issue-1996-01-03•Federal Register final rules — 1996-01-03
Federal Register final rules — 1996-01-03
issue-1996-01-03Federal Register final rules — 1996-01-03Regulation
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FR Doc. 96-93 Policy on Audits of RUS Borrowers
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 104-114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-93]
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1773
RIN 0572-AA93
Policy on Audits of RUS Borrowers
AGENCY: Rural Utilities Service, USDA.
ACTION: Interim final rule with request for comments.
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SUMMARY: The Rural Utilities Service (RUS) hereby amends its
regulations on audits of RUS borrowers. This rule incorporates changes
to the audit regulations necessitated by the 1994 revision of
Government Auditing Standards (GAGAS), issued by the Comptroller
General of the United States, United States General Accounting Office
(GAO), effective for financial audits of periods ending on or after
January 1, 1995 and by Statement on Auditing Standards (SAS) No. 74,
[[Page 105]]
Compliance Auditing Considerations in Audits of Governmental Entities
and Recipients of Governmental Financial Assistance, issued by the
Auditing Standards Board of the American Institute of Certified Public
Accountants (AICPA), effective for fiscal periods ending after December
31, 1994.
This rule also clarifies the peer review requirements for certified
public accountants (CPA) performing audits of RUS borrowers.
DATES: This rule is effective January 3, 1996. This rule applies to
audits of periods ending on December 31, 1995, and thereafter.
Written comments must be received by RUS or carry a postmark or
equivalent no later than March 4, 1996.
ADDRESSES: Submit written comments to Ms. Roberta D. Purcell, Chief,
Technical Accounting and Auditing Staff, Borrower Accounting Division,
Rural Utilities Service, Ag Box 1523, room 2221-S, U.S. Department of
Agriculture, Washington, DC 20250, telephone number (202) 720-5227. RUS
requires a signed original and three copies of all comments (7 CFR part
1700). All comments will be made available for inspection at room 2234
South Building during regular business hours (7 CFR 1.27(b)).
FOR FURTHER INFORMATION CONTACT: Ms. Roberta D. Purcell, Chief,
Technical Accounting and Auditing Staff, Borrower Accounting Division,
Rural Utilities Service, Ag Box 1523, room 2221-S, U.S. Department Of
Agriculture, Washington, DC 20250, telephone number (202) 720-5227.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This interim rule has been determined to be not significant for the
purposes of Executive Order 12866 and therefore has not been reviewed
by the Office of Management and Budget (OMB).
Regulatory Flexibility Act Certification
The Administrator, RUS, has determined that the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) does not apply to this rule.
Information Collection and Record Keeping Requirements
The reporting and recordkeeping requirements contained in the
interim rule were approved by the Office of Management and Budget (OMB)
pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35,
as amended) under control number 0572-0095.
Send questions or comments regarding this burden or any other
aspect of these collections of information, including suggestions for
reducing the burden, to F. Lamont Hepppe, Jr., Deputy Director, Program
Support Staff, Rural Utilities Service, Ag Box 1522, Washington, DC
20250-1522.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review program to eliminate unnecessary regulations and
improve those that remain in force.
National Environmental Policy Act Certification
The Administrator, RUS, has determined that this rule will not
significantly affect the quality of the human environment as defined by
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
Therefore, this action does not require an environmental impact
statement or assessment.
Catalog of Federal Domestic Assistance
The program described by this interim rule is listed in the Catalog
of Federal Domestic Assistance Programs under number 10.850--Rural
Electrification Loans and Loan Guarantees. This catalog is available on
a subscription basis from the Superintendent of Documents, the United
States Government Printing Office, Washington, DC 20402, (202) 512-
1800.
Executive Order 12372
This rule is excluded from the scope of Executive Order 12372,
Intergovernmental Consultation. A Notice of Final Rule entitled
Department Programs and Activities Excluded from Executive Order 12372
(50 FR 47034) exempts RUS electric loans and loan guarantees from
coverage under this Order.
Executive Order 12778
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform. This rule: (1) Will not preempt any state or local
laws, regulations, or policies, unless they present an irreconcilable
conflict with this rule; (2) Will not have any retroactive effect; and
(3) Will not require administrative proceeding before parties may file
suit challenging the provisions of this rule.
Background
Part 1773 implements the standard RUS security instrument provision
requiring RUS borrowers to prepare and furnish to RUS, at least once
during each 12-month period, a full and complete report of its
financial condition, operations, and cash flows, in form and substance
satisfactory to RUS, audited and certified by an independent CPA,
satisfactory to RUS, and accompanied by a report of such audit, in form
and substance satisfactory to RUS. A report of the audit was defined in
Sec. 1773.1, General, to include the auditor's report, report on
compliance, report on internal controls and management letter.
On January 6, 1994, RUS published a final rule amending part 1773,
at 59 FR 657, that revised and clarified a provision of part 1773 that
requires a certified public accountant (CPA) to state whether an
electric borrower has complied with certain provisions of its loan and
security instruments. The January 6, 1994 final rule also incorporated
the illustrative management letter issued by the AICPA in a Technical
Practice Aid dated November 11, 1992.
This rule amends part 1773 to comply with the 1994 revision of
GAGAS. The 1994 revision of GAGAS adds three additional field work
standards. It also provides guidance on reporting, required
communications, and external quality control review.
The first additional standard requires CPAs to follow up on known,
material findings and recommendations from previous audits. This
standard is accomplished through compliance with Sec. 1773.32(a) and
Sec. 1773.33 of the current regulation.
The second additional standard requires CPAs to design their audits
to detect material noncompliance with contracts or grant agreements.
Section 1773.9, Disclosure of Irregularities and Illegal Acts, requires
CPAs to design the audit to include audit steps and procedures to
provide reasonable assurance of detecting errors, irregularities, and
illegal acts that could have a material effect on the financial
statement amounts and to extend audit procedures if there is an
indication that an irregularity may have occurred. This rule revises
the language of this section to include the supplemental standard to
design the audit to detect material noncompliance with contracts or
grant agreements as required by the 1994 revision of GAGAS.
The third additional standard requires CPAs to provide, in the
working papers, sufficient information to allow an experienced auditor
to locate the evidence supporting the CPA's significant conclusions and
judgments. Section 1773.6, Audit Agreement, requires the CPA and
borrower to enter into an audit agreement. Among the declarations that
must be included in the audit agreement is a statement that the CPA
will document the audit work
[[Page 106]]
performed in accordance with the professional standards of the AICPA
and part 1773. This rule revises this section to incorporate the
additional working paper requirements set forth in the 1994 revision of
GAGAS.
The 1994 revision of GAGAS requires the CPA to communicate the
auditor's responsibilities for consideration of internal controls and
compliance with laws and regulations and to contrast those
responsibilities with the additional procedures that could be performed
and the additional assurances or opinions on the internal control
structure or on compliance with laws and regulations that would result.
This communication must be with the board of directors. This rule
revises Sec. 1773.6 to include this required communication.
Section 1773.6 also requires the audit agreement to include a
statement that ``The borrower and CPA acknowledge that RUS regulations
provide that if the borrower fails to have an audit performed and
documented in compliance with GAGAS and this part, the borrower is in
violation of its security instrument with RUS''. In response to our
September 23, 1993, proposed rule, one CPA firm stated that this
language exceeds the applicable mortgage covenant and the following
language should be substituted ``The borrower and CPA acknowledge that
RUS will consider the borrower to be in violation of its security
instrument with RUS if the borrower fails to have an audit performed
and documented in compliance with GAGAS and 7 CFR part 1773. The
proposed rule published on September 23, 1993, did not include
revisions to Sec. 1773.6; therefore, we have incorporated the
aforementioned revision in this proceeding.
Section 1773.5, Qualifications of CPA, requires a CPA to submit to
a peer review of its accounting and audit practice every three years or
at such additional times as designated by the peer review executive
committee. Due to the increased number of peer reviews being performed,
many reviewers have experienced problems scheduling peer reviews within
the required time period. As a result, the AICPA extended the time
period to 42 months. RUS is, therefore, amending its requirement to
allow CPAs an additional six months to comply.
Similarly, the AICPA Board of Directors and the AICPA Council
approved the combination of the peer review program conducted by the
Private Companies Practice Section of the AICPA and the AICPA quality
review program effective for reviews performed April 3, 1995, and
thereafter. The AICPA Peer Review Board will conduct this program in
cooperation with the state CPA societies. Section 1773.5 has been
revised to reflect the changes necessitated by this merger.
The 1994 revision of GAGAS also provides guidance on external
quality control (peer) reviews. The CPA is required to provide a copy
of its most recent peer review report to those contracting for the
audit. Reciprocal peer reviews are prohibited; for example, an audit
organization is not permitted to review the organization that conducted
its most recent review. This interim rule revises Sec. 1773.5 to
incorporate the aforementioned change.
RUS's peer review requirement as currently set forth in Sec. 1773.5
does not allow individual CPAs that previously audited RUS borrowers as
part of a CPA firm to enter into private practice and audit RUS
borrowers without first obtaining a peer review. RUS is allowing the
Administrator of RUS to waive the peer review requirement for a period
of 18 months if the CPA meets certain proposed criteria set forth in
Sec. 1773.5(c)(7). The criteria established provides RUS with assurance
that the CPA has previously participated in establishing the quality
control standards for a CPA firm, the CPA has had responsibility for
the audit of an RUS borrower, and that a CPA firm is not reorganizing
for the sole purpose of evading the peer review requirement or
extending the time period for the performance of a peer review.
The 1994 revision of GAGAS requires the auditor's report to refer
to separate reports on compliance and on internal controls. Section
1773.31, Auditor's Report, requires the CPA to prepare a written report
covering all statements issued. This rule revises the language of this
section to incorporate the aforementioned change.
The 1988 revision of GAGAS required auditors to express positive-
negative assurance on compliance with laws and regulations in the
report on compliance and to identify the categories of controls
considered significant in the report on the internal control structure.
These requirements were eliminated in the 1994 revision of GAGAS.
Section 1773.32, Report on Compliance, requires the CPA to prepare a
written report on compliance with applicable laws, regulations, and
contracts as required by GAGAS. This rule removes the positive-negative
assurance requirement from the report on compliance. Similarly,
Sec. 1773.33, Report on Internal Controls, requires the CPA to prepare
a written report on the borrower's internal control structure and the
assessment of control risk made as part of the financial statement
audit as required by GAGAS. This rule deletes the requirement to
identify the categories of controls considered significant in the CPA's
report on the internal control structure.
Section 1773.34, Management Letter, specifies the minimum
requirements for the CPA's management letter. Among these is the
requirement for the CPA to state whether the information submitted to
RUS in its most recent December 31 RUS Form 7, Financial and
Statistical Report; Form 12, Operating Report--Financial; or Form 479,
Financial and Statistical Report for Telephone Borrowers, is in
agreement with the borrower's records. This rule would clarify that the
CPA's statement must indicate whether the most recent December 31 RUS
Form 7, 12, or 479 agrees with the borrower's ``audited'' records.
The CPA is also required by Sec. 1773.34 to comment when
depreciation rates for electric borrowers are not in compliance with
RUS requirements. This rule clarifies the requirement that the CPA
comment when the depreciation rates used by the borrower for each
primary plant account are not within the range established for that
particular account by RUS Bulletin 183-1, Depreciation Rates and
Procedures, or by the requirements of the state regulatory body having
jurisdiction over the borrower's depreciation rates.
Also included in Sec. 1773.34 is a requirement for the CPA to
comment on the adequacy of the borrower's controls over materials and
supplies. As part of the comment, RUS requires the presentation of a
``Detailed Schedule of Inventory Differences.'' RUS is eliminating this
schedule as it does not provide information that is beneficial to the
users of the financial statements. The above changes are also reflected
in the revision of Appendix C to Part 1773--Illustrative Independent
Auditor's Management Letter.
In February 1995, the Auditing Standards Board issued SAS No. 74,
Compliance Auditing Considerations in Audits of Governmental Entities
and Recipients of Governmental Financial Assistance, effective for
fiscal periods ending after December 31, 1994. SAS No. 74 supersedes
SAS No. 68, Compliance Auditing Applicable to Governmental Entities and
Other Recipients of Governmental Financial Assistance. In conjunction
with the issuance of SAS No. 74 and the 1994 revision of GAGAS, the
AICPA also revised its illustrative reports in the Audit and Accounting
Guide, Audits of State and Local Governmental Units, thereby
necessitating the changes in the
[[Page 107]]
sample reports contained in Appendix A to Part 1773--Sample Auditor's
Report for an Electric Cooperative and Appendix B to Part 1773--Sample
Auditor's Report for a Class A or B Commercial Telephone Company.
RUS has determined that, for a number of reasons, good cause exists
to make this rule effective immediately on an interim basis. Notice and
comment prior to the effective date is impractical, unnecessary and
contrary to the public interest. RUS loan documents and implementing
regulations generally require that each borrower provide RUS with an
annual audit report, prepared by an independent CPA within 120 days of
the ``as of'' audit date. To meet this deadline for audits of financial
statements prepared as of December 31, 1995, audits must be undertaken
immediately. In conducting the audit and preparing the report, CPAs are
required to comply with the provisions of GAGAS and with the provisions
of this part 1773. As a result of changes in GAGAS, there are currently
inconsistencies between GAGAS and this part 1773; therefore, CPAs must
be immediately advised of the applicable audit requirements and any
inconsistencies between GAGAS and part 1773 must be resolved. If the
inconsistencies are not resolved, borrowers could be placed in
technical default under their loan documents with both the government
and private co-lenders. Any failure to comply with loan documents can
of course affect borrowers access to and cost of capital. Moreover,
borrowers could be forced to incur additional audit expense absent an
immediate reconciliation of RUS audit requirements. Such consequences
are not in the interests of the RUS program, the borrowers or the
people they serve. In addition, many of the changes implemented by this
rule were previously subjected to notice and comment prior to being
issued by GAO. Consequently, further notice and comment is unnecessary.
List of Subjects in 7 CFR Part 1773
Accounting, Electric power, Loan programs--communications, Loan
programs--energy, Reporting and recordkeeping requirements, Rural
areas, Telecommunications.
For the reasons set forth in the preamble, RUS hereby amends 7 CFR
chapter XVII as follows:
PART 1773--POLICY ON AUDITS OF RUS BORROWERS
1. The authority citation for Part 1773 continues to read as
follows:
Authority: 7 U.S.C. 901 et seq.; 7 U.S.C. 1921 et seq.; Pub. L.
103-354, 108 Stat. 3178 (7 U.S.C. 6941 et seq.).
2. Section 1773.1 is amended by revising paragraph (c) to read as
follows:
Sec. 1773.1 General.
* * * * *
(c) This part complies with the 1994 revision of Government
Auditing Standards, issued by the Comptroller General of the United
States, United States General Accounting Office.
* * * * *
3. Section 1773.5 is amended by revising paragraph (c) to read as
follows:
Sec. 1773.5 Qualifications of CPA.
* * * * *
(c) Peer review requirement. The CPA must belong to and participate
in a peer review program, and must have undergone a satisfactory peer
review of the accounting and audit practice conducted by an approved
peer review program under paragraph (c)(4) of this section, unless a
waiver is granted under paragraph (c)(7) of this section. The reviewing
organization must not be affiliated with or have had its most recent
peer review conducted by the organization currently being reviewed
(reciprocal reviews). After the initial peer review has been performed,
the CPA must undergo a peer review of the accounting and audit practice
within 42 months of the previous ``as of'' peer review date or at such
additional times as designated by the peer review executive committee.
(1) A CPA that receives an unqualified peer review report will be
satisfactory to RUS provided that the CPA meets the other criteria set
forth in this section.
(2) If a CPA receives a qualified or adverse peer review report,
the CPA must undergo a second peer review within 18 months of the date
of the qualified or adverse report. A CPA that receives an unqualified
second peer review report will be satisfactory to RUS provided that the
CPA meets the other criteria set forth in this section.
(3) A CPA that receives a second qualified or adverse peer review
report will not be satisfactory to RUS.
(4) Approved peer review programs. The following peer review
programs are approved by RUS:
(i) The peer review programs conducted by the AICPA;
(ii) The peer review program conducted by the regulated audit
program group of the National Conference of CPA Practitioners; and
(iii) An independent peer review program that, in RUS's
determination, requires its members to:
(A) Ensure that the CPA can legally engage in the practice of
certified public accounting;
(B) Adhere to the quality control standards established by the
AICPA;
(C) Submit to peer reviews of the CPA's accounting and audit
practice every 42 months or at such additional times as designated by
its own executive committee; and
(D) Ensure that all professionals in the firm, including CPAs and
nonCPAs, take part in the qualifying continuing professional education
requirements of GAGAS, as set forth in paragraphs (c)(4)(iii)(D)(1) and
(c)(4)(iii)(D)(2). A qualified continuing professional education course
is one which meets the standards of the AICPA.
(1) An auditor responsible for planning, directing, conducting, or
reporting on government audits must complete, every two years, at least
eighty hours of continuing education and training which contributes to
the auditor's professional proficiency. At least twenty hours must be
completed in any one year of the two-year period; and
(2) An individual responsible for planning, directing, and
conducting substantial portions of the field work, or reporting on the
government audit must complete at least 24 of the 80 hours of
continuing education and training in subjects directly related to the
government environment and to government auditing. If the audited
entity operates in a specific or unique environment, auditors must
receive training that is related to that environment.
(5) Notification. The CPA must notify the Director, BAD, in
writing, of participation in a peer review program. RUS will notify the
CPA within 60 days of receipt of this notice if the selected peer
review program is acceptable.
(6) Submission of reports. The CPA must submit to the Director,
BAD, a copy of any peer review report and accompanying letter of
comment, if any, within 60 days of the date such report and letter of
comment are released by the peer review group.
(i) If the peer review report indicates that a follow-up review
will be made, the CPA must submit subsequent reports to the Director,
BAD, within 60 days of the date such reports are released by the peer
review group.
(ii) A peer review report must be submitted to the Director, BAD,
at least once every 42 months, or more frequently, if required by the
peer review program.
(iii) A copy of the peer review report, accompanying letter of
comment, and the partners' inspections must be made available to OGC,
upon request.
[[Page 108]]
(7) Waiver of the peer review requirement.
(i) A CPA may request that the Administrator, RUS, waive the peer
review requirement. To be eligible for a waiver, the following criteria
must be met:
(A) The firm has been in existence for less than 1 year from the
date of the request and has not been previously organized under a
different name;
(B) One of the partners organizing the firm has previously, within
18 months preceding the request, worked for a firm that has been peer
reviewed and the partner was partner-in-charge of audits of RUS
borrowers in the previous firm;
(C) The firm has enrolled in an approved peer review program; and
(D) The firm agrees to have the peer review conducted within 18
months of the date of the RUS waiver.
(ii) Waiver requests must address each of the criteria in paragraph
(c)(7)(i) of this section and should be submitted to the Director,
Borrower Accounting Division.
* * * * *
4. Section 1773.6 is amended by revising paragraph (a) to read as
follows:
Sec. 1773.6 Audit agreement.
(a) An audit agreement must be entered into between the CPA and the
borrower. The audit agreement must set forth the auditor's
responsibilities in a financial statement audit, including the
responsibilities for testing and reporting on internal controls and
compliance with laws and regulations and the nature of any additional
testing of internal controls and compliance required by laws and
regulations. These responsibilities should be contrasted with the
additional procedures that could be performed that would result in
additional assurances or opinions on the internal control structure and
compliance with laws and regulations. The audit agreement must also
include the following:
(1) The borrower and the CPA acknowledge that the audit is being
performed and the auditor's report, report on compliance, report on
internal controls, and management letter is being issued in order to
enable the borrower to comply with the provisions of RUS's security
instrument;
(2) The borrower and CPA acknowledge that RUS will consider the
borrower to be in violation of its security instrument with RUS if the
borrower fails to have an audit performed and documented in compliance
with GAGAS and this part;
(3) The CPA represents that he/she meets the requirements under
this part to be satisfactory to RUS;
(4) The CPA will perform the audit and will prepare the auditor's
report, report on compliance, report on internal controls, and
management letter in accordance with the requirements of this part;
(5) The CPA will document the audit work performed in accordance
with GAGAS, the professional standards of the AICPA, and the
requirements of this part;
(6) The CPA will make all audit-related documents, including
auditor's reports, workpapers, and management letters available to RUS
or its representatives (OGC and GAO), upon request, and will permit the
photocopying of all audit-related documents; and
(7) The CPA will follow the requirements of reporting
irregularities and illegal acts as outlined in Sec. 1773.9.
* * * * *
5. Section 1773.9 is amended by revising paragraphs (a) and (b) to
read as follows:
Sec. 1773.9 Disclosure of irregularities and illegal acts.
(a) In accordance with GAGAS, the CPA must design audit steps and
procedures to provide reasonable assurance of detecting errors,
irregularities, illegal acts, and noncompliance with the provisions of
contracts or grant agreements that could have a direct and material
effect on financial statement amounts.
(b) If there is an indication that an irregularity may have
occurred or evidence concerning the existence of a possible instance of
noncompliance with the provisions of contracts or grant agreements that
could have a material direct or indirect effect on the financial
statements, the CPA must extend audit steps and procedures to obtain
sufficient, competent evidential matter to determine whether, in fact,
an irregularity or an instance of noncompliance has occurred and the
effect on the borrower's financial statements.
* * * * *
6. Section 1773.31 is revised to read as follows:
Sec. 1773.31 Auditor's report.
The CPA must prepare a written report on comparative balance
sheets, statements of revenue and patronage capital (or income and
retained earnings, depending upon the structure of the borrower) and
statements of cash flows. This report must be signed by the CPA, cover
all statements presented, and refer to the separate reports on internal
controls and on compliance with laws and regulations issued in
conjunction with the auditor's report.
7. Section 1773.32 is amended by revising paragraph (a) to read as
follows:
Sec. 1773.32 Report on compliance.
(a) As required by GAGAS, the CPA must prepare a written report on
the tests performed for compliance with applicable laws, regulations,
contracts, and grants. This report must be signed by the CPA and must
contain the status of known but uncorrected significant or material
findings and recommendations from prior audits that affect the current
audit objective.
* * * * *
8. Section 1773.33 is revised to read as follows:
Sec. 1773.33 Report on internal controls.
As required by GAGAS, the CPA must prepare a written report on the
borrower's internal control structure and the assessment of control
risk made as part of the financial statement audit. This report must be
signed by the CPA and must include, as a minimum:
(a) The scope of the CPA's work to obtain an understanding of the
borrower's internal control structure and in assessing the control
risk;
(b) A description of the reportable conditions noted which include
material weaknesses identified as a result of the CPA's work in
understanding and assessing the control risk; and
(c) The status of known but uncorrected, significant or material
findings and recommendations from prior audits that affect the current
audit objective.
9. Section 1773.34 is amended by removing paragraphs (d)(1),
(d)(2), and (d)(3) and revising paragraphs (e)(1)(iii), (e)(2)(iii),
and (g) to read as follows:
Sec. 1773.34 Management letter.
* * * * *
(e) * * *
(1) * * *
(iii) The requirement for a borrower to prepare and furnish
mortgagees annual financial and statistical reports on the borrower's
financial condition and operations. The CPA must state whether the
information represented by the borrower as having been submitted to RUS
in its most recent December 31 RUS Form 7 or Form 12 is in agreement
with the borrower's audited records, and must comment on any exceptions
noted. If the borrower represents that an amended report has been filed
as of December 31, the comments must relate to the amended report.
(2) * * *
(iii) The requirement for a borrower to prepare and furnish
mortgagees annual
[[Page 109]]
financial and statistical reports on the borrower's financial condition
and operations. The CPA must state whether the information represented
by the borrower as having been submitted to RUS in its most recent
December 31 RUS Form 479 is in agreement with the borrower's audited
records, and must comment on any exceptions noted. If the borrower
represents that an amended report has been filed as of December 31, the
comments must relate to the amended report;
* * * * *
(g) Depreciation rates. For electric borrowers, comment when the
depreciation rates used in computing monthly accruals are not in
compliance with RUS requirements (See RUS Bulletin 183-1, Depreciation
Rates and Procedures), which require the use of depreciation rates that
are within the ranges established by RUS for each primary plant
account, or with the requirements of the State regulatory body having
jurisdiction over the borrower's depreciation rates; and
* * * * *
10. In Appendix A to Part 1773 Exhibits 1 through 6 are revised to
read as follows:
Appendix A to Part 1773--Sample Auditor's Report for an Electric
Cooperative
* * * * *
Exhibit 1--Sample Auditor's Report
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center County Electric Cooperative:
Independent Auditor's Report
We have audited the accompanying balance sheets of Center County
Electric Cooperative as of December 31, 19X9 and 19X8, and the
related statements of revenue and patronage capital, and cash flows
for the years then ended. These financial statements are the
responsibility of Center County Electric Cooperative's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Center County Electric Cooperative as of December 31, 19X9 and 19X8,
and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 19X0, on our consideration of Center
County Electric Cooperative's internal control structure and a
report dated March 2, 19X0, on its compliance with laws and
regulations.
Certified Public Accountants
March 2, 19X0
Exhibit 2--Sample Report on Compliance When, Based on Assessments
of Materiality and Audit Risk, the CPA Concluded It Was Not
Necessary to Perform Tests of Compliance With Laws and Regulations
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center County Electric Cooperative:
We have audited the financial statements of Center County
Electric Cooperative as of and for the years ended December 31, 19X9
and 19X8, and have issued our report thereon dated March 2, 19X0.
We conducted our audits in accordance with generally accepted
auditing standards and the Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement.
Compliance with laws, regulations, contracts, and grants
applicable to Center County Electric Cooperative is the
responsibility of Center County Electric Cooperative's management.
As part of our audit, we assessed the risk that noncompliance with
certain provisions of laws, regulations, contracts, and grants could
cause the financial statements to be materially misstated. We
concluded that the risk of such material misstatement was
sufficiently low that it was not necessary to perform tests of
Center County Electric Cooperative's compliance with such provisions
of laws, regulations, contracts, and grants.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
Exhibit 3--Sample Report on Compliance When, Based on Assessments
of Materiality and Audit Risk, the CPA Performed Compliance Testing
and Found No Reportable Instances of Noncompliance
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center County Electric Cooperative:
We have audited the financial statements of Center County
Electric Cooperative as of and for the years ended December 31, 19X9
and 19X8, and have issued our report thereon dated March 2, 19X0.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.
Compliance with laws, regulations, contracts, and grants
applicable to Center County Electric Cooperative is the
responsibility of Center County Electric Cooperative's management.
As part of obtaining reasonable assurance about whether the
financial statements are free of material misstatement, we performed
tests of Center County Electric Cooperative's compliance with
certain provisions of laws, regulations, contracts, and grants.
However, the objective of our audit of the financial statements was
not to provide an opinion on overall compliance with such
provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance
that are required to be reported herein under Government Auditing
Standards.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
Exhibit 4--Sample Report on Compliance When, Based on Assessments
of Materiality and Audit Risk, the CPA Performed Compliance Testing
and Found Reportable Instances of Noncompliance
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center County Electric Cooperative:
We have audited the financial statements of Center County
Electric Cooperative as of and for the years ended December 31, 19X9
and 19X8, and have issued our report thereon dated March 2, 19X0.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.
Compliance with laws, regulations, contracts, and grants
applicable to Center County Electric Cooperative is the
responsibility of Center County Electric Cooperative's management.
As part of obtaining reasonable assurance about whether the
financial statements are free of material misstatement, we preformed
tests of Center County Electric Cooperative's compliance with
certain provisions of laws, regulations, contracts, and grants.
However, the objective of our audit of the financial
[[Page 110]]
statements was not to provide an opinion on overall compliance with
such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed instances of noncompliance
that are required to be reported herein under Government Auditing
Standards for which the ultimate resolution cannot presently be
determined. Accordingly, no provision for any liability that may
result has been recognized in Center County Electric Cooperative's
19X9 and 19X8 financial statements.
[Include paragraphs describing the instances of noncompliance
noted.]
We considered these instances of noncompliance in forming our
opinion on whether Center County Electric Cooperative's 19X9 and
19X8 financial statements are presented fairly, in all material
respects, in conformity with generally accepted accounting
principles, and this report does not effect our report dated March
2, 19X0, on those financial statements.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
Exhibit 5--Sample Report on Internal Controls When Reportable
Conditions Were Found
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center County Electric Cooperative:
We have audited the financial statements of Center County
Electric Cooperative as of and for the years ended December 31, 19X9
and 19X8, and have issued our report thereon dated March 2, 19X0.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.
The management of Center County Electric Cooperative is
responsible for establishing and maintaining an internal control
structure. In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected
benefits and related costs of internal control structure policies
and procedures. The objectives of an internal control structure are
to provide management with reasonable, but not absolute, assurance
that the assets are safeguarded against loss from unauthorized use
or disposition, and that transactions are executed in accordance
with management's authorization and recorded properly to permit the
preparation of financial statements in accordance with generally
accepted accounting principles. Because of inherent limitations in
any internal control structure, errors or irregularities may
nevertheless occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk
that procedures may become inadequate because of changes in
conditions or that the effectiveness of the design and operation of
policies and procedures may deteriorate.
In planning and performing our audit of the financial statements
of Center County Electric Cooperative for the years ended December
31, 19X9 and 19X8, we obtained an understanding of the internal
control structure. With respect to the internal control structure,
we obtained an understanding of the design of relevant policies and
procedures and whether they have been placed in operation, and we
assessed control risk in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial
statements and not to provide an opinion on the internal control
structure. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control
structure and its operation that we consider to be reportable
conditions under standards established by the American Institute of
Certified Public Accountants. Reportable conditions involve matters
coming to our attention relating to significant deficiencies in the
design or operation of the internal control structure that, in our
judgement, could adversely affect the entity's ability to record,
process, summarize, and report financial data consistent with the
assertions of management in the financial statements.
[Include paragraphs to describe the reportable conditions noted.]
A material weakness is a reportable condition in which the
design or operation of one or more of the specific internal control
structure elements does not reduce to a relatively low level the
risk that errors or irregularities in amounts that would be material
in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal
course of performing their assigned functions.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be reportable conditions and, accordingly, would not
necessarily disclose all reportable conditions that are also
considered to be material weaknesses as defined above. However, we
believe none of the reportable conditions described above is a
material weakness.
We also noted other matters involving the internal control
structure and its operation that we have reported to the management
of Center County Electric Cooperative in a separate letter dated
March 2, 19X0.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record, and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
Exhibit 6--Sample Report on Internal Controls When No Reportable
Conditions Were Found
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center County Electric Cooperative:
We have audited the financial statements of Center County
Electric Cooperative, as of and for the years ended December 31,
19X9 and 19X8, and have issued our report thereon dated March 2,
19X0.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.
The management of Center County Electric Cooperative is
responsible for establishing and maintaining an internal control
structure. In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected
benefits and related costs of internal control structure policies
and procedures. The objectives of an internal control structure are
to provide management with reasonable, but not absolute, assurance
that assets are safeguarded against loss from unauthorized use or
disposition, and that transactions are executed in accordance with
management's authorization and recorded properly to permit the
preparation of financial statements in accordance with generally
accepted accounting principles. Because of inherent limitations in
any internal control structure, errors or irregularities may
nevertheless occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk
that procedures may become inadequate because of changes in
conditions or that the effectiveness of the design and operation of
policies and procedures may deteriorate.
In planning and performing our audit of the financial statements
of Center County Electric Cooperative for the years ended December
31, 19X9 and 19X8, we obtained an understanding of the internal
control structure. With respect to the internal control structure,
we obtained an understanding of the design of relevant policies and
procedures and whether they have been placed in operation, and we
assessed control risk in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial
statements and not to provide an opinion on the internal control
structure. Accordingly, we do not express such an opinion.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of one or
more of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the
financial statements being audited may occur
[[Page 111]]
and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We noted no matters
involving the internal control structure and its operations that we
consider to be material weaknesses as defined above.
However, we noted other matters involving the internal control
structure and its operation that we have reported to the management
of Center County Electric Cooperative in a separate letter dated
March 2, 19X0.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record, and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
* * * * *
11. In Appendix B to Part 1773, Exhibits 1 through 6 are revised to
read as follows:
Appendix B to Part 1773--Sample Auditor's Report for a Class A or B
Commercial Telephone Company
* * * * *
Exhibit 1--Sample Auditor's Report
Certified Public Accountants, 1600 Main Street, City, State 24105,
The Board of Directors, Center Telephone Company:
Independent Auditor's Report
We have audited the accompanying balance sheets of Center
Telephone Company as of December 31, 19X9 and 19X8, and the related
statements of revenue and patronage capital, and cash flows for the
years then ended. These financial statements are the responsibility
of Center Telephone Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Center Telephone Company as of December 31, 19X9 and 19X8, and the
results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also
issued a report dated March 2, 19X0, on our consideration of Center
Telephone Company's internal control structure and a report dated
March 2, 19X0, on its compliance with laws and regulations.
Certified Public Accountants
March 2, 19X0
Exhibit 2--Sample Report on Compliance When, Based on Assessments
of Materiality and Audit Risk, the CPA Concluded It Was Not
Necessary to Perform Tests of Compliance With Laws and Regulations
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center Telephone Company
We have audited the financial statements of Center Telephone
Company as of and for the years ended December 31, 19X9 and 19X8,
and have issued our report thereon dated March 2, 19X0.
We conducted our audits in accordance with generally accepted
auditing standards and the Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement.
Compliance with laws, regulations, contracts, and grants
applicable to Center Telephone Company is the responsibility of
Center Telephone Company's management. As part of our audit, we
assessed the risk that noncompliance with certain provisions of
laws, regulations, contracts, and grants could cause the financial
statements to be materially misstated. We concluded that the risk of
such material misstatement was sufficiently low that it was not
necessary to perform tests of Center Telephone Company's compliance
with such provisions of laws, regulations, contracts, and grants.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
Exhibit 3--Sample Report on Compliance When, Based on Assessments
of Materiality and Audit Risk, the CPA Performed Compliance Testing
and Found No Reportable Instances of Noncompliance
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center Telephone Company:
We have audited the financial statements of Center Telephone
Company as of and for the years ended December 31, 19X9 and 19X8,
and have issued our report dated March 2, 19X0.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.
Compliance with laws, regulations, contracts, and grants
applicable to Center Telephone Company is the responsibility of
Center Telephone Company's management. As part of obtaining
reasonable assurance about whether the financial statements are free
of material misstatement, we performed tests of Center Telephone
Company's compliance with certain provisions of laws, regulations,
contracts, and grants. However, the objective of our audit of the
financial statements was not to provide an opinion on overall
compliance with such provisions. Accordingly, we do not express such
an opinion.
The results of our tests disclosed no instances of noncompliance
that are required to be reported herein under Government Auditing
Standards.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
Exhibit 4--Sample Report on Compliance When, Based on Assessments
of Materiality and Audit Risk, the CPA Performed Compliance Testing
and Found Reportable Instances of Noncompliance
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center Telephone Company:
We have audited the financial statements of Center Telephone
Company as of and for the years ended December 31, 19X9 and 19X8,
and have issued our report thereon dated March 2, 19X0.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.
Compliance with laws, regulations, contracts, and grants
applicable to Center Telephone Company is the responsibility of
Center Telephone Company's management. As part of obtaining
reasonable assurance about whether the financial statements are free
of material misstatement, we preformed tests of Center Telephone
Company's compliance with certain provisions of laws, regulations,
contracts, and grants. However, the objective of our audit of the
financial statements was not to provide an opinion on overall
compliance with such provisions. Accordingly, we do not express such
an opinion.
The results of our tests disclosed instances of noncompliance
that are required to be reported herein under Government Auditing
Standards for which the ultimate resolution cannot presently be
determined. Accordingly, no provision for any liability that may
result has been recognized in Center Telephone Company's 19X9 and
19X8 financial statements.
[Include paragraphs describing the instances of noncompliance
noted.]
We considered these instances of noncompliance in forming our
opinion on whether Center Telephone Company's 19X9
[[Page 112]]
and 19X8 financial statements are presented fairly, in all material
respects, in conformity with generally accepted accounting
principles, and this report does not effect our report dated March
2, 19X0, on those financial statements.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
Exhibit 5--Sample Report on Internal Controls When Reportable
Conditions Were Found
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center Telephone Company:
We have audited the financial statements of Center Telephone
Company as of and for the years ended December 31, 19X9 and 19X8,
and have issued our report thereon dated March 2, 19X0.
We conducted our audits in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.
The management of Center Telephone Company is responsible for
establishing and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgements by
management are required to assess the expected benefits and related
costs of internal control structure policies and procedures. The
objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that the
assets are safeguarded against loss from unauthorized use or
disposition, and that transactions are executed in accordance with
management's authorization and recorded properly to permit the
preparation of financial statements in accordance with generally
accepted accounting principles. Because of inherent limitations in
any internal control structure, errors or irregularities may
nevertheless occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk
that procedures may become inadequate because of changes in
conditions or that the effectiveness of the design and operation of
policies and procedures may deteriorate.
In planning and performing our audit of the financial statements
of Center Telephone Company for the years ended December 31, 19X9
and 19X8, we obtained an understanding of the internal control
structure. With respect to the internal control structure, we
obtained an understanding of the design of relevant policies and
procedures and whether they have been placed in operation, and we
assessed control risk in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial
statements and not to provide an opinion on the internal control
structure. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control
structure and its operation that we consider to be reportable
conditions under standards established by the American Institute of
Certified Public Accountants. Reportable conditions involve matters
coming to our attention relating to significant deficiencies in the
design or operation of the internal control structure that, in our
judgement, could adversely affect the entity's ability to record,
process, summarize, and report financial data consistent with the
assertions of management in the financial statements.
[Include paragraphs to describe the reportable conditions noted.]
A material weakness is a reportable condition in which the
design or operation of one or more of the specific internal control
structure elements does not reduce to a relatively low level the
risk that errors or irregularities in amounts that would be material
in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal
course of performing their assigned functions.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be reportable conditions and, accordingly, would not
necessarily disclose all reportable conditions that are also
considered to be material weaknesses as defined above. However, we
believe none of the reportable conditions described above is a
material weakness.
We also noted other matters involving the internal control
structure and its operation that we have reported to the management
of Center Telephone Company in a separate letter dated March 2,
19X0.
This report is intended for the information of the audit
committee, management, and Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record, and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
Exhibit 6--Sample Report on Internal Controls When No Reportable
Conditions Were Found
Certified Public Accountants, 1600 Main Street, City, State
24105, The Board of Directors, Center Telephone Company:
We have audited the financial statements of Center Telephone
Company, as of and for the years ended December 31, 19X9 and 19X8,
and have issued our report thereon dated March 2, 19X0.
We conducted our audit in accordance with generally accepted
auditing standards and Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement.
The management of Center Telephone Company is responsible for
establishing and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgements by
management are required to assess the expected benefits and related
costs of internal control structure policies and procedures. The
objectives of an internal control structure are to provide
management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition,
and that transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of
financial statements in accordance with generally accepted
accounting principles. Because of inherent limitations in any
internal control structure, errors or irregularities may
nevertheless occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk
that procedures may become inadequate because of changes in
conditions or that the effectiveness of the design and operation of
policies and procedures may deteriorate.
In planning and performing our audit of the financial statements
of Center Telephone Company for the years ended December 31, 19X9
and 19X8, we obtained an understanding of the internal control
structure. With respect to the internal control structure, we
obtained an understanding of the design of relevant policies and
procedures and whether they have been placed in operation, and we
assessed control risk in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial
statements and not to provide an opinion on the internal control
structure. Accordingly, we do not express such an opinion.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of one or
more of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the
financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of
performing their assigned functions. We noted no matters involving
the internal control structure and its operations that we consider
to be material weaknesses as defined above.
However, we noted other matters involving the internal control
structure and its operation that we have reported to the management
of Center Telephone Company in a separate letter dated March 2,
19X0.
This report is intended for the information of the audit
committee, management, the Rural Utilities Service, and supplemental
lenders. However, this report is a matter of public record, and its
distribution is not limited.
Certified Public Accountants
March 2, 19X0
* * * * *
12. Appendix C to Part 1773 is revised to read as follows:
[[Page 113]]
Appendix C to Part 1773--Illustrative Independent Auditor's
Management Letter
RUS requires that CPAs auditing RUS borrowers provide a
management letter in accordance with Sec. 1773.34. This letter must
be signed by the CPA, bear the same date as the auditor's report,
and be addressed to the borrower's board of directors.
Illustrative Independent Auditor's Management Letter
March 15, 19X6
Board of Directors, [Name of Borrower], [City, State].
We have audited the financial statements of [Name of Borrower]
for the year ended December 31, 19X5, and have issued our report
thereon dated March 15, 19X6. We conducted our audit in accordance
with generally accepted auditing standards, Government Auditing
Standards issued by the Comptroller General of the United States,
and 7 CFR part 1773, Policy on Audits of Rural Utilities Service
(RUS) Borrowers. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.
In planning and performing our audit of the financial statements
of [Name of Borrower] for the year ended December 31, 19X5, we
considered its internal control structure in order to determine our
auditing procedures for the purpose of expressing an opinion on the
financial statements and not to provide assurance on the internal
control structure.
A description of the responsibility of management for
establishing and maintaining the internal control structure and the
objectives of and inherent limitations in such a structure is set
forth in our independent auditors' report on the internal control
structure dated March 15, 19X6, and should be read in conjunction
with this report.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by the
American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or
operation of the specific internal control structure elements does
not reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the
financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters
involving the internal control structure and its operation that we
consider to be a material weakness as defined above. [If a material
weakness was noted, refer the reader to the independent auditors'
report on internal control structure.]
7 CFR 1773.34 requires comments on specific aspects of the
internal control structure, compliance with specific RUS loan and
security instrument provisions, and other additional matters. We
have grouped our comments accordingly. In addition to obtaining
reasonable assurance about whether the financial statements are free
from material misstatements, at your request, we performed tests of
specific aspects of the internal control structure, of compliance
with specific RUS loan and security instrument provisions, and of
additional matters. The specific aspects of the internal control
structure, compliance with specific RUS loan and security instrument
provisions, and additional matters tested include, among other
things, the accounting procedures and records, materials control,
compliance with specific RUS loan and security instrument provisions
set forth in 7 CFR 1773.34 (e)(1), [for telephone borrowers, 7 CFR
1773.34 (e)(2)], related party transactions, and depreciation rates.
[For electric borrowers:] The additional matters tested also include
a schedule of deferred debits and credits, upon which we express an
opinion. In addition, our audit of the financial statements also
included the procedures specified in 7 CFR 1773.38-.45. Our
objective was not to provide an opinion on these specific aspects of
the internal control structure, compliance with specific RUS loan
and security instrument provisions, or additional matters, and
accordingly, we express no opinion thereon.
No reports (other than our independent auditors' report, our
independent auditors' compliance report, and our independent
auditors' report on the internal control structure, all dated March
15, 19X6) or summary of recommendations related to our audit have
been furnished to management.
Our comments on specific aspects of the internal control
structure, compliance with specific RUS loan and security instrument
provisions, and other additional matters as required by 7 CFR
1773.34 are presented below.
Comments on Certain Specific Aspects of the Internal Control Structure
We noted no matters regarding [Name of Borrower]'s internal
control structure and its operation that we consider to be a
material weakness as previously defined with respect to:
--The accounting procedures and records [list other comments];
--The process for accumulating and recording labor, material, and
overhead costs, and the distribution of these costs to construction,
retirement, and maintenance or other expense accounts [list other
comments]; and
--The materials control [list other comments].
Comments on Compliance With Specific RUS Loan and Security Instrument
Provisions
Management's responsibility for compliance with laws,
regulations, contracts, and grants is set forth in our independent
auditors' report on compliance dated March 15, 19X6, and should be
read in conjunction with this report. At your request, we have
performed the procedures enumerated below with respect to compliance
with certain provisions of laws, regulations, and contracts. The
procedures we performed are summarized as follows:
--Procedure performed with respect to the requirement to maintain
all funds in institutions whose accounts are insured by an Agency of
the Federal government:
1. Obtained information from financial institutions with which
[Name of Borrower] maintains funds that indicated that the
institutions are insured by an Agency of the Federal government.
--Procedures performed with respect to the requirement for a
borrower to obtain written approval of the mortgagee to enter into
any contract for the operation or maintenance of property, or for
the use of mortgaged property by others [see 1773.34 (e)(2)(i) for
additional telephone borrower requirements in accordance with 7 CFR
1773.34 (e)] for the year ended December 31, 19X5 of [Name of
Borrower]:
1. Obtained and read a borrower prepared schedule of new written
contracts entered into during the year for the operation or
maintenance of its property, or for the use of its property by
others as defined in Sec. 1773.34 (e)(1)(ii) [Sec. 1773.34 (e)(2)(i)
for telephone borrowers]
2. Reviewed Board of Director minutes to ascertain whether
board-approved written contracts are included in the borrower-
prepared schedule.
3. Noted the existence of written RUS [and other mortgagee]
approval of each contract listed by the borrower.
--Procedure performed with respect to the requirement to submit RUS
Form 7 or Form 12 [Form 479 for telephone borrowers] to the RUS:
1. Agreed amounts reported in Form 7 or Form 12 [Form 479 for
telephone borrowers] to [Name of Borrower]'s records.
The results of our tests indicate that, with respect to the
items tested, [Name of Borrower] complied, except as noted below, in
all material respects, with the specific RUS loan and security
instrument provisions referred to below. With respect to items not
tested, nothing came to our attention that caused us to believe that
[Name of Borrower] had not complied, in all material respects, with
those provisions. The specific provisions tested, as well as any
exceptions noted, include the requirements that:
--The borrower maintains all funds in institutions whose accounts
are insured by an Agency of the Federal government [list all
exceptions];
--The borrower has obtained written approval of the RUS [and other
mortgagees] to enter into any contract for the operation or
maintenance of property, or for the use of mortgaged property by
others as defined in Sec. 1773.34 (e)(1)(ii) [Sec. 1773.34 (e)(2)(i)
for telephone borrowers] [list all exceptions]; and
--The borrower has submitted its Form 7 or Form 12 [Form 479 for
telephone borrowers] to the RUS and the Form 7 or Form 12 [Form 479
for telephone borrowers], Financial and Statistical Report, as of
December 31, 19X5, represented by the borrower as having been
submitted to RUS is in agreement with the [Name of Borrower]'s
audited records in all material respects [list all exceptions].
Comments on Other Additional Matters
In connection with our audit of the financial statements of
[Name of Borrower],
[[Page 114]]
nothing came to our attention that caused us to believe that [Name
of Borrower] failed to comply with respect to:
--The reconciliation of subsidiary plant records to the controlling
general ledger plant accounts addressed at 7 CFR 1773.34 (c)(1)
[list all exceptions];
--The clearing of the construction accounts and the accrual of
depreciation on completed construction addressed at 7 CFR 1773.34
(c)(2) [list all exceptions];
--The retirement of plant addressed at 7 CFR 1773.34 (c)(3) and (4)
[list all exceptions];
--Sales of plant material, or scrap addressed at 7 CFR 1773.34
(c)(5) [list all exceptions];
--The disclosure of material related party transactions, in
accordance with Statement of Financial Accounting Standards No. 57,
Related Party Transactions, for the year ended December 31, 19X5, in
the financial statements referenced in the first paragraph of this
report addressed at 7 CFR 1773.34 (f) [list all exceptions]; and
--For electric borrowers only: depreciation rates addressed at 7 CFR
1773.34 (g) [list all exceptions].
For Electric Borrowers Only: Detailed Schedule of Deferred Debits and
Deferred Credits
Our audit was made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The detailed schedule
of deferred debits and deferred credits required by 7 CFR 1773.34
(h) and provided below is presented for purposes of additional
analysis and is not a required part of the basic financial
statements. This information has been subjected to the auditing
procedures applied in our audit of the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
[The detailed schedule of deferred debits and deferred credits would
be included here. The total amount of deferred debits and deferred
credits as reported in the schedule must agree with the totals
reported on the Balance Sheet under the specific captions of
``Deferred Debits'' and ``Deferred Credits''. Those items that have
been approved, in writing, by RUS should be clearly indicated.]
This report is intended solely for the information and use of
the board of directors, management, and the RUS and supplemental
lenders. However, this report is a matter of public record and its
distribution is not limited.
Certified Public Accountants
Dated: December 19, 1995.
Jill Long Thompson,
Under Secretary, Rural Economic and Community Development.
[FR Doc. 96-93 Filed 1-2-96; 8:45 am]
BILLING CODE 3410-15-P
Complete official Federal Register PDF
FR Doc. 96-62 Airworthiness Directives; Boeing Model 747-100 and -200 Series Airplanes
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 115-120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-62]
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[[Page 116]]
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-NM-193-AD; Amendment 39-9479; AD 96-01-03]
Airworthiness Directives; Boeing Model 747-100 and -200 Series
Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final rule; request for comments.
-----------------------------------------------------------------------
SUMMARY: This amendment adopts a new airworthiness directive (AD) that
is applicable to certain Boeing Model 747-100 and -200 series
airplanes. This action requires a revision of the Airplane Flight
Manual (AFM) and of the Airplane Weight and Balance Supplement to
restrict the running load and maximum total payload to a suitable
level. This amendment is prompted by a determination that these
airplanes are incapable of carrying the currently certified payload
limits due to the missing external structural doublers located forward
of the surround structure of the main deck side cargo door, and
deficiencies in the main deck floors. The actions specified in this AD
are intended to prevent collapse of the aft fuselage due to inadequate
strength in the airplane structure, and subsequent separation of the
aft fuselage from the airplane.
DATES: Effective January 30, 1996.
Comments for inclusion in the Rules Docket must be received on or
before March 4, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Transport Airplane Directorate, ANM-103,
Attention: Rules Docket No. 95-NM-193-AD, 1601 Lind Avenue, SW.,
Renton, Washington 98055-4056.
Information concerning this AD may be examined at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington.
FOR FURTHER INFORMATION CONTACT: Steven Fox, Aerospace Engineer,
Airframe Branch, ANM-120S, Seattle Aircraft Certification Office, FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington 98055-4056; telephone (206) 227-2777; fax (206) 227-1181.
SUPPLEMENTARY INFORMATION:
History of Relevant Supplemental Type Certificates (STC)
In 1988, the FAA approved two STC's. The first STC, SA2322SO,
modified a Boeing Model 747-100 series airplane from a passenger
configuration to a special freighter configuration by adding a main
deck side cargo door. In order to install the main deck side cargo
door, this modification entailed cutting a 324 square foot hole in the
side of the fuselage from body stations 1740 to 1960; however, the STC
did not provide for reinforcement of the fuselage skin, forward of the
main deck side cargo door. The second STC, SA2323SO, further modified
this airplane by adding a cargo floor and changing the associated
systems. These modifications were accomplished by the Pemco
Corporation. The FAA-approval of these two STC's by the Atlanta
Aircraft Certification Office was based on an incorrect finding that
the design was identical to the previously FAA-approved modification of
the Model 747 special freighter airplanes. Subsequently, these STC's
were sold to GATX-Airlog Company, which converted nine more Model 747-
100 series airplanes from a passenger configuration to a special
freighter configuration in accordance with these two STC's.
In 1994, the GATX-Airlog Company applied for approval of a new STC,
SA4227NM-D, to modify a Model 747-200 series airplane from a passenger
configuration to a special freighter configuration. The approval of
this STC was based on the data that were submitted for the two previous
STC's.
Subsequently, the weight and balance limitations for all three of
these STC's were modified by STC SA5199NM (for Model 747-100 series
airplanes) and STC SA5759NM (for Model 747-200 series airplanes). These
new weight and balance limitations increased the cargo payload for
airplanes modified to a special freighter configuration in accordance
with the three earlier STC's. The GATX-Airlog Company received approval
of these latter two STC's based on the assumption that the data
submitted for the three earlier STC's were structurally satisfactory
and complied with the applicable regulations.
History of Relevant AD's
On December 27, 1994, the FAA issued AD 95-01-04, amendment 39-9115
(60 FR 2005, January 6, 1995), applicable to Model 747-100 series
airplanes modified in accordance with STC SA2322SO. That AD requires a
one-time detailed visual inspection of the lap joint of stringer 4L
from fuselage stations 1660 to 2040 to detect discrepancies (such as
corrosion, cracking, open holes, misdrilled holes, and any freeze plugs
in the fuselage skin and internal stringer or longerons). That AD also
requires that operators submit a report of their findings to the FAA.
That AD was prompted by reports of ``hidden'' open fasteners holes in
the middle row of the lap joint, as well as misdrilled holes, elongated
holes, and ``figure eight'' holes, and short edge margins in the
fastener holes of the fuselage skin. These reports were received from
operators of Model 747-100 series airplanes that had been modified in
accordance with STC SA2322SO. The actions required by AD 95-01-04 are
intended to prevent reduced fatigue life of the fuselage in the area in
which holes are found.
In response to the reporting requirement of that AD, the FAA
received reports of 216 misdrilled, open, or short-edged margin holes
that were filled with random fasteners on a single airplane. The FAA
has also learned from these reports that the skin lap splice at
stringer 4L has had to be replaced on all of the inspected airplanes
because of the severity of the discrepancies found during the
inspections required by that AD. Further, another operator reported
finding five body frames that did not have inner chord attachments
installed above the main deck side cargo door. The FAA has received
reports of multiple misdrilled fasteners where the main deck floor
beams attach to the existing frame of the airplane, which cause the
frames to be extremely susceptible to early fatigue failure. The FAA
finds that failure of a single frame would not significantly affect the
airplane's fail-safe design; however, misdrilled fasteners were found
on both sides of most of the fuselage frames. Because the frames on
airplanes that have been converted in accordance with the subject STC's
have reduced strength due to numerous misdrilled holes, the FAA has
determined that failure of any single frame on these airplanes will
result in structurally significant higher loads in the adjacent frames.
These manufacturing deficiencies have further reduced the
structural capability of these airplanes. Because of the variability of
the manufacturing defects and the missing structural components, it is
impossible for the FAA to determine the extent of the reduction in the
structural capability of these airplanes without re-examining each
airplane that was reconfigured in accordance with the subject STC's.
Since all of the affected airplanes have not yet been inspected in
accordance with the requirements of AD 95-01-04, the FAA has not
completed a comprehensive review to determine final corrective action.
-
On August 3, 1995, the FAA issued AD 95-15-52, amendment 39-9335
(60 FR 40748, August 10, 1995), applicable to Model 747-100 series
airplanes
[[Page 117]]
modified in accordance with STC SA2322SO, SA2323SO, or SA5199NM; and
Model 747-200 series airplanes modified in accordance with STC
SA4227NM-D or SA5759NM. That AD requires a revision of the Limitations
Section of the FAA-approved Airplane Flight Manual (AFM) and of the
Limitations Section of the Airplane Weight and Balance Supplement to
restrict cargo loading from fuselage stations 1265 to 1480
(approximately 200 inches of the center section of the fuselage). That
AD provides for the removal of the restrictions following
accomplishment of a modification of the longitudinal floor beams of the
affected fuselage stations in accordance with a method approved by the
FAA. That action was prompted by a determination that the strength in
the floor beams was inadequate between fuselage stations 1265 to 1480.
The actions specified in that AD are intended to prevent failure of the
longitudinal floor beams in the center section of the fuselage, which
may cause the keel beam to fail and result in rupture of the fuselage.
(This AD did not address any section of the fuselage other than the
center section of the fuselage.) -
Since the issuance of AD 95-15-52, an operator of Model 747-100 and
-200 series airplanes applied for approval of an alternative method of
compliance (AMOC) to AD 90-06-06, amendment 39-6490 (55 FR 8374, March
7, 1990). AD 90-06-06, which is applicable to certain Boeing Model 747
airplanes, requires structural modifications of older airplanes,
including a requirement to modify the lower lap joints of the fuselage
skin. This operator's airplanes were converted from a passenger
configuration to a special freighter configuration in accordance with
STC's SA2322SO and SA2323SO (for Model 747-100 series airplanes) and
SA4227NM-D (for Model 747-200 series airplanes).
The FAA's Findings -
An FAA review of the data submitted to approve this AMOC, and an
FAA evaluation of the health of the affected airplanes based upon the
in-service history of the fleet, have led the FAA to make the following
findings: Airplanes modified in accordance with all of the STC's
discussed above are unsafe, and the FAA approved these STC's in error.
Specifically, the FAA has determined that the ultimate strength of the
main deck floor and the ultimate strength of the surround structure of
the main deck side cargo door are inadequate. -
The floor system lacks stabilization straps that attach to the main
deck floor beam lower chord. These stabilization straps would prevent
the floor beam lower chord from buckling under ultimate design load
conditions. The floor is structurally inadequate without these straps.
The main deck floor beams are capable of sustaining approximately
three-fourths of the ultimate gust conditions, and have only a small
margin for limit gust conditions. Since the failure mode for these
floor beams is column buckling instability, there would be no warning
prior to collapse of the main deck floor. Consequently, inspections
would be ineffective to detect this failure mode prior to collapse of
the floor. Therefore, the only immediate option to prevent collapse of
the main deck floor during a gust load condition would be to reduce the
weight of the cargo on the main deck of the airplane. -
Further, the FAA finds that the STC's did not provide needed
reinforcement of the fuselage skin, forward of the main deck side cargo
door. Such lack of reinforcement results in an unacceptably high
concentration of shear and bending stress and the inability to react to
various flight maneuver loads. -
The FAA finds that the non-reinforced fuselage skin is not
structurally capable of sustaining flight maneuvers with a 1.5 ultimate
safety factor. For example, the 1.5 ultimate safety factor applied to
the 2.5g dive maneuver load condition, requires that the airplane be
capable of sustaining, without failure, 3.75g ultimate load. These
airplanes, when loaded with full cargo (and with a forward center of
gravity), can sustain only 55 percent of this 3.75g ultimate flight
condition. Analysis of the non-reinforced structure for three other
critical load conditions [identified in part 25, ``Airworthiness
Standards: Transport Category Airplanes,'' of the Federal Aviation
Regulations (14 CFR 25) as abrupt-up elevator, dynamic landing and
dynamic lateral gust] yields a similarly low structural capability. -
The non-reinforced fuselage skin may result in an instability
failure that provides no indication of impending failure until the skin
and stringers buckle. In the worst case, the aft fuselage may collapse
and separate from the airplane. There are no structural inspections
that can detect or prevent this type of failure.
In-Service History
In 1991, a Model 747-100 series airplane that had been modified in
accordance with these STC's was involved in an incident in which the
pilot successfully recovered the airplane from a 3.0g dive maneuver.
This airplane had a total payload of 163,800 pounds, which was much
less than the maximum allowable payload of 214,300 pounds. The center
of gravity (18 percent) was well within the allowable flight manual
range of 12 percent (forward limit) to 21 percent (aft limit) for
takeoff. The FAA estimates that during this 3.0g maneuver, the airplane
loads were only 10 percent less than those that would have caused the
fuselage to collapse. The FAA has recently determined by analysis that,
if only 6,700 pounds of additional cargo had been loaded in the front
portion of the fuselage, the airplane's center of gravity would have
shifted forward three percent. The resulting stress levels would exceed
the airplane's structural capability, which could lead to separation of
the aft fuselage from the airplane. In light of the weight of a Model
747 series airplane (738,000 pounds), 6,700 pounds is insignificant and
is just 3.1 percent of the the maximum allowable payload (214,300
pounds).
The operators of the 10 affected airplanes have reported four in-
flight events that have resulted in substantial structural damage to
these airplanes, which are among the oldest Model 747 series airplanes
in operation (the youngest of which is over 24 years old). In addition
to the 3.0g maneuver, discussed above, the FAA has received the
following reports:
1. A report of total engine separation due to intentional departure
into known severe turbulence;
2. A report of uncontained engine failure (more than 180 degrees)
that resulted in deformation of the pylon and subsequent damage to the
wing and fuselage due to projectile penetrations (survivability of such
in-flight damage is dependent upon the integrity of the fuselage
structure); and
3. A report of a severe landing that resulted in a 40-foot by 3-
foot hole in the aft fuselage.
The FAA's Consideration of All Relevant Factors
Based upon National Aeronautics and Space Administration (NASA)
Contractor Report 181909, DOT/FAA-CT-89/36-IV, ``The NASA Digital VGH
Program,'' Volume IV, ``B747 Data 1978-1980,'' dated December 1989, the
FAA finds that, typically, a Boeing Model 747 series airplane will
encounter turbulence or a flight maneuver above 2.0g every 15,000
flight hours, which would exceed the structural capability of the
affected airplanes if cargo were critically loaded. Therefore, the FAA
has determined that another major incident on these affected
[[Page 118]]
airplanes is likely to occur in the near future. If the airplane is
critically loaded, analysis indicates that the airplane will be unable
to sustain ultimate load, and in certain cases limit load.
The FAA has considered the possibility of requiring modifications
to reinforce the subject structure, but finds that they are not
feasible at this time because internal loads data were not generated to
substantiate the original STC. The lack of internal loads data makes
the determination of adequate reinforcement impossible. Therefore,
until such data are generated, structural modifications are not a
viable option to restore safety to these airplanes.
The FAA has considered imposing altitude, airspeed, center of
gravity, and payload limitations on these airplanes. The FAA finds that
a reduction in altitude would have little effect on any of the critical
flight conditions since three critical flight conditions (i.e., 2.5g
dive maneuver, abrupt-up elevator, and dynamic lateral gust) can occur
at any altitude. (The remaining critical flight condition is a landing
condition.)
The FAA finds that a reduction in allowable airspeed would have the
greatest effect on the structural loads that result from abrupt-up
elevator and lateral gust conditions. However, to provide full
structural capability, the airspeed would have to be reduced below the
airplane's design maneuver speed (278 knots) to an airspeed close to
the flaps-up, stall speed and stick shaker activation speed (215 knots)
for these airplanes. Additionally, the critical shear loads resulting
from the dynamic landing condition are at approach speeds that cannot
be reduced. Therefore, reducing airspeeds would not be a safe option.
Since the horizontal stabilizer balances loads during flight
maneuvers, a limitation of the airplane's center of gravity would have
a significant effect in reducing the shear and bending loads on the
fuselage that result from the required 3.75g dive maneuvers (which is
2.5g multiplied by the required 1.5 safety factor). For example, a 20
percent forward center of gravity limitation would yield full
structural capability for these airplanes during a 2.5g dive maneuver
with a 1.5 ultimate safety factor. This limitation would not require
any new payload restrictions for the dive maneuver requirements, but
does not solve the negative margins of safety for the other cases.
The FAA finds that a reduction in payload is the only operational
limitation that would have an effect on structural loads that result
from dynamic landing, abrupt-up elevator, and gust conditions. Removal
of payload aft of the main deck side cargo door (fuselage station 1720)
would provide a suffcient reduction in the critical shear and bending
loads on the fuselage during these conditions.
Substantiation of the FAA's Findings
The FAA has reviewed data from the following sources to verify its
findings of large negative margins of safety.
1. The FAA has reviewed Hayes International Corporation Engineering
Report 8813, ``Structural Substantiation for Main Deck Side Cargo Door
Modification Installation and `E' Class Cargo Compartment for the
Boeing 747-100 Aircraft,'' dated March 22, 1988. This report documents
over 100 findings of negative margins of safety on numerous pages. One
such example can be found on page 7.2.127 of this report, which
documents many negative margins of safety, one as large as -0.44 at
fuselage station 1680 of the floor beam. The report recommends the
installation of a reinforcement strap to ensure the structural
integrity of the fuselage in this area of the airplane. However, the
report does not contain any engineering analysis to determine whether
the installation of a reinforcement strap would resolve the negative
margins of safety. The FAA inspected one airplane and determined that
some of the reinforcement straps were not installed on the fuselage
foward of the main deck floor. The FAA used the Hayes International
Report 8813 internal loads data for the main deck floor and conducted
an analysis that verified the negative margins of safety documented in
the report. The report contains no analysis or internal loads data for
the missing structural doublers forward of the main deck side cargo
door cutout.-
2. The FAA has reviewed data submitted by Elsinore Aerospace
Services, on behalf of the GATX-Airlog Company, to the FAA for approval
of a modification that converts Model 747 combi airplanes to a special
freighter configuration. The design and data submitted for the forward
fuselage were identical to the design and data submitted for the
subject STC's. The Elsinore data confirmed the FAA's findings of
negative margins of safety in the existing main deck floor. Elsinore
Aerospace Services, together with the FAA, identified design
deficiencies of the main deck floor and developed corrective measures
for combi airplanes to meet the minimum level of safety required by
part 25 of the Federal Aviation Regulation (14 CFR 25). However,
similar corrective measures have not yet been developed for the Model
747-100 and -200 series airplanes. -
3. The FAA has reviewed Boeing Commercial Airplane Group data that
were used to convert Model 747 series airplanes from a passenger
configuration to a special freighter configuration in accordance with a
design developed by Boeing. The FAA Designated Engineering
Representatives (DER) at the Boeing Commercial Airplane Group verified
that large negative margins of safety would exist on airplanes modified
in accordance with its design if the external skin doublers at the
cargo door were not installed. The FAA reviewed and concurred with this
analysis, and concluded that because of the similarity of the Boeing
design (having the doublers removed) with the GATX design, the GATX
design would have similar negative margins of safety of approximately
-0.45 for the non-reinforced fuselage forward of the main deck side
cargo door. -
4. The FAA has conferred with the FAA DER's at the GATX-Airlog
Company working on location at the Israel Aircraft Industries (IAI).
These DER's are currently analyzing the design of the GATX-Airlog
Company modification of the forward main deck side cargo door. Although
the IAI report has not yet been submitted in final form to GATX,
preliminary data reviewed by the DER's, on behalf of the FAA, indicate
that large negative margins of safety exist forward of the main deck
side cargo door, similar to those obtained in the Boeing and FAA
analysis. -
5. On December 20, 1995, the FAA held a meeting/telecon with
operators and interested parties to gather more data. However, no data
were presented to refute the FAA's findings of multiple unsafe
conditions that were substantiated by all of the sources of data,
discussed above. At this meeting, a consultant for the GATX-Airlog
Company presented data (derived from the 3.0g dive maneuver incident)
to demonstrate that the affected airplanes are capable of withstanding
structural loads in the cargo door surround structure in excess of the
payload restriction required by this AD. The FAA finds that this data
for applied vertical loads (by far the largest component in determining
margins of safety) are essentially the same as those determined by the
FAA analysis, and confirms the FAA's findings of unsafe conditions. -
This consultant's data did raise one issue that had not been
considered by the FAA prior to the December 20, 1995, meeting. The
consultant suggested that the data showed the possibility of
[[Page 119]]
additional small lateral compression stresses resulting from minor
lateral loads having occurred during the 3.0g dive maneuver, thereby
indicating that the cargo door surround structure might be slightly
stronger than that previously determined by the FAA. The data to
support this conclusion had not been fully evaluated by either the
consultant or the FAA and estimates of increments of strength cannot be
definitively verified. The estimates for the loads in the analysis were
extrapolated from the airplane's flight data recorder and the actual
fuselage loads of the airplane during the 3.0g dive maneuver and the
resulting stresses on the cargo door surround structure have not been
demonstrated by instrumentation and tests. Without such tests, any
conclusion regarding the strength of the structure would be
speculative. The FAA's determinations of the unsafe conditions and
proposed operational limitations are based on reliable analysis
techniques and extensive instrumented testing of the Model 747 series
airplane by the Boeing Commercial Airplane Group. -
At the meeting, GATX-Airlog Company requested that the FAA delay
issuance of this rulemaking action until all data have been finalized
and a corrective modification has been designed, developed, and
approved. The FAA has determined that delaying this AD action would be
inappropriate since multiple unsafe conditions exist and the large
negative margins of safety present an unacceptable risk. Therefore, the
FAA has concluded that the level of risk associated with these unsafe
conditions, including the potential for total loss of the aircraft, is
so great that a delay cannot be justified. Furthermore, a delay in
issuance of this AD action would be contrary to the interest of public
safety, since the nature of the unsafe conditions is such that failure
cannot be predicted. Failure under the currently authorized operating
conditions is predicated upon the occurrence of uncontrollable factors
such as wind gusts, maneuver loads, and hard landings.
Requirements of This AD
Consequently, the FAA has determined that a combination of
operational payload limitations must be imposed to reduce the shear and
bending loads forward of the main deck side cargo door. A 20 percent
forward center of gravity limitation, together with the removal of all
payload aft of fuselage station 1720 will reduce both the shear and
bending loads on the fuselage during all critical flight conditions.
These limitations still allow operation of the airplane with a center
of gravity between 20 percent and 33 percent (with full flight range
capability).
Since an unsafe condition has been identified that is likely to
exist or develop on other airplanes having these STC's as part of their
type design, this AD is being issued to prevent structural collapse and
subsequent separation of the aft fuselage from the airplane. This AD
requires a revision to the Limitations Section of the FAA-approved AFM
and the Limitations Section of the Airplane Weight and Balance
Supplement to restrict the running load (which is the maximum allowable
linear load per inch), maximum total payload, and center of gravity
limits.
This AD also provides for the removal of these restrictions
following accomplishment of a modification of the airplane structure
that corrects all structural deficiencies that restores the airplane to
meet or exceed the requirements of part 25 of the Federal Aviation
Regulations (14 CFR 25) in accordance with a method that is approved by
the Manager of the Seattle Aircraft Certification Office.
This AD's restrictions are in addition to, not in lieu of, the
restriction imposed by AD 95-15-52. Therefore, the revision to the
Limitations Section of the AFM and the Airplane Weight and Balance
Supplement required by this AD, does not supersede the revision
required by AD 95-15-52. Further, modifications approved as terminating
action for the restriction required by AD 95-15-52, amendment 39-9335,
are not considered to be approved as terminating action for the
restrictions required by this AD.
The load level established by this AD is based upon an FAA
evaluation of the maximum payload that these airplanes are capable of
carrying without external structural doublers installed and without
correction of inadequacies in the main deck floor. The FAA has
determined that the restrictions imposed by this AD will provide a
sufficient level of safety for airplanes on which the external doublers
are missing and structural inadequacies of the main deck floor and
manufacturing deficiencies exist.
Impact of the Limitations Imposed by the AD
The FAA is aware that the operational limitations imposed by this
AD may severely impact the economic viability of the operators of these
modified airplanes. In effect, the AD would limit total payload to
120,000 pounds from a maximum of 220,000 pounds. This may result in the
operators' inability to operate economically because operators may be
unable to obtain contracts that guarantee payload capabilities of
200,000 pounds. The average payload per flight is approximately 150,000
pounds, and operators may be unable to complete heavy-loaded segments
of multiple-stop flights. These limits occur because the AD specifies
that nothing is to be carried between body stations 1720 and 2360 for
both the main deck and lower deck cargo areas and operation is
prohibited forward of 20 percent center of gravity. Nonetheless, the
FAA must impose these restrictions to ensure continued operational
safety of these airplanes.
The FAA further acknowledges that these restrictions may be
conservative. However, an alternative solution to this complex matter--
one which will ensure the safety of these airplanes and the
flightcrews--has not yet been developed. Operators should note that
other operational limitations data may be submitted to the FAA for
approval under the alternative methods of compliance provision of
paragraph (c) of the AD.
In a meeting on December 27, 1995, the operators asked that the
effective date of the AD be delayed until corrective measures can be
developed. The operators also indicated that they would be removing the
10 affected airplanes from service no later than January 31, 1996. The
effective date of this AD is January 30, 1996, with a compliance time
of 48 hours for implementing the AD. As a result of the operators'
commitment, the aircraft will be out of service pending repairs before
the expiration of the compliance time.
The FAA intends to investigate other types of loading conditions to
determine whether additional operational limitations must be imposed to
address the structural inadequacies of the main deck floor and other
areas that have not yet been identified. If, after review of such data,
the FAA determines that the data indicate that further restrictions are
necessary, the FAA may consider further rulemaking to implement
appropriate corrective action.
Since a situation exists that requires the immediate adoption of
this regulation, it is found that notice and opportunity for prior
public comment hereon are impracticable, and that good cause exists for
making this amendment effective in less than 30 days.
Comments Invited
Although this action is in the form of a final rule that involves
requirements affecting flight safety and, thus, was not preceded by
notice and an opportunity for public comment, comments are invited on
this rule. Interested persons
[[Page 120]]
are invited to comment on this rule by submitting such written data,
views, or arguments as they may desire. Communications shall identify
the Rules Docket number and be submitted in triplicate to the address
specified under the caption ADDRESSES. 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 Number 95-NM-193-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 that it 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 USC 106(g), 40101, 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
96-01-03 Boeing: Amendment 39-9479. Docket 95-NM-193-AD.
Applicability: Model 747-100 series airplanes modified in
accordance with Supplemental Type Certificate (STC) SA2322SO,
SA2323SO, or SA5199NM; and Model 747-200 series airplanes modified
in accordance with STC SA4227NM-D or SA5759NM; 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 use the authority
provided in paragraph (c) of this AD to request approval from the
FAA. This approval may address either no action, if the current
configuration eliminates the unsafe condition; or different actions
necessary to address the unsafe condition described in this AD. Such
a request should include an assessment of the effect of the changed
configuration on the unsafe condition addressed by this AD. In no
case does the presence of any modification, alteration, or repair
remove any airplane from the applicability of this AD.
Compliance: Required as indicated, unless accomplished
previously.
To prevent structural collapse and subsequent separation of the
aft fuselage from the airplane, accomplish the following:
(a) Within 48 clock hours (not flight hours) after this AD
becomes effective, revise the Limitations Section of the FAA-
approved Airplane Flight Manual (AFM) and the Limitations Section of
the Airplane Weight and Balance Supplement to include the following
information. This may be accomplished by inserting a copy of this AD
in the AFM and the Airplane Weight and Balance Supplement.
``PAYLOAD LIMITATIONS:
Do not exceed 0.00 pounds/inch running load between body
stations 1720 and 2360. The maximum total payload between body
stations 1720 and 2360 shall not exceed 0.00 pounds for both main
deck and lower deck cargo.
The currently certified center of gravity limitations defined in
STC's SA2322SO, SA2323SO, and SA5199NM (for Model 747-100 series
airplanes) and STC's SA4227NM-D and SA5759NM (for Model 747-200
series airplanes) shall be limited to prohibit operation forward of
20 percent center of gravity.''
(b) Accomplishment of a modification of the airplane structure
in accordance with a method approved by the Manager, Seattle
Aircraft Certification Office (ACO), FAA, Transport Airplane
Directorate, constitutes terminating action for the limitation
requirements of paragraph (a) of this AD. The AFM limitation and the
Weight and Balance Supplement limitation may be removed following
accomplishment of such a modification.
(c) 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, Seattle ACO. Operators shall submit
their requests through an appropriate FAA Principal Maintenance
Inspector, who may add comments and then send it to the Manager,
Seattle ACO.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Seattle ACO.
(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) This amendment becomes effective on January 30, 1996.
Issued in Renton, Washington, on December 27, 1995.
Darrell M. Pederson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-62 Filed 1-2-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-58 Amendment of Class E Airspace; Lovelock, NV
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 121-122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-58]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 71
[Airspace Docket No. 95-AWP-32]
Amendment of Class E Airspace; Lovelock, NV
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This action amends the Class E airspace area at Lovelock, NV.
The development of a Global Positioning System (GPS) Standard
Instrument Approach Procedure (SIAP) to Runway (RWY) 1 has made this
action necessary. The intended effect of this action is to provide
adequate controlled airspace for Instrument Flight Rules (IFR)
operations at Lovelock Derby Field, Lovelock, NV.
EFFECTIVE DATE: 0901 UTC, February 29, 1996.
FOR FURTHER INFORMATION CONTACT: Scott Speer, Airspace Specialist,
System Management Branch, AWP-530, Air Traffic Division, Western-
Pacific Region, Federal Aviation Administration, 15000 Aviation
Boulevard, Lawndale, California 90261, telephone (310) 725-6533.
SUPPLEMENTARY INFORMATION:
History
On October 30, 1995, the FAA proposed to amend part 71 of the
Federal Aviation Regulations (14 CFR part 71) by amending the Class E
airspace area at Lovelock, NV (60 FR 55224). This action would provide
adequate controlled airspace to accommodate a GPS SIAP to RWY 1 at
Lovelock Derby Field, Lovelock, NV.
Interested parties were invited to participate in this rulemaking
proceeding by submitting written comments on the proposal to the FAA.
No comments to the proposal were received. Class E airspace
designations are published in paragraph 6005 of FAA Order 7400.9C dated
August 17, 1995, and effective September 16, 1995, which is
incorporated by reference in 14 CFR 71.1. The Class E airspace
designations listed in this document will be published subsequently in
this Order.
The Rule
This amendment to part 71 of the Federal Aviation Regulations (14
CFR
[[Page 122]]
part 71) amends the Class E airspace area at Lovelock, NV. The
development of a GPS SIAP to RWY 1 has made this action necessary. The
intended effect of this action is to provide adequate airspace for
aircraft executing the GPS RWY 1 SIAP at Lovelock Derby Field, NV.
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.
Therefore, this proposed regulation--(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 10034; 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 is revised to read as
follows:
Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 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 the Federal
Aviation Administration Order 7400.9C, Airspace Designations and
Reporting Points, dated August 17, 1995, and effective September 16,
1995, is amended as follows:
Paragraph 6005 Class E airspace areas extending upward from 700
feet or more above the surface of the earth.
* * * * *
AWP NV E5 Lovelock, NV [Revised]
Lovelock Derby Field, NV
(Lat. 40 deg.03'59'' N, long. 118 deg.33'55'' W)
Lovelock VORTAC
(Lat. 40 deg.07'30'' N, long. 118 deg.34'40'' W)
That airspace extending upward from 700 feet above the surface
within a 4.3-mile radius of Lovelock Derby Field and within 3.5
miles each side of 349 deg. radial of the Lovelock VORTAC, extending
from the 4.3-mile radius to the 10.4 miles north of the Lovelock
VORTAC. That airspace extending upward from 1,200 feet above the
surface beginning at lat. 40 deg.37'30'' N, long. 118 deg.36'34'' W;
to lat. 40 deg.12'00'' N, long. 118 deg.55'04'' W; to lat.
40 deg.03'00'' N, long 118 deg.52'04'' N; to lat. 40 deg.22'19'' N,
long. 118 deg.14'00'' W; to lat. 40 deg.32'00'' N, long.
118 deg.14'00'' W; to lat. 40 deg.23'00'' N, long. 118 deg.29'00''
W; to lat. 40 deg.27'00'' N, long. 118 deg.34'04'' W, to the point
of beginning and that airspace beginning at lat. 40 deg.05'00'' N,
long. 118 deg.28'29'' W; to lat. 40 deg.06'00'' N, long.
118 deg.23'04'' W; to lat. 40 deg.03'00'' N, long. 118 deg.22'04''
W; to lat. 40 deg.00 deg.00'' N, long. 118 deg.31'44'' W, thence via
a 4.3-mile radius of Lovelock Derby Field to the point of beginning
and that airspace bounded by a line beginning at lat. 40 deg.23'00''
N, long. 118 deg.29'00'' W; to lat. 40 deg.32'00'' N, long.
118 deg.14'00'' W; to lat. 40 deg.22'00'' N, long. 118 deg.14'00''
W; to lat. 40 deg.18'00'' N, long. 118 deg.23'00'' W, thence to the
point of beginning.
* * * * *
Issued in Los Angeles, California, on December 11, 1995.
Richard R. Lien,
Manager, Air Traffic Division, Western-Pacific Region.
[FR Doc. 96-58 Filed 1-2-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-57 Amendment of Class E Airspace; Flagstaff, AZ
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 120-121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-57]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 71
[Airspace Docket No. 95-AWP-31]
Amendment of Class E Airspace; Flagstaff, AZ
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This action amends the Class E airspace area at Flagstaff, AZ.
The development of a Global Positioning System (GPS) Standard
Instrument Approach Procedure (SIAP) to Runway
[[Page 121]]
(RWY) 21 has made this action necessary. The intended effect of this
action is to provide adequate controlled airspace for Instrument Flight
Rules (IFR) operations at Flagstaff Pulliam Airport, Flagstaff, AZ.
EFFECTIVE DATE: 0901 UTC, February 29, 1996.
FOR FURTHER INFORMATION CONTACT:
Scott Speer, Airspace Specialist, System Management Branch, AWP-530,
Air Traffic Division, Western-Pacific Region, Federal Aviation
Administration, 15000 Aviation Boulevard, Lawndale, California 90261,
telephone (310) 725-6533.
SUPPLEMENTARY INFORMATION:
History
On November 1, 1995, the FAA proposed to amend part 71 of the
Federal Aviation Regulations (14 CFR part 71) by amending the Class E
airspace area at Flagstaff, AZ (60 FR 55503). This action would provide
adequate controlled airspace to accommodate a GPS SIAP to RWY 21 at
Flagstaff Pulliam Airport, Flagstaff, AZ.
Interested parties were invited to participate in this rulemaking
proceeding by submitting written comments on the proposal to the FAA.
No comments to the proposal were received. Class E airspace
designations are published in paragraph 6005 of FAA Order 7400.9C dated
August 17, 1995, and effective September 16, 1995, which is
incorporated by reference in 14 CFR 71.1. The Class E airspace
designations listed in this document will be published subsequently in
this Order.
The Rule
This amendment to part 71 of the Federal Aviation Regulations (14
CFR part 71) amends the Class E airspace area at Flagstaff, AZ. The
development of a GPS SIAP to RWY 21 has made this action necessary. The
intended effect of this action is to provide adequate airspace for
aircraft executing the GPS RWY 21 SIAP at Flagstaff Pulliam Airport,
Flagstaff, AZ.
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.
Therefore, this proposed regulation--(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 10034; 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 is revised to read as
follows:
Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 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 the Federal
Aviation Administration Order 7400.9C, Airspace Designations and
Reporting Points, dated August 17, 1995, and effective September 16,
1995, is amended as follows:
Paragraph 6005 Class E airspace areas extending upward from 700
feet or more above the surface of the earth.
* * * * *
AWP NV E5 Flagstaff, AZ [Revised]
Flagstaff Pulliam Airport, AZ
(Lat. 35 deg.08'18'' N, long. 111 deg.40'17'' W)
Flagstaff VOR/DME
(Lat. 35 deg.08'50'' N, long. 111 deg.40'27'' W)
That airspace extending upward from 700 feet above the surface
within an 3.6-mile radius of Flagstaff Pulliam Airport, and within a
10-mile radius of the Flagstaff VOR beginning at a line 1.8 miles
northeast of and parallel to the Flagstaff VOR 043 deg. radial
extending clockwise to a line 1.8 miles west of and parallel to the
Flagstaff VOR 198 deg. radial. That airspace extending upward from
1,200 feet above the surface within 8.3 miles each side of the
Flagstaff VOR 127 deg. and 307 deg. radials, extending from 7 miles
northeast to 16.5 miles southeast of the Flagstaff VOR and that
airspace bounded by a line beginning at lat. 35 deg.13'32'' N, long.
111 deg.04'31'' W; to lat. 35 deg.17'17'' N, long. 111 deg.02'35''
W; to lat. 35 deg.22'00'' N, long. 111 deg.16'43'' N; to lat.
35 deg.24'00'' N, long. 111 deg.26'16'' W; to lat. 35 deg.18'00'' N,
long. 111 deg.35'33'' W; thence clockwise via a 10-mile radius of
the Flagstff VOR to lat. 35 deg.16'34'' N, long. 111 deg.32'42'' W;
to lat. 35 deg.19'58'' N, long. 111 deg.24'10'' W, thence to the
point of beginning and that airspace bounded by a line beginning at
lat. 35 deg.03'00'' N, long. 111 deg.21'00'' W; to lat.
35 deg.02'00'' N, long. 111 deg.15'00'' W; to lat. 35 deg.01'00'' N,
long. 111 deg.22'00'' W, thence to the point of beginning.
* * * * *
Issued in Los Angeles, California, on December 11, 1995.
Richard R. Lien,
Manager, Air Traffic Division, Western-Pacific Region.
[FR Doc. 96-57 Filed 1-2-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-55 Special Conditions; Hamilton Standard Model 568F Propeller
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 114-115]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-55]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 35
[Docket No. 94-ANE-60; Special Condition No. 35-ANE-02]
Special Conditions; Hamilton Standard Model 568F Propeller
AGENCY: Federal Aviation Administration, DOT.
ACTION: Final special conditions.
-----------------------------------------------------------------------
SUMMARY: These special conditions are issued for the Hamilton Standard
Model 568F propeller with electronic propeller and pitch control
system. The applicable regulations currently do not contain adequate or
appropriate safety standards for constant speed propellers with
electronic propeller and pitch control. These special conditions
contain additional safety standards which the Administrator considers
necessary to establish a level of safety equivalent to that established
by the airworthiness standards of part 35 of the Federal Aviation
Regulations (FAR).
EFFECTIVE DATE: February 2, 1996.
FOR FURTHER INFORMATION CONTACT:
Martin Buckman, Engine and Propeller Standards Staff, ANE-110, Engine
and Propeller Directorate, Aircraft Certification Service, FAA, New
England Region, 12 New England Executive Park, Burlington,
Massachusetts, 01803-5229; telephone (617) 238-7112; fax (617) 238-
7199.
SUPPLEMENTARY INFORMATION:
Background
On January 26, 1994, Hamilton Standard applied for type
certification for a new Model 568F propeller. The new propeller would
use a new electronic propeller and pitch control system in place of the
primary governor control and synchrophaser unit.
The existing propeller pitch control is monitored by a governor
which senses propeller speed and adjusts the pitch to absorb the engine
power and therefore maintains the propeller at the correct RPM. When
the primary governor fails, the propeller pitch is controlled by an
overspeed governor. This type of system is conventional and its
airworthiness considerations are addressed by part 35 of the FAR's.
The FAA has determined that special conditions are necessary to
certificate a Hamilton Standard electronic propeller and pitch control
in place of the primary governor control and synchrophaser unit for the
Model 568F propeller. A Notice of Proposed Special Conditions was
published in the Federal Register on January 20, 1995 (60 FR 4114) for
the Hamilton Standard Model 568F propeller with electronic propeller
and pitch control system. This control is designed to operate a
mechanical and hydraulic interface for the engine and propeller. It
commands speed governing, synchrophasing and provides beta scheduling.
Electronic propeller and pitch controls introduce potential failures
that can result in hazardous conditions. These types of
[[Page 115]]
failures are not addressed by the requirements of part 35. These
failures can lead to the following possible hazardous conditions:
(1) Loss of control of the propeller,
(2) Instability of a critical function,
(3) Unwanted change in propeller pitch causing improper thrust/
overspeed, and
(4) Unwanted action of a critical control function resulting in
propeller flat pitch or reverse.
Certification issues that must be addressed are possible loss of
aircraft-supplied electrical power, aircraft supplied data, failure
modes, environmental effects including lightning strike sand high
intensity radiated fields (HIRF) and software design.
The FAA finds that under the provisions of Sec. 21.16 of the FAR,
additional safety standards must be applied to the Hamilton Standard
electronic propeller control for Model 568F propellers to demonstrate
that it is capable of acceptable operation.
Type Certification Basis
Under the provisions of Sec. 21.17 of the FAR, Hamilton Standard
must show that the Model 568F propeller meets the requirements of the
applicable regulations in effect on the date of the application. Those
FAR's are Sec. 21.21 and part 35, effective February 1, 1965, as
amended.
The Administrator finds that the applicable airworthiness
regulations in part 35, as amended, do not contain adequate or
appropriate safety standards for the Model 568F propeller. Therefore,
the Administrator prescribes special conditions under the provisions of
Sec. 21.16 to establish a level of safety equivalent to that
established in the regulations.
Special conditions, as appropriate, are issued in accordance with
Sec. 11.49 of the FAR's after public notice and opportunity for
comment, as required by Secs. 11.28 and 11.29(b), and become part of
the type certification basis in accordance with Sec. 21.101(b)(2).
Discussion of Comments
Interested persons have been afforded the opportunity to
participate in the making of these special conditions. Due
consideration has been given to the comments received.
One commenter states concern that the term ``unacceptable change''
is vague and could lead to multiple interpretations if the term was not
defined in the special condition.
The FAA agrees, and the term ``unacceptable change'' has been
removed from the text and replaced with the term ``hazardous'', which
is defined in the special condition.
The commenter also states concern with system redundancy and states
that FAR 25.1309, its associated Advisory Circular and a Failure Modes
Effects Analysis should be included in the special conditions.
The FAA disagrees. The special condition as written in paragraph
(a)(2) addresses the commenter's concerns by requiring that the
propeller be designed and constructed so that no single failure or
malfunction, or probable combination of failures of electrical or
electronic components of the propeller control system, result in a
hazardous condition. Also, the propeller manufacturer includes a
Failure Modes Effects Analysis (FMEA) report as part of the data
required for propeller certification. This same report is submitted to
the airframe manufacturer for incorporation into aircraft certification
documentation to show compliance with FAR 25.1309. Therefore, the
commenter's concerns are already included in the certification
documentation and a special condition is not needed.
After careful review of the available data, including the comments
noted above, the FAA determined that air safety and the public interest
require the adoption of these special conditions with the changes
discussed previously.
Conclusion
This action affects only the Hamilton Standard Model 568F propeller
with a new system of electronic propeller and pitch control. It is not
a rule of general applicability and affects only the manufacturer who
applied to the FAA for approval of these features on the propeller.
List of Subjects in 14 CFR Part 35
Air transportation, Aircraft, Aviation safety, Safety.
The authority citation for these special conditions continues to
read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701, 44702, 44704; 14 CFR
11.28, 21.16.
The Special Conditions
Accordingly, pursuant to the authority delegated to me by the
Federal Aviation Administration (FAA), the following special conditions
are issued as part of the type certification basis for the Hamilton
Standard Model 568F propeller and pitch control system. Considering
that electronic propeller and pitch control systems introduce potential
failures that can result in hazardous conditions, the following special
conditions are issued.
(a) Each propeller and pitch control system which relies on
electrical and electronic means for normal operation must:
(1) Be designed and constructed so that any failure or malfunction
of aircraft-supplied power or data will not result in a hazardous
change in propeller pitch setting or prevent continued safe operation
of the propeller.
(2) Be designed and constructed so that no single failure or
malfunction, or probable combination of failures of electrical or
electronic components, or mechanical and hydraulic interface of the
propeller control system, result in a hazardous condition.
(3) Be tested to its environmental limits including transients
(variations) caused by lightning and high intensity radiated fields
(HIRF) and demonstrate no adverse effects on the control system
operation and performance or resultant damage. These tests shall
include, but not be limited to, the following:
(i) Lightning strikes, such as multiple-stroke and multiple-burst;
(ii) Pin-injected tests to appropriate wave forms and levels;
(iii) HIRF susceptibility tests.
(4) Be demonstrated by analysis/tests that associated software is
designed and implemented to prevent errors that would result in a
hazardous change in propeller pitch or a hazardous condition.
(5) Be designed and constructed so that a failure or malfunction of
electrical or electronic components in the propeller control system
could not prevent safe operation of any remaining propeller that is
installed on the aircraft.
(b) For purposes of these special conditions, a hazardous condition
is considered to exist for each of the following conditions:
(1) Loss of control of the propeller,
(2) Instability of a critical function,
(3) Unwanted change in propeller pitch causing improper thrust/
overspeed, and
(4) Unwanted action of a critical control function resulting in
propeller flat pitch or reverse.
Issued in Burlington, Massachusetts, on December 19, 1995.
James C. Jones,
Acting Manager, Engine and Propeller Directorate, Aircraft
Certification Service.
[FR Doc. 96-55 Filed 1-2-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-46 Truth in Savings
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Page 114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-46]
=======================================================================
-----------------------------------------------------------------------
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 707
Truth in Savings
AGENCY: National Credit Union Administration (NCUA).
ACTION: Approval of Information Collection Requirements.
-----------------------------------------------------------------------
SUMMARY: On September 27, 1993, the National Credit Union
Administration (NCUA) published a final rule on Truth in Savings (58 FR
50394). At that time, the NCUA had not yet submitted its application to
the Office of Management and Budget (OMB) for approval of the
information collection requirements found in the regulation (see 58 FR
50444, 9/27/93). On July 18, 1994, the NCUA published the collection
requirements in the Federal Register (59 FR 36451), notifying the
public that the requirements had been submitted to OMB for approval and
seeking public comment on the requirements. The information collection
requirements in the final rule were approved by the Office of
Management and Budget on September 29, 1994. The control number
assigned for this rule is 3133-0134. Notice of this approval appeared
in the Federal Register on November 21, 1994 (59 FR 59899). The Federal
Register determined that the notice was inadequate, hence this new
notice is provided.
EFFECTIVE DATE: January 1, 1996.
ADDRESSES: Becky Baker, Secretary of the Board, National Credit Union
Administration Board, 1775 Duke Street, Alexandria, VA 22314-3428.
FOR FURTHER INFORMATION CONTACT:
Hattie Ulan, Special Counsel to the General Counsel, telephone: (703)
518-6540, at the above address.
By the National Credit Union Administration Board on December
27, 1995.
Hattie Ulan,
Acting Secretary of the Board.
[FR Doc. 96-46 Filed 1-2-96; 8:45 am]
BILLING CODE 7535-01-M
Complete official Federal Register PDF
FR Doc. 96-3 Defense Federal Acquisition Regulation Supplement; Uruguay Round (1996 Agreement)
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Page 130]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Parts 225 and 252
Defense Federal Acquisition Regulation Supplement; Uruguay Round
(1996 Agreement)
AGENCY: Department of Defense (DoD).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Director of Defense Procurement has amended the Defense
Federal Acquisition Regulation Supplement (DFARS) to implement the DoD-
unique requirements of the renegotiated General Agreement on Tariffs
and Trade (GATT) Government Procurement Agreement (1996 Code) (Uruguay
Round), which becomes effective January 1, 1996. This agreement is
implemented in statute by the Uruguay Round Agreement Act, Pub. L. 103-
465, which amends the Trade Agreements Act of 1979.
DATES: Effective date: January 1, 1996.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
This final rule amends DFARS 225.402 and 252.225-7007, permitting
purchase of nondesignated country end products, if sufficient U.S.
made, qualifying country, or eligible products are not available. This
implements Section 343 of Pub. L. 103-465, which amends Section 302(a)
of the Trade Agreements Act of 1979 (19 U.S.C. 2512(a)).
A proposed rule was published in the Federal Register on October
13, 1995 (60 FR 53319). No comments were received in response to the
proposed rule.
B. Regulatory Flexibility Act
The Department of Defense certifies that this final rule will not
have a significant economic impact on a substantial number of small
entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C.
601, et seq., because it permits purchase of nondesignated country end
products without a waiver only if sufficient U.S. made, qualifying
country, or eligible products are not available.
C. Paperwork Reduction Act
The final rule does not impose any reporting or recordkeeping
requirements which require OMB approval under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 225 and 252
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Parts 225 and 252 are amended as follows:
1. The authority citation for 48 CFR Parts 225 and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 225--FOREIGN ACQUISITION
2. Section 225.402 is amended by revising paragraph (c) to read as
follows:
225.402 Policy.
(a) * * *
(c)(i) Except as provided in paragraphs (c) (ii) and (iii) of this
section, do not purchase nondesignated country end products subject to
the Trade Agreements Act unless they are NAFTA, Caribbean Basin, or
qualifying country end products (see 225.872-1).
(ii) The prohibition in paragraph (c)(i) of this section does not
apply when the contracting officer determines that offers of U.S. made,
qualifying country, or eligible products from responsive, responsible
offerors are either--
(A) Not received; or
(B) Insufficient to fill the Government's requirements. In these
cases, accept all responsive, responsible offers of U.S. made,
qualifying country, and eligible products before accepting any other
offers.
(iii) National interest waivers under Section 302(b)(2) of the
Trade Agreements Act are approved on a case-by-case basis. Except as
delegated in paragraphs (c)(iii) (A) and (B) of this section, a request
for a national interest waiver shall include supporting rationale and
be submitted under department/agency procedures to the Director of
Defense Procurement.
(A) The head of the contracting activity may approve a national
interest waiver for a purchase by an overseas purchasing activity of
products critical to the support of U.S. forces stationed abroad. The
waiver must be supported by a written statement from the requiring
activity stating that the requirement is critical for the support of
U.S. forces stationed abroad.
(B) The Commander, Defense Fuel Supply Center, may approve national
interest waivers for purchases of fuel for use by U.S. forces overseas.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
3. Section 252.225-7007 is amended by revising the clause date to
read ``(JAN 1996)'' and by revising paragraph (c)(1) to read as
follows:
252.225-7007 Trade Agreements.
* * * * *
Trade Agreements (Jan 1996)
* * * * *
(c) * * *
(1) Offerors may not supply a nondesignated country end product
unless--
(i) It is a qualifying country end product, a Caribbean Basin
country end product, or a NAFTA country end product;
(ii) The Contracting Officer has determined that offers of U.S.
made end products or qualifying, designated, NAFTA, or Caribbean
Basin country end products from responsive, responsible offerors are
either not received or are insufficient to fill the Government's
requirements; or
(iii) A national interest waiver has been granted under Section
302 of the Trade Agreements Act of 1979 (see FAR 25.402(c)).
* * * * *
[FR Doc. 96-3 Filed 1-2-96; 8:45 am]
BILLING CODE 5000-04-M
Complete official Federal Register PDF
FR Doc. 96-26 Raisins Produced From Grapes Grown in California; Reduction in the Production Cap for the 1996 Raisin Diversion Program for Natural (Sun-dried) Seedless Raisins
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 100-102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
7 CFR Part 989
[FV95-989-5IFR]
Raisins Produced From Grapes Grown in California; Reduction in
the Production Cap for the 1996 Raisin Diversion Program for Natural
(Sun-dried) Seedless Raisins
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Interim final rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: This interim final rule invites comments on a reduction of the
production cap for the 1996 Raisin Diversion Program (RDP) for Natural
(sun-dried) Seedless raisins. The production cap, which limits the
amount of raisin tonnage per acre for which an RDP participant can
receive credit, is reduced from 2.75 tons per acre to 2.2 tons per acre
for this program. This reduction is intended to bring the production
cap for 1996 in line with 1995 production per acre, which was
approximately 20 percent smaller than the 1994 crop yield per acre.
This rule was unanimously recommended by the Raisin Administrative
Committee (Committee), the body which locally administers the marketing
order.
DATES: This interim final rule becomes effective January 3, 1996.
Comments which are received by January 18, 1996 will be considered
prior to any finalization of this interim final rule.
ADDRESSES: Interested persons are invited to submit written comments
concerning this action. Comments must be sent in triplicate to the
Docket Clerk, Fruit and Vegetable Division, AMS, USDA, room 2525-S,
P.O. Box 96456, Washington, DC 20090-6456, or faxed to 202-720-5698.
Comments should reference the docket number and the date and page
number of this issue of the Federal Register and will be made available
for public inspection in the Office of the Docket Clerk during regular
business hours.
FOR FURTHER INFORMATION CONTACT: Richard Van Diest, Marketing
Specialist, California Marketing Field Office, Fruit and Vegetable
Division, AMS, USDA, 2202 Monterey Street, suite 102B, Fresno,
California 93721; telephone: 209-487-5901 or Mark A. Slupek, Marketing
Specialist, Marketing Order Administration Branch, Fruit and Vegetable
Division, AMS, USDA, room 2523-S, P.O. Box 96456, Washington, DC 20090-
6456; telephone: 202-205-2830.
SUPPLEMENTARY INFORMATION: This interim final rule is issued under
[[Page 101]]
marketing agreement and Order No. 989 (7 CFR part 989), both as
amended, regulating the handling of raisins produced from grapes grown
in California, hereinafter referred to as the ``order.'' The order is
effective under the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
The Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This interim final rule has been reviewed under Executive Order
12778, Civil Justice Reform. Under the marketing order provisions now
in effect, the production cap for the RDP is 2.75 tons per acre, but it
may be reduced with the approval of the Secretary. This rule
establishes a production cap of 2.2 tons per acre for the 1996 RDP.
This rule is not intended to have retroactive effect. This interim
final rule will not preempt any State or local laws, regulations, or
policies, unless they present an irreconcilable conflict with this
rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the Secretary a
petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with law and requesting a modification of the order or to be exempt
therefrom. Such handler is afforded the opportunity for a hearing on
the petition. After the hearing, the Secretary would rule on the
petition. The Act provides that the district court of the United States
in any district in which the handler is an inhabitant, or has his/her
principal place of business, has jurisdiction in equity to review the
Secretary's ruling on the petition, provided a bill in equity is filed
not later than 20 days after the date of the entry of the ruling.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this action on small
entities.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 20 handlers of California raisins who are
subject to regulation under the raisin marketing order, and
approximately 4,500 producers in the regulated area. Small agricultural
service firms have been defined by the Small Business Administration
(13 CFR 121.601) as those whose annual receipts (from all sources) are
less than $5,000,000, and small agricultural producers are defined as
those having annual receipts of less than $500,000. No more than eight
handlers, and a majority of producers, of California raisins may be
classified as small entities. Twelve of the 20 handlers subject to
regulation have annual sales estimated to be at least $5,000,000, and
the remaining eight handlers have sales less than $5,000,000, excluding
receipts from any other sources.
The authority for the RDP and implementing rules and regulations
are specified in Secs. 989.56 and 989.156, respectively. The purpose of
the RDP is to give producers the means to voluntarily reduce their
raisin production. Each approved producer who has removed grapes in
accordance with rules and regulations receives a diversion certificate
from the Committee. Such certificates represent reserve tonnage raisins
equal to the amount of raisins diverted. That is, the amount of grape
acreage removed from production (for RDP purposes) multiplied by the
producer's previous crop year yield in tons per acre, or multiplied by
the production cap if the previous year's actual yield exceeds the cap.
These certificates may be submitted by producers only to handlers.
The handler pays the producer for the free tonnage applicable to the
diversion certificate minus the established harvest cost for the entire
tonnage shown on the certificate. Factors reviewed by the Committee in
determining allowable harvest costs are specified in
Sec. 989.156(a)(1).
Any handler holding diversion certificates may redeem such
certificates with the Committee for reserve pool raisins. To redeem a
certificate, the handler must present the certificate to the Committee
and pay the Committee an amount equal to the established harvest costs
plus an amount equal to the payment for receiving, storing, fumigating,
handling, and inspecting reserve tonnage raisins specified in
Sec. 989.401 for the entire tonnage represented on the certificate.
The marketing order requires the Committee to meet on or before
November 30 of each crop year to review production data, supply data,
demand data, inventory, and other matters relating to the quantity of
raisins available to or needed by the market. If the Committee decides
that the current crop year's reserve pool has more than enough raisins
to meet projected market needs, it can announce the amount of such
excess eligible for diversion during the subsequent crop year. The
administrative rules and regulations established under the order
require that such announcement be made on or before November 30 of each
year.
A production cap of 2.75 tons of raisins per acre is established
under the order for any production unit of a producer approved for
participation in an RDP. When the diversion tonnage is announced, the
Committee may recommend, subject to the approval of the Secretary, that
the production cap for that RDP be less than 2.75 tons per acre. The
production cap limits the yield that a producer can claim and is
designed to allow most high yield producers to participate in an RDP.
When the cap was added to the marketing order in 1989, only 8 percent
of raisin producers exceeded the 2.75 tons per acre yield. Producers
who historically produce yields above the production cap can choose to
produce a crop rather than participate in a diversion program. No
producer is required to participate in an RDP.
A producer who wants to participate in an RDP must apply to the
Committee. The producer must specify, among other things, the raisin
production and the acreage covered by the application. The Committee
verifies producers' production claims using handler acquisition reports
and other available information. However, a producer could misrepresent
production by claiming that some raisins produced on one ranch were
produced on another, and use an inflated yield on the RDP application.
Thus, the production cap limits the amount of raisins for which a
producer participating in an RDP may be credited, and protects the
program from overstated production yields.
For example, a producer whose actual yield was 2.5 tons per acre
might claim that the yield was 3.5 tons per acre on the RDP
application. The current production cap would allow that producer to
receive a diversion certificate for 2.75 tons per acre, which is 0.25
tons above the actual yield but far less than the 1.0 ton which would
have been improperly credited if the diversion certificate had been
based on a yield of 3.5 tons per acre. The production cap reduces the
amount of inflated tonnage which could be improperly credited and
allows more producers to participate. When the production cap is more
in line with the
[[Page 102]]
actual yield per acre, the total quantity of raisins available under
the RDP can be allocated to more applicants. A producer who actually
produced 3.5 tons per acre might decide to produce a raisin crop rather
than apply for the RDP and be subject to the production cap.
The Committee met on November 27, 1995, and reviewed data relating
to the quantity of reserve pool raisins and anticipated market needs.
The Committee decided that the 1995-96 reserve pool had more raisins
than necessary to meet projected market needs and announced that 20,000
tons of Natural (sun-dried) Seedless raisins would be eligible for
diversion under the 1996 RDP.
The Committee members believe that the current production cap is
too high because 1995 crop year yields per acre are down 20 percent
compared to 1994. The Committee, therefore, unanimously recommended a
reduction in the production cap of 20 percent, from 2.75 tons per acre
to 2.2 tons per acre for the 1996 RDP, based on 1995 production.
Reducing the production cap proportionately to the decrease in yield
per acre is more reflective of actual production yields during the 1995
crop year.
A 15-day comment period was deemed appropriate for this rule
because the submission deadlines for applications and corrected
applications for the 1996 RDP are December 20, 1995, and January 12,
1996, respectively, and the Department would like to make its final
decision available as quickly as possible.
The information collection requirement (i.e., the RDP application)
referred to in this rule has been previously approved by the Office of
Management and Budget (OMB) under the provisions of 44 U.S.C. Chapter
35 and has been assigned OMB number 0581-0083.
Based on available information, the Administrator of the AMS has
determined that the issuance of this interim final rule will not have a
significant economic impact on a substantial number of small entities.
After consideration of all relevant information presented,
including the Committee's recommendations and other information, it is
found that this regulation, as hereinafter set forth, will tend to
effectuate the declared policy of the Act.
Pursuant to 5 U.S.C. 553, it is also found and determined upon good
cause that it is impracticable, unnecessary, and contrary to the public
interest to give preliminary notice prior to putting this rule into
effect, and that good cause exists for not postponing the effective
date of this rule until 30 days after publication in the Federal
Register because: (1) The submission deadlines for producer
applications and corrected applications for the 1996 RDP are December
20, 1995, and January 12, 1996, respectively, and producers need to
know about the reduced production cap as soon as possible, to make a
decision on whether or not to apply; (2) producers are aware of this
action, which was recommended by the Committee at an open meeting; (3)
the program is voluntary, and any producer who objects to the reduced
production cap can choose to produce a raisin crop for delivery during
1996; and (4) this interim final rule provides a 15-day period for
written comments and all comments received will be considered prior to
finalization of this interim final rule.
List of Subjects in 7 CFR Part 989
Grapes, Marketing agreements, Raisins, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR Part 989 is
amended to read as follows:
PART 989--RAISINS PRODUCED FROM GRAPES GROWN IN CALIFORNIA
1. The authority citation for 7 CFR Part 989 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. A new paragraph (t) is added to Sec. 989.156 of Subpart--
Administrative Rules and Regulations (7 CFR Part 989.102-989.176) to
read as follows:
Sec. 989.156 Raisin diversion program.
* * * * *
(t) Pursuant to Sec. 989.56(a), the production cap for the 1996
Raisin Diversion Program for the Natural (sun dried) Seedless varietal
type is 2.2 tons of raisins per acre.
Dated: December 26, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-26 Filed 1-2-96; 8:45 am]
BILLING CODE 3410-02-P
Complete official Federal Register PDF
FR Doc. 96-24 Amendment of Provisions Regulating Domestically Produced Peanuts Handled by Persons Not Subject to the Peanut Marketing Agreement
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 102-104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-24]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
7 CFR Part 997
[Docket No. FV95-997-2FIR]
Amendment of Provisions Regulating Domestically Produced Peanuts
Handled by Persons Not Subject to the Peanut Marketing Agreement
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Agriculture (Department) is adopting as a
final rule, without modification, the provisions of an interim rule
that amended, for 1995 and subsequent crop years, several certification
and identification requirements established for peanuts handled by
persons not signatory to Peanut Marketing Agreement No. 146
(Agreement). The interim final rule provided for a chemical analysis
exemption for superior grade shelled peanuts and added addresses and
updated contact numbers of chemical analysis laboratories. The changes
are consistent with industry operating practices and bring the non-
signatory handling requirements into conformity with requirements
specified under the Agreement. Continuation of this rule should reduce
the regulatory burden and handling costs on non-signatory peanut
handlers.
EFFECTIVE DATE: February 2, 1996.
FOR FURTHER INFORMATION CONTACT: Richard Lower, Marketing Order
Administration Branch, Fruit and Vegetable Division, AMS, USDA, P.O.
Box 96456, room 2523-S, Washington, D.C. 20090-6456, telephone (202)
720-2020, facsimile (202) 720-5698.
SUPPLEMENTARY INFORMATION: This final rule is issued pursuant to
requirements of the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674), hereinafter referred to as the ``Act.''
The Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform. This action will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule. This action is not intended to have
retroactive effect. There are no administrative procedures which must
be exhausted prior to any judicial challenge to the provisions of this
rule.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this rule on small
entities.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened.
There are approximately 45 handlers of peanuts who have not signed
the
[[Page 103]]
Agreement and, thus, are subject to the regulations contained herein.
Small agricultural service firms are defined by the Small Business
Administration (13 CFR 121.601) as those whose annual receipts are less
than $5,000,000. It is estimated that most of the non-signatory
handlers are small entities. Most of the 47,000 peanut producers who
might potentially do business with these handlers are also small
entities. Small agricultural producers have been defined as those
having annual receipts of less than $500,000.
In 1994, the reported U.S. production, mostly covered under the
Agreement, was approximately 4.25 billion pounds of peanuts, a 25
percent increase from the short 1993 crop. The preliminary 1994 peanut
crop value is $1.23 billion, up 19 percent from the 1993 crop value.
After aflatoxin was found in peanuts in the mid-1960's, the
domestic peanut industry has sought to minimize aflatoxin contamination
in peanuts and peanut products. Under authority of the Act, Peanut
Marketing Agreement No. 146 and the Peanut Administrative Committee
(Committee) were established by the Secretary in 1965 (7 CFR part 998).
The Agreement was signed by a majority of domestic peanut handlers
(signatory handlers).
Public Law 101-220, enacted December 12, 1989, amended section 608b
of the Act to require that all handlers who have not signed the
Agreement (non-signatory handlers) be subject to quality, handling, and
inspection requirements to the same extent and manner as are required
under the Agreement. Regulations to implement Pub. L. 101-220 were
issued and made effective on December 4, 1990 (55 FR 49983). It is
estimated that 5 percent of the domestic peanut crop is marketed by
non-signatory handlers and the remainder of the crop is handled by
signatory handlers.
The objective of the Agreement (7 CFR part 998) and the non-
signatory handling regulations (7 CFR part 997) is to ensure that only
wholesome peanuts enter edible market channels. Under both regulations,
farmers stock peanuts with visible Aspergillus flavus mold (the
principal source of aflatoxin) are required to be diverted to non-
edible uses. Both regulations also provide that shelled peanuts meeting
minimum outgoing quality requirements must be chemically analyzed for
aflatoxin contamination.
Under the non-signatory provisions, no peanuts may be sold or
otherwise disposed of for human consumption if the peanuts fail to meet
the quality requirements of the Agreement. The non-signatory handler
regulations have been amended several times thereafter and are
published in 7 CFR part 997. All amendments have been made to ensure
that the non-signatory handling requirements are the same as
modifications made to the signatory handling requirements under the
Agreement. Violation of non-signatory regulations may result in a
penalty in the form of an assessment by the Secretary equal to 140
percent of the support price for quota peanuts. The support price for
quota peanuts is determined under section 108B of the Agricultural Act
of 1949 (7 U.S.C. 1445c-3) for the crop year during which the violation
occurs.
Because aflatoxin appears most frequently in damaged, stressed,
under-developed, and malformed peanut kernels, peanut lots with fewer
poor quality kernels are less likely to be contaminated. Under section
998.200(a) of the Agreement, minimum quality requirements for shelled
peanuts are found in the ``Other Edible Quality'' table of the
Agreement. All shelled peanuts destined for edible consumption must
meet these minimum requirements. Peanuts meeting this minimum grade
must also be chemically tested for contamination.
The Agreement also has a higher level of quality requirements
titled ``Indemnifiable Grades.'' Peanuts meeting the indemnifiable
grades do not have to be chemically analyzed for aflatoxin.
The minimum quality requirements specified in the ``Other Edible
Quality'' table of the Agreement are also specified in the non-
signatory handler regulations in the table titled ``Minimum Grade
Requirements--Peanuts for Human Consumption'' (hereinafter referred to
as Table 1) in section 997.30(a).
To be consistent with the Agreement, the Department established in
the interim final rule, a second table titled ``Superior Quality
Exemption--Peanuts for Human Consumption'' (hereinafter referred to as
Table 2) in the outgoing quality requirements in section 997.30(a). The
quality requirements in Table 2 are the same as those established in
the Indemnifiable Grades table of the Agreement. Non-signatory handler
peanuts meeting the Superior Quality Exemption grades are not required
to be chemically tested for aflatoxin. However, buyers often require
chemical analysis as an assurance of minimum aflatoxin contamination.
The Superior Quality Exemption tolerances in these regulations are
(in percentage of kernels): Unshelled and damaged kernels (1.25);
combined unshelled, damaged kernels and kernels with minor defects
(2.00); sound split and broken kernels (3.00 for most varieties); sound
whole kernels that pass specified screens (3.00 for most varieties);
combined sound split and broken kernels (4.00 for all varieties);
foreign material (.10 for some varieties and .20 for other varieties),
and moisture (9.00).
Amendments to Handling Requirements
The Committee meets in February or March each year and recommends
to the Secretary such rules and regulations as may be necessary to keep
the Agreement consistent with current industry practice. The Committee
met on March 22 and 23, 1995, and unanimously recommended four
relaxations in the Agreement handling requirements which the Department
accepted. The changes were published in the July 14, 1995, issue of the
Federal Register as an interim final rule (60 FR 36205). The interim
final rule established the same relaxations, as appropriate, for the
non-signatory handling regulations.
The first amendment relaxed Positive Lot Identification (PLI) and
quality certification requirements specified in paragraph (g) of
section 997.20 Shelled peanuts by allowing movement of failing quality
shelled peanuts, which originated from Segregation 1 peanuts, from one
handler to another handler without requiring re-inspection and PLI
certification by the receiving handler. Previously, paragraph (g)
provided that handlers could acquire from other handlers for remilling,
Segregation 1 shelled peanuts that failed to meet the requirements for
human consumption. The peanuts had to be accompanied by a valid
inspection certificate and be positive lot identified. Further, the
peanuts had to be held and milled separate and apart from other
receipts or acquisitions of the receiving handler and the transaction
had to be reported to the Division by both handlers.
Under the relaxed handling procedure, receiving handlers are not
required to hold and remill such peanuts separate from other receipts
and acquisitions of the handlers and the received peanuts do not have
to be reinspected. Any peanuts so transferred and handled must still
meet all the applicable edible quality requirements before being
disposed of for human consumption.
Therefore, paragraph (g) of section 997.20 was revised, in the
interim final rule, by removing the second sentence requiring
inspection certification and positive lot identification and changing
the last sentence to remove reference to received peanuts being held
and milled separate and apart from other peanuts.
[[Page 104]]
The second amendment relaxed ownership requirements of paragraph
(f) of section 997.30 Outgoing regulations by allowing handlers to
transfer peanuts to another handler or to domestic commercial storage
facilities. Originally, paragraph (f) applied to the transfer of
peanuts from one plant to another of a handler's plants or to
commercial storage without having the peanuts PLI and certified as
meeting quality requirements--provided that ownership was retained by
the handler and that the transfer was only to points within the same
production area.
The amendment extended the provisions of paragraph (f) to allow the
transfer of peanuts from one handler's facility to another handler's
facility for further handling. The relaxation allows handlers to make
the most efficient use of other handling facilities without having to
pay additional costs entailed in obtaining PLI and quality
certification of the peanuts. Any peanuts so transferred are still
subject to all applicable edible quality requirements before being
disposed of for human consumption. Thus, the revisions to paragraph (f)
of section 997.30 to include the transfer of peanuts between facilities
of different handlers without quality certification and PLI at the time
of transfer is continued in effect.
Similarly, the third amendment revised some PLI and certification
requirements of paragraphs (a)(1), (a)(2) and (a)(3) of section 997.40
Reconditioning and disposition of peanuts failing quality requirements.
Paragraph (a)(1) previously provided that a handler of failing quality,
Segregation 1 shelled peanuts may have remilled, moved under PLI to a
custom remiller, sold to another handler, or blanched such peanuts.
Paragraph (a)(2) provided that such peanuts moved to blanching, or sold
to another handler for blanching, had to be moved under PLI. Paragraph
(a)(3) required peanut lots in such transactions to be accompanied by a
valid grade certificate and moved under PLI. Peanuts so handled had to
be kept separate and apart from other peanuts at the remilling,
blanching or receiving handler facility.
Under the relaxed handling procedure, the peanuts do not have to be
moved under PLI to the remiller, blancher, or receiving handler.
Further, to be consistent with the changes in the Agreement
regulations, peanuts so moved no longer have to be kept separate and
apart from other peanuts at the remilling, blanching or receiving
handler facility. Thus, the revisions to paragraphs (a)(1), (a)(2), and
(a)(3) of section 997.40 by removing references to PLI and movement
accompanied by valid certification are continued in effect.
Additionally, the provisions added in the appropriate provisions to
provide that the transferred peanuts do not have to be kept separate
and apart at the receiving remilling, blanching, or handling facility
remain in effect.
The Committee members, in proposing the changes in the Agreement
provisions, believed that the more restrictive level of regulatory
control for each peanut lot is no longer needed. The changes in this
rule are based on the fact that current shelling, processing, remilling
and blanching technologies are generally more efficient than in the
past. The rule makes it more economical for handlers to use blanchers'
and remillers' facilities which are generally operated more
efficiently. These facilities are now located throughout the different
production areas which also encourages their use.
The rule provides handlers more reconditioning flexibility by
eliminating some certification requirements and PLI of peanuts and by
reducing costs incurred during movement to different locations and
facilities. The rule should improve handlers' competitive positions.
Relaxing the regulations has allowed freer movement of peanuts and more
efficient use of facilities. The relaxation of PLI and certification
requirements has reduced the number of inspections and should result in
lower costs to the entire industry. Fewer inspections are not expected
to compromise the industry's quality control and lot identification
objectives.
The interim final rule also added and updated addresses and
telephone and facsimile numbers, where applicable, of approved
aflatoxin testing laboratories and identified the contact point of the
USDA Science Division headquarter's office. The laboratories perform
chemical analyses required by the non-signatory handling regulations.
This information is provided in paragraphs (c)(5)(i) and (ii) of
section 997.30 Outgoing regulation. Nine of the laboratories are
approved by the USDA/AMS Science Division and eight are approved by the
Committee. Non-signatory handlers may send peanut samples to any
laboratory on the list, per instructions specified in paragraph (c) of
the outgoing regulation.
The interim final rule on these issues was published in the Federal
Register on September 28, 1995 (60 FR 50083). That rule invited
interested persons to submit written comments through October 30, 1995.
No Comments were received and the Department is adopting as a final
rule, without change, the provisions of the interim final rule.
In accordance with the Paperwork Reduction Act of 1988 (44 U.S.C.
Chapter 35), information collection requirements that are contained in
this rule have been previously approved by the Office of Management and
Budget (OMB) and have been assigned OMB No. 0581-0163.
Based on the above, the Administrator of the AMS has determined
that this final rule will not have a significant economic impact on a
substantial number of small entities.
After consideration of all available information, it is found that
this rule, as hereinafter set forth, will tend to effectuate the
declared policy of the Act.
List of Subjects in 7 CFR Part 997
Food grades and standards, Peanuts, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 997 is
amended as follows:
PART 997--PROVISIONS REGULATING THE QUALITY OF DOMESTICALLY
PRODUCED PEANUTS HANDLED BY PERSONS NOT SUBJECT TO THE PEANUT
MARKETING AGREEMENT
Accordingly, the interim final rule amending 7 CFR Part 997 which
was published at 60 FR 50083 on September 28, 1995, is adopted as a
final rule without change.
Dated: December 26, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-24 Filed 1-2-96; 8:45am]
BILLING CODE 3410-02-P
Complete official Federal Register PDF
FR Doc. 96-23 Papayas Grown in Hawaii; Reduction of Expenses and Assessment Rate for the 1995-96 Fiscal Year
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 99-100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-23]
========================================================================
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. 2 / Wednesday, January 3, 1996 /
Rules and Regulations
[[Page 99]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 928
[Docket No. FV95-928-1-FR; Amendment 1]
Papayas Grown in Hawaii; Reduction of Expenses and Assessment
Rate for the 1995-96 Fiscal Year
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule reduces the expenses and rate of assessment
previously established under Marketing Order No. 928 for the 1995-96
fiscal year. This rule reduces the budget of expenses and assessment
rate which papaya handlers will be assessed for funding expenses by the
Papaya Administrative Committee (Committee) that are reasonable and
necessary to administer the program.
EFFECTIVE DATE: July 1, 1995 through June 30, 1996.
FOR FURTHER INFORMATION CONTACT: Mary Kate Nelson, Marketing Assistant,
California Marketing Field Office, Fruit and Vegetable Division, AMS,
USDA, 2202 Monterey Street, suite 102B, Fresno, California 93721,
telephone (209) 487-5901, or Fax # (209) 487-5906; or Charles L. Rush,
Marketing Order Administration Branch, Fruit and Vegetable Division,
AMS, USDA, room 2522-S, P.O. Box 96456, Washington, D.C. 20090-6456;
telephone: (202) 720-5127, or Fax # (202) 720-5698.
SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing
Agreement and Order No. 928 (7 CFR part 928), regulating the handling
of papayas grown in Hawaii, hereinafter referred to as the ``order.''
The marketing agreement and order are effective under the Agricultural
Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674),
hereinafter referred to as the ``Act.''
The Department of Agriculture (Department) is issuing this rule in
conformance with Executive Order 12866.
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform. Under the marketing order provisions now in effect,
papayas grown in Hawaii are subject to assessments. It is intended that
the assessment rate as issued herein will be applicable to all
assessable papayas handled during the 1995-96 fiscal year, which began
July 1, 1995, and ends June 30, 1996. This final rule will not preempt
any State or local laws, regulations, or policies, unless they present
an irreconcilable conflict with this rule.
The Act provides that administrative proceedings must be exhausted
before parties may file suit in court. Under section 608c(15)(A) of the
Act, any handler subject to an order may file with the Secretary a
petition stating that the order, any provision of the order, or any
obligation imposed in connection with the order is not in accordance
with law and request a modification of the order or to be exempted
therefrom. Such handler is afforded the opportunity for a hearing on
the petition. After the hearing the Secretary would rule on the
petition. The Act provides that the district court of the United States
in any district in which the handler is an inhabitant, or has his or
her principal place of business, has jurisdiction in equity to review
the Secretary's ruling on the petition, provided a bill in equity is
filed not later than 20 days after date of the entry of the ruling.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Administrator of the Agricultural Marketing Service
(AMS) has considered the economic impact of this rule on small
entities.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Marketing orders issued
pursuant to the Act, and rules issued thereunder, are unique in that
they are brought about through group action of essentially small
entities acting on their own behalf. Thus, both statutes have small
entity orientation and compatibility.
There are approximately 300 producers of papayas in Hawaii, and
approximately 60 handlers regulated under this marketing order. Small
agricultural producers have been defined by the Small Business
Administration (13 CFR 121.601) as those having annual receipts of less
than $500,000, and small agricultural service firms are defined as
those whose annual receipts are less than $5,000,000. The majority of
these producers and handlers may be classified as small entities.
The papaya marketing order, administered by the Department,
requires that the assessment rate for a particular fiscal year apply to
all assessable papayas handled from the beginning of such year. Annual
budgets of expenses are prepared by the Committee, the agency
responsible for local administration of this marketing order, and
submitted to the Department for approval. The members of the Committee
are handlers and producers of Hawaiian papayas. They are familiar with
the Committee's needs and with the costs for goods, services, and
personnel in their local area, and are thus in a position to formulate
appropriate budgets. The Committee's budget was formulated and
discussed in a public meeting. Thus, all directly affected persons have
had an opportunity to participate and provide input.
The assessment rate recommended by the Committee was derived by
dividing anticipated expenses by expected shipments of papayas. Because
that rate is applied to actual shipments, it must be established at a
rate which will produce sufficient income to pay the Committee's
expected expenses. In recommending an assessment rate, the Committee
also considered funds available in a monetary reserve that could be
used to pay expenses.
The Committee met on April 28, 1995, and unanimously recommended
expenses totaling $562,044 for its 1995-96 budget. The Committee met
again on July 20, 1995, and unanimously recommended a new budget
because the original budget contained inaccuracies. The revised
recommendation contained expenses totaling $465,800 for the 1995-96
budget. This was a $123,400 reduction in expenses compared to the 1994-
95 budget of $589,200.
The Committee also unanimously recommended an assessment rate of
$.0089 per pound for the 1995-96 fiscal
[[Page 100]]
year, which was the same as was recommended for the 1994-95 fiscal
year.
An interim final rule was published in the Federal Register (60 FR
43351, August 21, 1995). A final rule was published in the Federal
Register on September 28, 1995 (60 FR 50078).
The Committee met again on September 28, 1995, and recommended
revising the budget to reduce expenses to $435,800, and the assessment
rate to $.0059 per pound for the 1995-96 fiscal year, which is $.0030
less than was recommended for the 1994-95 fiscal year. The Committee
recommended reducing their expenses for research and development by
$30,000, and reducing the reserve carryover for the following year to
$26,597. There was some concern expressed at the meeting as to whether
the Committee would have enough income to meet expenses. Ultimately, by
a vote of eight to three with one abstention, the Committee recommended
the reduced expenses of $435,800 and an assessment rate of $.0059.
The assessment rate, when applied to anticipated shipments of 33
million pounds, yields $194,700 in assessment income. Other sources of
program income include $40,000 from the Hawaii Department of
Agriculture, $57,000 from the Department's Foreign Agricultural
Service, $7,800 from the Japanese Inspection program, $3,000 in
interest income, and $4,766 from the County of Hawaii. Thus, total
income is expected to be $307,266. The Committee plans to use money
from its reserve account to meet its estimated expenses for the year.
Major expense categories for the 1995-96 fiscal year include
$165,500 for the market expansion program, $115,000 for research and
development, and $67,000 for salaries. Funds in the reserve at the end
of the 1995-96 fiscal year, estimated at $26,597, will be within the
maximum permitted by the order of one fiscal year's expenses.
A proposed rule was published in the Federal Register on November
6, 1995 (60 FR 56003). That rule provided a 30-day comment period. No
comments were received.
This action will reduce the assessment obligation imposed on
handlers. The assessments will be uniform for all handlers. The
assessment costs are expected to be offset by the benefits derived from
the operation of the marketing order. Therefore, the Administrator of
the AMS has determined that this action will not have a significant
economic impact on a substantial number of small entities.
After consideration of all relevant matter presented, including the
information and recommendations submitted by the Committee and other
available information, it is hereby found that this rule, as
hereinafter set forth, will tend to effectuate the declared policy of
the Act.
Pursuant to 5 U.S.C. 533, it is also found and determined that good
cause exists for not postponing the effective date of this rule until
30 days after publication in the Federal Register because: (1) This
action reduces the expenses and rate of assessment previously
established under the marketing order for the 1995-96 fiscal year; (2)
the 1995 crop year began on July 1, 1995, and the marketing order
requires that the rate of assessment apply to all assessable papayas
during the crop year; and (3) handlers are aware of this rule which was
recommended by the Committee at a public meeting and published in the
Federal Register as a proposed rule. The proposed rule provided a 30-
day comment period; no comments were received.
List of Subjects in 7 CFR Part 928
Marketing agreements, Papayas, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, 7 CFR part 928 is
amended as follows:
PART 928--PAPAYAS GROWN IN HAWAII
1. The authority citation for 7 CFR part 928 continues to read as
follows:
Authority: 7 U.S.C. 601-674.
2. A new Sec. 928.225 is added to read as follows:
Note: This section will not appear in the Code of Federal
Regulations.
Sec. 928.225 Expenses and assessment rate.
Expenses of $435,800 by the Papaya Administrative Committee are
authorized and an assessment rate of $.0059 per pound of assessable
papayas is established for the fiscal year ending June 30, 1996.
Unexpended funds may be carried over as a reserve.
Dated: December 26, 1995.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-23 Filed 1-2-96; 8:45 am]
BILLING CODE 3410-02-P
Complete official Federal Register PDF
FR Doc. 96-103 Requirements for Determining Assigned Deterioration Factors for Alternative Fuel Vehicles, Amendments to Labelling Requirements for Inherently Low-Emission Vehicles, and Related Provisions
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 122-128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-103]
=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 86 and 88
[AMS-FRL-5347-3]
RIN 2060-AF87
Requirements for Determining Assigned Deterioration Factors for
Alternative Fuel Vehicles, Amendments to Labelling Requirements for
Inherently Low-Emission Vehicles, and Related Provisions
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule (DFRM).
-----------------------------------------------------------------------
SUMMARY: This rulemaking promulgates actions to clarify and streamline
existing regulations for certifiers and purchasers of clean-fuel and/or
alternative fuel vehicles. This rule reduces the regulatory burden for
industry, and it is highly accommodating to their concerns. To
temporarily reduce the certification burden of the emerging industry of
aftermarket conversions of alternative fuel vehicles, EPA will take
action in this rule that will provide flexibility in the regulations
for the determination of assigned deterioration factors for alternative
fuel vehicles.
To encourage the production of Inherently Low-Emission Vehicles
(ILEVs), this rule also promulgates an amendment to allow additional
options for external ILEV label dimensions. Also in this rule, EPA will
amend two California Pilot Program (CPP) requirements: the method for
determining a manufacturer's clean-fuel vehicle (CFV) sales quota and
the method for administering CPP credits. This amendment to the method
of administering credits will reduce a manufacturer's reporting
requirements by a factor of four. Finally, this rule includes several
additional technical amendments to the regulations issued under Clean
Fuel Fleet Program and California Pilot Program final rules.
DATES: This rule is effective March 4, 1996 unless notice is received
by February 2, 1996 that adverse or critical comments will be submitted
on a specific element of this rule. EPA will publish a timely document
in the Federal Register withdrawing that portion of the rule for which
adverse comments were received.
ADDRESSES: Interested parties may submit written comments in response
to this rule (in duplicate if possible) to Public Docket Nos. A-92-30
and A-92-14 for alternative fuel vehicle provisions, Public Docket No.
A-92-30 for ILEV and Clean Fuel Fleet Program provisions, and Public
Docket No. A-92-69 for California Pilot Program provisions, at: Air
Docket Section, U.S. Environmental Protection Agency, Attention: Docket
Nos. A-92-30, A-92-14, or A-92-69, First Floor, Waterside Mall, Room M-
1500, 401 M Street SW., Washington, DC 20460. A copy of the comments
should also be sent to Mr. Bryan Manning (SRPB-12), U.S. EPA,
Regulation Development and Support Division, 2565 Plymouth Road, Ann
Arbor, MI 48105.
Materials relevant to this rule have been placed in Docket Nos. A-
92-30 and A-92-14 or A-92-69 by EPA. The docket is located at the above
address and may be inspected from 8 a.m. to 5:30 p.m. on weekdays. EPA
may charge a reasonable fee for copying docket materials.
A copy of this action is available through the Technology Transfer
Network Bulletin Board System (TTNBBS) under OMS, Rulemaking and
Reporting, Alternative Fuels, Clean Fuel Fleets. TTNBBS is available 24
hours a day, 7 days a week except Monday morning from 8-12 EST, when
the system is down for maintenance and backup. For help in accessing
the system, call the systems operator at 919-541-5384 in Research
Triangle Park, North Carolina, during normal business hours EST.
[[Page 123]]
FOR FURTHER INFORMATION CONTACT: Mr. Bryan Manning (SRPB-12), U.S. EPA,
Regulation Development and Support Division, 2565 Plymouth Road, Ann
Arbor, MI 48105, Telephone: (313) 741-7832; FAX: 313-741-7816.
SUPPLEMENTARY INFORMATION: Because EPA considers this action to be
noncontroversial, we are finalizing it without prior proposal. The
action will become effective March 4, 1996 unless adverse comments are
received by February 2, 1996. If EPA receives adverse comments, only
the affected portions of the direct final rule will be withdrawn and
all public comments received will be addressed in a subsequent final
rule based on the proposed rule (please see proposed rule entitled,
``Sales Volume Limit Provisions for Small-Volume Manufacturers
Certification of Clean-Fuel and Conventional Vehicle Conversions and
Related Provisions,'' published simultaneously in the ``Proposed
Rules'' section of this Federal Register).
I. Description of Action
The alternative fuel vehicle industry is likely to expand
considerably over the next several years in response to Clean Air Act
(CAA), the Energy Policy Act, and other alternative fuel fleet and
vehicle programs at the state and local levels. Nevertheless, EPA
believes alternative fuel vehicles will still have limited sales in
comparison to conventional vehicles. Thus, due to this potential
inequity in sales, EPA believes it may be difficult for aftermarket
converters of alternative fuel vehicles to recover their certification
cost over the next several years. Since EPA encourages the production
of certified alternative fuel vehicles for air quality purposes, EPA
believes it will be wise to temporarily reduce the certification burden
for aftermarket converters of alternate fuel vehicles as described
below.
A. Flexibility in Certification Procedure for Determining Deterioration
Factors
As is shown in 40 CFR 86.094-14, the Small-Volume Manufacturers
(SVM) Certification Program exempts entities seeking a Certificate of
Conformity with total annual vehicle/engine sales less than 10,000 from
EPA's full certification program. Specifically, the SVM provisions
relieve such entities from some elements otherwise required to
demonstrate the durability of emissions over the life of the vehicle.
Instead of accumulating mileage on actual prototype vehicles, the SVM
program in some cases permits the use of EPA-assigned values for
emission deterioration. This can be of significant economic benefit to
entities manufacturing or converting relatively few vehicles. The
standard protocol EPA uses to assign deterioration factors is described
in EPA Advisory Circular No. 51-C.
Currently, small volume manufacturers with aggregated sales of less
than 301 vehicles per year or without durability data may use assigned
deterioration factors of the 70th percentile deterioration factors from
industry-wide data based on previously completed durability data
vehicles. In addition, manufacturers with aggregated sales from 301 to
9,999 may calculate and use assigned deterioration factors, but these
assigned deterioration factors must be no less than either the 70th
percentile or the average of all the manufacturer's deterioration
factor data (whichever is less). (See 40 CFR 86.094-14(c)(7)(i)(C)).
However, since alternative fuel vehicles are an emerging industry,
manufacturers of these vehicles and EPA currently have an extremely
limited database from which to calculate assigned deterioration
factors. According to current EPA regulations, many small-volume
manufacturers of alternative fuel vehicles would be required to
determine deterioration factors by conducting full useful-life tests
since there is an insufficient database of previously-certified
vehicles on which to base deterioration factors.
To enable certifiers of alternative fuel vehicles to avoid the
burden of full certification testing for the economic reasons discussed
above and to support the development of alternative fuel vehicle
technology, EPA believes it is wise to provide flexibility in the
regulations for the determination of assigned deterioration factors for
alternative fuel vehicles. Thus, EPA will permit manufacturers to use
assigned deterioration factors that the Administrator determines by
alternative methods if no deterioration factor data (either the
manufacturer's or industry-wide deterioration factor data) are
available, as detailed in section 86.094-14(a)(2) of the regulations
associated with today's rule. Following promulgation of this provision,
EPA expects to issue guidance describing the specific alternative
methods used in determining assigned deterioration factors for gaseous-
fueled vehicles through model year 2000.1
\1\ The assigned deterioration factors for gaseous-fueled
vehicles and the specific methods used to determine these factors
are expected to be specified in a ``Dear Manufacturer'' letter
(advisory letter) that would be available in docket A-92-14 and A-
92-30 and on TTNBBS.
---------------------------------------------------------------------------
B. Amendments to the Required Dimensions of Inherently Low-Emission
Vehicle (ILEV) Exterior Labels
In the regulations for the Clean Fuel Fleet (CFF) Credit Program
final rule, EPA specified size and shape requirements for ILEV exterior
identification labels. The manufacturer or dealer of an ILEV is
required to attach one label on the rear of the vehicle and one on each
of two sides of the vehicle if requested by a qualifying fleet
purchaser. In February 1995, Ford commented 2 that the required
dimensions for the rear ILEV labels are inappropriate for certain
vehicle models since their vehicle body design makes the placement of
such labels on these vehicles difficult or impossible. Ford also stated
that safety requirements for lighting and bumpers affect the vehicle
body design; in addition, for natural gas vehicles, a separate label is
required on the lower right rear of the vehicle by the National Fire
Protection Association Safety Standard 52. In April 1995 Ford suggested
a much smaller alternative ILEV label design for such vehicle models,
which American Automobile Manufacturer's Association (AAMA) agreed to
in May 1995.3 Ford also suggested that the problem of reduced
space on the rear of passenger cars also exists for the side of
vehicles since fleet advertisements often take up much of the space
available on the side of the vehicle.
\2\ Ford Motor Company, Comments on Reconsideration of ILEV
Labelling Requirements, letter from Kelly M. Brown to Margo T. Oge
of the U.S. Environmental Protection Agency, February 2, 1995.
\3\ Ford Motor Company, ``ILEV Labels'', Facsimile from Sarah
Rudy to Bryan Manning of the U.S. Environmental Protection Agency,
April 21, 1995.
---------------------------------------------------------------------------
As indicated in the preamble for the Clean Fuel Fleet Credit
Program final rule, EPA intends for ILEVs to be specially and clearly
identified since properly labeled ILEVs may be exempt from
transportation control measure (TCM) requirements, including high-
occupancy vehicle (HOV) lane restrictions. EPA expected ILEVs to look
much like conventional vehicles, and thus, the Agency intended for
ILEVs to have special labels to clearly indicate to law enforcement
officers, as well as the general public, that these vehicles are not
violating TCM ordinances.
EPA believes that the distinctive design and shape of AAMA's
suggested ILEV label would be consistent with EPA's intent to have
ILEVs clearly identified by law enforcement officials, as well as the
general public. At the time the CFF Credits/ILEV rule was finalized,
EPA was unaware of any vehicle models that would have a conflict with
the ILEV
[[Page 124]]
labeling requirements. Since EPA encourages the production of ILEVs for
air quality purposes, EPA will amend the ILEV label regulations in a
manner similar to that suggested by AAMA in order to provide additional
flexibility for ILEV manufacturers, thus reducing some of the
certification burden. To meet industry's vehicle body space concerns
while maintaining a label that is clearly identifiable, EPA will
provide new optional ILEV labels of smaller dimensions. Specifically,
for the sides and rear of an ILEV, EPA will provide an optional ILEV
label of smaller dimensions than the existing primary ILEV label and in
the distinctive shape of a truncated circle, as specified in
88.312(a)(1) of the regulations in today's rule.
For the rear of an ILEV, existing regulations provide an option to
choose a smaller rectangular label, if the larger primary (side)
rectangular label cannot be attached to the rear of an ILEV. Today's
rule will provide two optional rear labels which could be chosen if
neither of the primary labels described above and in section
88.312(a)(1) of the regulations cannot be attached to the rear of an
ILEV. One of these rear label options is the existing smaller
rectangular label (see section 88.312(c)(2)(ii)(A) of the regulations
in today's rule), and the other option is a smaller version of the
truncated circular label described above, as detailed in section
88.312(c)(2)(ii)(B) of the regulations associated with today's rule.
C. Method for Determining Each Manufacturer's CFV Sales Requirement
Under the Federal California Pilot Program
The California Pilot Program requires that California sales figures
from two model years earlier be used to calculate required CFV sales
shares (see California Pilot Test Program (CPP) final rule, 59 FR
50066, September 30, 1994). In the proposal for the rulemaking (58 FR
34727, June 29, 1993), EPA requested comment as to whether a
manufacturer's share of required CFV sales should be calculated based
on sales in the previous model year or sales two model years prior. No
comments were received from manufacturers. EPA decided to use model
year (MY) sales data from two years prior rather than from the previous
model year to provide manufacturers with more time to plan their CFV
production.
However, after the CPP rule was finalized, the AAMA notified EPA of
their view that basing the calculation on data from two years prior is
not practical.4 According to AAMA, this is because the production
volumes would not be established early enough to allow auto
manufacturers sufficient planning time to comply with the CFV sales
requirements in the California Pilot Program. AAMA suggested that at
least a three-year lead time is needed for the completion of the annual
production reports, EPA calculation of the manufacturer total sales,
and subsequent certification strategy or sales planning by the
manufacturers. More specifically, AAMA suggested that a manufacturer's
share of CFV sales be the average of two consecutive years based on
data from model years three and four years earlier than the model year
in question. AAMA believes a two-year average would help level out any
fluctuations in the market.
\4\ American Automobile Manufacturers Association (AAMA),
Recommendation on Determination of Manufacturer Quotas for the
California Pilot Test Program, Letter from Marcel L. Halberstadt to
Tad Wysor of the U.S. Environmental Protection Agency, February 17,
1995.
---------------------------------------------------------------------------
EPA has considered these comments and agrees that using data from
the model year two years prior to the year in question does not provide
manufacturers enough time to adequately plan their production, since
production for the model year in question could be well underway before
sales data is available for production planning. (Production under a
certificate may begin on January 2 of the calendar year prior to the
model year of the certificate and may continue through December 31 of
the certification model year.)
Thus, EPA will require that the average California sales figures
from three and four model years earlier than the current model year be
used by each manufacturer to calculate their required CFV sales share.
For example, for the 1997 model year, the average of sales figures from
1993 and 1994 model years would be used to calculate the CFV sales
share. This change will have no impact on the overall number of CFVs
sold in California; the allocation of those vehicles among
manufacturers may change slightly. This change will also reduce the
regulatory burden for manufacturers, and EPA believes it is highly
accommodating to manufacturers considering that manufacturers did not
comment on the method proposed.
D. Reporting Requirements for the Credit Program of the California
Pilot Test Program
In the information collection request 5 for the Credit Program
for California Pilot Test Program Final Rule (57 FR 60038, December 17,
1992), EPA had requested quarterly reporting of credit use and balance
statements to administer the credit program. However, EPA has
reevaluated this request and does not believe quarterly reporting is a
necessary requirement for administering the CPP credit program. The
Agency does not expect the volume or frequency of credit transactions
to be substantial enough so as to require such frequent monitoring. EPA
now believes that annual reports from the manufacturers of credit use
and balances will be sufficient for EPA to adequately administer and
enforce the CPP credit program and verify the proper use of traded CPP
credits. Thus, EPA will require annual reporting of credit use and
balances for the CPP credit program. (See section 88.205-94 (d)(1) and
(d)(3)(iii) of the regulations associated with today's rule for further
detail.) This change will reduce the manufacturer reporting burden by a
factor of four, and thus, EPA believes it is highly accommodating to
manufacturers.
\5\ U.S. Environmental Protection Agency, Office of Mobile
Sources, Supporting Statement for Information Collection Request--
California Pilot Test Program: Vehicle Credit Program, May 1991.
---------------------------------------------------------------------------
E. Technical Amendments to CFV Emission Standards Rulemaking and CFF
and CPP Credit Program Rulemakings
1. Redesignation of Paragraph Specifying Methane Analyzer Method Within
Description of Exhaust Analytical System
In the regulations for the Clean-Fuel Vehicle Emission Standards
final rulemaking (59 FR 50042, September 30, 1994), the specifications
for the measurement of methane from heavy-duty exhaust samples,
paragraph (b)(2)(iii) of section 86.1311-94 (``Exhaust gas analytical
system; CVS bag sample''), were incorrectly designated as a sub-
paragraph of paragraph (b)(2), which contains the specifications for
the measurement of carbon monoxide from heavy-duty exhaust samples.
Thus, in today's action, EPA will redesignate paragraph (b)(2)(iii) as
paragraph (b)(3) in section 86.1311-94.
2. Clarification of Applicable Test Procedures for CFV Exhaust
Standards for Light-duty Vehicles and Light-duty Trucks
In paragraph (k) of section 88.104-94 of the regulations for the
Clean-Fuel Vehicle Standards final rulemaking, EPA specifies that CFV
tailpipe emission standards for light-duty vehicles and light-duty
trucks shall
[[Page 125]]
comply with the following requirement: ``* * * standards in this
paragraph shall be administered and enforced in accordance with the
California Regulatory Requirements * * *.'' However, in paragraph (l)
of section 88.104-94 EPA incorrectly specified that CFV standards for
light-duty vehicles and light-duty trucks shall be ``* * * tested in
accordance with test procedures set forth in 40 CFR part 86 * * *.''
(In this same paragraph, EPA correctly specified that NMOG emissions
are to be measured in accordance with the California Regulatory
Requirements which were incorporated by reference in paragraph (k) of
the same section.) Thus, EPA wishes to clarify that all CFV standards
set forth in section 88.104-94 for light-duty vehicles and light-duty
trucks shall be administered and enforced in accordance with California
requirements by deleting paragraph (l) of section 88.104-94.
3. Corrections to Specifications for Emission Standards for Inherently
Low-Emission Vehicle (ILEV)
In the regulations for the Clean-Fuel Vehicle final rulemaking, EPA
specified in paragraph (c) of section 88.311-93 that exhaust emissions
for ILEVs in light-duty vehicle and light-duty truck classes ``* * *
shall be measured in accordance with the test procedures specified in
Sec. 88.104(l).'' As mentioned above in section I.E.2., EPA is deleting
paragraph (l) in section 88.104-94. Thus, EPA today wishes to clarify
that exhaust emissions for ILEVs in light-duty vehicle and light-duty
truck classes shall be measured in accordance with test procedures
specified in section 88.104-94(k) (California Regulatory Requirements).
Thus, section 88.311-93(c) will be amended accordingly.
For heavy-duty ILEVs, EPA incorrectly specified in section 88.311-
93(d) that exhaust emissions ``* * * shall be measured in accordance
with the test procedures specified in Sec. 88.105(d).'' However,
paragraph (d) specifies only the exhaust standards but not the exhaust
test procedures for heavy-duty ILEVs. The exhaust emission test
procedures for ILEVs are specified in Sec. 88.105(e). Thus, EPA today
revises this section to require that the exhaust emissions for heavy-
duty ILEVs be measured in accordance with the test procedures specified
in Sec. 88.105(e).
Further, in paragraph (d) of section 88.311-93, the requirements
that heavy-duty (HD) ILEVs ``* * * have exhaust emissions with combined
non-methane hydrocarbon and oxides of nitrogen * * * which do not
exceed the exhaust emission standards * * * in Sec. 88.105'' may be
misleading. Not only are HD ILEVs required to meet exhaust emission
standards in section 88.105(d) for combined non-methane hydrocarbon and
oxides of nitrogen emissions, but HD ILEVs are also required to meet
exhaust emission standards in section 88.105(d) for carbon monoxide,
particulate matter, and formaldehyde emissions. Thus, EPA wishes to
clarify that HD ILEVs shall have exhaust emissions which do not exceed
any of the exhaust emission standards specified in section 88.105(d).
4. Correction to Clean Fuel Fleet Credit Table Applying When a Fleet
Purchases More Clean-Fuel Vehicles Than Required
Due to an editorial error, in Table C94-1.1 of the regulations for
the Clean Fuel Fleet Credit Program final rule (58 FR 11888, March 1,
1993) and the CFV Emission Standards final rule, the two vehicle-
equivalent credits for ULEVs in the two heavy light-duty truck (HLDT)
classes greater than 3,750 pounds ALVW were incorrectly specified as
1.29 and 1.47 respectively. For Table C94-1.1, EPA today corrects these
values to 1.26 and 1.56, respectively.
Within this same table, EPA incorrectly specified in the last
column heading for HLDTs greater than 5750 ALVW pounds that the ALVW
parameter was ``K5750'' pounds. The ``K'' prefix added to 5750 pounds
is an editorial error and may be misleading. EPA today changes the
column heading to ``LDT >6000 GVWR, >5750 ALVW''.
5. Correction to Early Credits Requirements for Heavy Light-Duty Trucks
in the CPP
In the regulations for the Credit Program for the CPP final rule,
EPA incorrectly excluded heavy LDTs that meet CFV standards from being
eligible for early credits during model years 1996 and 1997. (For the
CPP, a manufacturer's share of required CFV annual sales for model
years 1996 and 1997 is based on LDVs and light LDTs sales only;
however, a manufacturer's share of required CFV annual sales beginning
in 1998 is also based on heavy LDTs sales.) In the final rule, EPA
allowed early credits for LDVs and all LDTs up to the beginning of CPP
sales requirements in 1996. To provide heavy LDT manufacturers with a
similar opportunity to earn early credits, EPA had intended to allow
manufacturers to earn early credits for heavy LDTs up to the beginning
of their sales requirements in 1998. Thus, to rectify this
inconsistency for heavy LDTs in the CPP, EPA wishes to clarify that
heavy LDTs certified to CFV standards shall be eligible for early
credits up to model year 1998. Today's action changes section 88.205(g)
of the regulations accordingly.
II. Environmental and Economic Impacts
The nature of today's provisions for the determination of assigned
deterioration factors for alternative fuel vehicles are such that no
impact on air quality should result. If and when an entity (converter
or original equipment manufacturer) certifies an alternative fuel
vehicle, these actions will not seriously compromise EPA's confidence
that certified emission levels are being met in use. While some loss of
control could theoretically occur if the reduced durability
demonstration were in serious error, the Agency does not believe that
this is likely to be common and in any event the numbers of vehicles
involved is not large in comparison to conventional vehicle production.
In addition, these provisions should significantly reduce the cost of
certifying an alternative fuel engine family, thus encouraging the
development of such vehicles.
For the relaxed ILEV labelling requirements, EPA believes that if
the smaller but distinctive ILEV labels are used on an ILEV, they will
still be able to be clearly identified by law enforcement officials.
EPA expects that these changes will help encourage manufacturers to
develop and produce ILEVs, which will in turn have a positive
environmental impact relative to conventional vehicles.
With these changes to the CPP, EPA will ease the certification
burden for manufacturers with no effect on air quality. This result
will occur because the same number of vehicles will be sold under the
CPP industry-wide; only the relative allocations among manufacturers
might change.
In today's rule, EPA will reduce the regulatory burden on industry
without effecting air quality. EPA believes this rule is highly
accommodating to industry's concerns.
III. Public Participation
EPA believes the provisions of today's action are non-controversial
and will make the affected provisions less burdensome and more
effective. Nonetheless, if public comments are to be submitted, the
Agency requests wherever applicable, full supporting data and detailed
analysis should be submitted to allow EPA to make maximum use of the
comments. Commenters should provide specific suggestions for any
changes to any
[[Page 126]]
aspect of the regulations that they believe need to be modified or
improved. All comments should be directed to EPA Air Docket, Docket No.
A-92-30 and A-92-14 for the certification flexibility provisions and
Docket No. A-92-69 for the CPP provisions (See ADDRESSES). The official
comment period will last for 30 days following publication of this
direct final rule.
Commenters desiring to submit proprietary information for
consideration should clearly distinguish such information from other
comments to the greatest possible extent, and clearly label it
``Confidential Business Information.'' Submissions containing such
proprietary information should be sent directly to the contact person
listed above, and not to the public docket, to ensure that proprietary
information is not inadvertently placed in the docket.
Information covered by such a claim of confidentiality will be
disclosed by EPA only to the extent allowed and by the procedures set
forth in 40 CFR part 2. If no claim of confidentiality accompanies the
submission when it is received by EPA, it may be made available to the
public without further notice to the commenter.
IV. Statutory Authority
The statutory authority for this action is granted by Sections 202,
203, 206, 207, 241, 242, 243, 244, 245, 246, 247, 249, and 301(a) of
the Clean Air Act.
V. Administrative Designation and Regulatory Analysis
Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the
Agency must determine whether this regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The order defines
``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 loan 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.
Pursuant to the terms of Executive Order 12866, EPA believes that
this action is not a ``significant regulatory action'' within the
meaning of the Executive Order. Today's action provides greater
flexibility in the certification process for manufacturers of alternate
fuel vehicles, thus eliminating some of the certification burden. ILEV
labelling requirements have been relaxed, reducing some of the
certification burden. Today's action also reduces the certification
burden for manufactures required to produce CFVs under the CPP, by
providing more flexibility in CFV production planning and credit
reporting.
VI. Compliance with Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) of 1980 requires federal
agencies to examine the effects of federal regulations and to identify
significant adverse impacts on a substantial number of small entities.
Because the RFA does not provide concrete definitions of ``small
entity'', ``significant impact'', or ``substantial number'', EPA has
established guidelines setting the standards to be used in evaluating
impacts on small businesses.6 Section 604 of the Regulatory
Flexibility Act requires EPA to prepare a Regulatory Flexibility
Analysis when the Agency determines that there is a significant adverse
impact on a substantial number of small entities.
\6\ U.S. Environmental Protection Agency Memorandum to
Assistant Administrators, ``Compliance With the Regulatory
Flexibility Act'', EPA Office of Policy, Planning, and Evaluation,
1984. In addition, U.S. Environmental Protection Agency, Memorandum
to Assistant Administrators, ``Agency's Revised Guidelines for
Implementing the Regulatory Flexibility Act'', EPA Office of Policy,
Planning, and Evaluation, 1992.
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Today's action will provide regulatory flexibility to converters of
alternative fuel vehicles in the determination of assigned
deterioration factors. EPA has evaluated the effects of today's
regulations and the Administrator of EPA certifies that there will not
be an adverse impact on a substantial number of small entities; in
fact, most small converters of alternative fuel vehicles will
experience an economic benefit. Therefore, a Regulatory Flexibility
Analysis has not been performed for this rule.
VII. Unfunded Mandates
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 written statement to accompany any 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 that
is consistent with statutory requirements. Section 203 requires EPA to
establish a plan for informing and advising any small governments that
may be significantly and uniquely impacted by the rule.
EPA estimates that the costs to State, local, or tribal
governments, or the private sector, from this rule will be less than
$100 million. EPA has determined that this rule will reduce the
regulatory burden imposed on certifiers of clean-fuel and/or
alternative fuel vehicles (especially converters of such vehicles). EPA
has determined that an unfunded mandates statement therefore is
unnecessary.
VIII. Paperwork Reduction Act
Today's rule does not add any mandatory information collection
requirements for certifiers of alternative fuel vehicles or any other
entity, and EPA has not prepared an Information Collection Request
document for this rule.
The information collection requirements of the Credit Program for
California Pilot Test Program have been amended to reflect today's
relaxation of the credit reporting requirements. These amended
requirements have been approved by the Office of Management and Budget
(OMB) under the provisions of the Paperwork Reduction Act, 44 U.S.C.
3501 et seq., and have been assigned OMB control number 2060-0229. A
copy of the Information Collection Request document (ICR No. 1590) may
be obtained from Sandy Farmer, OPPE Regulatory Information Division,
U.S. Environmental Protection Agency (2136); 401 M St. S.W.;
Washington, DC 20460 or by calling (202) 260-2740.
Send comments regarding this collection of information to the
Director, OPPE Regulatory Information Division; U.S. Environmental
Protection Agency (2136); 401 M. St., S.W.; Washington, DC 20460; and
to the Office of Information and Regulatory Affairs, Office of
Management and Budget, 725 17th St., N.W., Washington, DC 20503, marked
``Attention: Desk Officer for EPA.'' Include the ICR number in any
correspondence.
[[Page 127]]
List of Subjects
40 CFR Part 86
Environmental protection, Administrative practice and procedure,
Confidential business information, Labeling, Motor vehicle pollution,
Reporting and recordkeeping requirements.
40 CFR Part 88
Environmental protection, Motor vehicle pollution, Reporting and
recordkeeping requirements.
Dated: November 27, 1995.
Carol M. Browner,
Administrator.
For the reasons set forth in the preamble, part 86 and 88 of title
40 of the Code of Federal Regulations are amended as follows:
PART 86--CONTROL OF AIR POLLUTION FROM NEW AND IN-USE MOTOR
VEHICLES AND NEW AND IN-USE MOTOR VEHICLE ENGINES: CERTIFICATION
AND TEST PROCEDURES
1. The authority citation for part 86 continues to read as follows:
Authority: Secs. 202, 203, 205, 206, 207, 208, 215, 216, 217,
and 301(a), Clean Air Act as amended (42 U.S.C. 7521, 7522, 7524,
7525, 7541, 7542, 7549, 7550, 7552, and 7601(a)).
2. Section 86.094-14 of subpart A is amended by redesignating
paragraph (a) as paragraph (a)(1) and adding paragraph (a)(2) to read
as follows:
Sec. 86.094-14 Small-volume manufacturers certification procedures.
(a)(1) * * *
(2) To satisfy the durability data requirements of the small-volume
manufacturers certification procedures, manufacturers of vehicles (or
engines) as described in paragraph (b) of this section may use assigned
deterioration factors that the Administrator determines by methods
described in paragraph (c)(7)(i)(C) of this section. However, if no
deterioration factor data (either the manufacturer's or industry-wide
deterioration factor data) are available from previously completed
durability data vehicles or engines used for certification,
manufacturers of vehicles (or engines) as described in paragraph (b) of
this section or with new technology not previously certified may use
assigned deterioration factors that the Administrator determines by
alternative methods, based on good engineering judgement. The factors
that the Administrator determines by alternative methods will be
published in an advisory letter or advisory circular.
* * * * *
Sec. 86.1311-94 [Amended]
3. Section 86.1311-94 of subpart N is amended by redesignating
paragraph (b)(2)(iii) as paragraph (b)(3) preceding figure N94-1.
PART 88--CLEAN-FUEL VEHICLES
4. The authority citation for Part 88 continues to read as follows:
Authority: 42 U.S.C. 7410, 7418, 7581, 7582, 7583, 7584, 7586,
7588, 7589, and 7601(a).
5. In Sec. 88.104-94, paragraph (l), which precedes the tables to
the section, is removed.
5a. A center heading is added immediately preceding the tables to
the section to read as follows:
Tables to Sec. 88.104-94
6. Section 88.204-94 of subpart B is amended by revising the
introductory text of paragraph (c)(2) and paragraph (c)(2)(ii) to read
as follows:
Sec. 88.204-94 Sales requirements for the California Pilot Test
Program.
* * * * *
(c) * * *
(2) The required annual clean fuel vehicle sales volume for a given
manufacturer is expressed in the following equation rounded to the
nearest whole number:
[GRAPHIC] [TIFF OMITTED] TR03JA96.003
Where:
RMS=a manufacturer's required sales in a given model year.
MS=the average of a manufacturer's total LDV and light LDT sales in
California three and four model years earlier than year in question
(for MY 1996 and 1997 RMS calculations).
=the average of a manufacturer's total LDV and LDT sales in
California three and four model years earlier than year in question
(for MY 1998 and later RMS calculations).
TS=the average of total LDV and light LDT sales in California of all
manufacturers three and four model years earlier than the year in
question (for MY 1996 and 1997 RMS calculations). Sales of
manufacturers which meet the criteria of (d) of this paragraph will
not be included.
=the average of total LDV and LDT sales in California of all
manufacturers three and four model years earlier than the year in
question (for MY 1998 and later RMS calculations). Sales of
manufacturers which meet the criteria of (d) of this paragraph will
not be included.
TCPPS=Pilot program annual CFV sales requirement (either 150,000 or
300,000) for the model year in question.
(i) * * *
(ii) A manufacturer certifying for the first time in California
shall calculate annual required sales share based on projected
California sales for the model year in question. In the second year,
the manufacturer shall use actual sales from the previous year. In the
third year, the manufacturer will use sales from two model years prior
to the year in question. In the fourth year, the manufacturer will use
sales from three years prior to the year in question. In the fifth year
and subsequent years, the manufacturer will use average sales from
three and four years prior to the year in question.
* * * * *
7. Section 88.205-94 of subpart B is amended by revising paragraphs
(d)(1), (d)(3)(iii), and (g) to read as follows:
Sec. 88.205-94 California Pilot Test Program Credits Program.
* * * * *
(d) * * *
(1) During certification, the manufacturer shall calculate the
projected credits, if any, based on required sales projections.
* * * * *
(3) * * *
(iii) Maintain the records required under this subpart.
* * * * *
(g) Early credits. Beginning in model year 1992 appropriate
credits, as determined from the given credit table, will be given for
the sale of vehicles certified to the clean-fuel vehicle standards for
TLEVs, LEVs, ULEVs, and ZEVs, where appropriate. For LDVs and light
LDTs (<6000 lbs GVWR), early credits can be earned from model year 1992
to the beginning of the Pilot Program sales requirements in 1996. For
heavy LDTs (>6000 lbs GVWR), early credits can be earned from model
years 1992 through 1997. The actual calculation of early credits shall
not begin until model year 1996.
8. Section 88.311-93 of subpart C is amended by revising paragraphs
(c) and (d) to read as follows:
Sec. 88.311-93 Emissions standards for Inherently Low-Emission
Vehicles.
* * * * *
(c) Light-duty vehicles and light-duty trucks. ILEVs in LDV and LDT
classes shall have exhaust emissions which do not exceed the LEV
exhaust emission standards for NMOG, CO, HCHO, and PM and the ULEV
exhaust emission standards for NOx listed in Tables A104-1 through
A104-6 for light-duty CFVs. Exhaust emissions shall be measured in
accordance with the test procedures specified in Sec. 88.104-94(k).
[[Page 128]]
An ILEV must be able to operate on only one fuel, or must be certified
as an ILEV on all fuels on which it can operate. These vehicles shall
also comply with all requirements of 40 CFR part 86 which are
applicable to conventional gasoline-fueled, methanol-fueled, diesel-
fueled, natural gas-fueled or liquified petroleum gas-fueled LDVs/LDTs
of the same vehicle class and model year.
(d) Heavy-duty vehicles. ILEVs in the HDV class shall have exhaust
emissions which do not exceed the exhaust emission standards in grams
per brake horsepower-hour listed in Sec. 88.105-94(d). Exhaust
emissions shall be measured in accordance with the test procedures
specified in Sec. 88.105-94(e). An ILEV must be able to operate on only
one fuel, or must be certified as an ILEV on all fuels on which it can
operate. These vehicles shall also comply with all requirements of 40
CFR part 86 which are applicable in the case of conventional gasoline-
fueled, methanol-fueled, diesel-fueled, natural gas-fueled or liquified
petroleum gas-fueled HDVs of the same weight class and model year.
* * * * *
9. Section 88.312-93 of subpart C is amended by revising paragraphs
(a)(1) and (c)(2)(ii) to read as follows:
Sec. 88.312-93 Inherently Low-Emission Vehicle Labeling.
* * * * *
(a) Label design. (1) Label design shall consist of either of the
following specifications:
(i) The label shall consist of a white rectangular background,
approximately 12 inches (30 centimeters) high by 18 inches (45
centimeters) wide, with ``CLEAN AIR VEHICLE'' printed in contrasting
block capital letters at least 4.3 inches (10.6 centimeters) tall and
1.8 inches (4.4 centimeters) wide with a stroke width not less than 0.5
inches (1.3 centimeters). In addition, the words ``INHERENTLY LOW-
EMISSION VEHICLE'' must be present in lettering no smaller than 1 inch
(2.5 centimeters) high. Nothing shall be added to the label which
impairs readability. Labels shall include a serialized identification
number; or
(ii) The label shall consist of a white truncated-circular
background, approximately 10 inches (25 centimeters) in diameter by 7
inches (17.5 centimeters) in height. The bottom edge of the truncated-
circular background shall be approximately 2 inches (5 centimeters)
from the center. The acronym ``ILEV'' shall be printed on the label in
contrasting block capital letters at least 2 inches (5 centimeters)
tall and 1.5 inches (3.8 centimeters) wide with a stroke width not less
than 0.4 inches (1.0 centimeter). In addition, the words ``CLEAN AIR
VEHICLE'' must be present in lettering no smaller than 0.8 inches (2.0
centimeters) high. Nothing shall be added to the label which impairs
readability. Labels shall include a serialized identification number.
* * * * *
(c) * * *
(2) * * *
(ii) In the case that an ILEV label of the proportions specified in
paragraph (a)(1) of this section cannot be attached to the rear of the
ILEV, the manufacturer or the manufacturer's agent shall attach to the
rear of the vehicle an ILEV label of either of the following
proportions:
(A) The label shall consist of a white rectangular background,
approximately 4 inches (10 centimeters) high by 24 inches (60
centimeters) wide, with ``CLEAN AIR VEHICLE'' printed in contrasting
block capital letters at least 2.8 inches (7 centimeters) tall and 1.3
inches (3.3 centimeters) wide with a stroke width not less than 0.3
inches (0.8 centimeter). In addition, the words ``INHERENTLY LOW-
EMISSION VEHICLE'' must be present in lettering no smaller than 0.6
inches (1.5 centimeters) high. Nothing shall be added to the label
which impairs readability. Labels shall include a serialized
identification number; or
(B) The label shall consist of a white truncated-circular
background, approximately 5 inches (12.5 centimeters) in diameter by
3.5 inches (8.8 centimeters) in height. The bottom edge of the
truncated-circular background shall be approximately 1 inch (2.5
centimeters) from the center. The acronym ``ILEV'' shall be printed on
the label in contrasting block capital letters at least 1 inch (2.5
centimeters) tall and 0.8 inches (2.0 centimeters) wide with a stroke
width not less than 0.3 inches (0.8 centimeters). In addition, the
words ``CLEAN AIR VEHICLE'' must be present in lettering no smaller
than 0.4 inches (1.0 centimeter) high. Nothing shall be added to the
label which impairs readability. Labels shall include a serialized
identification number.
* * * * *
10. Table C94-1.1 to subpart C of part 88 is revised to read as
follows:
Tables to Subpart C of Part 88
Table C94-1.--Fleet Credit Table Based on Reduction in NMOG. Vehicle
Equivalents for Light-Duty Vehicles and Light-Duty Trucks
Table C94-1.1.--Credit Generation: Purchasing More Clean-Fuel Vehicles Than Required by the Mandate
----------------------------------------------------------------------------------------------------------------
LDV, LDT 6000 eq>6000 GVWR, LDT >6000 GVWR, LDT >6000 GVWR, LDT >6000
NMOG GVWR, 3750 LVW 3750 >3750 ALVW 5750
eq>3750 LVW thn-eq>5750 LVW ALVW thn-eq>5750 ALVW
ALVW
----------------------------------------------------------------------------------------------------------------
LEV............................ 1.00 1.26 0.71 0.91 1.11
ULEV........................... 1.20 1.54 1.00 1.26 1.56
ZEV............................ 1.43 1.83 1.43 1.83 2.23
----------------------------------------------------------------------------------------------------------------
* * * * *
[FR Doc. 96-103 Filed 1-2-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-102 Conversions Sales Volume Limit Provisions for Small Volume Manufacturers Certification of the Final Rule Entitled ``Emission Standards for Clean Vehicles and Engines, Requirements for Clean-Fuel Vehicle Conversions, and California Pilot Test Program''
[Federal Register Volume 61, Number 2 (Wednesday, January 3, 1996)]
[Rules and Regulations]
[Pages 128-130]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-102]
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[[Page 129]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 88
[AMS-FRL-5347-1]
Conversions Sales Volume Limit Provisions for Small Volume
Manufacturers Certification of the Final Rule Entitled ``Emission
Standards for Clean Vehicles and Engines, Requirements for Clean-Fuel
Vehicle Conversions, and California Pilot Test Program''
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule; removal of direct final rule provision.
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SUMMARY: On September 30, 1994 (59 FR 50042), EPA published the final
rule establishing emission standards for clean-fuel vehicles (CFVs) and
engines and requirements for CFV conversions. As a part of this final
rule, EPA published a direct final rulemaking (DFRM) intended to apply
a 10,000 vehicle sales volume limit (EPA's current Small-Volume
Manufacturers Certification Program limit) to vehicle converters
seeking to certify their conversion configurations as CFVs under EPA's
Small-Volume Certification Program. EPA is removing this provision
because adverse or critical comments were received by the Agency prior
to October 31, 1994 (the published deadline for submitting comments).
EFFECTIVE DATE: This action is effective January 3, 1996.
ADDRESSES: Materials directly relevant to the direct final rule are
contained in Public Docket A-92-30 located at: Air and Radiation Docket
and Information Center, Room M-1500, Waterside Mall (ground floor),
U.S. Environmental Protection Agency, 401 M Street SW, Washington, D.C.
20460. The docket may be inspected from 8 a.m. until 4 p.m. Monday
through Friday. As provided in 40 CFR part 2, a reasonable fee may be
charged by EPA for copying docket materials.
FOR FURTHER INFORMATION CONTACT: Mr. Bryan Manning, U.S. EPA (SRPB-12),
Regulation Development and Support Division, 2565 Plymouth Road, Ann
Arbor, MI 48105, Telephone: (313) 741-7832.
SUPPLEMENTARY INFORMATION:
I. Accessing Electronic Copies of Rulemaking Documents through the
Technology Transfer Network Bulletin Board System (TTNBBS)
A copy of this action is available through TTNBBS under OMS,
Rulemaking and Reporting, Alternative Fuels, Clean Fuel Fleets. TTNBBS
is available 24 hours a day, 7 days a week except Monday morning from
8-12 EST, when the system is down for maintenance and backup. For help
in accessing the system, call the systems operator at 919-541-5384 in
Research Triangle Park, North Carolina, during normal business hours
EST.
II. Description of Action
The Clean Air Act requires EPA to establish, by regulation,
emission standards for clean-fuel vehicles (CFVs) pursuant to sections
242 and 243 of the Act. On September 30, 1994, EPA promulgated such
emissions standards for all CFVs, including vehicles converted from
conventional vehicles to CFVs. See 59 FR 50042. That rulemaking
included a regulatory provision that adopted a sales volume limit of
10,000 converted vehicles for converters seeking to certify as small
volume manufacturers. The Small-Volume Manufacturers certification
program exempts manufacturers with annual sales of 10,000 or less from
EPA's full certification program. EPA had intended to implement the
10,000 limit for CFV conversion certification under the small-volume
manufacturers provisions to make the treatment of CFVs consistent with
that of other conventional and alternative-fueled vehicles. A
discussion of EPA's perspective on this regulatory provision was
presented in Section II, Part B of the Clean Fuel Vehicle Conversions
Final Rule. See 59 FR 50063-50064 (September 30, 1994).
EPA did not include this sales volume limit in its proposed clean-
fuel vehicle regulations (See 58 FR 32474, June 10, 1993). EPA
promulgated this provision in the final rule establishing the CFV
standards through a direct final rulemaking process, because the Agency
considered it a noncontroversial action and did not anticipate adverse
comment. However, EPA did receive adverse comment during the comment
period provided for the sales volume limit. Specifically, the Natural
Gas Vehicle Coalition (NGVC) commented that certification is more
burdensome for conversion companies compared to Original Equipment
Manufacturers (OEMs) since the relative costs of the end products of
the two types of business are very different and the opportunity to
recover certification costs by increasing product prices is much more
limited for converters. Since adverse comments were received on this
direct final action, EPA is removing the volume limit for converters
seeking to use the provisions for small-volume manufacturers. In
another document elsewhere in this Federal Register, EPA is proposing
to adopt this volume limit for application of small volume manufacturer
provisions to certification of CFV conversions. Interested parties
should refer to the ``Proposed Rules'' section of this Federal Register
for that proposal.
EPA's removal of these regulatory changes is not based on EPA's
agreement or disagreement with the adverse comments received. The
removal is based solely on the receipt of the comment itself. As stated
in the September 30, 1994, rule, the sales volume limit would be
effective only if no persons submitted adverse comments or requested an
opportunity to comment. Section 88.306-94(b)(3) is being revised for
purposes of removing the direct final rule provisions. In addition to
removing the volume limit in this action, EPA is proposing new
provisions regarding the vehicle volume limit for converters seeking
certification under the small volume manufacturers provisions in a
document elsewhere in this Federal Register.
III. Statutory Authority
The statutory authority for this action is granted to EPA by
Sections 202, 203, 247, and 301 of the Clean Air Act.
List of Subjects in 40 CFR Part 88
Environmental protection, Administrative practice and procedure,
Motor vehicle pollution, Reporting and recordkeeping requirements.
Dated: November 27, 1995.
Carol M. Browner,
Administrator.
For the reasons set forth in the preamble part 88 of title 40 of
the Code of Federal Regulations is amended as follows:
PART 88--CLEAN-FUEL VEHICLES
1. The authority citation for Part 88 continues to read as follows:
Authority: 42 U.S.C. 7410, 7418, 7581, 7582, 7583, 7584, 7586,
7588, 7589, 7601(a).
2. Section 88.306-94 of subpart C is amended by revising paragraph
(b)(3) to read as follows:
Sec. 88.306-94 Requirements for a converted vehicle to qualify as a
clean-fuel fleet vehicle.
* * * * *
(b) * * *
(3) For the purpose of determining whether certification under the
Small-Volume Manufacturers Certification Program pursuant to the
requirements of 40 CFR 86.094-14 is permitted, the 10,000 sales volume
limit in 40 CFR 86.094-14(b)(1) is waived for a certifier
[[Page 130]]
of a clean-fuel vehicle aftermarket conversion.
* * * * *
[FR Doc. 96-102 Filed 1-2-96; 8:45 am]
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