or effect of changing orinfluencing control of the issuer, or inconnection with or as a participant inany transaction having that purpose oreffect until the expiration of the tenthday from the date of the filing of theSchedule 13D (§ 240.13d–101) pursuantto this section, that person shall not:

(i) Vote or direct the voting of thesecurities described therein; or

(ii) Acquire an additional beneficialownership interest in any equitysecurities of the issuer of the securities,nor of any person controlling the issuer.

(f)(1) Notwithstanding paragraph (c)of this section and § 240.13d–2(b),persons reporting on Schedule 13G(§ 240.13d–102) pursuant to paragraph(c) of this section shall immediatelybecome subject to §§ 240.13d–1(a) and240.13d–2(a) and shall remain subject tothose requirements for so long as, andshall file a statement on Schedule 13D(§ 240.13d–101) within 10 days of thedate on which, the person’s beneficialownership equals or exceeds 20 percentof the class of equity securities.

(2) From the time of the acquisition of20 percent or more of the class of equitysecurities until the expiration of the

tenth day from the date of the filing ofthe Schedule 13D (§ 240.13d–101)pursuant to this section, the personshall not:

(i) Vote or direct the voting of thesecurities described therein, or

(ii) Acquire an additional beneficialownership interest in any equitysecurities of the issuer of the securities,nor of any person controlling the issuer.

(g) Any person who has reported anacquisition of securities in a statementon Schedule 13G (§ 240.13d–102)pursuant to paragraph (b) of this section,or has become obligated to report on theSchedule 13G (§ 240.13d–102) but hasnot yet filed the Schedule, andthereafter ceases to be a person specifiedin paragraph (b)(1)(ii) of this section ordetermines that it no longer hasacquired or holds the securities in theordinary course of business shallimmediately become subject to§ 240.13d–1(a) or § 240.13d–1(c) (if theperson satisfies the requirementsspecified in § 240.13d–1(c)), and§§ 240.13d–2 (a), (b) or (d), and shallfile, within 10 days thereafter, astatement on Schedule 13D (§ 240.13d–101) or amendment to Schedule 13G, asapplicable, if the person is a beneficialowner at that time of more than fivepercent of the class of equity securities.

(h) Any person who has filed aSchedule 13D (§ 240.13d–101) pursuantto paragraph (e), (f) or (g) of this sectionmay again report its beneficialownership on Schedule 13G (§ 240.13d–102) pursuant to paragraphs (b) or (c) ofthis section provided the personqualifies thereunder, as applicable, byfiling a Schedule 13G (§ 240.13d–102)once the person determines that theprovisions of paragraph (e), (f) or (g) ofthis section no longer apply.* * * * *

3. By amending § 240.13d–2 byrevising paragraphs (a), (b), and the noteto § 240.13d–2; redesignating paragraph(c) as paragraph (e), and addingparagraphs (c) and (d) to read as follows:

§ 240.13d–2 Filing of amendments toSchedules 13D or 13G.

(a) If any material change occurs inthe facts set forth in the Schedule 13D(§ 240.13d–101) required by § 240.13d–1(a), including, but not limited to, anymaterial increase or decrease in thepercentage of the class beneficiallyowned, the person or persons who wererequired to file the statement shallpromptly file or cause to be filed withthe Commission an amendmentdisclosing that change. An acquisitionor disposition of beneficial ownership ofsecurities in an amount equal to onepercent or more of the class of securitiesshall be deemed ‘‘material’’ for purposes


of this section; acquisitions ordispositions of less than those amountsmay be material, depending upon thefacts and circumstances.

(b) Notwithstanding paragraph (a) ofthis section, and provided that theperson filing a Schedule 13G(§ 240.13d–102) pursuant to § 240.13d–1(b) or § 240.13d–1(c) continues to meetthe requirements set forth therein, anyperson who has filed a Schedule 13G(§ 240.13d–102) pursuant to § 240.13d–1(b), § 240.13d–1(c) or § 240.13d–1(d)shall amend the statement within forty-five days after the end of each calendaryear if, as of the end of the calendaryear, there are any changes in theinformation reported in the previousfiling on that Schedule: Provided,however, That an amendment need notbe filed with respect to a change in thepercent of class outstanding previouslyreported if the change results solelyfrom a change in the aggregate numberof securities outstanding. Once anamendment has been filed reflectingbeneficial ownership of five percent orless of the class of securities, noadditional filings are required unless theperson thereafter becomes the beneficialowner of more than five percent of theclass and is required to file pursuant to§ 240.13d–1.

(c) Any person relying on § 240.13d–1(b) that has filed its initial Schedule13G (§ 240.13d–102) pursuant to thatparagraph shall, in addition to filing anyamendments pursuant to § 240.13d–2(b), file an amendment on Schedule13G (§ 240.13d–102) within 10 daysafter the end of the first month in whichthe person’s direct or indirect beneficialownership, computed as of the last dayof the month, exceeds 10 percent of theclass of equity securities. Thereafter,that person shall, in addition to filingany amendments pursuant to § 240.13d–2(b), file an amendment on Schedule13G (§ 240.13d–102) within 10 daysafter the end of the first month in whichthe person’s direct or indirect beneficialownership, computed as of the last dayof the month, increases or decreases bymore than five percent of the class ofequity securities. Once an amendmenthas been filed reflecting beneficialownership of five percent or less of theclass of securities, no additional filingsare required by this paragraph (c).

(d) Any person relying on § 240.13d–1(c) and has filed its initial Schedule13G (§ 240.13d–102) pursuant to thatparagraph shall, in addition to filing anyamendments pursuant to § 240.13d–2(b), file an amendment on Schedule13G (§ 240.13d–102) promptly uponacquiring, directly or indirectly, greaterthan 10 percent of a class of equitysecurities specified in § 240.13d–1(d),

and thereafter promptly upon increasingor decreasing its beneficial ownershipby more than five percent of the class ofequity securities. Once an amendmenthas been filed reflecting beneficialownership of five percent or less of theclass of securities, no additional filingsare required by this paragraph (d).* * * * *

Note to § 240.13d–2: For personsfiling a short-form statement pursuant toRule 13d–1 (b) or (c), see also Rules13d–1 (e), (f), and (g).

4. By amending § 240.13d–3 byrevising paragraph (d)(1)(ii) to read asfollows:

§ 240.13d–3 Determination of beneficialownership.

* * * * *(d) * * *(1) * * *(ii) Paragraph (d)(1)(i) of this section

remains applicable for the purpose ofdetermining the obligation to file withrespect to the underlying security eventhough the option, warrant, right orconvertible security is of a class ofequity security, as defined in § 240.13d–1(i), and may therefore give rise to aseparate obligation to file.* * * * *

5. By adding § 240.13d–7 to read asfollows:

§ 240.13d–7 Dissemination.One copy of the Schedule filed

pursuant to §§ 240.13d–1 and 240.13d–2 shall be sent to the issuer of thesecurity at its principal executive office,by registered or certified mail. A copyof Schedules filed pursuant to§§ 240.13d–1(a) and 240.13d–2(a) shallalso be sent to each national securitiesexchange where the security is traded.

6. By amending § 240.13d–101 byrevising the language preceding the firstbox on the cover page, revising the noteon the cover page, revising Instruction(2) for the Cover Page, and in Item 7revise the cite ‘‘Rule 13d–1(f)‘‘(§ 240.13d–1(f))’’ to read ‘‘§ 240.13d–1(k)’’ as follows:

§ 240.13d–101 Schedule 13D—Informationto be included in statements filed pursuantto § 240.13d–1(a) and amendments theretofiled pursuant to § 240.13d–2(a).

* * * * *If the filing person has previously

filed a statement on Schedule 13G toreport the acquisition that is the subjectof this Schedule 13D, and is filing thisschedule because of §§ 240.13d–1(e),240.13d–1(f) or 240.13d–1(g), check thefollowing box.* * * * *

Note: Schedules filed in paper format shallinclude a signed original and five copies of

the schedule, including all exhibits. See§ 240.13d–7(b) for other parties to whomcopies are to be sent.

* * * * *

Instructions for Cover Page

* * * * *(2) If any of the shares beneficially

owned by a reporting person are held asa member of a group and themembership is expressly affirmed,please check row 2(a). If the reportingperson disclaims membership in agroup or describes a relationship withother person but does not affirm theexistence of a group, please check row2(b) [unless it is a joint filing pursuantto Rule 13d–1(k)(1) in which case it maynot be necessary to check row 2(b)].* * * * *

7. By amending § 240.13d–102 byrevising the section heading, before thefirst paragraph on the cover page add aline for the date of the reportable eventand boxes to check for the appropriatefiling provision, revising Instruction (2)for the Cover Page, revising InstructionA following the Notes, revising Items 3,4, 8, and 10, and revising the Note at theend of the schedule, to read as follows:

§ 240.13d–102 Schedule 13G—Informationto be included in statements filed pursuantto § 240.13d–1(b), (c) and (d) andamendments thereto filed pursuant to§ 240.13d–2.

* * * * *lllllllllllllllllllll

(Date of Event Which Requires Filing of thisStatement)

Check the appropriate box todesignate the rule pursuant to whichthis Schedule is filed:[ ] Rule 13d–1(b)[ ] Rule 13d–(c)[ ] Rule 13d–1(d)* * * * *

Instructions for Cover Page

* * * * *(2) If any of the shares beneficially

owned by a reporting person are held asa member of a group and thatmembership is expressly affirmed,please check row 2(a). If the reportingperson disclaims membership in agroup or describes a relationship withother person but does not affirm theexistence of a group, please check row2(b) [unless it is a joint filing pursuantto Rule 13d–1(k)(1) in which case it maynot be necessary to check row 2(b)].* * * * *

Notes

* * * * *Instructions. A. Statements filed

pursuant to Rule 13d–1(b) containingthe information required by this


schedule shall be filed not later thanFebruary 14 following the calendar yearcovered by the statement or within thetime specified in Rules 13d–1(b)(2) and13d–2(c). Statements filed pursuant toRule 13d–1(c) shall be filed within thetime specified in Rules 13d–1(c), 13d–2(b) and 13d–2(d). Statements filedpursuant to Rule 13d–1(c) shall be filednot later than February 14 following thecalendar year covered by the statementpursuant to Rules 13d–1(d) and 13d–2(b).* * * * *

Item 3. If this statement is filedpursuant to §§ 240.13d–1(b) or 240.13d–2(b) or (c), check whether the personfiling is a:

(a) [ ] Broker or dealer registeredunder section 15 of the Act (15 U.S.C.78o).

(b) [ ] Bank as defined in section3(a)(6) of the Act (15 U.S.C. 78c).

(c) [ ] Insurance company as definedin section 3(a)(19) of the Act (15 U.S.C.78c).

(d) [ ] Investment company registeredunder section 8 of the InvestmentCompany Act of 1940 (15 U.S.C 80a–8).

(e) [ ] An investment adviser inaccordance with § 240.13d–1(b)(1)(ii)(E);

(f) [ ] An employee benefit plan orendowment fund in accordance with§ 240.13d–1(b)(1)(ii)(F);

(g) [ ] A parent holding company orcontrol person in accordance with§ 240.13d–1(b)(1)(ii)(G);

(h) [ ] A savings associations asdefined in Section 3(b) of the FederalDeposit Insurance Act (12 U.S.C. 1813);

(i) [ ] A church plan that is excludedfrom the definition of an investmentcompany under section 3(c)(14) of theInvestment Company Act of 1940 (15U.S.C. 80a–3);

(j) [ ] Group, in accordance with§ 240.13d–1(b)(1)(ii)(J).

If this statement is filed pursuant to§ 240.13d–1(c), check this box. [ ]

Item 4. Ownership

Provide the following informationregarding the aggregate number andpercentage of the class of securities ofthe issuer identified in Item 1.

(a) Amount beneficially owned:lllll.

(b) Percent of class: lllll.(c) Number of shares as to which the

person has:(i) Sole power to vote or to direct the

vote lllll.(ii) Shared power to vote or to direct

the vote lllll.

(iii) Sole power to dispose or to directthe disposition of lllll.

(iv) Shared power to dispose or todirect the disposition of lllll.

Instruction. For computationsregarding securities which represent aright to acquire an underlying securitysee § 240.13d–3(d)(1).* * * * *

Item 8. Identification and Classificationof Members of the Group

If a group has filed this schedulepursuant to § 240.13d–1(b)(1)(ii)(J), soindicate under Item 3(h) and attach anexhibit stating the identity and Item 3classification of each member of thegroup. If a group has filed this schedulepursuant to § 240.13d–1(d), attach anexhibit stating the identity of eachmember of the group.* * * * *

Item 10. Certifications

(a) The following certification shall beincluded if the statement is filedpursuant to § 240.13d–1(b):

By signing below I certify that, to thebest of my knowledge and belief, thesecurities referred to above wereacquired and are held in the ordinarycourse of business and were notacquired and are not held for thepurpose of or with the effect of changingor influencing the control of the issuerof the securities and were not acquiredand are not held in connection with oras a participant in any transactionhaving that purpose or effect.

(b) The following certification shall beincluded if the statement is filedpursuant to § 240.13d–1(c):

By signing below I certify that, to thebest of my knowledge and belief, thesecurities referred to above were notacquired and are not held for thepurpose of or with the effect of changingor influencing the control of the issuerof the securities and were not acquiredand are not held in connection with oras a participant in any transactionhaving that purpose or effect.* * * * *

Note: Schedules filed in paper format shallinclude a signed original and five copies ofthe schedule, including all exhibits. See§ 240.13d–7(b) for other parties for whomcopies are to be sent.

* * * * *8. By amending § 240.16a–1 to revise

paragraphs (a)(1)(i), (ii), (iii), (iv), (v),(vi) and (vii), redesignate paragraph(a)(1)(viii) as paragraph (a)(1)(xi) and to

add paragraphs (a)(1)(viii), (ix) and (x)to read as follows:

§ 240.16a–1 Definition of terms.

* * * * *(a) * * *(1) * * *(i) A broker or dealer registered under

section 15 of the Act (15 U.S.C. 78o);(ii) A bank as defined in section

3(a)(6) of the Act (15 U.S.C. 78c);(iii) An insurance company as defined

in section 3(a)(19) of the Act (15 U.S.C.78c);

(iv) An investment companyregistered under section 8 of theInvestment Company Act of 1940 (15U.S.C. 80a–8);

(v) Any person registered as aninvestment adviser under Section 203 ofthe Investment Advisers Act of 1940 (15U.S.C. 80b–3) or under the laws of anystate;

(vi) An employee benefit plan asdefined in Section 3(3) of the EmployeeRetirement Income Security Act of 1974,as amended, 29 U.S.C. 1001 et seq.(‘‘ERISA’’) that is subject to theprovisions of ERISA, or any such planthat is not subject to ERISA that ismaintained primarily for the benefit ofthe employees of a state or localgovernment or instrumentality, or anendowment fund;

(vii) A parent holding company orcontrol person, provided the aggregateamount held directly by the parent orcontrol person, and directly andindirectly by their subsidiaries oraffiliates that are not persons specifiedin paragraphs (a)(1)(i) through (ix), doesnot exceed one percent of the securitiesof the subject class;

(viii) A savings association as definedin Section 3(b) of the Federal DepositInsurance Act (12 U.S.C. 1813);

(ix) A church plan that is excludedfrom the definition of an investmentcompany under section 3(c)(14) of theInvestment Company Act of 1940 (15U.S.C. 80a–3); and

(x) A group, provided that all themembers are persons specified in§ 240.16a–1(a)(1)(i) through (ix).* * * * *

By the Commission.Dated: January 12, 1998.

Jonathan G. Katz,Secretary.[FR Doc. 98–1084 Filed 1–15–98; 8:45 am]BILLING CODE 8010–01–P

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2869


Part VI

The PresidentProclamation 7062—Suspension of Entryas Immigrants and Nonimmigrants ofPersons Who Are Members of theMilitary Junta in Sierra Leone andMembers of Their Families

Presidential Documents

2871

Federal Register

Vol. 62, No. 11


Title 3—

The President

Proclamation 7062 of January 14, 1998

Suspension of Entry as Immigrants and Nonimmigrants ofPersons Who Are Members of the Military Junta in SierraLeone and Members of Their Families

By the President of the United States of America

A Proclamation

In light of the refusal of the military junta in de facto control in SierraLeone to permit the return to power of the democratically elected governmentof that country, and in furtherance of United Nations Security CouncilResolution 1132 of October 8, 1997, I have determined that it is in theforeign policy interests of the United States to suspend the entry into theUnited States of aliens described in section 1 of this proclamation.

NOW, THEREFORE, I, WILLIAM J. CLINTON, by the power vested in meas President of the United States by the Constitution and the laws of theUnited States of America, including sections 212(f) and 215 of the Immigra-tion and Nationality Act of 1952, as amended (8 U.S.C. 1182(f) and 1185),hereby find that the entry into the United States of aliens described insection 1 of this proclamation, as immigrants or nonimmigrants would,except as provided for in section 2 of this proclamation, be detrimentalto the interests of the United States. I do therefore proclaim that:

Section 1. The entry into the United States as immigrants and nonimmigrantsof members of the military junta in Sierra Leone and members of theirfamilies, is hereby suspended.

Sec. 2. Section 1 shall not apply with respect to any person otherwisecovered by section 1 where the entry of such person would not be contraryto the interests of the United States.

Sec. 3. Persons covered by sections 1 and 2 shall be identified by theSecretary of State.

Sec. 4. This proclamation is effective immediately and shall remain ineffect until such time as the Secretary of State determines that it is nolonger necessary and should be terminated.

Sec. 5. The Secretary of State is hereby authorized to implement this procla-mation pursuant to such procedures as the Secretary of State may establish.

IN WITNESS WHEREOF, I have hereunto set my hand this fourteenth dayof January, in the year of our Lord nineteen hundred and ninety-eight,and of the Independence of the United States of America the two hundredand twenty-second.

œ–[FR Doc. 98–1346

Filed 1–15–98; 11:17 am]

Billing code 3195–01–P

i

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Vol. 63, No. 11


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FEDERAL REGISTER PAGES AND DATES, JANUARY

1–138..................................... 2139–398................................. 5399–654................................. 6655–1050............................... 71051–1320............................. 81321–1734............................. 91735–1888.............................121889–2134.............................132135–2304.............................142305–2592.............................152593–2872.............................16

CFR PARTS AFFECTED DURING JANUARY

At the end of each month, the Office of the Federal Registerpublishes separately a List of CFR Sections Affected (LSA), whichlists parts and sections affected by documents published sincethe revision date of each title.

3 CFR

Administrative Orders:Notice of January 2,

1998 .................................653Proclamations:7062...................................2871

5 CFR

251.....................................2305551.....................................2304Proposed Rules:890.......................................446

7 CFR

301.................................1, 1321925.......................................655930.......................................399966.......................................139980.......................................139997.....................................2846998.....................................28461930...................................2135Proposed Rules:610.......................................446868.....................................23531301...................................1396

8 CFR

103.....................................1331212.....................................1331214.....................................1331235.....................................1331274a...................................1331Proposed Rules:103.....................................1775

9 CFR

3...............................................192.......................................188993.......................................188994...............................406, 188995.......................................188996...............................406, 188997.......................................188998.......................................1889130.....................................1889145...........................................2147...........................................2310.....................................1735319.......................................147Proposed Rules:304.....................................1797305.....................................1797310.....................................1800327.....................................1797335.....................................1797381.....................................1797500.....................................1797

10 CFR

30.......................................1890

32.......................................189040.......................................189050.............................1335, 189052.......................................189060.......................................189061.......................................189070.......................................189071.......................................189072.......................................1890110.....................................1890150.....................................1890Proposed Rules:430.....................................2186708.......................................374

12 CFR207.....................................2806220.....................................2806221.....................................2806224.....................................2806226.....................................2723265.....................................2806560.....................................1051Proposed Rules:10.......................................2640220.....................................2840221.....................................2840224.....................................2840309.........................................29563.......................................563563b.....................................563

14 CFR

39 .....4, 658, 1335, 1337, 1735,1737, 1738, 1901, 1903,1905, 1907, 1909, 1911,1912, 1913, 2593, 2596

61.........................................66071 .........924, 1884, 1915, 1916,

1997, 2136, 2137, 2138,2598, 2599, 2600, 2601

91.............................1917, 230493.......................................191797 .........666, 2139, 2601, 2603,

2604121 ......................4, 1917, 2304135.................................4, 1917142.....................................2304Proposed Rules:25.......................................218639 .......167, 169, 171, 172, 174,

1070, 1072, 1074, 1076,1930

91.........................................126121.......................................126125.......................................126129.......................................126

15 CFR

732.....................................2452740.....................................2452742.....................................2452743.....................................2452

ii Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Reader Aids

744.....................................2452746.....................................2452762.....................................2452774.....................................2452902...............................290, 667

16 CFR

Proposed Rules:Ch. I ...................................1802303...............................447, 4491210...................................1077

17 CFR

Ch. II ....................................451240...........................1884, 2854Proposed Rules:1.................................695, 2188

20 CFR

200.....................................2140Proposed Rules:200.........................................34

21 CFR

510.......................................408520...............................148, 408558.............................408, 2306Proposed Rules:101.....................................1078201.......................................176

22 CFR

40.........................................66941.........................................669

23 CFR

1327.....................................149

24 CFR

207.....................................1302251.....................................1302252.....................................1302255.....................................1302266.....................................1302Proposed Rules:81.......................................1997

26 CFR

1 ...........6, 409, 411, 671, 1054,1740, 1917

40...........................................2448...........................................24513.....................................2723602 ......................6, 1917, 2723Proposed Rules:1.....35, 39, 42, 453, 707, 1803,

1932, 193354.........................................708301.....................................1086

29 CFR

1610...................................16101910...................................11521926.........................1152, 19194044...................................2307

30 CFR

203.....................................2605260.....................................2626

924.....................................1342Proposed Rules:Ch. II ....................................18556...............................290, 264257...............................290, 264262...............................290, 264270...............................290, 264271...............................290, 2642904.....................................1396918.......................................712936.............................454, 1399944.....................................2192

31 CFR

103.....................................1919

33 CFR

117 ................1746, 2141, 2308Proposed Rules:165.....................................1089

35 CFR

115.....................................2141117.....................................2141119.....................................2141Proposed Rules:133.......................................186135.......................................186

36 CFR

1151...................................19241153...................................19241155...................................19241191.........................2000, 2060

37 CFR

203.....................................1926253.....................................2142

38 CFR

3...................................412, 413

39 CFR

111.......................................153255.....................................2304

40 CFR

9 ..............673, 926, 1059, 131851...............................414, 136252 .......26, 414, 415, 674, 1060,

1362, 1369, 1927, 2146,2147

60...............................414, 174661...............................414, 174662.......................................215463.............................1746, 263068.........................................64081.......................................272685.........................................92686.........................................926140.....................................1318180 .....156, 416, 417, 676, 679,

1369, 1377, 1379, 2156,2163

185.....................................2163186...........................1379, 2163228.......................................682244.......................................683245.......................................683

271.............................683, 2167712.......................................684716.......................................684721 ......................673, 685, 686Proposed Rules:52 ...........456, 714, 1091, 1804,

1935, 219455.......................................264260.......................................219461.......................................219462.......................................219563.......................................219473.........................................71481.......................................2804122.....................................1536123.....................................1536440.....................................2646

42 CFR

405.......................................687411.....................................1646413.............................292, 1379440.......................................292441.......................................292489.......................................292Proposed Rules:411.....................................1659424.....................................1659435.....................................1659455.....................................16591001.....................................187

43 CFR

Proposed Rules:3100...................................19363106...................................19363130...................................19363160...................................1936

44 CFR

11.......................................1063

45 CFR

1301...................................23121304...................................23121305...................................23121306...................................23121630...................................1532Proposed Rules:302.......................................187303.......................................187304.......................................187

47 CFR

0...........................................9901 ......................990, 2170, 231520.......................................263121.......................................231524.............................2170, 231526.......................................231527.......................................231536.......................................209454...............................162, 209469.......................................209473 ............164, 160, 2350, 235190.......................................231595.......................................2315Proposed Rules:1...................................460, 77021.........................................770

24.........................................77026.........................................77027.........................................77064.......................................194373 ............193, 194, 2354, 235576.......................................194390.........................................77095.........................................770

48 CFR

4.........................................15326.........................................15328.........................................139912.......................................153213.......................................153216.......................................153219.......................................153232.......................................153233.......................................153241.......................................153242.......................................153243.......................................153249.......................................153252.......................................153253...............................648, 15321505.....................................6901514.....................................6901535.....................................4181537.....................................6901548.....................................6901552 ..........418, 690, 691, 1532Proposed Rules:Ch. XXVIII..........................139944.........................................649922.......................................386952.......................................386970.......................................386

49 CFR

10.......................................2171173.....................................1884382.....................................2172393.....................................1383571.........................................27653.......................................418654.......................................4181111...................................2638Proposed Rules:232 ..................195, 1418, 2631571.........................................46

50 CFR

17...............................692, 175232.......................................2178226.....................................1388285.......................................667600.......................................419622 ....................290, 443, 1772648 ........444, 1773, 2182, 2184660.......................................419Proposed Rules:17.............................1418, 1948222.....................................1807227.....................................1807300.....................................1812622.....................................1813648.............................466, 2651660.....................................2195679.....................................2694

iiiFederal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Reader Aids

REMINDERSThe items in this list wereeditorially compiled as an aidto Federal Register users.Inclusion or exclusion fromthis list has no legalsignificance.

RULES GOING INTOEFFECT JANUARY 16,1998

ENVIRONMENTALPROTECTION AGENCYPesticides; tolerances in food,

animal feeds, and rawagricultural commodities:Pesticide residues;

tolerances revocation forcommodities no longerregulated; published 12-17-97

FEDERALCOMMUNICATIONSCOMMISSIONCommon carrier services:

Commercial mobile radioservices—Wireless services

compatibility withenhanced 911 services;published 1-16-98

HEALTH AND HUMANSERVICES DEPARTMENTFood and DrugAdministrationMedical devices:

Investigational deviceexemptions therapeuticand diagnostic devices;treatment use; published9-18-97

NUCLEAR REGULATORYCOMMISSIONPlants and materials; physical

protection:Nuclear power plant security

requirements; internalthreat requirements,deletion; published 12-2-97

TRANSPORTATIONDEPARTMENTCoast GuardDrawbridge operations:

North Carolina; published12-17-97

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAir traffic operating and flight

rules, etc.:Grand Canyon National

Park, CO; special flightrules in vicinity (SFARNo. 50-2)Effective date; partial

delay; published 12-17-97

COMMENTS DUE NEXTWEEK

AGRICULTUREDEPARTMENTAgricultural MarketingServiceMushroom promotion,

research, and consumerinformation order;referendum procedures;comments due by 1-22-98;published 12-23-97

Spearmint oil produced in FarWest; comments due by 1-23-98; published 12-24-97

Tomatoes grown in Floridaand imported; commentsdue by 1-20-98; published12-18-97

AGRICULTUREDEPARTMENTAnimal and Plant HealthInspection ServiceExportation and importation of

animals and animalproducts:Bovine spongiform

encephalopathy; diseasestatus change—Belgium; comments due

by 1-20-98; published11-18-97

Plant-related quarantine,domestic:Mediterranean fruit fly;

comments due by 1-20-98; published 11-20-97

AGRICULTUREDEPARTMENTNatural ResourcesConservation ServiceTechnical assistance:

State Technical Committees;membership and roleexpansionComment period

extension; commentsdue by 1-23-98;published 1-6-98

AGRICULTUREDEPARTMENTRural Utilities ServiceElectric, telecommunications,

and water and wastefinancial assistanceprograms; environmentalpolicies and procedures;comments due by 1-23-98;published 11-24-97

DEFENSE DEPARTMENTEngineers CorpsWater resource development

projects, public use;shoreline use permits;flotation materials;comments due by 1-20-98;published 12-4-97

EDUCATION DEPARTMENTSpecial education and

rehabilitative services:

Individuals with DisabilitiesEducation ActAmendments of 1997;implementation—State assistance and

preschool grants forchildren with disabilitiesprograms and earlyintervention program forinfants and toddlerswith disabilities;comments due by 1-20-98; published 10-22-97

ENVIRONMENTALPROTECTION AGENCYAir quality implementation

plans; approval andpromulgation; variousStates:California; comments due by

1-22-98; published 12-23-97

Colorado; comments due by1-22-98; published 12-23-97

Illinois; comments due by 1-22-98; published 12-23-97

New York; comments dueby 1-21-98; published 12-22-97

Texas; comments due by 1-20-98; published 12-19-97

Pesticides; tolerances in food,animal feeds, and rawagricultural commodities:Fenarimol; comments due

by 1-20-98; published 11-18-97

Fomesafen; comments dueby 1-20-98; published 11-19-97

Hydroprene; comments dueby 1-20-98; published 11-19-97

Superfund program:National oil and hazardous

substances contigencyplan—Uncontrolled hazaradous

waste sites; listing anddeletion policy forFederal facilities;comments due by 1-23-98; published 11-24-97

FARM CREDITADMINISTRATIONFarm credit system:

Loan policies andoperations—Interest rates and

charges; comments dueby 1-21-98; published12-22-97

FEDERALCOMMUNICATIONSCOMMISSIONCommon carrier services:

Satellite communications—Ka-band satellite

application and licensingprocedures; comments

due by 1-21-98;published 11-18-97

FEDERAL ELECTIONCOMMISSIONContribution and expenditure

limitations and prohibitions:Corporate and labor

organizations—Association member;

definition; commentsdue by 1-21-98;published 12-22-97

Qualified nonprofitcorporations; commentsdue by 1-23-98;published 12-10-97

FEDERAL EMERGENCYMANAGEMENT AGENCYDisaster assistance:

Fire suppression assistance;eligibility processsimplified and Federalcost share changed;comments due by 1-23-98; published 11-24-97

Public assistance andhazard mitigation grantprograms; appeals reviewand dispositionprocedures; commentsdue by 1-23-98; published11-24-97

FEDERAL RESERVESYSTEMTruth in lending (Regulation

Z):Official staff commentary;

update; comments due by1-20-98; published 12-9-97

HOUSING AND URBANDEVELOPMENTDEPARTMENTFair housing:

Fair Housing Act violations;civil penalties; commentsdue by 1-20-98; published12-18-97

Single Audit Act Amendmentsof 1996; implementation:Audits of States, local

governments, and non-profit organizationsexpending Federalawards; comments due by1-20-98; published 11-18-97

INTERIOR DEPARTMENTFish and Wildlife ServiceEndangered and threatened

species:Mobile River Basin, AL;

cylindrical lioplax, etc. (sixaquatic snails); commentsdue by 1-23-98; published12-19-97

Preble’s meadow jumpingmouse; comments due by1-22-98; published 12-23-97

Riparian brush rabbit, etc.;comments due by 1-20-98; published 11-21-97

iv Federal Register / Vol. 63, No. 11 / Friday, January 16, 1998 / Reader Aids

Rough Popcornflower;comments due by 1-20-98; published 11-20-97

INTERIOR DEPARTMENTSurface Mining Reclamationand Enforcement OfficePermanent program and

abandoned mine landreclamation plansubmissions:Virginia; comments due by

1-22-98; published 12-23-97

LABOR DEPARTMENTEmployment and TrainingAdministrationWelfare-to-work grants;

governing provisions;comments due by 1-20-98;published 11-18-97

LABOR DEPARTMENTMine Safety and HealthAdministrationCoal and metal and nonmetal

mine safety and health:Occupational noise exposure

Report availability;comments due by 1-22-98; published 12-23-97

PERSONNEL MANAGEMENTOFFICEPrevailing rate systems;

comments due by 1-22-98;published 12-23-97

Retirement, health benefits,and life insurance, Federalemployees:

Decennial censusemployees with dualappointments; continuity ofcoverage requirements;exemption; comments dueby 1-23-98; published 12-24-97

SECURITIES ANDEXCHANGE COMMISSIONInvestment advisers:

Fees based upon capitalgains shares or capitalappreciation of client’saccount; exemption;comments due by 1-20-98; published 11-19-97

Multi-state investmentadvisers; exemption;comments due by 1-20-98; published 11-19-97

TRANSPORTATIONDEPARTMENTCoast GuardPorts and waterways safety:

Los Angeles Harbor-SanPedro Bay, CA; safetyzone; comments due by1-20-98; published 11-19-97

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

Allison Engine Co.;comments due by 1-20-98; published 11-18-97

Boeing; comments due by1-23-98; published 12-9-97

British Aerospace;comments due by 1-20-98; published 12-18-97

Eurocopter France;comments due by 1-20-98; published 11-21-97

Fokker; comments due by1-20-98; published 12-18-97

Saab; comments due by 1-20-98; published 12-18-97

Class E airspace; commentsdue by 1-20-98; published12-3-97

TRANSPORTATIONDEPARTMENTFederal RailroadAdministrationRailroad power brakes and

drawbars:Train and locomotive power

braking systems;advanced technology use;two-way end-of-traintelemetry devices;comments due by 1-20-98; published 1-5-98

TRANSPORTATIONDEPARTMENTNational Highway TrafficSafety AdministrationAnthropomorphic test devices:

Side impact test dummies;dynamic crash test;

comments due by 1-22-98; published 12-8-97

TRANSPORTATIONDEPARTMENT

Research and SpecialPrograms Administration

Pipeline safety:

Facility response plansubmissions; reportingcycle changes; commentsdue by 1-22-98; published12-24-97

Outer Continental Shelfpipelines; point at whichpipeline is subject toRSPA regulations;memorandum ofunderstanding with InteriorDepartment; commentsdue by 1-20-98; published11-19-97

TREASURY DEPARTMENT

Alcohol, Tobacco andFirearms Bureau

Alcohol; viticultural areadesignations:

San Francisco Bay, CA;comments due by 1-20-98; published 10-20-97