issue-1995-12-12•Federal Register proposed rules — 1995-12-12
Federal Register proposed rules — 1995-12-12
issue-1995-12-12Federal Register proposed rules — 1995-12-12Proposed Regulation
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FR Doc. 95-30374 Access to Telecommunications Equipment and Services by Persons With Disabilities (Hearing Aid Compatibility)
[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Proposed Rules]
[Pages 63667-63669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30374]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 64 and 68
[CC Docket No. 87-124; FCC 95-474]
Access to Telecommunications Equipment and Services by Persons
With Disabilities (Hearing Aid Compatibility)
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: On November 28, 1995, the Commission adopted a Notice of
Proposed Rulemaking (NPRM) regarding hearing aid compatibility of
wireline telephones. Rules proposed in the NPRM would require that all
wireline telephones in the workplace, confined settings (e.g.,
hospitals, nursing homes) and hotels and motels eventually would be
hearing aid compatible and have volume control. This NPRM contains
proposed or modified information collections subject to the Paperwork
Reduction Act of 1995 (PRA). It has been submitted to the Office of
Management and Budget (OMB) for review under Section 3507(d) of the
PRA. OMB, the general public, and other Federal agencies are invited to
comment on the proposed or modified information collections contained
in this proceeding.
DATES: Written comments by the public on the NPRM and on the proposed
and/or modified information collections are due on or before January
12, 1996, and reply comments are due on or before February 16, 1996.
Written comments must be submitted by the Office of Management and
Budget (OMB) on the proposed and/or modified information collections on
or before February 12, 1996.
ADDRESSES: Office of the Secretary, Room 222, Federal Communications
Commission, 1919 M Street, NW, Washington, DC 20554. In addition to
filing comments with the Secretary, a copy of any comments on the
information collections contained herein should be submitted to Dorothy
Conway, Federal Communications Commission, Room 234, 1919 M Street,
N.W., Washington, DC 20554, or via the Internet to [email protected], and
to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W.,
Washington, DC 20503 or via the Internet to [email protected].
FOR FURTHER INFORMATION CONTACT: Greg Lipscomb, Attorney, 202/418-2340,
Fax 202/418-2345, TTY 202/418-0484, [email protected], Network Services
[[Page 63668]]
Division, Common Carrier Bureau. For additional information concerning
the information collections contained in this NPRM contact Dorothy
Conway at 202-418-0217, or via the Internet at [email protected].
SUPPLEMENTARY INFORMATION: This summarizes the Commission's Notice of
Proposed Rulemaking in the matter of Access to Telecommunications
Equipment and Services by Persons With Disabilities, (CC Docket 87-124,
adopted November 28, 1995, and released November 28, 1995). The file is
available for inspection and copying during the weekday hour of 9 a.m.
to 4:30 p.m. in the Commission's Reference Center, Room 239, 1919 M
Street, N.W., or copies may be purchased from the Commission's
duplicating contractor, ITS, Inc., 2100 M Street, N.W., Suite 140,
Washington D.C. 20037, phone 202/857-3800.
Paperwork Reduction Act of 1995
This NPRM contains either a proposed or modified information
collection. The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public and the Office of
Management and Budget (OMB) to comment on the information collections
contained in this NPRM, as required by the Paperwork Reduction Act of
1995, Pub. L. No. 104-13. Public and agency comments are due at the
same time as other comments on this NPRM; OMB comments are due 60 days
from date of publication of this NPRM in the Federal Register. Comments
should address: (a) whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
OMB Approval Number: NA.
Title: Access to Telecommunications Equipment and Services by
Persons With Disabilities, CC Docket No. 87-124.
Form No.: NA.
Type of Review: New Collection.
Respondents: Businesses or other for profit.
Number of Respondents: 806,100.
Estimated Time per Response: 2 hours.
Total Annual Burden: 1,635,000 hours.
Needs and Uses: The manufacturing date stamp on telephone equipment
is needed for, and will be used for, determining whether a particular
telephone is hearing aid compatible. The designation of emergency use
hearing aid compatible telephones is needed to provide access to
workplace emergency telephones for persons with hearing disabilities
until workplaces are required to provide that all workplace telephones
are hearing aid compatible. The equipment packaging and instructions
information is needed to alert consumers in cases where a packaged
telephone is not hearing aid compatible.
Analysis of Proceeding: In 1992, the Commission adopted rules
implementing the Hearing Aid Compatibility Act of 1988, 47 U.S.C.
Sec. 610 (HAC Act). In 1993, the Commission suspended portions of the
1992 rules because petitions filed by establishments affected by the
regulations stated that the establishments were encountering serious
difficulties in their attempts to comply. On March 27, 1995, the
Commission announced that an advisory committee, the Hearing Aid
Compatibility Negotiated Rulemaking Committee (Committee), would
consider whether the rule suspension should be lifted and whether new
rules should be proposed. (See 59 FR 60343 (Nov. 23, 1994); 58 FR 1539
(March 27, 1995); and 60 FR 27945 (May 26, 1995). The Committee
represented the views and interests of all interested parties,
including those of the Commission, telephone equipment manufacturers,
employers, hospitals, nursing homes, hotels and motels, and persons
with disabilities. The Committee's recommendations, adopted by
unanimous consent, were filed with the Commission in the Committee's
Final Report of August, 1995. The NPRM reflects the recommendations of
the Committee.
The NPRM seeks comment first, on the Committee's proposal to
require hearing aid-compatible telephones in: (1) The non-common areas
of the workplace; (2) the patient and residential rooms of confined
settings, such as hospitals and nursing homes; and (3) the guest rooms
of hotels and motels. Second, the NPRM seeks comment on a proposal that
all replacement telephones and all newly purchased telephones should be
equipped with volume control, in addition to having electro-magnetic
coil hearing aid-compatibility. The NPRM also seeks comment on a
proposed rule that would require that all telephones manufactured or
imported for use in the United States have a volume control feature,
and includes a proposed technical specification for volume control.
Third, the NPRM seeks comment on a proposal to modify our rules
governing telephone equipment labelling requirements. Fourth, the NPRM
seeks comment on proposals to implement additional recommendations of
the Committee regarding consumer education. Finally, the NPRM seeks
comment on proposed amendments to existing hearing aid compatibility
rules for the purpose of clarification.
The proposed rules provide, in general, that all wireline
telephones in the workplace, in confined settings, and in hotels and
motels eventually would be hearing aid compatible, as defined at 47
C.F.R. Section 68.316 (electro-magnetic coil compatibility). The
proposed rules would require no testing or retrofitting of existing
workplace telephones. Instead, the proposed rules set deadlines that
are beyond the normal life-cycle times for the telephones in these
establishments to be replaced. The proposed rules also would require
volume control for newly acquired and replacement telephones in these
establishments, once the Commission's technical standards and
implementation rules for volume control are in place. Replacement or
retrofitting for volume control also would not be required, and
existing inventories of telephones would not be affected by the volume
control requirement. The NPRM states that the volume control feature
could assist many telephone users, whether they have hearing
disabilities, and whether they rely on telephones that are hearing aid
compatible. The rules are necessary to implement the Hearing Aid
Compatibility Act of 1988. If adopted, the proposed rules would
increase access by persons with hearing disabilities to telephones
provided for emergency use.
Under the proposed rules, most workplace telephones would be
required to be hearing aid compatible by January 1, 2000. In harmony
with the provisions of the Americans With Disabilities Act of 1990,
establishments with fewer than fifteen employees would be exempt from
these requirements. After the applicable date for having hearing aid
compatible telephones, employers could presume that their telephones
were hearing aid compatible. Any person legitimately on the premises
could challenge this presumption with a good faith request for a
hearing aid compatible telephone. Upon receipt of such a request, the
employer would have fifteen working days to replace any particular
telephone
[[Page 63669]]
that turns out not to be hearing aid compatible.
For confined settings, the proposed rules would require that
establishments with fifty or more beds make their telephones hearing
aid compatible within one year of the Commission's implementing Order,
while those with fewer than fifty beds would have to comply within two
years. Telephones in all confined setting establishments would be
exempt if alternate signalling devices were available, monitored and
working, or if a resident brought in and maintained his or her own
telephone equipment.
The proposed rules would require that hotels and motels with eighty
or more guest rooms be required to provide hearing aid compatible
telephones within two years of the Commission's implementing Order,
while those with fewer than eighty guest rooms would have three years
to do so. Upon the effective date of these proposed rules, generally
twenty percent of guest rooms must have telephones that are hearing aid
compatible.
The proposed rules do not address wireless telephone hearing aid
compatible issues, because those are being addressed by the
Commission's Wireless Telecommunications Bureau.
Initial Regulatory Flexibility Analysis
As required by Section 603 of the Regulatory Flexibility Act of
1980, 5 U.S.C. 601 et seq., the Commission has prepared an Initial
Regulatory Flexibility Analysis (``IRFA'') of the expected impact on
small entities of the proposals suggested in this document. The IRFA is
set forth in Appendix C of the NPRM. Written public comments are
requested in the IRFA. These comments must be filed in accordance with
the same filing procedures as other comments in this proceeding, but
they also must have a separate and distinct heading designating them as
responses to the Initial Regulatory Flexibility Analysis.
Reason for Action: The NPRM responds to the recommendations of the
Hearing Aid Compatibility Negotiated Rulemaking Committee. Pursuant to
the Negotiated Rulemaking Act, the Commission is obligated to initiate
this rulemaking proceeding.
Objectives: The objective of this proposal is to provide greater
access to the telephone network by persons with hearing disabilities,
while at the same time balancing the needs of establishments that must
provide hearing aid-compatible telephones.
Legal Basis: The proposed action is authorized under Sections 1,
201-205, and 218 of the Communications Act of 1934, as amended, 47
U.S.C. Sections 151, 154, 201-205, and 218.
Reporting, Record Keeping and Other Compliance Requirements: The
proposed rules would require manufacturers and importers of telephones
for use in the United States to provide volume control with their
equipment after a certain date. Such telephone equipment manufacturers
and importers also would be required to display on their equipment the
date of manufacture. In addition, workplaces with fifteen or more
employees, confined setting establishments and hotels and motels would
have to provide hearing aid-compatible telephones after certain dates.
Federal Rules Which Overlap, Duplicate, or Conflict with These
Rules: None.
Description, Potential Impact and Number of Small Entities
Involved: The proposals set forth in this Notice may have an economic
impact on workplaces with fifteen or more employees, confined setting
establishments and hotels and motels. These establishments eventually
may be required to replace some or all of their existing telephones
with telephones that are hearing aid-compatible, including telephones
that have volume control. These proposals also may make it easier for
these establishments to acquire employees and generate business.
Any Significant Alternatives Minimizing the Impact on Small
Entities, Consistent with Stated Objectives: None.
List of Subjects
47 CFR Part 64
Communications common carriers, Handicapped, Telephone, Hearing aid
compatibility.
47 CFR Part 68
Administrative practice and procedure, Communications common
carriers, Communications equipment, Reporting and recordkeeping
requirements, Telephone, Hearing aid compatibility, Volume control.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-30374 Filed 12-11-95; 8:45 am]
BILLING CODE 6712-01-P
Complete official Federal Register PDF
FR Doc. 95-30247 Federal Acquisition Regulation; Disaster Relief Act
[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Proposed Rules]
[Page 63876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30247]
[[Page 63875]]
_______________________________________________________________________
Part VI
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 6 and 26
Federal Acquisition Regulation: Disaster Relief Fund; Proposed Rule
Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 /
Proposed Rules
[[Page 63876]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 6 and 26
[FAR Case 93-303]
RIN 9000-AG77
Federal Acquisition Regulation; Disaster Relief Act
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
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SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are proposing to amend the Federal
Acquisition Regulation (FAR) to address competition requirements for
acquisitions of major disaster or emergency assistance activities. This
regulatory action was not subject to Office of Management and Budget
review under Executive Order 12866, dated September 30, 1993.
DATES: Comments should be submitted on or before February 12, 1996 to
be considered in the formulation of a final rule.
ADDRESSES: Comments should be submitted to: General Services
Administration, FAR Secretariat (VRS), 18th and F Streets, NW., Room
4037, Washington, DC 20405.
Please cite FAR case 93-303 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405, (202) 501-
4755. Please cite FAR case 93-303.
SUPPLEMENTARY INFORMATION:
A. Background
Section 5150 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5121, et seq.) establishes a
preference for local sources in the award of Federal contracts for
major disaster or emergency assistance activities. This proposed rule
amends FAR parts 6 and 26 to reflect the requirements of Section 5150.
B. Regulatory Flexibility Act
The proposed rule is not expected to have significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. because the rule
only applies to acquisitions conducted during the term of a
Presidential declaration of major disaster or emergency. An Initial
Regulatory Flexibility Analysis has, therefore, not been performed.
Comments are invited from small businesses and other interested
parties. Comments from small entities concerning the affected FAR
subparts will be considered in accordance with Section 610 of the Act.
Such comments must be submitted separately and cite FAR case 93-303 in
correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
rule does not impose any information collection requirements which
require the approval of the Office of Management and Budget under 44
U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 6 and 26
Government procurement.
Dated: December 7, 1995.
C. Allen Olson,
Director, Office of Federal Acquisition Policy.
Therefore, it is proposed that 48 CFR Parts 6 and 26 be amended as
set forth below:
PART 6--COMPETITION REQUIREMENTS
1. The authority citation for 48 CFR Parts 6 and 26 continues to
read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Section 6.302-5 is amended by removing ``or'' from the end of
paragraph (b)(3); removing the period from the end of paragraph (b)(4)
and inserting ``; or''; and adding paragraph (b)(5) to read as follows:
6.302-5 Authorized or required by statute.
* * * * *
(b) * * *
(5) The Robert T. Stafford Disaster Relief and Emergency Assistance
Act--42 U.S.C. 5150 (see subpart 26.2).
* * * * *
PART 26--OTHER SOCIOECONOMIC PROGRAMS
3. Subpart 26.2 is added to read as follows:
Subpart 26.2--Disaster or Emergency Assistance Activities
26.200 Scope of subpart.
This subpart implements 42 U.S.C. 5150, which provides a preference
for local organizations, firms, and individuals when contracting for
major disaster or emergency assistance activities (see 6.302-5).
26.201 Policy.
(a) When contracting for major disaster or emergency assistance
activities under this subpart, such as debris clearance, distribution
of supplies, or reconstruction, preference shall be given, to the
extent feasible and practicable, to those organizations, firms, or
individuals residing or doing business primarily in the area affected
by such major disaster or emergency.
(b) The authority to provide preference under this subpart applies
only to those acquisitions, including those which do not exceed the
simplified acquisition threshold, conducted during the term of a major
disaster or emergency declaration made by the President of the United
States under authority of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C. 5121, et seq.).
[FR Doc. 95-30247 Filed 12-11-95; 8:45 am]
BILLING CODE 6820-EP-M
Complete official Federal Register PDF
FR Doc. 95-30220 Radio Broadcasting Services; Ada, Newcastle, Watonga, OK
[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Proposed Rules]
[Pages 63669-63670]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30220]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 95-175; RM-8707]
Radio Broadcasting Services; Ada, Newcastle, Watonga, OK
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Commission requests comments on a petition filed by Tyler
Broadcasting Corporation requesting the reallotment of Channel 227C1
from Ada, OK, to Newcastle, OK, as the community's first local aural
broadcast service, and the modification of Station KTLS' license to
specify Newcastle as its community of license. To accommodate the
allotment at Newcastle, the Commission also proposes the substitution
of Channel 230A for Channel 228A at Watonga, OK, and the modification
of Station KIMY's license to specify the alternate Class A channel.
Channel 227C1 can be allotted to Newcastle in compliance with the
Commission's minimum distance separation requirements with a site
restriction of 7.5 kilometers (4.7 miles) south, at coordinates 35-10-
44 NL; 97-36-03 WL, to accommodate petitioner's desired transmitter
site. Channel 230A can be allotted to Watonga at Station KIMY's
licensed transmitter site, at coordinates 35-54-17 NL; 98-23-09 WL.
DATES: Comments must be filed on or before January 29, 1996, and reply
comments on or before February 13, 1996.
ADDRESSES: Federal Communications Commission, Washington, DC 20554. In
addition to filing comments with the FCC, interested parties should
serve the petitioner, or its counsel or consultant, as follows: Gary S.
Smith, Esq., Smithwick & Belendiuk, P.C., 1990 M Street, NW., Suite
510, Washington, DC 20036 (Counsel to petitioner).
FOR FURTHER INFORMATION CONTACT: Leslie K. Shapiro, Mass Media Bureau,
(202) 418-2180.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Proposed Rule Making, MM Docket No. 95-175, adopted November
21, 1995, and released December 6, 1995. The full text of this
Commission decision is available for inspection and copying during
normal business hours in the FCC Reference Center (Room 239), 1919 M
Street, NW., Washington, DC. The complete text of this decision may
also be purchased from the Commission's copy contractor, International
Transcription Services, Inc., (202) 857-
[[Page 63670]]
3800, 2100 M Street, NW., Suite 140, Washington, DC 20037.
Provisions of the Regulatory Flexibility Act of 1980 do not apply
to this proceeding.
Members of the public should note that from the time a Notice of
Proposed Rule Making is issued until the matter is no longer subject to
Commission consideration or court review, all ex parte contacts are
prohibited in Commission proceedings, such as this one, which involve
channel allotments. See 47 CFR 1.1204(b) for rules governing
permissible ex parte contacts.
For information regarding proper filing procedures for comments,
see 47 CFR 1.415 and 1.420.
List of Subjects in 47 CFR Part 73
Radio broadcasting.
Federal Communications Commission.
John A Karousos,
Chief, Allocations Branch, Policy and Rules Division, Mass Media
Bureau.
[FR Doc. 95-30220 Filed 12-11-95; 8:45 am]
BILLING CODE 6712-01-F
Complete official Federal Register PDF
FR Doc. 95-30213 Airworthiness Directives; Boeing Model 747-400 Series Airplanes Powered by General Electric CF6-80C2 or Pratt & Whitney PW4000 Series Engines
[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Proposed Rules]
[Pages 63663-63665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30213]
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DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. 95-NM-98-AD]
Airworthiness Directives; Boeing Model 747-400 Series Airplanes
Powered by General Electric CF6-80C2 or Pratt & Whitney PW4000 Series
Engines
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: This document proposes the adoption of a new airworthiness
directive (AD) that is applicable to certain Boeing Model 747-400
series airplanes. This proposal would require modification of the
engine fuel feed system. This proposal is prompted by reports
indicating that the coupling nut on the fuel tube on the outboard strut
(engine position 1) fractured. The actions specified by the proposed AD
are intended to prevent such fracturing of the coupling nut, which
could result in release of fuel onto the engine cowling and a
subsequent fire.
[[Page 63664]]
DATES: Comments must be received by February 6, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Transport Airplane Directorate, ANM-103,
Attention: Rules Docket No. 95-NM-98-AD, 1601 Lind Avenue, SW., Renton,
Washington 98055-4056. Comments may be inspected at this location
between 9:00 a.m. and 3:00 p.m., Monday through Friday, except Federal
holidays.
The service information referenced in the proposed rule may be
obtained from Boeing Commercial Airplane Group, P.O. Box 3707, Seattle,
Washington 98124-2207. This information may be examined at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington.
FOR FURTHER INFORMATION CONTACT: Tamra J. Elkins, Aerospace Engineer,
Propulsion Branch, ANM-140S, FAA, Seattle Aircraft Certification
Office, 1601 Lind Avenue, SW., Renton, Washington; telephone (206) 227-
2669; fax (206) 227-1181.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Communications shall identify the Rules Docket number
and be submitted in triplicate to the address specified above. All
communications received on or before the closing date for comments,
specified above, will be considered before taking action on the
proposed rule. The proposals contained in this notice may be changed in
light of the comments received.
Comments are specifically invited on the overall regulatory,
economic, environmental, and energy aspects of the proposed rule. All
comments submitted will be available, both before and after the closing
date for comments, in the Rules Docket for examination by interested
persons. A report summarizing each FAA-public contact concerned with
the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this notice must submit a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to Docket Number 95-NM-98-AD.'' The postcard will be date stamped and
returned to the commenter.
Availability of NPRMs
Any person may obtain a copy of this NPRM by submitting a request
to the FAA, Transport Airplane Directorate, ANM-103, Attention: Rules
Docket No. 95-NM-98-AD, 1601 Lind Avenue, SW., Renton, Washington
98055-4056
Discussion
The FAA has received reports indicating that the coupling nut on
the fuel tube on the outboard strut (engine position 1) on several
Boeing Model 747-400 series airplanes fractured. Fracturing of the
coupling nut caused fuel to leak onto the engine cowling. This
fracturing has been attributed to relative movement between the
outboard struts (engine positions 1 and 4) and the wing front spar.
Fracturing of the coupling nut on the fuel tube can result in release
of fuel onto the engine cowling. This condition, if not corrected,
could result in a fire.
The FAA has reviewed and approved two service bulletins that
describe procedures for modification of the engine fuel feed system:
1. Boeing Alert Service Bulletin 747-28A2185, Revision 1, dated
September 21, 1995, which applies to certain Model 747-400 series
airplanes powered by either General Electric CF6-80C2 or Pratt &
Whitney PW4000 series engines. This service bulletin describes
procedures for replacement of the strut fuel tubes and couplings at
engine positions 1 and 4. The replacement involves installing new
shrouded couplings that have been redesigned to be more flexible in
response to the relative movement between the outboard struts and the
wing front spar.
2. Boeing Service Bulletin 747-28-2146, dated August 13, 1992,
which applies to certain Model 747-400 series airplanes powered by
General Electric CF6-80C2 series engines. This service bulletin
describes procedures for installation of new fuel lines, shrouded fuel
line couplings redesigned to be more flexible (between the strut mid
bulkhead and the wing front spar), and drain lines at each engine
position to provide a drain path from the new couplings to the existing
drain system.
Since an unsafe condition has been identified that is likely to
exist or develop on other products of this same type design, the
proposed AD would require modification of the engine fuel feed system.
The actions would be required to be accomplished in accordance with the
service bulletins described previously.
Operators should note that, although Boeing Service Bulletin 747-
28-2146 recommends installation of fuel lines, couplings, and drain
lines at each engine position, this proposed AD would require those
installations only at engine positions 1 and 4. The FAA finds that the
addressed unsafe condition does not exist with regard to engine
positions 2 and 3, since relative movement between those engine
positions and the wing front spar is insufficient to cause fracturing
of the coupling nut. Further, the FAA has received no reports of
fracturing of the coupling nut that have been attributed to relative
movement between engine positions 2 and 3 and the wing front spar.
There are approximately 226 Model 747-400 series airplanes of the
affected design in the worldwide fleet.
The FAA estimates that 34 airplanes of U.S. registry would be
required by this proposed AD to replace the strut fuel tubes and
couplings at engine positions 1 and 4 in accordance with Boeing Alert
Service Bulletin 747-28A2185. That replacement would take approximately
74 work hours per airplane to accomplish, at an average labor rate of
$60 per work hour. Required parts would cost approximately $9,582 per
airplane. Based on these figures, the cost impact of this proposed
replacement on U.S. operators is estimated to be $476,748, or $14,022
per airplane.
Currently, there are no Model 747-400 series airplanes on the U.S.
Register that would be required by this AD to accomplish the
installation specified in Boeing Service Bulletin 747-28-2146. However,
should an affected airplane be imported and placed on the U.S. Register
in the future, it would require approximately 162 work hours per
airplane (81 work hours per engine; 2 engines per airplane) to
accomplish the proposed installation, at an average labor rate of $60
per work hour. Required parts would cost approximately $9,582 per
airplane. Based on these figures, the cost impact of this proposed
installation would be $19,302 per airplane.
The regulations proposed herein would 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
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this proposed
regulation (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not
[[Page 63665]]
a ``significant rule'' under the DOT Regulatory Policies and Procedures
(44 FR 11034, February 26, 1979); and (3) if promulgated, will not have
a significant economic impact, positive or negative, on a substantial
number of small entities under the criteria of the Regulatory
Flexibility Act. A copy of the draft regulatory evaluation prepared for
this action is contained in the Rules Docket. A copy of it may be
obtained by contacting the Rules Docket at the location provided under
the caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Safety.
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration proposes to amend
part 39 of the Federal Aviation Regulations (14 CFR part 39) as
follows:
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:
Boeing: Docket 95-NM-98-AD.
Applicability: Model 747-400 series airplanes powered by General
Electric CF6-80C2 or Pratt & Whitney PW4000 series engines; as
identified in Boeing Alert Service Bulletin 747-28A2185, Revision 1,
dated September 21, 1995, and Boeing Service Bulletin 747-28-2146,
dated August 13, 1992; 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 (b) 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 fracturing of the coupling nut, which could result in
release of fuel onto the engine cowling and a subsequent fire,
accomplish the following:
(a) Within 18 months after the effective date of this AD,
accomplish the requirements of paragraph (a)(1) or (a)(2), as
applicable.
(1) For Model 747-400 series airplanes identified in Boeing
Alert Service Bulletin 747-28A2185, Revision 1, dated September 21,
1995: Replace the strut fuel tubes and couplings at engine numbers 1
and 4 with new redesigned (shrouded) couplings, in accordance with
that alert service bulletin.
(2) For Model 747-400 series airplanes having variable numbers
RT641 through RT650 inclusive, identified in Boeing Service Bulletin
747-28-2146, dated August 13, 1992: On engine positions 1 and 4
only, install new fuel lines, shrouded fuel line couplings (between
the strut mid bulkhead and the wing front spar), and drain lines in
accordance with that service bulletin.
(b) 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 Aircraft Certification
Office (ACO), FAA, Transport Airplane Directorate. 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.
(c) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
Issued in Renton, Washington, on December 6, 1995.
Darrell M. Pederson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 95-30213 Filed 12-11-95; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 95-30212 Airworthiness Directives; Airbus Model A300-600 Series Airplanes
[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Proposed Rules]
[Pages 63665-63667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30212]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-NM-78-AD]
Airworthiness Directives; Airbus Model A300-600 Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: This document proposes the adoption of a new airworthiness
directive (AD) that is applicable to certain Airbus Model A300-600
series airplanes. This proposal would require inspections to detect
corrosion and cracking of the lower horizontal-stabilizer cutout
longeron, the corner fitting, the skin strap, and the outer skin; and
repair, if necessary. This proposal is prompted by cracking found at
the lower corner of the horizontal-stabilizer cutout longeron during a
full scale fatigue test. The actions specified by the proposed AD are
intended to prevent such cracking, which could result in reduced
structural integrity of the horizontal stabilizer cutout longeron.
DATES: Comments must be received by January 23, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Transport Airplane Directorate, ANM-103,
Attention: Rules Docket No. 95-NM-78-AD, 1601 Lind Avenue, SW., Renton,
Washington 98055-4056. Comments may be inspected at this location
between 9:00 a.m. and 3:00 p.m., Monday through Friday, except Federal
holidays.
The service information referenced in the proposed rule may be
obtained from Airbus Industrie, 1 Rond Point Maurice Bellonte, 31707
Blagnac Cedex, France. This information may be examined at the FAA,
Transport Airplane Directorate, 1601 Lind Avenue, SW., Renton,
Washington.
FOR FURTHER INFORMATION CONTACT: Charles Huber, Aerospace Engineer,
Standardization Branch, ANM-113, FAA, Transport Airplane Directorate,
1601 Lind Avenue, SW., Renton, Washington 98055-4056; telephone (206)
277-2589; fax (206) 227-1149.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Communications shall identify the Rules Docket number
and be submitted in triplicate to the address specified. All
communications received on or before the closing date for comments,
specified above, will be considered before taking action on the
proposed rule. The proposals contained in this notice may be changed in
light of the comments received.
Comments are specifically invited on the overall regulatory,
economic, environmental, and energy aspects of the proposed rule. All
comments submitted will be available, both before and after the closing
date for comments, in the Rules Docket for examination by interested
persons. A report summarizing each FAA-public contact concerned with
the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments
[[Page 63666]]
submitted in response to this notice must submit a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to Docket Number 95-NM-78-AD.'' The postcard will be date stamped and
returned to the commenter.
Availability of NPRMs
Any person may obtain a copy of this NPRM by submitting a request
to the FAA Transport Airplane Directorate, ANM-103, Attention: Rules
Docket No. 95-NM-78-AD, 1601 Lind Avenue, SW., Renton, Washington
98055-4056.
Discussion
The Direction Generale de l'Aviation Civile (DGAC), which is the
airworthiness authority for France, recently notified the FAA that an
unsafe condition may exist on certain Airbus Model A300-600 series
airplanes. The DGAC advises that, during a full-scale fatigue test,
cracking was found on the test airplane at the lower corner of the
horizontal-stabilizer cutout longeron, between frame (FR) 87 and FR89
and between stringer (STGR) 24 and STGR27, left- and right-hand. The
cracking was found after 87,675 simulated flights. Such fatigue
cracking, if not corrected, could result in reduced structural
integrity of the horizontal stablizer cutout longeron.
Airbus has issued Service Bulletin A300-53-6042, Revision 1, dated
February 20, 1995, which describes procedures for repetitive visual and
eddy current inspections to detect corrosion and cracking of the lower
horizontal-stabilizer cutout longeron, the corner fitting, the skin
strap, and the outer skin between FR87 and FR89 and between STGR24 and
STGR27, left- and right-hand; and repair, if necessary. The service
bulletin also describes procedures for repetitive rotating probe
inspections to detect cracks in the fastener holes at the same
locations, and repair, if necessary. The service bulletin also
describes procedures for certain follow-on actions, which include
installing a new corner fitting, installing a new longeron, and
performing a cold working procedure repairing cracks of certain
measurements. The DGAC classified this service bulletin as mandatory
and issued French airworthiness directive (CN) 94-269-171(B)R1, dated
March 29, 1995, in order to assure the continued airworthiness of these
airplanes in France.
This airplane model is manufactured in France and is type
certificated for operation in the United States under the provisions of
section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and
the applicable bilateral airworthiness agreement. Pursuant to this
bilateral airworthiness agreement, the DGAC has kept the FAA informed
of the situation described above. The FAA has examined the findings of
the DGAC, reviewed all available information, and determined that AD
action is necessary for products of this type design that are
certificated for operation in the United States.
Since an unsafe condition has been identified that is likely to
exist or develop on other airplanes of the same type design registered
in the United States, the proposed AD would require repetitive visual
and eddy current inspections to detect corrosion and fatigue cracking
of the lower horizontal-stabilizer cutout longeron, the corner fitting,
the skin strap, and the skin between FR87 and FR89 and between STGR24
and STGR27, left-hand and right-hand. The proposed AD would also
require repetitive rotating probe inspections to detect cracks in the
fastener holes at the same locations; and repair or certain a follow-on
actions, if necessary. The actions would be required to be accomplished
in accordance with the service bulletin described previously. Certain
repairs would be required to be accomplished in accordance with a
method approved by the FAA.
Operators should note that certain requirements of this proposed AD
would differ from actions recommended in the referenced Airbus service
bulletin. The service bulletin specifies that inspection thresholds and
intervals may be adjusted based on certain average flight operations of
the airplane. However, the FAA has determined that such adjustments
would not address the unsafe condition in a timely manner. Therefore,
this proposed AD does not permit such adjustments. In developing the
appropriate compliance time for the proposed rule, the FAA considered
not only the manufacturer's recommendation, but the safety implications
involved with cracking of the horizontal-stabilizer cutout longeron and
the number of landings that had been accumulated when cracking was
detected. In light of these factors, the FAA finds the compliance times
specified in the proposed AD for initiating the required actions to be
warranted, in that they represent an appropriate interval of time
allowable for the affected airplanes to continue to operate without
compromising safety.
Additionally, the service bulletin specifies that operators need
not count touch-and-go landings in determining the total number of
landings between two consecutive inspections, even if those landings
are less than five percent of the landings between inspection
intervals. Since the fatigue cracking that was found in the lower
horizontal stabilizer cutout longeron is aggravated by landing, the FAA
finds that all touch-and-go landings must be counted in determining the
total number of landings between two consecutive inspections.
The FAA estimates that 2 airplanes of U.S. registry would be
affected by this proposed AD, that it would take approximately 268 work
hours per airplane to accomplish the proposed actions, and that the
average labor rate is $60 per work hour. Based on these figures, the
cost impact of the proposed AD on U.S. operators is estimated to be
$32,160 to $16,080 per airplane.
The cost impact figure discussed above is based on assumptions that
no operator has yet accomplished any of the proposed requirements of
this AD action, and that no operator would accomplish those actions in
the future if this AD were not adopted.
The regulations proposed herein would 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
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this proposed
regulation (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under the DOT
Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
and (3) if promulgated, will not have a significant economic impact,
positive or negative, on a substantial number of small entities under
the criteria of the Regulatory Flexibility Act. A copy of the draft
regulatory evaluation prepared for this action is contained in the
Rules Docket. A copy of it may be obtained by contacting the Rules
Docket at the location provided under the caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Safety.
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration proposes to amend
part 39 of the Federal Aviation Regulations (14 CFR part 39) as
follows:
[[Page 63667]]
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. App. 1354(a), 1421 and 1423; 49 U.S.C.
106(g); and 14 CFR 11.89.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
Airbus Industries: Docket 95-NM-78-AD.
Applicability: Model A300-600 series airplanes on which Airbus
Modification No. 6146 has not been installed, certificated in any
category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must use the authority
provided in paragraph (f) 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, alternation, or repair
remove any airplane from the applicability of this AD.
Compliance: Required as indicated, unless accomplished
previously.
To prevent reduced structural integrity of the horizontal
stabilizer cutout longeron due to fatigue cracking, accomplish the
following:
(a) Prior to the accumulation of 18,000 total landings, or
within 2,000 landings after the effective date of this AD, whichever
occurs later: Perform a visual and an eddy current inspection to
detect cracks and/or corrosion of Areas 1 and 2 of the lower
horizontal stabilizer cutout longeron, as defined in Airbus Service
Bulletin A300-53-6042, Revision 1, and dated February 20, 1995.
Perform the inspections in accordance with the service bulletin.
(b) Perform a visual and an eddy current inspection to detect
cracks and/or corrosion of Area 3 of the lower horizontal-stabilizer
cutout longeron, as defined in Airbus Service Bulletin A300-53-6042,
Revision 1, dated February 20, 1995. Perform these inspections in
accordance with the service bulletin, at the later of the times
specified in paragraph (b)(1) and (b)(2) of this AD.
(1) Prior to the accumulation of 24,000 total landings, but not
before the accumulation of 18,000 total landings; or
(2) Prior to the accumulation of 2,000 landings after the
effective date of this AD.
(c) If no cracking is detected during any inspection required by
this AD: Prior to further flight, cold work and ream the vacated
fastener holes, in accordance with Airbus Service Bulletin A300-53-
6042, Revision 1, dated February 20, 1995; and perform the
requirements of paragraph (c)(1) or (c)(2) of this AD, as
applicable.
(1) For airplanes on which no cracking is found in Area 1 or 2:
Repeat the inspections required by paragraph (a) of this AD
thereafter at intervals not to exceed 6,000 flight cycles.
(2) For airplanes on which no cracking is found in Area 3:
Perform the various follow-on actions in accordance with the service
bulletin. (The follow-on actions include installing a new corner
fitting, installing a new longeron and performing a cold working
procedure.) After accomplishment of these follow-on actions, no
further action is required by this AD.
(d) If any cracking is detected during any inspection required
by this AD, perform the requirements of paragraph (d)(1) or (d)(2)
of this AD, as applicable.
(1) If any cracking is found in Area 1 or 3 that is within the
limits specified in Airbus Service bulletin A300-53-6042, Revision
1, dated February 20, 1995: Prior to further flight, repair in
accordance with the service bulletin.
(2) If any cracking is found in Area 2, or if any cracking is
found in any area and that cracking is beyond the limits described
in Airbus Service Bulletin A300-53-6042, Revision 1, dated February
20, 1995: Prior to further fight, repair in accordance with a method
approved by the Manager, Standardization Branch, ANM-113, FAA,
Transport Airplane Directorate.
(e) If any corrosion is detected during any inspection required
by this AD, prior to further flight, repair the corrosion in
accordance with Airbus Service Bulletin A300-53-6042, Revision 1,
dated February 20, 1995.
(f) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, Standardization Branch, ANM-113.
Operators shall submit their requests through an appropriate FAA
Principal Maintenance Inspector, who may add comments and then send
it to the Manager, Standardization Branch, ANM-113.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Standardization Branch, ANM-113.
(g) 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.
Issued in Renton, Washington, on December 6, 1995.
Darrell M. Pederson,
Acting Manger, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 95-30212 Filed 12-11-95; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 95-30131 Securities Credit Transactions; Review of Regulation U, ``Credit by Banks for the Purpose of Purchasing or Carrying Margin Stocks''
[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Proposed Rules]
[Pages 63660-63663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30131]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 60, No. 238 / Tuesday, December 12, 1995 /
Proposed Rules
[[Page 63660]]
FEDERAL RESERVE SYSTEM
12 CFR Part 221
[Regulation U; Docket No. R-0905]
RIN 7100-AB65
Securities Credit Transactions; Review of Regulation U, ``Credit
by Banks for the Purpose of Purchasing or Carrying Margin Stocks''
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Proposed rule.
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SUMMARY: The Board is proposing amendments to Regulation U, the
regulation that covers extensions of credit by banks that are secured
in whole or in part by those publicly traded securities defined as
``margin stock''. These amendments are being proposed as part of the
Board's program to periodically review its regulations as well as to
fulfill the requirements of section 303 of the Riegle Community
Redevelopment and Regulatory Improvement Act of 1994. Two of the most
important effects of the proposed amendments would be to provide:
Explicit guidance for banks financing margin stock purchased by their
customers through a broker-dealer on a delivery-versus-payment (or
C.O.D.) basis; and greater flexibility for withdrawals and
substitutions of collateral when margin stock is pledged along with
cash equivalents and other securities by treating the entire credit as
a single loan. In addition, amendments would conform Regulation U to
changes recently proposed for Regulation T regarding increased loan
value for exchange-traded options and money market mutual funds.
Technical amendments would update the regulation to reflect a 1991
Board interpretation allowing lead banks to apply Regulation U to
syndicated loans independent of other credit extended by syndicate
banks and restore language indicating that the exemption for temporary
financing of customer securities transactions does not apply to
securities purchased at a broker-dealer.
DATES: Comments should be received on or before February 15, 1996.
ADDRESSES: Comments should refer to Docket No. R-0905, and may be
mailed to William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue, NW.,
Washington, DC 20551. Comments also may be delivered to Room B-222 of
the Eccles Building between 8:45 a.m. and 5:15 p.m. weekdays, or to the
guard station in the Eccles Building courtyard on 20th Street, NW.
(between Constitution Avenue and C Street, NW.) at any time. Comments
received will be available for inspection in Room MP-500 of the Martin
Building between 9 a.m. and 5 p.m. weekdays, except as provided in 12
CFR 261.8 of the Board's rules regarding availability of information.
FOR FURTHER INFORMATION CONTACT: Scott Holz, Senior Attorney, or Angela
Desmond, Senior Counsel, Division of Banking Supervision and
Regulation, (202) 452-2781. For users of Telecommunications Device for
the Deaf (TDD), please contact Dorothea Thompson, (202) 452-3544.
SUPPLEMENTARY INFORMATION: The Board is proposing amendments to
Regulation U (12 CFR part 221), ``Credit by Banks for the Purpose of
Purchasing or Carrying Margin Stocks,'' as part of its program to
periodically review its regulations and to satisfy requirements under
section 303 of the Riegel Community Redevelopment and Regulatory
Improvement Act of 1994. The proposed amendments include coverage of
bank financing of securities purchased by customers through a broker-
dealer on a cash basis and treatment of mixed-collateral loans (loans
secured in part by margin stock and in part by other collateral) as a
single loan if all collateral consists of securities and cash
equivalents. Conforming amendments are proposed in light of the
recently published amendments to Regulation T (12 CFR part 220),
``Credit by Brokers and Dealers'' (see 60 FR 33763; June 29, 1995) that
would increase the loan value of exchange-traded options and money
market mutual funds. Two technical amendments are discussed below.
In addition to the amendments described in this proposal, comment
is invited on all areas of Regulation U, including (but not limited to)
whether the regulation can be eliminated, simplified, or the burdens
imposed thereunder eased.
1. Financing of Securities Purchased on a DVP Basis
Banks often act as custodians for their customers' securities.
These securities are generally purchased via a registered broker-dealer
in a cash account and sent to the bank on a delivery-versus-payment
(DVP) basis.1 Banks traditionally have not accepted securities in
a DVP transaction if the customer does not have the funds to make full
payment on hand at the bank. Accepting securities without having the
customer's full payment on hand involves a credit relationship similar
to a customer using a margin account at a broker-dealer.
\1\ Customers purchase securities at a broker-dealer on either
a cash or margin basis, using either a cash or margin account. When
a customer purchases a security on a cash basis, he either deposits
the full purchase price in the cash account or asks to have the
security sent to his agent (usually a custodial bank) against full
payment of the purchase price. This latter method is described in
section 220.2(e) of Regulation T as a delivery against payment,
payment against delivery, or C.O.D. transaction and is generally
referred to by the industry as a DVP transaction.
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In the past few years, System examiners and staff of the Securities
and Exchange Commission have alleged that certain banks were financing
these DVP purchases without documentation and in excess of margin
requirements contained in Regulation U. The banks were found in
violation of Regulation U or settled charges without admitting or
denying their culpability.2
\2\ See, e.g., SEC v. Hansen, 726 F. Supp. 74 (S.D.N.Y. 1989).
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Provided customers have sufficient collateral, Board staff believes
financing of securities purchases can be accommodated within the
existing provision for revolving-credit agreements found in
Sec. 221.3(c) of Regulation U, with the addition of some clarifying
language.3 However, it should be noted that this will not result
in exactly equal regulation between banks and broker-dealers because
the combination of Board, SEC, and SRO rules applicable to broker-
dealers in this area cannot be recreated in Regulation
[[Page 63661]]
U.4 Board staff believes that the supervisory structure for
banking institutions and the requirement that banks establish credit
agreements before financing these transactions will lead banks to
impose some additional limitations themselves, but because the
additional requirements applicable to broker-dealers are not contained
in Regulation T, they cannot be imposed by Regulation U.
\3\ Applying the section on revolving-credit agreements will
ensure that banks financing such purchases establish credit limits
for their customers, including limits on intraday trading.
\4\ Although the Board does not have a maintenance margin in its
regulations, broker-dealers are required to monitor extensions of
securities credit under SRO rules, call for additional collateral
when market values fall below a specified percentage, and sell some
of the customer's securities if the additional collateral is not
received. In addition, SRO rules require customers opening margin
accounts to deposit a minimum amount of equity in cash or securities
(generally $2000).
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2. Mixed-Collateral Loans
Regulation U does not apply to extensions of securities credit that
are not secured at least in part by margin stock. Loans secured in part
by margin stock and in part by other collateral are known as ``mixed-
collateral'' loans and Regulation U has always required some kind of
separation for these types of loans. Although a single credit agreement
may be used,5 Sec. 221.3(e) of Regulation U states that a loan
secured in part by margin stock and in part by other collateral ``shall
be treated as two separate loans.'' This separation requirement has
been the subject of numerous inquiries since the last revision of
Regulation U and has led to this proposal for a relaxation of the
regulation in this area.6
\5\ The ability of a bank to use a single credit agreement was a
reform instituted in 1983. Before that time, separate credit
agreements were required for the stock collateral and the nonstock
collateral.
\6\ Before 1983, Regulation U covered loans secured by any
stock. A ``mixed-collateral'' loan was one secured in part by stock
and in part by other collateral. Now that the regulation's scope has
been reduced to cover only loans secured by margin stock, a ``mixed-
collateral'' loan is one secured in part by margin stock and in part
by other collateral. ``Other collateral'' may include stock that
would have been covered under the previous version of Regulation U
and therefore not subject to the provisions covering mixed-
collateral loans. This reduction in the scope of the regulation had
the unintended effect of reducing the flexibility for withdrawals
and substitutions of collateral for mixed-collateral loans.
---------------------------------------------------------------------------
The section on mixed-collateral loans does not present a problem
when first applied at the time the loan commitment is made, as it
merely requires a bank to determine the loan value of margin stock
collateral and then verify that the other collateral has a good faith
loan value sufficient to make up the difference between the loan value
of the margin stock and the amount of credit being extended and to
allocate the credit secured by each tranche.
There have been, however, a number of inquiries concerning the
interplay of Sec. 221.3(e) (mixed-collateral loans) and Sec. 221.3(f)
(withdrawals and substitutions) of Regulation U. As an example, suppose
the value of a customer's nonmargin stock collateral has increased over
time but the value of the margin stock has not. In spite of the fact
that the overall value of the collateral has increased, the customer
cannot withdraw margin stock because this ``separate'' loan does not
have sufficient loan value to permit the withdrawal. In other words,
changes in collateral value in one tranche have no effect on the other
tranche. This separation requirement makes collateral management
extremely difficult.
Board staff has tried to respond to inquiries in this area through
interpretation of the existing regulation.7 However, in light of
the growth of revolving credit agreements secured by more than just
margin stock, it appears that the current rule is unnecessarily
burdensome to effectuate the statutory scheme of regulation.8
\7\ See, e.g., Federal Reserve Regulatory Service 5-923.2, 5-
923.41, and 5-923.42.
\8\ Many customers who have securities to pledge as collateral
have more than just margin stock (they often have debt securities as
well). The section on mixed-collateral loans presumes there will be
no change in the collateral once it has been pledged. The number of
inquiries in this area is an indication that this is often not the
case.
---------------------------------------------------------------------------
The proposed amendment to the section on mixed collateral loans
would still require the regulatory segregation of collateral, but would
expand the types of collateral that could be securing loans that
currently can only be secured by margin stock to include all financial
instruments (stocks, bonds, and cash equivalents).9 Acting in good
faith, a bank would be able to value all financial instruments in
accordance with the margin requirements in the Supplement to Regulation
U (Sec. 221.8) and permit substitutions within this group in conformity
with the section on withdrawals and substitutions, meaning the
aggregate loan value of the substituted collateral must at least equal
the aggregate loan value of the collateral withdrawn. Under the
proposed amendment, credit secured by nonfinancial collateral, such as
real estate, would continue to be treated as a separate loan. Comment
is invited on the continuing need for separation of collateral between
financial instruments and other collateral.
\9\ One of the goals of the section on mixed-collateral loans is
to ensure that a lender does not inflate the loan value of nonmargin
collateral to offset the fact that the margin regulations limit the
value of margin stock to 50 percent of its current market value.
Most financial instruments have readily available prices, lessening
the possibility for evasion of the margin requirements. Other
collateral, such as real estate, boats and automobiles, is more
likely to have a less well agreed upon market value.
---------------------------------------------------------------------------
3. Conforming Amendments
Although the Board's margin regulations provide a level playing
field for lenders extending purpose credit secured by margin stock,
statutory and other considerations have always made the scope of
Regulations G and U less broad than that of Regulation T.10 Two of
the proposed amendments to Regulation T would make it less restrictive
than Regulation U, leading the Board to propose conforming amendments.
The two amendments would allow 50 percent margin for exchange-traded
options (currently given no loan value) and good faith loan value for
money market mutual funds (currently given 50 percent loan value). In
addition, the definitions of ``cash equivalent'' and ``examining
authority'' would be added from the Regulation T proposal to the
definitional section of Regulation U.
\10\ For example, although the Securities Exchange Act of 1934
requires the Board to set margins for all purchases of securities,
it specifically excludes bank loans on nonconvertible debt
securities.
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4. Technical Amendments
Two technical amendments are proposed. The first would add a
sentence to the ``single-credit rule'' to reflect a 1991 Board
interpretation allowing the lead bank to perform Regulation U
compliance for syndicated loans. The other would reinsert language
inadvertently deleted in 1983 from one of the Regulation U exemptions
for credit extended to persons other than broker-dealers.11
\11\ The exemption for credit to a customer to temporarily
finance the purchase or sale of securities for prompt delivery
contained a restriction prohibiting its use for securities purchased
at a broker-dealer. This restriction was inadvertently dropped in
1983 and it is being reinserted.
---------------------------------------------------------------------------
5. Section-by-Section Explanation of Proposed Changes to Regulation U
Section 221.1 Authority, Purpose and Scope.
No substantive changes.
Section 221.2 Definitions.
(1) Eliminate letter designations for definitions in Sec. 221.2 and
references thereto in Secs. 221.1(b), 221.3(a) and 221.7(c)(2).
(2) Add definitions (from Regulation T) for cash equivalent and
examining authority (referred to in Sec. 221.5(c)(9)(ii)).
[[Page 63662]]
(3) Exclude money market funds from definition of margin stock so
as to give allow them good faith loan value.
(4) Edit statement in definition of maximum loan value that
``[p]uts, calls and combinations thereof have no loan value'' to
reflect loan value for exchange-traded options.
Section 221.3 General Requirements
221.3(a)--General Rule
(1) Edit statement in general rule that collateral other than
margin stock has good faith loan value to reflect fact that puts and
calls that do not qualify as margin stock have no loan value.
221.3(c)--Revolving-Credit or Multiple-Draw Agreements
(2) Expand subsection to cover financing of securities purchased on
a payment-against-delivery (or DVP) basis.
(3) Clarify that FR U-1 is always taken when arrangement is
established and must be amended for subsequent disbursements if (i) all
collateral is not pledged up front, or (ii) collateral has been
withdrawn or substituted between disbursements.
221.3(d)--Single Credit Rule
(4) Clarify that single credit rule does not cover syndicated loans
(see Board Interpretation on loan participations in section 221.124 of
Regulation U).
221.3(e)--Mixed Collateral Loans
(5) Alter application of rule so that instead of separating margin
stock collateral from nonmargin stock collateral, securities and cash
equivalents are separated from other types of collateral.
Section 221.4 Agreements of Nonmember Banks
Editorial change reflects combining of Forms FR T-1 and FR T-2.
Section 221.5 Special Purpose Loans to Brokers and Dealers
No substantive changes.
Section 221.6 Exempted Transactions
Restore language to 221.6(f) that credit is not to be used by a
customer to purchase securities from a broker-dealer.
Section 221.7 OTC List
No substantive changes.
Section 221.8 Supplement
Allow options that qualify as margin stock the same loan value as
other margin stock.
Regulatory Flexibility Act
As noted in the summary, the proposed amendments should improve the
regulation by providing explicit guidance on certain lending practices
and greater flexibility in verifying compliance for certain types of
loans. The Board believes there will be a beneficial economic impact if
this proposal is adopted. Comments are invited on this statement.
Paperwork Reduction Act
In accordance with section 3506 of the Paperwork Reduction Act of
1995 (44 U.S.C. Ch. 35; 5 CFR 1320 Appendix A.1), the Board reviewed
the proposed rule under the authority delegated to the Board by the
Office of Management and Budget. Comments on the collections of
information should be sent to the Office of Management and Budget,
Paperwork Reduction Project (7100-0115), Washington, DC 20503, with
copies of such comments to be sent to Mary M. McLaughlin, Federal
Reserve Board Clearance Officer, Division of Research and Statistics,
Mail Stop 97, Board of Governors of the Federal Reserve System,
Washington, DC 20551.
The collection of information requirements in this proposed
regulation are found in 12 CFR part 221. This information is required
by Regulation U and authorized by the Securities Exchange Act of 1934
(15 U.S.C. 78g and 78w). The respondents are for-profit financial
institutions. Records must be retained for three years after the credit
is extinguished.
The Federal Reserve may not conduct or sponsor, and an organization
is not required to respond to, this information collection unless it
displays a currently valid OMB control number. The OMB control number
is 7100-0115.
No additional reporting requirements or modifications to existing
recordkeeping requirements are proposed. The current estimated burden
is 4 minutes per response. There are 10,637 subject respondents making
an estimated average of 212 of the subject loans annually, for a total
of 157,853 hours of annual burden for recordkeeping. Based on an hourly
cost of $20, the annual cost to the public is estimated to be
$3,157,060.
Because the records would be maintained at banks and the notices
are not provided to the Federal Reserve, no issue of confidentiality
under the Freedom of Information Act arises.
Comments are invited on: (a) Whether the proposed collection of
information is necessary for the proper performance of the Federal
Reserve's functions; including whether the information has practical
utility; (b) the accuracy of the Federal Reserve's estimate of the
burden of the proposed information collection, including the cost of
compliance; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
information collection on respondents, including through the use of
automated collection techniques or other forms of information
technology.
List of Subjects in 12 CFR Part 221
Banks, banking, Brokers, Credit, Federal Reserve System, Margin,
Margin requirements, Investment companies, Investments, Reporting and
recordkeeping requirements, Securities.
For the reasons set out in the preamble, the Board proposes to
amend 12 CFR Part 221 as follows:
PART 221--CREDIT BY BANKS FOR THE PURPOSE OF PURCHASING OR CARRYING
MARGIN STOCK (REGULATION U)
1. The authority citation for Part 221 is revised to read as
follows:
Authority: 15 U.S.C. 78c, 78g, 78h, 78q, and 78w.
Sec. 221.1 [Amended]
2. Section 221.1(b) is amended by removing the word
``Sec. 221.2(b)'' and adding ``Sec. 221.2'' in its place.
3. Section 221.2 is amended as follows:
a. By removing the alphabetic paragraph designations from the
definitions and placing the definitions in alphabetical order;
b. By removing the paragraph designation (1) in front of the
definition of Bank, by designating the text following the work Bank as
paragraph (1), by revising newly designated paragraph (1) introductory
text and paragraph (2) introductory text;
c. By adding new definitions in alphabetical order for Cash
equivalent and Examining authority;
d. By removing the period at the end of paragraph (6)(iii) and
adding ``; or'' in its place, and by adding new paragraph (6)(iv) to
the definition of Margin stock;
e. By revising the third sentence of the definition of Maximum loan
value.
The additions and revisions read as follows:
Sec. 221.2 Definitions.
* * * * *
Bank (1) Has the meaning given to it in section 3(a)(6) of the Act
(15 U.S.C. 78c(a)(6)) and includes:
* * * * *
(2) Bank does not include:
* * * * *
[[Page 63663]]
Cash equivalent means negotiable bank certificates of deposit,
bankers acceptances issued by banking institutions in the United States
and payable in the United States, and any security issued by an
investment company registered under section 8 of the Investment Company
Act of 1940 (15 U.S.C. 80a-8) that is a money market fund in compliance
with all applicable requirements of SEC Rule 2a-7 (17 CFR 270.2a-7).
* * * * *
Examining authority means:
(1) The national securities exchange or national securities
association of which a broker or dealer is a member; or
(2) If a member of more than one self-regulatory organization, the
organization designated by the Securities and Exchange Commission (SEC)
as the examining authority for the creditor.
* * * * *
Margin stock * * *
(6) * * *
(iv) A company which is a money market fund in compliance with all
applicable requirements of SEC Rule 2a-7 (17 CFR 270.2a-7).
Maximum loan value * * * Puts, calls and combinations thereof that
do not qualify as margin stock have no loan value. * * *
* * * * *
4. Section 221.3 is amended as follows:
a. By revising the last sentence of paragraph (a)(1);
b. By revising paragraph (c);
c. By adding a sentence to the end of paragraph (d)(1);
d. By revising paragraph (e). The revisions and additions read as
follows:
Sec. 221.3 General requirements.
(a) * * * (1) * * * All other collateral, except for puts and
calls, has good faith loan value, as defined in Sec. 221.2 of this
part.
* * * * *
(c) Purpose statement for agreements involving revolving or
multiple-draw credit or financing of securities purchases on a payment-
against-delivery basis. (1) If a bank extends credit, secured directly
or indirectly by any margin stock, in an amount exceeding $100,000,
under an agreement involving revolving or other multiple-draw credit or
financing of securities purchases on a payment-against-delivery basis,
Form FR U-1 must be executed at the time the credit arrangement is
originally established and must be amended as described in paragraph
(c)(2) of this section for each disbursement if all of the collateral
for the agreement is not pledged at the time the agreement is
originally established.
(2) If a purpose statement executed at the time the credit
arrangement is initially made indicates that the purpose is to purchase
or carry margin stock, the credit will be deemed in compliance with
this part if the maximum loan value of the collateral at least equals
the aggregate amount of funds actually disbursed or at the end of any
day on which credit is extended under the agreement, the bank calls for
additional collateral sufficient bring the credit into compliance with
Sec. 221.8 (the Supplement). For any purpose credit disbursed under the
agreement, the bank shall obtain and attach to the executed Form FR U-1
a current list of collateral which adequately supports all credit
extended under the agreement.
(d) * * * (1) * * * Syndicated loans need not be aggregated with
other unrelated purpose credit extended by the same bank.
* * * * *
(e) Mixed collateral loans. (1) A purpose credit secured in part by
margin stock and in part by collateral other than securities and cash
equivalents shall be treated as two separate loans, one secured by
margin stock and any other securities and cash equivalents and one by
all other collateral. A bank may use a single credit agreement, if it
maintains records identifying each portion of the credit and its
collateral.
(2) A purpose credit secured entirely by securities and cash
equivalents may be treated as a single loan.
* * * * *
5. Section 221.4 is amended by revising the parenthetical phrase in
the middle of paragraph (a) to read as follows:
Sec. 221.4 Agreements of nonmember banks.
(a) * * * (See Form FR T-1, T-2) * * *
* * * * *
6. Section 221.6 is amended by revising paragraph (f) to read as
follows:
Sec. 221.6 Exempted transactions.
* * * * *
(f) To any customer, other than a broker or dealer, to temporarily
finance the purchase or sale of securities for prompt delivery, if the
credit is to be repaid in the ordinary course of business upon
completion of the transaction and is not extended to enable the
customer to pay for securities purchased in an account subject to part
220 of this chapter;
* * * * *
7. Section 221.7 is amended by revising paragraph (c)(2) to read as
follows:
Sec. 221.7 Requirements for the list of OTC margin stocks.
* * * * *
(c) * * *
(2) No longer substantially meets the provisions of paragraph (b)
of this section or the definition of OTC margin stock in Sec. 221.2 of
this part.
* * * * *
8. Section 221.8 is amended by revising paragraphs (a) and (c) to
read as follows:
Sec. 221.8 Supplement, maximum loan value of margin stock and other
collateral.
(a) Maximum loan value of margin stock. The maximum loan value of
any margin stock is fifty percent of its current market value.
* * * * *
(c) Maximum loan value of options. Except for options that qualify
as margin stock, puts, calls, and combinations thereof have no loan
value.
By order of the Board of Governors of the Federal Reserve
System, December 6, 1995.
William W. Wiles,
Secretary of the Board.
[FR Doc. 95-30131 Filed 12-11-95; 8:45 am]
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