issue-1996-03-07•Federal Register proposed rules — 1996-03-07
Federal Register proposed rules — 1996-03-07
issue-1996-03-07Federal Register proposed rules — 1996-03-07Proposed Regulation
Published Federal Register documents, not public-inspection drafts. The GPO XML/text rendition is a research aid; the linked complete official PDF retains the printed layout and all graphics. Graphics are retained in that PDF and are not independently reproduced in this text rendition. Publication does not establish that every provision remains legally in force.
FR Doc. 96-5418 Control of Air Pollution; Supplementary Notice of Proposed Rulemaking for New Gasoline Spark-Ignition Marine Engines; Exemptions for Non-Road Compression-Ignition Engines at or Above 37 Kilowatts and New Nonroad Spark-Ignition Engines at or Below 19 Kilowatts
[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9132-9133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5418]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 89, 90, and 91
[FRL-5437-7]
RIN 2060-AE54
Control of Air Pollution; Supplementary Notice of Proposed
Rulemaking for New Gasoline Spark-Ignition Marine Engines; Exemptions
for Non-Road Compression-Ignition Engines at or Above 37 Kilowatts and
New Nonroad Spark-Ignition Engines at or Below 19 Kilowatts
AGENCY: Environmental Protection Agency (EPA).
ACTION: Supplementary Notice of Proposed Rule; Notice of Data
Availability.
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SUMMARY: Regarding gasoline marine engines, EPA has data available for
public review regarding relative engine use by age of engine.
DATES: The comment period will remain open until March 8, 1996 for
purposes of taking comment on the issues raised regarding marine
gasoline engine relative use by engine age. Please direct all
correspondence to the address specified below.
ADDRESSES: Interested parties may submit written comments (in
duplicate, if possible) for EPA consideration by addressing them as
follows: EPA Air Docket (LE-131), Attention: Docket Number A-92-28,
room M-1500, 401 M Street, S.W., Washington, D.C. 20460.
Materials relevant to this rulemaking are contained in this docket
and may be reviewed at this location from 8:00 a.m. until 5:30 p.m.
Monday through Friday. As provided in 40 CFR part 2, a reasonable fee
may be charged by EPA for photocopying.
FOR FURTHER INFORMATION CONTACT: Deanne R. North, Office of Mobile
Sources, Engine Programs and Compliance Division, (313) 668-4283.
SUPPLEMENTARY INFORMATION:
I. Notice of Data Availability
The State of Wisconsin performed a survey of the 1995 summer season
to obtain better information on relative use of spark-ignition gasoline
marine engines by age. This Wisconsin data is available now in the Air
Docket A-92-28 and on EPA's Technology Transfer Network/Bulletin Board
System as described below. EPA may consider the survey results when
deciding how to finalize the marine spark-ignition gasoline engine rule
with respect to the relative use by age function.
The Agency proposed in the Supplemental Notice of Proposed
Rulemaking (SNPRM) (61 FR 4600, February 7, 1996) to include a
statistical function in the credit calculation formula in Sec. 91.207
of the regulations proposed for 40 CFR Part 91, representing relative
usage of engines by engine age and power output. EPA will accept
comment on the Wisconsin data and the proposals in the SNPRM through
March 8, 1996.
II. Obtaining Information on this Rulemaking
The SNPRM preamble, proposed regulatory language, and supporting
data are available to the public through several sources. Electronic
copies (on 3.5'' diskettes) of the proposed regulatory language may be
obtained free of charge by visiting, writing, or calling the
Environmental Protection Agency, Engine Programs and Compliance
Division, 2565 Plymouth Road, Ann Arbor, MI 48105, (313) 668-4288.
Refer to Docket A-92-28. A copy is also available for inspection in the
docket (see ADDRESSES).
The SNPRM preamble, proposed regulatory language, and some
supporting information are also available electronically on the
Technology Transfer Network (TTN), which is an electronic bulletin
board system (BBS) operated by EPA's Office of Air Quality Planning and
Standards. The service is free of charge, except for the cost of the
phone call. Users are able to access and download TTN files on their
first call using a personal computer and modem per the following
information.
TTN BBS: 919-541-5742 (1200-14400 bps, no parity, 8 data bits, 1
stop bit) Voice Helpline: 919-541-5384 Also accessible via Internet:
TELNET ttnbbs.rtpnc.epa.gov Off-line: Mondays from 8:00 AM to 12:00
Noon ET.
A user who has not called TTN previously will first be required to
answer some basic informational questions for registration purposes.
After completing the registration process, proceed through the
following menu choices from the Top Menu to access information on this
rulemaking.
GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)
OMS--Mobile Sources Information
Rulemaking & Reporting
<6> Non-Road
<1> File area #1. Non-Road Marine Engines
At this point, the system will list all available files in the
chosen category in chronological order with brief descriptions. To
download a file, select a transfer protocol that is supported by the
terminal software on your own computer, then set your own software to
receive the file using that same protocol.
[[Page 9133]]
If unfamiliar with handling compressed (that is, ZIP'ed) files, go
to the TTN top menu, System Utilities (Command: 1) for information and
the necessary program to download in order to unZIP the files of
interest after downloading to your computer. After getting the files
you want onto your computer, you can quit the TTN BBS with the
oodbye command.
Please note that due to differences between the software used to
develop the document and the software into which the document may be
downloaded, changes in format, page length, etc. may occur.
List of Subjects
40 CFR Part 89
Environmental protection, Administrative practice and procedure,
Air pollution control, Confidential business information, Environmental
protection, Imports, Incorporation by reference, Labeling, Nonroad
source pollution, Reporting and recordkeeping requirements.
40 CFR Part 90
Administrative practice and procedure, Air pollution control,
Confidential business information, Environmental protection, Imports,
Incorporation by reference, Labeling, Nonroad source pollution,
Reporting and recordkeeping requirements.
40 CFR Part 91
Administrative practice and procedure, Air pollution control,
Confidential business information, Environmental protection, Imports,
Incorporation by reference, Labeling, Nonroad source pollution,
Reporting and recordkeeping requirements.
Dated: March 1, 1996.
Richard Wilson,
Acting Assistant Administrator.
[FR Doc. 96-5418 Filed 3-6-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-5415 Clean Air Act Proposed Full Approval of the Operating Permits Program; Approval of Construction Permit and Plan Approval Programs Under Section 112(l); Proposed Approval of State Implementation Plan Revision for the Issuance of Federally Enforceable State Plan Approval and Operating Permits Under Section 110; Commonwealth of Pennsylvania
[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9125-9132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5415]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 52 and 70
[PA65-1; AD-FRL-5436-7]
Clean Air Act Proposed Full Approval of the Operating Permits
Program; Approval of Construction Permit and Plan Approval Programs
Under Section 112(l); Proposed Approval of State Implementation Plan
Revision for the Issuance of Federally Enforceable State Plan Approval
and Operating Permits Under Section 110; Commonwealth of Pennsylvania
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed full approval of Title V Operating Permit Program and
proposed approval of State Operating Permit and Plan Approval Programs.
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SUMMARY: The EPA proposes full approval, under Title V of the Clean Air
Act (the Act), of the Operating Permits Program submitted by the
Commonwealth of Pennsylvania for the purpose of complying with Federal
requirements for an approvable State program to issue operating permits
to all major stationary sources, and to certain other sources. EPA is
also proposing to approve Pennsylvania's Operating Permit and Plan
Approval Programs pursuant to Section 110 of the Act for the purpose of
creating Federally enforceable operating permit and plan approval
conditions for sources of criteria air pollutants. In order to extend
the federal enforceability of State operating permits and plan
approvals to include hazardous air pollutants (HAPs), EPA is also
proposing approval of Pennsylvania's plan approval and operating
permits program regulations pursuant to Section 112 of the Act. Today's
action also proposes approval of Pennsylvania's mechanism for receiving
straight delegation of Section 112 standards.
DATES: Comments on this proposed action must be received in writing by
April 8, 1996.
ADDRESSES: Comments should be addressed to the contact indicated below.
Copies of the State's submittal and other supporting information used
in developing these proposed approvals are available for inspection
during normal business hours at the following location: U.S.
Environmental Protection Agency, Region 3, 841 Chestnut Building,
Philadelphia, Pennsylvania 19107.
FOR FURTHER INFORMATION CONTACT: Michael H. Markowski, 3AT23, U.S.
[[Page 9126]]
Environmental Protection Agency, Region 3, 841 Chestnut Building,
Philadelphia, Pennsylvania, 19107, (215) 597-3023.
SUPPLEMENTARY INFORMATION:
I. Background and Purpose
A. Introduction
As required under Title V of the 1990 Clean Air Act Amendments
(sections 501-507 of the Clean Air Act (``the Act'')), EPA has
promulgated rules which define the minimum elements of an approvable
State operating permits program and the corresponding standards and
procedures by which the EPA will approve, oversee, and withdraw
approval of State operating permits programs (see 57 FR 32250 (July 21,
1992)). These rules are codified at 40 Code of Federal Regulations
(CFR) part 70. Title V requires States to develop, and submit to EPA,
programs for issuing these operating permits to all major stationary
sources and to certain other sources.
The Act requires that states develop and submit these programs to
EPA by November 15, 1993, and that EPA act to approve or disapprove
each program within 1 year after receiving the submittal. The EPA's
program review occurs pursuant to section 502 of the Act and the part
70 regulations, which together outline criteria for approval or
disapproval. Where a program substantially, but not fully, meets the
requirements of part 70, EPA may grant the program interim approval for
a period of up to 2 years. If EPA has not fully approved a program by 2
years after the November 15, 1993 date, or by the end of an interim
program, it must establish and implement a Federal program.
On June 28, 1989 (54 FR 27274) EPA published criteria for approving
and incorporating into the SIP regulatory programs for the issuance of
federally enforceable state operating permits. Permits issued pursuant
to an operating permit program meeting these criteria and approved into
the SIP are considered federally enforceable. EPA has encouraged States
to consider developing such programs in conjunction with Title V
operating permit programs for the purpose of creating federally
enforceable limits on a source's potential to emit. This mechanism
would enable sources to reduce their potential to emit of criteria
pollutants to below the Title V applicability thresholds and avoid
being subject to Title V. (See the guidance document entitled,
``Limitation of Potential to Emit with Respect to Title V Applicability
Thresholds,'' dated September 18, 1992, from John Calcagni, Director of
EPA's Air Quality Management Division).
Also as part of this action, EPA is proposing to approve
Pennsylvania's plan approval (i.e., construction permit) and operating
permit programs pursuant to Section 112(l) of the Clean Air Act for the
purpose of allowing the State to issue plan approvals and operating
permits which limit source's potential to emit hazardous air pollutants
(HAPs). Section 112(l) of the Clean Air Act provides the underlying
authority for controlling emissions of HAPs. Therefore, in order to
extend federal enforceability of the State's operating permit and plan
approval programs to include HAPs, EPA today proposes to approve
Pennsylvania's plan approval and operating permit program submittals
pursuant to Section 112(l) of the Act.
II. Proposed Action and Implications
A. Analysis of State Submission
EPA has concluded that the operating permit program submitted by
Pennsylvania meets the requirements of Title V and is proposing to
grant full approval to the program. For more detailed information on
the analysis of the State's submission, please refer to the technical
support document (TSD) included in the docket at the address noted
above.
1. Title V Support Materials
On November 15, 1993, the Commonwealth of Pennsylvania submitted an
operating permits program for review by EPA. The submittal was found to
be administratively incomplete pursuant to 40 CFR 70.4(e)(1) on January
18, 1994. Additional materials were submitted on May 18, 1995. Based on
additional information received in the May 18, 1995 submittal, EPA
found the submittal to be administratively and technically complete on
May 31, 1995. The Commonwealth submitted supplemental information on
November 28, 1995. The submittal includes a letter from the Secretary
of the Department of Environmental Resources, as the designee of the
Governor of the Commonwealth of Pennsylvania, requesting approval of
the Commonwealth's Title V program, a legal opinion from the State
Attorney General stating that the laws of the Commonwealth provide
adequate legal authority to carry out all aspects of the program, and a
description of how the Commonwealth intends to implement the program.
The submittal additionally contains evidence of proper adoption of the
program regulations, a permit fee demonstration, a description of the
State's Title V program, and a proposed draft of an implementation
agreement (IA) to be negotiated between EPA and the Commonwealth of
Pennsylvania.
2. Title V Operating Permit Program Regulations and Program
Implementation
The Commonwealth of Pennsylvania's Title V regulations were adopted
and became effective on November 26, 1994. They include 25 Pa. Code
Chapter 127, Subchapters F and G, as well as the definitions provided
in 25 Pa. Code Chapter 121.1. EPA has determined that these regulations
``fully meet'' the requirements of 40 CFR Part 70, Sections 70.2 and
70.3 with respect to applicability; parts 70.4, 70.5, and 70.6 with
respect to permit content including operational flexibility; part 70.5
with respect to complete application forms and criteria which define
insignificant activities; part 70.7 with respect to public
participation and minor permit modifications; and part 70.11 with
respect to requirements for enforcement authority. The TSD contains a
detailed analysis of Pennsylvania's program and describes the manner in
which the State's program meets all the operating permit program
requirements of 40 CFR Part 70. However, several issues were identified
by EPA during its review of Pennsylvania's Title V operating permit
program which warrant a more detailed discussion and analysis. These
issues are outlined below.
a. Absence of Part 70 Emergency Defense Provisions--Pennsylvania
has incorporated by reference New Source Performance Standards (NSPS),
National Emission Standards for Hazardous Air Pollutants (NESHAP), and
Maximum Available Control Technology (MACT) technology-based emissions
limitations/standards in 25 Pa. Code 122.1, 124.1, and 127.35,
respectively. Where these technology-based standards incorporate an
emergency defense, that emergency defense becomes part of Pennsylvania
law by reference. Pennsylvania's program does not provide for any other
emergency defense, and does not specifically provide for a Part 70
emergency defense. While it is true that a specific Part 70 emergency
defense is lacking, EPA clarified, in its August 31, 1995, supplemental
Part 70 notice, that ``the Part 70 rule does not require the States to
adopt the emergency defense. A State may include such a defense in its
Part 70 program to the extent it finds appropriate, although it may not
adopt an emergency defense less stringent than that set forth at 40 CFR
70.6(g).'' 60 FR 45530, 45559. Thus, since State
[[Page 9127]]
adoption of emergency defense provisions under Part 70 is
discretionary, Pennsylvania's failure to include such a defense in its
Part 70 program is not inconsistent with 70.6(g).
b. Origin of and Authority for Permit Terms and Conditions--40 CFR
70.6(a)(1)(I) requires that each Title V permit, as issued by the
permitting authority, specify and reference the origin of and authority
for each permit term or condition, and identify any difference in form
as compared to the applicable requirement upon which the term or
condition is based. These requirements for permit content related to
specification of the origin and authority for permit terms and
conditions in Title V permits have been met by the Pennsylvania program
primarily through the language of Section IV.B.16(a)(1) of the
Commonwealth's Title V program description and through relevant
provisions of an Implementation Agreement (IA) that has been negotiated
between EPA and PADEP (the rulemaking docket includes an IA that was
signed by PADEP on January 31, 1996, and by EPA on February 15, 1996).
Section IV.B.16(a)(1) of the PADEP's Title V program description
provides that Title V permit applications shall require sources to
identify all applicable requirements, including citations to the origin
of and authority for each requirement. EPA regards this language, along
with the Title V permit application form itself and the relevant
provisions of an IA that has been negotiated between EPA and PADEP, as
sufficient assurance that Pennsylvania's Title V operating permits will
include citation to the origin of and authority for each permit term
and condition.
c. 45 Day EPA Review Prior to Permit Issuance--Under
Sec. 127.522(f) of the Commonwealth's regulations, EPA is afforded a 45
day period to review proposed permits for conformity with Clean Air Act
and Part 70 requirements. Section Sec. 127.522(f) further specifies
that EPA may veto a permit within this review period.
It is noted that Sec. 127.522 does not ensure that EPA will have an
opportunity for a 45 day period of pre-issuance review of permits that
are revised as a result of the public and affected State's comments. It
appears that pursuant to Sec. 127.521(d) and (e) and Sec. 127.522(f),
the 30 day public comment period may commence at the same time as EPA's
45 day review period. Thus, it is possible that Pennsylvania could
modify and issue the proposed permit on the basis of public (or
affected State) comments.
However, Sec. 127.522(f) does provide that the final permit shall
be provided to EPA ``upon issuance if material substantive changes are
made to the proposed permit.'' If EPA objects within 45 days of final
permit issuance, ``the permit will be revoked.'' Both Section
IV.B.17(h) of the program description and Sec. 127.522(f) state that if
EPA objects to the issuance of the final revised permit within 45 days,
the permit will be revoked. EPA concludes from the regulatory language
and program description that post-issuance revocation will be
straightforward and automatic, in the event that EPA objects (within 45
days of receipt of the revised permit) to permit conditions that result
from public or affected state comments.
Provisions defining ``material substantive changes'' are included
in the IA that has been negotiated between EPA and PADEP. The IA will
help to clarify the criteria to be used by Pennsylvania in determining
which final permits must be provided to EPA for post-issuance review.
Moreover, the IA will confirm that post-issuance permit revocation is
indeed automatic for revised permits issued by Pennsylvania but
objected to by EPA within 45 days of issuance.
EPA believes that the provisions in the regulation and the IA
regarding EPA review of permits that are revised on the basis of public
and affected state comments are adequate to protect EPA's oversight
function.
d. Insignificant Activities--Under Part 70, EPA may approve as part
of a State program a list of insignificant activities and emission
levels which need not be included in permit applications. Pennsylvania
has not requested EPA approval of such a list of insignificant
activities or emission levels.
e. Proposed Exemption from Title V for R&D Facilities--Under 25 Pa.
Code Sec. 127.502(c) of the Commonwealth's Title V operating permit
program regulations, Research and Development (R&D) facilities located
at a Title V facility are not required to be included as part of the
Title V facility. However, for the purpose of determining Title V
applicability, emissions from R&D facilities are aggregated with the
rest of the facility's emissions. R&D facilities are defined in 25 Pa.
Code Sec. 121.1 as a stationary source whose purpose is to conduct
research and development of products and processes, or basic research
``for education or the general advancement of technology and
knowledge'' under the ``close supervision of technically trained
personnel.'' R&D facilities may not engage in the manufacture of
products for commercial sale or internal manufacturing use ``except in
deminimus amounts on an infrequent basis.'' The emissions from the R&D
facility must be less than the Title V threshold.
EPA interprets the Commonwealth's regulations as providing an
exemption from Title V requirements for co-located R&D facilities. The
current Part 70 rule does not provide any specific exemption from Title
V for co-located R&D facilities. However, EPA's August 31, 1995 (60 FR
45530) and August 29, 1994 supplemental Part 70 notices and the
preamble to the original Part 70 rule do provide for the separate
treatment of co-located R&D activities under Title V. In the August
1995 notice, EPA proposed to revise the Part 70 definition of ``major
source'' so that R&D activities could be considered separately for the
purpose of determining whether a source is major. EPA further stated in
that notice that it believes it appropriate to continue to implement
the current Part 70 rule to allow for the separate treatment of co-
located R&D activities. Thus, EPA believes that co-located R&D
facilities may be treated separately for purposes of determining Title
V applicability, and determining whether the Title V facility and the
co-located R&D facility are major sources.
Pursuant to the August 1995 notice, emissions from R&D activities
need not be aggregated with those of co-located stationary sources
unless the R&D activities contribute to the product produced or service
rendered by the co-located sources in a more than deminimus manner. As
a result of this approach, nonmajor R&D facilities are exempted from
Title V. The separate treatment of co-located R&D facilities, as
provided for in EPA's August 1995 notice, exempts non-major R&D
facilities from Title V since only major sources are required to obtain
a Title V permit at this time. Under the EPA's August 1995 proposal,
research and development activities would be required to have a Title V
permit only if the R&D facility itself were a major source.
The Sec. 121.1 definition of ``Research and Development Facility''
provided in the Commonwealth's regulations is reserved exclusively for
those research and development activities ``with emissions less than
the emissions thresholds for a Title V facility.'' Thus, by definition,
only non-major research and development activities qualify as ``R&D
facilities'' under the Pennsylvania regulations. Section 127.502(c) of
the Commonwealth's regulations further requires that emissions from a
co-located R&D facility be included when evaluating Title V
applicability. In its
[[Page 9128]]
August 1995 supplemental Part 70 notice, however, EPA proposed to
exempt non-major R&D facilities not only from Title V applicability but
also from the need to aggregate emissions from the R&D facility with
emissions from the Title V facility for the purpose of determining
whether a major source is present. Therefore, the Pennsylvania Title V
operating permit program is at least as stringent in this regard than
is required by EPA for program approval.
f. Acid Rain Requirements- Section 6.5 of Pennsylvania's Air
Pollution Control Act (``APCA''), 35 P.S. Sec. 4006.5, and 25 Pa. Code
Sec. 127.531 contain special operating permit provisions related to
Title IV of the Clean Air Act, the legislation's ``acid rain'' section.
In pertinent part, APCA Section 6.5 authorizes DEP to develop an acid
rain permit program; incorporates the definitions of sections 402 and
501 of the Clean Air Act; establishes a schedule for permit application
and compliance plan submission; and establishes certain permit
requirements for permits concerning sulfur dioxide emissions and
allowances.
25 Pa. Code Sec. 127.531 sets out an appropriate schedule for
submission of acid rain permits and compliance plans (Sec. 127.531(b));
provides that the permit application and compliance plan is binding and
enforceable until permit issuance (Sec. 127.531(c)); requires the
source to comply with permit conditions ``no later than the date
required by the Clean Air Act or regulations thereunder''
(Sec. 127.531(d)); allows permit revisions any time after submission of
the application and compliance plan (Sec. 127.531(e)); prohibits
emissions in excess of allowances or applicable emission limitations,
premature use of allowances, or contravention of any permit term
(Sec. 127.531 (f) and (g)); and requires compliance with accounting
procedures for allowances promulgated under Title IV
(Sec. 127.531(g)(3)).
It is noted that Pennsylvania has not directly incorporated by
reference EPA's Title IV regulations found at 40 CFR Part 72, and has
not adopted EPA's model rules. However, several regulatory provisions
require that Pennsylvania's Title V program be operated in accordance
with the requirements of Title IV and its implementing regulations.
Section 127.531(a) provides that the acid rain provisions of that
section ``shall be interpreted in a manner consistent with the Clean
Air Act and the regulations thereunder.'' Section 127.531(b) requires
that affected sources submit a permit application and compliance plan
``that meets the requirements of * * * the Clean Air Act and the
regulations thereunder.'' Further, the Sec. 121.1 definition of
``applicable requirements'' for Title V sources includes standards or
other requirements ``of the acid rain program under Title IV of the
Clean Air Act * * * or the regulations thereunder.''
The statute and regulations cited above support the Pennsylvania
Attorney General's opinion that ``Commonwealth law is consistent with,
and cannot be used to modify, the Acid Rain requirements of 40 CFR Part
72.'' Attorney General Opinion at 8-9.
For additional assurance that Pennsylvania's operating permit
program will operate in compliance with applicable acid rain
requirements, the Commonwealth has agreed to accept delegation of the
applicable provisions of 40 C.F.R. Parts 70, 72, and 78 for the purpose
of implementing the Title IV requirements of its operating permit
program. PADEP shall apply these provisions for purposes of
incorporating Acid Rain program requirements into each affected
source's operating permit; identifying designated representatives;
establishing permit application deadlines; issuing, denying, modifying,
reopening, and renewing permits; establishing compliance plans;
processing permit appeals; and issuing written exemptions under 40
C.F.R. Secs. 72.7 and 72.8. This commitment is contained in the IA that
has been negotiated between EPA and PADEP.
Furthermore, at EPA's request, Pennsylvania's Title V program
description has been revised to clarify that the Commonwealth will
implement its acid rain program in accordance with applicable
provisions of 40 C.F.R. Parts 70, 72, and 78; and that PADEP will
perform completeness and substantive reviews of acid rain permit
applications, and that acid rain permits will be issued in accordance
with EPA's acid rain permit writer's guidance. The revised program
description also states Pennsylvania will initiate appropriate
enforcement activities to compel compliance with permit conditions.
3. Title V Permit Fee Demonstration
Section 502(b)(3) of the Act requires that each permitting
authority collect fees sufficient to cover all reasonable direct and
indirect costs required to develop and administer its Title V operating
permits program. Each Title V program submittal must contain either a
detailed demonstration of fee adequacy or a demonstration that
aggregate fees collected from Title V sources meet or exceed $25 per
ton of emission per year (adjusted from 1989 by the Consumer Price
Index (CPI)). The $25 per ton amount is presumed, for program approval,
to be sufficient to cover all reasonable program costs and is thus
referred to as the ``presumptive minimum'' [Section 70.9(b)(2)(I)].
Pennsylvania has opted to make a presumptive minimum fee
demonstration. Pennsylvania's existing fee schedule, under Section
127.705 of the Commonwealth's regulations, requires Title V facilities
to pay an annual Title V emission fee of $37 per ton for each ton of a
regulated pollutant actually emitted from the facility. This amount
exceeds the $25 per ton presumptive minimum. Section 127.705 also
includes a provision that ties the amount of the fee to the Consumer
Price Index (CPI) as required by 40 CFR 70.9(b)(2)(iv). The $37 per ton
amount was derived by dividing the total annual estimated Title V
operating permit program cost by the total annual number of billable
tons of emissions. Pennsylvania used actual operating hours and
production rates, and considered in-place control equipment and the
types of materials processed, stored, or combusted in calculating the
total actual billable tons figure. EPA has determined that these fees
will result in collection and retention of revenues sufficient to cover
the Title V operating permit program costs.
4. Provisions Implementing the Requirements of Other Titles of the Act
a. Section 112--Pennsylvania has demonstrated in its Program
submittal adequate legal authority to implement and enforce all section
112 requirements through the Title V permit. This legal authority is
contained in Pennsylvania's enabling legislation (the Air Pollution
Control Act, ``APCA'') and in regulatory provisions defining
``applicable requirements'' and ``Title V facility'' and mandating that
permits must incorporate all applicable requirements. EPA has
determined that this legal authority is sufficient to allow
Pennsylvania to issue permits that assure compliance with all section
112 requirements, and to carry out all section 112 activities,
including those required under section 112(g). For further rationale on
this interpretation, please refer to the Technical Support Document
accompanying this rulemaking and the April 13, 1993 guidance memorandum
entitled ``Title V Program Approval Criteria for Section 112
Activities,'' signed by John Seitz, Director of the Office of Air
Quality Planning and Standards.
b. Program for Straight Delegation of Section 112 Standards--The
requirements for approval, specified in 40 CFR 70.4(b), encompass
section 112(l)(5) requirements for approval of a
[[Page 9129]]
program for delegation of the provisions of 40 CFR part 63, Subpart A,
and section 112 standards promulgated by EPA as they apply to part 70
sources, as well as non-part 70 sources. Section 112(l)(5) requires
that the State's program contain adequate authorities, adequate
resources for implementation, and an expeditious compliance schedule,
which are also requirements under part 70. Therefore, EPA is also
proposing to grant approval under section 112(l)(5) and 40 CFR part
63.91 of the State's program for receiving delegation of section 112
standards that are unchanged from the Federal standards as promulgated.
Because Pennsylvania has historically accepted delegation of Section
112 standards through automatic delegation, EPA proposes to approve the
delegation of Section 112 standards and requirements through automatic
delegation. The details of this delegation mechanism have been set
forth in an Implementation Agreement (IA) between Pennsylvania and EPA.
This approval applies to both existing and future standards but is
limited to sources covered by the Part 70 operating permit program.
c. Limiting HAP Emissions Through FESOP and Plan Approval
Programs--As part of this action EPA proposes to approve, pursuant to
Section 112(l) of the Clean Air Act, the Commonwealth's request for
authority to regulate HAPs through the issuance of federally
enforceable State operating permits and plan approvals. As explained
more fully in the Technical Support Document accompanying this proposed
rulemaking, EPA proposes to approve and incorporate into the SIP
Pennsylvania's operating permit and plan approval (i.e., construction
permit) programs codified in Subchapters F and B, respectively, of the
PADEP's air quality regulations. This would grant the PADEP authority
to issue plan approvals and operating permits which limit potential to
emit of criteria pollutants. However, as part of this action, EPA also
proposes to approve both State programs under Section 112(l) of the Act
for the purpose of extending Pennsylvania's authority to create
federally enforceable limits to include HAPs in addition to criteria
pollutants. Please refer to the Technical Support Document for a
thorough analysis of Pennsylvania's operating permit and plan approval
programs in accordance with applicable federal approval criteria.
d. Program for Implementing Title IV of the Act--Pennsylvania's
program contains adequate authority to issue permits which reflect the
requirements of Title IV of the Act, and Pennsylvania commits to adopt
the rules and requirements promulgated by EPA to implement an acid rain
program through the Title V permit.
B. Proposed Action
1. Title V Operating Permits Program
EPA is proposing full approval of the operating permits program
submitted to EPA by the Commonwealth of Pennsylvania on May 18, 1995.
Among other things, Pennsylvania has demonstrated that the program will
be adequate to meet the minimum elements of a State operating permits
program as specified in 40 CFR part 70. The scope of the Pennsylvania
program that EPA proposes to approve in this notice would apply to all
Title V facilities (as defined in the approved program) within the
Commonwealth of Pennsylvania, except for those areas where a separate
local agency Title V operating permits program has been approved by
EPA.
EPA also proposes approval of Pennsylvania's Plan Approval and
Operating Permit Programs, found in Subchapters B and F, respectively,
of Chapter 127 of the State's regulations, under section 112(l) of the
Act for the purpose of creating Federally enforceable permit conditions
for sources of hazardous air pollutants (HAPs) listed pursuant to
Section 112(b) of the Act.
2. Program for Delegation of Section 112 Standards as Promulgated
Requirements for approval, specified in 40 CFR 70.4(b), encompass
Section 112(l)(5) requirements for approval of a program for delegation
of section 112 standards as promulgated by EPA as they apply to part 70
sources. Section 112(l)(5) requires that the State's program contain
adequate authorities, adequate resources for implementation, and an
expeditious compliance schedule, which are also requirements under part
70. Therefore, EPA is also proposing to grant approval under section
112(l)(5) and 40 CFR part 63.91 of the State's program for receiving
delegation of section 112 standards that are unchanged from Federal
standards as promulgated. Because Pennsylvania has historically
accepted delegation of Section 112 standards through automatic
delegation, EPA proposes to approve the delegation of Section 112
standards and requirements through automatic delegation. The details of
this delegation mechanism are set forth in an Implementation Agreement
(IA) that has been negotiated between Pennsylvania and EPA. This
approval applies to both existing and future standards but is limited
to sources covered by the Part 70 operating permit program.
III. Proposed Approval of State Operating Permit and Plan Approval
Programs Under Section 110 of the Act
A. Background
As part of the May 18, 1995 submittal, PADEP submitted to EPA for
review and approval a revision to its State Implementation Plan (SIP)
designed to create federally enforceable limits on a source's potential
to emit. The revision consists of regulations establishing a State
operating permit program and a plan approval program, codified in
Subchapters F and B, respectively, of the Commonwealth's air quality
regulations. Pennsylvania refers to construction permits as ``plan
approvals.'' The proposed SIP revision generally strengthens the
Pennsylvania SIP by establishing a comprehensive operating permit and
plan approval program and by making the operating permit program
regulations consistent with the Title V operating permit regulations
codified in Chapter 127, Subchapter G of the Commonwealth's
regulations.
Limiting a source's potential to emit to below major source
thresholds through the use of federally enforceable terms and
conditions in a State operating permit or plan approval exempts such a
source from Title V permitting requirements. State operating permit
programs which have been incorporated into the SIP renders operating
permits issued pursuant to such a program as federally enforceable, and
the program itself is referred to as a federally enforceable State
operating permit program, or ``FESOP'' program. This FESOP mechanism
will allow sources to reduce their potential to emit to below the Title
V applicability thresholds and avoid being subject to Title V.
Similarly, construction permit (i.e., plan approval) programs which
have been incorporated into the SIP renders construction permits, or,
in Pennsylvania's case, plan approvals, issued pursuant to such a
program as federally enforceable.
Pennsylvania's FESOP and plan approval program regulations were
adopted and became effective on November 26, 1994. The operating permit
program regulations are codified under Chapter 127, Subchapter F of the
Commonwealth's air quality regulations, and the plan approval program
regulations are codified under Chapter 127, Subchapter B of the
Commonwealth's air quality regulations.
[[Page 9130]]
EPA found the SIP submittal complete on May 31, 1995.
EPA's review of this submittal indicates that the operating permit
and plan approval programs both meet applicable federal criteria for
approval. Accordingly, EPA is today proposing to approve the
Pennsylvania SIP revision for the plan approval and operating permit
programs, which was submitted on May 18, 1995.
B. Federal Criteria for Approval of Pennsylvania's FESOP and Plan
Approval Programs Pursuant to Section 110 of the Act
The five criteria for approving a State operating permit program
into a SIP were set forth in the June 28, 1989 Federal Register
document (54 FR 27282). Permits issued under an approved program are
federally enforceable and may be used to limit the potential to emit of
sources of criteria pollutants. Pennsylvania's FESOP provisions of
Subchapter F, Chapter 127 meet the June 28, 1989 criteria by ensuring
that the limits will be permanent, quantifiable, and practically
enforceable and by providing adequate notice and comment to both EPA
and the public. Please refer to the Technical Support Document for a
thorough analysis of the June 28, 1989 criteria as applied to
Pennsylvania's FESOP program.
EPA is proposing to approve pursuant to Section 110 of the Act and
the approval criteria specified in the June 28, 1989 Federal Register
document the following regulations that were submitted to make permits
issued pursuant to the Commonwealth's FESOP program federally
enforceable and to make the program consistent with it's Title V
operating permit program: Subchapter F, Chapter 127, Sections 127.401
through 127.464, inclusive.
As described above, Pennsylvania also submitted on May 18, 1995 for
EPA approval revisions to its existing new source review (NSR)
construction permit (i.e., plan approval) program. Pennsylvania's new
source review construction permit is called a ``plan approval.'' The
Commonwealth's plan approval program has been part of its SIP for many
years and meets the requirements in Section 110(a)(2)(C) of the Act
which requires all SIPs to provide for the regulation of the
modification and construction of any stationary source within the areas
covered by the plan implementation as necessary to assure that national
ambient air quality standards (NAAQS) are achieved. Pennsylvania's plan
approval regulations referenced above were originally approved by EPA
into the SIP on May 31, 1972 (37 FR 10842) for the purpose of meeting
the Section 110(a)(2)(C) requirement.
In order to make its program consistent with the Clean Air Act
Amendments of 1990, Pennsylvania had previously submitted, on February
10, 1994, its new source review (NSR) construction permit program to
EPA for review and approval. EPA is reviewing this program submittal
and will take the appropriate approval/disapproval action at a later
date. As part of this action, Pennsylvania is making changes to its
public hearing and administrative procedures in order to achieve
consistency of such procedures throughout all of its permitting
programs. EPA has reviewed these proposed changes to Pennsylvania's
plan approval program and has determined that they meet all applicable
federal requirements for approval.
C. Proposed Approval of Pennsylvania's Plan Approval and FESOP Programs
Under Section 112(1)
On May 18, 1995, PADEP requested approval of Pennsylvania's FESOP
and plan approval programs under Section 112 of the Act for the purpose
of creating federally enforceable limitations on the potential to emit
of HAPs. As described above, the Commonwealth's plan approval program
regulations were initially approved by EPA and incorporated into the
Pennsylvania SIP on May 31, 1972. EPA is today proposing to approve and
incorporate into the SIP Pennsylvania's operating permit and plan
approval program regulations submitted May 18, 1995.
EPA approval of the Commonwealth's plan approval and FESOP programs
under Section 112(l) of the Act is necessary to extend Pennsylvania's
existing authority under Section 110 of the Act to include authority to
create federally enforceable limits on the potential to emit HAPs.
EPA's previous rulemaking actions on the various Pennsylvania permit
programs for incorporation into the SIP provides a mechanism only for
controlling criteria air pollutants which does not extend to HAPs. Only
Section 112 of the Act provides the underlying authority for States to
limit potential to emit of HAPs in federally enforceable State
operating permits and construction permits. This necessitates EPA
approval of Pennsylvania's operating permit and plan approval programs
pursuant to Section 112(l) of the Act.
The criteria used by EPA for the original SIP approval of
Pennsylvania's plan approval program are located in 40 CFR 51.160-164.
EPA believes that the PADEP's existing plan approval program meets the
requirements of 40 CFR 51.160 through 51.164.
EPA has determined that the five approval criteria for approving
FESOP programs into the SIP, as specified in the June 28, 1989 Federal
Register notice referenced above, are also appropriate for evaluating
and approving the programs under Section 112(l). The June 28, 1989
notice does not address HAPs because it was written prior to the 1990
amendments to Section 112 of the Act. Hence, the following five
criteria are applicable to FESOP approvals under Section 112(l): (1)
the program must be submitted to and approved by EPA; (2) the program
must impose a legal obligation on the operating permit holders to
comply with the terms and conditions of the permit, and permits that do
not conform with the June 28, 1989 criteria shall be deemed not
federally enforceable; (3) the program must contain terms and
conditions that are at least as stringent as any requirements contained
in the SIP or enforceable under the SIP or any other Section 112 or
other Clean Air Act standard or requirement; (4) permits issued under
the program must contain conditions that are permanent, quantifiable,
and enforceable as a practical matter; and (5) permits issued under the
program must be subject to public participation. Please refer to the
TSD for a thorough analysis of how Pennsylvania's operating permits
program satisfies each of the five approval criteria. Since the State's
operating permits program meets the five program approval criteria for
both criteria and hazardous air pollutants, the Pennsylvania program
may be used to limit the potential to emit of both criteria and
hazardous air pollutants.
In addition to meeting the criteria discussed above, Pennsylvania's
plan approval and operating permits programs for limiting potential to
emit of HAPs must meet the statutory criteria for approval under
Section 112(l)(5) of the Act. This section allows EPA to approve a
program only if it: (1) contains adequate authority to assure
compliance with any Section 112 standard or requirement; (2) provides
for adequate resources; (3) provides for an expeditious schedule for
assuring compliance with Section 112 requirements; and (4) is otherwise
likely to satisfy the objectives of the Act.
The EPA plans to codify the approval criteria for programs limiting
the potential to emit of HAPs through amendments to Subpart E of 40 CFR
part 63, the regulations promulgated to implement section 112(l) of the
Act.
[[Page 9131]]
(See 58 Fed. Reg. 62262, November 26, 1993). The EPA currently
anticipates that these criteria, as they apply to FESOP programs, will
mirror those set forth in the June 28, 1989 notice, with the addition
that the State's authority must extend to HAPs instead of or in
addition to VOC's and PM10. The EPA currently anticipates that
FESOP programs that are approved pursuant to Section 112(l) prior to
the planned Subpart E revisions will have had to meet these criteria,
and hence will not be subject to any further approval action.
The EPA believes it has the authority under section 112(l) to
approve programs to limit potential to emit of HAPs directly under
section 112(l) prior to this revision to Subpart E. Section 112(l)(5)
requires the EPA to disapprove programs that are inconsistent with
guidance required to be issued under section 112(l)(2). This might be
read to suggest that the ``guidance'' referred to in section 112(l)(2)
was intended to be a binding rule. Even under this interpretation, the
EPA does not believe that section 112(l) requires this rulemaking to be
comprehensive. That is, it need not address every possible instance of
approval under section 112(l). The EPA has already issued regulations
under section 112(l) that would satisfy any section 112(l)(2)
requirement for rulemaking. Given the severe timing problems posed by
impending deadlines set forth in ``maximum achievable control
technology'' (MACT) emission standards under section 112 and for
submittal of Title V permit applications, the EPA believes it is
reasonable to read section 112(l) to allow for approval of programs to
limit potential to emit prior to promulgation of a rule specifically
addressing this issue. The EPA is therefore proposing approval of
Pennsylvania's FESOP and plan approval programs now so that
Pennsylvania may begin to issue federally enforceable operating permits
and plan approvals limiting potential to emit as soon as possible. This
will allow Pennsylvania to immediately begin exempting sources from
Title V requirements where this is possible and appropriate.
The EPA proposes approval of Pennsylvania's FESOP and plan approval
programs pursuant to Section 112(l) of the Act because the programs
meet applicable approval criteria specified in the June 28, 1989
Federal Register document and in Section 112(l)(5) of the Act.
Regarding the statutory criteria of Section 112(l)(5) of the Act
referred to above, the EPA believes Pennsylvania's FESOP and plan
approval programs contain adequate authority to assure compliance with
Section 112 requirements since neither program provides for waiving any
Section 112 requirement(s). Sources would still be required to meet
Section 112 requirements applicable to non-major sources. Regarding
adequate resources, Pennsylvania has included in its FESOP and plan
approval programs provisions for collecting fees from sources making
application for either a plan approval, an operating permit, or both.
Furthermore, EPA believes that Pennsylvania's FESOP and plan approval
programs provide for an expeditious schedule for assuring compliance
because they allow a source to establish a voluntary limit on potential
to emit and avoid being subject to a federal Clean Air Act requirement
applicable on a particular date. Nothing in Pennsylvania's plan
approval or operating permit programs would allow a source to avoid or
delay compliance with a federal requirement if it fails to obtain the
appropriate federally enforceable limit by the relevant deadline.
Finally, Pennsylvania's FESOP and plan approval programs are consistent
with the objectives of the Section 112 program because their purpose is
to enable sources to obtain federally enforceable limits on potential
to emit to avoid major source classification under Section 112. The EPA
believes that this purpose is consistent with the overall intent of
Section 112.
IV. Administrative Requirements
A. Request for Public Comments
The EPA is soliciting public comments on all aspects of this
proposed full approval. Interested parties may participate in the
Federal rulemaking procedure by submitting written comments to the EPA
Regional office listed in the Addresses section of this notice. These
comments will be considered before taking final action. Copies of the
State's submittal and other information relied upon for the proposed
Title V and section 112(l) approvals and the approval of Pennsylvania's
SIP revision pertaining to its plan approval and FESOP programs are
contained in a docket maintained at the EPA Regional Office. The docket
is an organized and complete file of all the information submitted to,
or otherwise considered by, EPA in the development of these proposed
approvals. The principal purposes of the docket are:
(1) to allow interested parties a means to identify and locate
documents so that they can effectively participate in the approval
process, and
(2) to serve as the record in case of judicial review. The EPA will
consider any comments received by April 8, 1996.
B. Executive Order 12866
The Office of Management and Budget has exempted this action from
Executive Order 12866 review.
C. Regulatory Flexibility Act
EPA's actions under sections 502, 110 and 112 of the Act do not
create any new requirements, but simply address operating permits
programs submitted to satisfy the requirements of 40 CFR part 70, the
creation of Federally enforceable permit conditions for sources of
hazardous air pollutants listed pursuant to section 112(b) of the Act,
and plan approval and FESOP requirements that the State is already
imposing. Because this action does not impose any new requirements, it
does not have a significant impact on a substantial number of small
entities.
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA
must prepare a regulatory flexibility analysis assessing the impact of
any proposed or final rule on small entities. 5 U.S.C. 603 and 604.
Alternatively, EPA may certify that the rule will not have a
significant impact on a substantial number of small entities. Small
entities include small businesses, small not-for-profit enterprises,
and government entities with jurisdiction over populations of less than
50,000.
SIP approvals under section 110 and subchapter I, part D of the
Clean Air Act do not create any new requirements but simply approve
requirements that the State is already imposing. Therefore, because the
Federal SIP approval does not impose any new requirements, the
Administrator certifies that it does not have a significant impact on
any small entities affected. Moreover, due to the nature of the
Federal-State relationship under the Act, preparation of a flexibility
analysis would constitute Federal inquiry into the economic
reasonableness of state action. The Clean Air Act forbids EPA to base
its actions concerning SIPs on such grounds. Union Electric Co. v. U.S.
EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).
Nothing in this action should be construed as permitting or
allowing or establishing a precedent for any future request for
revision to any State implementation plan. Each request for revision to
the State implementation plan shall be considered separately in light
of specific technical, economic,
[[Page 9132]]
and environmental factors and in relation to relevant statutory and
regulatory requirements.
D. 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 budgetary impact statement to accompany any proposed or
final rule that includes a Federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate; or to
private sector, of $100 million or more. Under Section 205, EPA must
select the most cost-effective and least burdensome alternative that
achieves the objectives of the rule and is consistent with statutory
requirements. Section 203 requires EPA to establish a plan for
informing and advising any small governments that may be significantly
or uniquely impacted by the rule.
This Federal action approves pre-existing requirements under State
or local law, and imposes no new Federal requirements. Accordingly, no
additional costs to State, local, or tribal governments, or to the
private sector, result from this action.
This action proposing approval of Pennsylvania's Title V program
has been classified as a Table 3 action for signature by the Regional
Administrator under the procedures published in the Federal Register on
January 19, 1989 (54 FR 2214-2225), as revised by a July 10, 1995
memorandum from Mary Nichols, Assistant Administrator for Air and
Radiation. The Office of Management and Budget (OMB) has exempted this
regulatory action from E.O. 12866 review.
Authority: 42 U.S.C. 7401-7671q.
Dated: February 23, 1996.
Stanley L. Laskowski,
Acting Regional Administrator, EPA Region III.
[FR Doc. 96-5415 Filed 3-6-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-5411 Uniform System of Records of Property Changes for Railroad Companies
[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9138-9139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5411]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
49 CFR Parts 1201 and 1262
[Ex Parte No. 512]
Uniform System of Records of Property Changes for Railroad
Companies
AGENCY: Surface Transportation Board, DOT.
ACTION: Proposed rule, withdrawal.
-----------------------------------------------------------------------
SUMMARY: The Surface Transportation Board (the Board) is withdrawing
the proposed rule and discontinuing the Ex Parte No. 512 proceeding.
DATES: This withdrawal is made on March 7, 1996.
FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-5610. [TDD for
the hearing impaired: (202) 927-5721].
SUPPLEMENTARY INFORMATION: Effective January 1, 1996, the ICC
Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803 (ICCTA)
abolished the Interstate Commerce Commission (the Commission) and
established within the Department of Transportation. Section 204 of the
ICCTA provides that ``[t]he Board shall promptly rescind all
regulations established by the [Commission] that are based on
provisions of law repealed and not substantively reenacted by this
Act.'' Former 49 U.S.C. 10784, the statutory basis for the Part 1262
rail valuation regulations, has been repealed.
[[Page 9139]]
Accordingly, in a separate proceeding, Removal of Obsolete Valuation
Regulations, STB Ex Parte No. 539, the Board is removing the now
obsolete part 1262 regulations as well as Instruction 1-3 (g) in part
1201, which refers to Part 1262.
Prior to the elimination of Sec. 10784, in Uniform System of
Records of Property Changes for Railroad Companies, Ex Parte No. 512
(ICC served Aug. 26, 1992) and published at 57 FR 38810 (1992), the
Commission had proposed to eliminate these same regulations. The
Commission stated that the more general instructions in 49 CFR 1201,
Uniform System of Accounts for Railroad Companies, provided sufficient
guidelines to support adequate accounting for rail property. Moreover,
to conform to generally accepted accounting principles (GAAP),
railroads had developed internal accounting systems that appropriately
record and document property changes. Also, railroads provide property
information in Annual Report Form R-1 (R-1).
In light of our action in STB Ex Parte No. 539, it is unnecessary
to continue this proceeding. We have considered the comments that were
submitted in response to the Commission's proposal and are satisfied
that no further action need be taken.
Of the three comments received in response to the Commission's
proposal, only one (jointly filed by the Western Coal Traffic League
and Edison Electric Institute (WCTL/EEI)) opposed the elimination of
the rules. WCTL/EEI suggested that the Part 1262 regulations continued
to serve a useful purpose in computing variable costs. The problem with
reliance on Part 1201 and GAAP, in WCTL/EEI's view, was that Part 1201
lacks sufficient detail to ensure recordkeeping uniformity among all
Class I railroads, and GAAP is variously interpreted and applied among
its users. For this reason, WCTL/EEI argued that Part 1201 and GAAP
would not be an effective vehicle for ensuring uniformity. They
expressed concern that, if Part 1262 were eliminated, there would be an
increase in the incidence of disparities in the form and content of
property records, which could make it more difficult to develop
accurate and reliable variable cost estimates. WCTL/EEI also
hypothesized that, without Part 1262 to ensure uniformity, the cost of
developing property costs using the Uniform Railroad Costing System
(URCS) would increase. Finally, they argued that the cost of
maintaining the Part 1262 requirements vis-a-vis different systems
should be small.
WCTL/EEI's concern that elimination of Part 1262 would lessen the
accuracy of property accounting and, in turn, adversely affect the URCS
variable cost computation is misplaced. Part 1262 sets forth detailed
recordkeeping requirements to update the basic railroad property
valuation essentially completed in 1920. By the early 1960's, the basic
property valuations were reconciled with the accounting records as
prescribed in Part 1201. Thus, the recorded value of property reported
under Parts 1201 and 1262 regulations are comparable. The data
requirements for URCS are not dependent upon the form of records
required by Part 1262. We believe that Part 1201 provides adequate
provision to obtain the data and information necessary for URCS.
We also find no need for the specific Part 1262 forms for other
Board purposes. Part 1262 forms are not used in the review and approval
of railroad depreciation rates, which use data supported by Part 1201.
Data contained elsewhere, especially in the R-1, comprise the basic
source of financial and cost information used by the Board. In short,
elimination of Part 1262 will not compromise the integrity of the
railroads' property accounts. For that reason, and in light of the
Congressional action repealing 49 U.S.C. 10784, we are discontinuing
the Ex Parte No. 512 proceeding.
Environmental and Energy Considerations
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
Regulatory Flexibility Analysis
We conclude that this action will not have a significant economic
impact on a substantial number of small entities. No new regulatory
requirements are being imposed on such entities. As required by the
ICCTA, the Board removed the Part 1262 regulations in STB Ex Parte No.
539 because former 49 U.S.C. 10784 was eliminated. Moreover, we have
here determined that those regulations are not needed for any other
Board purpose. Accordingly, the economic impact, if any, of our
withdrawing the proposed rules and discontinuing this proceeding, will
not likely affect a significant number of small entities.
Decided: February 28, 1996.
By the Board, Chairman Morgan, Vice Chairman Simmons, and
Commissioner Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 96-5411 Filed 3-6-96; 8:45 am]
BILLING CODE 4915-00-P
Complete official Federal Register PDF
FR Doc. 96-5374 Transportation of Hydrogen Sulfide by Pipeline
[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9133-9136]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5374]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Research and Special Programs Administration
49 CFR Parts 191 and 192
[Docket No. PS-106; Notice 3]
RIN 2137-AB63
Transportation of Hydrogen Sulfide by Pipeline
AGENCY: Research and Special Programs Administration (RSPA).
ACTION: Withdrawal of notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: In response to three National Transportation Safety Board
(NTSB) Safety Recommendations, RSPA issued an Advance Notice of
Proposed Rulemaking (ANPRM) followed by a Notice of Proposed Rulemaking
(NPRM) that proposed changes in the Pipeline Safety Regulations to
address the hazard of excessive levels of hydrogen sulfide (H2S)
in natural gas transmission pipelines. In a final review of information
and comment from all sources, including advice from the Technical
Pipeline Safety Standards Committee (TPSSC), RSPA determined that a
regulation to address H2S in transmission lines is not warranted.
Therefore, the NPRM is withdrawn.
FOR FURTHER INFORMATION CONTACT: Mike Israni, (202) 366-4571, regarding
the subject matter of this notice, or the Dockets Unit, (202) 366-4453,
regarding copies of this notice or other material in the docket as
referenced above.
SUPPLEMENTARY INFORMATION:
Background
H2S is a colorless and flammable gas which is hazardous to
life and health at concentrations above 300 parts per million (ppm) .
At concentrations of 1000 ppm in air it can cause immediate
unconsciousness and death. The Occupational Safety and Health
Administration has established an upper concentration level of 10 ppm
for prolonged (8 hours) workplace exposure.
The current regulations in 49 CFR Parts 192 and 195 address
H2S only with respect to its corrosive effect on pipelines, as
follows:
Sec. 192.125(d) states that copper pipe that does not have
an internal corrosion resistant lining may not be used to carry gas
that has an average H2S content of over 0.3 grains per 100
standard cubic feet (SCF) of gas.
Sec. 192.475 states that corrosive gas may not be
transported by pipeline unless the corrosive effect of the gas on the
pipeline has been investigated and steps have been taken to minimize
internal corrosion. In addition, gas containing more than 0.1 grains of
H2S per 100 SCF may not be stored in pipe-type or bottle-type
holders.
Sec. 195.418 states that no operator may transport any
hazardous liquid that would corrode the pipe or other pipeline
components unless it has investigated the corrosive effect of the
hazardous liquid on the system and taken adequate steps to mitigate
corrosion.
NTSB Recommendations
As a result of the NTSB investigation of an August 1987 accidental
release of H2S into a gas supply to Lone Star Gas Company in
Texas, and after learning of 11 additional H2S releases since 1977
(none of which involved any fatalities or serious injuries), NTSB
issued three Safety Recommendations to RSPA (P-88-1, -2 and -3) which
called for (-1) establishing a maximum allowable concentration of
H2S in natural gas pipeline systems, (-2) requiring operators to
report all incidents in which concentrations of H2S exceed this
maximum, and (-3) requiring operators to install equipment to
automatically detect and shut off the flow of gas when H2S
concentrations exceed the maximum.
Advance Notice of Proposed Rulemaking (ANPRM)
The RSPA responded to the NTSB recommendations by issuing an ANPRM
on June 7,1989 (54 FR 24361). Because the Pipeline Safety Regulations
do not require any monitoring of H2S levels in natural gas
pipeline systems, the ANPRM included a request for information to be
used in assessing the need for any such regulations. The ANPRM provided
background information and discussion on gas wells having significant
concentrations of H2S (sour gas), on the toxicity of H2S, and
on the effects of H2S with regard to sulfide stress and stress
corrosion cracking of line pipe. It discussed two H2S incidents in
California (1983 and 1984) and one in Texas (1987) that were reported
by NTSB, and mentioned some instances where workers were overcome by
H2S at a sour gas field in Canada. It quoted the aforementioned
three NTSB Safety Recommendations (P-88-1, -2 and -3), summarized the
aforementioned Federal Regulations (49 CFR 192.125, 192.475 and
195.418), discussed state regulations on H2S (California General
Order 58; Michigan Rules 299, 460 and 81; and Texas Rule 36), and
mentioned seven sections in Canadian Standard Z184-1975 that deal with
sour gas. For additional information on the above items refer to the
ANPRM which is available in the docket.
In its request for information, the ANPRM included four questions
as follows:
Question 1. What factors should be considered in determining the
need for a maximum allowable concentration of H2S in natural gas
pipeline systems? What should this concentration be?
Question 2. Describe events you know of in which H2S has been
released from,
[[Page 9134]]
or into, a pipeline in dangerous amounts and what were the H2S
concentrations? What were the consequences of such releases? What would
be the burden associated with mandatory reporting of such events?
Question 3. If you are an operator receiving gas from a producer,
do you have automatic H2S detection and shut-off equipment? Do
these devices work reliably? For such operators that do not have this
equipment, what costs and other burdens can be associated with
requiring use of the equipment?
Question 4. Which pipelines transporting sour gas should be subject
to an H2S monitoring requirement? Should rural gas gathering lines
be subject to H2S monitoring requirements, even though they are
not now subject to any of the part 192 safety standards?
RSPA received 54 responses to the ANPRM, mostly from natural gas
and hazardous liquid operators. Question 1 produced a wide variety of
suggestions for assessing the need for a maximum level of H2S. In
addition, most commenters suggested a maximum allowable H2S
concentration in the range of 0.25 to 1.0 grains per 100 SCF of natural
gas. The suggested factors for assessing the need for a maximum
allowable H2S level included such things as the kind of pipeline
system (gathering, transmission or distribution); operating conditions
(pressure, temperature, rate of flow); presence of contaminants
(H2O, CO2, hydrocarbon liquids, inhibitors); time interval of
H2S intrusion; piping materials; piping age; gas destination;
weather conditions; and provisions for ``grandfathering.'' With regard
to a maximum allowable H2S level, RSPA felt that an upper limit of
1 grain per 100 SCF of natural gas would be appropriate because it is
consistent with the limit set by OSHA and several states.
With regard to question 2, the commenters indicated that H2S
releases have not been widespread, significant, or a recurring problem.
On the matter of burden associated with mandatory reporting, most
distribution operators, as well as many transmission operators,
indicated little burden, but they questioned the usefulness of a
reporting requirement. However, in spite of this train of comment, RSPA
was of the opinion that a release of an excessive amount of H2S
into a pipeline system could result in a hazardous situation if there
is gas leakage from the piping.
Response to question 3 from most operators was that H2S
detection equipment and allied gas shutoff equipment is generally
reliable, with per installation equipment cost in the $10,000 to
$30,000 range. Monthly operating cost for the most part was $1500, with
one operator reporting $3000. A large midwestern distribution operator
reported that it would cost $484,000 for equipment for its entire
system with an annual operating cost of $105,000. RSPA felt that, to
ensure public safety, high concentrations of H2S should be removed
from the gas before delivery to the transmission pipeline.
On question 4 most commenters favored a location immediately
downstream of where the gas is treated for H2S removal as the
place for monitoring. Very few commenters thought that pipelines
carrying sour gas should not be monitored. Most commenters were opposed
to rural gathering lines being subject to H2S monitoring.
RSPA agreed with most commenters that monitoring should be in the
interface between the gathering line and transmission line at a point
immediately downstream of the H2S removal facility. RSPA also
agreed that there is no need for monitoring equipment where
transmission pipelines are not receiving gas that could be subject to
H2S contamination. In addition, RSPA agreed with the commenters
who stated that regulation of H2S in gathering lines is
impractical because those pipelines are generally upstream of H2S
removal facilities.
The Notice of Proposed Rulemaking
On the basis of its review and analysis of the information and
comments received from the ANPRM, RSPA published an NPRM on March 18,
1991 (56 FR 11490) proposing rule changes in parts 191 and 192. The
proposed changes were to (1) limit H2S levels in transmission
lines downstream of gas processing plants, sulfur recovery plants, and
storage fields to 1 grain per 100 SCF of natural gas; (2) require
reporting to RSPA if an excessive amount of H2S enters a
transmission line; and (3) require that operators of jurisdictional
onshore and offshore gas gathering lines containing over 31 grains of
H2S per 100 SCF of natural gas have written contingency plans for
any release of H2S into the atmosphere. For detail on the changes
in the regulations, refer to the NPRM which is available in the docket.
RSPA received 30 responses to the NPRM; 23 from gas and hazardous
liquid pipeline operators, three from pipeline industry associations
(American Gas Association, Interstate Natural Gas Association, and
American Petroleum Institute), two from Federal government agencies
(NTSB and Minerals Management Service), one from a state pipeline
safety agency. (Kansas Corporation Commission), and one from a local
government (County of Santa Barbara). The following summarizes the
responses:
General Comments--Several commenters, particularly
distribution system operators, supported limits on the amount of
H2S allowable in natural gas transmission pipelines. The
distribution operators were concerned about the regulations requiring
the installation of H2S monitoring equipment in their systems.
NTSB commented that the term ``grains per 100 SCF of natural gas''
should be replaced with ``parts per million'' (ppm). NTSB also
suggested that RSPA provide the scientific basis for the H2S
limits used in these regulations.
Many commenters were concerned that a pending RSPA rulemaking for
redefining gas gathering lines would result in some lines being
reclassified as transmission lines, and the resulting affects of this
on any such lines that transport high concentration H2S natural
gas.
The API was concerned about the definition of ``gathering lines''
and ``production facilities'', and urged that RSPA adopt the API
proposed definitions of these terms (these proposed API definitions are
being taken into consideration by RSPA in the development of the
rulemaking for redefining ``gathering line'').
Several commenters, especially Monterrey Pipeline Company, were
concerned about RSPA proposing regulations in spite of comments that
argued against the need for regulations for establishing a maximum
H2S level for natural gas in transmission pipelines. In contrast,
many commenters, such as Tenneco, felt that RSPA, in developing the
proposed regulations, had adequately balanced considerations of public
safety with the need for prudent operation of pipeline systems. The
Resources Management Department of the County of Santa Barbara
commended the effort by the RSPA to address the hazards of sour gas in
natural gas. Santa Barbara recommended three levels of protection
(operational procedures, H2S detectors, and mechanical means) with
standby/duplication at each level.
Section 191.3--Several commenters noted that the NPRM
definition of an event involving the presence of H2S, as proposed
in the Sec. 191.3 definition of an H2S ``Incident,'' should be
limited to ``transmission pipelines downstream of gas processing
plants, sulfur recovery plants, or storage fields,'' wording
[[Page 9135]]
similar to the NPRM proposed Sec. 192.631.
Many commenters took the position that there is no need to expand
the definition of ``incident'' in Sec. 191.3 by adding an H2S
``incident'' because people are not exposed to the H2S that may be
introduced into a pipeline downstream of a gas processing plant, sulfur
recovery plant, or storage field.
The proposed addition to the definition of ``incident'' read ``An
event where hydrogen sulfide in excess of 20 grains per 100 standard
cubic feet of natural gas is released into a transmission pipeline''.
Interstate Natural Gas Association of America (INGAA) and Enron
commented that this wording should be revised to make it clear that it
is natural gas, containing a certain concentration of H2S, that
enters a transmission pipeline to create the reportable incident.
United Gas Pipe Line Company (UGPL) commented that there was
nothing to quantify the extent of a release with respect to time.
According to UGPL, the small quantity of gas entering a transmission
pipeline during the 30 to 60 seconds required to activate shutoff would
constitute a reportable incident, even though it would be quickly
diluted by the large volume of sweet gas in the pipeline from other
sources, and therefore pose no hazard. On the other hand, the Minerals
Management Service (MMS) commented that a minimum level of 20 grains
per 100 SCF of natural gas (320 ppm) may be too high because at that
level the pipe would be subject to sulfide stress cracking. In
addition, MMS made reference to the high toxicity level at 20 grains of
H2S per 100 SCF (320 ppm) with the following description of
toxicity at 200 ppm from API RP 49, Table A.1: ``Burns eyes and throat.
At concentration between 200-500 ppm pulmonary edema which can be life
threatening almost always occurs.''
The proposed addition to the definition of ``incident'' in
Sec. 191.3 included any release (into a transmission pipeline) of
natural gas containing in excess of 20 grains of H2S per 100 SCF
(320 ppm) a reportable incident. RSPA agreed that because of the
dilution mentioned previously, and because the gas would be contained
inside the piping (as indicated by many commenters), a hazardous
situation would be unlikely.
Section 191.5--INGAA, Ocean Drilling and Exploration Co.
(ODECO), UGPL, and Colorado Interstate Gas (CIG) opposed the use of the
telephonic notice for reporting H2S incidents. CIG, INGAA and UGPL
suggested using the Sec. 191.25 Safety-Related Condition Report, and
ODECO favored a written report similar to that of Sec. 191.9. INGAA and
UGPL recommended that the reported information should address the
concentration instead of the amount of H2S, and the length of time
of the release. They also said that determining how far the H2S
had spread could be difficult.
Section 192.631--Many commenters indicated that the
proposed Sec. 192.631, if taken literally, could require transmission
pipelines that are not immediately downstream of a gas processing
plant, sulfur recovery plant, or storage field, to be monitored for the
presence of H2S. Many transmission pipelines, especially those
belonging to gas distribution operators, are many miles downstream of
the point (gas processing plant, sulfur recovery plant or storage
field) where sour gas could be inadvertently released into the pipeline
and there is therefore no need for H2S monitoring. Alabama Gas
Corporation commented that the rule should be rephrased so that
monitoring is not required where there is no possibility of an H2S
release.
Several commenters pointed out that the introductory phrase
``Except as set forth in Sec. 192.633,'' should be deleted in proposed
Sec. 192.631 because there is no exception in Sec. 192.633 for
transmission pipelines. This introductory phrase was included in this
proposed rule because, in accordance with the current requirements in
Sec. 192.9, gathering lines must comply with rules that are applicable
to transmission pipelines. The introductory phrase was intended to
except gathering lines from having to comply with Sec. 192.631 so they
may carry sour gas by complying with Sec. 192.633.
Okaloosa County Gas District recommended that OSHA standards on
H2S be implemented by limiting H2S to 0.625 grains per 100
SCF of natural gas. Transcontinental Gas Pipe Line Corporation
(Transco) commented that the proposed limit of 1 grain of H2S per
100 SCF of natural gas could conflict with existing gas purchase
contract limits and proposed ``grandfathering'' the conditions in
existing gas purchase contracts that do not exceed 2 grains of H2S
per 100 SCF of natural gas. The NTSB suggested that the maximum
permissible concentration of H2S should be 10 ppm (0.625 grains
per 100 SCF of natural gas), as established by OSHA, instead of 1 grain
of H2S per 100 SCF of natural gas (16 ppm). The MMS commented that
15.9 ppm (1 grain per 1000 SCF) is very conservative and appropriate
for transmission pipelines, and pointed out that 1 grain of H2S
per 100 SCF of natural gas (16 ppm), as specified in Sec. 192.631, is
the short term exposure limit established by OSHA as the `` * * *
employee's 15-minute time weighted average which shall not be exceeded
at any time during a work day * * * '' (54 FR 2920).
Section 192.633--Several commenters supported the use of
the Texas Railroad Commission Rule 36 in developing regulations for
gathering lines that carry high concentrations of H2S. Pennzoil
was concerned that the regulations proposed in Sec. 192.633 may be
misinterpreted to apply to gathering lines in rural areas. As noted in
the NPRM, these regulations do not apply to gathering lines in rural
areas. In accordance with the applicability regulations in
Sec. 192.1(2), Part 192 does not apply to the onshore gathering of gas
outside one of the following areas:
(i) An area within the limits of any incorporated or unincorporated
city, town, or village.
(ii) Any designated residential or commercial area such as a
subdivision, business or shopping center, or community development.
It should be noted that Sec. 192.633 applies to offshore gathering
lines since Sec. 192.1(2) only excepts onshore gathering lines from the
requirements of Part 192.
Lone Star Gas Company (LSG) commented that Rule 36 was intended to
apply to production wells producing natural gas having high
concentrations of H2S; i.e., a single point source of possible
H2S release. LSG commented that applying the formula in proposed
Sec. 192.633(b)(1) to pipelines needed some clarification, particularly
regarding the term ``maximum volume of gas available for escape.'' LSG
also commented that Sec. 192.633(b)(2) should be clarified since Rule
36 requires a plat detailing the area around a production well which
again is a point source of possible escape of natural gas carrying high
concentrations of H2S. LSG argues that a pipeline subject to
Sec. 192.633(b)(2) is not a point source.
Both LSG and Enron suggested that contingency plans proposed in
Sec. 192.633 be incorporated into Sec. 192.615 since such plans for
hydrogen sulfide emergencies would probably be incorporated into
emergency plans currently existing under Sec. 192.615. Both commenters
observed that many of the requirements in the proposed Sec. 192.633
were taken from Sec. 192.615 and no purpose is served by requiring that
the information be repeated. Enron commented that there is no reason to
differentiate between contingency plans for onshore as opposed to
offshore pipelines. According to Enron, current emergency plans exist
for onshore and
[[Page 9136]]
offshore pipelines and Part 192 does not outline differences that are
to exist between them.
Technical Pipeline Safety Standards Committee
RSPA presented the NPRM to the TPSSC for its consideration at a
meeting in Washington, DC on March 11, 1992. The TPSSC is RSPA's
statutory advisory committee for gas pipeline safety. It is composed of
15 members, representing industry, government, and the public, who are
technically qualified to evaluate gas pipeline safety. The TPSSC
expressed concerns about adopting the proposed changes in 49 CFR Part
192 to address H2S in natural gas transmission pipelines. The
TPSSC 's concerns centered around the need for such a regulation
considering the limited number of incidents involving the release of
H2S natural gas into transmission pipelines, and whether it would
increase safety, be cost effective and redundant to already existing
state regulations. Therefore, the TPSSC recommended that the incidence
of H2S in transmission lines did not warrant a rulemaking.
On the basis of that finding, an analysis and review of the
comments to the NPRM, and further analysis of the comments to the
ANPRM, RSPA decided to re-consider the need for the proposed regulation
and concluded that the proposed H2S regulations are not warranted
because they are oriented/directed toward transmission lines. No
injuries or deaths have been attributed to H2S in natural gas
transmission lines. H2S releases into transmission lines to date
have been infrequent, have been of extremely brief duration, and have
involved only very minute amounts of H2S. H2S that is
released into a transmission line remains confined with very little
likelihood that there would happen to be a leak in the transmission
line at the same time and in the same general vicinity as the release.
And lastly, H2S released into a transmission line from a
processing plant would most likely be diluted by natural gas from other
sources.
Rather than applying rule changes affecting transmission pipelines,
RSPA's regulatory efforts on H2S should be redirected to gathering
lines. The source of H2S is the gas well, and the gathering line
is the first pipeline facility downstream of the well. It is on
gathering lines transporting H2S laden natural gas from wells to
processing plants that regulations may be needed. Future development
with respect to H2S in gathering lines may be addressed in a later
rulemaking.
On the basis of the foregoing, RSPA hereby withdraws the NPRM
proposing to limit H2S levels in natural gas in gas transmission
pipelines.
Authority: 49 U.S.C. 60102 et seq.; 49 CFR 1.53.
Issued in Washington, D.C. on March 4, 1996.
Richard B Felder,
Associate Administrator for Pipeline Safety.
[FR Doc. 96-5374 Filed 3-6-96; 8:45 am]
BILLING CODE 4910-60-P
Complete official Federal Register PDF
FR Doc. 96-5368 Airworthiness Directives; Learjet Model 31 and 35A Airplanes
[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9119-9121]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5368]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. 95-NM-197-AD]
Airworthiness Directives; Learjet Model 31 and 35A Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This document proposes the adoption of a new airworthiness
directive (AD) that is applicable to certain Learjet Model 31 and 35A
airplanes. This proposal would require replacement of two segments of
16 American Wire Gauge (AWG) wire with 8 AWG wire at the connector that
is connected to the auxiliary cabin heater relay box. This proposal is
prompted by a report that two segments of the 16 AWG wire in the
auxiliary cabin heater that were spliced during production do not
provide adequate current-carrying capacity. The actions specified by
the proposed AD are intended to prevent electrical arcing and a
subsequent fire hazard that could result from wiring with inadequate
current-carrying capacity.
DATE: Comments must be received by April 17, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Transport Airplane Directorate, ANM-103,
Attention: Rules Docket No. 95-NM-197-AD, 1601 Lind Avenue, SW.,
[[Page 9120]]
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 Learjet, Inc., One Learjet Way, Wichita, Kansas 67209-
2942. This information may be examined at the FAA, Transport Airplane
Directorate, 1601 Lind Avenue, SW., Renton, Washington; or at the FAA,
Small Airplane Directorate, Wichita Aircraft Certification Office, 1801
Airport Road, Room 100, Mid-Continent Airport, Wichita, Kansas.
FOR FURTHER INFORMATION CONTACT: Dale Bleakney, Aerospace Engineer,
Flight Test Branch, ACE-117W, FAA, Small Airplane Directorate, Wichita
Aircraft Certification Office, 1801 Airport Road, Room 100, Mid-
Continent Airport, Wichita, Kansas; telephone (316) 946-4135; fax (316)
946-4407.
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-197-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-197-AD, 1601 Lind Avenue, SW., Renton, Washington
98055-4056.
Discussion
The FAA has received a report indicating that, during regularly
scheduled maintenance on a Learjet Model 35 series airplane, two
segments of the 16 American Wire Gauge (AWG) wire in the auxiliary
cabin heat circuit were found to provide inadequate current-carrying
capacity. Investigation revealed that, during production, the 16 AWG
wire had been spliced into a 10 AWG circuit at the P190 connector that
is connected to the E33 auxiliary cabin heater relay box. The use of
this manufacturing splicing technique (16 AWG wire into a 10 AWG
circuit) can allow the rated current-carrying capability of the wire to
be exceeded. This condition, if not corrected, could result in
electrical arcing and may lead to a potential fire hazard.
The FAA has reviewed and approved Learjet Service Bulletin SB 31-
21-10, dated August 11, 1995 (for Model 31 airplanes), and Learjet
Service Bulletin SB 35-21-24, dated August 11, 1995 (for Model 35A
airplanes), which describes procedures for replacement of two segments
of 16 AWG wire with 8 AWG wire at the P190 connector that is connected
to the E33 auxiliary cabin heater relay box. The replacement will
ensure that the wire size is adequate for the electrical current
requirements of that circuit.
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 replacement of two segments of 16 AWG wire
with 8 AWG wire at the P190 connector that is connected to the E33
auxiliary cabin heater relay box. The actions would be required to be
accomplished in accordance with the applicable service bulletin
described previously.
There are approximately 52 Learjet Model 31 and 35A airplanes of
the affected design in the worldwide fleet. The FAA estimates that 44
airplanes of U.S. registry would be affected by this proposed AD, that
it would take approximately 4 work hours per airplane to accomplish the
proposed actions, and that the average labor rate is $60 per work hour.
Required parts would be supplied by the manufacturer at no cost to the
operators. Based on these figures, the cost impact of the proposed AD
on U.S. operators is estimated to be $10,560, or $240 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:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 USC 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
Learjet, Inc.: Docket 95-NM-197-AD.
Applicability: Model 31 airplanes having serial numbers 31-002
through 31-029 inclusive, and Model 35A airplanes having serial
numbers 35-647 through 35-670 inclusive; certificated in any
category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or
[[Page 9121]]
repaired so that the performance of the requirements of this AD is
affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (b) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required as indicated, unless accomplished
previously.
To prevent electrical arcing and subsequent fire hazard,
accomplish the following:
(a) Within 6 months after the effective date of this AD, replace
two segments of 16 American Wire Gauge (AWG) wire with 8 AWG wire at
the P190 connector that is connected to the E33 auxiliary cabin
heater relay box, in accordance with Learjet Service Bulletin SB 31-
21-10, dated August 11, 1995 (for Model 31 airplanes), or Learjet
Service Bulletin SB 35-21-24, dated August 11, 1995 (for Model 35A
airplanes), as applicable.
(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 Wichita Aircraft Certification Office (ACO),
FAA, Small Airplane Directorate. Operators shall submit their
requests through an appropriate FAA Principal Maintenance Inspector,
who may add comments and then send it to the Wichita ACO.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Wichita 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 March 1, 1996.
Darrell M. Pederson,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-5368 Filed 3-6-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-5292 Federal Motor Vehicle Safety Standards; Head Impact Protection
[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9136-9138]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5292]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 571 and 572
[Docket No. 92-28; Notice 6]
RIN 2127-AG07
Federal Motor Vehicle Safety Standards; Head Impact Protection
AGENCY: National Highway Traffic Safety Administration (NHTSA), DOT.
ACTION: Advance Notice of Proposed Rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document grants four petitions to commence rulemaking to
amend upper interior head protection requirements to accommodate
vehicles equipped with a dynamic head protection device which is
activated in a side impact (e.g., a side air bag). This document
requests information on various issues NHTSA must evaluate before
issuing a notice of proposed rulemaking for these petitions.
DATES: Comments must be received by April 22, 1996.
ADDRESSES: All comments must refer to the docket and notice number set
forth above and be submitted (preferably in 10 copies) to the Docket
Section, National Highway Traffic Safety Administration, Room 5109, 400
Seventh Street S.W., Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT: The following persons at the National
Highway Traffic Safety Administration, 400 Seventh Street, S.W.,
Washington, D.C. 20590:
For non-legal issues:
Dr. William Fan, Office of Vehicle Safety Standards, NPS-14,
telephone (202) 366-4922, facsimile (202) 366-4329, electronic mail
``[email protected]''.
For legal issues:
Mary Versailles, Office of the Chief Counsel, NCC-20, telephone
(202) 366-2992, facsimile (202) 366-3820, electronic mail
``[email protected]''.
SUPPLEMENTARY INFORMATION: On August 18, 1995, NHTSA published a final
rule amending Standard No. 201, Occupant Protection in Interior Impact,
to require passenger cars, trucks, buses and multipurpose passenger
vehicles with a gross vehicle weight rating (GVWR) of less than 10,000
pounds to incorporate measures to prevent or reduce injury when a
vehicle occupant's head strikes upper interior components during a
crash. The covered components include pillars, side rails, headers, and
the roof. The amendments add procedures and performance requirements
for a new in-vehicle component test (60 FR 43031). The period for
submittal of petitions for reconsideration closed September 19, 1995.
NHTSA received nine petitions for reconsideration of the final
rule. Four of those petitions (BMW, Mercedes-Benz, Volkswagen, and
Volvo) asked for a variety of changes to the final rule if a vehicle is
equipped with a dynamic head protection countermeasure which is
activated in a crash (i.e., a side air bag, hereafter referred to as
dynamic systems). In addition, four manufacturers (BMW, Ford, Mercedes-
Benz, and Volvo) requested meetings with the agency to discuss the
impact of the final rule on dynamic systems. The petitions requested a
variety of changes to the rule, including:
A complete exclusion of any vehicle equipped with a
dynamic system,
An exclusion of targets protected by a dynamic system,
For targets protected by a dynamic system, a reduction of
the free motion headform (FMH) impact speed from 15 miles per hour
(mph) to 12 mph when tested without the dynamic system activated,
The inclusion of a dynamic test in the standard, and
Testing with the dynamic system activated.
Because these issues are outside the scope of the rulemaking that
led to the August 18 final rule, it is not a proper subject for a
petition for reconsideration. Therefore, the agency is treating the
Mercedes-Benz petition, and the related portions of the BMW, Volkswagen
and Volvo petitions as petitions for rulemaking, and is granting those
petitions. Before publishing a notice of proposed rulemaking, the
agency wishes to conduct some evaluations. To assist the agency in
conducting these evaluations, this notice requests comments on the
issues identified above.
[[Page 9137]]
Performance Evaluation
Currently, Standard No. 201 requires that a vehicle's instrument
panel meet the Standard when impacted at a relative velocity of 15
miles per hour, with one exception. The exception is for vehicles that
meet the occupant protection requirements of S5.1 of Standard No. 208,
``Occupant Crash Protection,'' by means of an inflatable restraint.
Those vehicles need only meet the performance requirement when impacted
at a relative velocity of 12 miles per hour.
The agency notes that while this exception appears to be similar to
one of the changes requested by the petitions, there is an important
distinction. The existing exception is premised upon the existence of a
dynamic performance test that provides an objective evaluation of the
protection provided by the inflatable restraint. That test provides
assurance that the inflatable restraint provides protection that is a
suitable substitute for the protection otherwise afforded by the
Standard. However, the exception sought by the petitioners is not
necessarily premised on the existence of such a test for evaluating the
performance of dynamic systems. NHTSA believes that before it considers
any changes in the requirements of the August 18 final rule, it should
have a method of testing dynamic systems for a minimum level of
performance. Since such a method does not now exist, one must be
developed. Either there must be a single testing method appropriate for
evaluating the performance of the wide range of dynamic systems under
development, or there must be a variety of test methods that, together,
are sufficient for testing all systems and ensuring that they provide
equivalent protection.
NHTSA is aware of two categories of dynamic systems that are under
consideration by the manufacturers. The first category is dynamically
deployed padding. The dynamically deployed padding would provide
improved protection for head impacts with the upper interior components
already covered by the final rule. However, the dynamically deployed
padding is anticipated to provide protection in higher severity impacts
than that provided by the static padding which would otherwise be
utilized to meet the requirements of the final rule. The second
category includes dynamically deployed air bags or other inflatable
devices such as BMW's Inflatable Tubular Structure. This technology
provides head protection for impacts with various vehicle upper
interior components. It also potentially affords protection for side
impacts with external objects such as trees and poles or the front high
hooded areas of a colliding vehicle.
Since the dynamic systems may have the potential to provide
improved head protection beyond that provided by the final rule, the
agency is considering rulemaking to allow them. However, as noted
above, the agency believes that test procedures must be developed to
evaluate the dynamic systems in order to assure that the protection
afforded by the dynamic systems is a suitable substitute for that
provided by the final rule.
A number of test procedures have been suggested. These include:
Procedures for Dynamically Deployed Padding
For targets protected by dynamically deployed padding, impact the
targets with the FMH at 12 mph, prior to the deployment of the padding.
The targets would be located using the existing procedures. Impact
these same target locations again, this time at 20 mph, after
deployment of the padding. The higher speed for testing the deployed
padding is intended to assure that increased head protection is
provided by the advanced technology. (For an explanation of the 20 mph
test speed, see the questions below regarding benefits.) Conduct crash
tests at 15-20 mph to ensure that sensors activate the deployment of
the advanced padding under those conditions.
Procedures for Dynamically Deployed Air Bags and Other Inflatable
Devices
(1) For targets protected by an air bag or other inflatable device,
conduct FMH impacts at 12 mph. The advanced systems are not deployed
for these tests. All other targets are tested at 15 mph.
(2) Conduct a side impact crash test of the vehicle into a 250 mm
diameter rigid pole at 30 kph. The vertical centerline of the pole is
aligned with the center of gravity of the dummy's head. The dummy's
seat is positioned forward of the mid-seating location such that the
dummy's head is sufficiently within the front window opening that the
striking pole will not contact the B-pillar.
(3) Conduct a side impact crash test at 50 kph using the ISO 10997
moving deformable barrier (MDB) fitted with a rigid face whose top edge
is not less than 1250 mm above the ground. The dummy's seat is
positioned forward of the mid-seating location such that the dummy's
head is sufficiently within the front window opening that the striking
MDB can make direct head contact. The second and third test procedures
for the ``dynamically deployed air bags and other inflatable devices''
were presented by the U.S. delegation to the ISO/TC 22/SC 10/WG 3 in
its draft technical report, Document N100, ``Road Vehicles--Test
Procedures of Evaluating Various Occupant Interactions with Deploying
Side Impact Air Bags.''
To assist the agency in developing possible ways of evaluating
performance, the agency requests answers to the following questions:
1. What test procedures could be used to measure the performance of
a dynamic system?
2. What performance criteria would assure that advanced systems,
when deployed, provide protection equivalent to that provided by
countermeasures that meet the requirements of the final rule?
3. Are there other test methods appropriate for dynamic systems
using full scale crash tests and an anthropomorphic test device?
4. If the agency were to propose a lower impact speed for targets
protected by a dynamic system, are there components of the dynamic
system which are not protected by the system but which could not meet
the upper interior requirements at the current impact speed (15 mph)?
Benefits
The majority of dynamic systems known to NHTSA would offer occupant
protection only in side impacts. The final rule was intended to provide
head impact protection in frontal, side, and rollover crashes. Before
deciding whether to propose amendments to accommodate vehicles with
dynamic systems, NHTSA wishes to explore the nature and extent of any
tradeoffs. To do this, it must compare the benefits provided by these
dynamic systems with the benefits afforded by the final rule. Excluding
targets or reducing the impact speed for targets would reduce the
benefits for those targets in crashes which do not cause the dynamic
system to deploy. Conversely, the dynamic systems may offer increased
benefits when they do deploy. To assist the agency in evaluating the
relative benefits of possible proposals, the agency requests answers to
the following questions:
5. What effect would reducing test speeds have on injuries in non-
deployment crashes?
6. What is the effectiveness of each dynamic system in reducing
fatalities and injuries? What percent reduction in the various injury
criteria (e.g., HIC) would result if these technologies were installed?
Would this reduction vary by delta-V? If so, specify the relationship
[[Page 9138]]
between delta-V and injury criteria reduction for the specific system.
7. Could the dynamic systems cause increases in neck injuries? If
so, what data are available to quantify this impact? What criteria can
be used to determine whether lateral neck motion is increasing or
causing injury?
8. Some advanced technologies appear to offer potential reductions
in the likelihood of ejection. What would the effectiveness of dynamic
systems be in reducing ejection in side or other impact modes or in a
subsequent collision?
9. The dynamic systems known to NHTSA will deploy and protect the
near-side occupant in a side impact. Will the dynamic system for the
far-side occupant deploy in a side impact or in rollovers to protect
against possible rebound effects or subsequent collision?
10. Do MY 1996 vehicles meet 12 mph test requirements? Do any MY
1996 vehicles meet 15 mph test requirements?
11. Should an impact speed higher than 15 mph be used in FMH
testing of the system in order to compensate for the loss in benefits
because the system does not deploy in rollover and frontal crashes? If
so, is 20 mph an appropriate impact speed?
12. Are there existing accident data analyses concerning head
injuries as a function of crash modes and target components?
Miscellaneous Questions
To allow NHTSA to become better acquainted with the dynamic systems
under development, the agency requests answers to the following
questions:
13. Are dynamic systems compatible with the B-pillar mounted
shoulder anchorage point? Are integrated restraint seats (IRS), which
have shoulder belt anchorages attached to the upper backseat, more
compatible with the dynamic systems?
14. How much would the dynamic systems add to the price and weight
of the vehicle?
15. What are the performance criteria for the sensor system
designs? What is the time interval necessary for full deployment of the
dynamic system?
16. If changes were made to the August 18 final rule, what is the
anticipated time frame for introduction of dynamic systems? Are any
dynamic systems being introduced prior to the requirements of the
August 18 final rule?
17. Will the systems be introduced as optional or standard
equipment?
Rulemaking Analyses and Notices
Executive Order 12866 and DOT Regulatory Policies and Procedures
This rulemaking document was reviewed under E.O. 12866,
``Regulatory Planning and Review.'' Further, this action has been
determined to be ``significant'' under the Department of
Transportation's regulatory policies and procedures because of
anticipated public interest. Any anticipated rulemaking resulting from
this notice would provide manufacturers with an alternative to the
requirements in the August 18 final rule. A decision by a manufacturer
to avail itself of the alternative would entail use of technology
(i.e., dynamic systems) that may well be more costly than the padding
which could be used to comply with the final rule. The agency solicits
information from the manufacturers concerning those cost of those
dynamic systems.
Executive Order 12612 (Federalism)
NHTSA has analyzed this notice in accordance with the principles
and criteria contained in E.O. 12612, and has determined that it does
not have significant federalism implications to warrant the preparation
of a Federalism Assessment.
Submission of Comments
Interested persons are invited to submit comments. It is requested
but not required that 10 copies be submitted.
All comments must not exceed 15 pages in length. (49 CAR 553.21).
Necessary attachments may be appended to these submissions without
regard to the 15-page limit. This limitation is intended to encourage
commenters to detail their primary arguments in a concise fashion.
If a commenter wishes to submit certain information under a claim
of confidentiality, three copies of the complete submission, including
purportedly confidential business information, should be submitted to
the Chief Counsel, NHTSA, at the street address given above, and seven
copies from which the purportedly confidential information has been
deleted should be submitted to the Docket Section. A request for
confidentiality should be accompanied by a cover letter setting forth
the information specified in the agency's confidential business
information regulation. 49 CFR Part 512.
All comments received before the close of business on the comment
closing date indicated above will be considered, and will be available
for examination in the docket at the above address both before and
after that date. To the extent possible, comments filed after the
closing date will also be considered. Comments will be available for
inspection in the docket. The NHTSA will continue to file relevant
information as it becomes available in the docket after the closing
date, and it is recommended that interested persons continue to examine
the docket for new material.
Those persons desiring to be notified upon receipt of their
comments in the rules docket should enclose a self-addressed, stamped
postcard in the envelope with their comments. Upon receiving the
comments, the docket supervisor will return the postcard by mail.
(Authority: 49 U.S.C. 322, 30111, 30115, 30117, and 30166;
delegation of authority at 49 CFR 1.50)
Issued on March 1, 1996.
Barry Felrice,
Associate Administrator for Safety Performance Standards.
[FR Doc. 96-5292 Filed 3-6-96; 8:45 am]
BILLING CODE 4910-59-P
Complete official Federal Register PDF
FR Doc. 96-5235 Risk-Based Capital Standards; Market Risk; Internal Models Backtesting
[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9114-9119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5235]
========================================================================
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. 61, No. 46 / Thursday, March 7, 1996 /
Proposed Rules
[[Page 9114]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 3
[Docket No. 96-05]
RIN 1557-AB14
FEDERAL RESERVE SYSTEM
12 CFR Parts 208 and 225
[Regulations H and Y; Docket No. R-0884]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 325
RIN 3064-AB72
Risk-Based Capital Standards; Market Risk; Internal Models
Backtesting
AGENCIES: Office of the Comptroller of the Currency, Treasury; Board of
Governors of the Federal Reserve System; and Federal Deposit Insurance
Corporation.
ACTION: Joint notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Office of the Comptroller of the Currency (OCC), the Board
of Governors of the Federal Reserve System (Board), and the Federal
Deposit Insurance Corporation (FDIC) (Agencies) are proposing to amend
their July 25, 1995, proposal to incorporate a measure for market risk
into their respective risk-based capital standards. The proposed
amendment would provide additional guidance to an institution about how
the multiplication factor used to calculate capital requirements for
market risk under the internal models approach would be adjusted if
comparisons of its internal model's previous estimates with actual
trading results indicate that the internal model is inaccurate. The
proposed amendment would increase the market risk capital charge for an
institution with an inaccurate model.
DATES: Comments must be received on or before April 5, 1996.
ADDRESSES: Comments should be directed to:
OCC: Comments may be submitted to Docket No. 96-05, Communications
Division, Third Floor, Office of the Comptroller of the Currency, 250 E
Street, S.W., Washington, D.C., 20219. Comments will be available for
inspection and photocopying at that address. In addition, comments may
be sent by facsimile transmission to FAX number (202) 874-5274, or by
electronic mail to [email protected]
Board: Comments directed to the Board should refer to Docket No. R-
0884 and may be mailed to William W. Wiles, Secretary, Board of
Governors of the Federal Reserve System, 20th Street and Constitution
Avenue, N.W., Washington, D.C., 20551. Comments may also be delivered
to Room B-2222 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, N.W., (between Constitution Avenue and C Street) at any
time. Comments may be inspected 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.
FDIC: Written comments should be sent to Jerry L. Langley,
Executive Secretary, Attention: Room F--402, Federal Deposit Insurance
Corporation, 550 17th Street N.W., Washington, D.C. 20429. Comments may
be hand delivered to Room F--402, 1776 F Street N.W., Washington, D.C.
20429 on business days between 8:30 a.m. and 5 p.m. (Fax number (202)
898-3838; Internet address: [email protected]). Comments will be
available for inspection and photocopying in Room 7118, 550 17th
Street, N.W., Washington, D.C. 20429, between 9 a.m. and 4:30 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT:
OCC: Margot Schwadron, Financial Analyst, or Christina Benson,
Capital Markets Specialist (202/874-5070), Office of the Chief National
Bank Examiner. For legal issues, Ronald Shimabukuro, Senior Attorney,
or Andrew Gutierrez, Attorney (202/874-5090), Legislative and
Regulatory Activities Division.
Board: Roger Cole, Deputy Associate Director (202/452-2618), James
Houpt, Assistant Director (202/452-3358), Barbara Bouchard, Supervisory
Financial Analyst (202/452-3072), Division of Banking Supervision and
Regulation; or Stephanie Martin, Senior Attorney (202/452-3198), Legal
Division. For the Hearing impaired only, Telecommunication Device for
the Deaf, Dorothea Thompson (202/452-3544).
FDIC: William A. Stark, Assistant Director, (202/898-6972), Miguel
D. Browne, Deputy Assistant Director, (202/898-6789), or Kenton Fox,
Senior Capital Markets Specialist, (202/898-7119), Division of
Supervision; Jamey Basham, Counsel, (202/898-7265) Legal Division,
FDIC, 550 17th Street N.W., Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION:
Background
The Agencies' risk-based capital standards are based upon
principles contained in the agreement on International Convergence of
Capital Measurement and Capital Standards (Accord) issued in July 1988.
The Accord, proposed by the Basle Committee on Banking Supervision
(Committee) and endorsed by the central bank governors of the Group of
Ten (G-10) countries,1 assesses an institution's capital adequacy
by weighting its assets and off-balance-sheet exposures on the basis of
credit risk. In April 1995, the Committee issued a consultative
proposal to supplement the Accord to cover market risk, specifically
market risk in foreign exchange and commodity activities and in debt
and equity instruments held in trading portfolios, in addition to
credit risk.2 On July 25, 1995, the Board, the OCC, and the FDIC
issued a joint proposal to amend their respective risk-based capital
standards in accordance
[[Page 9115]]
with the consultative proposal (60 FR 38082) (July 1995 proposal).
Under the July 1995 proposal, an institution with relatively large
trading activities would calculate a capital charge for market risk
using either its own internal value-at-risk (VAR) 3 model
(internal models approach) or, alternatively, risk measurement
techniques that were developed by the Committee (standardized
approach). The institution would integrate the market risk capital
charge into its risk-based capital ratios.
---------------------------------------------------------------------------
\1\ The Committee is composed of representatives of the central
banks and supervisory authorities from the G-10 countries (Belgium,
Canada, France, Germany, Italy, Japan, Netherlands, Sweden,
Switzerland, the United Kingdom, and the United States) and
Luxembourg. The Agencies each adopted risk-based capital standards
implementing the Accord in 1989.
\2\ The Committee's document is entitled ``Proposal to issue a
Supplement to the Basle Capital Accord to cover market risk.'' On
December 11, 1995, the G-10 Governors endorsed a final supplement to
the Accord incorporating a measure for market risk, subject to the
completion of rulemaking procedures in countries that require such
action. The final supplement is entitled ``Amendment to the Capital
Accord to incorporate market risks.'' The proposal and the final
supplement are available through the Board's and the OCC's Freedom
of Information Office and the FDIC's Reading Room.
\3\ Generally, the VAR is an estimate of the maximum amount that
could be lost on a set of positions due to general market movements
over a given holding period, measured with a specified confidence
level.
---------------------------------------------------------------------------
Under the internal models approach, an institution would calculate
a VAR amount using its internal model, subject to certain qualitative
and quantitative regulatory parameters. The institution's capital
charge for market risk would equal the greater of (1) its previous
day's VAR amount (calculated based upon a 99 percent confidence level
and a ten-day holding period); or (2) an average of the daily VAR
amounts over the preceding 60 business days multiplied by a minimum
multiplication factor of three.
The July 1995 proposal also provides that the Agencies could adjust
the multiplication factor to increase an institution's capital
requirement based on an assessment of the quality and historical
accuracy of the institution's risk management system. One of the
proposal's qualitative criteria, which supervisors would use to
evaluate the quality and accuracy of a risk management system, is that
an institution would have to conduct regular backtesting. Backtesting
involves comparing the VAR amounts generated by the institution's
internal model against its actual daily profits and losses (outcomes).
Supervisory Framework for the Use of Backtesting
Since issuing its consultative proposal, the Committee developed a
framework that more explicitly incorporates backtesting into the
internal models approach and directly links backtesting results to
required capital levels.4 This framework recognizes that
backtesting can be useful in evaluating the accuracy of an
institution's internal model, and also acknowledges that even accurate
models (i.e., models whose true coverage level is 99 percent) can
perform poorly under certain conditions.
---------------------------------------------------------------------------
\4\ The Committee sets out this framework in a document entitled
``Supervisory framework for the use of `backtesting' in conjunction
with the internal models approach to market risk capital
requirements,'' which accompanies the document entitled ``Amendment
to the Capital Accord to incorporate market risks,'' supra note 2.
---------------------------------------------------------------------------
The Agencies agree with the Committee that backtesting can be a
useful tool in evaluating the performance of an institution's internal
model but recognize that backtesting techniques are still evolving and
that they differ among institutions. The Agencies believe that the
framework for backtesting developed by the Committee adequately
recognizes the limitations of backtesting, while providing incentives
for institutions to improve the efficiency of their internal models.
The Agencies, therefore, are proposing to amend their July 1995
proposal to incorporate a backtesting framework similar to the one
endorsed by the G-10 Governors, as described later in the supplementary
information.
Under the supervisory framework for backtesting, an institution
must compare its internal model's daily VAR amount with the following
day's trading outcome. The institution must use the daily VAR amount
generated for internal risk measurement purposes, not the daily VAR
amount generated for supervisory capital purposes. Moreover, when
making this comparison, the institution must first adjust the VAR
amount, if necessary, to correspond to an assumed one-day holding
period and a 99 percent confidence level.
An institution must count the number of times that the magnitude of
trading losses on a single day, if any, exceeds the corresponding day's
adjusted VAR amount during the most recent 250 business days
(approximately one year) to determine the number of exceptions. The
number of exceptions, in turn, will determine whether and how much an
institution must adjust the multiplication factor it would use when
calculating capital requirements for market risk. However, if the
institution demonstrates to its supervisor's satisfaction that an
exception resulted from an accurate model affected by unusual events,
the supervisor may allow the institution to disregard that exception.
The Agencies recognize that there may be several explanations for
exceptions. For example, an exception may result when an institution's
internal model does not capture the risk of certain positions or when
model volatilities or correlations are not calculated correctly. This
type of exception reflects a problem with the basic integrity of the
model. In other cases, the model may not measure market risk with
sufficient precision, implying the need to refine the model. Other
types of exceptions, on the other hand, may occur occasionally even
with accurate models, such as exceptions resulting from unexpected
market volatility or large intra-day changes in the institution's
portfolio.
Backtesting results also could prompt the supervisor to require
improvements in an institution's risk measurement and management
systems or additional capital for market risk. When considering
supervisory responses, the Agencies would take into account the extent
to which trading losses exceed the VAR amounts, since exceptions that
greatly exceed VAR amounts are of greater concern than are exceptions
that exceed them only slightly. The Agencies also could consider, for
example, other statistical test results provided by the institution,
documented explanations for individual exceptions, and the
institution's compliance with applicable qualitative and quantitative
internal model standards. The first backtesting for regulatory capital
purposes is scheduled to begin in January 1999, using VAR amounts and
trading outcomes beginning in January 1998.
Framework for Interpreting Backtesting Results
This framework attempts to balance the possibility that an accurate
risk model would be determined inaccurate (Type I error) and the
possibility that an inaccurate model would be determined accurate (Type
II error). Consequently, it divides the number of possible exceptions
into three zones:
(1) The green zone (four or fewer exceptions)--Backtest results do
not themselves suggest a problem with the quality or accuracy of the
institution's internal model. In these cases, backtest results are
viewed as acceptable, given the supervisors' concerns of committing a
Type I error. Within this zone, there is no presumed increase to an
institution's multiplication factor.
(2) The yellow zone (five through nine exceptions)--Backtest
results raise questions about a model's accuracy, but could be
consistent with either an accurate or inaccurate model. If the number
of exceptions places an institution into the yellow zone, then it must
adjust its multiplication factor. Because a larger number of exceptions
carries a stronger presumption that the model is inaccurate, the
adjustment to an institution's multiplication factor increases with the
number of exceptions. Accordingly, the institution would adjust its
multiplication factor by the amount corresponding to the number of
exceptions as shown in Table 1.
(3) The red zone (ten or more exceptions)--Backtest results
indicate a
[[Page 9116]]
problem with the institution's internal model, and the probability that
the model is accurate is remote. Unless the high number of exceptions
is attributed to a regime shift involving dramatic changes in financial
market conditions that result in a number of exceptions for the same
reason in a short period of time, the institution must increase its
multiplication factor from three to four, and improve its risk
measurement and management system.
The presumed adjustments to an institution's multiplication factor
based on the number of exceptions follow:
Table 1--Adjustment in Multiplication Factor From Results of Backtesting Based on 250 Trading Outcomes \1\
----------------------------------------------------------------------------------------------------------------
Cumulative
Adjustment to probability
Zone No. of exceptions multiplication (in
factor percent)
----------------------------------------------------------------------------------------------------------------
Green Zone...................................... 4 or fewer....................... 0.00 89.22
5................................ 0.40 95.88
6................................ 0.50 98.63
Yellow Zone..................................... 7................................ 0.65 99.60
8................................ 0.75 99.89
9................................ 0.85 99.97
Red Zone........................................ 10 or more....................... 1.00 99.99
----------------------------------------------------------------------------------------------------------------
\1\ The zones are defined according to the cumulative probability of obtaining up to a given number of
exceptions in a sample of 250 independent observations when the true level of coverage is 99 percent. The
yellow zone begins where the cumulative probability equals or exceeds 95 percent, and the red zone begins
where the cumulative probability equals or exceeds 99.99 percent.
The Agencies urge institutions to continue working on improving the
accuracy of backtests that use actual trading outcomes and to develop
the capability to perform backtests based on the hypothetical changes
in portfolio value that would occur if there were no intra-holding
period changes (e.g., from fee income or intra-holding period changes
in portfolio composition).
Questions on Which the Agencies Specifically Request Comment
1. Some industry participants have argued that VAR measures cannot
be compared against actual trading outcomes because the actual outcomes
will be contaminated by intra-day trading and the inclusion of fee
income booked in connection with the sale of new products. The results
of intra-day trading, they believe, will tend to increase the
volatility of trading outcomes while the inclusion of fee income may
mask problems with the internal model. Others have argued that the
actual trading outcomes experienced by the bank are the most important
and relevant figures for risk management and backtesting purposes.
What are the merits and problems associated with performing
backtesting on the basis of hypothetical outcomes (e.g., the changes in
portfolio values that would occur if end-of-day positions remained
unchanged with no intra-day trading or fee income)?
What are the merits and problems associated with performing
backtesting on the basis of actual trading profits and losses?
2. What, if any, operational problems may institutions encounter in
implementing the proposed backtesting framework? What changes, if any,
should the Agencies consider to alleviate those problems?
3. What type of events or regime shifts might generate exceptions
that the Agencies should view as not warranting an increase in an
institution's multiplication factor? How should the Agencies factor in
or exclude the effects of regime shifts from subsequent backtesting
exercises?
4. The adjustments to the multiplication factor set forth in Table
1 of the proposal are based on the number of exceptions in a sample of
250 independent observations. Should the Agencies permit institutions
to use other sample sizes and, if so, what degree of flexibility should
be provided?
5. The Agencies recognize that an institution may utilize different
parameters (e.g., historical observation period) for the VAR model that
it employs for its own risk management purposes than for the VAR model
that determines its market risk capital requirements (as specified in
the July 1995 proposal). Should the adjustment to an institution's
multiplication factor be determined using trading outcomes backtested
against the institution's VAR amounts generated for internal risk
management purposes or against the VAR amounts generated for market
risk capital requirements? Should the Agencies permit an institution to
choose? Should backtesting be required against both sets of VAR
amounts?
Regulatory Flexibility Act Analysis
OCC Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
Comptroller of the Currency certifies that this proposal would not have
a significant impact on a substantial number of small business entities
in accord with the spirit and purposes of the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.). Accordingly, a regulatory flexibility
analysis is not required. The impact of this proposal on banks
regardless of size is expected to be minimal. Further, this proposal
generally would apply to larger banks with significant trading
activities and would cover only trading activities and foreign exchange
and commodity positions throughout the bank.
Board Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
Board does not believe this proposal would have a significant impact on
a substantial number of small business entities in accord with the
spirit and purposes of the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.). Accordingly, a regulatory flexibility analysis is not required.
In addition, because the risk-based capital standards generally do not
apply to bank holding companies with consolidated assets of less than
$150 million, this proposal would not affect such companies.
FDIC Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act (Pub.
L. 96-354, 5 U.S.C. 601 et seq.), it is certified that the proposal
would not have a significant impact on a substantial number of small
entities.
Paperwork Reduction Act
The Agencies have determined that this proposal would not increase
the regulatory paperwork burden of banking organizations pursuant to
the provisions
[[Page 9117]]
of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
OCC Executive Order 12866 Determination
The OCC has determined that this proposal is not a significant
regulatory action under Executive Order 12866.
OCC Unfunded Mandates Reform Act of 1995 Determination
The OCC has determined that this proposal would not result in
expenditures by state, local, and tribal governments, or by the private
sector, of $100 million or more in any one year. Accordingly, a
budgetary impact statement is not required under section 202 of the
Unfunded Mandates Reform Act of 1995.
List of Subjects
12 CFR Part 3
Administrative practice and procedure, Capital, National banks,
Reporting and recordkeeping requirements, Risk.
12 CFR Part 208
Accounting, Agriculture, Banks, banking, Confidential business
information, Crime, Currency, Federal Reserve System, Mortgages,
Reporting and recordkeeping requirements, Securities.
12 CFR Part 225
Administrative practice and procedure, Banks, banking, Federal
Reserve System, Holding companies, Reporting and recordkeeping
requirements, Securities.
12 CFR Part 325
Administrative practice and procedure, Banks, banking, Capital
adequacy, Reporting and recordkeeping requirements, Savings
associations, State non-member banks.
Authority and Issuance
Office of the Comptroller of the Currency
12 CFR CHAPTER I
For the reasons set out in the preamble, part 3 of title 12 of
chapter I of the Code of Federal Regulations, as proposed to be amended
at 60 FR 38082, is further proposed to be amended as follows:
PART 3--MINIMUM CAPITAL RATIOS; ISSUANCE OF DIRECTIVES
1. The authority citation for part 3 continues to read as follows:
Authority: 12 U.S.C. 93a, 161, 1818, 1828(n), 1828 note, 1831n
note, 3907, and 3909.
2. Appendix B to part 3 as proposed to be added at 60 FR 38095
would be amended by revising paragraph (a)(2) of section 4 and by
adding a new paragraph (d) to section 5 to read as follows:
Appendix B to Part 3--Market Risk
* * * * *
Section 4. Market Risk Exposure
* * * * *
(a) * * *
(2) The average of the daily value-at-risk amounts for each of
the preceding 60 business days times a multiplication factor of
three, except as provided in section 5(d).
* * * * *
Section 5. Qualifying Internal Market Risk Model
* * * * *
(d) Backtesting. A bank using an internal market risk model
shall conduct backtesting as follows:
(1) The bank shall conduct backtesting quarterly;
(2) For each backtesting, the bank shall compare the previous
250 business days' trading outcomes with the corresponding daily
value-at-risk measurements generated for its internal risk
measurement purposes, calibrated to a one-day holding period and a
99 percent confidence level;
(3) The bank shall consider each business day for which the
trading loss, if any, exceeds the daily value-at-risk measurement as
an exception; however, the OCC may allow the bank to disregard an
exception if it determines that the exception does not reflect an
inaccurate model; and
(4) Depending on the number of exceptions, a bank shall adjust
the multiplication factor of three described in section 4(a)(2) of
this appendix B by the corresponding amount indicated in Section
5(d)(4) Table, and shall use the adjusted multiplication factor when
determining its market risk capital requirements until it obtains
the next quarter's backtesting results, unless the OCC determines
that a different adjustment or other action is appropriate:
Section 5(d)(4) Table.--Adjustment to Multiplication Factor From Results
of Backtesting Based on 250 Trading Outcomes
------------------------------------------------------------------------
Adjustment to
No. of exceptions multiplication
factor
------------------------------------------------------------------------
4 or fewer.............................................. 0.00
5....................................................... 0.40
6....................................................... 0.50
7....................................................... 0.65
8....................................................... 0.75
9....................................................... 0.85
10 or more.............................................. 1.00
------------------------------------------------------------------------
* * * * *
Dated: February 26, 1996.
Eugene A. Ludwig,
Comptroller of the Currency.
Federal Reserve Board
12 CFR CHAPTER II
For the reasons set forth in the preamble, parts 208 and 225 of
title 12 of chapter II of the Code of Federal Regulations, as proposed
to be amended at 60 FR 38082 (July 25, 1995) are further proposed to be
amended as follows:
PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL
RESERVE SYSTEM (REGULATION H)
1. The authority citation for part 208 continues to read as
follows:
Authority: 12 U.S.C. 36, 248(a), 248(c), 321-338a, 371d, 461,
481-486, 601, 611, 1814, 1823(j), 1828(o), 1831o, 1831p-1, 3105,
3310, 3331-3351, and 3906-3909; 15 U.S.C. 78b, 78l(b), 78l(g),
78l(i), 78o-4(c)(5), 78q, 78q-1, and 78w; 31 U.S.C. 5318; 42 U.S.C.
4012a, 4104a, 4104b, 4106, and 4128.
2. In appendix E to part 208 as proposed to be added at 60 FR
38103, section III.B. would be amended by revising paragraph 2.a. and
adding a new paragraph 3 to read as follows:
Appendix E to Part 208--Capital Adequacy Guidelines for State Member
Banks: Market Risk Measure
* * * * *
III. The Internal Models Approach
* * * * *
B. * * *
2. * * *
a. A bank must have a risk control unit that is independent from
its business trading units and reports directly to senior management
of the bank. The unit must be responsible for designing and
implementing the bank's risk management system and analyzing daily
reports on the output of the bank's risk measurement model in the
context of trading limits. The unit must conduct regular backtesting
13 and adjust its multiplication factor, if appropriate, in
accordance with section III.B.3. of this appendix E.
* * * * *
c. * * *
3. In addition to any backtesting the bank may conduct as part
of its internal risk management system, the bank must conduct, for
regulatory capital purposes, backtesting that meets the following
criteria:
a. The backtesting must be conducted quarterly, using the most
recent 250 trading days' outcomes and VAR measures, which encompass
approximately twelve months. The VAR measures must be calibrated to
a one-day holding period and a 99 percent confidence level.
b. The bank should identify the number of exceptions (that is,
cases where the
[[Page 9118]]
magnitude of the daily trading loss, if any, exceeds the previous
day's VAR measure) to determine its appropriate zone and level
within a zone, as set forth in Table A of section III.B.3.c. of this
appendix E.
c. A bank should adjust its multiplication factor by the amount
indicated in Table A of this paragraph c., unless the Federal
Reserve determines that a different adjustment or other action is
appropriate:
Table A.--Adjustment to Multiplication Factor from Results of Backtesting Based on 250 Trading Outcomes
----------------------------------------------------------------------------------------------------------------
Cumulative
Adjustment to 1
Zone Level (No. of exceptions) multiplication probability
factor (in
-------------------------------------------------------------------------------------------------------percent)-
Green Zone...................................... 4 or fewer....................... 0.00 89.22
5................................ 0.40 95.88
6................................ 0.50 98.63
Yellow Zone..................................... 7................................ 0.65 99.60
8................................ 0.75 99.89
9................................ 0.85 99.97
Red Zone........................................ 10 or more....................... 1.00 99.99
----------------------------------------------------------------------------------------------------------------
\1\ The zones are defined according to the cumulative probability of obtaining up to a given number of
exceptions in a sample of 250 independent observations when the true coverage level is 99 percent. The yellow
zone begins where cumulative probability equals or exceeds 95 percent, and the red zone begins where the
cumulative probability equals or exceeds 99.99 percent.
* * * * *
PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL
(REGULATION Y)
1. The authority citation for part 225 continues to read as
follows:
Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1,
1843(c)(8), 1844(b), 1972(1), 3106, 3108, 3310, 3331-3351, 3907, and
3909.
2. In appendix E to part 225 as proposed to be added at 60 FR
38116, section III.B. would be amended by revising paragraph 2.a. and
adding a new paragraph 3 to read as follows:
Appendix E to Part 225--Capital Adequacy Guidelines for Bank Holding
Companies: Market Risk Measure
* * * * *
III. The Internal Models Approach
* * * * *
B. * * *
2. * * *
a. A institution must have a risk control unit that is
independent from its business trading units and reports directly to
senior management of the bank holding company. The unit must be
responsible for designing and implementing the institution's risk
management system and analyzing daily reports on the output of the
institution's risk measurement model in the context of trading
limits. The unit must conduct regular backtesting 13 and adjust
its multiplication factor, if appropriate, in accordance with
section III.B.3. of this appendix E.
* * * * *
c. * * *
3. In addition to any backtesting the bank holding company may
conduct as part of its internal risk management system, the bank
holding company must conduct, for regulatory capital purposes,
backtesting that meets the following criteria:
a. The backtesting must be conducted quarterly, using the most
recent 250 trading days' outcomes and VAR measures, which encompass
approximately twelve months. The VAR measures must be calibrated to
a one-day holding period and a 99 percent confidence level.
b. The bank holding company should identify the number of
exceptions (that is, cases where the magnitude of the daily trading
loss, if any, exceeds the previous day's VAR measure) to determine
its appropriate zone and level within a zone, as set forth in Table
A of section III.B.3.c. of this appendix E.
c. An institution should adjust its multiplication factor by the
amount indicated in Table A of this paragraph c., unless the Federal
Reserve determines that a different adjustment or other action is
appropriate:
Table A.--Adjustment to Multiplication Factor From Results of Backtesting Based on 250 Trading Outcomes
----------------------------------------------------------------------------------------------------------------
Adjustment to Cumulative
Zone Level (No. of exceptions) multiplication \1\
factor probability
----------------------------------------------------------------------------------------------------(in percent)
Green Zone..................................... 4 or fewer...................... 0.00 89.22
5............................... 0.40 95.88
6............................... 0.50 98.63
Yellow Zone.................................... 7............................... 0.65 99.60
8............................... 0.75 99.89
9............................... 0.85 99.97
Red Zone....................................... 10 or more...................... 1.00 99.99
----------------------------------------------------------------------------------------------------------------
\1\ The zones are defined according to the cumulative probability of obtaining up to a given number of
exceptions in a sample of 250 independent observations when the true coverage level is 99 percent. The yellow
zone begins where cumulative probability equals or exceeds 95 percent, and the red zone begins where the
cumulative probability equals or exceeds 99.99 percent.
[[Page 9119]]
* * * * *
By order of the Board of Governors of the Federal Reserve
System, February 9, 1996.
---------------------------------------------------------------------------
\13\ Back-testing includes ex post comparisons of the risk
measures generated by the model against the actual daily changes in
portfolio value.
---------------------------------------------------------------------------
William W. Wiles,
Secetary of the Board.
Federal Deposit Insurance Corporation
12 CFR CHAPTER III
For the reasons set forth in the preamble, part 325 of title 12 of
chapter III of the Code of Federal Regulations, as proposed to be
amended at 60 FR 38082 (July 25, 1995), is further proposed to be
amended as follows:
PART 325--CAPITAL MAINTENANCE
1. The authority citation for part 325 continues to read as
follows:
Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b),
1818(c), 1818(t), 1819(Tenth), 1828(c), 1828(d), 1828(i), 1828(n),
1828(o), 1831o, 3907, 3909, 4808; Pub. L. 102-233, 105 Stat. 1761,
1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 105 Stat. 2236,
2355, 2386 (12 U.S.C. 1828 note).
2. In appendix C to part 325 as proposed to be added at 60 FR
38129, section III.B.2. introductory text and section III.B.2.a. would
be revised and section III.B.3. would be added to read as follows:
Appendix C to Part 325--Risk-Based Capital for State Non-Member Banks:
Market Risk
* * * * *
III. The Internal Models Approach
* * * * *
B. * * *
1. * * *
2. A bank must meet the following minimum qualitative criteria
before using its internal model to measure its exposure to market
risk.\13\
a. A bank must have a risk control unit that is independent from
its business trading units and reports directly to senior management
of the bank. The unit must be responsible for designing and
implementing the bank's risk management system and analyzing daily
reports on the output of the bank's risk measurement model in the
context of trading limits. The unit must conduct regular backtesting
\14\ and adjust its multiplication factor, if appropriate, in
accordance with section III.B.3. of this appendix C.
* * * * *
3. In addition to any backtesting the bank may conduct as part
of its internal risk management system, the bank must conduct, for
regulatory capital purposes, backtesting that meets the following
criteria:
a. The backtesting must be conducted quarterly, using the most
recent 250 trading days' outcomes and VAR measures, which encompass
approximately twelve months. The VAR measures must be calibrated to
a one-day holding period and a 99 percent confidence level.
b. The bank should identify the number of exceptions (that is,
cases where the magnitude of the daily trading loss, if any, exceeds
the previous day's VAR measure) to determine its appropriate zone
and level within a zone, as set forth in Table A of section
III.B.3.c. of this appendix C.
c. A bank should adjust its multiplication factor by the amount
indicated in Table A, unless the FDIC determines that a different
adjustment or other action is appropriate.
Table A.--Adjustment to Multiplication Factor From Results of Backtesting Based on 250 Trading Outcomes
----------------------------------------------------------------------------------------------------------------
Adjustment to Cumulative\1\
Zone Level No. of exceptions) multiplication probability
factor (in percent)
----------------------------------------------------------------------------------------------------------------
Green Zone..................................... 4 or fewer...................... 0.00 89.22
5............................... 0.40 95.88
6............................... 0.50 98.63
Yellow Zone.................................... 7............................... 0.65 99.60
8............................... 0.75 99.89
9............................... 0.85 99.97
Red Zone....................................... 10 or more...................... 1.00 99.99
----------------------------------------------------------------------------------------------------------------
\1\ The zones are defined according to the cumulative probability of obtaining up to a given number of
exceptions in a sample of 250 independent observations when the true coverage level is 99 percent. The yellow
zone begins where cumulative probability equals or exceeds 95 percent, and the red zone begins where the
cumulative probability equals or exceeds 99.99 percent.
* * * * *
By order of the Board of Directors.
---------------------------------------------------------------------------
\13\ If the FDIC is not satisfied with the extent to which a
bank meets these criteria, the FDIC may adjust the multiplication
factor used to calculate market risk capital requirements or
otherwise increase capital requirements.
\14\ Back-testing includes ex post comparisons of the risk
measures generated by the model against the actual daily changes in
portfolio value.
Dated at Washington, D.C., this 27th day of February 1996.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 96-5235 Filed 3-6-96; 8:45 am]
BILLING CODE 4810-33-P (\1/3\), 6210-01-P (\1/3\), 6714-01-P (\1/3\)
Complete official Federal Register PDF
FR Doc. 96-5133 Operation of Motor Vehicles by Intoxicated Minors
[Federal Register Volume 61, Number 46 (Thursday, March 7, 1996)]
[Proposed Rules]
[Pages 9121-9125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5133]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
Federal Highway Administration
23 CFR Part 1210
[NHTSA Docket No. 96-007; Notice 1]
RIN 2127-AG20
Operation of Motor Vehicles by Intoxicated Minors
AGENCY: National Highway Traffic Safety Administration (NHTSA) and
Federal Highway Administration (FHWA), Department of Transportation
(DOT).
ACTION: Notice of Proposed Rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This notice proposes to implement a new program enacted by the
National Highway System Designation (NHS) Act of 1995, which provides
for the withholding of Federal-aid highway funds from any State that
does not enact and enforce a ``zero tolerance'' law. This notice
solicits comments on a proposed regulation to clarify what States must
do to avoid the withholding of funds.
DATES: Comments must be received by April 22, 1996.
ADDRESSES: Written comments should refer to the docket number and the
number of this notice and be submitted (preferably in ten copies) to:
Docket Section, National Highway Traffic Safety Administration, Room
5109, Nassif Building, 400 Seventh Street, S.W., Washington, D.C.
20590. (Docket hours are from 9:30 a.m. to 4 p.m.)
FOR FURTHER INFORMATION CONTACT: In NHTSA: Ms. Marlene Markison, Office
of State and Community Services, NSC-01, telephone (202) 366-2121; or
Ms. Heidi L. Coleman, Office of Chief Counsel, NCC-30, telephone (202)
366-1834.
In FHWA: Ms. Mila Plosky, Office of Highway Safety, HHS-20,
telephone (202) 366-6902; or Mr. Raymond W. Cuprill, HCC-20, telephone
(202) 366-0834.
SUPPLEMENTARY INFORMATION: The National Highway System Designation
(NHS) Act of 1995, Pub. L. 104-59, was signed into law on November 28,
1995. Section 320 of the Act established a new Section 161 of Title 23,
United States Code (Section 161), which requires the withholding of
certain Federal-aid highway funds from States that do not enact and
enforce ``zero tolerance'' laws. Section 161 provides that these ``zero
tolerance'' laws must consider an individual under the age of 21 who
has a blood alcohol concentration of 0.02 percent or greater while
operating a motor vehicle in the State, to be driving while intoxicated
or driving under the influence of alcohol.
In a letter to Senator Robert Byrd, who sponsored the zero
tolerance legislation, President Clinton stated:
Drinking and driving by young people is one of the nation's most
serious threats to public health and public safety. I am deeply
concerned about this ongoing tragedy which kills thousands of young
people every year. It's against the law for young people to drink.
It should be against the law for young people to drink and drive. *
* *
A decade ago, we decided as a nation that the minimum drinking
age should be 21. In 1984, President Reagan signed bipartisan
legislation to achieve this goal, and today all 50 states have
enacted such laws. Our efforts are paying off--drunk driving among
people under 21 have been cut in half since 1984.
But we must do more. * * * If all states had [''zero
tolerance''] laws hundreds more lives could be saved and thousands
of injuries could be prevented.
Senator Byrd stated, when he introduced the legislation:
My amendment builds upon one of the most important--and
successful--Federal initiatives related to alcohol and minors--a
1984 requirement that States adopt laws prohibiting the possession
or purchase of alcohol by anyone younger than twenty-one years of
age * * *
NHTSA has estimated that the 21-year-old drinking age has saved
8400 lives since 1984. Further, in 1993, * * * the 21-year-old
drinking age requirement is estimated to have saved $1.8 billion in
economic costs to our society * * *
The Congress should now take the next step, and explicitly
state, as a matter of law, that minors are not allowed to drink and
drive. My amendment is simple and straight forward--since it is
illegal for minors under the age of 21 to * * * publicly possess
or purchase alcohol--any level of consumption that is coupled with
driving should be treated, under the requirements of each State's
laws, as driving while intoxicated * * *
Under my amendment, the message to that minor is clear: you
cannot drink and drive. Period. And, hopefully, this type of tough
and absolute requirement in the law will encourage our young people
not to drink at all.
Similar sentiments were expressed by Congresswoman Lowey, who
sponsored zero tolerance legislation in the U.S. House of
Representatives.
Adoption of Zero Tolerance Law
Section 161 specifically provides that the Secretary must withhold
from apportionment a portion of Federal-aid highway funds from any
State that does not meet certain statutory requirements. To avoid such
withholding, a State must enact and enforce a law that considers an
individual under the age of 21 who has a blood alcohol concentration of
0.02 percent or greater while operating a motor vehicle in the State,
to be driving while intoxicated or driving under the influence of
alcohol.
Any State that does not enact and enforce a conforming zero
tolerance law will be subject to a withholding from apportionment a
portion of its Federal-aid highway funds. In accordance with Section
161, if a State does not meet the statutory requirements on October 1,
1998, five percent of its FY 1999 Federal-aid highway apportionment
under 23 U.S.C. 104(b)(1), 104(b)(3) and 104(b)(5)(B) shall be withheld
on that date. These sections relate to the National Highway System
(NHS), the
[[Page 9122]]
Surface Transportation Program (STP) and the Interstate System.
If the State does not meet the statutory requirements on October 1,
1999, ten percent of its FY 2000 apportionment will be withheld on that
date. Ten percent will continue to be withheld on October 1 of each
subsequent fiscal year, if the State does not meet the requirements on
those dates.
Compliance Criteria
To avoid the withholding from apportionment of Federal-aid highway
funds, Section 161 provides that a State must enact and enforce:
A law that considers an individual under the age of 21 who has a
blood alcohol concentration of 0.02 percent or greater while
operating a motor vehicle in the State to be driving while
intoxicated or driving under the influence of alcohol.
Section 161 does not define any of these terms, and it does not
contain many details about what conforming State laws must provide. For
example, it does not specify the penalties that must be imposed on
offenders who violate such zero tolerance laws. Since Section 161 does
not prescribe the penalties that must be imposed on offenders who
violate zero tolerance laws, the agencies are proposing not to specify
any minimum penalties in the implementing regulation.
The agencies believe that, while Congress intended to encourage all
States to enact and enforce effective zero tolerance laws, it also
intended to provide States with sufficient flexibility so they could
develop laws that suit the particular conditions that exist in those
States. Accordingly, Section 161 prescribes only a limited number of
basic elements that State laws must meet to avoid the withholding of
Federal-aid highway funds.
In this notice, the agencies propose to define these basic
elements. These elements are described below:
1. Under the Age of 21.
To avoid the withholding of funds, a State must enact and enforce a
zero tolerance law that applies to all persons under the age of 21.
The agencies are aware of four States that currently have laws
under which individuals who have a blood alcohol concentration of 0.02
percent or greater while operating a motor vehicle in the State are
considered to be driving while intoxicated or driving under the
influence of alcohol, only if those individuals are under the age of
18. Since these laws do not apply to individuals between the ages of 18
and 21, they would not conform to the Federal requirement.
2. Blood Alcohol Concentration of 0.02 Percent.
To avoid the withholding of funds, a State must set 0.02 percent as
the legal limit for blood alcohol concentration. States with laws that
set a lower percentage (such as 0.00 percent) as the legal limit would
also conform to the Federal requirement.
The agencies are aware of four States that currently have laws
under which individuals under the age of 21 are considered to be
driving while intoxicated or driving under the influence of alcohol, if
they have a blood alcohol concentration of 0.04 or 0.07 percent. Since
these laws do not reach individuals under the age of 21 who have a
blood alcohol concentration of 0.02 percent, they would not conform to
the Federal requirement.
3. Per Se Law.
To avoid the withholding of funds, a State must consider
individuals under the age of 21 who have a blood alcohol concentration
of 0.02 percent or greater while operating a motor vehicle in the State
to be driving while intoxicated or driving under the influence of
alcohol.
In other words, States must establish a 0.02 ``per se'' law for
persons under the age of 21, that makes driving with a BAC of 0.02
percent or above itself an offense for such persons.
The agencies are aware of one State that currently has a law that
makes it unlawful for persons under the age of 21 to drive while
intoxicated or drive under the influence of alcohol, but provides that
a BAC of 0.02 percent or above is only prima facie evidence of driving
while intoxicated or driving under the influence of alcohol. Since the
law does not make the operation of a motor vehicle by an individual
under the age of 21 with a blood alcohol concentration of 0.02 a ``per
se'' offense, this law would not conform to the Federal requirement.
4. Primary Enforcement.
To avoid the withholding of funds, a State must enact and enforce a
zero tolerance law that provides for primary enforcement.
The agencies are aware of one State that currently has a law under
which individuals under the age of 21 who have a blood alcohol
concentration of 0.02 or greater while operating a motor vehicle in the
State are considered to be driving while intoxicated or driving under
the influence of alcohol. Enforcement of this law, however, may be
accomplished only as a secondary action when the driver of a motor
vehicle has been cited for a violation of some other offense.
Accordingly, this law would not conform to the Federal requirement.
Demonstrating Compliance
Section 161 provides that funds will be withheld from apportionment
from noncomplying States beginning in fiscal year 1999. To avoid the
withholding, each State would be required by this proposed regulation
to submit a certification. Under the agencies' proposal, States would
be required to submit their certifications on or before September 30,
1998, to avoid the withholding from apportionment of FY 1999 funds on
October 1, 1998. The agencies propose to permit (and strongly
encourage) States to submit certifications in advance.
The submission of certifications in advance will enable the
agencies to inform States as quickly as possible whether or not their
laws satisfy the requirements of Section 161 and this regulation, and
will provide States with noncomplying laws an opportunity to take the
necessary steps to meet these requirements before the date for the
withholding of funds.
In addition, it will prevent a State from receiving from the
agencies an initial determination of noncompliance which, as explained
later in this notice, the agencies propose to issue through FHWA's
advance notice of apportionments, normally not later than ninety days
prior to final apportionment (which normally occurs on October 1 of
each fiscal year).
States that are found in noncompliance with these requirements in
any fiscal year would be required to submit a certification to avoid
the withholding of funds from apportionment in the following fiscal
year. To avoid the withholding in that fiscal year, these States would
be required to submit a certification demonstrating compliance before
the last day (September 30) of the previous fiscal year.
Once a State is determined by the agencies to be in compliance with
these requirements, the agencies propose that the State would not be
required to submit certifications in subsequent fiscal years, unless
the State's law had changed. The proposal specifies that it would be
the responsibility of the States to inform the agencies of any such
change in a subsequent fiscal year, by submitting an amendment or
supplement to its certification.
The certifications submitted under this Part would provide the
agencies with the basis for finding States in compliance with the
Operation of Motor Vehicles by Intoxicated Minors requirement. The
agencies are proposing that the certification must consist of a
certifying statement and a copy of the
[[Page 9123]]
State's conforming law. If the State's law were to change, the State
would be required to amend or supplement the State's original
submission.
Notification of Compliance
For each fiscal year, beginning with FY 1999, NHTSA and FHWA
propose to notify States of their compliance or noncompliance with
Section 161, based on a review of certifications received. The agencies
propose that this notification will take place through FHWA's normal
certification of apportionments process. If a State does not submit a
certification or if its certification does not conform to Section 161
and the implementing regulation, the agencies will make an initial
determination that the State does not comply. States that are
determined to be in noncompliance with Section 161 will be advised of
the amount of funds expected to be withheld through FHWA's advance
notice of apportionments, normally not later than ninety days prior to
final apportionment.
Each State determined to be in noncompliance will have an
opportunity to rebut the initial determination. The State will be
notified of the agencies' final determination of compliance or
noncompliance as part of the certification of apportionments, which
normally occurs on October 1 of each fiscal year.
As stated earlier, NHTSA and FHWA expect that States will want to
know as soon as possible whether their laws satisfy the requirements of
Section 161 or they may want assistance in drafting conforming
legislation. In addition, since the agencies propose to issue initial
determinations of noncompliance through FHWA's advance notice of
apportionments, normally not later than ninety days prior to final
apportionment (which normally occurs on October 1 of each fiscal year),
States will want to submit their certifications more than ninety days
before October 1.
States are strongly encouraged to submit certifications in advance,
and to request preliminary reviews and assistance from the agencies.
Requests should be submitted through NHTSA's Regional Administrators,
who will refer these requests to appropriate NHTSA and FHWA offices for
review.
Period of Availability for Funds
Section 161 provides an incremental approach to the withholding of
funds from apportionment for noncompliance. If a State is found to be
in noncompliance on October 1, 1998, the State would be subject to a
five percent withholding of its FY 1999 apportionment on that date. If
a State is found to be in noncompliance on October 1 of any subsequent
fiscal year, beginning with FY 2000, the State would be subject to a
ten percent withholding.
In addition, if a State is found to be in noncompliance in fiscal
years 1999 or 2000, the funds withheld from apportionment to the State
would remain available for apportionment to that State for a period of
time, prescribed in the statute. If a State is found to be in
noncompliance in any subsequent fiscal year, the funds withheld from
apportionment would no longer be available for apportionment.
Paragraph (b)(1)(B) of Section 161 provides that, ``No funds
withheld under this section from apportionment to any State after
September 30, 2000, shall be available for apportionment to the
State.'' These funds would lapse, in accordance with paragraph (b)(4)
of the section.
Paragraphs (b)(1)(A) and (b)(2) of Section 161 identify the period
of time during which funds withheld on or before September 30, 2000,
remain available for apportionment, and when they are to be restored if
the State complies with the Federal requirements before the funds
lapse. Paragraph (b)(3) establishes the period of time during which
these subsequently apportioned funds would remain available to a State
for expenditure. If the State does not meet the requirements during the
period of time that the funds remain available for expenditure, the
funds would lapse, in accordance with paragraph (b)(4) of the section.
These sections are virtually identical to those found in the
National Minimum Drinking Age Act, as amended, 23 U.S.C. 158, and the
Drug Offender's Drivers License Suspension Act, as amended, 23 U.S.C.
159. For a full discussion of how these provisions have been applied in
practice, interested parties are encouraged to read the preambles to
the agencies' joint final rules published in the Federal Register on
August 18, 1988 (53 FR 31318) and August 12, 1992 (57 FR 35989).
Comments
Interested persons are invited to comment on this proposal. All
comments must be limited to 15 pages in length. Necessary attachments
may be appended to those submissions without regard to the 15 page
limit. This limitation is intended to encourage commenters to detail
their primary arguments in a concise fashion.
Written comments to the public docket must be received by April 22,
1996. To expedite the submission of comments, simultaneous with the
issuance of this notice, NHTSA and FHWA will mail copies to all
Governors, Governors' Representatives for Highway Safety and State
highway agencies.
All comments received before the close of business on the comment
closing date will be considered and will be available for examination
in the docket at the above address before and after that date. To the
extent possible, comments filed after the closing date will also be
considered. However, the rulemaking action may proceed at any time
after that date. The agencies will continue to file relevant material
in the docket as it becomes available after the closing date, and it is
recommended that interested persons continue to examine the docket for
new material.
Those persons who wish to be notified upon receipt of their
comments in the docket should enclose, in the envelope with their
comments, a self-addressed stamped postcard. Upon receiving the
comments, the docket supervisor will return the postcard by mail.
Copies of all comments will be placed in Docket 96-007; Notice 1 of
the NHTSA Docket Section in Room 5109, Nassif Building, 400 Seventh
Street, S.W., Washington, D.C. 20590.
Separate Interim Final Rule in Today's Federal Register
In today's Federal Register, NHTSA has published a separate interim
final rule and request for comments, relating to Part 1313, the
agency's regulation that implements its Section 410 program.
The interim final rule amends Part 1313, to reflect changes that
were made to 23 U.S.C. 410 by the NHS Act, and requests comments on
these changes. It also recognizes that one of the grant criteria under
the section 410 program, which requires that States ``deem persons
under age 21 who operate a motor vehicle with a BAC of 0.02 or greater
to be driving while intoxicated,'' is similar to the new ``zero
tolerance'' sanction requirement contained in Section 320 of the NHS
Act (23 U.S.C. Section 161). The interim final rule requests comments
regarding whether additional changes should be made to the section 410
``0.02'' grant criterion, as a result of the new ``zero tolerance''
sanction program. Comments regarding this issue should be submitted to
the attention of Docket 89-02; Notice 8.
[[Page 9124]]
Regulatory Analyses and Notices
Executive Order 12778 (Civil Justice Reform)
This proposed rule would not have any preemptive or retroactive
effect. The enabling legislation does not establish a procedure for
judicial review of final rules promulgated under its provisions. There
is no requirement that individuals submit a petition for
reconsideration or other administrative proceedings before they may
file suit in court.
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
The agencies have determined that this proposed action is not a
significant regulatory action within the meaning of Executive Order
12866 or significant within the meaning of Department of Transportation
Regulatory Policies and Procedures. States can choose to enact and
enforce a zero tolerance law, in conformance with Pub. L. 104-59, and
thereby avoid the withholding of Federal-aid highway funds. While
specific criteria that State laws must meet have been proposed in this
NPRM, they are mandated by Pub. L. 104-59. Accordingly, a full
regulatory evaluation is not required.
Regulatory Flexibility Act
In compliance with the Regulatory Flexibility Act (Pub. L. 96-354,
5 U.S.C. 601-612), the agencies have evaluated the effects of this
proposed action on small entities. Based on the evaluation, we certify
that this proposed action would not have a significant impact on a
substantial number of small entities. Accordingly, the preparation of a
Regulatory Flexibility Analysis is unnecessary.
Paperwork Reduction Act
The requirements in this proposal that States certify that they
conform to the statutory requirements to avoid the withholding of
Federal-aid highway funds are considered to be information collection
requirements as that term is defined by the Office of Management and
Budget (OMB) in 5 C.F.R Part 1320. The reporting and recordkeeping
requirement associated with this rule is subject to approval by the
Office of Management and Budget in accordance with 44 U.S.C. Chapter
35. NHTSA and FHWA, NEED FOR INFORMATION: To encourage States to enact
and enforce zero tolerance laws; NHTSA and FHWA, PROPOSED USE OF
INFORMATION: To provide procedures to State recipients of Federal-aid
highway funds on how to certify compliance with the provision of Public
Law 104-59. The law requires a zero tolerance law for drivers under the
age of 21; FREQUENCY: One time only; BURDEN ESTIMATE: 52 hours;
RESPONDENTS: States; FORM(S): None; AVERAGE BURDEN HOURS PER
RESPONDENT: 1 hour. For further information contact: Mr. Edward Kosek,
Office of Information Resources Management, NAD-51, NHTSA, 400 Seventh
Street, SW., Washington, DC 20590, (202) 366-2590.
Comments on the proposed information collection requirements should
be submitted to: Office of Management and Budget, Office of Information
and Regulatory Affairs, Washington, DC 20503, Attention: Desk Officer
for NHTSA. It is requested that comments sent to OMB also be sent to
the NHTSA rulemaking docket for this proposed action.
National Environmental Policy Act
The agencies have analyzed this proposed action for the purpose of
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.)
and have determined that it would not have any significant impact on
the quality of the human environment.
Executive Order 12612 (Federalism Assessment)
This proposed action has been analyzed in accordance with the
principles and criteria contained in Executive Order 12612, and it has
been determined that this proposed action does not have sufficient
federalism implications to warrant the preparation of a federalism
assessment. Accordingly, the preparation of a Federalism Assessment is
not warranted.
List of Subjects in 23 CFR Part 1210
Alcohol abuse, Grant programs--transportation, Highway safety,
Reporting and recordkeeping requirements, Youth.
In accordance with the foregoing, the agencies propose to add a new
Part 1210 to Title 23 of the Code of Federal Regulations to read as
follows:
PART 1210--OPERATION OF MOTOR VEHICLES BY INTOXICATED MINORS
Sec.
1210.1 Scope.
1210.2 Purpose.
1210.3 Definitions.
1210.4 Adoption of zero tolerance law.
1210.5 Certification requirements.
1210.6 Period of availability of withheld funds.
1210.7 Apportionment of withheld funds after compliance.
1210.8 Period of availability of subsequently apportioned funds.
1210.9 Effect of noncompliance.
1210.10 Procedures affecting States in noncompliance.
Authority: 23 U.S.C. 161; delegation of authority at 49 CFR 1.48
and 1.50.
Sec. 1210.1 Scope.
This part prescribes the requirements necessary to implement
Section 161 of Title 23, United States Code, which encourages States to
enact and enforce zero tolerance laws.
Sec. 1210.2 Purpose.
The purpose of this part is to specify the steps that States must
take to avoid the withholding of Federal-aid highway funds for
noncompliance with 23 U.S.C. 161.
Sec. 1210.3 Definitions.
As used in this part:
(a) BAC means either blood or breath alcohol concentration.
(b) Alcohol concentration means either grams of alcohol per 100
milliliters of blood or grams of alcohol per 210 liters of breath.
(c) Operating a motor vehicle means driving or being in actual
physical control of a motor vehicle.
Sec. 1210.4 Adoption of zero tolerance law.
(a) The Secretary shall withhold five percent of the amount
required to be apportioned to any State under each of sections
104(b)(1), 104(b)(3) and 104(b)(5) of title 23, United States Code, on
the first day of fiscal year 1999 if the State does not meet the
requirements of this part on that date.
(b) The Secretary shall withhold ten percent of the amount required
to be apportioned to any State under each of sections 104(b)(1),
104(b)(3) and 104(b)(5) of title 23, United States Code, on the first
day of fiscal year 2000 and any subsequent fiscal year if the State
does not meet the requirements of this part on that date.
(c) A State meets the requirements of this section if the State has
enacted and is enforcing a law that considers an individual under the
age of 21 who has a blood alcohol concentration of 0.02 percent or
greater while operating a motor vehicle in the State to be driving
while intoxicated or driving under the influence of alcohol. The law
must:
(1) Apply to all individuals under the age of 21;
(2) Set a blood alcohol concentration of not higher than 0.02
percent as the legal limit;
(3) Make operating a motor vehicle by an individual under age 21 at
or above the legal limit a per se offense; and
(4) Provide for primary enforcement.
[[Page 9125]]
Sec. 1210.5 Certification requirements.
(a) Until a State has been determined to be in compliance with the
requirements of 23 U.S.C. 161, to avoid the withholding of funds in any
fiscal year, beginning with FY 1999, the State shall certify to the
Secretary of Transportation, before the last day of the previous fiscal
year, that it meets the requirements of 23 U.S.C. 161, and this part.
(b) The certification shall contain:
(1) A copy of the State zero tolerance law, regulation, or binding
policy directive implementing or interpreting such law or regulation,
that conforms to 23 U.S.C. 161 and Sec. 1210.4(c) of this part; and
(2) A statement by an appropriate State official, that the State
has enacted and is enforcing a conforming zero tolerance law. The
certifying statement shall be worded as follows:
(Name of certifying official), (position title), of the (State
or Commonwealth) of ________, do hereby certify that the (State or
Commonwealth) of ________, has enacted and is enforcing a zero
tolerance law that conforms to the requirements of 23 U.S.C. 161 and
23 CFR 1210.4(c).
(c) An original and four copies of the certification shall be
submitted to the appropriate NHTSA Regional Administrator. Each
Regional Administrator will forward the certifications it receives to
appropriate NHTSA and FHWA offices.
(d) Once a State has been determined to be in compliance with the
requirements of 23 U.S.C. 161, it is not required to submit additional
certifications, except that the State shall promptly submit an
amendment or supplement to its certification provided under paragraphs
(a) and (b) of this section if the State's zero tolerance legislation
changes.
Sec. 1210.6 Period of availability of withheld funds.
(a) Funds withheld under Sec. 1210.4 from apportionment to any
State on or before September 30, 2000, will remain available for
apportionment until the end of the third fiscal year following the
fiscal year for which the funds are authorized to be appropriated.
(b) Funds withheld under Sec. 1210.4 from apportionment to any
State after September 30, 2000 will not be available for apportionment
to the State.
Sec. 1210.7 Apportionment of withheld funds after compliance.
Funds withheld to a State from apportionment under Sec. 1210.4,
which remain available for apportionment under Sec. 1210.5(a), will be
made available to the State if it conforms to the requirements of
Secs. 1210.4 and 1210.5 before the last day of the period of
availability as defined in Sec. 1210.6(a).
Sec. 1210.8 Period of availability of subsequently apportioned funds.
Funds apportioned pursuant to Sec. 1210.7 will remain available for
expenditure until the end of the third fiscal year following the fiscal
year in which the funds are apportioned.
Sec. 1210.9 Effect of noncompliance.
If a State has not met the requirements of 23 U.S.C. 161 and this
part at the end of the period for which funds withheld under
Sec. 1210.4 are available for apportionment to a State under
Sec. 1210.6, then such funds shall lapse.
Sec. 1210.10 Procedures affecting States in noncompliance.
(a) Each fiscal year, each State determined to be in noncompliance
with 23 U.S.C. 161 and this part, based on NHTSA's and FHWA's
preliminary review of its law, will be advised of the funds expected to
be withheld under Sec. 1210.4 from apportionment, as part of the
advance notice of apportionments required under 23 U.S.C. 104(e),
normally not later than ninety days prior to final apportionment.
(b) If NHTSA and FHWA determine that the State is not in compliance
with 23 U.S.C. 161 and this part, based on the agencies' preliminary
review, the State may, within 30 days of its receipt of the advance
notice of apportionments, submit documentation showing why it is in
compliance.
Documentation shall be submitted to the National Highway Traffic
Safety Administration, 400 Seventh Street, S.W., Washington, D.C.
20590.
(c) Each fiscal year, each State determined not to be in compliance
with 23 U.S.C. 161 and this part, based on NHTSA's and FHWA's final
determination, will receive notice of the funds being withheld under
Sec. 1210.4 from apportionment, as part of the certification of
apportionments required under 23 U.S.C. 104(e), which normally occurs
on October 1 of each fiscal year.
Issued on: February 29, 1996.
Rodney E. Slater,
Administrator, Federal Highway Administration.
Ricardo Martinez,
Administrator, National Highway Traffic Safety Administration.
[FR Doc. 96-5133 Filed 3-6-96; 8:45 am]
BILLING CODE 4910-59-P
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