issue-1996-09-19•Federal Register final rules — 1996-09-19
Federal Register final rules — 1996-09-19
issue-1996-09-19Federal Register final rules — 1996-09-19Regulation
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FR Doc. 96-24069 Office of the Assistant Secretary for Housing-Federal Housing Commissioner; Real Estate Settlement Procedures Act; Statement of Enforcement Standards: Title Insurance Practices in Florida; RESPA Statement of Policy 1996-4
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49398-49400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24069]
[[Page 49397]]
_______________________________________________________________________
Part IV
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 3500
Real Estate Statement Procedures Act; Statement of Enforcement
Standards: Title Insurance Practices in Florida; Final Rule
Federal Register / Vol. 61, No. 183 / Thursday, September 19, 1996 /
Rules and Regulations
[[Page 49398]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 3500
[Docket No. FR-4114-N-01]
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner; Real Estate Settlement Procedures Act; Statement of
Enforcement Standards: Title Insurance Practices in Florida; RESPA
Statement of Policy 1996-4
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Statement of policy.
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SUMMARY: This Statement advises the public of the enforcement standards
HUD applies to determine whether certain practices involving title
insurance companies and title insurance agents comply with the Real
Estate Settlement Procedures Act (RESPA). Although this Statement
specifically addresses issues and practices that HUD reviewed in the
State of Florida, its general principles may apply by analogy to other
geographic and settlement service areas.
This Statement discusses HUD's interpretation of two exceptions:
Section 8(c)(1)(B) involving ``payments of a fee by a title company to
its duly appointed agent for services actually performed in the
issuance of a policy of title insurance;'' and Section 8(c)(2)
involving the ``payment to any person of a bona fide salary or
compensation or other payment for goods or facilities actually
furnished or for services actually performed.'' HUD is publishing this
Statement to inform the public of its interpretation of the law.
EFFECTIVE DATE: September 19, 1996.
FOR FURTHER INFORMATION CONTACT: David R. Williamson, Director, Office
of Consumer and Regulatory Affairs, Room 5241, telephone: (202) 708-
4560. For legal enforcement questions, contact Peter S. Race, Assistant
General Counsel, Program Compliance Division, Room 9253, telephone:
(202) 708-4184. (These are not toll free numbers.) For hearing and
speech-impaired persons, this number may be accessed via TTY (text
telephone) by calling the Federal Information Relay Service at 1-800-
877-8339. (This number is toll free.) The address for the above listed
persons is: Department of Housing and Urban Development, 451 Seventh
Street, SW, Washington, DC 20410.
SUPPLEMENTARY INFORMATION:
General Background
Section 8(a) of the Real Estate Settlement Procedures Act (RESPA)
prohibits any person from giving or accepting any fee, kickback, or
thing of value for the referral of settlement service business
involving a federally related mortgage loan. (See 12 U.S.C. 2607(a).)
Section 8(b) of RESPA prohibits any person from giving or accepting any
portion, split or percentage of any charge made or received for the
rendering of a settlement service other than for services actually
performed. (See 12 U.S.C. 2607(b).) Two exemptions to section 8's
prohibitions against compensated referrals in RESPA covered
transactions involve payments for title insurance services actually
performed. Section 8(c)(1)(B) specifically exempts payments of a fee
``by a title company to its duly appointed agent for services actually
performed in the issuance of a policy of title insurance.'' A more
general provision, section 8(c)(2), exempts the ``payment to any person
of a bona fide salary or compensation or other payment for goods or
facilities actually furnished or for services actually performed.''
(See also 24 CFR 3500.14(g)(1).)
In enacting RESPA, Congress stated its intent that section 8 of
RESPA did not prohibit payments by title insurance companies for
``goods furnished or services actually rendered, so long as the payment
bears a reasonable relationship to the value of the goods or services
received by the person or company making the payment.'' (H. Rep. No.
1177, 93d Cong., 2nd Sess. 1974 at 7-8 (hereafter ``the Report'').) The
Report stated that ``to the extent the payment is in excess of the
reasonable value of the goods provided or services performed, the
excess may be considered a kickback or referral fee proscribed by
Section [8].'' The legislative history of section 8(c)(1)(B) also noted
that the ``value of the referral itself is not to be taken into account
in determining whether the payment is reasonable.'' (Report at 8.) The
Report specifically elaborated on the exemption for payments made by
title insurance companies to duly appointed agents for services
actually performed in the issuance of a policy of title insurance and
stated:
Such agents, who in many areas of the country may also be
attorneys, typically perform substantial services for and on behalf
of a title insurance company. These services may include a title
search, an evaluation of the title search to determine the
insurability of the title (title examination), the actual issuance
of the policy on behalf of the title insurance company, and the
maintenance of records relating to the policy and policy-holder. In
essence, the agent does all of the work that a branch office of the
title insurance company would otherwise have to perform.
Report at 8.
On November 2, 1992, HUD issued regulations that, among other
things, gave guidance concerning title agent services under RESPA.
These regulations relied in part on the legislative history. Section
3500.14(g)(3)\1\ of the regulations provides an example of the type of
substantial or ``core'' title insurance agent services necessary for an
attorney to receive multiple fees in a RESPA covered transaction. It
states:
\1\ All citations in this Statement of Policy refer to recently
streamlined regulations published on March 26, 1996 (61 FR 13,232),
in the Federal Register (to be codified at 24 C.F.R. 3500 et seq.).
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For example, for an attorney of the buyer or seller to receive
compensation as a title agent, the attorney must perform core title
agent services (for which liability arises) separate from attorney
services, including the evaluation of the title search to determine
the insurability of the title, the clearance of underwriting
objections, the actual issuance of the policy or policies on behalf
of the title insurance company, and, where customary, the issuance
of the title commitment, and the conducting of the title search and
closing.
Appendix B to the regulations provides additional guidance on the
meaning and coverage of RESPA. Illustration 4 provides a factual
situation in which an attorney represented a client as an attorney and
as a title insurance agent and received fees for each role in a
residential real estate transaction. In its comments on Illustration 4,
HUD stated that the attorney was double billing his clients because the
work he performed as a ``title agent'' was work he was already
performing for his clients as an attorney. The title insurance company
was actually performing the title agent work and providing the attorney
with an opportunity to collect a fee as a title agent in exchange for
referrals of title insurance business. HUD also stated that for the
attorney to receive a separate payment as a title insurance agent, the
attorney must ``perform necessary core title work and may not contract
out the work.''
To qualify for a section 8(c)(1)(B) exemption, the attorney title
insurance agent must ``provide his client with core title agent
services for which he assumes liability, and which includes, at a
minimum, the evaluation of the title search to determine insurability
of the title, and the issuance of a title
[[Page 49399]]
commitment where customary, the clearance of underwriting objections,
and the actual issuance of the policy or policies on behalf of the
title company.'' (See 24 CFR part 3500, Appendix B, Illustration 4.)
In another example, Illustration 10 of Appendix B, a real estate
broker refers title insurance business to its own affiliate title
company. This company, in turn, refers or contracts out all of its
business to another title company that performs all the title work and
splits its fees with the affiliate. HUD stated that because the
affiliate title company provided no substantive services for its
portion of the fee, the arrangement between the two title companies
would be in violation of section 8 of RESPA. This illustration showed
that the controlled business arrangement exemption did not extend to
``shell'' entities that did not perform substantive services for the
fees it collected from the transaction. (See 24 CFR part 3500, Appendix
B, Illustration 10.)
Section 19(a) of RESPA authorizes the Secretary to interpret RESPA
to achieve the purposes of the Act. Section 19(c) of RESPA authorizes
HUD to investigate possible violations of RESPA. During the course of
its RESPA investigations, HUD applies the facts revealed by the
investigation to the statute and regulations in determining whether a
violation exists.
After receiving complaints of possible RESPA violations, HUD, in
1993, initiated an investigation of practices by some title insurance
companies and some title insurance agents in the State of Florida. On
September 21, 1995, HUD sent a letter and document entitled ``Findings
of HUD's Investigation of Florida Title Insurance Companies and
Statement of Enforcement Standards'' to certain title insurance
companies in Florida. In November 1995, HUD met with Florida title
insurance companies and received input from them on the enforcement
standards. On June 19, 1996, HUD sent additional guidance to the
particular companies that received the September 21, 1995 letter.
Statement of Policy--1996-4
To give guidance to interested members of the public on the
application of RESPA and its implementing regulations to these issues,
the Secretary, pursuant to section 19(a) of RESPA and 24 CFR
3500.4(a)(1)(ii), hereby issues the following Statement of Policy.\2\
In issuing this Statement, HUD is not dictating particular practices
for title insurance companies and their agents but is setting forth
HUD's enforcement position for qualification in Florida for exemptions
from section 8 violations.
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\2\ This Statement provides additional guidance to the 1995
standards issued to the particular companies and, to the extent
there are any inconsistencies, supersedes those standards.
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Generally, it is beneficial for title insurance companies and their
agents to qualify under the section 8(c)(1)(B) exemption since HUD does
not normally scrutinize the payments as long as they are ``for services
actually performed in the issuance of a policy of title insurance.''
(HUD will, however, continue to examine payments to agents that are
merely for the referral of business such as gifts or trips based on the
volume of business referred.) If the practices of a title insurance
company or its agent do not qualify under the section 8(c)(1)(B)
exemption, the company and the agent may still qualify under section
8(c)(2). Under a section 8(c)(2) standard, HUD will examine the amount
of the payments to or retentions by the title insurance agent to see if
they are reasonably related to services actually performed by the
agent.
A. Definitions
For purposes of this statement, the terms listed below are defined
as follows:
1. ``Title Insurance Agent'' means a person who has entered into an
agreement with a title insurance company to act as an agent in
connection with the issuance of title insurance policies, and includes
title agents, title agencies, attorneys, and law firms.
2. ``Core title services'' are those basic services that a title
insurance agent must actually perform for the payments from or
retention of the title insurance premium to qualify for RESPA's section
8(c)(1)(B) exemption for ``payments by a title company to its duly
appointed agent for services actually performed in the issuance of a
policy of title insurance.''
In performing core title services, the title insurance agent must
be liable to his/her title insurance company for any negligence in
performing the services. In considering liability, HUD will examine the
following type of indicia: the provisions of the agency contract,
whether the agent has errors and omissions insurance or malpractice
insurance, whether a contract provision regarding an agent's liability
for a loss is ever enforced, whether an agent is financially viable to
pay a claim, and other factors the Secretary may consider relevant.
``Core title services'' mean the following in Florida:
a. The examination and evaluation, based on relevant law and title
insurance underwriting principles and guidelines, of the title evidence
(as defined below) to determine the insurability of the title being
examined, and what items to include and/or exclude in any title
commitment and policy to be issued.
b. The preparation and issuance of the title commitment, or other
document, that discloses the status of the title as it is proposed to
be insured, identifies the conditions that must be met before the
policy will be issued, and obligates the insurer to issue a policy of
title insurance if such conditions are met.
c. The clearance of underwriting objections and the taking of those
steps that are needed to satisfy any conditions to the issuance of the
policies.
d. The preparation and issuance of the policy or policies of title
insurance.
e. The handling of the closing or settlement, when it is customary
for title insurance agents to provide such services and when the
agent's compensation for such services is customarily part of the
payment or retention from the insurer.
3. A ``pro forma commitment'' is a document that contains a
determination of the insurability of the title upon which a title
insurance commitment or policy may be based and that contains
essentially the information stated in Schedule A and B of a title
insurance commitment (and may legally constitute a commitment when
countersigned by an authorized representative). A pro forma commitment
is a document that contains determinations or conclusions that are the
product of legal or underwriting judgment regarding the operation or
effect of the various documents or instruments or how they affect the
title, or what matters constitute defects in title, or how the defects
can be removed, or instructions concerning what items to include and/or
to exclude in any title commitment or policy to be issued on behalf of
the underwriter.
4. ``Title evidence'' means a written or computer generated
document that identifies and either describes or compiles those
documents, records, judgments, liens, and other information from the
public records relevant to the history and current condition of the
title to be insured. Title evidence does not, however, include a pro
forma commitment.
B. Qualification Under Section 8(c)(1)(B)
To qualify for an exemption as an agent in Florida under section
8(c)(1)(B), the payments to (or retentions by) a title insurance agent
must be ``for services actually performed in the issuance of a
[[Page 49400]]
policy of title insurance.'' HUD interprets this language as requiring
a title insurance agent to perform core title services, as defined
above, in order for title insurance company payments to the title
insurance agent to qualify for this exemption. These ``core title
services'' describe the type of services that Congress stated would
come within this exemption, that is, the type of work that a branch
office of the title insurance company would otherwise have to perform
in the issuance of a title insurance policy. Thus, as applied to
practices in Florida, for a title insurance agent to be able to retain
the maximum agency portion of the risk premium payment allowed under
Florida law, the title insurance agent must actually perform ``core
title services,'' and generally may not contract out those services.
HUD recognizes, however, that there may be a legitimate temporary
need (such as surges in business) for the title insurance agent to
contract out some part of the core title services to an independent
third party, not affiliated with the title insurance company. In such
cases, payments to these agents still qualify under section 8(c)(1)(B).
However, there is no qualification for the exemption if such
contracting out of core title services is done on a regular basis.
HUD also will not consider a title insurance agent to be an agent
for purposes of section 8(c)(1)(B) and to have actually performed (or
incurred liability for) core title services when the service is
undertaken in whole or in part by the agent's insurance company (or an
affiliate of the insurance company). For example, if the title
insurance company provides its title insurance agent with a pro forma
commitment, typing, or other document preparation services, the title
insurance agent is not ``actually performing'' these services. As such,
the title insurance agent would not be providing ``core title
services'' for the payments to come within the section 8(c)(1)(B)
exemption. HUD acknowledges, however, that title insurance companies
often provide their own title insurance agents with general advice and
assistance on a particular unusual question or concern on an individual
case by case basis, and this type of assistance would not affect the
scrutiny of the payments to the title insurance agent under this
exemption.
Within the section 8(c)(1)(B) context, moreover, title insurance
companies may provide their title insurance agents with title evidence,
as defined above. HUD acknowledges that title insurance companies have
invested in title plants and may sell title evidence to their title
insurance agents. In doing so, however, title insurance companies
should not charge fees that reflect a payment for the referral of the
title insurance order. (See 24 CFR 3500.14(b).) By this, HUD interprets
the section 8 requirements to mean that the title insurance company
must charge its title insurance agents a fee for title evidence that is
not a disguised referral fee given in exchange for the referral of
title business. It is evidence of a thing of value given for referrals
if the title insurance company is not charging fees for title evidence
that cover its costs of producing the title evidence or if the title
insurance company charges less for title evidence to be used for a
commitment or policy issued on behalf of the title insurance company
than on another company's behalf.
In performing core title services, a title insurance agent is
likely to use employees. If a title insurance company supplies
employees or has control over or directs the work of employees of the
title insurance agent, then the title insurance agent is not actually
performing the core title services. In such a case, HUD will review the
services provided by the insurance company to the agent for sufficiency
under section 8(c)(2).
C. Qualification Under Section 8(c)(2)
If a title insurance agent does not perform ``core title services''
to qualify for the exemption under section 8(c)(1)(B) of RESPA, that
agent may receive payment for services actually performed pursuant to
section 8(c)(2), so long as the payment is reasonably commensurate with
the reduced level of responsibilities assumed by the agent.
With respect to practices under Florida's title insurance statute,
it is HUD's enforcement position that it is difficult to justify the
payment (or retention) of a significant portion of the title insurance
risk premium to a title insurance agent who fails to perform and assume
responsibility for the title examination function. Likewise, if the
title insurance company provides other services, or carries out the
title insurance agent functions, or provides or controls ``part time
examiners,'' HUD may scrutinize the net level of retention realized by
the agent to determine whether the agent's compensation from the
insurer reflects a meaningful reduction from the compensation generally
paid to agents in the area who perform all core title services. The
level of such reduction in compensation must be reasonably commensurate
with the reduced level of responsibilities assumed by such person for
the services provided and the underwriting risks taken. The value of a
referral, however, is not to be taken into account in determining
whether the payment bears a reasonable relationship to the services
rendered. (See 24 CFR 3500.14(g)(2).)
D. Unearned Fees
Under the RESPA regulations, when a person in a position to refer
title insurance business, such as an attorney, real estate broker or
agent, mortgage lender, or developer or builder, receives a payment for
providing title insurance agent services, such payment must be for
services that are actual, necessary, and distinct from the primary
services provided by such person. (See 24 CFR 3500.14(g)(3).) Thus, if
an attorney is representing a consumer in a home purchase and also
acting as a title insurance agent, he or she may not receive duplicate
fees for the same work.
If a title insurance agent obtains third party services, such as
the provision of title evidence, and does not add any additional value
to the service provided by the third party, but increases the charge to
the consumer for that service and retains the difference, then HUD
views the amount that the person retains as an unearned fee in
violation of section 8(b) of RESPA. (See 24 CFR 3500.14(c).)
Dated: September 6, 1996.
Nicolas P. Retsinas,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 96-24069 Filed 9-18-96; 8:45 am]
BILLING CODE 4210-27-P
Complete official Federal Register PDF
FR Doc. 96-23998 Acquisition of Library Materials by Nonpurchase Means and Disposition of Surplus Library Materials
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49261-49262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23998]
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LIBRARY OF CONGRESS
36 CFR Part 701
[Docket No. LOC 96-2]
Acquisition of Library Materials by Nonpurchase Means and
Disposition of Surplus Library Materials
AGENCY: Library of Congress.
ACTION: Final rule.
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SUMMARY: The Library of Congress issues this final rule to revise its
policy on the transfer of surplus library materials to reduce the
volume and type of materials it receives from Federal agencies. The
Library will eliminate the transfer of all bound and unbound serials
and restrict all other transfers to certain specific categories.
EFFECTIVE DATE: September 19, 1996.
FOR FURTHER INFORMATION CONTACT:
Johnnie M. Barksdale, Regulations Officer, Office of the General
Counsel, Library of Congress, Washington, D.C. 20540-1050. Telephone
No. (202) 707-1593.
SUPPLEMENTARY INFORMATION: Under 2 U.S.C. 131, 136, and 149, the
Librarian of Congress has general and specific authority for the
administration and disposition of Library materials; it pertains to the
organization and handling of duplicate materials and to the exchange
and transfer operations of the Library, sale, donation to domestic
educational institutions and public bodies, and the disposition of
materials not needed for any of these uses. In order to enhance these
operations and to fill gaps in its permanent collections, the Library
of Congress has encouraged libraries and other agencies of the Federal
Government to send to the Library's Exchange and Gift Division all
library materials that are surplus to their needs. For several decades
this program benefitted the Library, the Federal library community and
the general public. Because of reductions in staffing levels, due to
budgetary constraints, and reduced demand in some categories, the
Library can no longer fully utilize these materials. In analyzing the
costs and benefits to the Federal Government, the Library found that
the expenses to administer the current program far outweigh the
benefits. The Library issues this revised subpart to set forth the
general policy on the transfer of surplus library materials to reduce
the volume and type of materials it receives from Federal agencies and
to redirect its remaining fiscal and human resources to efficiently
administer a reduced, but more focused, program. Other Federal agencies
will achieve considerable savings in labor and postage by not having to
handle and ship unwanted materials to the Library of Congress. The
proposed rule was published in the Federal Register on May 23, 1996,
for public comment. No comments were received and no changes were made
to the original text.
List of Subjects in 36 CFR Part 701
Libraries, Seals and insignias.
Proposed Regulations
In consideration of the foregoing the Library of Congress amends 36
CFR part 701 to read as follows:
PART 701--PROCEDURES AND SERVICES
1. The authority citation for part 701 will continue to read as
follows:
Authority: 2 U.S.C. Sec. 131, Sec. 136 & Sec. 149.
2. Section 701.33(a)(4) is revised to read as follows:
[[Page 49262]]
Sec. 701.33 Acquisition of library materials by non-purchase means
and disposition of surplus library materials.
* * * * *
(4) Transfer. Libraries and other agencies of the Federal
Government are encouraged to send to the Library for disposition soft
or hard-bound books that are surplus to their needs in the following
categories: (1) Novels and (2) Reference works (e.g. encyclopedias,
directories, guides, such as Encyclopedia of Associations, The World of
Learning, The Stateman's Yearbook, Books in Print, etc.) not older than
three years. And not older than five years in: (1) Humanities (art,
music, belles letters etc.); (2) History and area studies; (3) Social
sciences (economics, politics, etc.); (4) Education; and (5) Science
(agriculture, medicine, computer science, mathematics, physics, etc.).
Such transferred materials are needed to fill gaps in the Library's
holdings, for exchanges, to transfer to other Federal agencies, and to
make available through the Surplus Books Program to qualified
recipients. The Library's Exchange and Gift Division (E&G) requests
notification at the earliest possible date of any government libraries
that are scheduled to close or be substantially reduced. The Library
also requests that shipments of 1,000 pounds or more be cleared with
E&G in advance. The Library does not accept bound and unbound serials.
Federal agencies should dispose of surplus serials, and other surplus
library materials not specified above, in accordance with their
agency's regulations governing the disposal of surplus materials.
* * * * *
Dated: September 10, 1996.
Approved by:
James H. Billington,
The Librarian of Congress.
[FR Doc. 96-23998 Filed 9-18-96; 8:45 am]
BILLING CODE 1410-04-M
Complete official Federal Register PDF
FR Doc. 96-23989 Airworthiness Directives; SOCATA Groupe AEROSPATIALE TBM 700 Airplanes
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49252-49254]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23989]
[[Page 49252]]
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DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-CE-67-AD; Amendment 39-9766; AD 95-19-18]
RIN 2120-AA64
Airworthiness Directives; SOCATA Groupe AEROSPATIALE TBM 700
Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
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SUMMARY: This amendment adopts a new airworthiness directive (AD) that
applies to certain SOCATA Groupe AEROSPATIALE (Socata) TBM 700
airplanes. This action requires installing four rivets on the right
side of the rudder and drilling drainage holes at the areas of the
elevators and rudder. Reports of water accumulating in the areas of the
elevators and rudder and a report of a bonding defect between the skin
and rudder rear spar on the affected airplanes prompted this action.
The actions specified by this AD are intended to prevent the wing skin
and the rear spar from becoming unbonded or water accumulating in
either the elevators or rudder, which could result in loss of control
of the airplane.
DATES: Effective November 8, 1996.
The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of November 8, 1996.
ADDRESSES: Service information that applies to this AD may be obtained
from the SOCATA Groupe AEROSPATIALE, Socata Product Support, Aeroport
Tarbes-Ossun-Lourdes, B P 930, 65009 Tarbes Cedex, France; telephone
62.41.74.26; facsimile 62.41.74.32; or the Product Support Manager,
U.S. AEROSPATIALE, 2701 Forum Drive, Grand Prairie, Texas 75053;
telephone (214) 641-3614; facsimile (214) 641-3527. This information
may also be examined at the Federal Aviation Administration (FAA),
Central Region, Office of the Assistant Chief Counsel, Attention: Rules
Docket No. 95-CE-67-AD, Room 1558, 601 E. 12th Street, Kansas City,
Missouri 64106; or at the Office of the Federal Register, 800 North
Capitol Street, NW., suite 700, Washington, DC.
FOR FURTHER INFORMATION CONTACT:
Mr. William J. Timberlake, Program Officer, Brussels Aircraft
Certification Division, FAA, Europe, Africa, and Middle East Office, c/
o American Embassy, B-1000 Brussels, Belgium; telephone (32 2)
513.38.30; facsimile (32 2) 230.68.99; or Mr. Mike Kiesov, Aerospace
Engineer, FAA, Small Airplane Directorate, 1201 Walnut Street, suite
900, Kansas City, Missouri 64106; telephone (816) 426- 6934; facsimile
(816) 426-2169.
SUPPLEMENTARY INFORMATION:
Events Leading to This Action
A proposal to amend part 39 of the Federal Aviation Regulations (14
CFR part 39) to include an AD that would apply to certain Socata TBM
700 airplanes registered in the United States was published in the
Federal Register on April 9, 1996 (61 FR 15738). The action proposed to
require installing four rivets on the right side of the rudder and
drilling drainage holes at the specified areas of the elevators and
rudder. Accomplishment of the proposed installation as specified in the
notice of proposed rulemaking (NPRM) would be in accordance with Socata
Service Bulletin (SB) TBM 70-027 and Socata SB TBM 70- 028, both dated
September 1993.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. Due consideration has been given to
the four comments received from one commenter.
Comment Issue No. 1: Divide the Proposal Into Two Different AD's
Socata suggests that the actions specified by the NPRM would be
clearer if they were broken out into two separate AD's. The reasons
that Socata gives are:
the Direction Generale de l'Aviation Civile (DGAC), which
is the airworthiness authority for France, issued two separate AD's;
there are two separate Socata service bulletins: Socata SB
TBM 70-027 and Socata SB TBM 70-028, both dated September 1993; and
justification, causes, and effects of each action proposed
in the NPRM are different.
The FAA concurs that the DGAC issued two separate AD's and that
there are two service bulletins. However, the FAA does not concur that
the justification, causes, and effects of each action proposed in the
NPRM are entirely different. Socata SB TBM 70-027 requires installing
four rivets on the rudder. If this is not accomplished and debonding
occurs, then moisture can accumulate in the rudder. Thus, Socata SB TBM
70-028 contains procedures for drilling drainage holes in the elevator
and rudder to reduce corrosion effects caused by moisture accumulation
that could lead to control surface imbalance. The FAA has determined
that one AD is justified because accomplishment of the actions
specified in both service bulletins will help prevent control surface
imbalance and the compliance times are exactly the same (thus
preventing the owner/operator from having to schedule the
accomplishment of two separate AD actions). No changes have been made
to the AD as a result of this comment.
Comment Issue No. 2: Need More Justification for Stating That the
Existing Conditions Could Cause Loss of Control of the Airplane
Socata states that, if the FAA believes that the conditions
specified in the NPRM, ``* * * if not detected and corrected, could
result in loss of control of the airplane'', then the FAA should be
more precise in stating how this is correct. Also, concerning the
bonding defect between the skin and the rear spar (Socata SB TBM 70-
027), Socata states that loss of control of the airplane is improbable
with the assumption that the safe life of the rudder will be affected
over time without corrective action.
The FAA believes that the conditions, if not detected and
corrected, could result in loss of control of the airplane. The
objective of Socata SB 70-028 is to provide control surface drainage
(elevator and rudder). Moisture that accumulates in the control
surfaces can freeze when the aircraft climbs to a high altitude, which
then could result in control surface imbalance. This effect can cause
flutter, which can result in loss of control of the airplane. As
earlier explained (Comment Issue No. 1), the accomplishment of the
actions specified in both Socata SB TBM 70-027 and Socata SB TBM 70-028
will help prevent these control surface imbalances. No changes to the
AD have been made as a result of this comment.
Comment Issue No. 3: Problems With the Absence of Elevator and Rudder
Drainage Holes
Socata states that different problems could occur with the absence
of drainage holes in the elevator and rudder. These problems are:
--Corrosion for airplanes which could stay at parking for a long time
where water would stagnate,
--if the water freezes, it may slightly affect the controls balance.
No specific changes to the AD or recommendations for additional or
different AD action were presented by the commenter regarding this
issue. No changes to the AD have been made as a result of this comment.
[[Page 49253]]
Comment Issue No. 4: Workhours for Accomplishing Actions are
Incorrect
Socata states that the workhours for accomplishing the actions
specified in the NPRM are incorrect. For example:
--For installing the rivets, one workhour is required instead of two as
specified in the NPRM; and
--For drilling the drainage holes, 1.5 hours is needed instead of two
as specified in the NPRM.
The FAA concurs. However, FAA policy is to round fractional numbers
concerning workhours to the next whole number. Therefore, the workhours
for installing rivets will be changed in the AD to reflect 1 workhour;
however, the workhours for drilling the drainage holes will remain at 2
workhours.
The FAA's Determination
After careful review of all available information related to the
subject presented above, including the referenced service information,
the FAA has determined that air safety and the public interest require
the adoption of the rule as proposed except for the change to the
economic information and minor editorial corrections. The FAA has
determined that the change and minor corrections will not change the
meaning of the AD and will not add any additional burden upon the
public than was already proposed.
Cost Impact
The FAA estimates that 31 airplanes in the U.S. registry will be
affected by the required rivet installation and 35 airplanes will be
affected by the required drainage hole drillings, that it will take 1
workhour to install the rivets and 2 workhours to drill the drainage
holes, and that the average labor cost is $60 per hour. No cost is
attributed to parts that would be necessary to accomplish the required
actions since these parts are available through common operator stock
and an approximate cost cannot be traced. Based on these figures, the
total cost impact of this AD on U.S. operators is estimated to be
$1,860 or $60 per airplane for the rivet installation and $4,200 or
$120 per airplane for the drainage hole drilling. Since parts are not
sold through the manufacturer, the FAA has no method of determining the
number of parts already distributed, and thus bases this cost impact
upon the assumption that no owner/operator of the affected airplanes
has accomplished the required actions.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) will not have a
significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A copy of the final evaluation prepared for this
action is contained in the Rules Docket. A copy of it may be obtained
by contacting the Rules Docket at the location provided under the
caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding a new airworthiness directive
(AD) to read as follows:
96-19-18 Socata Groupe Aerospatiale: Amendment 39-9766; Docket No.
95-CE-67-AD.
Applicability: TBM 700 airplanes (serial numbers 1 through 19,
21, 22, 25 through 34, 38, 39, 46, 49, 50, 52, 53, 57, 59 through
63, 67, 68, 70 through 78, 80, and 82 through 85), certificated in
any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (d) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required within the next 100 hours time-in-service
after the effective date of this AD, unless already accomplished.
To prevent the wing skin and the rear spar from becoming
unbonded or water accumulating in either the elevators or rudder,
which could result in loss of control of the airplane, accomplish
the following:
(a) For any TBM 700 airplane with a serial number in the
following range: 1 through 19, 21, 22, 25 through 34, 38, 39, 46,
49, 50, 52, 53, 57, 59, 61 through 63, 67, 68, and 71 through 75;
install four rivets on the right side of the rudder in accordance
with the DESCRIPTION section of Socata Service Bulletin (SB) TBM 70-
027, dated September 1993.
(b) For any TBM 700 airplane with a serial number in the
following range: 2 through 19, 21, 22, 24 through 34, 38, 39, 46,
49, 50, 52, 53, 57, 59 through 63, 67, 68, 70 through 78, 80, and 82
through 85; drill drainage holes in the area of the elevators and
rudder in accordance with the DESCRIPTION section of Socata SB TBM
70-028, dated September 1993.
(c) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(d) An alternative method of compliance or adjustment of the
compliance time that provides an equivalent level of safety may be
approved by the Manager, Brussels Aircraft Certification Division,
FAA, Europe, Africa, and Middle East Office, c/o American Embassy,
B-1000 Brussels, Belgium. The request shall be forwarded through an
appropriate FAA Maintenance Inspector, who may add comments and then
send it to the Manager, Brussels Aircraft Certification Division.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Brussels Aircraft Certification Division.
(e) The rivet installation required by this AD shall be done in
accordance with Socata Service Bulletin TBM 70-027, dated September
1993. The drainage hole drilling required by this AD shall be done
in accordance with Socata Service Bulletin TBM 70-028, dated
September 1993. This incorporation by reference was approved by the
Director of the Federal Register in accordance with 5 U.S.C. 552(a)
and 1 CFR part 51. Copies may be obtained from the SOCATA Groupe
AEROSPATIALE, Socata Product Support, Aeroport Tarbes-Ossun-Lourdes,
BP 930, 65009 Tarbes Cedex, France; or the Product Support Manager,
U.S. AEROSPATIALE, 2701 Forum Drive, Grand Prairie, Texas 75053.
Copies may be inspected at the FAA, Central Region, Office of the
Assistant Chief Counsel, Room 1558, 601 E. 12th Street, Kansas City,
Missouri, or
[[Page 49254]]
at the Office of the Federal Register, 800 North Capitol Street,
NW., suite 700, Washington, DC.
(f) This amendment (39-9766) becomes effective on November 8,
1996.
Issued in Kansas City, Missouri, on September 12, 1996.
Michael Gallagher,
Manager, Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. 96-23989 Filed 9-18-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-23988 Airworthiness Directives; Burkhart Grob Luft-und Raumfahrt Models G115C, G115C2, G115D, and G115D2 Airplanes
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49250-49251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23988]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 96-CE-50-AD; Amendment 39-9765; AD 96-19-07]
RIN 2120-AA64
Airworthiness Directives; Burkhart Grob Luft-und Raumfahrt Models
G115C, G115C2, G115D, and G115D2 Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule; request for comments.
-----------------------------------------------------------------------
SUMMARY: This document publishes in the Federal Register an amendment
adopting Airworthiness Directive (AD) 96-19-07, which was sent
previously to all known U.S. owners and operators of Burkhart Grob
Luft-und Raumfahrt (Grob) Models G115C, G115C2, G115D, and G115D2
airplanes. This AD requires installing a placard that restricts the
never exceed speed (Vne) of the affected airplane models from 184 knots
to 160 knots; installing on the airspeed indicator glass a red line at
296 km/h (160 knots); installing a placard that prohibits aerobatic
maneuvers; and placing a copy of this AD in the Limitations Section of
the airplane flight manual. An in-flight breakup of a Grob Model G115D
airplane prompted priority letter AD 96-19-07. The actions specified by
this AD are intended to prevent loss of control of the airplane caused
by excessive speed or aerobatic maneuvers.
DATES: Effective September 27, 1996, to all persons except those to
whom it was made immediately effective by priority letter AD 96-19-07,
issued September 6, 1996, which contained the requirements of this
amendment.
Comments for inclusion in the Rules Docket must be received on or
before November 19, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Central Region, Office of the Assistant Chief
Counsel, Attention: Rules Docket 96-CE-50-AD, Room 1558, 601 E. 12th
Street, Kansas City, Missouri 64106.
The service information and placards specified in this AD may be
obtained from Burkhart Grob Luft-und Raumfahrt, D-8939 Mattsies,
Germany. This information may also be examined at the Rules Docket at
the address above.
FOR FURTHER INFORMATION CONTACT: Mr. Greg Holt, Program Officer,
Brussels Aircraft Certification Division, FAA, Europe, Africa, and
Middle East Office, c/o American Embassy, B-1000 Brussels, Belgium;
telephone (32 2) 508.26.92; facsimile (32 2) 230.68.99; or Mr. Mike
Kiesov, Aerospace Engineer, FAA, Small Airplane Directorate, 1201
Walnut Street, suite 900, Kansas City, Missouri 64106; telephone (816)
426-6934; facsimile (816) 426-2169.
SUPPLEMENTARY INFORMATION:
Events Leading to the AD
The Federal Aviation Administration (FAA) is currently involved
with investigating an in-flight breakup of a Grob Model G115D airplane.
Preliminary investigation of the accident reveals that the empennage
separated from the airplane. Both crew members were killed in the
accident. Involved in the on-going investigation are:
--The FAA;
--The National Transportation Safety Board (NTSB); and
--Grob (the manufacturer of the accident airplane).
Applicable Service Information
Grob has issued Service Bulletin (SB) 1078-59/2, dated September 2,
1996, which specifies (1) installing a placard that restricts the never
exceed speed (Vne) of the affected airplanes from 184 knots to 160
knots; (2) installing on the airspeed indicator a red line at 296 km/h
(160 knots); and (3) installing a placard that prohibits aerobatic
maneuvers. The placards are included in this service bulletin.
The FAA's Determination
Although the on-going investigation of the in-flight breakup of the
Grob Model G115D airplane is not complete, the FAA has determined (1)
that the actions specified in Grob SB 1078-59/2, dated September 2,
1996, should be accomplished by all owners/operators of Grob Models
G115C, G115C2, G115D, and G115D2 airplanes; and (2) airworthiness
directive (AD) action should be taken to prevent loss of control of the
airplane caused by excessive speed or aerobatic maneuvers. Further
rulemaking may be required when the results of the accident
investigation are known.
These airplane models are manufactured in Germany and are type
certificated for operation in the United States under the provisions of
section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and
the applicable bilateral airworthiness agreement. The Luftfahrt-
Bundesamt (LBA), which is the airworthiness authority for Germany, is
preparing an AD in order to assure the continued airworthiness of these
airplanes in Germany.
Explanation of the Provisions of This AD
Since an unsafe condition has been identified that is likely to
exist or develop on other Grob Models G115C, G115C2, G115D, and G115D2
airplanes of the same type design that are registered for operation in
the United States, the FAA issued priority letter AD 96-19-07 on
September 5, 1996, to prevent loss of control of the airplane caused by
excessive speed or aerobatic maneuvers. The AD requires the following:
--Installing a placard that restricts the never exceed speed (Vne) of
the affected airplane models from 184 knots to 160 knots;
--Installing on the airspeed indicator glass a red line at 296 km/h
(160 knots);
--Installing a placard that prohibits aerobatic maneuvers; and
--Placing a copy of this AD in the Limitations Section of the airplane
flight manual.
The placards are included with Grob SB 1078-59/2, dated September
2, 1996.
Since it was found that immediate corrective action was required,
notice and opportunity for prior public comment thereon were
impracticable and contrary to the public interest, and good cause
existed to make the AD effective immediately by individual letters
issued on September 5, 1996, to all known U.S. operators of Grob G115C,
[[Page 49251]]
G115C2, G115D, and G115D2 airplanes. These conditions still exist, and
the AD is hereby published in the Federal Register as an amendment to
section 39.13 of the Federal Aviation Regulations (14 CFR 39.13) to
make it effective as to all persons.
Comments Invited
Although this action is in the form of a final rule that involves
requirements affecting immediate flight safety and, thus, was not
preceded by notice and opportunity to comment, comments are invited on
this rule. Interested persons are invited to comment on this rule by
submitting such written data, views, or arguments as they may desire.
Communications should identify the Rules Docket number and be submitted
in triplicate to the address specified above. All communications
received on or before the closing date for comments will be considered,
and this rule may be amended in light of the comments received. Factual
information that supports the commenter's ideas and suggestions is
extremely helpful in evaluating the effectiveness of the AD action and
determining whether additional rulemaking action would be needed.
Comments are specifically invited on the overall regulatory,
economic, environmental, and energy aspects of the rule that might
suggest a need to modify the rule. All comments submitted will be
available, both before and after the closing date for comments, in the
Rules Docket for examination by interested persons. A report that
summarizes each FAA-public contact concerned with the substance of this
AD will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this rule must submit a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to Docket No. 96-CE-50-AD.'' The postcard will be date stamped and
returned to the commenter.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
The FAA has determined that this regulation is an emergency
regulation that must be issued immediately to correct an unsafe
condition in aircraft, and is not a ``significant regulatory action''
under Executive Order 12866. It has been determined further that this
action involves an emergency regulation under DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979). If it is determined
that this emergency regulation otherwise would be significant under DOT
Regulatory Policies and Procedures, a final regulatory evaluation will
be prepared and placed in the Rules Docket. A copy of it, if filed, may
be obtained from the Rules Docket at the location provided under the
caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding a new airworthiness directive
(AD) to read as follows:
96-19-07 Burkhart Grob Luft-Und Raumfahrt: Amendment 39-9765;
Docket No. 96-CE-50-AD.
Applicability: Models G115C, G115C2, G115D, and G115D2 airplanes
(all serial numbers), certificated in any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (f) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required prior to further flight after the effective
date of this AD, unless already accomplished, except to those
operators receiving this action by priority letter issued September
6, 1996, which made these actions effective immediately upon
receipt.
To prevent loss of control of the airplane caused by excessive
speed or aerobatic maneuvers, accomplish the following:
(a) Install, on the limitation placard at the left-hand cabin
wall, the airspeed placard that is included with Grob Service
Bulletin (SB) 1078-59/2, dated September 2, 1996. This placard
reduces the maximum airspeed to 296 kilometers per hour (km/h);
equal to 160 knots per hour.
(b) Modify the airspeed indicator glass by accomplishing the
following:
(1) Place a red radial line on the indicator glass at 296 km/h
(160 knots). The minimum dimensions for this radial line are 0.05-
inch in width and 0.30-inch in length.
(2) Place a white 0.05-inch minimum width slippage index mark
that connects both the instrument glass and bezel. This slippage
index mark shall not obscure any airspeed markings.
(c) Install, near the airspeed indicator, the red placard
included with Grob SB 1078-59/2 that has the words: ``Aerobatic
maneuvers are prohibited.''
(d) Insert a copy of this AD into the Limitations Section of the
airplane flight manual.
(e) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(f) An alternative method of compliance or adjustment of the
compliance time that provides an equivalent level of safety may be
approved by the Manager, Brussels Aircraft Certification Division,
FAA, Europe, Africa, and Middle East Office, c/o American Embassy,
B-1000 Brussels, Belgium. The request shall be forwarded through an
appropriate FAA Maintenance Inspector, who may add comments and then
send it to the Manager, Brussels Aircraft Certification Division.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Brussels Aircraft Certification Division.
(g) The service information and placards specified in this AD
may be obtained from Burkhart Grob Luft-und Raumfahrt, D-8939
Mattsies, Germany. This information may also be examined at the FAA,
Central Region, Office of the Assistant Chief Counsel, Room 1558,
601 E. 12th Street, Kansas City, Missouri 64106.
(h) This amendment (39-9765) becomes effective on September 27,
1996, to all persons except those persons to whom it was made
immediately effective by priority letter AD 96-19-07, issued
September 6, 1996, which contained the requirements of this
amendment.
Issued in Kansas City, Missouri, on September 12, 1996.
Michael Gallagher,
Manager, Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. 96-23988 Filed 9-18-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-23973 Revision of Delegations of Authority
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Page 49237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23973]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 61, No. 183 / Thursday, September 19, 1996 /
Rules and Regulations
[[Page 49237]]
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 2
Revision of Delegations of Authority
AGENCY: Department of Agriculture.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This document revises the delegations of authority from the
Secretary of Agriculture and general officers of the Department to
delegate to the General Counsel the authority to pay tort claims that
arise outside the United States, as authorized by section 920 of Public
Law 104-27.
EFFECTIVE DATE: September 19, 1996.
FOR FURTHER INFORMATION CONTACT: Robert L. Siegler, Deputy Assistant
General Counsel, Research and Operations Division, Office of the
General Counsel, Department of Agriculture, Room 2321-S, Washington,
D.C. 20250, telephone 202-720-6035.
SUPPLEMENTARY INFORMATION: Section 920 of the Federal Agriculture
Improvement and Reform Act of 1996 (FAIR Act), Pub. L. No. 104-127 (7
U.S.C. 2262a), authorizes the Secretary of Agriculture to pay a tort
claim if the claim arises outside the United States in connection with
activities of individuals performing service for the Secretary. This
document delegates the authority of the Secretary to the General
Counsel to make determinations of tort claims that arise outside the
United States in accordance with section 920 of the FAIR Act.
This rule relates to internal agency management. Therefore,
pursuant to 5 U.S.C. 553, notice of proposed rule making and
opportunity for comment are not required. Further, since this rule
relates to internal agency management, it is exempt from the provisions
of Executive Order Nos. 12291 and 12778. In addition, this action is
not a rule as defined by Pub. L. No. 96-354, the Regulatory Flexibility
Act, and thus is exempt from the provisions of that Act. Accordingly,
as authorized by section 808 of the Small Business Regulatory
Enforcement Fairness Act of 1996, Pub. L. No. 104-121, this rule may be
made effective upon publication in the Federal Register.
List of Subjects in 7 CFR Part 2
Authority delegations (Government agencies).
PART 2--DELEGATIONS OF AUTHORITY BY THE SECRETARY OF AGRICULTURE
AND GENERAL OFFICERS OF THE DEPARTMENT
Accordingly, Part 2, Title 7, Code of Federal Regulations is
amended as follows:
1. The authority citation for Part 2 continues to read as follows:
Authority: Sec. 212(a), Pub. L. 103-353, 108 Stat. 3210, 7
U.S.C. 6912(a)(1); 5 U.S.C. 301; Reorganization Plan No. 2 of 1953,
3 CFR, 1949-1953 Comp., p. 1024.
Subpart D--Delegations of Authority to Other General Officers and
Agency Heads
2. Section 2.31 is amended by revising paragraph (a) to read as
follows:
Sec. 2.31 General Counsel.
* * * * *
(a) Consider, ascertain, adjust, determine, compromise, and settle
claims pursuant to the Federal Tort Claims Act, as amended (28 U.S.C.
2671-2680), and the regulations of the Attorney General contained in 28
CFR part 14; and consider, ascertain, adjust, determine, compromise,
and settle claims pursuant to section 920 of the Federal Agriculture
Improvement and Reform Act of 1996, Public Law 104-127 (7 U.S.C.
2262a).
Dated: September 10, 1996.
Dan Glickman,
Secretary of Agriculture.
[FR Doc. 96-23973 Filed 9-18-96; 8:45 am]
BILLING CODE 3410-01-M
Complete official Federal Register PDF
FR Doc. 96-23971 Fisheries of the Northeastern United States; Northeast Multispecies Fishery; Exception to Permit Requirements
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49276-49277]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23971]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 648
[Docket No. 960216032-6246-07; I.D. 082096H]
RIN 0648-AH70
Fisheries of the Northeastern United States; Northeast
Multispecies Fishery; Exception to Permit Requirements
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: NMFS issues this final rule to modify the regulations
implementing the Northeast Multispecies Fishery Management Plan. This
rule allows vessels fishing exclusively with pot gear, which are not
otherwise allowed to possess multispecies finfish, to possess
multispecies frames as bait, provided that a receipt for purchase of
that specific bait is on board the vessel. The intended effect is to
allow the current practice of using multispecies frames as bait in the
pot gear fishery to continue.
DATES: This rule is effective September 13, 1996. Comments must be
received on or before October 15, 1996.
ADDRESSES: Comments on the rule should be sent to Dr. Andrew A.
Rosenberg, Regional Director, NMFS, Northeast Regional Office, 1
Blackburn Drive, Gloucester, MA 01930, Attention: Susan A. Murphy.
FOR FURTHER INFORMATION CONTACT: Susan A. Murphy, NMFS, Fishery Policy
Analyst, 508-281-9252.
SUPPLEMENTARY INFORMATION: Amendment 7 to the FMP, effective on July 1,
1996 (61 FR 27710, May 31, 1996), implemented comprehensive
[[Page 49277]]
measures to rebuild the important multispecies stock complex. Among the
measures implemented was a measure eliminating the open access
possession limit permit category. Possession of such a permit allowed
vessels to retain up to 500 lb (226.8 kg) of regulated multispecies per
trip. Under this new measure, vessels fishing for, retaining, or
possessing regulated multispecies must either possess a limited access
multispecies permit and be fishing under a days-at-sea, or possess an
open access permit endorsed for appropriate gear type (i.e., handline,
rod and reel, or scallop dredge).
An unintended consequence of this provision is its prohibition on
the use of multispecies ``frames,'' also known as ``racks,'' as bait in
the pot fishery. A multispecies frame or rack is the remains of a
multispecies finfish after it has been filleted. Because many pot
vessel fishers have traditionally utilized multispecies frames as bait
in their fish traps, the elimination of the possession limit permit
category prevents many vessels from continuing this practice. The New
England Fishery Management Council (Council) did not immediately
recognize the need for an exception to this provision and recently
indicated that it was never its intent to prohibit pot fishers, that
are not otherwise allowed to possess multispecies finfish, from
possessing multispecies frames as bait. The Council stated that its
main purpose in eliminating the possession limit permit category was to
reduce fishing mortality by reducing the catch of regulated
multispecies. The Council further stated that prohibiting the
possession of multispecies frames does not contribute to this objective
because multispecies frames are the remains of finfish that have
already been caught, and that to prohibit their possession by pot
fishers would reduce the economic value of the landings at a time when
the fishing industry needs to capitalize on landings to the largest
extent possible.
Modifications to the regulations made by this rule are intended to
allow pot fishers, who are not otherwise allowed to possess
multispecies finfish, to possess multispecies frames for the purpose of
using them as bait, provided that a receipt for purchase of that
specific bait is on board the vessel.
Classification
Because prohibiting the possession of multispecies frames for use
as bait in pot gear does not contribute to the goal of reducing fishing
mortality by reducing the catch of regulated multispecies and
needlessly reduces the economic value of multispecies landings at a
time when the fishing industry needs to capitalize on the value of such
landings to the largest extent possible, the delay associated with
providing prior notice and opportunity for comment would be contrary to
the public interest. Accordingly, the Assistant Administrator for
Fisheries, NOAA (AA), finds good cause to waive the requirement to
provide prior notice and opportunity for public comment, pursuant to
the authority set forth at 5 U.S.C. 553(b)(B). Because this rule
relieves a restriction under 5 U.S.C. 553(d)(1), it may be made
immediately effective. Comments on the final rule are invited and must
be received on or before October 15, 1996, (see ADDRESSES). The
Regional Director will review all comments received and, if the
comments warrant, will take further rulemaking action.
This rule has been determined to be not significant for purposes of
E.O. 12866.
List of Subjects in 50 CFR Part 648
Fisheries, Fishing, Reporting and recordkeeping requirements.
Dated: September 13, 1996.
Rolland A. Schmitten,
Assistant Administrator for Fisheries, National Marine Fisheries
Service.
For the reasons set out in the preamble, 50 CFR part 648 is amended
as follows:
PART 648--FISHERIES OF THE NORTHEASTERN UNITED STATES
1. The authority citation for part 648 continues to read as
follows:
Authority: 16 U.S.C. 1801 et seq.
2. In Sec. 648.2, the definition for ``Multispecies frames'' is
added in alphabetical order to read as follows:
Sec. 648.2 Definitions.
* * * * *
Multispecies frames, also known as multispecies racks, means the
remains of the multispecies finfish after it has been filleted or
processed, not including the fillet.
* * * * *
3. In Sec. 648.4, paragraph (a)(1) introductory text is revised to
read as follows:
Sec. 648.4 Vessel permits.
(a) * * *
(1) NE multispecies vessels. Any vessel of the United States,
including a charter or party boat, must have been issued and have on
board a valid multispecies permit to fish for, possess or land
multispecies finfish in or from the EEZ. Multispecies frames used as,
or to be used as, bait on a vessel fishing exclusively with pot gear
are deemed not to be multispecies finfish for purposes of this part
provided that there is a receipt for the purchase of those frames on
board the vessel.
* * * * *
4. In Sec. 648.83, paragraph (b)(3) is added to read as follows:
Sec. 648.83 Minimum fish sizes.
* * * * *
(b) * * *
(3) Vessels fishing exclusively with pot gear may possess
multispecies frames used, or to be used, as bait that measure less than
the minimum fish size, if there is a receipt for purchase of those
frames on board the vessel.
* * * * *
[FR Doc. 96-23971 Filed 9-13-96; 4:09 pm]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-23958 Medicare Program; Part B Advance Payments to Suppliers Furnishing Items or Services Under Medicare Part B
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49271-49276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23958]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
42 CFR Part 421
[BPO-105-F]
RIN 0938-AF85
Medicare Program; Part B Advance Payments to Suppliers Furnishing
Items or Services Under Medicare Part B
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule establishes requirements and procedures for advance
payments to suppliers of Medicare Part B services. An advance payment
will be made only if the carrier is unable to process a claim timely;
the supplier requests advance payment; we determine that payment of
interest is insufficient to compensate the supplier for loss of the use
of the funds; and, we expressly approve the advance payment in writing.
These rules are necessary to address deficiencies noted by the
General Accounting Office in its report analyzing current procedures
for making advance payments. The intent of this rule is to ensure more
efficient and effective administration of this aspect of the Medicare
program.
EFFECTIVE DATE: This rule is effective October 21, 1996.
FOR FURTHER INFORMATION CONTACT: Robert Shaw, (410) 786-3312.
SUPPLEMENTARY INFORMATION:
I. Background
A. General
The Medicare Supplementary Medical Insurance (Part B) program is a
voluntary program that pays all or part of the costs for physicians'
services; outpatient hospital services; certain home health services;
services furnished by rural health clinics, ambulatory surgical centers
and comprehensive outpatient rehabilitation facilities; and certain
other items or medical and hospital health services not covered by the
Medicare Hospital Insurance program (Part A).
B. Use of Carriers
1. Statutory basis. Under section 1842(a) of the Social Security
Act (the Act), public and private organizations and agencies may
participate in the administration of the Medicare program under
contracts entered into with the Secretary. These Medicare contractors,
known as ``carriers,'' process and pay Part B claims.
Usually, these payments are made on a claim-by-claim basis.
Regulations at 42 CFR part 421, subpart C--Carriers, set forth the
functions performed by Medicare carriers, which include the following:
Determining the eligibility status of a beneficiary.
Determining whether the services for which payment is
claimed are covered under Medicare, and if so, the correct payment
amounts.
Making correct payment to the beneficiary or the supplier
of the items or services, as appropriate.
Carriers must also observe the ``prompt payment'' requirements set
forth in section 1842(c) of the Act. As amended by section 13568 of the
Omnibus Budget Reconciliation Act of 1993 (OBRA '93) (Public Law 103-
66), enacted on August 10, 1993, this provision currently requires
interest to be paid on all ``clean'' claims for which payment is not
issued within 30 calendar days.
[[Page 49272]]
2. Advance payments to suppliers. Under Part B, a carrier may make
an advance partial payment to a supplier if the carrier is not able to
process a claim. (For purposes of the Medicare program, Sec. 400.202
defines ``supplier'' as a physician or other practitioner, or an entity
other than a provider, that furnishes health care services under
Medicare. Section 400.202 defines ``services'' as medical care or
services and items, such as medical diagnosis and treatment, drugs and
biologicals, supplies, appliances, and equipment, medical social
services, and use of the facilities of a hospital, a rural primary care
hospital, or a skilled nursing facility.) An advance payment may be
made to a supplier eligible to receive Medicare payments.
At the present time, there are no regulations or guidelines for
making advance payments. In rare instances, such as when major
administrative changes are made in processing Part B claims, a backlog
of pending claims may occur. To avoid or reduce the payment of interest
on claims that are not processed timely, we sometimes authorize advance
payments for pending backlogged claims, subject to later recoupment
from amounts we owe, once the claims are processed.
II. General Accounting Office Report Finding--``HCFA Should Improve
Internal Controls Over Part B Advance Payments''
As a result of administrative changes made in processing Part B
claims at two carriers in two States during 1988, a large backlog of
pending claims occurred. In order to minimize the effects of these
claims payment disruptions on suppliers, in 1989 we authorized the two
carriers to make advance payments for pending backlogged claims,
subject to later recoupment, once the claims were actually processed.
The difficulties experienced by the suppliers resulted in the General
Accounting Office investigating these two carriers and their claims
processing systems. This investigation led the General Accounting
Office to question whether we had sufficient guidelines and safeguards
in place to ensure that advance payments were promptly recouped. A full
report of the General Accounting Office findings is included in the
proposed rule published in the Federal Register on July 18, 1994 (59 FR
36415).
As a result of its review of these cases, the General Accounting
Office recommended that we determine whether it is appropriate for
carriers to make advance payments to suppliers and that we be in
compliance with the Federal Managers' Financial Integrity Act (31
U.S.C. 3512) when making these determinations. A full discussion of the
requirements of the Federal Managers' Financial Integrity Act was
included in the proposed rule (59 FR 36416).
In applying this standard to Part B advance payments, the General
Accounting Office expressed the opinion that HCFA, rather than the
carriers, should authorize advance payments to be executed by the
carriers. In addition, the General Accounting Office asserted that we
should clearly communicate to carriers our approval to make advance
payments and include the terms under which these payments must be made.
Therefore, the General Accounting Office recommended that we develop
regulations and instructions for carriers regarding Part B advance
payments to suppliers. (General Accounting Office report, GAO/HRD-91-81
(April 1991), entitled ``Medicare: HCFA Should Improve Internal
Controls Over Part B Advance Payments.'')
III. Summary of the Proposed Regulations
We published a proposed rule in the Federal Register on July 18,
1994 (59 FR 36415) to announce our intention to establish requirements
and procedures for advance payments to suppliers of Medicare Part B
services. The proposed rule responded to the General Accounting Office
report and recommendation and proposed to add Sec. 421.214 (``Advance
payments to suppliers furnishing items or services under Part B'') to
42 CFR part 421, subpart C.
Proposed Sec. 421.214 would ensure the smooth and uniform issuance
and recoupment of Part B advance payments that may be authorized from
time to time to counter the negative consequences of disruptions in
Medicare Part B claims processing. The regulation, as proposed, would
be entirely self-contained. Advance payments would be made when a
carrier is unable to process a claim timely, not when delay is the
result of late or incomplete submittal of a claim by a supplier.
Processing delays would be highlighted to us to ensure that payment
disruptions and risks to the Medicare trust fund would be minimized.
There are some entities with provider agreements under section 1866
of the Act that are paid for certain Part B services from the Part B
Trust Fund through intermediaries (performing as a carrier when making
Part B payments). These providers generally have access to the existing
accelerated payment provisions under Sec. 413.64(g). The purpose of the
proposed regulation is to create a Part B advance payment procedure for
suppliers, not to supplant the existing Part A advance payment
procedure for some providers. Therefore, this section would not apply
to claims for Part B items or services that are furnished by entities
with provider agreements under section 1866 of the Act that receive
payments from intermediaries.
Proposed Sec. 421.214(b) defines the term ``advance payment'' to
mean a carrier's conditional partial payment to a supplier on a Part B
claim that the carrier is unable to process within the prescribed time
limits.
Proposed Sec. 421.214(c) specifies that an advance payment may be
made if the carrier is unable to process claims timely; if we determine
that the prompt payment interest provision in section 1842(c) of the
Act is insufficient to make claimants whole; and, if the advance
payment is expressly approved by us in writing. The prompt payment
interest provision currently requires us to pay interest on clean
claims when the carrier is unable to make payment within 30 calendar
days. The determination to issue advance payments must take into
consideration elements that are, or may be, subject to changes, such as
legislation related to prompt payment; system enhancements; severity of
system malfunctions; changes to regulations; change in contractors; and
any number of other factors that may necessitate the issuance of
advance payments. Therefore, we stated we would implement the threshold
criterion or criteria through manual instructions to the carriers. This
would give us the flexibility to respond promptly to providers without
going through the rulemaking process each time a unique situation
occurs. We specifically requested public comments on this approach. In
making changes, we would ensure that advance payments would be made in
a way that would ensure budget neutrality.
Section 421.214(d) specifies that no advance payment would be made
to any supplier who is delinquent in repaying a Medicare overpayment,
or one that has been advised that it is under active medical review or
program integrity investigation. Also, an advance payment would not be
made to a supplier that has not submitted any claims, or has not
accepted claims' assignments within the most recent 180-day period
preceding the system malfunction that created the need for the advance
payment.
Proposed Sec. 421.214(e)(1) specifies that a supplier must request,
in writing to the carrier, an advance payment for providing Part B
services. Paragraph
[[Page 49273]]
(e)(2) specifies that a supplier must accept an advance payment as a
conditional payment subject to adjustment, recoupment, or both based on
an eventual determination of the actual amount due on the claim and
subject to the other rules found in Sec. 421.214.
Proposed Sec. 421.214(f)(1) states that a carrier must calculate an
advance payment for a specific claim at no more than 80 percent of the
historical assigned claims payment data paid a supplier. ``Historical
data'' are defined as a representative 90-day assigned claims payment
trend within the most recent 180-day experience before the system
malfunction. Based on this amount, the carrier must determine and issue
an advance payment on a particular claim not to exceed 80 percent of
the average per claim amount paid during the 90-day trend period. If
historical data are not available or if backlogged claims cannot be
identified, the carrier would determine and issue advance payments
based on some other methodology approved by us. Advance payments would
be made no more frequently than once every 2 weeks to a supplier.
Proposed Sec. 421.214(f)(2) specifies that generally, a supplier
would not receive advance payments for more assigned claims than were
paid, on a daily average, for the 90 days before the system
malfunction. This would prevent and discourage suppliers from
submitting assigned claims that may lack merit in order to maximize the
receipt of advance payments. However, an example of a permissible
exception would be when a supplier does not receive payments from a
carrier for services during the early months of the year when
beneficiary deductibles are being met. In this case, the carrier would
use more representative payment months for the suppliers' daily
average.
Proposed Sec. 421.214(f)(3) specifies that a carrier must recover
an advance payment by applying it against the amount due on the claim
on which the advance payment was made. Under the proposal, if the
advance payment exceeds the Medicare payment amount, the carrier must
apply the unadjusted balance of the advance payment against further
Medicare payments due the supplier.
It is not our intent to permit repayment of an advance payment by
an option that could delay the recovery process or that would create a
duplicate payment or an overpayment. Thus, a supplier of Part B
services could not elect to receive the full payment amount for a claim
and repay the advance payment separately at some other time.
Proposed Sec. 421.214(f)(4) specifies that in accordance with our
instructions, a carrier must maintain financial records in accordance
with the Statement of Federal Financial Accounting Standards for
tracking each advance payment and its recoupment.
Proposed Sec. 421.214(g)(1) permits us to waive the requirements of
paragraph (e)(1) if we determine it is appropriate to make advance
payments to all affected suppliers. Paragraph (g)(2) specifies that if
adjusting Medicare payments fails to recover an advance payment, we may
authorize the use of any other recoupment method available (for
example, lump sum repayment or an extended repayment schedule).
Paragraph (g)(2) also allows an unpaid balance from a past advance
payment to be converted into an overpayment. In the unlikely event
that, after the adjustment process is completed, more money has been
advanced to the supplier than was due, we would consider that amount to
be an overpayment. We could then attempt to recover the overpayment
under the Medicare recovery procedures in part 401, subpart F and part
405, subpart C.
Proposed Sec. 421.214(h) clarifies that the advance payment would
be considered a payment that would satisfy the ``prompt payment''
requirements of section 1842(c)(2) of the Act for the amount of the
advance. Therefore, if an advance payment is made before the ``prompt
payment'' time limit and the actual amount of payment for the claim is
determined after the time limit, interest would be paid only on the
balance due the supplier after the carrier deducts the amount of the
advance. (Of course, no interest would accrue if the amount of the
advance exceeds the actual payment amount to be made on the claim.) If
the advance payment is issued after the time limit for making a prompt
payment, interest would accrue on the advance (or on the amount of the
claim, whichever is smaller) up to the date that the advance payment is
issued, and on the balance due the supplier, if any, up to the date of
payment.
Proposed Sec. 421.214(i) explains that the decision to advance
payments and the determination of the amount to be advanced on any
given claim are committed to agency discretion and are not subject to
review or appeal. However, the carrier would notify the supplier
receiving the advance payment about the amounts advanced and recouped,
and how any Medicare payment amounts have been adjusted. If the
supplier believes the carrier's reconciliation of the amounts advanced
and recouped is incorrectly computed, it may request an administrative
review from the carrier. If a review is requested, the carrier would
provide a written explanation of the adjustments. This review and
explanation would be separate from a supplier's right to appeal the
amount and computation of benefits paid on the claim, as provided at 42
CFR part 405, subpart H. The carrier's reconciliation of amounts
advanced and recouped would not be an initial determination as defined
at Sec. 405.803, and any written explanation of this reconciliation
would not be subject to further administrative review. We expect that
this review process would help to eliminate unnecessary appeals that
might result from errors in computation.
IV. Analysis of Public Comments
In response to the July 1994 proposed rule, we received three
timely items of correspondence. Comments were received from two
national trade associations--one is a nonprofit association comprised
of over 2,100 home medical equipment suppliers and one represents over
850 wholesale and retail distributors of health and medical products.
The third comment was sent by a 30,000-member professional association
representing pharmacists in various health settings. These comments and
our responses are discussed below.
Comment: One commenter stated that the term ``established time
limit'' that is referenced in the definition of advance payment
(Sec. 421.214(b)) should be specific for purposes of this rule. The
commenter suggested that after 30 to 60 days, interest should be paid
by the carrier on outstanding claims and after 60 days, advance
payments should be made automatically.
Response: Carriers must adhere to the ``prompt payment''
requirements set forth in section 1842(c) of the Act. As amended by
section 13568 of OBRA '93, this provision currently requires interest
to be paid on all ``clean'' claims for which payment is not made within
30 calendar days. We expect that the need for advance payment would be
determined in much less than 60 days. Additionally, as outlined in
Sec. 421.214(c) (``When advance payments may be made'') and
Sec. 421.214(d) (``When advance payments are not made''), advance
payments will be paid when the requirements of the rule are met.
However, it would be presumptuous for us or the carrier to assume that
all suppliers would want an advance payment.
Comment: Two commenters stated that it should be the obligation of
the carrier to notify suppliers as soon as the carrier discovers that
payment would not be made in a timely manner and
[[Page 49274]]
advance payments would be necessary. One of the commenters suggested
that, after an initial request, suppliers should not have to request an
advance payment in writing each time an advance payment is warranted.
Response: We agree that the carrier should notify a supplier when
there is a need to make advance payment. If the reason for not making
prompt payment is associated with the carriers' inability to process
Medicare claims in a timely manner, the carrier will notify the
supplier. The supplier will have the option of receiving an advance
payment, as long as the conditions as outlined in this final rule are
met. Additionally, it is not our intention to require suppliers to
request an advance payment each time a claim is submitted during a
period that advance payments are deemed to be necessary. Advance
payments will be automatic until the condition that caused the need for
advance payments is corrected.
Comment: One commenter disagreed with our position that the
decision to advance payments and the determination of the amount of any
advance payment are committed to agency discretion and are not subject
to review or appeal (Sec. 421.214(i)). The commenter believed that this
position does not ensure more efficient and effective administration of
this aspect of the Medicare program.
Response: Advance payments are discretionary because the Medicare
statute imposes no obligation to advance these monies before a final
payment determination is made. The final payment determination is not
affected by the advance payment process; suppliers can only be
advantaged by receiving these advances. Agency discretion for the
amount to be advanced is based on a valid and fair formula, as outlined
in Sec. 421.214(f)(1) and (f)(2). This is an efficient and effective
administration of the program that minimizes the risks to the Medicare
trust fund, without prejudice to the supplier.
Comment: One commenter objected to the provision in the proposed
rule instructing a carrier that the amount of an advance payment should
be no more than 80 percent of the historical assigned claims payment
data (Sec. 421.214(f)(1)). The commenter believed the supplier should
get an advance payment of 100 percent of its submitted charges, minus
the supplier's historical percentage differential between submitted and
approved charges.
Response: We have determined that the fairest method of calculating
advance payments to suppliers without risking an overpayment is to
calculate an advance payment for a particular claim at no more than 80
percent of the anticipated payment for that claim based upon the
historical assigned claims payment data for claims paid to the
supplier. This payment methodology balances the financial needs of the
supplier with our responsibility to protect the Medicare trust fund.
Comment: One commenter was concerned that a provision in the
proposed rule (Sec. 421.214(f)(3)) would allow the carrier to recover
payment from the supplier without requiring the carrier to resolve the
problem that actually caused the claims processing problem.
Response: The commenter's concern is unfounded. It is not our
intent to recover any part of the advance payment before the carrier
resolves the problem that made the advance payment necessary.
Comment: One commenter recommended that the supplier be given the
opportunity to repay the advance payment by check or wire transfer to
avoid the offsetting against claims because offsetting claims often
results in accounting problems.
Response: Permitting suppliers to refund advance payments (as
opposed to having the advanced payment offset against the actual
payment amount) would undoubtedly produce systemic overpayments and
duplicate payments to suppliers. This would be directly contrary to the
intent and purpose of this final rule. It is not our intent to permit
repayment of an advance payment by an option that could delay the
recovery process or that will create a duplicate payment or an
overpayment. A supplier of Part B services could not elect to receive
full payment for a claim and repay the advance payment separately at
some other time. Permitting suppliers to refund the advance payment by
check or wire transfer also conflicts with the definition of ``advance
payment'' in Sec. 421.214(b) and the concept of advancing a portion of
what is owed. The recommendation by the commenter would, in all
probability, increase the frequency of overpayments and duplicate
payments to providers, could be prone to abuse, and is inconsistent
with the intent of this rule.
Comment: One commenter had concerns about the provision prohibiting
an advance payment to a supplier if the supplier is under active
medical review or undergoing a program integrity investigation
(Sec. 421.214(d)(2)). The same commenter also believed that suppliers
that do not take assignment should not be excluded from receiving a
cash advance (Sec. 421.214(d)(4)).
Response: A supplier that is under an active medical review or
undergoing a program integrity investigation is in a status that we do
not treat lightly. These reviews and investigations could culminate in
actions that result in civil, criminal, and administrative remedies. To
authorize an advance payment without final resolution of the medical
review or program integrity investigation is not in the best interest
of the Medicare trust fund. A supplier that does not accept assignment
receives no monies from Medicare. Therefore, there is no basis for an
advance payment.
Comment: One commenter suggested that within 3 business days of a
carrier's receipt of an advance payment request, the carrier should
inform the supplier in writing of the amount of the advance payment
and, within the following 5 business days, the carrier should forward a
check for the advance payment to the supplier.
Response: The commenter proposes an administratively burdensome
time frame for carrier action that is far shorter than (and
inconsistent with) the ``prompt payment'' standard for ``clean'' claims
provided by Congress in section 1842(c)(2) of the Act. In accordance
with this provision, we pay interest when the carrier does not pay a
claim within 30 calendar days of receipt. Under 421.214(b), we will
issue advance payments only if the carrier is unable to process claims
timely, that is, within this 30 day period. Once we decide that the
carrier should issue advance payments, continuing advance payments will
be timed to be consistent with these prompt payment rules and the
carrier's usual operating procedures. This should minimize the
obligation to pay interest, as well as reduce the administrative burden
on the carrier during difficult circumstances. In addition, to adopt
the commenter's suggestion would likely aggravate the situation because
it would appear to create an incentive to seek advance payments.
Comment: One commenter stated that it opposed our proposed method
of calculating the amount of the advance payment (Sec. 421.214(f)) if
the payment is based on 80 percent of assigned claims submitted in the
past 90 days. The commenter further stated that if a carrier is unable
to process claims, the advance payment provision should allow that
carrier to pay at 100 percent of the supplier's submitted charges,
minus the supplier's historical percentage differential between
submitted and approved charges.
[[Page 49275]]
Response: We chose to base the advance payment on 80 percent of
assigned claims submitted in the past 90 days to meet the needs of a
supplier to continue to be a viable business and our responsibility to
protect the Medicare trust fund. If we chose to base the advance
payment on 100 percent of its submitted charges, minus the supplier's
historical percentage differential between submitted and approved
charges, we would likely create a situation in which a carrier overpays
a supplier and subsequently must recover the overpayment. This
situation creates an administrative burden on the carrier to develop
procedures to recover the overpayment successfully and results in
increased costs to the Medicare program.
V. Provisions of the Final Rule
We are making the following changes in this final rule as a result
of written comments received on the proposed rule. We are adding the
following paragraph (1) at the beginning of Sec. 421.214(f), which
concerns requirements for carriers:
``(1) A carrier must notify a supplier as soon as it is determined
that payment will not be made in a timely manner, and an advance
payment option is to be offered to the supplier.''
We are also clarifying Sec. 421.214(f)(1)(i) to eliminate possible
uncertainty regarding how advance payments will be calculated.
VI. Collection of Information
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
requires that we solicit comment on the following issues:
Whether the information collection is necessary and useful
to carry out the proper functions of our agency;
The accuracy of our estimate of the information collection
burden;
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for
Sec. 421.214(f)(4) of this document that contains information
collection requirements. The information collection in that section
requires carriers to maintain a system of financial data in accordance
with the Statement of Federal Financial Accounting Standards for
tracking each advance payment and its recoupment. We estimate that it
will take a carrier 4 minutes for entry of an advance payment into the
tracking system and 2 minutes for any update (including recoupment).
For comments that relate to information collection requirements,
mail a copy of comments to: Health Care Financing Administration,
Office of Financial and Human Resources, Management Planning and
Analysis Staff, Room C2-26-17, 7500 Security Boulevard, Baltimore,
Maryland 21244-1850.
VII. Regulatory Impact Statement
Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612), we prepare a regulatory flexibility analysis unless the
Secretary certifies that a rule will not have a significant economic
impact on a substantial number of small entities. For purposes of the
RFA, we consider all suppliers that provide services under Medicare
Part B to be small entities. We do not consider carriers to be small
entities.
Also, section 1102(b) of the Act requires the Secretary to prepare
a regulatory impact analysis for any rule that may have a significant
impact on the operations of a substantial number of small rural
hospitals. This analysis must conform to the provisions of section 604
of the RFA. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area and has fewer than 50 beds.
This final rule amends Medicare regulations to ensure that if
carriers make advance payments to suppliers and those payments are
greater than the amounts actually due after the claim is processed, the
excess payments are recovered promptly. We expect this rule will result
in marginal administrative savings to carriers and suppliers. In
addition, we do not believe this regulation will have a negative effect
on the economy. Therefore, the overall benefits are positive and indeed
provide stability for suppliers during potentially disruptive claims
processing delays.
We have determined, and we certify, that this final rule will not
have a significant economic impact on a substantial number of small
entities or a significant impact on the operations of a substantial
number of small rural hospitals. Therefore, we have not prepared
analyses for either the RFA or section 1102(b) of the Act.
In accordance with the provisions of Executive Order 12866, this
regulation was not reviewed by the Office of Management and Budget.
This rule is not a major rule as defined at 5 U.S.C. 804(2).
List of Subjects in 42 CFR Part 421
Administrative practice and procedure, Health facilities, Health
professions, Medicare, Reporting and recordkeeping requirements.
42 CFR part 421 is amended as follows:
PART 421--INTERMEDIARIES AND CARRIERS
1. The authority citation for part 421 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
Subpart C--Carriers
2. A new Sec. 421.214 is added to subpart C to read as follows:
Sec. 421.214 Advance payments to suppliers furnishing items or
services under Part B.
(a) Scope and applicability. This section provides for the
following:
(1) Sets forth requirements and procedures for the issuance and
recovery of advance payments to suppliers of Part B services and the
rights and responsibilities of suppliers under the payment and recovery
process.
(2) Does not limit HCFA's right to recover unadjusted advance
payment balances.
(3) Does not affect suppliers' appeal rights under part 405,
subpart H of this chapter relating to substantive determinations on
suppliers' claims.
(4) Does not apply to claims for Part B services furnished by
suppliers that have in effect provider agreements under section 1866 of
the Act and part 489 of this chapter, and are paid by intermediaries.
(b) Definition. As used in this section, advance payment means a
conditional partial payment made by the carrier in response to a claim
that it is unable to process within established time limits.
(c) When advance payments may be made. An advance payment may be
made if all of the following conditions are met:
(1) The carrier is unable to process the claim timely.
(2) HCFA determines that the prompt payment interest provision
specified in section 1842(c) of the Act is insufficient to make a
claimant whole.
[[Page 49276]]
(3) HCFA approves, in writing to the carrier, the making of an
advance payment by the carrier.
(d) When advance payments are not made. Advance payments are not
made to any supplier that meets any of the following conditions:
(1) Is delinquent in repaying a Medicare overpayment.
(2) Has been advised of being under active medical review or
program integrity investigation.
(3) Has not submitted any claims.
(4) Has not accepted claims' assignments within the most recent
180-day period preceding the system malfunction.
(e) Requirements for suppliers. (1) Except as provided for in
paragraph (g)(1) of this section, a supplier must request, in writing
to the carrier, an advance payment for Part B services it furnished.
(2) A supplier must accept an advance payment as a conditional
payment subject to adjustment, recoupment, or both, based on an
eventual determination of the actual amount due on the claim and
subject to the provisions of this section.
(f) Requirements for carriers. (1) A carrier must notify a supplier
as soon as it is determined that payment will not be made in a timely
manner, and an advance payment option is to be offered to the supplier.
(i) A carrier must calculate an advance payment for a particular
claim at no more than 80 percent of the anticipated payment for that
claim based upon the historical assigned claims payment data for claims
paid the supplier.
(ii) ``Historical data'' are defined as a representative 90-day
assigned claims payment trend within the most recent 180-day experience
before the system malfunction.
(iii) Based on this amount and the number of claims pending for the
supplier, the carrier must determine and issue advance payments.
(iv) If historical data are not available or if backlogged claims
cannot be identified, the carrier must determine and issue advance
payments based on some other methodology approved by HCFA.
(v) Advance payments can be made no more frequently than once every
2 weeks to a supplier.
(2) Generally, a supplier will not receive advance payments for
more assigned claims than were paid, on a daily average, for the 90-day
period before the system malfunction.
(3) A carrier must recover an advance payment by applying it
against the amount due on the claim on which the advance was made. If
the advance payment exceeds the Medicare payment amount, the carrier
must apply the unadjusted balance of the advance payment against future
Medicare payments due the supplier.
(4) In accordance with HCFA instructions, a carrier must maintain a
financial system of data in accordance with the Statement of Federal
Financial Accounting Standards for tracking each advance payment and
its recoupment.
(g) Requirements for HCFA. (1) In accordance with the provisions of
this section, HCFA may determine that circumstances warrant the
issuance of advance payments to all affected suppliers furnishing Part
B services. HCFA may waive the requirement in paragraph (e)(1) of this
section as part of that determination.
(2) If adjusting Medicare payments fails to recover an advance
payment, HCFA may authorize the use of any other recoupment method
available (for example, lump sum repayment or an extended repayment
schedule) including, upon written notice from the carrier to the
supplier, converting any unpaid balances of advance payments to
overpayments. Overpayments are recovered in accordance with part 401,
subpart F of this chapter concerning claims collection and compromise
and part 405, subpart C of this chapter concerning recovery of
overpayments.
(h) Prompt payment interest. An advance payment is a ``payment''
under section 1842(c)(2)(C) of the Act for purposes of meeting the time
limit for the payment of clean claims, to the extent of the advance
payment.
(i) Notice, review, and appeal rights. (1) The decision to advance
payments and the determination of the amount of any advance payment are
committed to HCFA's discretion and are not subject to review or appeal.
(2) The carrier must notify the supplier receiving an advance
payment about the amounts advanced and recouped and how any Medicare
payment amounts have been adjusted.
(3) The supplier may request an administrative review from the
carrier if it believes the carrier's reconciliation of the amounts
advanced and recouped is incorrectly computed. If a review is
requested, the carrier must provide a written explanation of the
adjustments.
(4) The review and explanation described in paragraph (i)(3) of
this section is separate from a supplier's right to appeal the amount
and computation of benefits paid on the claim, as provided at part 405,
subpart H of this chapter. The carrier's reconciliation of amounts
advanced and recouped is not an initial determination as defined at
Sec. 405.803 of this chapter, and any written explanation of a
reconciliation is not subject to further administrative review.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance and No. 93.774 Supplementary Medical
Insurance Program)
Dated: August 30, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
[FR Doc. 96-23958 Filed 9-18-96; 8:45 am]
BILLING CODE 4120-01-P
Complete official Federal Register PDF
FR Doc. 96-23957 Medicare Program; Waiver of Recovery of Overpayments
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49269-49271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23957]
=======================================================================
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 401 and 405
[BPD-869-F]
Medicare Program; Waiver of Recovery of Overpayments
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule duplicates in HCFA's regulations the content
of two sections of the Social Security Administration's regulations
concerning waiver of recovery of overpayments. In the past, regulations
in 20 CFR part 404 were applicable to both the Federal Old-Age,
Survivors and Disability Insurance program (OASDI), which provides
monthly Social Security checks directly to beneficiaries or their
representatives, and the Medicare program. Since the Social Security
Administration (SSA) is now independent of HHS, and SSA is
restructuring its regulations to apply only to the OASDI program, we
are establishing the content of these sections in 42 CFR part 405 to
preserve
[[Page 49270]]
provisions that are applicable to the Medicare program.
EFFECTIVE DATE: These regulations are effective on October 21, 1996.
FOR FURTHER INFORMATION CONTACT: David Walczak, (410) 786-4475.
SUPPLEMENTARY INFORMATION:
I. Background
Until 1977, HCFA was a part of SSA and all Medicare rules were
located in title 20 of the Code of Federal Regulations (20 CFR). Since
then, we have developed separate Medicare rules in title 42. However,
some Medicare rules remain in 20 CFR, and we have been working with SSA
to restructure those rules.
Recently, we and SSA mutually agreed to restructure regulations on
recovery or adjustment of overpayments in the OASDI program (title II)
and the Medicare program (title XVIII). The overpayment recovery
provisions for both the OASDI and Medicare programs have historically
been located in 20 CFR part 404, subpart F. The SSA project revises
part 404, subpart F, so that it applies only to the OASDI program, and
removes all reference to the Medicare program. We are developing
separate regulations, which would, similarly, apply only to the
Medicare program and provide more specific criteria for applying waiver
authority. Unfortunately, our regulations are not yet ready for
publication, whereas SSA has already published a proposed rule on June
2, 1995 (60 FR 28767), and the SSA final rule revising several of its
provisions is in preparation. With the publication of the SSA final
rule, all references to the Medicare program are removed from 20 CFR
404.502a and 404.506, thus eliminating certain regulatory authorities
necessary for continuation of these provisions in the Medicare program.
Therefore, until we publish final regulations, we are moving the
content of those two sections of the regulations from 20 CFR part 404
to 42 CFR part 405 so that this content is preserved until our final
rule is published.
II. Provisions of the Rule
We are incorporating the content of 20 CFR 404.502a, ``Notice of
right to waiver consideration,'' as new 42 CFR 405.357, and the content
of 20 CFR 404.506, ``When waiver of adjustment or recovery may be
applied,'' as new 42 CFR 405.358, with minor editorial changes. In new
Secs. 405.357 and 405.358, we are removing reference to section 204(b)
of the Act, since it is the basis for the OASDI provisions. In
Sec. 405.358, we are adding another reference (in paragraph (b)(1)) to
the Medicare program (title XVIII) to conform to the actual wording of
the Medicare statute (section 1870(c) of the Social Security Act). We
are also making conforming changes to existing Secs. 401.601(d)(2)(ii),
401.607(d)(2), 405.350, and 405.356 to revise cross-references that
reflect the addition of Secs. 405.357 and 405.358.
This is a technical regulation and no changes in Medicare policies
concerning waiver result from this action. Any restructuring or
expansion of the applicability of waiver to Medicare would be issued as
a proposed rule.
III. Waiver of Proposed Rulemaking
We ordinarily publish a notice of proposed rulemaking in the
Federal Register and invite prior public comment on proposed rules. The
notice of proposed rulemaking includes a reference to the legal
authority under which the rule is proposed, and the terms and
substances of the proposed rule or a description of the subjects and
issues involved. This procedure can be waived, however, if an agency
finds good cause that a notice-and-comment procedure is impracticable,
unnecessary, or contrary to the public interest and incorporates a
statement of the finding and its reasons in the rule issued.
Since this rule merely incorporates, with minor editorial changes,
content from one part of the CFR to another, we believe that it is
unnecessary to publish a proposed rule. Therefore, we find good cause
to waive the notice of proposed rulemaking and to issue this final
rule.
IV. Regulatory Impact Statement
A. Introduction
We generally prepare a regulatory flexibility analysis that is
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612) unless the Secretary certifies that a final rule will not
have a significant economic impact on a substantial number of small
entities. Individuals and States are not included in the definition of
a small entity.
In addition, section 1102(b) of the Act requires the Secretary to
prepare a regulatory impact analysis if a rule may have a significant
impact on the operations of a substantial number of small rural
hospitals. This analysis must conform to the provisions of section 604
of the RFA. For purposes of section 1102(b) of the Act, we define a
small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area and has fewer than 50 beds.
B. Provisions of the Final Regulations
This is a technical rule that makes no changes to Medicare policy.
It incorporates in 42 CFR part 405, with only minor editorial changes,
the content of 20 CFR 404.502a and 404.506. This rule also makes
conforming changes to cross references in 42 CFR parts 401 and 405
resulting from the transfer of content from 20 CFR part 404 to 42 CFR
part 405. We are not preparing analyses for either the RFA or section
1102(b) of the Act, since we have determined, and the Secretary
certifies, that this final rule will not result in a significant
economic impact on a substantial number of small entities and will not
have a significant impact on the operations of a substantial number of
small rural hospitals.
This rule is not a major rule as defined at 5 U.S.C. 804(2).
In accordance with the provisions of Executive Order 12866, this
regulation was not reviewed by the Office of Management and Budget.
C. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995.
List of Subjects
42 CFR Part 401
Claims, Freedom of information, Health facilities, Medicare,
Privacy.
42 CFR Part 405
Administrative practice and procedure, Health facilities, Health
professions, Kidney diseases, Medicare, Reporting and recordkeeping
requirements, Rural areas, X-rays.
42 CFR chapter IV is amended as follows:
A. Part 401 is amended as set forth below:
PART 401--GENERAL ADMINISTRATIVE REQUIREMENTS
1. The authority citation for part 401 continues to read as
follows:
Authority: Secs 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1895hh). Subpart F is also issued under the
authority of the Federal Claims Collection Act (31 U.S.C. 3711).
2. Section 401.601 is amended by revising paragraph (d)(2)(ii) to
read as follows:
[[Page 49271]]
Sec. 401.601 Basis and scope.
* * * * *
(d) * * *
(2) * * *
(ii) Adjustments in Railroad Retirement or Social Security benefits
to recover Medicare overpayments to individuals are covered in
Secs. 405.350--405.358 of this chapter.
* * * * *
3. Section 401.607 is amended by revising paragraph (d)(2) to read
as follows:
Sec. 401.607 Claims collection.
* * * * *
(d) * * *
(2) Under regulations at Sec. 405.350--405.358 of this chapter,
HCFA may initiate adjustments in program payments to which an
individual is entitled under title II of the Act (Federal Old Age,
Survivors, and Disability Insurance Benefits) or under the Railroad
Retirement Act of 1974 (45 U.S.C. 231) to recover Medicare
overpayments.
B. Part 405 is amended as set forth below:
PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED
1. The authority citation for part 405 subpart C continues to read
as follows:
Authority: Secs. 1102, 1862, and 1871 of the Social Security Act
(42 U.S.C. 1302, 1395y, and 1895hh).
2. Section 405.350 is amended by revising the introductory
paragraph to read as follows:
Sec. 405.350 Individual's liability for payments made to providers and
other persons for items and services furnished the individual.
Any payment made under title XVIII of the Act to any provider of
services or other person with respect to any item or service furnished
an individual shall be regarded as a payment to the individual, and
adjustment shall be made pursuant to Secs. 405.352 through 405.358
where:
* * * * *
3. Section 405.356 is revised to read as follows:
Sec. 405.356 Principles applied in waiver of adjustment or recovery.
The principles applied in determining waiver of adjustment or
recovery (Sec. 405.355) are the applicable principles of Sec. 405.358
and 20 CFR 404.507-404.509, 404.510a, and 404.512.
4. New Sec. 405.357 is added to subpart C to read as follows:
Sec. 405.357 Notice of right to waiver consideration.
Whenever an initial determination is made that more than the
correct amount of payment has been made, notice of the provisions of
section 1870(c) of the Act regarding waiver of adjustment or recovery
shall be sent to the overpaid individual and to any other individual
against whom adjustment or recovery of the overpayment is to be
effected (see Sec. 405.358).
5. New Sec. 405.358 is added to subpart C to read as follows:
Sec. 405.358 When waiver of adjustment or recovery may be applied.
Section 1870(c) of the Act provides that there shall be no
adjustment or recovery in any case where an incorrect payment under
title XVIII (hospital and supplementary medical insurance benefits) has
been made (including a payment under section 1814(e) of the Act with
respect to an individual:
(a) Who is without fault, and
(b) Adjustment or recovery would either:
(1) Defeat the purposes of title II or title XVIII of the Act, or
(2) Be against equity and good conscience.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: July 1, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
[FR Doc. 96-23957 Filed 9-18-96; 8:45 am]
BILLING CODE 4120-01-P
Complete official Federal Register PDF
FR Doc. 96-23951 Truth in Lending
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49237-49248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23951]
=======================================================================
-----------------------------------------------------------------------
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Regulation Z; Docket No. R-0927]
Truth in Lending
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Board is publishing revisions to Regulation Z (Truth in
Lending). The revisions implement the Truth in Lending Act Amendments
of 1995, which establish new creditor-liability rules for closed-end
loans secured by real property or dwellings and consummated on or after
September 30, 1995. The 1995 Amendments create several tolerances for
accuracy in disclosing the amount of the finance charge, and creditors
have no civil or administrative liability if the finance charge and
affected disclosures are within the applicable tolerances. The
amendments also clarify how lenders must disclose certain fees
connected with mortgage loans. In addition, the Board is publishing a
new rule regarding the treatment of fees charged in connection with
debt cancellation agreements, which is similar to the existing rule for
credit insurance premiums and provides for more uniform treatment of
these fees.
DATES: This rule is effective October 21, 1996.
FOR FURTHER INFORMATION CONTACT: James A. Michaels, Senior Attorney, or
Natalie E. Taylor or Michael L. Hentrel, Staff Attorneys, Division of
Consumer and Community Affairs, Board of Governors of the Federal
Reserve System, at (202) 452-3667 or 452-2412; users of
Telecommunications Device for the Deaf (TDD) only, contact Dorothea
Thompson at (202) 452-3544.
SUPPLEMENTARY INFORMATION:
I. Background
The purpose of the Truth in Lending Act (TILA) (15 U.S.C. 1601 et
seq.) is to promote the informed use of consumer credit by requiring
disclosures about its terms and cost. The act requires creditors to
disclose the cost of credit as a dollar amount (the ``finance charge'')
and as an annual percentage rate (the ``APR''). Uniformity in
creditors' disclosures is intended to assist consumers in comparison
shopping.
[[Page 49238]]
The TILA requires additional disclosures for loans secured by a
consumer's home and permits consumers to rescind certain transactions
that involve their principal dwelling. The act is implemented by the
Board's Regulation Z (12 CFR part 226).
II. Regulatory Provisions
On September 30, 1995, the Congress enacted the Truth in Lending
Act Amendments of 1995 (1995 Amendments), Pub. L. 104-29, 109 Stat.
271. The 1995 Amendments address the concerns of mortgage lenders
stemming from a 1994 court decision, Rodash v. AIB Mortgage Co., 16
F.3d 1142 (11th Cir. 1994). In that case, the U.S. Court of Appeals
affirmed a district court opinion that allowed a consumer to rescind a
home mortgage loan and recover all fees and finance charges that had
been paid, based in part on errors in the creditor's TILA disclosures.
Subsequently, a number of class action lawsuits were filed, involving
thousands of mortgage loans, alleging similar violations and seeking
the remedy of rescission.
In response to mortgage lenders' concerns about their potential
liability for finance charge violations that they viewed as minor, the
Congress enacted a temporary moratorium on such litigation, which has
now been replaced by the 1995 Amendments. The Amendments establish new
liability rules for loans consummated before and after September 30,
1995, establish a new rule that includes mortgage broker fees in the
finance charge disclosure, and clarify the proper treatment of other
fees. In May 1996, the Board published proposed regulations to
implement the amendments with respect to loans made after September 30
(61 FR 26126).
The Board is also amending Regulation Z to provide a rule
addressing the treatment of fees charged in connection with debt
cancellation agreements, which serve purposes similar to credit
insurance. A specialized form of debt cancellation agreement, known as
guaranteed automobile protection or ``GAP,'' is also covered by the new
rule. In response to public comments, the final rule has been modified
slightly from the May 1996 proposal.
Finally, the Board is making a technical amendment to the
definitions of ``business day'' in Regulation Z, 12 CFR 226.2(a)(6).
For clarity, the Board has amended the definitions of ``business day''
to include a specific reference to subpart E.
Under the 1995 Amendments, the statutory provision treating
mortgage broker fees as finance charges becomes effective on September
30, 1996. The other provisions of the 1995 Amendments became effective
upon the law's enactment on September 30, 1995. The Board believes that
revisions to Regulation Z do not impose any additional disclosure
requirements beyond those already required under the statute, as
amended. Accordingly, the revisions to Regulation Z will become
effective on October 21, 1996.
The new rule on debt cancellation fees will also become effective
on October 21. The rule imposes no additional disclosure requirements.
Creditors must continue to treat debt cancellation fees as finance
charges; when the new rule becomes effective creditors will have the
option of excluding voluntary debt cancellation fees from the finance
charge if they meet the specified requirements.
III. Section-by-Section Analysis
Subpart A--General
Section 226.2--Definitions and Rules of Construction
2(a) Definitions
2(a)(6)
Paragraph (2)(a)(6) is adopted as proposed. For purposes of the
Board's rules implementing the Home Ownership and Equity Protection Act
of 1994 in Subpart E of Regulation Z, the ``business day'' definition
for rescission applies. The Board has also updated the list of legal
public holidays to include the Birthday of Martin Luther King, Jr.
Section 226.4--Finance Charge
4(a)(1) Charges by Third Parties
Paragraph 4(a)(1) reflects the general rule for third party charges
currently contained in comment 4(a)-3 of the Official Staff Commentary.
A slight modification has been made for clarity. In general, amounts
charged by third parties are included in the finance charge if the
creditor requires the use of the third party or retains any portion of
the charge (in which case the portion retained is included as a finance
charge).
4(a)(2) Special Rule; Closing Agent Charges
Paragraph 4(a)(2) incorporates the substance of section 2(a) of the
1995 Amendments, and is consistent with the existing interpretation in
comment 4(a)-4 of the Official Staff Commentary. Under the rule, a fee
charged by a third-party closing agent is included in the finance
charge only if the creditor requires the imposition of the charge or
the provision of the service, or retains any portion of the charge.
Accordingly, a courier fee charged by a third-party closing agent is
only a finance charge if the creditor requires the use of the courier
(or to the extent the creditor retains a portion of the charge). The
rule only applies to the third-party serving as the closing agent with
respect to that loan. The final rule has also been modified slightly to
clarify the term ``closing agent.''
4(a)(3) Special Rule; Mortgage Broker Fees
Paragraph 4(a)(3) contains a new rule regarding the treatment of
mortgage broker fees, to implement section 106(a)(6) of the TILA (15
U.S.C. 1605(a)(6)), which becomes effective on September 30, 1996. The
rule requires that all fees charged by a mortgage broker and paid
directly by the consumer be included in the finance charge, whether the
fee is paid to the broker or to the lender for delivery to the broker.
A fee charged by a mortgage broker will be excluded from the finance
charge only if it is the type of fee that would also be excluded when
it is charged by the creditor. In the case of application fees charged
by a mortgage broker, such fees may be excluded from the finance charge
if the mortgage broker charges the fee to all applicants for credit,
whether or not credit is actually extended.
Several commenters questioned the basis for requiring creditors to
disclose, as finance charges, fees that the creditor neither imposes
nor requires. They also expressed concern about creditors' duty for
including brokers' fees in Truth in Lending disclosures when the
existence or amount of such fees may not be known to the creditor.
The new rule is mandated by the 1995 Amendments. Under the Real
Estate Settlement Procedures Act (RESPA) (12 U.S.C. 2601 et seq.),
amounts paid by a consumer directly to a mortgage broker or through the
lender for delivery to the mortgage broker are already required to be
disclosed to the borrower at the loan closing on the HUD-1 or HUD-1A.
See 24 CFR part 3500 appendix A, appendix B para.12. The Board believes
that the new TILA disclosure requirement should not pose a significant
additional burden, and that it is reasonable to require creditors to
use the information from the HUD forms in calculating the finance
charge. Accordingly, the Board expects that creditors will adopt
practices and procedures consistent with their affirmative obligation
to obtain the relevant information from the parties involved.
In the May proposal, the Board noted that fees paid by the funding
party to a broker as a ``yield spread premium,''
[[Page 49239]]
and already included in the finance charge as interest or as points
should not be double counted. Several commenters sought further
clarification, noting that brokers may be compensated by the lender
under various arrangements. The proposal's reference to ``yield spread
premiums'' was only intended to be one example of lender-paid
compensation that must be separately disclosed on the HUD-1 under the
current RESPA rules, but should not be double counted because it is
already included as part of the finance charge.
4(b) Example of Finance Charge
4(b)(10) Debt Cancellation Fees
Debt cancellation agreements serve a purpose similar to credit
insurance, even though the products are not identical in all respects.
Paragraph 4(b)(10) clarifies that fees charged by creditors for debt
cancellation coverage that is written in connection with a credit
transaction are considered finance charges. Conditions under which
voluntary debt cancellation fees may be excluded from the finance
charge are set forth in paragraph 4(d)(3).
Comments by some insurance providers noted that the term ``debt
cancellation agreement'' is not commonly used in reference to GAP
agreements. For purposes of Regulation Z, however, the term ``debt
cancellation agreement'' is used generically to refer to a contract
between a debtor and creditor providing for satisfaction of all or part
of the debt when a specified event occurs. This definition includes GAP
agreements, even though GAP agreements only cancel the portion of the
debt remaining after the application of property insurance benefits.
Some commenters disagreed with the notion that voluntary debt
cancellation fees may be considered finance charges, although they
generally supported the Board's approach in paragraph 4(d)(3),
excluding such fees when appropriate disclosures are provided. Other
commenters believed that debt cancellation agreements are an integral
part of the loan agreement and argue that such fees are necessarily
charged as an incident to the extension of credit, making them finance
charges.
The Board believes that a debt cancellation fee charged by the
creditor satisfies the definition of a finance charge because it is
part of the cost of the credit. The TILA defines a finance charge to
include any charge imposed as an incident to the extension of credit.
The Board has interpreted this definition to include any fee charged by
the creditor in connection with the loan, if it is not charged in
comparable cash transactions and is not subject to an express
exemption. The Board has generally taken a case-by-case approach in
determining whether particular fees are ``finance charges,'' and does
not interpret Regulation Z to automatically exclude all ``voluntary''
charges from the finance charge. As a practical matter, most voluntary
fees are excluded from the finance charge under the separate exclusion
for charges that are payable in a comparable cash transaction, such as
fees for optional maintenance agreements or fees paid to process motor
vehicle registrations. In the case of debt cancellation agreements,
however, the voluntary nature of the arrangement does not alter the
fact that debt cancellation coverage is a feature of the loan affecting
the total price paid for the credit.
Thus, even though a lender may not require a particular loan
feature, the feature may become a term of the credit if it is included.
For example, borrowers obtaining variable-rate loans may have an option
to convert the loan to a fixed interest rate at a subsequent date. Even
though the lender does not require that particular feature, when it is
included for an additional charge (either paid separately at closing or
paid in the form of a higher interest rate or points), that amount
properly represents part of the finance charge for that particular
loan, even though less costly loans may be available without that
feature. This is also the case with debt cancellation coverage, which
alters the fundamental nature of the borrower's repayment obligation.
Although the same loan may be available without that feature, with
respect to a loan that has been structured in this manner, the debt
cancellation fee is one that has been imposed as an incident to that
particular extension of credit. The same rationale applies to premiums
for voluntary credit insurance, which generally are finance charges
under the TILA but may be excluded if specified disclosures are given.
Creditors have reported significant difficulty in determining the
proper treatment of debt cancellation fees under Regulation Z,
particularly GAP fees. Because the status of these agreements under
state insurance laws and regulations is often unclear, creditors have
been unsure whether they may apply the TILA rules excluding certain
credit insurance premiums from the finance charge. Those rules permit
the cost of credit insurance to be excluded if the purchase is
voluntary and certain disclosures are made regarding the terms of the
coverage. For the reasons discussed below, the Board has determined
that similar treatment for debt cancellation fees is appropriate.
Accordingly, paragraph 4(d)(3) provides that debt cancellation fees may
be excluded from the finance charge if the disclosures and requirements
in that paragraph are satisfied.
4(c) Charges Excluded From the Finance Charge
4(c)(7) Real-Estate Related Fees
4(c)(7)(ii)
Paragraph 4(c)(7)(ii) is revised to implement the amendment to
section 106(e)(2) of the TILA (15 U.S.C. 1605(e)(2)). The Board
believes that the amendment does not represent a substantive change
from the current rule.
4(c)(7)(iii)
Paragraph 4(c)(7)(iii) is revised by deleting the reference to
appraisal fees, which is addressed separately in revised paragraph
4(c)(7)(iv).
4(c)(7)(iv)
Former paragraph 4(c)(7)(iv) is redesignated as 4(c)(7)(v). A new
paragraph 4(c)(7)(iv) implements section 106(e)(5) of the TILA (15
U.S.C. 1605(e)(5)), which clarifies that fees related to property
inspections conducted prior to closing for pest infestation or flood
hazard determinations, may be excluded from the finance charge. In
response to commenters' suggestions, the language has been modified to
reflect that the same rule applies to other types of property
inspections conducted as part of the lender's credit decision to assess
the value or condition of the property. The revision is consistent with
comment 4(c)(7)-3 of the Official Staff Commentary, which states that
excluded fees are those charged solely in connection with the initial
decision to extend credit. The exclusion does not apply to fees for
inspections or services to be performed periodically during the term of
the loan.
4(d) Insurance and Debt Cancellation Coverage
4(d)(1) Voluntary Credit Insurance Premiums
Paragraph 4(d)(1)(i) is modified consistent with existing comment
4(d)-1 of the Official Staff Commentary, to clarify that a disclosure
that insurance coverage is not required by the creditor must be in
writing.
[[Page 49240]]
4(d)(3) Voluntary Debt Cancellation Fees
The Board is amending Regulation Z by adding a provision on fees
charged for debt cancellation agreements, which serve a purpose similar
to credit insurance. The new rule allows creditors to exclude fees for
voluntary debt cancellation coverage from the finance charge when
specified disclosures are made. In disclosing debt cancellation fees,
creditors may not use the model forms for insurance premiums unless
debt cancellation coverage constitutes insurance under state law.
Under a debt cancellation agreement, the creditor agrees to cancel
all or part of any remaining debt in the event of an occurrence, such
as the death, disability or unemployment of the borrower. The creditor
may or may not purchase insurance to cover this risk. A specific form
of debt cancellation known as guaranteed automobile protection, or
``GAP,'' is sold in connection with motor vehicle loans. GAP agreements
cancel the remaining debt when the vehicle securing the loan is stolen
or destroyed and the settlement payment made by the consumer's primary
automobile insurance is insufficient to pay the loan balance.
Previously, debt cancellation fees have not been specifically
addressed in Regulation Z. In December 1995, the Board proposed to
issue its first written interpretation on the proper treatment of debt
cancellation fees under then existing rules. The December
interpretation recognized that debt cancellation fees are finance
charges paid as an incident to the extension of credit. In some states,
debt cancellation coverage may be considered insurance, thus the
proposed interpretation noted that in some cases the fees might be
excluded from the finance charge in accordance with the existing rules
in Sec. 226.4(d) for certain types of insurance premiums. For example,
the Board noted that in a state where debt cancellation agreements are
considered or regulated as insurance, Sec. 226.4(d)(1) would allow such
fees to be excluded from the finance charge if the agreement insures
against the death, disability, or loss of income of the borrower and
certain disclosures are given. On the other hand, fees for GAP coverage
not protecting against the types of risk covered in Secs. 226.4(d) (1)
and (2) were to be included in the finance charge, as were other types
of debt cancellation fees in states where the agreements are not
considered to be insurance. The proposed interpretation also noted that
charges for insurance protecting the creditor against credit loss are
finance charges under section 226.4(b)(5) and may not be excluded under
Sec. 226.4(d).
The comments received in response to the proposed December
interpretation were mostly negative. Commenters expressed particular
concern about the need to make a state-by-state determination of
whether such agreements are considered insurance contracts. They noted
that reliance on state law would not create a uniform rule for
measuring the cost of credit, contrary to the purpose of the TILA.
Creditors in some states could quote a lower APR for the same product,
which would not assist consumers in comparison shopping. Even within a
state that treats debt cancellation agreements as insurance, debt
cancellation fees would not be treated uniformly under Regulation Z,
which excludes such fees from the finance charge only if the agreement
covers loss of life, disability, or unemployment, but not if the
agreement covered other contingencies, as in the case of GAP
agreements. Moreover, debt cancellation fees and credit insurance
premiums would be treated differently for purposes of cost disclosures
even though they served a similar purpose to the consumer.
Commenters also expressed concern about the potential compliance
risks associated with making a determination about the status of debt
cancellation agreements, including GAP, in states where the insurance
laws are unclear. Commenters stated that some creditors have refused to
make or purchase loans with GAP coverage due to the uncertainty about
how fees must be disclosed under the TILA. Several lawsuits have
challenged creditors' practices of excluding voluntary GAP fees from
the finance charge, although some courts have held that these fees are
not finance charges in the absence of a contrary ruling by the Board.
In April 1996, the proposed interpretation was withdrawn to allow
the Board to consider amending Regulation Z to provide a separate rule
that would explicitly address GAP and other debt cancellation fees. In
May 1996, the Board proposed such a rule. The proposed rule did not
mirror the withdrawn interpretation which had largely addressed the
fees based on the application of the rules for insurance premiums.
Instead, the Board proposed to treat debt cancellation agreements in a
uniform manner, without regard to their status under state insurance
law.
The Board believes that it is important for Regulation Z to promote
uniformity in the disclosure of similar credit cost features to assist
consumers and to facilitate creditor compliance. Accordingly, the Board
is adopting a new rule to specifically address debt cancellation
agreements, including GAP agreements. Pursuant to its authority under
section 105 of the TILA, the Board is authorized to issue regulations
containing such differentiations or exceptions for any class of
transactions as in the Board's judgment are proper to effectuate the
purposes of the TILA or facilitate compliance with the act. The Board
has determined that the rule being adopted, which allows voluntary debt
cancellation fees to be excluded from the finance charge when certain
disclosures are given, will effectuate the TILA's purpose of providing
uniform disclosures to promote comparison shopping and the informed use
of credit. The new rule also addresses creditors' difficulties with the
existing rules and facilitates compliance with the act.
Comments from credit insurance providers questioned the Board's
authority to issue the rule based on a section 106(d)(4) of the
original TILA, which was deleted in the Truth in Lending Simplification
and Reform Act of 1980 (``Simplification Act''). Section 106 defines
the term ``finance charge'' for purposes of the TILA and former section
106(d)(4) authorized the Board to issue regulations excluding from the
finance charge any ``type of charge which is not for credit'' (emphasis
added). Insurance providers asserted that the deletion of section
106(d)(4) curtailed the Board's general authority to exclude items from
the finance charge by regulation. The Board disagrees with the
insurance providers' interpretation.
The Board has express authority to issue the rule on debt
cancellation fees under section 105 of the TILA. To the extent that the
former section 106(d)(4) may also have provided more specific
authority, its deletion merely eliminated an alternate source of
authority. The Board believes, however, that these commenters have
misinterpreted the purpose of section 106(d)(4) and the reason for the
changes made by the Simplification Act. The Simplification Act sought
to clarify the statutory definition of a ``finance charge'' and did so
by adding language to expressly exclude from the finance charge, all
charges ``payable in a comparable cash transaction.'' This new
statutory exclusion made it unnecessary for the Board to exclude
noncredit charges on an individual basis by regulation. Thus, the
authority originally granted in section 106(d)(4) became obsolete.
There is nothing to suggest that the Simplification Act's revision
to section 106 was intended to limit the Board's
[[Page 49241]]
general regulatory authority under section 105. Section 106(d)(4)
established the Board's authority to exclude charges that were not for
credit. The Board's broader authority under section 105 to make
exceptions also applies to credit-related charges, and was not affected
by the Simplification Act. Debt cancellation fees are credit-related
charges that are not payable in comparable cash transactions, and would
not have been the type of fees governed by section 106(d)(4).
New paragraph 4(d)(3) closely parallels the existing rule
pertaining to credit insurance in Sec. 226.4(d)(1), and excludes fees
paid for similar types of debt cancellation agreements, as well as GAP
agreements, from the finance charge if the specified conditions are
met. Paragraph 4(d)(3) applies whether or not the debt cancellation
agreement is considered to be insurance under state law. The language
of paragraph 4(d)(3) has been modified in the final rule to clarify
that it applies only to specific types of debt cancellation agreements.
Under the final rule, fees for GAP coverage must be disclosed
according to paragraph 4(d)(3) rather than the provisions in paragraph
4(d)(2) for property insurance. Even though GAP coverage is triggered
by the loss of or damage to property, GAP agreements do not insure
against such loss or damage. Instead, GAP agreements typically cover
the remaining balance due on the obligation after traditional property
insurance benefits are exhausted.
Comments from credit insurance providers expressed concern that
consumers will be unaware that debt cancellation agreements differ from
credit insurance. According to these commenters, the differences are
significant and stem largely from the fact that insurance is heavily
regulated while, to date, debt cancellation agreements are largely
unregulated. They also noted that debt cancellation coverage may
require consumers to pay taxes that would not apply to credit insurance
policies. The insurance providers believed that, in the past, the
different treatment afforded to debt cancellation fees and credit
insurance premiums under Regulation Z has protected consumers from the
creditors' utilization of unregulated debt cancellation agreements, but
that the new rule would promote their use. These commenters asserted
that if the TILA cost disclosures are identical for insurance and non-
insurance products, consumers will be misled or misinformed; they
believe that even though greater consumer protection is afforded by the
regulated insurance products, this difference will not be apparent to
consumers.
The Board is mindful that debt cancellation agreements and
traditional insurance products are not identical in all respects. From
the consumer's standpoint, however, both products are available to
satisfy the consumer's liability for the debt in full measure if the
specified contingency occurs. The fact that debt cancellation
agreements may be subject to less oversight by state regulators or
different tax rules is not sufficient in the Board's judgment to
suggest that the fees paid must necessarily be included in the finance
charge and APR for purposes of the TILA's cost disclosures. Whatever
degree of regulation may be appropriate for debt cancellation coverage,
Regulation Z does not affect the ability of appropriate governmental
authorities to implement such protections. The TILA cost disclosures
are not intended to deter creditors from offering unregulated products.
While the TILA seeks to provide uniform disclosures about the cost
and terms of credit to promote comparison shopping, the ultimate task
of assessing the relative value of two different products that are
similarly priced rests with the consumer. Where voluntary credit
insurance and debt cancellation agreements cover the identical
contingency for the same price, requiring the fee to be included in the
finance charge and APR in one loan but not in the other does not fairly
inform the borrower about the relative cost of the two loans. Consumers
are unlikely to become better informed about the distinctions between
these products simply by having the TILA disclosures make one loan
appear costlier than the other. The new rule allows the cost to be
excluded from the finance charge and APR in both cases, so long as the
cost for the initial term of coverage is disclosed along with other
specified items. Consumers are likely to find comparison shopping
easier under this rule to the extent they will have similar cost
disclosures for both products and will not have to account for
different treatment in the finance charge or APR disclosures.
Likewise, consumers comparing loans offered by lenders in two
different states will be able to comparison shop based on these cost
disclosures without considering the impact state insurance laws might
have on the disclosed finance charge or APR. Some commenters suggested
that uniformity could be achieved just as easily if all voluntary debt
cancellation fees were simply included in the finance charge rather
than excluded. Uniformity would not be achieved by the adoption of such
a rule, however, given that in states where debt cancellation coverage
is considered insurance the statutory exclusion for credit insurance
premiums would still allow creditors to exclude some debt cancellation
fees from the finance charge.
The Board believes that treating debt cancellation fees and credit
insurance premiums similarly for purposes of cost disclosure should not
in itself create confusion about the nature of the parties' contractual
relationship or the degree to which that relationship is regulated by
state insurance agencies. The Board agrees that some confusion could
result if creditors use the Board's existing model forms for disclosing
insurance premiums to also disclose debt cancellation fees. Although
the new rule allows both types of charges to be excluded from the
finance charge under similar conditions, it does not authorize
creditors to characterize debt cancellation fees as insurance premiums
for TILA purposes. Creditors can comply with Sec. 226.4(d)(3) by
providing a disclosure that refers to debt cancellation coverage
whether or not the agreement is considered insurance. Creditors may use
the Board's existing credit insurance disclosure forms only if the debt
cancellation coverage constitutes insurance under state law.
4(e) Certain Security-Interest Charges
4(e)(3) Taxes on Security Instruments
Paragraph 4(e)(3), which implements section 106(d)(3) of the TILA
(15 U.S.C. 1605(d)(3)) is consistent with comment 4(e)-1(i) of the
Official Staff Commentary. The new provision provides that taxes levied
on security instruments or on documents evidencing indebtedness
(``intangible property taxes''), that must be paid to record the
security instrument, are excluded from the finance charge. The language
has been modified slightly from the proposal, to clarify that the
exclusion applies when payment of the tax is a requirement for
recording the instrument, regardless of when the fee is paid.
Subpart C--Closed-end Credit
Section 226.17--General Disclosure Requirements
17(a) Form of Disclosures
17(a)(1)
Footnote 38 in paragraph 17(a)(1) is revised to include the
disclosures relating to debt cancellation agreements among those that
may be made together with or separately from the other required
disclosures.
[[Page 49242]]
17(c) Basis of Disclosures and Use of Estimates
17(c)(2)
Paragraph 17(c)(2) is redesignated as 17(c)(2)(i) and modified
slightly to reflect the general rule that disclosures must be based on
the best information reasonably available to the creditor at the time
the disclosures are provided to the consumer.
17(c)(2)(ii)
Paragraph 17(c)(2)(ii) reflects the 1995 amendment to section
121(c) of the TILA (15 U.S.C. 1631(c)), which deals with the disclosure
of per-diem interest charges collected at loan consummation.
Per-diem interest, also known as ``odd-days interest,'' is the
interest that will accrue between consummation and the first regularly-
scheduled payment. A disclosure affected by the amount of per-diem
interest collected at consummation will be considered accurate if the
disclosure is based on the information known to the creditor at the
time the disclosure is prepared, even if the actual charge differs by
the time disclosures are provided to the borrower. Creditors should
exercise reasonable diligence in ascertaining the correct information
when preparing disclosures.
Several commenters requested clarification on how the new $100
finance charge tolerance for mortgage loans applies when the per-diem
interest charges disclosed prior to consummation are inaccurate. Under
the new rule, if finance charge disclosures are affected by per-diem
interest, creditors may rely on the charges known at the time the
disclosures are prepared, and the disclosures will be deemed to be
accurate without regard to the amount of per-diem charges actually paid
at closing. In that case, the $100 finance charge tolerance would not
be needed. If in the same transaction, other components of the finance
charge were understated, the creditor would still have the benefit of
the full $100 tolerance.
As commenters noted, this provision does not have any applicability
in open-end credit transactions.
17(f) Early Disclosures
Paragraph 17(f) is revised to clarify the creditor's duty to
provide new disclosures, which is determined by comparing the APR at
the time of consummation to the APR disclosed earlier.
Section 226.18--Content of Disclosures
18(d) Finance Charge
Section 106(f) of the TILA (15 U.S.C. 1605(f)) establishes a new
tolerance for accuracy in disclosing the finance charge for closed-end
loans secured by real property or dwellings. Section 226.18(d) has been
revised and reorganized to incorporate this change. Commenters
generally supported the regulatory provisions implementing the new
tolerances.
18(d)(1) Mortgage Loans
Paragraph 18(d)(1) provides a new finance charge tolerance
applicable to mortgage loans consummated on or after September 30,
1995. For covered transactions, the disclosed finance charge will be
considered accurate if it is understated by $100 or less or if the
finance charge is overstated. The new tolerance applies to the
disclosed finance charge as well as any disclosure affected by the
finance charge, including the APR. The effect of the new finance charge
tolerance on the disclosed APR is explained in more detail under
paragraph 22(a).
Consumer groups expressed concern that the new statutory tolerance
might be viewed as an opportunity for creditors to intentionally charge
consumers up to $100 more than the finance charge stated in the TILA
disclosures and they refer to the legislative history, which suggests
that the new law was not intended to give lenders the right to pad
fees. They argued that the new tolerances should apply, therefore, only
to creditor errors made in good faith. Although this principle might
appear sound, the Board notes that the existing tolerances in
Regulation Z are not limited to good-faith errors and that application
of a ``good faith'' rule would necessitate a case-by-case determination
of how a particular error occurred, complicating the broad relief
intended by the Congress. The Board believes that imposing a good-faith
standard would be inconsistent with the purpose of the 1995 Amendments,
which is to reduce potential litigation over disclosure errors.
Moreover, with the new $100 tolerance, a creditor making intentional
misstatements would leave little or no margin for making bona fide
errors, risking the type of potential liability that led to enactment
of the 1995 Amendments.
18(d)(2) Other Credit
The existing tolerance for finance charge disclosures, currently in
footnote 41, continues to apply to all closed-end loans other than
mortgage loans, and has been moved into paragraph 18(d)(2).
18(n) Insurance and Debt Cancellation Agreements
Paragraph 18(n) has been revised to include disclosures made in
connection with debt cancellation agreements.
Section 226.19--Certain Residential Mortgage and Variable Rate
Transactions
19(a)(2) Redisclosure Required
Paragraph 19(a)(2) has been further revised for clarity and
consistency with paragraph 17(f).
Section 226.22--Determination of Annual Percentage Rate
22(a) Accuracy of Annual Percentage Rate
Paragraph 22(a) is revised to add new paragraphs (a)(4) and (a)(5).
For closed-end loans secured by real property or dwellings, the new
provisions establish two additional tolerances for accuracy in
disclosing the APR when the disclosed finance charge is within the
tolerances established by the 1995 Amendments.
The TILA contains tolerances for the APR, of either one-quarter or
one-eighth of 1 percent, depending on the type of transaction. These
existing statutory APR tolerances were not altered by the 1995
Amendments, although the amendments create a tolerance for the finance
charge disclosed for mortgage loans as well as ``any disclosure
affected by the finance charge.'' Consumer groups argued that the
Congress intended the new tolerances to apply only to numerical
disclosures other than the APR (such as the ``amount financed'' and the
``total of payments''), for which there is currently no regulatory or
statutory tolerance. The Board believes, however, that the APR is one
of the ``affected disclosures.'' Otherwise, transactions in which the
disclosed finance charge is misstated but considered accurate under the
new tolerance would remain subject to legal challenge based on the
disclosed APR, which seems inconsistent with the legislative intent.
There was broad support for this approach among creditors who commented
on the rule.
22(a)(4) Mortgage Loans
Paragraph 22(a)(4) provides an additional tolerance for APR
disclosures in transactions where the finance charge is understated or
overstated but is considered accurate under the 1995 Amendments. For
example, in a secured home-improvement loan, if a creditor improperly
omits a $100 fee from the
[[Page 49243]]
finance charge, the understated finance charge will now be considered
accurate under Sec. 226.18(d)(1). Under paragraph 22(a)(4), the APR
resulting from the understated finance charge will also be considered
accurate, even if the disclosed APR falls outside of the existing
tolerance of one-eighth of 1 percent provided under section 107(c) of
the TILA. For purposes of determining a borrower's right to rescind a
mortgage loan, an APR resulting from a finance charge that is
considered accurate in accordance with the applicable rule in
Sec. 226.23(g) or (h)(2) will also be considered accurate. The language
has been modified slightly to clarify that new tolerances apply in
addition to the existing tolerances in paragraphs 22(a)(2) and (3).
22(a)(5) Additional Tolerance for Mortgage Loans
In light of the new APR tolerance established under the 1995
Amendments, the Board has adopted an additional APR tolerance (not
provided in the statute) in Sec. 226.22(a)(5). The purpose is to avoid
the anomalous result of imposing liability on a creditor for a
disclosed APR that is incorrect but is closer to the actual APR than
the APR that would be considered accurate under the statutory tolerance
in paragraph 22(a)(4).
For instance, if the omission of a $100 fee from the finance charge
results in an understatement of the finance charge and a disclosed APR
that is understated by one-half of 1 percent, that APR will be
considered accurate under paragraph 22(a)(4), even though it is outside
of the existing APR tolerance of one-eighth of 1 percent. Under
paragraph 22(a)(5), the disclosed APR is considered accurate if it is
understated by less than one-half of 1 percent. Thus, if the actual APR
in this example is 9.00 percent and the $100 omission results in an APR
of 8.50 percent that is considered accurate under paragraph 22(a)(4), a
disclosed APR of 8.75 percent will be within the tolerance in paragraph
22(a)(5). Similarly, if an overstated finance charge results in an
overstated APR, the creditor will not be liable for an overstatement
that is closer to the actual APR.
Under section 105 of the TILA, the Board is authorized to adopt
exceptions to the TILA that will facilitate compliance. Paragraph
22(a)(5) treats as accurate, a disclosed APR that is more accurate than
the one resulting from a misstated finance charge that is considered
accurate under the 1995 Amendments. The Board believes that this rule
will facilitate compliance with the TILA, and prevent disputes over
errors that have no greater effect on consumers beyond the effects
already contemplated by the statutory tolerances. The Board recognizes
that this rule might allow a creditor to disclose an inaccurate APR
that is not derived from either the actual or the disclosed finance
charge. Presumably, this situation will not be common. On balance,
however, the Board believes the rule is consistent with the intent of
the 1995 Amendments.
The language in the proposed rule has been modified slightly to
clarify that the new tolerance is in addition to and not in lieu of the
existing tolerance.
Section 226.23--Right of Rescission
23(b) Notice of Right To Rescind
Paragraph 23(b)(2) clarifies that use of the appropriate model form
approved by the Board, or a comparable form, is required for compliance
with the regulation for those disclosures.
Model form H-9 was revised to ease compliance and to clarify that
it may be used in loan refinancings with the original creditor, whether
or not the creditor is the holder of the note at the time of
refinancing. Some commenters requested further clarification on the
proper use of the form, noting that it does not address the situation
where the original note and mortgage are extinguished and new documents
are executed to cover both the outstanding debt and the amount borrowed
in the new transaction. The form has been revised in order to address
these concerns.
23(g) Tolerances for Accuracy
Paragraph 23(g) implements section 106(f)(2) of the TILA (15 U.S.C.
1605(f)(2)). The Board is applying the rescission tolerances in section
106(f)(2) in addition to, rather than in lieu of, the general
tolerances in section 106(f)(1). The Board believes this is consistent
with the statutory language; it is unlikely that the Congress intended
to allow the rescission remedy to be invoked when the disclosures would
otherwise be considered accurate under the rules for civil and
administrative liability. Most commenters supported these
interpretations. Consumer groups expressed the view that the new
rescission tolerances should only be applied to creditor errors made in
good faith. For the reasons already discussed, the Board believes such
an interpretation would be inconsistent with the legislative intent of
the amendments.
Several commenters sought clarification of what constitutes a loan
where ``no new money is advanced'' for purposes of Sec. 226.23(g)(2).
The rule has been modified for consistency and now refers to a
refinancing in which there has been ``no new advance.'' This phrase
applies to loans for which the new amount financed does not exceed the
unpaid principal balance plus any earned unpaid finance charge on the
existing debt, and amounts attributed solely to the costs of the
refinancing. This is consistent with section 226.23(f)(2) and the
language used in comment 23(f)-4 of the Official Staff Commentary.
23(h) Special Rules for Foreclosures
Paragraph 23(h) implements section 125(i)(2) of the TILA (15 U.S.C.
1635(i)(2)), which provides special rescission rules after a
foreclosure action has been initiated. Most commenters supported the
proposal, although consumer groups believed that the foreclosure rules
should apply to both open- and closed-end mortgage transactions.
The Board proposed to apply the new foreclosure rules only to
closed-end mortgages since there appeared to be no basis for applying
them to open-end lines of credit. The Board believes the Congress
clearly intended to provide additional consumer protections once
foreclosure has been initiated. For example, the statute allows a
consumer to rescind a closed-end loan in foreclosure if the finance
charge is understated by more than $35, even though a larger tolerance
would otherwise apply. Because open-end home equity loans have no
general tolerance for finance charge errors, applying the $35 tolerance
to open-end loans in foreclosure would actually result in less
protection for consumers. The Board believes this would be inconsistent
with the intent of the special foreclosure rules. Accordingly, the
Board interprets the foreclosure tolerances to apply only to closed-end
loans.
The 1995 Amendments also allow a consumer to rescind a loan in
foreclosure if a mortgage broker fee was not properly disclosed,
without regard to the dollar amount involved. Consumer groups commented
that this aspect of the new foreclosure rules should be applied to
open-end transactions. Because broker fees are not generally associated
with open-end lines of credit, it seems unlikely that this was the
legislative intent. There is also no basis for reading this portion of
the foreclosure rules more broadly than the foreclosure tolerances
which apply only to closed-end transactions.
The new rules covering consumers' right to rescind a loan in
foreclosure
[[Page 49244]]
only apply to transactions that were originally subject to the right of
rescission. Consequently, the new rules do not apply to purchase money
loans.
Subpart E--Special Rules for Certain Mortgage Transactions
Section 226.31--General Rules
31(d) Basis of Disclosures and Use of Estimates
Paragraph 31(d) is revised and reorganized, consistent with the
revisions made to Sec. 226.17(c).
31(d)(3)
Paragraph 31(d)(3) incorporates the new rule regarding the
disclosure of per-diem interest charges, consistent with the amendment
in section 226.17(c)(2)(ii). In preparing disclosures, creditors are
expected to exercise reasonable diligence in ascertaining the necessary
information. Paragraph 31(d)(3) has been modified slightly to clarify
that the rule applies to a disclosure made pursuant to Subpart E (such
as the APR) that would be affected by the per-diem interest charge.
31(g) Accuracy of Annual Percentage Rate
Paragraph 31(g) is intended to clarify that for purposes of
determining whether a transaction is covered under Sec. 226.32(a) and
in making the disclosures required by Sec. 226.32(c), a creditor may
rely on its APR calculations if they are considered accurate according
to the APR tolerances provided in Sec. 226.22. For this purpose, the
APR tolerances in paragraph 22(a) (4) and (5) apply only if the finance
charge is considered accurate under Sec. 226.18(d)(1); the rescission
tolerances in Sec. 226.23 (g) or (h) do not apply.
Consumer groups expressed the view that the new tolerances should
not apply in determining whether a loan is covered under
Sec. 226.32(a). The language of the 1995 Amendments suggests that the
new tolerances apply to all closed-end mortgage loans. The Board does
not believe such an interpretation would be consistent with the
legislative intent of the statute.
Appendix H to Part 226--Closed-End Model Forms and Clauses
H-9 Rescission Model Form
The 1995 Amendments clarify that creditors will not be liable for
the form of rescission notice they give to the consumer if the creditor
uses the appropriate form published by the Board or a comparable
notice. In order to ease compliance, model form H-9 has been revised
slightly to clarify that it may be used in loan refinancings with the
original creditor, without regard to whether the original creditor is
the holder of the note at the time of refinancing. Creditors may,
however, continue to use the original forms H-8 and H-9 as appropriate.
Supplement I--Official Staff Interpretations
The revisions would conform the Official Staff Commentary
consistent with the amendments to Regulation Z.
IV. Regulatory Flexibility Analysis
In accordance with section 3(a) of the Regulatory Flexibility Act
(5 U.S.C. 603), the Board's Office of the Secretary has reviewed the
amendments to Regulation Z. Overall, the amendments are not expected to
have any significant impact on small entities. The regulatory revisions
required to implement the 1995 Amendments clarify the existing
disclosure requirements and ease compliance by providing new
tolerances. Under the existing rules, fees charged in connection with
debt cancellation agreements are generally treated as finance charges;
the final rule allows creditors to exclude these fees from the finance
charge if additional disclosures are provided to the consumer.
V. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 et seq.), the Board has reviewed the amendments to Regulation Z
under the authority delegated to the Board by the Office of Management
and Budget. 5 CFR part 1320 appendix A.1.
The respondents are individuals or businesses that regularly offer
or extend consumer credit. The purpose of the TILA and Regulation Z is
to promote the informed use of consumer credit by requiring creditors
to disclose its terms and cost. Creditors must retain records of
compliance for 24 months. The revisions to the requirements in this
regulation are found in 12 CFR 226.4, 226.17, 226.18, 226.19, 226.23,
and 226.31.
The disclosures made by creditors to consumers under Regulation Z
are mandatory pursuant to the Truth in Lending Act (15 U.S.C. 1601 et
seq.). Since the Federal Reserve does not collect any information, no
issue of confidentiality under the Freedom of Information Act arises.
Disclosures relating to specific transactions or accounts are not
publicly available.
The Board's Regulation Z applies to all types of creditors, not
just state member banks. Under the Paperwork Reduction Act, however,
the Federal Reserve accounts for the paperwork burden associated with
Regulation Z only for state member banks. Any estimates of paperwork
burden for institutions other than state member banks that would be
affected by the amendments would be provided by the federal agency or
agencies that supervise those lenders.
There are 1,042 state member banks with an average frequency of
136,294 responses per bank each year. The current estimated burden for
Regulation Z ranges from 5 seconds per response (for disclosures prior
to opening a credit card account) to 30 minutes per response (for
inclusion of information in an advertisement). The combined annual
burden for all state member banks under Regulation Z is estimated to be
1,975,605 hours (an average of 1,896 hours per state member bank).
As stated in the notice of proposed rulemaking, the changes to the
regulation are not expected to increase the ongoing annual burden of
Regulation Z. The Federal Reserve also estimated the associated startup
cost to be $160 per respondent for changing disclosures (or disclosure-
producing software) to include disclosures relating to voluntary debt
cancellation agreements.
The Federal Reserve received comments on the burden estimates from
a multi-bank holding company and from a bank and its affiliated
mortgage company. Both believed that the Federal Reserve's estimate of
the cost of revising the disclosures was too low. However, some
activities cited by the commenters, such as recordkeeping, filing,
auditing, and monitoring, should be ongoing under the current rule. The
burden for these activities is included in the figures above, estimated
to be 1,896 hours per state member bank per year. Also, under the
Paperwork Reduction Act, some activities, while associated with
complying with the regulation, are not considered paperwork burden.
Nonetheless, the Federal Reserve is revising its estimate of the
typical startup cost at a state member bank to $3,000 to include the
cost of additional legal services.
An agency may not collect or sponsor the collection or disclosure
of information, and an organization is not required to collect or
disclose information unless a currently valid OMB control number is
displayed. The OMB control number for the Recordkeeping and Disclosure
Requirements in Connection with Regulation Z is 7100-0199.
Send comments regarding the burden estimate, or any other aspect of
this collection of information, including
[[Page 49245]]
suggestions for reducing the burden, to: Secretary, Board of Governors
of the Federal Reserve System, 20th and C Streets, NW., Washington, DC
20551; and to the Office of Management and Budget, Paperwork Reduction
Project (7100-0199), Washington, DC 20503.
List of Subjects in 12 CFR Part 226
Advertising, Banks, banking, Consumer protection, Credit, Federal
Reserve System, Mortgages, Reporting and recordkeeping requirements,
Truth in lending.
For the reasons set forth in the preamble, the Board amends 12 CFR
Part 226 as follows:
PART 226--TRUTH IN LENDING (REGULATION Z)
1. The authority citation for part 226 continues to read as
follows:
Authority: 12 U.S.C. 3806; 15 U.S.C. 1604 and 1637(c)(5).
2. Section 226.2 is amended by revising paragraph (a)(6) to read as
follows:
Sec. 226.2 Definitions and rules of construction.
(a) Definitions. * * *
* * * * *
(6) Business day means a day on which the creditor's offices are
open to the public for carrying on substantially all of its business
functions. However, for purposes of rescission under Secs. 226.15 and
226.23, and for purposes of Sec. 226.31, the term means all calendar
days except Sundays and the legal public holidays specified in 5 U.S.C.
6103(a), such as New Year's Day, the Birthday of Martin Luther King,
Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.
* * * * *
3. Section 226.4 is amended as follows:
a. Paragraph (a) is revised;
b. New paragraph (b)(10) is added;
c. A heading is added to paragraph (c)(7), the introductory text to
paragraph (c)(7) is republished, paragraphs (c)(7)(ii) and (c)(7)(iii)
are revised, paragraph (c)(7)(iv) is redesignated as paragraph
(c)(7)(v) and republished, and a new paragraph (c)(7)(iv) is added;
d. The paragraph (d) heading is revised, the paragraph (d)(1)
heading and introductory text are revised, paragraph (d)(1)(i) is
revised, and a new paragraph (d)(3) is added.
e. A new paragraph (e)(3) is added.
The revisions and additions are to read as follows:
Sec. 226.4 Finance charge.
(a) Definition. The finance charge is the cost of consumer credit
as a dollar amount. It includes any charge payable directly or
indirectly by the consumer and imposed directly or indirectly by the
creditor as an incident to or a condition of the extension of credit.
It does not include any charge of a type payable in a comparable cash
transaction.
(1) Charges by third parties. The finance charge includes fees and
amounts charged by someone other than the creditor, unless otherwise
excluded under this section, if the creditor:
(i) requires the use of a third party as a condition of or an
incident to the extension of credit, even if the consumer can choose
the third party; or
(ii) retains a portion of the third-party charge, to the extent of
the portion retained.
(2) Special rule; closing agent charges. Fees charged by a third
party that conducts the loan closing (such as a settlement agent,
attorney, or escrow or title company) are finance charges only if the
creditor:
(i) Requires the particular services for which the consumer is
charged;
(ii) Requires the imposition of the charge; or
(iii) Retains a portion of the third-party charge, to the extent of
the portion retained.
(3) Special rule; mortgage broker fees. Fees charged by a mortgage
broker (including fees paid by the consumer directly to the broker or
to the creditor for delivery to the broker) are finance charges even if
the creditor does not require the consumer to use a mortgage broker and
even if the creditor does not retain any portion of the charge.
(b) Example of finance charge * * *
* * * * *
(10) Debt cancellation fees. Charges or premiums paid for debt
cancellation coverage written in connection with a credit transaction,
whether or not the debt cancellation coverage is insurance under
applicable law.
(c) Charges excluded from the finance charge. * * *
* * * * *
(7) Real-estate related fees. The following fees in a transaction
secured by real property or in a residential mortgage transaction, if
the fees are bona fide and reasonable in amount:
* * * * *
(ii) Fees for preparing loan-related documents, such as deeds,
mortgages, and reconveyance or settlement documents.
(iii) Notary and credit report fees.
(iv) Property appraisal fees or fees for inspections to assess the
value or condition of the property if the service is performed prior to
closing, including fees related to pest infestation or flood hazard
determinations.
(v) Amounts required to be paid into escrow or trustee accounts if
the amounts would not otherwise be included in the finance charge.
* * * * *
(d) Insurance and debt cancellation coverage.--(1) Voluntary credit
insurance premiums. Premiums for credit life, accident, health or loss-
of-income insurance may be excluded from the finance charge if the
following conditions are met:
(i) The insurance coverage is not required by the creditor, and
this fact is disclosed in writing.
* * * * *
(3) Voluntary debt cancellation fees. (i) Charges or premiums paid
for debt cancellation coverage of the type specified in paragraph
(d)(3)(ii) of this section may be excluded from the finance charge,
whether or not the coverage is insurance, if the following conditions
are met:
(A) The debt cancellation agreement or coverage is not required by
the creditor, and this fact is disclosed in writing;
(B) The fee or premium for the initial term of coverage is
disclosed. If the term of coverage is less than the term of the credit
transaction, the term of coverage also shall be disclosed. The fee or
premium may be disclosed on a unit-cost basis only in open-end credit
transactions, closed-end credit transactions by mail or telephone under
Sec. 226.17(g), and certain closed-end credit transactions involving a
debt cancellation agreement that limits the total amount of
indebtedness subject to coverage;
(C) The consumer signs or initials an affirmative written request
for coverage after receiving the disclosures specified in this
paragraph. Any consumer in the transaction may sign or initial the
request.
(ii) Paragraph (d)(3)(i) of this section applies to fees paid for
debt cancellation coverage that provides for cancellation of all or
part of the debtor's liability for amounts exceeding the value of the
collateral securing the obligation, or in the event of the loss of
life, health, or income or in case of accident.
(e) Certain security interest charges. * * *
* * * * *
(3) Taxes on security instruments. Any tax levied on security
instruments or on documents evidencing indebtedness if the payment of
such taxes is a requirement for recording the
[[Page 49246]]
instrument securing the evidence of indebtedness.
* * * * *
4. Section 226.17 is amended as follows:
a. In paragraph (a)(1), footnote 38 is revised;
b. Paragraph (c)(2) is redesignated as paragraph (c)(2)(i) and
revised, and paragraph (c)(2)(ii) is added;
c. Paragraph (f) is revised.
The revisions and additions are to read as follows:
Sec. 226.17 General disclosure requirements.
(a) Form of disclosures. (1) * * * 38 * * *
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\38\ The following disclosures may be made together with or
separately from other required disclosures: the creditor's identity
under Sec. 226.18(a), the variable rate example under
Sec. 226.18(f)(4), insurance or debt cancellation under
Sec. 226.18(n), and certain security interest charges under
Sec. 226.18(o).
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* * * * *
(c) Basis of disclosures and use of estimates. * * *
(2)(i) If any information necessary for an accurate disclosure is
unknown to the creditor, the creditor shall make the disclosure based
on the best information reasonably available at the time the disclosure
is provided to the consumer, and shall state clearly that the
disclosure is an estimate.
(ii) For a transaction in which a portion of the interest is
determined on a per-diem basis and collected at consummation, any
disclosure affected by the per-diem interest shall be considered
accurate if the disclosure is based on the information known to the
creditor at the time that the disclosure documents are prepared for
consummation of the transaction.
* * * * *
(f) Early disclosures. If disclosures required by this subpart are
given before the date of consummation of a transaction and a subsequent
event makes them inaccurate, the creditor shall disclose before
consummation: 39
---------------------------------------------------------------------------
\39\ For certain residential mortgage transactions,
Sec. 226.19(a)(2) permits redisclosure no later than consummation or
settlement, whichever is later.
---------------------------------------------------------------------------
(1) any changed term unless the term was based on an estimate in
accordance with Sec. 226.17(c)(2) and was labelled an estimate;
(2) all changed terms, if the annual percentage rate at the time of
consummation varies from the annual percentage rate disclosed earlier
by more than \1/8\ of 1 percentage point in a regular transaction, or
more than \1/4\ of 1 percentage point in an irregular transaction, as
defined in Sec. 226.22(a).
* * * * *
5. Section 226.18 is amended as follows:
a. Footnote 41 in paragraph (d) is removed and paragraph (d)
introductory text is republished;
b. New paragraphs (d)(1) and (d)(2) are added;
c. Footnotes 39 and 40 in paragraph (c) are redesignated as
footnotes 40 and 41 respectively; and
d. Paragraph (n) is revised.
The revisions and additions are to read as follows:
Sec. 226.18 Content of disclosures.
* * * * *
(d) Finance charge. The finance charge, using that term, and a
brief description such as ``the dollar amount the credit will cost
you.''
(1) Mortgage loans. In a transaction secured by real property or a
dwelling, the disclosed finance charge and other disclosures affected
by the disclosed finance charge (including the amount financed and the
annual percentage rate) shall be treated as accurate if the amount
disclosed as the finance charge:
(i) is understated by no more than $100; or
(ii) is greater than the amount required to be disclosed.
(2) Other credit. In any other transaction, the amount disclosed as
the finance charge shall be treated as accurate if, in a transaction
involving an amount financed of $1,000 or less, it is not more than $5
above or below the amount required to be disclosed; or, in a
transaction involving an amount financed of more than $1,000, it is not
more than $10 above or below the amount required to be disclosed.
* * * * *
(n) Insurance and debt cancellation. The items required by
Sec. 226.4(d) in order to exclude certain insurance premiums and debt
cancellation fees from the finance charge.
* * * * *
6. Section 226.19 is amended by revising paragraph (a)(2) to read
as follows:
Sec. 226.19 Certain residential mortgage and variable-rate
transactions.
(a) * * *
(2) Redisclosure required. If the annual percentage rate at the
time of consummation varies from the annual percentage rate disclosed
earlier by more than \1/8\ of 1 percentage point in a regular
transaction or more than \1/4\ of 1 percentage point in an irregular
transaction, as defined in Sec. 226.22, the creditor shall disclose all
the changed terms no later than consummation or settlement.
* * * * *
7. Section 226.22 is amended by adding new paragraphs (a)(4) and
(a)(5) to read as follows:
Sec. 226.22 Determination of annual percentage rate.
(a) Accuracy of annual percentage rate. * * *
* * * * *
(4) Mortgage loans. If the annual percentage rate disclosed in a
transaction secured by real property or a dwelling varies from the
actual rate determined in accordance with paragraph (a)(1) of this
section, in addition to the tolerances applicable under paragraphs
(a)(2) and (3) of this section, the disclosed annual percentage rate
shall also be considered accurate if:
(i) The rate results from the disclosed finance charge; and
(ii)(A) The disclosed finance charge would be considered accurate
under Sec. 226.18(d)(1); or
(B) For purposes of rescission, if the disclosed finance charge
would be considered accurate under Sec. 226.23(g) or (h), whichever
applies.
(5) Additional tolerance for mortgage loans. In a transaction
secured by real property or a dwelling, in addition to the tolerances
applicable under paragraphs (a)(2) and (3) of this section, if the
disclosed finance charge is calculated incorrectly but is considered
accurate under Sec. 226.18(d)(1) or Sec. 226.23(g) or (h), the
disclosed annual percentage rate shall be considered accurate:
(i) If the disclosed finance charge is understated, and the
disclosed annual percentage rate is also understated but it is closer
to the actual annual percentage rate than the rate that would be
considered accurate under paragraph (a)(4) of this section;
(ii) If the disclosed finance charge is overstated, and the
disclosed annual percentage rate is also overstated but it is closer to
the actual annual percentage rate than the rate that would be
considered accurate under paragraph (a)(4) of this section.
* * * * *
8. Section 226.23 is amended as follows:
a. Paragraphs (b)(1) through (b)(5) are redesignated as paragraphs
(b)(1)(i) through (b)(1)(v);
b. The introductory text of paragraph (b) is redesignated as (b)(1)
and republished;
c. A new paragraph (b)(2) is added; and
d. New paragraphs (g) and (h) are added.
The revisions and additions are to read as follows:
[[Page 49247]]
Sec. 226.23 Right of rescission.
* * * * *
(b)(1) Notice of right to rescind. In a transaction subject to
rescission, a creditor shall deliver two copies of the notice of the
right to rescind to each consumer entitled to rescind. The notice shall
be on a separate document that identifies the transaction and shall
clearly and conspicuously disclose the following:
(i) The retention or acquisition of a security interest in the
consumer's principal dwelling.
(ii) The consumer's right to rescind the transaction.
(iii) How to exercise the right to rescind, with a form for that
purpose, designating the address of the creditor's place of business.
(iv) The effects of rescission, as described in paragraph (d) of
this section.
(v) The date the rescission period expires.
(2) Proper form of notice. To satisfy the disclosure requirements
of paragraph (b)(1) of this section, the creditor shall provide the
appropriate model form in Appendix H of this part or a substantially
similar notice.
* * * * *
(g) Tolerances for accuracy.--(1) One-half of 1 percent tolerance.
Except as provided in paragraphs (g)(2) and (h)(2) of this section, the
finance charge and other disclosures affected by the finance charge
(such as the amount financed and the annual percentage rate) shall be
considered accurate for purposes of this section if the disclosed
finance charge:
(i) is understated by no more than \1/2\ of 1 percent of the face
amount of the note or $100, whichever is greater; or
(ii) is greater than the amount required to be disclosed.
(2) One percent tolerance. In a refinancing of a residential
mortgage transaction with a new creditor (other than a transaction
covered by Sec. 226.32), if there is no new advance and no
consolidation of existing loans, the finance charge and other
disclosures affected by the finance charge (such as the amount financed
and the annual percentage rate) shall be considered accurate for
purposes of this section if the disclosed finance charge:
(i) is understated by no more than 1 percent of the face amount of
the note or $100, whichever is greater; or
(ii) is greater than the amount required to be disclosed.
(h) Special rules for foreclosures.--(1) Right to rescind. After
the initiation of foreclosure on the consumer's principal dwelling that
secures the credit obligation, the consumer shall have the right to
rescind the transaction if:
(i) A mortgage broker fee that should have been included in the
finance charge was not included; or
(ii) The creditor did not provide the properly completed
appropriate model form in Appendix H of this part, or a substantially
similar notice of rescission.
(2) Tolerance for disclosures. After the initiation of foreclosure
on the consumer's principal dwelling that secures the credit
obligation, the finance charge and other disclosures affected by the
finance charge (such as the amount financed and the annual percentage
rate) shall be considered accurate for purposes of this section if the
disclosed finance charge:
(i) is understated by no more than $35; or
(ii) is greater than the amount required to be disclosed.
9. Section 226.31 is amended by revising paragraphs (d) and (g) to
read as follows:
Sec. 226.31 General rules.
* * * * *
(d) Basis of disclosures and use of estimates--(1) Legal
Obligation. Disclosures shall reflect the terms of the legal obligation
between the parties.
(2) Estimates. If any information necessary for an accurate
disclosure is unknown to the creditor, the creditor shall make the
disclosure based on the best information reasonably available at the
time the disclosure is provided, and shall state clearly that the
disclosure is an estimate.
(3) Per-diem interest. For a transaction in which a portion of the
interest is determined on a per-diem basis and collected at
consummation, any disclosure affected by the per-diem interest shall be
considered accurate if the disclosure is based on the information known
to the creditor at the time that the disclosure documents are prepared.
* * * * *
(g) Accuracy of annual percentage rate. For purposes of
Sec. 226.32, the annual percentage rate shall be considered accurate,
and may be used in determining whether a transaction is covered by
Sec. 226.32, if it is accurate according to the requirements and within
the tolerances under Sec. 226.22. The finance charge tolerances for
rescission under Sec. 226.23(g) or (h) shall not apply for this
purpose.
10. In Part 226, Appendix H is amended by revising the H-9
Rescission Model Form and the contents listing at the beginning of
Appendix H to read as follows:
Appendix H to Part 226--Closed End Model Forms and Clauses
H-1--Credit Sale Model Form (Sec. 226.18)
H-2--Loan Model Form (Sec. 226.18)
H-3--Amount Financed Itemization Model Form (Sec. 226.18(c))
H-4(A)--Variable-Rate Model Clauses (Sec. 226.18(f)(1))
H-4(B)--Variable-Rate Model Clauses (Sec. 226.18(f)(2))
H-4(C)--Variable-Rate Model Clauses (Sec. 226.19(b))
H-4(D)--Variable-Rate Model Clauses (Sec. 226.20(c))
H-5--Demand Feature Model Clauses (Sec. 226.18(I))
H-6--Assumption Policy Model Clause (Sec. 226.18(q))
H-7--Required Deposit Model Clause (Sec. 226.18(r))
H-8--Rescission Model Form (General) (Sec. 226.23)
H-9--Rescission Model Form (Refinancing With Original Creditor)
(Sec. 226.23)
H-10--Credit Sale Sample
H-11--Installment Loan Sample
H-12--Refinancing Sample
H-13--Mortgage with Demand Feature Sample
H-14--Variable-Rate Mortgage Sample (Sec. 226.19(b))
H-15--Graduated Payment Mortgage Sample
H-16--Mortgage Sample (Sec. 226.32)
* * * * *
H-9--Rescission Model Form (Refinancing with Original Creditor)
NOTICE OF RIGHT TO CANCEL
Your Right to Cancel
You are entering into a new transaction to increase the amount
of credit previously provided to you. Your home is the security for
this new transaction. You have a legal right under federal law to
cancel this new transaction, without cost, within three business
days from whichever of the following events occurs last:
(1) the date of this new transaction, which is ________________;
or
(2) the date you received your new Truth in Lending disclosures;
or
(3) the date you received this notice of your right to cancel.
If you cancel this new transaction, it will not affect any
amount that you presently owe. Your home is the security for that
amount. Within 20 calendar days after we receive your notice of
cancellation of this new transaction, we must take the steps
necessary to reflect the fact that your home does not secure the
increase of credit. We must also return any money you have given to
us or anyone else in connection with this new transaction.
You may keep any money we have given you in this new transaction
until we have done the things mentioned above, but you must then
offer to return the money at the address below.
[[Page 49248]]
If we do not take possession of the money within 20 calendar
days of your offer, you may keep it without further obligation.
How To Cancel
If you decide to cancel this new transaction, you may do so by
notifying us in writing, at
----------------------------------------------------------------------
(Creditor's name and business address).
You may use any written statement that is signed and dated by
you and states your intention to cancel, or you may use this notice
by dating and signing below. Keep one copy of this notice because it
contains important information about your rights.
If you cancel by mail or telegram, you must send the notice no
later than midnight of
----------------------------------------------------------------------
(Date)-----------------------------------------------------------------
(or midnight of the third business day following the latest of the
three events listed above).
If you send or deliver your written notice to cancel some other
way, it must be delivered to the above address no later than that
time.
I WISH TO CANCEL
----------------------------------------------------------------------
Consumer's Signature
----------------------------------------------------------------------
Date
11. In Supplement I to Part 226, under Section 226.4--Finance
Charge, under 4(a) Definition, paragraph 3.ii. is removed.
12. In Supplement I to Part 226, under Section 226.17--General
Disclosure Requirements, under 17(c) Basis of disclosures and use of
estimates, paragraph 17(c)(2) is redesignated as paragraph 17(c)(2)(i):
Supplement I--Official Staff Interpretations
* * * * *
Section 226.17--General Disclosure Requirements
* * * * *
17(c) Basis of Disclosures and Use of Estimates
* * * * *
Paragraph 17(c)(2)(i).
* * * * *
13. In Supplement I to Part 226, under Section 226.18--Content of
Disclosures, under 18(d) Finance charge, paragraph 2 is removed.
14. In Supplement I to Part 226, under Section 226.23--Right of
Rescission, under 23(b) Notice of right to rescind, the first sentence
of paragraph 3 is revised to read as follows:
Section 226.23--Right of Rescission.
* * * * *
23(b) Notice of right to rescind
* * * * *
3. Content. The notice must include all of the information
outlined in Section 226.23(b)(1)(i) through (v). * * *
* * * * *
By order of the Board of Governors of the Federal Reserve
System, September 13, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-23951 Filed 9-18-96; 8:45 am]
BILLING CODE 6210-01-P
Complete official Federal Register PDF
FR Doc. 96-23948 Establishment of Class E Airspace; Currituck, NC
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49254-49255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23948]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 71
[Airspace Docket No. 96-ASO-16]
Establishment of Class E Airspace; Currituck, NC
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
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SUMMARY: This amendment establishes Class E airspace at Currituck, NC.
A GPS RWY 22 Standard Instrument Approach Procedure (SIAP) has been
developed for Currituck County Airport. Controlled airspace extending
upward from 700 feet above the surface (AGL) is needed to accommodate
this SIAP and for instrument flight rules (IFR) operations at the
airport. The operating status of the airport will change from VFR to
include IFR operations concurrent with publication of this SIAP.
EFFECTIVE DATE: 0901 UTC, December 5, 1996.
FOR FURTHER INFORMATION CONTACT: Benny L. McGlamery, Operations Branch,
Air Traffic Division, Federal Aviation Administration, P.O. Box 20636,
Atlanta, Georgia 30320; telephone (404) 305-5570.
SUPPLEMENTARY INFORMATION:
History
On July 10, 1996, the FAA proposed to amend Part 71 of the Federal
Aviation Regulations (14 CFR Part 71) by establishing Class E airspace
at Currituck, NC, (61 FR 36312). This action will provide adequate
Class E airspace for IFR operations at Currituck County Airport.
Interested parties were invited to participate in this rulemaking
proceeding by submitting written comments on the proposal to the FAA.
No comments objecting to the proposal were received. Designations for
Class E airspace extending upward from 700 feet or more above the
surface are published in Paragraph 6005 of FAA Order 7400.9D dated
September 4, 1996,
[[Page 49255]]
and effective September 16, 1996. The Class E airspace designation
listed in this document will be published subsequently in the Order.
The Rule
This amendment to Part 71 of the Federal Aviation Regulations (14
CFR part 71) establishes Class E airspace at Currituck, NC, to
accommodate a GPS RWY 22 SIAP and for IFR operations at Currituck
County Airport. The operating status of the airport will be changed
from VFR to include IFR operations concurrent with publication of this
SIAP.
The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore, (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it is
certified that this rule will not have a significant economic impact on
a substantial number of small entities under the criteria of the
Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
Adoption of the Amendment
In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR Part 71 as follows:
PART 71--[AMENDED]
1. The authority citation for 14 CFR Part 71 continues to read as
follows:
Authority: 49 U.S.C. 106(g); 40103, 40113, 40120; EO 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of Federal
Aviation Administration Order 7400.9D, Airspace Designations and
Reporting Points, dated September 4, 1996, and effective September 16,
1996, is amended as follows:
Paragraph 6005 Class E airspace areas extending upward from 700
feet above the surface of the earth.
* * * * *
ASO NC E5 Currituck, NC [New]
Currituck County Airport, NC,
(Lat. 36 deg.23'56''N, long. 76 deg.00'59''W).
That airspace extending upward from 700 feet above the surface
within a 6.4-mile radius of Currituck County Airport.
* * * * *
Issued in College Park, Georgia, on September 10, 1996.
Benny L. McGlamery,
Acting Manager, Air Traffic Division, Southern Region.
[FR Doc. 96-23948 Filed 9-18-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-23947 Amendment to Class D Airspace; Smyrna, TN
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Page 49254]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23947]
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DEPARTMENT OF TRANSPORTATION
14 CFR Part 71
[Airspace Docket No. 96-ASO-15]
Amendment to Class D Airspace; Smyrna, TN
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment modifies Class D surface area airspace at
Smyrna, TN. Due to the relocation of the Nashville VORTAC, an airspace
review of the Smyrna, TN, Class D airspace area was conducted. As a
result of the airspace review, it was determined that the Smyrna Class
D airspace area for the Smyrna Airport requires redefinition by
removing a small exclusion and reducing the height from 3,000 feet to
2,000 feet MSL in the northwest quadrant of the Smyrna Class D airspace
area.
EFFECTIVE DATE: 0901 UTC, December 5, 1996.
FOR FURTHER INFORMATION CONTACT:
Benny L. McGlamery, System Management Branch, Air Traffic Division,
Federal Aviation Administration, P.O. Box 20636, Atlanta, Georgia
30320; telephone (404) 305-5570.
SUPPLEMENTARY INFORMATION:
History
On July 17, 1996, the FAA proposed to amend Part 71 of the Federal
Aviation Regulations (14 CFR Part 71) by modifying Class D airspace at
Smyrna, TN (61 FR 37230). This action would provide adequate Class D
airspace for IFR operations at the Smyrna Airport.
Interested parties were invited to participate in this rulemaking
proceeding by submitting written comments on the proposal to the FAA.
No comments objecting to the proposal were received. Class D airspace
designations are published in Paragraph 5000 of FAA Order 7400.9D,
dated September 4, 1996, and effective September 16, 1996, which is
incorporated by reference in 14 CFR 71.1. The Class D airspace
designation listed in this document will be published subsequently in
the Order.
The Rule
This amendment to Part 71 of the Federal Aviation Regulations (14
CFR part 71) modifies Class D airspace at Smyrna, TN, for Smyrna
Airport by removing a small exclusion and reducing the height from
3,000 feet to 2,000 feet MSL in the northwest quadrant of the Smyrna
Class D airspace area.
The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore, (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it is
certified that this rule will not have a significant economic impact on
a substantial number of small entities under the criteria of the
Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
Adoption of the Amendment
In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR Part 71 as follows:
PART 71--[AMENDED]
1. The authority citation for 14 CFR Part 71 continues to read as
follows:
Authority: 49 U.S.C. 106(g); 40103, 40113, 40120; EO 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of Federal
Aviation Administration Order 7400.9D, Airspace Designations and
Reporting Points, dated September 4, 1996, and effective September 16,
1996, is amended as follows:
Paragraph 5000 Class D airspace.
* * * * *
ASO TN D Smyrna, TN [Revised]
Smyrna Airport, TN,
(Lat. 36 deg.00'32'' N, long. 86 deg.31'12'' W)
That airspace extending upward from the surface to and including
3,000 feet MSL within a 3.9-mile radius of the Smyrna Airport,
excluding that airspace within the Nashville Class C airspace area.
This Class D airspace area is effective during the specific dates
and times established in advance by a Notice to Airmen. The
effective dates and times will thereafter be continuously published
in the Airport/Facility Directory.
* * * * *
Issued in College Park, Georgia, on September 10, 1996.
Benny L. McGlamery
Acting Manager, Air Traffic Division, Southern Region.
[FR Doc. 96-23947 Filed 9-18-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-23946 Amendment to Class E Airspace; Bowling Green, KY
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49255-49256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23946]
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DEPARTMENT OF TRANSPORTATION
14 CFR Part 71
[Airspace Docket No. 96-ASO-13]
Amendment to Class E Airspace; Bowling Green, KY
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
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SUMMARY: This amendment modifies the Class E airspace area at Bowling
Green, KY. An automated weather observing system has been installed at
the Bowling Green-Warren County Regional Airport. This system transmits
the required weather observations continuously to the Memphis Air Route
Traffic Control Center, which is the controlling facility for the
airport. Therefore, the Class E2 surface area is amended from part time
to continuous.
EFFECTIVE DATE: 0901 UTC, December 5, 1996.
FOR FURTHER INFORMATION CONTACT:
Benny L. McGlamery, System Management Branch, Air Traffic Division,
Federal Aviation Administration, P.O. Box 20636, Atlanta, Georgia
30320; telephone (404) 305-5570.
SUPPLEMENTARY INFORMATION:
History
On July 10, 1996, the FAA proposed to amend Part 71 of the Federal
Aviation Regulations (14 CFR Part 71) by modifying Class E airspace at
Bowling Green, KY (61 Fr 36311). This action would provide adequate
Class E airspace for IFR operations at the Bowling Green-Warren County
Regional Airport.
Interested parties were invited to participate in this rulemaking
proceeding by submitting written comments on the proposal to the FAA.
No comments objecting to the proposal were received. Class E airspace
areas designated as a surface area for an airport are published in
Paragraph 6002 of FAA Order 7400.9D dated September 4, 1996, and
effective September 16, 1996, which is incorporated by reference in 14
CFR 71.1. The Class E airspace designation listed in this document will
be published subsequently in the Order.
The Rule
This amendment to Part 71 of the Federal Aviation Regulations (14
CFR part 71) modifies Class E airspace at Bowling Green, KY. An
automated weather observing system has been installed at the Bowling
Green-Warren County Regional Airport. This system transmits the
required weather observations continuously to the Memphis Air Route
Traffic Control Center, which is the controlling facility for the
airport. Therefore, the Class E2 surface area is amended from part time
to continuous.
The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore, (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it is
certified that this rule will not have a significant economic impact on
a substantial number of small entities under the criteria of the
Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 71
Airspace, Incorporation by reference, Navigation (air).
Adoption of the Amendment
In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR Part 71 as follows:
PART 71--[AMENDED]
1. The authority citation for 14 CFR Part 71 continues to read as
follows:
Authority: 49 U.S.C. 106(g); 40103, 40113, 40120; EO 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389; 14 CFR 11.69.
Sec. 71.1 [Amended]
2. The incorporation by reference in 14 CFR 71.1 of Federal
Aviation Administration Order 7400.9D, Airspace Designations and
Reporting Points, dated September 4, 1996, and effective September 16,
1996, is amended as follows:
[[Page 49256]]
Paragraph 6002 Class E airspace areas designated as a surface area
for an airport.
* * * * *
ASO KY E2 Bowling Green, KY [Revised]
Bowling Green-Warren County Regional Airport, KY,
(Lat. 36 deg.57'52'' N, long. 86 deg.25'11'' W).
Bowling Green VORTAC,
(Lat. 36 deg.55'43'' N, long. 86 deg.26'36'' W).
Within a 4.2-mile radius of Bowling Green-Warren County Regional
Airport and within 3.5 miles each side of Bowling Green VORTAC
206 deg. radial, extending from the 4.2-mile radius to 7 miles
southwest of the VORTAC.
* * * * *
Issued in College Park, Georgia, on September 10, 1996.
Benny L. McGlamery,
Acting Manager, Air Traffic Division, Southern Region.
[FR Doc. 96-23946 Filed 9-19-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-23945 IFR Altitudes; Miscellaneous Amendments
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49256-49259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23945]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 95
[Docket No. 28654; Amdt. No. 398]
IFR Altitudes; Miscellaneous Amendments
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment adopts miscellaneous amendments to the required
IFR (instrument flight rules) altitudes and changeover points for
certain Federal airways, jet routes, or direct routes for which a
minimum or maximum en route authorized IFR altitude is prescribed. This
regulatory action is needed because of changes occurring in the
National Airspace System. These changes are designed to provide for the
safe and efficient use of the navigable airspace under instrument
conditions in the affected areas.
EFFECTIVE DATE: 0901 UTC, October 10, 1996.
FOR FURTHER INFORMATION CONTACT: Paul J. Best, Flight Procedures
Standards Branch (AFS-420), Technical Programs Division, Flight
Standards Service, Federal Aviation Administration, 800 Independence
Avenue SW., Washington, D.C. 20591; telephone: (202) 267-8277.
SUPPLEMENTARY INFORMATION: This amendment to part 95 of the Federal
Aviation Regulations (14 CFR part 95) amends, suspends, or revokes IFR
altitudes governing the operation of all aircraft in flight over a
specified route or any portion of that route, as well as the changeover
points (COPs) for Federal airways, jet routes, or direct routes as
prescribed in part 95.
The Rule
The specified IFR altitudes, when used in conjunction with the
prescribed changeover points for those routes, ensure navigation aid
coverage that is adequate for safe flight operations and free of
frequency interference. The reasons and circumstances that create the
need for this amendment involve matters of flight safety and
operational efficiency in the National Airspace System, are related to
published aeronautical charts that are essential to the user, and
provide for the safe and efficient use of the navigable airspace. In
addition, those various reasons or circumstances require making this
amendment effective before the next schedule charting and publication
date of the flight information to assure its timely availability to the
user. The effective date of this amendment reflects those
considerations. In view of the close and immediate relationship between
these regulatory changes and safety in air commerce, I find that notice
and public procedure before adopting this amendment are impracticable
and contrary to the public interest and that good cause exists for
making the amendment effective in less than 30 days. The FAA has
determined that this regulation only involves an established body of
technical regulations for which frequent and routine amendments are
necessary to keep them operationally current.
It, therefore--(1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. For the same reason, the FAA
certifies that this amendment will not have a significant economic
impact on a substantial number of small entities under the criteria of
the Regulatory Flexibility Act.
List of Subjects in 14 CFR Part 95
Airspace, Navigation (air).
Issued in Washington, D.C. on September 27, 1996.
Thomas C. Accardi,
Director, Flight Standards Service.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, part 95 of the Federal Aviation Regulations (14 CFR part
95) is amended as follows effective at 0901 UTC.
1. The authority citation for part 95 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120,
44502, 44514, 44719, 44721.
2. Part 95 is amended as follows:
Revisions to Minimum Enroute IFR Altitudes & Changeover Points Amendment
398 Effective Date, October 10, 1996
------------------------------------------------------------------------
From To MEA
------------------------------------------------------------------------
Sec. 95.1001 DIRECT ROUTES--U.S.
Sec. 95.48 GREEN FEDERAL AIRWAY
8
IS AMENDED TO READ IN PART
CAMPBELL LAKE, AK NDB........ GLENNALLEN, AK NDB...... 10200
ATLANTIC ROUTES
A638
GUYRO, VI FIX................ SLUGO, VI FIX........... 4000
SLUGO, VI FIX................ SAINT MAARTEN, NA VOR/ 3000
DME.
Sec. 95.6002 VOR FEDERAL AIRWAY
2
IS AMENDED TO READ IN PART
ALBANY, NY VORTAC............ WARIC, MA FIX........... 5000
WARIC, MA FIX................ GARDNER, MA VORTAC...... *4000
*3500--MOCA
Sec. 95.6014 VOR FEDERAL AIRWAY
14
IS AMENDED TO READ IN PART
ALBANY, NY VORTAC............ WARIC, MA FIX........... 5000
[[Page 49257]]
WARIC, MA FIX................ GARDNER, MA VORTAC...... *4000
*3500--MOCA
Sec. 95.6015 VOR FEDERAL AIRWAY
15
IS AMENDED TO READ IN PART
WACO, TX VORTAC.............. CEDAR CREEK, TX VORTAC.. 2500
CEDAR CREEK, TX VORTAC....... BONHAM, TX VORTAC....... *3500
*2200--MOCA
BONHAM, TX VORTAC............ ARDMORE, OK VORTAC...... 3600
Sec. 95.6016 VOR FEDERAL AIRWAY
16
IS AMENDED TO READ IN PART
MILLSAP, TX VORTAC........... GLEN ROSE, TX VORTAC.... 3000
GLEN ROSE, TX VORTAC......... CEDAR CREEK, TX VORTAC.. *3000
*2200--MOCA
CEDAR CREEK, TX VORTAC....... QUITMAN, TX VOR/DME..... *2500
*1900--MOCA
Sec. 95.6017 VOR FEDERAL AIRWAY
17
IS AMENDED TO READ IN PART
WACO, TX VORTAC.............. GLEN ROSE, TX VORTAC.... 3000
GLEN ROSE, TX VORTAC......... MILLSAP, TX VORTAC...... 3000
MILLSAP, TX VORTAC........... BOWIE, TX VORTAC........ *3000
*2500--MOCA
BOWIE, TX VORTAC............. DUNCAN, OK VOR/DME...... *3000
*2500--MOCA
Sec. 95.6018 VOR FEDERAL AIRWAY
18
IS AMENDED TO READ IN PART
MILLSAP, TX VORTAC........... GLEN ROSE, TX VORTAC.... 3000
GLEN ROSE, TX VORTAC......... CEDAR CREEK, TX VORTAC.. *3000
*2200--MOCA
CEDAR CREEK, TX VORTAC....... QUITMAN, TX VOR/DME..... *2500
*1900--MOCA
Sec. 95.6054 VOR FEDERAL AIRWAY
54
IS AMENDED TO READ IN PART
WACO, TX VORTAC.............. CEDAR CREEK, TX VORTAC.. 2500
CEDAR CREEK, TX VORTAC....... QUITMAN, TX VOR/DME..... *2500
*1900--MOCA
Sec. 95.6062 VOR FEDERAL AIRWAY
62
IS AMENDED TO READ IN PART
ABILENE, TX VORTAC........... FLECK, TX FIX........... 3300
FLECK, TX FIX................ GEENI, TX FIX........... *4000
*3300--MOCA
GEENI, TX FIX................ GLEN ROSE, TX VORTAC.... *3500
*3000--MOCA
Sec. 95.6063 VOR FEDERAL AIRWAY
63
IS AMENDED TO READ IN PART
BONHAM, TX VORTAC............ MC ALESTER, OK VORTAC... *3000
*2100--MOCA
Sec. 95.6066 VOR FEDERAL AIRWAY
66
IS AMENDED TO READ IN PART
ABILENE, TX VORTAC........... BOWIE, TX VORTAC........ 3500
BOWIE, TX VORTAC............. BONHAM, TX VORTAC....... 3700
BONHAM, TX VORTAC............ SULPHUR SPRINGS, TX VOR/ 2500
DME.
Sec. 95.6094 VOR FEDERAL AIRWAY
94
IS AMENDED TO READ IN PART
TUSCOLA, TX VOR/DME.......... GEENI, TX FIX........... 4000
GEENI, TX FIX................ GLEN ROSE, TX VORTAC.... *3500
*3000-MOCA
GLENROSE, TX VORTAC.......... CEDAR CREEK, TX VORTAC.. *3000
*2200-MOCA
CEDAR CREEK, TX VORTAC....... GREGG COUNTY, TX VORTAC. 2500
Sec. 95.6114 VOR FEDERAL AIRWAY
114
IS AMENDED TO READ IN PART
WICHITA FALLS, TX VORTAC..... BONHAM, TX VORTAC....... 3000
BONHAM, TX VORTAC............ QUITMAN, TX VOR/DME..... 2500
Sec. 95.6124 VOR FEDERAL AIRWAY
124
IS AMENDED TO READ IN PART
BONHAM, TX VORTAC............ PARIS, TX VOR/DME....... 2200
Sec. 95.6161 VOR FEDERAL AIRWAY
161
IS AMENDED TO READ IN PART
LLANO, TX VORTAC............. *BUILT, TX FIX.......... **4500
[[Page 49258]]
*6000-MRA
**2800-MOCA
BUILT, TX FIX................ DUFFA, TX FIX........... *6000
*2700-MOCA
DUFFA, TX FIX................ MILLSAP, TX VORTAC...... 3000
MILLSAP, TX VORTAC........... BOWIE, TX VORTAC........ *3000
*2500-MOCA
BOWIE, TX VORTAC............. ARDMORE, OK VORTAC...... 3000
Sec. 95.6163 VOR FEDERAL AIRWAY
163
IS AMENDED TO READ IN PART
LAMPASAS, TX VORTAC.......... GLEN ROSE, TX VORTAC.... *3500
*3000-MOCA
GLEN ROSE, TX VORTAC......... MILLSAP, TX VORTAC...... 3000
MILLSAP, TX VORTAC........... BOWIE, TX VORTAC........ *3000
*2500-MOCA
BOWIE, TX VORTAC............. ARDMORE, OK VORTAC...... 3000
Sec. 95.6194 VOR FEDERAL AIRWAY
194
IS AMENDED TO READ IN PART
CEDAR CREEK, TX VORTAC....... KISER, TX FIX........... 2100
KISER, TX FIX................ COLLEGE STATION, TX 4000
VORTAC.
Sec. 95.6205 VOR FEDERAL AIRWAY
205
IS AMENDED TO READ IN PART
BRADLEY, CT VORTAC........... DARTH, CT FIX........... *6000
*2200-MOCA
DARTH, CT FIX................ PUTNAM, CT VOR/DME...... *3000
2300-MOCA
Sec. 95.6234 VOR FEDERAL AIRWAY
234
IS AMENDED TO READ IN PART
VICHY, MO VOR/DME............ DELMA, MO DIX........... 3000
Sec. 95.6238 VOR FEDERAL AIRWAY
238
IS AMENDED TO READ IN PART
LENOX MO FIX................. DELMA, MO FIX........... 3000
Sec. 95.6278 VOR FEDERAL AIRWAY
278
IS AMENDED TO READ IN PART
GUTHRIE, TX VORTAC........... BOWIE, TX VORTAC........ 3300
BOWIE, TX VORTAC............. BONHAM, TX VORTAC....... 3700
BONHAM, TX VORTAC............ PARIS, TX VOR/DME....... 2200
Sec. 95.6355 VOR FEDERAL AIRWAY
355
IS AMENDED TO READ IN PART
BOWIE, TX VORTAC............. WICHITA FALLS, TX VORTAC 3000
Sec. 95.6358 VOR FEDERAL AIRWAY
358
IS AMENDED TO READ IN PART
WACO, TX VORTAC.............. GLEN ROSE, TX VORTAC.... 3000
GLEN ROSE, TX VORTAC......... MILLSAP, TX VORTAC...... 3000
MILLSAP, TX VORTAC........... BOWIE, TX VORTAC........ *3000
*2500-MOCA
BOWIE, TX VORTAC............. ARDMORE, OK VORTAC...... 3000
Sec. 95.6477 VOR FEDERAL AIRWAY
477
IS ADMENDED TO READ IN PART
LEONA, TX VORTAC............. CEDAR CREEK TX VORTAC... 2100
Sec. 95.6568 VOR FEDERAL AIRWAY
568
IS AMENDED TO READ IN PART
BUILT, TX FIX................ GLEN ROSE, TX VORTAC.... *3500
*3000--MOCA
GLEN ROSE, TX VORTAC......... MILLSAP, TX VORTAC...... 3000
Sec. 95.6569 VOR FEDERAL AIRWAY
569
IS AMENDED TO READ IN PART
FRANKSTON, TX VOR/DME........ CEDAR CREEK, TX VORTAC.. 1800
Sec. 95.6571 VOR FEDERAL AIRWAY
571
IS AMENDED TO READ IN PART
LEONA, TX VORTAC............. CEDAR CREEK, TX VORTAC.. 2100
Sec. 95.6583 VOR FEDERAL AIRWAY
583
IS AMENDED BY ADDING
QUITMAN, TX VOR/DME.......... PARIS, TX VOR/DME....... 2100
PARIS, TX VOR/DME............ MC ALESTER, OK VORTAC... 2600
------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
From To MEA MAA
----------------------------------------------------------------------------------------------------------------
Sec. 95.7066 JET ROUTE NO. 66
IS AMENDED TO READ IN PART
[[Page 49259]]
DALLAS/FORT WORTH, TX VORTAC.............. BONHAM, TX VORTAC..................... 18000 45000
BONHAM, TX VORTAC......................... LITTLE ROCK, AR VORTAC................ 18000 45000
Sec. 95.7181 JET ROUTE NO. 181
IS ADDED TO READ
DALLAS/FORT WORTH, TX VORTAC.............. OKMULGEE, OK VOR...................... 19000 45000
OKMULGEE, OK VOR.......................... NEOSHO, MO VOR/DME.................... 18000 45000
NEOSHO, MO VOR/DME........................ BRADFORD, IL VORTAC................... 18000 45000
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Change over points
From To ----------------------------
Distance From
----------------------------------------------------------------------------------------------------------------
Sec. 95.8003 VOR FEDERAL AIRWAYS CHANGEOVER
POINTS
V-15
IS AMENDED BY ADDING
AIRWAY SEGMENT
CEDAR CREEK, TX VORTAC................... BONHAM, TX VORTAC................... 20 CEDAR CREEK
V-569
IS AMENDED BY ADDING
AIRWAY SEGMENT
FRANKSTON, TX VOR/DME.................... CEDAR CREEK, TX VORTAC.............. 5 FRANKSTON
Sec. 95.8005 JET ROUTES CHANGEOVER POINTS
J-181
IS AMENDED BY ADDING
AIRWAY SEGMENT
DALLAS/FORT WORTH, TX VORTAC............. OKMULGEE, OK VOR.................... 139 DALLAS/FORT
WORTH
OKMULGEE, OK VOR......................... NEOSHO, MO VOR/DME.................. 58 OKMULGEE
----------------------------------------------------------------------------------------------------------------
[FR Doc. 96-23945 Filed 9-18-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-23911 National Emission Standards for Hazardous Air Pollutants for Source Categories: Perchloroethylene Dry Cleaning Facilities; Amendments
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49263-49265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23911]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 63
[AD-FRL-5612-2]
RIN 2060-AF90
National Emission Standards for Hazardous Air Pollutants for
Source Categories: Perchloroethylene Dry Cleaning Facilities;
Amendments
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final amendments to rule.
-----------------------------------------------------------------------
SUMMARY: This action promulgates amendments to the national emission
standards for hazardous air pollutants (NESHAP) for perchloroethylene
(PCE) dry cleaning facilities. These amendments were proposed in the
Federal Register on May 3, 1996; the NESHAP was promulgated in the
Federal Register on September 22, 1993. The Administrator is
promulgating these amendments to implement a settlement agreement that
the EPA has entered into regarding a small number of transfer machines.
EFFECTIVE DATE: September 19, 1996.
ADDRESSES: Docket. Docket Number A-95-16, containing supporting
information used in developing the proposed amendments, is available
for public inspection and copying between the hours of 8 a.m. and 5:30
p.m., Monday through Friday (except for government holidays) at The Air
and Radiation Docket and Information Center, U.S. Environmental
Protection Agency, 401 M Street, SW, Washington, DC 20460. The Air and
Radiation Docket and Information Center may be reached at (202) 260-
7548. A reasonable fee may be charged for copying.
FOR FURTHER INFORMATION CONTACT: Mr. George Smith at (919) 541-1549,
Emission Standards Division (MD-13), U.S. Environmental Protection
Agency, Research Triangle Park, North Carolina 27711.
SUPPLEMENTARY INFORMATION:
Regulated entities. Entities regulated by this action are dry
cleaning facilities that use perchloroethylene. Regulated categories
and entities include:
------------------------------------------------------------------------
Examples of regulated
Category entities
------------------------------------------------------------------------
Perchloroethylene dry cleaning facilities. Perchloroethylene dry
cleaning facilities that
installed transfer machines
between proposal and
promulgation.
------------------------------------------------------------------------
The above table provides a guide for readers regarding entities
likely to be regulated by this action. However, to determine whether
your facility is regulated by this action you should carefully examine
the applicability criteria in 40 CFR. 63.320 as amended by today's
action. If you have questions regarding the applicability of this
action to a particular entity, consult the person listed in the
preceding FOR FURTHER INFORMATION CONTACT section.
The information presented in this preamble is organized as follows:
I. Background, Summary, and Rationale for Promulgated Chances to
Rule
II. Comments Received on Proposed Changes to Rule
III. Administrative Requirements
A. Paperwork Reduction Act
B. Executive Order 12866 Review
C. Unfunded Mandates Reform Act
D. Regulatory Flexibility Analysis
E. Submission to Congress and the General Accounting Office
[[Page 49264]]
I. Background, Summary, and Rationale for Promulgated Changes To
Rule
National emission standards for hazardous air pollutants (NESHAP)
for perchloroethylene (PCE) dry cleaning facilities were promulgated on
September 22, 1993 (58 FR 49354), and amended on December 20, 1993 (58
FR 66287), as 40 CFR part 63, subpart M. On November 19, 1993, the
International Fabricare Institute (IFI), a trade association
representing commercial and industrial dry cleaners nationwide, filed
in the U.S. Court of Appeals for the District of Columbia Circuit a
petition for judicial review challenging the NESHAP. The Agency
subsequently entered into a settlement agreement with IFI, notice of
which was published prior to being filed with the court (60 FR 52000,
October 4, 1995).
In the litigation, IFI raised the issue of new transfer machines
purchased or installed between proposal and promulgation. The IFI's
concern stemmed from the fact that the Agency did not propose to ban
new transfer machines, yet at promulgation effectively banned such
machines. The IFI argued that dry cleaners who installed new transfer
machines between proposal and promulgation did so with the
understanding that the Agency had not proposed any prohibitions against
this. These dry cleaners would have had no recourse but to scrap these
new transfer machines and replace them with new dry-to-dry machines in
order to comply with the NESHAP. The IFI asserted that this was unfair,
given these dry cleaners acted in accordance with the law to the best
of their knowledge at the time.
At the time of proposal, the Agency believed that no new transfer
machines were being sold or installed, and for this reason did not
propose to ban purchase of new transfer machines. However, due to new
information that the Agency received after proposal that is explained
in the preamble to the final rule of the NESHAP, the Agency effectively
banned the purchase of new transfer machines (58 FR 49,368-49,370).
This was considered reasonable because the Agency's analysis showed
that emissions from clothing transfer could be eliminated through the
use of dry-to-dry machines. Emissions from clothing transfer account
for about 25 percent of transfer machine emissions. The Agency's
analysis also showed that in the typical case where a new dry-to-dry
machine was installed instead of a new transfer machine, a net savings
of $300 per ton of emission reductions would be realized by the dry
cleaner. Hence, the Agency decided at promulgation to effectively ban
new transfer machines by setting an emission limit which new transfer
machines could not achieve. It was believed this decision would have no
impact on dry cleaners, since no new transfer machines were being
purchased or installed. It was only after promulgation that it became
apparent that a few new transfer machines had been sold and installed
between proposal and promulgation of the NESHAP.
The Agency has agreed with IFI on this issue. Consequently, the
Administrator has subcategorized new transfer machines into two types:
New transfer machines installed after promulgation (i.e., September 22,
1993) and new transfer machines installed between proposal (i.e.,
December 9, 1991) and promulgation (i.e., September 22, 1993). The
requirements the Administrator is finalizing today for new transfer
machines installed after promulgation do not change. The requirements
the Administrator is promulgating today for the new subcategory, new
transfer machines installed between proposal and promulgation, however,
are similar to those for existing transfer machines.
Today's action does not sacrifice significant emissions reductions
because the number of affected machines is approximately one-tenth of
one percent of all dry cleaning machines (possibly 30 machines).
Today's action allows for the greatest achievable emissions reductions
by both those who had installed transfer machines prior to issuance of
the final rule and all other new sources and maintains the prospective
prohibition on new transfer machines.
II. Comments Received on Proposed Changes to Rule
Four comments were received on the proposed amendments to the
NESHAP. Two comments were received from industry trade associations and
two comments were received from states. All four commenters were
supportive of the proposed amendments for basically the same reasons
outlined at proposal (61 FR 19887, May 3, 1996). Therefore, no changes
have been made to the proposed amendments to the NESHAP.
III. Administrative Requirements
A. Paperwork Reduction Act
The information collection requirements of the previously
promulgated NESHAP for PCE Dry Cleaning Facilities were submitted to
and approved by the Office of Management and Budget. A copy of this
Information Collection Request (ICR) document (OMB control number 2060-
0234) may be obtained from Sandy Farmer, Information Policy Branch (PM-
223Y), U.S. Environmental Protection Agency, 401 M Street, SW,
Washington, DC 20460 or by calling (202) 260-2740. Today's changes to
the NESHAP for PCE Dry Cleaning Facilities do not affect the
information collection burden estimates made previously.
B. Executive Order 12866 Review
Under Executive Order 12866 (58 FR 51735, (October 4, 1993)), the
Agency must determine whether the regulatory action is ``significant''
and, therefore, subject to OMB review and the requirements of the
Executive Order. The Order defines a ``significant regulatory action''
as one that is likely to result in a rule that may:
1. Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities;
2. Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
3. Materially alter the budgetary impact of entitlements, grants,
user fees, or land programs or the rights and obligations of recipients
thereof; or
4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
This rule was classified ``non-significant'' under Executive Order
12866 and, therefore, was not reviewed by the Office of Management and
Budget.
C. Unfunded Mandates Reform Act
Under Section 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a statement to accompany any proposed rule where the
estimated costs to State, local, or tribal governments, or to the
private sector, will be $100 million or more in any one year. Under
Section 205, EPA must select the most cost-effective and least
burdensome alternative that achieves the objective of the rule and is
consistent with statutory requirements. Section 203 requires EPA to
establish a plan for informing and advising any small governments that
may be significantly impacted by the rule. The unfunded mandates
statement under Section 202 must include: (1) A citation of the
statutory authority under which the rule is proposed, (2) an
[[Page 49265]]
assessment of the costs and benefits of the rule, including the effect
of the mandate on health, safety, the environment, and the federal
resources available to defray the costs, (3) where feasible, estimates
of future compliance costs and disproportionate impacts upon particular
geographic or social segments of the nation or industry, (4) where
relevant, an estimate of the effect on the national economy, and (5) a
description of EPA's prior consultation with State, local, and tribal
officials.
The amendments to the NESHAP that the Administrator is proposing
today will not cause State, local, or tribal governments, or the
private sector to incur costs that will be $100 million or more in any
one year. Rather, the costs involved in this rulemaking are relatively
insignificant in comparison to the $100 million threshold of the
Unfunded Mandates Act. Therefore, the requirements of the Unfunded
Mandates Act are not applicable to this rulemaking.
D. Regulatory Flexibility Analysis
EPA has determined that it is not necessary to prepare a regulatory
flexibility analysis in connection with this final rule. This rule will
reduce regulatory burdens on small businesses because it will allow
small businesses that own or operate those few transfer machines
installed after December 9, 1991, but before September 22, 1993, to
keep these machines in use rather than requiring such businesses to
replace these machines or stop operations. EPA has determined that this
rule will not have an significant adverse economic impact on a
substantial number of small businesses.
E. Submission to Congress and the General Accounting Office
Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives and the Comptroller General of the
General Accounting Office prior to publication of the rule in today's
Federal Register. This rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).
List of Subjects in 40 CFR Part 63
Environmental protection, Air pollution control, Intergovernmental
relations, Reporting and recordkeeping requirements.
Dated: September 11, 1996.
Carol M. Browner,
Administrator.
Title 40, chapter I, part 63, of the Code of Federal Regulations is
amended to read as follows:
PART 63--NATIONAL EMISSION STANDARDS FOR HAZARDOUS AIR POLLUTANTS
FOR SOURCE CATEGORIES
1. The authority citation for part 63 continues to read as follows:
Authority: 42 U.S.C. 7401, et seq.
Subpart M--National Perchloroethylene Air Emission Standards for Dry
Cleaning Facilities
2. Section 63.320 is amended by revising paragraphs (c), (d), (e),
and (f) to read as follows:
Sec. 63.320 Applicability.
* * * * *
(c) Each dry cleaning system that commenced construction or
reconstruction before December 9, 1991, and each new transfer machine
system and its ancillary equipment that commenced construction or
reconstruction on or after December 9, 1991 and before September 22,
1993, shall comply with Secs. 63.322 (c), (d), (i), (j), (k), (l), and
(m), 63.323(d), and 63.324 (a), (b), (d)(1), (d)(2), (d)(3), (d)(4),
and (e) beginning on December 20, 1993, and shall comply with other
provisions of this subpart by September 23, 1996.
(d) Each existing dry-to-dry machine and its ancillary equipment
located in a dry cleaning facility that includes only dry-to-dry
machines, and each existing transfer machine system and its ancillary
equipment and each new transfer machine system and its ancillary
equipment installed between December 9, 1991 and September 22, 1993, as
well as each existing dry-to-dry machine and its ancillary equipment,
located in a dry cleaning facility that includes both transfer machine
system(s) and dry-to-dry machine(s) is exempt from Sec. 63.322,
Sec. 63.323, and Sec. 63.324, except paragraphs 63.322 (c), (d), (i),
(j), (k), (l), and (m), 63.323(d), and 63.324 (a), (b), (d)(1), (d)(2),
(d)(3), (d)(4), and (e) if the total perchloroethylene consumption of
the dry cleaning facility is less than 530 liters (140 gallons) per
year. Consumption is determined according to Sec. 63.323(d).
(e) Each existing transfer machine system and its ancillary
equipment, and each new transfer machine system and its ancillary
equipment installed between December 9, 1991 and September 22, 1993,
located in a dry cleaning facility that includes only transfer machine
system(s) is exempt from Sec. 63.322, Sec. 63.323, and Sec. 63.324,
except paragraphs 63.322 (c), (d), (i), (j), (k), (l), and (m),
63.323(d), and 63.324 (a), (b), (d)(1), (d)(2), (d)(3), (d)(4), and (e)
if the perchloroethylene consumption of the dry cleaning facility is
less than 760 liters (200 gallons) per year. Consumption is determined
according to Sec. 63.323(d).
(f) If the total yearly perchloroethylene consumption of a dry
cleaning facility determined according to Sec. 63.323(d) is initially
less than the amounts specified in paragraph (d) or (e) of this
section, but later exceeds those amounts, the existing dry cleaning
system(s) and new transfer machine system(s) and its (their) ancillary
equipment installed between December 9, 1991 and September 22, 1993 in
the dry cleaning facility must comply with Sec. 63.322, Sec. 63.323,
and Sec. 63.324 by 180 calendar days from the date that the facility
determines it has exceeded the amounts specified, or by September 23,
1996, whichever is later.
* * * * *
3. Section 63.322 is amended by revising paragraphs (a)
introductory text and (b) introductory text to read as follows:
Sec. 63.322 Standards.
(a) The owner or operator of each existing dry cleaning system and
of each new transfer machine system and its ancillary equipment
installed between December 9, 1991 and September 22, 1993 shall comply
with either paragraph (a)(1) or (a)(2) of this section and shall comply
with paragraph (a)(3) of this section if applicable.
* * * * *
(b) The owner or operator of each new dry-to-dry machine and its
ancillary equipment and of each new transfer machine system and its
ancillary equipment installed after September 22, 1993:
* * * * *
[FR Doc. 96-23911 Filed 9-18-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-23910 Hazardous Waste Management Program: Incorporation by Reference of Approved State Hazardous Waste Program for New Mexico
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49265-49269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23910]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 272
[FRL-5601-5]
Hazardous Waste Management Program: Incorporation by Reference of
Approved State Hazardous Waste Program for New Mexico
AGENCY: Environmental Protection Agency.
ACTION: Immediate final rule.
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[[Page 49266]]
SUMMARY: Under the Resource Conservation and Recovery Act of 1976, as
amended (RCRA), the United States Environmental Protection Agency (EPA)
may grant Final Authorization to States to operate their hazardous
waste management programs in lieu of the Federal program. The EPA uses
part 272 of Title 40 Code of Federal Regulations (CFR) to provide
notice of the authorization status of State programs, and to
incorporate by reference those provisions of the State statutes and
regulations that EPA will enforce under RCRA Sections 3008, 3013 and
7003. Thus, EPA intends to codify the New Mexico authorized State
program in 40 CFR Part 272. The purpose of this action is to
incorporate by reference EPA's approval of recent revisions to New
Mexico's program.
DATES: This document will be effective November 18, 1996 unless EPA
publishes a prior Federal Register (FR) action withdrawing this
immediate final rule. All comments on this action must be received by
the close of business October 21, 1996. The incorporation by reference
of certain New Mexico statutes and regulations was approved by the
Director of the Federal Register as of November 18, 1996 in accordance
with 5 U.S.C. 552(a) and 1 CFR part 51.
ADDRESSES: Written comments should be sent to Alima Patterson,
Authorization Coordinator for Region 6, Grants and Authorization
Section (6PD-G), Multimedia Planning and Permitting Division, EPA
Region 6, First Interstate Bank Tower at Fountain Place, 1445 Ross
Avenue, Suite 1200, Dallas, TX 75202, Phone number: 214-665-8533.
FOR FURTHER INFORMATION CONTACT: Alima Patterson, Authorization
Coordinator for Region 6, Grants and Authorization Section (6PD-G),
Multimedia Planning and Permitting Division, EPA Region 6, First
Interstate Bank Tower at Fountain Place, 1445 Ross Avenue, Suite 1200,
Dallas, TX 75202, Phone number: 214-665-8533.
SUPPLEMENTARY INFORMATION:
Background
Section 3006 of the Resource Conservation and Recovery Act of 1976,
as amended (RCRA), 42 U.S.C. 6926 et seq., allows the Environmental
Protection Agency (EPA) to authorize State hazardous waste programs to
operate in the State in lieu of the Federal hazardous waste program.
The purpose of today's Federal Register document is to incorporate by
reference EPA's approval of recent revisions to New Mexico's program.
Effective December 13, 1993 and August 21, 1995, Environmental
Protection Agency incorporated by reference New Mexico's then
authorized hazardous waste program (see 58 FR 52677 and 60 FR 32113).
Effective July 10, 1995 and January 2, 1996 (see 60 FR 20238 and 60 FR
53708, respectively), Environmental Protection Agency granted
authorization to New Mexico for additional program revisions. In this
document, EPA is incorporating the currently authorized State hazardous
waste program in New Mexico.
The Environmental Protection Agency provides both notice of its
approval of State programs in 40 CFR part 272 and incorporates by
reference therein the State statutes and regulations that EPA will
enforce under sections 3008, 3013 and 7003 of RCRA. This effort will
provide clearer notice to the public of the scope of the authorized
program in New Mexico. Such notice is particularly important in light
of the Hazardous and Solid Waste Act Amendments of 1984 (HSWA), Public
Law 98-616. Revisions to State hazardous waste programs are necessary
when Federal statutory or regulatory authority is modified. Because
HSWA extensively amended RCRA, State programs must be modified to
reflect those amendments. By incorporating by reference the authorized
New Mexico program and by amending the Code of Federal Regulations
whenever a new or different set of requirements is authorized in New
Mexico, the status of Federally approved requirements of the New Mexico
program will be readily discernible.
The Agency will only enforce those provisions of the New Mexico
hazardous waste management program for which authorization approval has
been granted by EPA. This document incorporates by reference provisions
of State hazardous waste statutes and regulations and clarifies which
of these provisions are included in the authorized and Federally
enforceable program. Concerning HSWA, some State requirements may be
similar to HSWA requirements that are in effect under Federal statutory
authority in that State. However, a State's HSWA-type requirements are
not authorized and will not be codified into the CFR until the Regional
Administrator publishes his final decision to authorize the State for
specific HSWA requirements. Until such time, EPA will enforce the HSWA
requirements and not the State analogues.
New Mexico Authorized Hazardous Waste Program
The Environmental Protection Agency is incorporating by reference
the New Mexico authorized hazardous waste program in subpart GG of 40
CFR part 272. The State statutes and regulations are incorporated by
reference at Sec. 272.1601(b)(1) and the Memorandum of Agreement, the
Attorney General's Statement and the Program Description are referenced
at Sec. 272.1601 (b)(5), (b)(6) and (b)(7), respectively.
The Agency retains the authority under sections 3007, 3008, 3013
and 7003 of RCRA to undertake enforcement actions in authorized States.
With respect to such an enforcement action, the Agency will rely on
Federal sanctions, Federal inspection authorities, and the Federal
Administrative Procedure Act rather than the authorized State analogues
to these requirements. Therefore, the Agency does not intend to
incorporate by reference for purposes of enforcement such particular,
authorized New Mexico enforcement authorities. Section 272.1601(b)(2)
of 40 CFR lists those authorized New Mexico authorities that are part
of the authorized program but are not incorporated by reference.
The public also needs to be aware that some provisions of the
State's hazardous waste management program are not part of the
Federally authorized State program. These non-authorized provisions
include:
(1) Provisions that are not part of the RCRA Subtitle C program
because they are ``broader in scope'' than RCRA Subtitle C (see 40 CFR
271.1(i)); and
(2) Federal rules for which New Mexico is not authorized, but which
have been incorporated into the State regulations because of the way
the State adopted Federal regulations by reference.
State provisions which are ``broader in scope'' than the Federal
program are not incorporated by reference for purposes of enforcement
in 40 CFR part 272. Section 272.1601(b)(3) of 40 CFR lists, for
reference and clarity the New Mexico provisions which are ``broader in
scope'' than the Federal program and which are not, therefore, part of
the authorized program being incorporated by reference. ``Broader in
scope'' provisions will not be enforced by EPA; the State, however,
will continue to enforce such provisions.
New Mexico has adopted but is not authorized for the Federal rules
published in the Federal Register from January 28, 1983 through March
20, 1984 (48 FR 3977, 48 FR 39611, 48 FR 52718, 49 FR 5308, and 49 FR
10490); amendments to the Toxicity Characteristic rule as published on
October 5, 1990 (55 FR 40834), February 1, 1991 (56 FR 3978), February
13, 1991 (56 FR 5910) and April 2, 1991 (56 FR
[[Page 49267]]
13406); amendments to the F037 and F038 listings as published on May
13, 1991 (56 FR 21955) and amendments to 40 CFR Parts 260, 261, 264,
265 and 266 relative to the Recycled Used Oil Management Standards, as
published on September 10, 1992 (57 FR 41566) and May 3, 1993 (58 FR
26420). Therefore, these Federal amendments included in New Mexico's
adoption by reference of Federal code at Title 20, Chapter 4, Part 1,
New Mexico Administrative Code (20 NMAC 4.1), Subparts I, II, III, V,
VI, and IX are not Federally enforceable.
Since EPA cannot enforce a State's requirements which have not been
reviewed and approved according to the Agency's authorization
standards, it is important that EPA clarify any limitations on the
scope of a State's approved hazardous waste program. Thus, in those
instances where a State's method of adopting Federal law by reference
has the effect of including unauthorized requirements, EPA will provide
this clarification by: (1) incorporating by reference the relevant
State legal authorities according to the requirements of the Office of
Federal Register; and (2) subsequently identifying in 272.1601(b)(4)
any requirements which while adopted and incorporated by reference, are
not authorized by EPA, and therefore are not Federally enforceable.
Thus, notwithstanding the language in the New Mexico hazardous waste
regulations incorporated by reference at 272.1601(b)(1), EPA would only
enforce the State provisions that are actually authorized by EPA. With
respect to HSWA requirements for which the State has not yet been
authorized, EPA will continue to enforce the Federal HSWA standards
until the State receives specific HSWA authorization from EPA.
HSWA Provisions
As noted above, the Agency is not amending part 272 to include HSWA
requirements and prohibitions that are immediately effective in New
Mexico and other States. Section 3006(g) of RCRA provides that any
requirement or prohibition of HSWA (including implementing regulations)
takes effect in authorized States at the same time that it takes effect
in nonauthorized States. Thus, Environmental Protection Agency has
immediate authority to implement a HSWA requirement or prohibition once
it is effective. A HSWA requirement or prohibition supersedes any less
stringent or inconsistent State provision which may have been
previously authorized by EPA (see 50 FR 28702, July 15, 1985).
Because of the vast number of HSWA statutory and regulatory
requirements taking effect over the next few years, the Environmental
Protection Agency expects that many previously authorized and
incorporated by reference State provisions will be affected. The States
are required to revise their programs to adopt the HSWA requirements
and prohibitions by the deadlines set forth in 40 CFR 271.21, and then
to seek authorization for those revisions pursuant to part 271. The
Environmental Protection Agency expects that the States will be
modifying their programs substantially and repeatedly. Instead of
amending the part 272 every time a new HSWA provision takes effect
under the authority of RCRA 3006(g), Environmental Protection Agency
will wait until the State receives authorization for its analog to the
new HSWA provision before amending the State's part 272 incorporation
by reference. In the interim, persons wanting to know whether a HSWA
requirement or prohibition is in effect should refer to 40 CFR
271.1(j), as amended, which lists each such provision.
The incorporation by reference of State authorized programs in the
CFR should substantially enhance the public's ability to discern the
current status of the authorized State program and clarify the extent
of Federal enforcement authority. This will be particularly true as
more State program revisions to adopt HSWA provisions are authorized.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. Before promulgating an Environmental Protection Agency rule
for which a written statement is needed, section 205 of the UMRA
generally requires EPA to identify and consider a reasonable number of
regulatory alternatives and adopt the least costly, most cost-
effective, or least burdensome alternative that achieves the objectives
of the rule. The provisions of section 205 do not apply when they are
inconsistent with applicable law. Moreover, section 205 allows EPA to
adopt an alternative other than the least costly, most cost-effective,
or least burdensome alternative if the Administrator publishes with the
final rule an explanation why that alternative was not adopted. Before
the Environmental Protection Agency establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of Environmental Protection Agency regulatory
proposals with significant Federal intergovernmental mandates, and
informing, educating, and advising small governments on compliance with
the regulatory requirements. The Environmental Protection Agency has
determined that this rule does not contain a Federal mandate that may
result in expenditures of $100 million or more for State, local, and
tribal governments, in the aggregate, or the private sector in any one
year. The EPA does not anticipate that the approval of New Mexico'
hazardous waste program referenced in today's notice will result in
annual costs of $100 million or more.
Today's rule contains no Federal mandates for State, local or
tribal governments or the private sector. The Act excludes from the
definition of a ``Federal mandate'' duties that arise from
participation in a voluntary Federal program, except in certain cases
where a ``federal intergovernmental mandate'' affects an annual federal
entitlement program of $500 million or more that are not applicable
here. New Mexico's request for approval of a hazardous waste program is
voluntary; if a state chooses not to seek authorization for
administration of a hazardous waste program under RCRA Subtitle C, RCRA
regulation is left to EPA.
In any event, the Environmental Protection Agency has determined
that this rule does not contain a Federal mandate that may result in
expenditures $100 million or more for state, local, and tribal
governments in the aggregate, or the private sector in any one year.
The Environmental Protection Agency does not anticipate that the
approval of New Mexico's hazardous waste program referenced in today's
notice will result in annual costs of $100 million or more. The
Environmental Protection Agency's approval of state programs generally
may reduce, not increase, compliance costs for the private sector since
the State, by virtue of the approval, may
[[Page 49268]]
now administer the program in lieu of Environmental Protection Agency
and exercise primary enforcement. Hence, owners and operators of
treatment, storage, or disposal facilities (TSDFs) generally no longer
face dual federal and state compliance requirements, thereby reducing
overall compliance costs. Thus, today's rule is not subject to the
requirements of sections 202 and 205 of the UMRA.
The Environmental Protection Agency has determined that this rule
contains no regulatory requirements that might significantly or
uniquely affect small governments. The Agency recognizes that small
governments may own and/or operate TSDFs that will become subject to
the requirements of an approved state hazardous waste program. However,
such small governments which own and/or operate TSDFs are already
subject to the requirements in 40 CFR parts 264, 265, and 270 and are
not subject to any additional significant or unique requirements by
virtue of this program approval. Once the Environmental Protection
Agency authorizes a State to administer its own hazardous waste program
and any revisions to that program, these same small governments will be
able to own and operate their TSDFs under the approved state program,
in lieu of the Federal program.
Certification Under the Regulatory Flexibility Act
The Environmental Protection Agency has determined that this
authorization will not have a significant economic impact on a
substantial number of small entities. The Environmental Protection
Agency recognizes that small entities may own and/or operate TSDFs that
will become subject to the requirements of an approved state hazardous
waste program. However, since such small entities which own and/or
operate TSDFs are already subject to the requirements in 40 CFR Parts
264, 265 and 270, this authorization does not impose any additional
burdens on these small entities. This is because EPA's authorization
would result in an administrative change (i.e., whether the
Environmental Protection Agency or the state administers the RCRA
Subtitle C program in that state), rather than result in a change in
the substantive requirements imposed on small entities. Once EPA
authorizes a state to administer its own hazardous waste program and
any revisions to that program, these same small entities will be able
to own and operate their TSDFs under the approved state program, in
lieu of the federal program. Moreover, this authorization, in approving
a state program to operate in lieu of the federal program, eliminates
duplicative requirements for owners and operators of TSDFs in that
particular state.
Therefore, EPA provides the following certification under the
Regulatory Flexibility Act, as amended by the Small Business Regulatory
Enforcement Fairness Act. Pursuant to the provisions of 5 U.S.C.
605(b), I hereby certify that this authorization will not have a
significant economic impact on a substantial number of small entities.
This authorization effectively suspends the applicability of certain
Federal regulations in favor of New Mexico's program, thereby
eliminating duplicative requirements for handlers of hazardous waste in
the State. It does not impose any new burdens on small entities. This
rule, therefore, does not require a regulatory flexibility analysis.
Submission to Congress and the General Accounting Office
Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, the Environmental
Protection Agency submitted a report containing this rule and other
required information to the U.S. Senate, the U. S. House of
Representatives and the Comptroller General of the General Accounting
Office prior to publication of the rule in today's Federal Register.
This rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).
Compliance With Executive Order 12866
The Office of Management and Budget has exempted this rule from the
requirements of Section 6 of Executive Order 12866.
Paperwork Reduction Act
Under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., Federal
agencies must consider the paperwork burden imposed by any information
request contained in a proposed rule or a final rule. This rule will
not impose any information requirements upon the regulated community.
List of Subjects In 40 CFR Part 272
Environmental protection, Administrative practice and procedure,
Confidential business information, Hazardous waste transportation,
Hazardous waste, Incorporation by reference, Indian lands,
Intergovernmental relations, Penalties, Reporting and recordkeeping
requirements, Water pollution control, Water supply.
Dated: August 19, 1996.
Allyn M. Davis,
Acting Regional Administrator.
For the reasons set forth in the preamble, subpart GG of 40 CFR
part 272 is amended as follows:
PART 272--APPROVED STATE HAZARDOUS WASTE MANAGEMENT PROGRAMS
1. The authority for part 272 continues to read as follows:
Authority: Secs. 2002(a), 3006, and 7004(b) of the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended, 42 U.S.C. 6912(a), 6926, and 6974(b).
2. 40 CFR part 272, subpart GG is amended by revising Sec. 272.1601
to read as follows:
Sec. 272.1601 New Mexico State-Administered Program: Final
Authorization.
(a) Pursuant to Section 3006(b) of RCRA, 42 U.S.C. 6926(b), New
Mexico has final authorization for the following elements as submitted
to EPA in New Mexico's base program application for final authorization
which was approved by EPA effective on January 25, 1985. Subsequent
program revision applications were approved effective on April 10,
1990, July 25, 1990, December 4, 1992, August 23, 1994, December 21,
1994, July 10, 1995, and January 2, 1996.
(b) State Statutes and Regulations.
(1) The New Mexico statutes and regulations cited in this paragraph
are incorporated by reference as part of the hazardous waste management
program under Subtitle C of RCRA, 42 U.S.C. 6921 et seq.
(i) EPA Approved New Mexico Statutory Requirements Applicable to
the Hazardous Waste Management Program, dated April, 1996.
(ii) EPA Approved New Mexico Regulatory Requirements Applicable to
the Hazardous Waste Management Program, dated April, 1996.
(2) The following statutes and regulations concerning State
enforcement, although not incorporated by reference, are part of the
authorized State program:
(i) New Mexico Statutes 1978 Annotated, Inspection of Public
Records Act, Chapter 14, Article 2, (1994 Cumulative Supplement),
Sections 14-2-1 et seq.
(ii) New Mexico Statutes 1978 Annotated, Hazardous Waste Act,
Chapter 74, Article 4, (1993 Replacement Pamphlet), Sections 74-4-4
(except 74-4-4C), 74-4-4.1, 74-4-4.2C through 74-4-4.2F, 74-4-4.2G(1),
74-4-4.2H, 74-4-4.2I, 74-4-4.3 (except
[[Page 49269]]
74-4-4.3A(2) and 74-4-4.3F), 74-4-4.7B, 74-4-4.7C, 74-4-5, 74-4-7, 74-
4-10, 74-4-10.1 (except 74-4-10.1C), 74-4-11 through 74-4-14.
(iii) Title 20, Chapter 4, Part 1, New Mexico Administrative Code
(20 NMAC 4.1), effective September, 23, 1994, Subpart IX, Section 902
(except 902.B.1 through 902.B.6); and Subpart XI, Sections 1101, 1105,
and 1106.
(3)(i) The following statutory provisions are broader in scope than
the Federal program, are not part of the authorized program, and are
not incorporated by reference:
(ii) New Mexico Statutes 1978 Annotated, Hazardous Waste Act,
Chapter 74, Article 4, (1993 Replacement Pamphlet), Sections 74-4-3.3
and 74-4-4.2J.
(4) Unauthorized State Provisions: The State's adoption of the
Federal rules listed below is not approved by EPA and are, therefore,
not enforceable:
------------------------------------------------------------------------
Federal Register Publication
Federal requirement reference date
------------------------------------------------------------------------
Biennial Report.................. 48 FR 3977.............. 01/28/83
Permit Rules; Settlement 48 FR 39611............. 09/01/83
Agreement.
Interim Status Standards; 48 FR 52718............. 11/22/83
Applicability.
Chlorinated Aliphatic Hydrocarbon 49 FR 5308.............. 02/10/84
Listing (F024).
National Uniform Manifest........ 49 FR 10490............. 03/20/84
Recycled Used Oil................ 57 FR 41566: Amendments 09/10/92
to 40 CFR Parts 260,
261 and 266.
Management Standards............. 58 FR 26420: Amendments 05/03/93
to 40 CFR Parts 261,
264 and 265.
------------------------------------------------------------------------
Additionally, New Mexico has adopted but is not authorized to implement
the HSWA rules that are listed below in lieu of EPA. EPA will continue
to enforce the Federal HSWA standards for which New Mexico is not
authorized until the State receives specific authorization from EPA.
------------------------------------------------------------------------
Federal Register Publication
Federal requirement reference date
------------------------------------------------------------------------
Toxicity Characteristic;......... 55 FR 40834............. 10/05/90
Hydrocarbon Recovery............. 56 FR 3978.............. 02/01/91
Operations....................... 56 FR 13406............. 04/02/91
Toxicity Characteristic; 56 FR 5910.............. 02/13/91
Chlorofluorocarbon Refrigerants.
Revisions to the Petroleum 56 FR 21955............. 05/13/91
Refining Primary and Secondary
Oil/Water/Solids Separation
Sludge Listings (F037 and F038).
------------------------------------------------------------------------
(5) Memorandum of Agreement. The Memorandum of Agreement between
EPA Region 6 and the State of New Mexico signed by the EPA Regional
Administrator on December 18, 1995 is referenced as part of the
authorized hazardous waste management program under Subtitle C of RCRA,
42 U.S.C. 6921 et seq.
(6) Statement of Legal Authority. ``Attorney General's Statement
for Final Authorization'', signed by the Attorney General of New Mexico
on January, 1985, and revisions, supplements and addenda to that
Statement dated April 13, 1988, September 14, 1988, July 19, 1989, July
23, 1992, February 14, 1994, July 18, 1994, July 20, 1994, August 11,
1994, November 28, 1994, and August 24, 1995, are referenced as part of
the authorized hazardous waste management program under Subtitle C of
RCRA, 42 U.S.C. 6921 et seq.
(7) Program Description. The Program Description and any other
materials submitted as part of the original application or as
supplements thereto are referenced as part of the authorized hazardous
waste management program under Subtitle C of RCRA, 42 U.S.C. 6921 et
seq.
Appendix A to Part 272--[Amended]
3. Appendix A to part 272, State Requirements, is amended by
revising the listing for ``New Mexico'' to read as follows:
New Mexico
The statutory provisions include:
New Mexico Statutes 1978 Annotated, Hazardous Waste Act, Chapter
74, Article 4 (1993 Replacement Pamphlet), Sections 74-4-2, 74-4-3
(except 74-4-3L, 74-4-3O and 74-4-3R), 74-4-3.1, 74-4-4.2A, 74-4-
4.2B, 74-4-4.2G introductory paragraph, 74-4-4.2G(2), 74-4-4.3F, 74-
4-4.7 (except 74-4-4.7B and 74-4-4.7C), 74-4-9 and 74-4-10.1C, as
published by the Michie Company, Law Publishers, 1 Town Hall Square,
Charlottesville, Virginia 22906-7587.
The regulatory provisions include:
Title 20, Chapter 4, Part 1, New Mexico Annotated Code (20 NMAC
4.1), Subparts I through Subpart VIII; Subpart IX, Sections 901,
902.B.1 through 902.B.6; and Subpart XI, Section 1103. Copies of the
New Mexico regulations can be obtained from the New Mexico
Commission of Public Records, State Records Center and Archives,
State Rules Division, 404 Montezuma, Santa Fe, NM 87501.
[FR Doc. 96-23910 Filed 9-18-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-23881 Young American Medals Program
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49259-49261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23881]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Office of Justice Programs
28 CFR Part 50
[OJP No. 1078]
RIN 1121-AA37
Young American Medals Program
AGENCY: United States Department of Justice, Office of Justice
Programs.
ACTION: Interim rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The United States Department of Justice, Office of Justice
Programs (OJP), is publishing this Interim Rule to implement the Young
American Medals Program authorized by 42 U.S.C. 1921 et seq. This
Interim Rule provides an outline of the program governing awards of the
Young American Medals for Bravery and Service.
EFFECTIVE DATES: This Interim Rule is effective September 19, 1996.
Comments must be submitted on or before November 18, 1996.
ADDRESSES: All comments concerning the Interim Rule should be addressed
to the Young American Medals Coordinator, Office of Justice Programs,
633 Indiana Avenue, N.W., Room 408, Washington, D.C. 20531.
FOR FURTHER INFORMATION CONTACT: Ellen Wesley at (202) 616-3558.
SUPPLEMENTARY INFORMATION:
Youth Medals
Congress authorized the Department of Justice to promulgate rules
and regulations establishing medals under the Youth Medals Act,
codified at 42 U.S.C. 1921 et seq. The Act establishes two medals: the
Young American Medal for Bravery, 42 U.S.C. 1921, and the Young
American Medal for Service, 42 U.S.C. 1922. The method of selecting the
recipients is based on criteria specified by the Act; the criteria for
the two medals are different. The Young American Medal for Bravery is
awarded to a person who has exhibited exceptional courage,
extraordinary decisiveness, presence of mind, and unusual swiftness of
action, regardless of his or her own personal safety, and who was
eighteen years of age or younger at the time of the occurrence. The
Young American Medal for Service is awarded to a person who has
displayed outstanding character and service and who was eighteen years
of age or younger at the time of the contribution.
The Young American Medals Committee is a part of the Office of the
Attorney General. The Committee is authorized to issue regulations
relating to the establishment of the two medals and, pursuant to that
authority, is issuing the following Interim Rule.
Request for Comment
The Office of Justice Programs seeks to fulfill Congressional
intent by soliciting, encouraging, and incorporating comments on all
aspects of this program while ensuring that the statutory requirements
are applied appropriately to all applicants.
Regulatory Flexibility Act
The Assistant Attorney General, Office of Justice Programs, in
accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has
reviewed this Interim Rule and, by approving it, certifies that the
Interim Rule will not have a significant economic impact on a
substantial number of small entities. The Assistant Attorney General,
Office of Justice Programs determined: (1) Interim Rule provides the
outline of a program governing the award of medals to individuals for
bravery or service; and (2) the award of such medals impose no
requirements on small businesses or on other small entities.
[[Page 49260]]
Paperwork Reduction Act
In addition, no information requirements are contained in this
interim rule. Any information collection requirements contained in
future application notices for this program will be reviewed by OMB, as
required by provisions of the Paperwork Reduction Act, 44 U.S.C.
3504(h).
Executive Order 12866
This Interim Rule has been drafted and reviewed in accordance with
Executive Order 12866, Sec. 1(b), Principles of Regulation. The Office
of Justice Programs has determined that this Interim Rule is not a
``significant regulatory action'' under Executive Order 12866,
Sec. 3(f), Regulatory Planning and Review, and accordingly this Interim
Rule has not been reviewed by the Office of Management and Budget.
List of Subjects in 28 CFR Part 50
Medals.
Accordingly, Title 28, Part 50 of the Code of Federal Regulations
is amended by adding new Section 50.22 as set forth below:
PART 50--[AMENDED]
1. The authority citation for part 50 is revised to read as
follows:
Authority: 5 U.S.C. 301; 28 U.S.C. 509, 510; AND 42 U.S.C. 1921
et seq., 1973c.
2. A new Sec. 50.22 is added to read as follows:
Sec. 50.22 Young American Medals Program
Authority: The United States Department of Justice is authorized
under 42 U.S.C. 1921 et seq. to promulgate rules and regulations
establishing medals, one for bravery and one for service. This
authority was enacted by Chapter 520, of Pub. L. 81-638 (August 3,
1950).
(a) Scope. There are hereby established two medals, one to be known
as the Young American Medal for Bravery and the other to be known as
the Young American Medal for Service.
(b) Young American Medal for Bravery
(1)(i) The Young American Medal for Bravery may be awarded to a
person--
(A) Who during a given calendar year has exhibited exceptional
courage, attended by extraordinary decisiveness, presence of mind, and
unusual swiftness of action, regardless of his or her own personal
safety, in an effort to save or in saving the life of any person or
persons in actual imminent danger;
(B) Who was eighteen years of age or younger at the time of the
occurrence; and
(C) Who habitually resides in the United States (including its
territories and possessions), but need not be a citizen thereof.
(ii) These conditions must be met at the time of the event.
(2) The act of bravery must have been public in nature and must
have been acknowledged by the Governor, Chief Executive Officer of a
State, county, municipality, or other political subdivision, or by a
civic, educational, or religious institution, group, or society.
(3) No more than two such medals may be awarded in any one calendar
year.
(c) Young American Medal for Service
(1) The Young American Medal for Service may be awarded to any
citizen of the United States eighteen years of age or younger at the
time of the occurrence, who has achieved outstanding or unusual
recognition for character and service during a given calendar year.
(2) Character attained and service accomplished by a candidate for
this medal must have been such as to make his or her achievement worthy
of public report. The outstanding and unusual recognition of the
candidate's character and service must have been public in nature and
must have been acknowledged by the Governor, Chief Executive Officer of
a State, county, municipality, or other political subdivision, or by a
civic, educational, or religious institution, group, or society.
(3) The recognition of the character and service upon which the
award of the Medal for Service is based must have been accorded
separately and apart from the Young American Medals program and must
not have been accorded for the specific and announced purpose of
rendering a candidate eligible, or of adding to a candidate's
qualifications, for the award of the Young American Medal for Service.
(4) No more than two such medals may be awarded in any one calendar
year.
(d) Eligibility
(1) The act or acts of bravery and the recognition for character
and service that make a candidate eligible for the respective medals
must have occurred during the calendar year for which the award is
made.
(2) A candidate may be eligible for both medals in the same year.
Moreover, the receipt of either medal in any year will not affect a
candidate's eligibility for the award of either or both of the medals
in a succeeding year.
(3) Acts of bravery performed and recognition of character and
service achieved by persons serving in the Armed Forces, which arise
from or out of military duties, shall not make a candidate eligible for
either of the medals, provided, however, that a person serving in the
Armed Forces shall be eligible to receive either or both of the medals
if the act of bravery performed or the recognition for character and
service achieved is on account of acts and service performed or
rendered outside of and apart from military duties.
(e) Request for Information
(1) A recommendation in favor of a candidate for the award of a
Young American Medal for Bravery or for Service must be accompanied by:
(i) a full and complete statement of the candidate's act or acts of
bravery or recognized character and service (including the times and
places) that supports qualification of the candidate to receive the
appropriate medal;
(ii) statements by witnesses or persons having personal knowledge
of the facts surrounding the candidate's act or acts of bravery or
recognized character and service, as required by the respective medals;
(iii) a certified copy of the candidate's birth certificate, or, if
no birth certificate is available, other authentic evidence of the date
and place of the candidate's birth; and
(iv) a biographical sketch of the candidate, including information
as to his or her citizenship or habitual residence, as may be required
by the respective medals.
(f) Procedure
(1)(i) All recommendations and accompanying documents and papers
should be submitted to the Governor or Chief Executive Officer of the
State, territory, or possession of the United States where the
candidate's act or acts of bravery or recognized character and service
were demonstrated. In the case of the District of Columbia, the
recommendations should be submitted to the Mayor of the District of
Columbia.
(ii) If the act or acts of bravery or recognized character and
service did not occur within the boundaries of any State, territory, or
possession of the United States, the papers should be submitted to the
Governor or Chief Executive Officer of the territory or other
possession of the United States wherein the candidate habitually
maintains his or her residence.
(2) The Governor or Chief Executive Officer, after considering the
various recommendations received after the close of the pertinent
calendar year, may nominate therefrom no more than two
[[Page 49261]]
candidates for the Young American Medal for Bravery and no more than
two candidates for the Young American Medal for Service. Nominated
individuals should have, in the opinion of the appropriate official,
shown by the facts and circumstances to be the most worthy and
qualified candidates from the jurisdiction to receive consideration for
awards of the above-named medals.
(3) Nominations of candidates for either medal must be submitted no
later than 120 days after notification that the Department of Justice
is seeking nominations under this program for a specific calendar year.
Each nomination must contain the necessary documentation establishing
eligibility, must be submitted by the Governor or Chief Executive
Officer, together with any comments, and should be submitted to the
address published in the notice.
(4) Nominations of candidates for medals will be considered only
when received from the Governor or Chief Executive Officer of a State,
territory, or possession of the United States.
(5) The Young American Medals Committee will select, from
nominations properly submitted, those candidates who are shown by the
facts and circumstances to be eligible for the award of the medals. The
Committee shall make recommendations to the Attorney General based on
its evaluation of the nominees. Upon consideration of these
recommendations, the Attorney General may select up to the maximum
allowable recipients for each medal for the calendar year.
(g) Presentation
(1) The Young American Medal for Bravery and the Young American
Medal for Service will be presented personally by the President of the
United States to the candidates selected. These medals will be
presented in the name of the President and the Congress of the United
States. Presentation ceremonies shall be held at such times and places
selected by the President in consultation with the Attorney General.
(2) The Young American Medals Committee will officially designate
two adults (preferably the parents of the candidate) to accompany each
candidate selected to the presentation ceremonies. The candidates and
persons designated to accompany them will be furnished transportation
and other appropriate allowances.
(3) There shall be presented to each recipient an appropriate
Certificate of Commendation stating the circumstances under which the
act of bravery was performed or describing the outstanding recognition
for character and service, as appropriate for the medal awarded. The
Certificate will bear the signature of the President of the United
States and the Attorney General of the United States.
(4) There also shall be presented to each recipient of a medal, a
miniature replica of the medal awarded in the form of a lapel pin.
(h) Posthumous Awards
In cases where a medal is awarded posthumously, the Young American
Medals Committee will designate the father or mother of the deceased or
other suitable person to receive the medal on behalf of the deceased.
The decision of the Young American Medals Committee in designating the
person to receive the posthumously awarded medal, on behalf of the
deceased, shall be final.
(i) Young American Medals Committee
The Young American Medals Committee shall be represented by the
following:
(1) Director of the FBI, Chairman;
(2) Administrator of the Drug Enforcement Administration, Member;
(3) Director of the U.S. Marshals Service, Member; and
(4) Assistant Attorney General, Office of Justice Programs, Member
and Executive Secretary.
Dated: September 13, 1996.
Laurie Robinson,
Assistant Attorney General, Office of Justice Programs, Executive
Secretary, Young American Medals Committee.
[FR Doc. 96-23881 Filed 9-18-96; 8:45 am]
BILLING CODE 4410-18-P
Complete official Federal Register PDF
FR Doc. 96-23819 Interim Final Determination That State Has Corrected a Deficiency Leading to Sanctions; State of New York
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49262-49263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23819]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[Region 2 Docket No. NY23-2-156; FRL-5607-2]
Interim Final Determination That State Has Corrected a Deficiency
Leading to Sanctions; State of New York
AGENCY: Environmental Protection Agency (EPA).
ACTION: Interim final determination.
-----------------------------------------------------------------------
SUMMARY: In the proposed rules section of this Federal Register, the
Environmental Protection Agency (EPA) has proposed to approve the State
Implementation Plan revision submitted by the State of New York for the
purpose of meeting the requirement to submit the heavy duty vehicle
portion of the Clean Fuel Fleet program (CFFP), part of the CFFP
requirements mandated by the Clean Air Act. Based on the proposed
conditional approval, EPA is making an interim final determination by
this action that New York has corrected the deficiency for which a
sanctions clock began on March 7, 1995. By this action EPA defers
application of the emission offset sanction previously scheduled to be
imposed on September 7, 1996 and defer the application of the highway
funds sanction, scheduled to be imposed on March 7, 1997. Although this
action is effective upon signature, EPA will take comment and will
publish a final determination, taking into consideration any comments
received on this interim final determination and the related proposed
SIP approval.
EFFECTIVE DATE: This action is effective August 29, 1996.
ADDRESSES: Comments should be sent to: Ronald Borsellino, Chief, Air
Programs Branch, Environmental Protection Agency, Region II Office, 290
Broadway, New York, New York 10007-1866.
The State submittal and EPA's analysis for that submittal, which
are the basis for this action, are available for public review at the
above address.
FOR FURTHER INFORMATION CONTACT: Michael P. Moltzen, Air Programs
Branch, Environmental Protection Agency, 290 Broadway, 25th Floor, New
York, New York 10007-1866, (212) 637-4249.
SUPPLEMENTARY INFORMATION:
I. Background
On May 15, 1994 and August 9, 1994 the State submitted a State
Implementation Plan (SIP) revision intended to fulfill Clean Fuel Fleet
program requirements under the Clean Air Act. EPA partially disapproved
the 1994 submittals on January 6, 1995 (60 FR 2022). EPA's disapproval
action started an 18-month clock for the application of one sanction
(emissions offsets), followed by a second sanction (withholding of
highway funds) 6 months later under section 179 of the Clean Air Act,
and a 24-month clock for the promulgation of a Federal implementation
plan under section 110(c)(1) of the Clean Air Act. The State
subsequently submitted a request to EPA for review of its proposed, and
emergency adopted, heavy duty CFFP on August 9, 1996. In the proposed
rules section of this Federal Register, EPA has proposed conditional
approval of the State of New York's submittal of its heavy duty Clean
Fuel Fleet SIP revision.
II. EPA Action
Based on the proposed conditional approval set forth in the
proposed rules section of this Federal Register, EPA believes that the
State, with full adoption of its heavy duty CFFP regulation, will have
corrected the original disapproval deficiency that started the sanction
clock. Therefore, EPA is taking this interim, final action, finding
that the State has corrected the disapproval deficiency. This interim
final action is effective upon signature. While this action does not
stop the sanctions clocks that started for this area on March 7, 1995,
it will defer the application of the emissions offsets sanction and the
application of the highway funds sanction. See 59 FR 39832 (Aug. 4,
1994) codified at 40 CFR 52.31. If EPA takes final action fully
approving the State's submittal, such action will stop the sanctions
clock and will permanently lift any applied, stayed or deferred
sanctions.
At this time, EPA is also providing the public with an opportunity
to comment on this final action. If, based on the comments on this
action and the comments on EPA's proposed approval of the State's
submittal, EPA determines that the State's submittal is not approvable
and this final action was inappropriate, EPA will take further action
to disapprove the State's revision and to find that the State has not
corrected the original disapproval deficiency. Such action will
reinstate the sanctions consequences as described in the sanctions
rule. See 59 FR 39832.
III. Administrative Requirements
Because EPA has preliminarily determined that the State has an
approvable plan, relief from sanctions should be provided as quickly as
possible. Therefore, EPA invokes the good cause exception under the
Administrative Procedure Act (APA) in not providing an opportunity for
comment before this action takes effect. See 5 U.S.C. 553(b)(B). See 59
FR 39832 at 39850, (August 4, 1994). As previously noted, by this
action EPA is providing the public with a chance to comment on EPA's
determination after the effective date and EPA will consider any
comments received in determining whether to reverse such action. The
EPA believes that notice-and-comment rulemaking before the effective
date of this action is impracticable and contrary
[[Page 49263]]
to the public interest. The EPA has reviewed the State's submittal and,
through its proposed action, is indicating that it believes the State
has corrected the deficiency that started the sanctions. Therefore, it
is not in the public interest to initially apply sanctions or to keep
applied sanctions in place when the State has proposed and emergency
adopted a measure which will correct the deficiency that triggered the
sanctions clock, provided it is not substantially changed prior to full
adoption. Moreover, it would be impracticable to go through notice-and-
comment rulemaking on a finding that the State has corrected the
deficiency prior to the rulemaking approving the State's submittal.
Therefore, EPA believes that it is necessary to use the interim final
rulemaking process to temporarily stay or defer sanctions while EPA
completes its rulemaking process on the approvability of the State's
submittal. In addition, EPA invokes the good cause exception to the 30-
day notice requirement of the APA because the purpose of this notice is
to relieve a restriction. See 5 U.S.C. 553(d)(1). For a complete
analysis of the application of the good cause exception, the reader is
referred to the Federal Register cited above, in which EPA adopted the
rule being applied here.
The Office of Management and Budget has exempted this action from
review under Executive Order 12866.
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA
must prepare a regulatory flexibility analysis assessing the impact of
any proposed or final rule on small entities. 5 U.S.C. 603 and 604.
Alternatively, EPA may certify that the rule will not have a
significant economic impact on a substantial number of small entities.
Small entities include small businesses, small not-for-profit
enterprises, and government entities with jurisdiction over populations
of less than 50,000.
This action temporarily relieves sources of an additional burden
potentially placed on them by the sanctions provisions of the Clean Air
Act. Therefore, I certify that this action will not have a significant
impact on a substantial number of small entities.
Under sections 202, 203 and 205 of the Unfunded Mandates Reform Act
of 1995 (Unfunded Mandates Act), signed into law on March 22, 1995, EPA
must undertake various actions in association with proposed or final
rules that include a Federal mandate that may result in estimated
annual costs of $100 million or more to the private sector, or to a
State, local and/or tribal government(s) in the aggregate. The EPA must
also develop a plan with regard to small governments that would be
significantly or uniquely affected by the rule.
Because this interim final determination is estimated to result in
the expenditure by State, local and tribal governments or the private
sector of less than $100 million in any one year, EPA has not prepared
a budgetary impact statement or specifically addressed the selection of
the least costly, most cost effective, or least burdensome alternative
because small governments will not be significantly or uniquely
affected by this rule, EPA is not required to develop a plan for small
governments. Further, this final determination only defers the
imposition of sanctions; it imposes no new requirements.
Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report
containing this rule and other required information to the U.S. Senate,
the U.S. House of Representatives and the Comptroller General of the
General Accounting Office prior to publication of this rule in today's
Federal Register. This rule is not a ``major rule'' as defined by 5
U.S.C. 804(2).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Hydrocarbons,
Incorporation by reference, Reporting and recordkeeping requirements,
Ozone, Volatile organic compounds.
Authority: 42 U.S.C. 7401-7671q.
Dated: August 29, 1996.
Jeanne M. Fox,
Regional Administrator.
[FR Doc. 96-23819 Filed 9-18-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-23712 Airworthiness Directives; Fokker Model F28 Mark 0100 Series Airplanes
[Federal Register Volume 61, Number 183 (Thursday, September 19, 1996)]
[Rules and Regulations]
[Pages 49248-49250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23712]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. 95-NM-59-AD; Amendment 39-9762; AD 96-19-16]
RIN 2120-AA64
Airworthiness Directives; Fokker Model F28 Mark 0100 Series
Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This amendment adopts a new airworthiness directive (AD),
applicable to certain Fokker Model F28 Mark 0100 series airplanes, that
requires inspections to detect cracking of the Hi-lok bolt holes in the
main hinge fittings of the horizontal stabilizer, and repair, if
necessary. The amendment also requires modification of the main hinge
fitting, modification or replacement of rib connecting angles, and
modification of ribs. This amendment is prompted by a report indicating
that cracking was found in the main hinge fittings of the horizontal
stabilizer during fatigue testing. The cracking was a result of higher-
than-anticipated loads induced during operation of the thrust reverser.
The actions specified by this AD are intended to prevent deterioration
of the fatigue life of the main hinge fittings of the horizontal
stabilizer and reduced structural integrity of the horizontal
stabilizer due to higher induced loads.
DATES: Effective October 24, 1996.
The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of October 24, 1996.
ADDRESSES: The service information referenced in this AD may be
obtained from Fokker Aircraft USA, Inc., 1199 North Fairfax Street,
Alexandria, Virginia 22314. This information may be examined at the
Federal Aviation Administration (FAA), Transport Airplane Directorate,
Rules Docket, 1601 Lind Avenue, SW., Renton, Washington; or at the
Office of the Federal Register, 800 North Capitol Street, NW., suite
700, Washington, DC.
FOR FURTHER INFORMATION CONTACT: Tim Dulin, Aerospace Engineer,
Standardization Branch, ANM-113, FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (206)
227-2141; fax (206) 227-1149.
SUPPLEMENTARY INFORMATION: A proposal to amend part 39 of the Federal
Aviation Regulations (14 CFR part 39) to include an airworthiness
directive (AD) that is applicable to certain Fokker Model F28 Mark 0100
series airplanes was published in the Federal Register on February 13,
1996 (61 FR 5524). That action proposed to require a rotor probe
inspection and a pencil probe inspection to detect cracks of the Hi-lok
bolt holes in the main hinge fittings of the horizontal stabilizer. For
certain airplanes, that action also proposed to require modification of
the Hi-lok bolt holes by cold expansion and stiffening of the ribs at
Station 215.
Interested persons have been afforded an opportunity to participate
in the making of this amendment. Due consideration has been given to
the comments received.
Support for the Proposal
One commenter supports the proposed rule.
Request To Extend the Compliance Time
One commenter requests that the compliance time for the initial
inspection be extended from the proposed 15,000 total flight cycles to
16,000 flight cycles. The commenter considers that extending the
compliance time to 16,000 flight cycles would allow an operator to
accomplish the inspection during regularly scheduled maintenance, and
would prevent any disruption of service. The commenter states that the
adoption of the proposed compliance time would require scheduling of
special times for the accomplishment of this inspection at considerable
expense beyond what was estimated in the cost impact of the proposed
rule.
The FAA does not concur. In developing the compliance time for this
rulemaking action, the FAA took into consideration not only the safety
implications associated with the addressed unsafe condition and the
normal maintenance schedules for the majority of affected operators,
but also the results of fatigue tests and analysis performed by the
manufacturer, the manufacturer's recommended compliance time specified
in the
[[Page 49249]]
applicable service bulletin, and the foreign airworthiness authority's
recommended compliance time of 15,000 total flight cycles. In
consideration of these factors, the FAA finds that a compliance time of
15,000 total flight cycles (or within 1 year after the effective date
of this date) is appropriate and should fall during a time of scheduled
maintenance for the majority of affected operators. However, paragraph
(d) of the final rule does provide affected operators the opportunity
to apply for an adjustment of the compliance time if data are presented
to justify such an adjustment.
Conclusion
After careful review of the available data, including the comments
noted above, the FAA has determined that air safety and the public
interest require the adoption of the rule as proposed.
Cost Impact
The FAA estimates that 90 airplanes of U.S. registry will be
affected by this AD, that it will take approximately 136 work hours per
airplane to accomplish the required actions, and that the average labor
rate is $60 per work hour. Required parts will cost approximately
$1,800 per airplane. Based on these figures, the cost impact of the AD
on U.S. operators is estimated to be $896,400, or $9,960 per airplane.
The cost impact figure discussed above is based on assumptions that
no operator has yet accomplished any of the requirements of this AD
action, and that no operator would accomplish those actions in the
future if this AD were not adopted.
Regulatory Impact
The regulations adopted herein will not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this final
rule does not have sufficient federalism implications to warrant the
preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) will not have a
significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A final evaluation has been prepared for this action
and it is contained in the Rules Docket. A copy of it may be obtained
from the Rules Docket at the location provided under the caption
ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.
Adoption of the Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration amends part 39 of
the Federal Aviation Regulations (14 CFR part 39) as follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
96-19-16 Fokker: Amendment 39-9762. Docket 95-NM-59-AD.
Applicability: Model F28 Mark 0100 airplanes; having serial
numbers 11244 through 11420 inclusive, 11422, 11424 through 11428
inclusive, 11432 through 11439 inclusive, and 11443 through 11445
inclusive; certificated in any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
otherwise modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (d) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required as indicated, unless accomplished
previously.
To prevent reduced structural integrity of the horizontal
stabilizer, accomplish the following:
Note 2: Inspections and modifications accomplished prior to the
effective date of this amendment in accordance with Fokker Service
Bulletin SBF100-55-021, Revision 1, dated September 6, 1993, are
considered acceptable for compliance with the inspections and
modifications required by this amendment.
(a) Prior to the accumulation of 15,000 total flight cycles, or
within 1 year after the effective date of this AD, whichever occurs
later: Perform a rotor probe inspection and a pencil probe
inspection to detect cracking of the Hi-lok bolt holes in the main
hinge fittings of the horizontal stabilizer, in accordance with Part
5 of the Accomplishment Instructions of Fokker Service Bulletin
SBF100-55-021, Revision 2, dated December 27, 1993. This inspection
is not required for airplanes that have been modified as specified
in paragraph (b) of this AD, provided that the modification is
accomplished prior to the accumulation of 1,000 total flight cycles.
(b) Either prior to the accumulation of 1,000 total flight
cycles; or prior to further flight after the inspection required by
paragraph (a) of this AD if, as a result of that inspection, no
cracking is found, or all cracks that are found are less than or
equal to the values specified in the Decision Diagram (Figure 2) of
Fokker Service Bulletin SBF100-55-021, Revision 2, dated December
27, 1993: Accomplish the modification requirements specified in
paragraph (b)(1) and (b)(2) of this AD.
(1) Modify the main hinge fittings of the horizontal stabilizer;
and replace or modify the connecting angles at Rib 215, as
applicable; in accordance with Fokker Service Bulletin SBF100-55-
021, Revision 2, dated December 27, 1993, and as specified in either
paragraph (b)(1)(i) or (b)(1)(ii) of this AD, as applicable.
(i) For airplanes that have accumulated less than 1,000 total
flight cycles at the time of modification: Accomplish the
modification in accordance with either Part 3 or Part 4 of the
Accomplishment Instructions of the service bulletin, as applicable.
(ii) For airplanes that have accumulated 1,000 or more total
flight cycles at the time of modification: Accomplish the
modification in accordance with either Part 6 or Part 7 of the
Accomplishment Instructions of the service bulletin, as applicable.
(2) Modify Rib 215 of the horizontal stabilizer to close the
lightening holes in accordance with Part 8 of the Accomplishment
Instructions of Fokker Service Bulletin SBF100-55-021, Revision 2,
dated December 27, 1993.
(c) If any cracking is found as a result of the inspection
required by paragraph (a) of this AD, and the cracking exceeds the
values specified in the Decision Diagram (Figure 2) of Fokker
Service Bulletin SBF100-55-021, Revision 2, dated December 27, 1993:
Prior to further flight, repair in accordance with a method approved
by the Manager, Standardization Branch, ANM-113, FAA, Transport
Airplane Directorate.
(d) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, Standardization Branch, ANM-113.
Operators shall submit their requests through an appropriate FAA
Principal Maintenance Inspector, who may add comments and then send
it to the Manager, Standardization Branch, ANM-113.
Note 3: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Standardization Branch, ANM-113.
[[Page 49250]]
(e) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(f) The actions shall be done in accordance with Fokker Service
Bulletin SBF100-55-021, Revision 2, dated December 27, 1993. This
incorporation by reference was approved by the Director of the
Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part
51. Copies may be obtained from Fokker Aircraft USA, Inc., 1199
North Fairfax Street, Alexandria, Virginia 22314. Copies may be
inspected at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue, SW., Renton, Washington; or at the Office of the Federal
Register, 800 North Capitol Street, NW., suite 700, Washington, DC.
(g) This amendment becomes effective on October 24, 1996.
Issued in Renton, Washington, on September 10, 1996.
James V. Devany,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-23712 Filed 9-18-96; 8:45 am]
BILLING CODE 4910-13-U
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