issue-1996-06-20•Federal Register proposed rules — 1996-06-20
Federal Register proposed rules — 1996-06-20
issue-1996-06-20Federal Register proposed rules — 1996-06-20Proposed 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. 96-15789 Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31481-31489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15789]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CC Docket No. 96-128; FCC 96-254]
Pay Telephone Reclassification and Compensation Provisions of the
Telecommunications Act of 1996
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Telecommunications Act of 1996 directs the Commission to
promulgate new rules governing the payphone industry. Section 276 of
the 1996 Act directs the Commission, among other things, to ensure that
all payphone owners are compensated for calls originated on their
payphones, and to ``discontinue * * * all intrastate and interstate''
subsidies for payphones owned by incumbent local exchange carriers
(``LECs''). In this NPRM, the Commission proposed rules that would
accomplish the following objectives set forth by Congress in Section
276: compensation for ``each and every completed intrastate and
interstate call using [a] payphone[;]'' termination of all subsidies
for LEC payphones, including ``access charge payphone service
elements[;]'' prescription of nonstructural safeguards for Bell
Operating Company (``BOC'') payphones; promulgation of rules permitting
the BOCs to negotiate with the payphone location provider about a
payphone's presubscribed interLATA carrier, unless the Commission finds
that such negotiations are ``not in the public interest;'' promulgation
of rules permitting all payphone providers to negotiate with the
location provider about a payphone's presubscribed intraLATA carrier;
and establishment of a class of public interest payphones to be located
``where there would otherwise not be a payphone[.]'' The intended
effect of this NPRM is to propose a rule implementing Section 276 of
the Communications Act of 1996.
DATES: Written comments by the public on the Further NPRM of Proposed
Rule Making and the proposed and/or modified information collections
are due June 27, 1996. Reply comments are due on July 8, 1996. Written
comments by the Office of Management and Budget (OMB) on the proposed
and/or modified information collections on or before August 19, 1996.
ADDRESSES: In addition to filing comments with the Secretary, a copy of
any comments on the information collections contained herein should be
submitted to Dorothy Conway, Federal Communications Commission, Room
234, 1919 M Street, N.W., Washington, DC 20554, or via the Internet to
[email protected] and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725
17th Street NW., Washington, DC 20503 or via the Internet to
[email protected].
FOR FURTHER INFORMATION CONTACT: Michael Carowitz, Enforcement
Division, Common Carrier Bureau, (202) 418-0960. For additional
information concerning the information collections contained in this
Further Notice of Proposed Rule Making contact Dorothy Conway at 202-
418-0217, or via the Internet at [email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rule Making in CC Docket No. 96-128, adopted on June 4,
1996 and released June 6, 1996. The full text of the Notice of Proposed
Rule Making is available for inspection and copying during normal
business hours in the FCC Reference Center, Room 239, 1919 M Street,
N.W., Washington, D.C. The complete text of this decision may also be
purchased from the Commission's duplicating contractor, International
Transcription Services, 2100 M Street, N.W., Suite 140, Washington,
D.C. 20037 (202) 857-3800. This Notice of Proposed Rule Making contains
proposed or modified information collections subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. It has been submitted
to the Office of Management and Budget (OMB) for review under Section
3507(d) of the PRA. OMB, the general public, and other Federal agencies
are invited to comment on the proposed or modified information
collections contained in this proceeding.
Paperwork Reduction Act
This NPRM contains eight proposed or modified information
collections. The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public and the Office of
Management and Budget (``OMB'') to comment on the
[[Page 31482]]
information collections contained in this NPRM, as required by the
Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency
comments are due at the same time as other comments on this NPRM; OMB
notification of action is due August 19, 1996. Comments should address:
(a) whether the proposed collection of information is necessary for the
proper performance of the functions of the Commission, including
whether the information shall have practical utility; (b) the accuracy
of the Commission's burden estimates; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology.
(1) OMB Control Number: None.
Title: Proposed Quarterly Report of Interexchange Carriers
(``IXCs'') Listing the Number of Dial-Around Calls for Which
Compensation is Being Paid to Payphone Owners.
Type of Review: New collection.
Respondents: Business or other for-profit, including small
business.
Number of Respondents: 275.
Estimated Time Per Response: \1/2\ hour.
Total Annual Burden: 550 hours.
Estimated Cost Per Respondent: $0.
Needs and Uses: IXCs who are responsible for paying per-call
compensation to payphone providers must provide this report to the
payphone providers. Without provision of this report, payphone
providers would be unable to ascertain the compensation amount to be
paid by the IXCs.
(2) OMB Control Number: None.
Title: Proposed Annual Report of Interexchange Carriers (``IXCs'')
Listing the Compensation Amount Paid to Payphone Providers and the
Number of Payees.
Type of Review: New collection.
Respondents: Business or other for-profit, including small
business.
Number of Respondents: 275.
Estimated Time Per Response: 2 hours.
Total Annual Burden: 550 hours.
Estimated Cost Per Respondent: $5,000.
Needs and Uses: IXCs who are responsible for paying per-call
compensation to payphone providers are required to provide annual
reports to the Common Carrier Bureau listing the amount of compensation
paid to payphone providers and the number of payees. Without provision
of this report, the Commission would be unable to ensure that all the
IXCs are paying their respective compensation obligations. In addition,
IXCs must initiate an annual independent verification of their per-call
tracking functions.
(3) OMB Control Number: None.
Title: Proposed Quarterly Report of IntraLATA Carriers Listing
Payphone ANIs.
Type of Review: New collection.
Respondents: Business or other for-profit, including small
business.
Number of Respondents: 400.
Estimated Time Per Response: 8 hours for initial report, 2 hours
for subsequent reports.
Total Annual Burden: 5600 hours for initial report, 3200 hours for
subsequent reports.
Estimated Cost Per Respondent: $0.
Needs and Uses: IntraLATA carriers are required to provide to
interexchange carriers (``IXCs'') a quarterly report listing payphone
ANIs. Without provision of this report, resolution of disputed ANIs
would be very difficult because IXCs would not be able to tell which
ANIs belong to payphones and would not be able to ascertain which dial-
around calls were originated by payphones for compensation purposes.
(4) OMB Control Number: None.
Title: Proposed One-Time Report of Local Exchange Companies
(``LECs'') of Cost Accounting Studies.
Type of Review: New collection.
Respondents: Business or other for-profit, including small
business.
Number of Respondents: 400.
Estimated Time Per Response: 50 hours.
Total Annual Burden: 20,000 hours.
Estimated Cost Per Respondent: $0.
Needs and Uses: LECs are required to provide to the Common Carrier
Bureau, on a one-time basis, a report containing engineering studies,
time and wage studies, and other cost accounting studies to identify
the direct cost of central office coin services. Without provision of
this report, the Commission would be unable to ascertain whether the
LECs were charging their payphone competitors unreasonably high prices
for central office coin services.
(5) OMB Control Number: None.
Title: Proposed Initial Report of Bell Operating Companies
(``BOCs'') of Comparably Efficient Interconnection Plans.
Type of Review: New collection.
Respondents: Business or other for-profit, including small
business.
Number of Respondents: 7.
Estimated Time Per Response: 50 hours.
Total Annual Burden: 350 hours.
Estimated Cost Per Respondent: $0.
Needs and Uses: BOCs are required to provide to the Common Carrier
Bureau initial Comparably Efficient Interconnection (``CEI'') plans
describing how they intend to comply with the CEI equal access
parameters. Thereafter, they may include this information in the CEI
plans they already file with the Commission. Without the provision of
these reports, the Commission would be unable to ascertain whether the
BOCs were providing competing payphone providers with unbundled
nondiscriminatory access to their network features and functionalities.
(6) OMB Control Number: None.
Title: Proposed Report of Bell Operating Companies (``BOCs'') of
Modified Comparably Efficient Interconnection Plans.
Type of Review: New collection.
Respondents: Business or other for-profit, including small
business.
Number of Respondents: 7.
Estimated Time Per Response: 6 hours.
Total Annual Burden: 42 hours.
Estimated Cost Per Respondent: $0.
Needs and Uses: BOCs are required to provide to the Common Carrier
Bureau initial Comparably Efficient Interconnection plans describing
how they intend to comply with the CEI equal access parameters.
Thereafter, they may include this information in the CEI plans they
already file with the Commission. Without the provision of these
reports, the Commission would be unable to ascertain whether the BOCs
were providing competing payphone providers with unbundled
nondiscriminatory access to their network features and functionalities.
(7) OMB Control Number: None.
Title: Proposed Annual Filing of Nondiscrimination Reports (on
quality of service, installation and maintenance) by Bell Operating
Companies (``BOCs'').
Type of Review: New collection.
Respondents: Business or other for-profit, including small
business.
Number of Respondents: 7.
Estimated Time Per Response: 50 hours.
Total Annual Burden: 350 hours.
Estimated Cost Per Respondent: $0.
Needs and Uses: BOCs are required to provide to the Common Carrier
Bureau nondiscrimination reports on an annual basis. Without the
provision of these reports, the Commission would be unable to ascertain
whether the BOCs were providing competing payphone providers with equal
access to all the basic underlying network services that are provided
to its own payphones.
[[Page 31483]]
(8) OMB Control Number: None.
Title: Proposed Public Disclosure of Network Information by Bell
Operating Companies (``BOCs'').
Type of Review: New collection.
Respondents: Business or other for-profit, including small
business.
Number of Respondents: 7.
Estimated Time Per Response: 50 hours.
Total Annual Burden: 350 hours. Report would be issued
periodically, when new network services are developed or network
changes made.
Estimated Cost Per Respondent: $0.
Needs and Uses: BOCs are required to publicly disclose changes in
their networks or new network services at two different points in time.
First, disclosure would occur at the ``make/buy'' point: when a BOC
decides to make for itself, or procure from an unaffiliated entity, any
product whose design affects or relies on the network interface.
Second, a BOC would publicly disclose technical information about a new
service 12 months before it is introduced. If the BOC could introduce
the service within 12 months of the make/buy point, it would make a
public disclosure at the make/buy point. In no event, however, would
the public disclosure occur less than six months before the
introduction of the service. Without provision of these reports, the
industry would be unable to ascertain whether the BOCs were designing
new network services or changing network technical specifications to
the advantage of their own payphones.
SUMMARY OF NOTICE OF PROPOSED RULE MAKING
I. Background
1. Section 276(b)(1)(A) directs the Commission to establish a
compensation mechanism to ensure ``that all payphone service providers
are fairly compensated for each and every completed intrastate and
interstate call'' from their payphones. Section 276(b)(1)(B) mandates
that the Commission ``discontinue the intrastate and interstate carrier
access charge payphone service elements and payments * * * and all
intrastate and interstate subsidies from basic exchange and exchange
access revenues.'' In addition, Section 276(b)(1)(D) directs the
Commission to consider whether BOCs should be permitted to be involved
with the location provider's selection of the payphone's presubscribed
carrier. Together with the other subsections of Section 276, these
three provisions help to establish regulatory parity for all payphone
service providers (``PSPs''), whether competitive payphone owners or
incumbent LECs (both independents and BOCs).
II. Discussion
A. Compensation for Each and Every Completed Intrastate and Interstate
Call Originated by Payphones
a. Scope of Payphone Calls Covered by this Rulemaking
2. Currently, most calls originated on payphones are within one of
the following categories: (1) coin calls; (2) directory assistance
calls; (3) operator service (``0+'' and ``0-'') calls; (4) access code
calls (using e.g., ``10XXX'' codes and ``1-800'' or ``950'' carrier
access numbers); and (5) subscriber 800 calls. Each of these categories
can be further subdivided between local, intraLATA toll, intrastate
interLATA, interstate interLATA and international. Each type of call is
a potential source of revenue for the payphone owner, whether the
revenue is derived from coins deposited into the payphone, through
commission payments on operator service calls, or from compensation
mandated by the FCC or the states.
3. The 1996 Act requires the Commission to ensure that PSPs are
fairly compensated for all calls originated by their payphones. In
light of the multiple sources of revenue for payphones, the Commission
seeks comment on what constitutes ``fair'' compensation and how we
should ``ensure'' that each PSP receives it for calls for originated by
its payphones. The Commission concludes that its mandate under Section
276(b)(1)(A) is to ensure that PSPs are ``fairly compensated'' for
``each and every completed intrastate and interstate call'' regardless
of whether the PSP currently receives compensation for the particular
call originated by its payphone. The Commission tentatively concludes,
however, that it should use this mandate to prescribe compensation only
when payphone providers are not already ``fairly compensated.''
Currently, PPOs and non-BOC LECs receive compensation, pursuant to
individual contracts, from the payphone's presubscribed IXC for all
``0+'' calls. IXCs have long competed for this type of business.
Therefore, the Commission tentatively concludes that it need not
prescribe per-call compensation for 0+ calls because competition in
this area ensures ``fair'' compensation for PSPs. It seeks comment on
these tentative conclusions.
4. The 1996 Act does not expressly state that compensation should
extend to international calls. The Commission finds no evidence,
however, of congressional intent to leave these calls uncompensated.
Therefore, despite the lack of reference to international calls in
Section 276(b)(1)(A), the Commission tentatively concludes that it
should exercise its general jurisdiction under Sections 4(i) and 201(b)
of the Communications Act of 1934, as amended, to ensure that PSPs are
compensated for international as well as interstate and intrastate
calls originating from their payphones in the United States. The
Commission seeks comment on this tentative conclusion.
5. The rate for the most common type of call, the local coin call,
is set by state commissions. Typically, the rate set for local coin
services provided by the incumbent LECs also applies to the PPOs.
Section 276 of the Act requires the Commission to ensure that the
payphone provider receives fair compensation for each interstate and
intrastate call, including local coin sent-paid calls. Section 276 also
expressly preempts state regulations that are inconsistent with the
Commission's regulations. The Commission seeks comment, however, on how
it should exercise its jurisdiction under Section 276. The Commission
notes that it had a range of options for ensuring fair compensation for
these calls, and it sought comment on which option will ensure fair
compensation for PSPs with respect to local coin sent-paid calls.
6. More specifically, one option would be to set a nationwide local
coin rate for all calls originated by payphones. The Commission seeks
comment on whether the Commission should take such action and request
that commenters identify the specific public interest benefits they
believe would result from a nationwide rate, why local rates are
inadequate to ensure fair compensation, the impacts of variations among
the states in the local coin sent-paid rate on PSPs and the public, and
whether those impacts are predominantly local, statewide, regional or
national. Another option would be for the Commission to prescribe
specific national guidelines that states would use to establish a local
rate that would ensure that all PSPs are fairly compensated. The
Commission seeks comment on whether the Commission should take such
action and request that commenters identify specific public interest
benefits they believe would result from the Commission prescribing such
guidelines, what factors such guidelines should consider, how the
guidelines would ensure fair compensation for local coin calls, the
impacts of variations among the states
[[Page 31484]]
in local coin rates, and whether those impacts are predominantly local,
statewide, regional or national.
7. A third option for ensuring fair compensation for PSPs would be
for the states, in the first instance, to continue to set the coin
rates for local payphone calls according to factors within their
discretion. The Commission has long recognized the interest of the
states in setting end-user rates for local calls, including rates for
411 calls. Indeed, as discussed above, the states have long had a
traditional and primary role in regulating payphones. However, because
Section 276 of the 1996 Act requires the Commission to ensure that PSPs
are fairly compensated for ``each and every completed intrastate and
interstate call,'' the Commission seeks comment on what further
procedures, such as a complaint or petition process, it should
establish, should it ultimately determine to defer to the states in
setting payphone rates. The Commission also seeks comment on what
standards it could use to adjudicate any complaints or petitions that
challenge a particular rate. It further ask whether the states' setting
of the rates for local coin calls subject to complaint or petition
would be consistent with Section 276's mandate that the Commission
ensure fair compensation for ``each and every completed intrastate and
interstate call.'' The Commission sought comment on whether the
Commission should take such action and request that commenters identify
specific public interest benefits they believe would result from having
coin rates for local payphone calls set by the states.
b. Entities Required To Pay Compensation
8. Because the 1996 Act directs the Commission to ensure that all
PSPs are compensated, with limited exception, for ``each and every
intrastate and interstate call'' using their payphones, the Commission
also addresses who pays that compensation. The possible payors include:
the caller using the payphone; the carrier over whose network the call
is placed; or, in the case of subscriber 800 calls, the entity being
called (who may or may not directly pass all the charges on to the
caller using the payphone). Industry participants have made two
compensation proposals that might satisfy the per-call compensation
requirement.
9. The first proposal builds on the per-call compensation mechanism
proposed for interstate access code calls in CC Docket No. 91-35. If
this ``carrier-pays'' mechanism were extended to all dial-around calls,
the IXC who receives such a call from a payphone would be required to
pay a per-call charge to the provider of the payphone. Each IXC would
decide independently how to recover this cost.
10. Another approach would be to rely on a ``set use fee.'' The
``set use fee'' is a fee that the IXC would bill and collect from the
end user. The fee would then be remitted to the PSP. In the case of the
subscriber 800 and other toll-free number calls, the set use fee could
be collected from the subscriber. For access code calls and operator-
assisted calls, the set use fee would be collected from the end user
that is billed for the call.
11. The Commission tentatively concludes that, for non-coin
payphone calls, either a ``carrier-pays'' system or a ``set use fee''
system where the end user pays would satisfy the requirements of the
1996 Act. As a general principle, however, the Commission tends to
favor an approach that minimizes transaction costs on the caller and on
the industry. The Commission finds that the carrier-pays mechanism is
preferable because it would result in less transaction costs because
the IXC could aggregate its payments to payphone providers. Under a
set-use fee, these payments would be spread among a vast number of
payphone callers through their individual telephone bills. Therefore,
the Commission tentatively concludes that it should adopt a ``carrier-
pays'' compensation mechanism that builds on existing procedures. It
seeks comment on these tentative conclusions.
c. Ability of Carriers To Track Calls From Payphones
12. Based on prior FCC proceedings, the Commission tentatively
concludes that tracking mechanisms and surrogates exist, or might
readily be made available, to support the complete per-call
compensation plan mandated by Section 276(b)(1)(A). It seeks comment on
what tracking options are currently, or may soon be, available. The
Commission seeks further comment on the ability of existing IXC-based
tracking mechanisms to accommodate all payphone providers and IXCs. In
the event that there is no standard technology or mechanism available
for tracking, the Commission seeks comment on alternative surrogate
methodologies that could be devised and by whom. Finally, it seeks
comment on which party or parties, whether IXCs, PSPs, or intraLATA
carriers, should be required to develop and maintain the tracking or
surrogate methodologies.
d. Administration of Per-Call Compensation
13. The Commission tentatively concludes that the direct-billing
arrangement established in previous Commission orders should be
maintained with the simple addition of requiring IXCs, and the
intrastate interexchange operations of LECs to send back to each PSP a
statement indicating the number of toll-free and access code calls that
each carrier has received from each of that PSP's payphones. The
Commission proposes to continue to leave the details of the billing
arrangements for the parties to determine. All parties, whether
carriers or PSPs, would be free to retain the services of one or more
clearinghouses to assist them with billing and collection and/or
payment of the compensation. The Commission would require, however,
that the carrier responsible for paying compensation file each year a
brief report with the Common Carrier Bureau listing the total amount of
compensation paid, pursuant to the rules adopted in this proceeding, to
PSPs for intrastate, interstate, and international calls; the number of
compensable calls received by the carrier; and the number of payees.
e. Per-Call Compensation Amount
14. The Commission previously examined various compensation methods
in the Second Report and Order. The Commission notes that the theory of
compensation and price surrogates that the Commission has historically
relied upon in its determination of the ``range of reasonable
compensation rates'' provides some guidance for our analysis of how to
ensure that PSPs are ``fairly compensated'' and what should be the
appropriate per-call compensation amount for all calls within the scope
of this rulemaking. As before, while the Commission noted that it was
confronted in the proceeding by the lack of reliable PPO cost data, it
tentatively concludes that PSPs should be compensated for their costs
in originating the types of calls for which it has tentatively
concludes that compensation is appropriate. It tentatively concludes
further that these costs should be measured by appropriate cost-based
surrogates. It seeks comment on these tentative conclusions. The
Commission also questions whether, to ensure that PSPs receive fair
compensation, it should prescribe different per-call compensation
amounts for the different types of calls originated by payphones. It
seeks further comment on how
[[Page 31485]]
compensation levels should be permitted to change in the future, and
whether some cost index or price cap system would be appropriate to
ensure that compensation levels reflect expected changes in unit costs
over time. The Commission also seeks comment on whether it should
provide PPOs some measure of interim compensation, to be paid until the
effective date of the final rules we adopt in this proceeding, for the
growing volume of dial-around calls originated from their payphones.
B. Reclassification of Incumbent LEC-Owned Payphones
a. Classification of LEC Payphones as CPE
15. To effectuate the Act's mandate that access charge payphone
service elements and payphone subsidies be discontinued, the Commission
tentatively concludes that it should treat incumbent LEC payphones as
unregulated, detariffed CPE. It tentatively concludes further that
incumbent LECs should be required to provide to PSPs, on a
nondiscriminatory tariffed basis, all functionalities used in a LEC's
delivery of payphone services.
16. The option of using central office coin services, such as coin
recognition, answer detection, and other related services, allows
incumbent LECs to use the less expensive ``dumb'' pay telephones, which
gives incumbent LECs a cost advantage over their competitors. The
Commission tentatively concludes that requiring that central office
coin services be made available to PPOs eliminates this cost advantage
and will increase competition in the payphone industry. To unbundle
payphones from their underlying transmission, the Commission
tentatively concludes that incumbent LECs, whether or not they
themselves provide payphone service, must offer individual central
office coin transmission services to PSPs under a nondiscriminatory,
public, tariffed offering. It seeks comment on this tentative
conclusion and on which central office coin services must be made
available by incumbent LECs to the PSPs to achieve this goal. In the
interest of clarity, it seeks comment on both the type of services and
the technological requirements necessary to allow PPOs to use payphones
that are equivalent to those payphones currently used by LECs. The
Commission also tentatively concludes that Section 68.2(a)(1) of the
FCC's regulations should be amended to facilitate registration of both
instrument implemented and central-office-implemented payphones. It
seeks comment on this tentative conclusion.
b. Transfer of Payphone Equipment to Unregulated Status
17. If the Commission concludes that it will treat payphones as
detariffed CPE, the incumbent LECs would have to transfer their
payphones and related equipment from regulated to unregulated
activities. FCC rules provide that, if reallocations of
telecommunications plant (i.e., central office equipment and outside
plant) from regulated to nonregulated operations are required, such
plant will be transferred at undepreciated baseline cost plus an
interest charge based on the authorized interstate rate of return to
reflect the time value of money. The Commission seeks comment on the
specific assets to be transferred. It tentatively concludes that the
assets to be transferred should be defined generally in terms of CPE
deregulation. Thus, the assets to be transferred may include all
facilities related to payphone service, including associated taxes and
depreciation, but likely would not include the loops connecting the
payphones to the network, or the central office ``coin-service'' or
operator service facilities supporting incumbent LEC payphones.
Including these network support facilities may be inappropriate because
it would allow incumbent LECs to continue providing a different form of
interconnection to their payphones than is available to PSPs. The
Commission also tentatively concludes that a phase-in period for a
transfer of payphone-related assets is not necessary, because payphone
terminal equipment consists of less than one percent of total plant
investment for the entire LEC industry. The Commission seeks comment on
our tentative conclusions and the general approach to asset transfers
outlined here.
c. Termination of Access Charge Compensation and Other Subsidies
18. Incumbent LECs today generally recover payphone costs allocated
to the interstate jurisdiction through the per-minute carrier common
line (``CCL'') charge they assess on IXCs and other interstate access
customers for originating and terminating interstate calls. The
incumbent LEC assesses the PPO a subscriber line charge (``SLC'') (at
the multi-line business rate) to recover the payphone common line costs
associated with that phone. In the case of competitive payphones, a PPO
recovers its payphone costs out of the revenue it receives from end
users, premises owners, and OSPs to whom its payphones are
presubscribed.
19. The 1996 Act mandates that the Commission ``discontinue the
intrastate and interstate carrier access charge payphone service
elements and payments * * * and all intrastate and interstate subsidies
from basic exchange and exchange access revenues[.]'' Accordingly, the
Commission must adopt rules that provide for the removal from regulated
intrastate and interstate rate structures of all charges that recover
the costs of payphones (i.e., the costs of payphone sets, not including
the costs of the lines connecting those sets to the public switched
network, which, like the lines connecting competitive payphones to the
network, will continue to be treated as regulated). It tentatively
concludes that incumbent LECs must reduce their interstate CCL charges
by an amount equal to the interstate allocation of payphone costs
currently recovered through those charges. LECs subject to the price
cap rules would treat this as an exogenous cost change to the Common
Line basket pursuant to Section 61.44(c) of our rules. The Commission
requests incumbent LECs to identify in their comments all accounts that
contain costs attributable to their payphone operations. The Commission
also requests comment on whether specific cost pools and allocators
should be used to capture the nonregulated investment and expenses
associated with their payphone operations. It seeks further comment on
whether a transition period is necessary to move from subsidized
compensation to per-call compensation for LEC payphones, and how that
transition would proceed.
20. The Commission also proposes, pursuant to the mandate of
Section 276(b)(1)(B), to require incumbent LECs to remove from their
intrastate rates any charges that recover the costs of payphones. The
Commission solicits comment on whether it should set a deadline and a
specific mechanism for elimination of any intrastate subsidies as well,
or whether it would be both consistent with the statute as well as
preferable from a policy perspective to permit the states to formulate
their own mechanisms for achieving this result within a specific time
frame.
21. In the telephone network, payphones, as well as all other
telephones, are connected to the local switch by means of a subscriber
line. The costs of the subscriber line that are allocated to the
interstate jurisdiction are recovered through two separate charges: a
flat-rate SLC assessed upon the end user customer who subscribes to
local service; and a per-minute CCL charge that recovers the balance of
the interstate subscriber line costs not
[[Page 31486]]
recovered through the SLC. LEC payphone costs are also included in the
CCL charge. The CCL charge, however, applies to interstate switched
access service that is unrelated to payphone service costs. While PPOs
are required to pay the SLC for the loop used by each of their
payphones, LECs have not been required to pay this charge because the
subscriber lines connected to LEC payphones have been recovered
entirely through the CCL charge. The Commission tentatively concludes
that, to avoid discrimination among payphone providers, the SLC should
apply to subscriber lines that terminate at both LEC and competitive
payphones. It tentatively concludes that the removal of payphone costs
from the CCL and the payment or imputation of a SLC to the subscriber
line that terminates at a LEC nonregulated payphone would result in the
recovery of LEC payphone costs on a more cost-causative basis. The
Commission seeks comment on these tentative conclusions and, more
generally, on how removing LEC payphones from the CCL charge would
affect the SLC.
22. The incumbent LECs' multi-line business SLC is currently
subject to a $6.00 per month cap. Those LECs with interstate subscriber
line costs that exceed this amount recover a portion of the interstate
costs of subscriber lines through the CCL charge. The issue of the
appropriate interstate SLC for the future has been referred to a
Federal-State Joint Board. To the extent that LECs charge or impute to
their own payphone operations only the multi-line business SLC, which
may be less than the full interstate cost of the subscriber lines
connecting their payphones to the network, and recover the balance of
the cost of these lines through the CCL charge, they may, in effect, be
subsidizing their payphones with access charge revenues, in violation
of Section 276. The Commission seeks comment on whether LECs in those
circumstances should charge or impute to their own payphone operations,
as well as to PPOs, an additional monthly charge representing the
difference between the SLC cap and the full interstate cost of these
subscriber lines. It also seeks comment on whether comparable changes
should be made to incumbent LECs' intrastate rates.
d. Deregulation of AT&T Payphones
23. In the Interstate, Interexchange Marketplace proceeding, the
Commission notes that it would consider in the instant proceeding ``the
issue of bundling pay telephone equipment with the underlying
transmission capacity.'' The Commission tentatively concludes that
other IXC bundling issues should be treated under the same rules we
have proposed in the Interstate, Interexchange Marketplace proceeding.
Commenters who disagree with this tentative conclusion, however, are
invited to comment in the proceeding.
24. Like LEC payphones, AT&T payphones are classified as network
equipment and, therefore, may receive subsidies. The Commission
tentatively concludes that payphones provided by AT&T should be
classified as CPE. While the 1996 Act does not expressly address AT&T
payphones, Section 276 directs the Commission to adopt regulations that
will ``promote competition among payphone service providers and promote
the widespread deployment of payphone services to the benefit of the
general public[.]'' Discontinuing possible subsidies for AT&T payphones
would be congruent with the 1996 Act's requirement that the Commission
discontinue subsidies for other payphones (i.e., those owned by
incumbent LECs) and would provide for symmetrical regulation of the
payphone industry. There are other reasons why this proposed action is
in harmony with the other rules the Commission has proposed in its
proceeding. First, since Tonka, AT&T payphones have been treated the
same as BOC payphones. Once LEC telephones, including those provided by
the BOCs, are declared to be CPE, the basis for treating AT&T payphones
as network equipment no longer exists. Second, the Commission believes
that deregulating AT&T payphones is in line with its general policy to
deregulate non-dominant carriers. It seeks comment on this tentative
conclusion.
C. Nonstructural Safeguards for BOC Provision of Payphone Service
25. The Computer III nonstructural safeguards currently apply to a
BOC's provision of payphone service if enhanced services are provided
through the payphone. Under the Computer III framework, BOCs are
permitted to provide enhanced services on an integrated basis subject
to nondiscrimination safeguards. The safeguards the Commission adopted
in Computer III include: (1) nondiscriminatory access to network
features and functionalities; (2) restrictions on the use of Customer
Proprietary Network Information (``CPNI''); (3) network information
disclosure rules; (4) nondiscrimination in the provision, installation,
and maintenance of services as well as nondiscrimination reporting
requirements; and (5) cost accounting safeguards. The Commission
tentatively concludes that all Computer III nonstructural safeguards
must be applied to meet our obligation under the 1996 Act. It seeks
comment on this tentative conclusion. We also seek comment on whether
there are other nonstructural safeguards that, while not explicitly
specified in the Computer III, should be applied to BOC payphones.
26. Currently, the Commission regulates BOC provision of enhanced
services through Comparably Efficient Interconnection (``CEI'') and
Open Network Architecture (``ONA'') requirements that require unbundled
nondiscriminatory access to BOC network features and functionalities.
Pursuant to these requirements, BOCs must file a service-specific CEI
plan before offering any enhanced service on an integrated basis. A BOC
must demonstrate in its CEI plan how it would provide competing
enhanced service providers (ESPs) with ``equal access'' to all basic
underlying network services the BOC used to provide its own enhanced
services. Subsequently, the Commission required BOCs to develop and
implement ONA plans detailing more fundamental unbundling of their
basic network services. ONA requires further unbundling of network
elements than under CEI because it is not limited to those elements
associated with specific BOC enhanced services. In 1993, the Common
Carrier Bureau lifted structural separation requirements after each BOC
demonstrated that its ONA plan complied with the BOC Safeguards Order.
Following the California III court decision, the Commission has
continued to require BOCs to file CEI plans for each individual
enhanced service it offers in addition to fulfilling the access
requirements of its ONA plan.
b. BOC CEI Plans
27. To ensure BOC compliance with the Computer III and ONA
requirements, we propose to require that each BOC file, within 90 days
of the effective date of the order in this proceeding, an initial CEI
plan describing how it intends to comply with the CEI equal access
parameters and nonstructural safeguards for the provision of payphone
services. Thereafter, the BOCs may integrate the filing of information
on payphone services unbundling and nonstructural safeguards with their
ongoing ONA filings. Generally, in a CEI plan, a BOC must describe how
it intends to comply with the CEI ``equal access'' parameters for the
specific payphone service it intends to offer. The CEI equal access
parameters include: interface functionality; unbundling of basic
[[Page 31487]]
services; resale; technical characteristics; installation, maintenance,
and repair; end user access; CEI availability; minimization of
transport costs; and availability to all interested customers or
enhanced service providers. Because the 1996 Act requires that we apply
safeguards that are equal to those set forth in Computer III ``at a
minimum,'' the Commission seeks comment on any other parameters or
requirements for BOC payphone service that, while not listed in this
NPRM, are consistent with the intent of the 1996 Act.
D. Ability of BOCs To Negotiate With Location Providers on the
Presubscribed Interlata Carrier
28. While the location provider selects the OSP for BOC and GTE
payphones, all other payphone providers are able to select the OSP
serving their payphones. As discussed above, payphone providers, both
PPOs and independent LECs, compete in the market for payphone services
by offering the location provider a commission on coin and 0+ traffic
originating from the payphones located on the location provider's
premises. In turn, payphone providers earn revenue by reselling local
and 1+ long distance service and by contracting for 0+ traffic with
OSPs that pay commissions on 0+ traffic. The legislation directs the
Commission to provide similar rights to BOCs, unless the Commission
determines that it is not in the public interest.
29. The Commission seeks comment on the extent to which extending
to the BOCs the same rights that all other payphone providers have to
select and contract with the interLATA carriers that carry interLATA
traffic from their payphones would be ``not in the public interest.''
The Commission questions whether these rights will benefit the general
public by increasing competition, available services, and overall
efficiency. It also asks whether carrier-selection rights will help to
foster increased competition and market parity that will ``promote the
widespread deployment of payphone services to the benefit of the
general public.'' Parties commenting on this issue should also address
how any Commission action with respect to a BOC's right to select and
contract with interLATA carriers would be consistent with the other
goals enunciated in Section 276, such as promoting regulatory parity
between BOCs and independent payphone providers, and that the location
provider has the ultimate decision-making authority in determining
interLATA services in connection with the choice of payphone providers.
30. The Commission seeks comment on whether the ability to select
the interLATA carrier serving their payphones is likely to permit the
BOCs to behave anticompetitively in the payphone market in the absence
of safeguards to prevent cost misallocations and discrimination. In
addition, the Commission seeks comment on whether the structural and
accounting safeguards mandated under Sections 271 and 272 of the 1996
Act, and any Commission rules implementing these safeguards, are
sufficient to prevent anticompetitive abuses. If not, the Commission
seeks comment on whether the Commission should adopt rules to prevent
BOCs from giving more favorable interLATA rates to their own payphone
operations than to their payphone competitors. Parties are asked to
specify what safeguards would be necessary to prevent potential
anticompetitive behavior by the BOCs in this regard. The Commission
also seeks comment on to what extent a BOC not authorized to provide
in-region interLATA service under Section 271 of the 1996 Act should be
allowed to participate in the selection of the interLATA carrier,
especially if the BOC has a non-attributable interest in the interLATA
carrier, such as an option to purchase or an agreement to merge.
E. Ability of Payphone Service Providers To Negotiate With Location
Providers on the Presubscribed Intralata Carrier
31. Currently, in some states, competitive payphones are required
to route intraLATA 0+ and 0- calls, and sometimes other intraLATA
calls, to the incumbent LEC. In contrast, Section 276(b)(1)(E) requires
the Commission to prescribe regulations to allow PSPs to negotiate with
the location provider on the selecting and contracting with the
intraLATA carrier serving the payphone. In accordance with this
requirement, the Commission tentatively concludes that all PSPs,
whether LECs or PPOs, should be given this right to negotiate with
location providers concerning the intraLATA carrier. The Commission
seeks comment on these tentative conclusions.
F. Establishment of Public Interest Payphones
32. Because Section 276(b)(2) directs the Commission to ``determine
whether public interest payphones * * * should be maintained,'' the
Commission seeks comment on whether it would be in the public interest
to maintain payphones provided in the interest of public health,
safety, and welfare, in locations where there would otherwise not be a
payphone.''
33. If the Commission determines that public interest payphones
should be maintained, then Section 276(b)(2) gives the Commission
statutory authority to determine further how public interest payphones
should be regulated. As with our jurisdiction over local call rates,
the Commission seeks comment on a range of options for maintaining
public interest payphones. One option would be for the Commission to
prescribe federal regulations for the maintenance of these payphones.
It seeks comment on whether and how this approach would serve the
public interest, and on whether Section 276 requires the Commission to
assume this responsibility.
34. A second option would be for the Commission to establish
national guidelines for public interest payphones. It seeks comment on
whether there are any state initiatives or programs concerning public
interest payphones that the Commission could use as a model for
national guidelines. Commenters supporting national guidelines should
specify what factors the guidelines should consider and how the
guidelines should be applied on a nationwide basis.
35. In the event that the Commission establishes national
guidelines for public interest payphones, it seeks comment on what is
to be considered a ``public interest payphone.'' The Joint Explanatory
Statement for Section 276 clarifies that the term ``public interest
payphones'' refers to payphones where payphone service would not
otherwise be available as a result of the operation of the market.
``Thus, the term does not apply to a payphone located near other
payphones, or to a payphone that, even though unprofitable by itself,
is provided for a location provider with whom the payphone provider has
a contract.'' The Commission seeks comment on whether a ``public
interest payphone'' should be defined as a payphone: (1) that operates
at a financial loss, but also fulfills some public policy objective,
such as emergency access; and (2) even though unprofitable by itself,
is not provided for a location provider with whom the PSP has a
contract. Under this definition, many payphones that fulfill important
public policy objectives would not be included because they would be
paid for, in the form of lower commission payments, by the entity that
is requesting that a payphone be placed in a particular location to
fulfill a public policy objective. This proposed definition would not
necessarily
[[Page 31488]]
decrease the number of payphones in existence fulfilling public policy
objectives, but would require the entities that most directly benefit
from these low profitability payphones to assume the cost of their
availability. The Commission seeks comment generally on this possible
definition. Parties may specify whether the definition should be
narrower, broader, or more specific.
36. A third option for maintaining public interest payphones would
be to defer to the states to determine, pursuant to their own statutes
and regulations, which payphones should be treated as ``public interest
payphones.'' This approach would treat the provision of ``public
interest payphones'' as primarily a matter of state concern. The
Commission seeks comment on whether it would be consistent with the
statute and better serve the public interest to allow the states to
develop their own guidelines regarding which payphones are ``public
interest payphones.''
37. With regard to a funding mechanism to support public interest
payphones ``fairly and equitably,'' the Commission seeks comment on
whether such a mechanism should be handled in conjunction with how
public interest payphones are maintained, whether through federal
regulations, federal guidelines for the states, or by the states
themselves. In the alternative, the Commission seeks comment on whether
it would it serve the public interest for the Commission and the states
to administer different portions of a public interest payphone program.
Commenters that support a Commission-mandated funding mechanism should
detail how the mechanism would function, including who would be
eligible to receive funding, who would be responsible for paying into
the fund, and who would administer the funding mechanism.
G. Other Issues
1. Dialing Parity
38. Section 251(b)(3) states that all LECs have the duty to
``provide dialing parity to competing providers of telephone exchange
service and telephone toll service.'' The Commission tentatively
concludes that the benefits of dialing parity requirements that it
adopts pursuant to Section 251(b)(3) of the Act should extend to all
payphone location providers. It seeks comment on this tentative
conclusion and on other methods for achieving dialing parity for
payphone location providers, and users, of payphones that are
consistent with the definition of dialing parity under Section 3(15) of
the 1934 Act, as amended. As a related matter, the Commission seeks
comment on whether the Commission should extend the type of intraLATA
carrier unblocking requirements established in TOCSIA to all local and
long distance calls.
2. Letterless Keypads
39. At least two distributors of payphone equipment have been
promoting letterless keypads. Such keypads defeat callers' attempts to
reach their OSP of choice through a ``vanity'' access number, such as
MCI's ``1-800-COLLECT'' or AT&T's ``1-800-CALL-ATT'' and ``10ATT,''
that can be easily remembered by callers. Standard payphone keypads
contain certain letters of the alphabet that correspond to each digit
(e.g., A, B, and C correspond to the digit ``2''). A ``letterless''
keypad does not include any letters associated with the requisite
digits. The Commission expressed concern that use of letterless keypads
may frustrate the intent of Congress, as expressed in TOCSIA, to permit
callers to reach the OSP of their choice from payphones. In addition,
the Commission is concerned that these keypads ultimately frustrates
congressional intent, as expressed in the 1996 Act, ``to promote
competition among payphone service providers and promote the widespread
deployment of payphone services to the benefit of the general
public[.]''
40. To promote consumer access to OSPs, TOCSIA required the
unblocking of 800 and 950 access numbers at aggregator locations and
directed the Commission to mandate the unblocking of 10XXX access codes
and/or the establishment of 800/950 access numbers by each OSP. In the
succeeding years, some OSPs have chosen to use ``vanity'' dialing
sequences for access numbers. While the Commission has previously found
that it does not have conclusive data showing a net change in the
average number of access code calls (both 10XXX and 800/950 access
calls) originated by each competitive payphone each month, payphone
industry representatives have argued that use of ``vanity'' dialing
sequences by payphone users has grown since their introduction.
41. The Commission staff has reviewed advertisements for letterless
keypads that specifically refer to a ``by-pass keypad'' that ``prevents
dial around [calls].'' The Commission tentatively concludes that the
use of letterless keypads violates both TOCSIA and the 1996 Act by
preventing callers from accessing their OSP of choice. It seeks comment
on how the Commission should take action to prohibit use of these ``by-
pass'' letterless keypads to restrict the availability of ``vanity''
access numbers.
3. Other Pending Payphone Proceedings
42. Several proceedings pending before the Commission concern the
rules governing the payphone industry. The Commission tentatively
concludes that it would further the public interest to consolidate and
address those proceedings within this rulemaking. The pending
proceedings are as follows: (1) Petition of the Public Telephone
Council to Treat BOC Payphones as CPE, DA 88-2055; (2) Policies and
Rules Concerning Operator Service Access and Pay Telephone
Compensation, CC Docket. No. 91-35 (payphone compensation issues only);
(3) Petition of Oncor Communications, Inc. Requesting Compensation for
Competitive Payphone Premises Owners and Presubscribed Operator
Services Providers, DA 95-1921; and (4) Amendment of Section 69.2 (m)
and (ee) of the Commission's Rules to Include Independent Public
Payphones Within the ``Public Telephone'' Exemption from End User
Common Line Access Charges, RM 8723. Each of these proceedings
addresses issues covered by Section 276 of the Act. We seek comment on
the implications of our tentative conclusion. Specifically, the
Commission seeks comment on which proceedings on the list commenters
believe may be resolved here, and reasons for such opinions, and which
proceedings should continue separately from this rulemaking, and the
reasons for those opinions. The Commission also concludes in the NPRM
that the Commission need not address the Florida Payphone remand in a
separate proceeding because the rules adopted in the proceeding will
address the remand by ensuring that PSPs are compensated, pursuant to
the 1996 Act, for all intrastate and interstate calls, including
subscriber 800 calls.
III. Comments and Ex Parte Presentations
43. All interested may file comments on the issues set forth in
this NPRM, on which comment is specifically sought, by June 27, 1996,
and reply comments by July 8, 1996. All relevant and timely comments
will be considered by the Commission before final action is taken in
this proceeding. To file formally in this proceeding, which involves
issues concerning the Commission's expedited implementation of the 1996
Act, participants must file an original, ten copies, and the electronic
version on disk of all comments and reply comments. Comments and reply
comments should be sent to the Office of the Secretary, Federal
[[Page 31489]]
Communications Commission, Washington, DC 20554. If participants want
each Commissioner to have a personal copy of their comments, an
original plus fourteen copies must be filed. In addition, participants
should submit two additional copies directly to the Common Carrier
Bureau, Enforcement Division, Room 6008, 2025 M Street NW., Washington,
D.C. 20554. The petition, comments, and reply comments will be
available for public inspection during regular business hours in the
Dockets Reference Room (Room 230) of the Federal Communications
Commission, 1919 M Street, NW., Washington, DC 20554. Copies of the
petition and any subsequently filed documents in this matter may be
obtained from ITS, Inc., 2100 M Street, NW., Suite 140, Washington, DC
20037, (202) 857-3800.
44. To facilitate review of comments and replies, both by parties
and by Commission staff, the Commission requires that comments be no
longer than seventy-five (75) pages and replies be no longer than
thirty-five (35) pages, including exhibits, appendices, and affidavits
of expert witnesses. Empirical economic studies and copies of relevant
state orders will not be counted against these page limits. The page
limits will not be waived and will be strictly enforced. Comments and
replies must include a short and concise summary of the substantive
arguments raised in the pleading. Comments and replies must also comply
with Section 1.49 and all other applicable sections of the Commission's
rules. The Commission also directs all interested parties to include
the name of the filing party and the date of the filing on each page of
their comments and replies. Comments and replies also must clearly
identify the specific portion of this NPRM to which a particular
comment or set of comments is responsive. If a portion of a party's
comments does not fall under a particular topic listed in the outline
of this NPRM, such comments must be included in a clearly labelled
section at the beginning or end of the filing. Parties may not file
more than a total of ten (10) pages of ex parte submissions, excluding
cover letters. This 10 page limit does not include: (1) written ex
parte filings made solely to disclose an oral ex parte contact; (2)
written material submitted at the time of an oral presentation to
Commission staff that provides a brief outline of the presentation; or
(3) written material filed in response to direct requests from
Commission staff. Ex parte filings in excess of this limit will not be
considered as part of the record in this proceeding.
45. Parties are invited to submit, in conjunction with their
comments or replies, proposed text for rules that the Commission could
adopt in this proceeding. Specific rule proposals should be filed as an
appendix to a party's comments or reply, and will not be counted
against the page limits set forth in the preceding paragraph. Such
appendices may include only proposed text for rules that would
implement proposals set forth in the parties' comments and replies in
this proceeding, and may not include any comments or arguments.
46. This is a non-restricted notice and comment rule making
proceeding. Ex parte presentations are permitted, except during the
Sunshine Agenda period, provided they are disclosed as provided in
Commission rules.
IV. Conclusion
V. Regulatory Flexibility Analysis
47. As required by Section 603 of the Regulatory Flexibility Act, 5
U.S.C. Section 601 et seq. (1981), the Commission has prepared a
Regulatory Flexibility Analysis of the expected impact on small
entities resulting from the policies and proposals set forth in the
NPRM. The full analysis is contained within the NPRM. The Secretary
shall send a copy of the NPRM to the Chief Counsel for Advocacy of the
Small Business Administration in accordance with Section 603(a) of the
Regulatory Flexibility Act.
VI. Ordering Clauses
48. Accordingly, it is further ordered, pursuant to Sections 1,
4(i)-4(j), 201-205, 226, and 276 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i), 154(j), 201-205, 226, and 276 that a
Notice of Proposed Rulemaking is ADOPTED.
49. It is furhter ordered that the Chief of the Common Carrier
Bureau is delegated authority to require the submission of additional
information, make further inquiries, and modify the dates and
procedures, if necessary, to provide for a fuller record and a more
efficient proceeding.
50. It is further ordered that this Notice of Proposed Rulemaking
is the Commission's disposition of all matters remanded by the U.S.
Court of Appeals for the District of Columbia Circuit in Florida Public
Telecommunications Ass'n. v, FCC, 54 F.3d 857 (D.C. Cir. 1995).
51. It is further ordered that the Secretary shall send a copy of
this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration in accordance with paragraph 603(a) of
the Regulatory Flexibility Act, Public Law No. 96-354, 94 Stat. 1164, 5
U.S.C. 601 et seq. (1981).
List of Subjects in 47 CFR Part 64
Communications common carriers; Reporting and recordkeeping
requirements; Telephone.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 96-15789 Filed 6-19-96; 8:45 am]
BILLING CODE 6712-01-P
Complete official Federal Register PDF
FR Doc. 96-15770 Common Crop Insurance Regulations; Arizona-California Citrus Crop Insurance Provisions
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31464-31468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15770]
========================================================================
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. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31464]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
Common Crop Insurance Regulations; Arizona-California Citrus Crop
Insurance Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes
specific crop provisions for the insurance of Arizona-California
citrus. The provisions will be used in conjunction with the Common Crop
Insurance Policy Basic Provisions, which contain standard terms and
conditions common to most crops. The intended effect of this action is
to provide policy changes to better meet the needs of the insured and
combine the current Arizona-California Citrus Crop Insurance
Regulations with the Common Crop Insurance Policy for ease of use and
consistency of terms.
DATES: Written comments, data, and opinions on this proposed rule will
be accepted until close of business July 22, 1996, and will be
considered when the rule is to be made final. The comment period for
information collections under the Paperwork Reduction Act of 1995
continues through August 19, 1996.
ADDRESSES: Interested persons are invited to submit written comments to
the Chief, Product Development Branch, Federal Crop Insurance
Corporation, United States Department of Agriculture (USDA), 9435
Holmes Road, Kansas City, MO 64131. Written comments will be available
for public inspection and copying in room 0324, South Building, USDA,
14th and Independence Avenue, S.W., Washington, D.C., 8:15 a.m.-4:45
p.m., Monday through Friday, except holidays.
FOR FURTHER INFORMATION CONTACT: John Meyer, Program Analyst, Research
and Development Division, Product Development Branch, FCIC, at the
Kansas City, MO, address listed above, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order No. 12866 and Departmental Regulation 1512-1
This action has been reviewed under United States Department of
Agriculture (USDA) procedures established by Executive Order No. 12866
and Departmental Regulation 1512-1. This action constitutes a review as
to the need, currency, clarity, and effectiveness of these regulations
under those procedures. The sunset review date established for these
regulations is June 30, 2006.
This rule has been determined to be not significant for the
purposes of Executive Order No. 12866 and, therefore, has not been
reviewed by the Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
The information collection requirements contained in the Arizona-
California Crop Insurance Provisions have been submitted to OMB for
approval under section 3507(j) of the Paperwork Reduction Act of 1995.
This proposed rule will amend the information collection requirements
under OMB control number 0563-0003 through September 30, 1998.
The Federal Crop Insurance Corporation will be amending the
information collection to adjust the estimated reporting hours and
revising the usage of FCI-12-P, Pre-Acceptance Perennial Crop
Inspection Report as it applies to the Arizona-California Citrus Crop
Insurance Provisions.
Section 7 of the 1998 Arizona-California Citrus Crop Provisions
adds interplanting as an insurable farming practice as long as it is
interplanted with another perennial crop. This practice was not
insurable under the previous Arizona-California Citrus Crop Insurance
Policy. Consequently, interplanting information will need to be
collected using the FCI-12-P Pre-Acceptance Perennial Crop Inspection
Report form for approximately 0.5 percent of the 2,468 insureds who
interplant their Arizona-California citrus crop. Standard interplanting
language has been added to most perennial crops. Interplanting is an
insurable practice as long as it does not adversely affect the insured
crop. This is a benefit to agriculture because insurance is now
available for more perennial crop producers and as a result less
acreage will need to be covered by the noninsured crop disaster
assistance program (NAP).
Revised reporting estimates and requirements for usage of OMB
control number 0563-0003 will be submitted to OMB for approval under
the provisions of 44 U.S.C., chapter 35. Public comments are due by
August 19, 1996.
The title of this information collection is ``Catastrophic Risk
Protection Plan and Related Requirements including, Common Crop
Insurance Regulations; Arizona-California Citrus Crop Insurance
Provisions.'' The information to be collected includes a crop insurance
acreage report, insurance application and continuous contract.
Information collected from the acreage report and application is
electronically submitted to FCIC by the reinsured companies. Potential
respondents to this information collection are growers of Arizona-
California citrus that are eligible for Federal crop insurance.
The information requested is necessary for the reinsured companies
and FCIC to provide insurance and reinsurance, determine eligibility,
determine the correct parties to the agreement or contract, determine
and collect premiums or other monetary amounts, and pay benefits.
All information is reported annually. The reporting burden for this
collection of information is estimated to average 25 minutes per
response for each of the 3.6 responses from approximately 1,755,015
respondents. The total annual burden on the public for this information
collection is 2,669,970.
The comment period for information collections under the Paperwork
Reduction Act of 1995 continues on the following: (a) Whether the
proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information shall have practical utility; (b) the accuracy of the
agency's estimate of the burden of the proposed collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
the collection of information on respondents, including through the use
of automated collection techniques
[[Page 31465]]
or other forms of information technology.
Comments regarding paperwork reduction should be submitted to the
Desk Officer for Agriculture, Office of Information and Regulatory
Affairs, Office of Management and Budget (OMB), Washington, DC 20503
and to Bonnie Hart, Advisory and Corporate Operations Staff, Regulatory
Review Group, Farm Service Agency, PO Box 2415, Ag Box 0572, United
States Department of Agriculture, Washington, DC 20013-2415. Copies of
the information collection may be obtained from Bonnie Hart at the
above address, telephone (202) 690-2857.
The Office of Management and Budget (OMB) is required to make a
decision concerning the collection(s) of information contained in these
proposed regulations between 30 and 60 days after submission to OMB.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication. This does not affect
the deadline for the public to comment on the proposed regulation.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, FCIC
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures of State, local, or tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
one year. When such a statement is needed for a rule, section 205 of
the UMRA generally requires FCIC to identify and consider a reasonable
number of regulatory alternatives and adopt the least costly, more
cost-effective or least burdensome alternative that achieves the
objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector. Thus, this rule is not subject to
the requirements of sections 202 and 205 of the UMRA.
Executive Order No. 12612
It has been determined under section 6(a) of Executive Order No.
12612, Federalism, that this rule does not have sufficient Federalism
implications to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on States or their political subdivisions, or on the
distribution of power and responsibilities among the various levels of
Government.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. Under the current regulations, a producer is
required to complete an application and acreage report. If the crop is
damaged or destroyed, the insured is required to give notice of loss
and provide the necessary information to complete a claim for
indemnity. The insured must certify to the number of acres and
production on an annual basis or receive a transitional yield. The
producer must maintain the records to support the certified information
for at least 3 years. This regulation does not alter those
requirements. Therefore, the amount of work required of the insurance
companies and Farm Service Agency (FSA) offices delivering and
servicing these policies will not increase significantly from the
amount of work currently required. This rule does not have any greater
or lesser impact on the producer. Therefore, this action is determined
to be exempt from the provisions of the Regulatory Flexibility Act (5
U.S.C. 605), and no Regulatory Flexibility Analysis was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order No. 12372
This program is not subject to the provisions of Executive Order
No. 12372, which require intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order No. 12778
The Office of the General Counsel has determined that these
regulations meet the applicable standards provided in sections 2(a) and
2(b)(2) of Executive Order No. 12778. The provisions of this rule will
not have a retroactive effect prior to the effective date. The
provisions of this rule will preempt State and local laws to the extent
such state and local laws are inconsistent herewith. The administrative
appeal provisions in 7 CFR parts 11 and 780 must be exhausted before
any action for judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
Background
FCIC proposes to add to the Common Crop Insurance Regulations (7
CFR part 457), a new section, 7 CFR 457.121, Arizona-California Citrus
Crop Insurance Provisions. The new provisions will be effective for the
1998 and succeeding crop years. These provisions will supersede and
replace the current provisions for insuring Arizona-California citrus
found at 7 CFR part 409 (Arizona-California Citrus Crop Insurance
Regulations). By separate rule, the current provisions for insuring
Arizona-California citrus will be revised to restrict its effect
through the 1997 crop year and later remove that part.
This rule makes minor editorial and format changes to improve the
Arizona-California Citrus Crop Insurance Regulations' compatibility
with the Common Crop Insurance Policy. In addition, FCIC is proposing
substantive changes in the provisions for insuring Arizona-California
citrus as follows:
1. Section 1--Add definitions for the terms ``days,''
``dehorning,'' ``direct marketing,'' ``FSA,'' ``good farming
practices,'' ``hedged,'' ``interplanted,'' ``irrigated practice,''
``non-contiguous,'' ``production guarantee (per acre),'' ``scaffold
limb,'' ``set out,'' ``type,'' and ``written agreement'' for
clarification.
2. Section 1--Change the definition of ``harvest,'' for
clarification.
3. Section 3(a)--Clarify that an insured may select one price
election for each citrus type, but that the price election selected for
each type does not need bear the same percentage relationship to the
maximum price offered for each type. However, if separate price
elections are available by variety within each type, the price
elections the insured chooses within the type must have the same
percentage relationship to the maximum price offered by the insurance
provider for each variety within the type. This helps protect against
adverse selection and simplifies the administration of the program.
4. Section 3(b)--Add a provision to specify that instead of
reporting citrus
[[Page 31466]]
production for the previous crop year as required by the Basic
Provisions, there is a lag period of one year because the citrus is not
harvested until after the production reporting date.
5. Section 3(c)--Add a provision to specify that the insured must
report damage, dehorning, removal of trees, and change in practices
that may reduce yields. Further, add provisions that for the first year
of insurance for acreage interplanted with another perennial crop the
insured must report the age and type, if applicable, the planting
pattern, and any other information that the insurance provider requests
to establish the yield upon which the production guarantee is based. If
the insured fails to notify the insurance provider of circumstances
that may reduce the yield below the yield upon which the insurance
guarantee is based, the insurance provider will reduce the production
guarantee at any time the circumstances become known. This allows the
insurance provider to limit liability, if necessary, before insurance
attaches.
6. Section 5--The cancellation and termination dates are changed to
November 20. Currently, the policy states November 30. This change is
consistent with other perennial crop policies and allows for ease of
administration.
7. Section 6--Remove citrus type designations from the Arizona-
California Citrus Crop Provisions and add them to the Special
Provisions. This will eliminate the need to amend the Arizona-
California Citrus Crop Provisions if FCIC decides to add additional
types.
8. Section 7--Add a provision to make interplanted citrus insurable
if planted with another perennial crop unless the insurance provider
inspects the acreage and determines it does not meet the other
requirements for insurability. This clause will make insurance
available to more producers and will reduce the number of acres for
which coverage would be available only under the noninsured crop
disaster assistance program (NAP).
9. Section 8(a)--Change the beginning of the insurance period from
December 1 to November 21 to be consistent with other perennial crops.
However, if an application is accepted by the insurance company after
November 20, insurance will attach on the 10th day after the
application is received in the local agent's office, if approved.
10. Section 8(b)--Add provisions to clarify the procedure for
insuring acreage when an insurable share is acquired or relinquished on
or before the acreage reporting date.
11. Section 9(a)--Add the clause, ``if caused by an insured peril
that occurs during the insurance period,'' to the end of the phrase
``failure of the irrigation water supply.'' This will limit coverage to
a cause of loss covered by the policy.
12. Section 9(b)--Clarify that disease and insect infestation are
excluded causes of loss unless adverse weather prevents the proper
application of control measures, causes control measures to be
ineffective when properly applied, or causes disease or insect
infestation for which no effective control mechanism is available.
13. Section 10--The previous 15 day ``notice of probable loss''
requirement is replaced by the requirement that the insured provide
notice of damage within 72 hours of discovery to be consistent with
other citrus policies.
14. Section 10(a)--Add a provision requiring the insured to give
notice within 3 days of the date harvest should have started if the
crop will not be harvested in order to permit a timely appraisal of the
marketable production.
15. Section 10(b)--Require the producer to give notice at least 15
days before any production from any unit will be marketed directly to
consumers because insureds usually have inadequate records of such
marketing and an appraisal is necessary to accurately determine the
direct marketed production.
16. Section 12--Add provisions for providing insurance coverage by
written agreement. FCIC has a long standing policy of permitting
certain modifications of the insurance contracts by written agreement
for some policies. This amendment will extend this practice to Arizona-
California citrus fruit and make it possible to tailor the policy to a
specific insured in certain specific instances.
List of Subjects in 7 CFR Part 457
Crop insurance, Arizona-California citrus.
Proposed Rule
Pursuant to the authority contained in the Federal Crop Insurance
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance
Corporation hereby proposes to amend the Common Crop Insurance
Regulations (7 CFR part 457), effective for the 1998 and succeeding
crop years, to read as follows:
PART 457--[AMENDED]
1. The authority citation for 7 CFR part 457 continues to read
as follows:
Authority: 7 U.S.C. 1506(l), and 1506(p)
2. 7 CFR part 457 is amended by adding a new Sec. 457.121 to read
as follows:
Sec. 457.121 Arizona-California Citrus Crop Insurance Provisions.
The Arizona-California Citrus Crop Insurance Provisions for the
1998 and succeeding crop years are as follows:
UNITED STATES DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
Arizona-California Citrus Crop Provisions
If a conflict exists among the Basic Provisions (Sec. 457.8),
these crop provisions, and the Special Provisions, the Special
Provisions will control these crop provisions and the Basic
Provisions, and these crop provisions will control the Basic
Provisions.
1. Definitions
Carton--The standard container for marketing fresh packed fruit
by citrus type as shown below. In the absence of marketing records
on a carton basis, production will be converted to cartons on the
basis of the following average net pounds of packed fruit in a
standard packed carton.
------------------------------------------------------------------------
Container size Types of fruit Pounds
------------------------------------------------------------------------
Container #58 Navel oranges.......... ........................ 38
Valencia oranges & Sweet .......
oranges
Container #58 Lemons................. ........................ 40
Container #59 Grapefruit............. ........................ 32
Container #63 Tangerines............. ........................ 25
(including Tangelos) & .......
Mandarin oranges
------------------------------------------------------------------------
Crop year--In lieu of the definition in section 1 (Definitions)
of the Basic Provisions (Sec. 457.8), crop year is the period
beginning with the date insurance attaches to the citrus crop and
extending through normal harvest time, and will be designated by the
calendar year following the year in which the bloom is normally set.
Days--Calendar days.
Dehorning--Cutting of any scaffold limb to a length that is not
greater than one-fourth (\1/4\) the height of the tree before
cutting.
Direct marketing--Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper or buyer. Examples of direct
marketing include selling through an on-farm or roadside stand,
farmer's market, and permitting the general public to enter the
field for the purpose of picking all or a portion of the crop.
FSA--The Farm Service Agency, an agency of the United States
Department of Agriculture or any successor agency.
Good farming practices--The cultural practices generally in use
in the county for
[[Page 31467]]
the crop to make normal progress toward maturity and produce at
least the yield used to determine the production guarantee, and
generally recognized by the Cooperative Extension Service as
compatible with agronomic and weather conditions in the county.
Harvest--The severance of mature citrus from the tree by
pulling, picking, or any other means, or by collecting marketable
fruit from the ground.
Interplanted--Acreage on which two or more crops are planted in
any form of alternating or mixed pattern.
Irrigated practice--A method of producing a crop by which water
is artificially applied during the growing season by appropriate
systems and at the proper times, with the intention of providing the
quantity of water needed to produce at least the yield used to
establish the irrigated production guarantee on the irrigated
acreage planted to the insured crop.
Non-contiguous land--Any two or more tracts of land owned by
you, or rented by you for any consideration other than a share in
the insured crop, whose boundaries do not touch at any point. Land
that is separated only by a public or private right-of-way, waterway
or irrigation canal will be considered to be contiguous.
Production guarantee (per acre)--The number of citrus (cartons)
determined by multiplying the approved yield per acre by the
coverage level percentage you elect.
Scaffold limb--A major limb attached directly to the trunk.
Set out--Transplanting a tree into the grove.
Type--Classes of fruit with similar characteristics that are
grouped for insurance purposes as specified in the Special
Provisions.
Written agreement--A written document that alters designated
terms of a policy in accordance with section 12.
2. Unit Division
(a) A unit as defined in section 1 (Definitions) of the Basic
Provisions (Sec. 457.8), will be divided into basic units by each
citrus type designated in the Special Provisions.
(b) Unless limited by the Special Provisions, these basic units
may be divided into optional units if, for each optional unit you
meet all the conditions of this section or if a written agreement to
such division exists.
(c) Basic units may not be divided into optional units on any
basis including, but not limited to, production practice, type, and
variety, other than as described in this section.
(d) If you do not comply fully with these provisions, we will
combine all optional units that are not in compliance with these
provisions into the basic unit from which they were formed. We will
combine the optional units at any time we discover that you have
failed to comply with these provisions. If failure to comply with
these provisions is determined to be inadvertent, and the optional
units are combined, that portion of the premium paid for the purpose
of electing optional units will be refunded to you pro rata for the
units combined.
(e) All optional units must be identified on the acreage report
for each crop year.
(f) The following requirements must be met for each optional
unit:
(1) You must have records, which can be independently verified,
of acreage and production for each optional unit for at least the
last crop year used to determine your production guarantee;
(2) You must have records of marketed production or stored
production from each optional unit maintained in such a manner that
permits us to verify the production from each optional unit, or the
production from each unit must be kept separate until loss
adjustment is completed; and
(3) Each optional unit must be located on non-contiguous land.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 (Insurance
Guarantees, Coverage Levels, and Prices for Determining Indemnities)
of the Basic Provisions (Sec. 457.8), you may select only one price
election and coverage level for each citrus fruit type designated in
the Special Provisions that you elect to insure. The price elections
you choose for each type need not bear the same percentage
relationship to the maximum price offered by us for each type. For
example, if you choose one hundred percent (100%) of the maximum
price election for sweet oranges, you may choose seventy-five
percent (75%) of the maximum price election for grapefruit. However,
if separate price elections are available for varieties within each
type, the price elections you choose for each variety must have the
same percentage relationship to the maximum price offered by us for
each variety within the type.
(b) In lieu of reporting your citrus production of marketable
fresh fruit for the previous crop year, as required by the Basic
Provisions (Sec. 457.8), there is a lag period of one year. Each
crop year, you must report your production from two crop years ago,
e.g., on the 1998 crop year production report, you will provide your
1996 crop year production.
(c) In addition, you must report, by the production reporting
date designated in section 3 (Insurance Guarantees, Coverage Levels,
and Prices for Determining Indemnities) of the Basic Provisions
(Sec. 457.8), by type, if applicable:
(1) The number of trees damaged, dehorned or removed, and any
change in practices or any other circumstance that may reduce the
expected yield below the yield upon which the insurance guarantee is
based; and the number of affected acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern; and
(4) For the first year of insurance for acreage interplanted
with another perennial crop, and anytime the planting pattern of
such acreage is changed:
(i) The age of the interplanted crop, and type, if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to
establish your approved yield.
We will reduce the yield used to establish your production
guarantee as necessary, based on our estimate of the effect of the
following: interplanted perennial crop; damage; dehorning; removal
of trees; or change in practices on the yield potential of the
insured crop. If you fail to notify us of any circumstance that may
reduce yields from previous levels, we will reduce your production
guarantee, as necessary, at any time we become aware of the
circumstance.
4. Contract Changes
The contract change date is August 31 preceding the cancellation
date (see the provisions of section 4 (Contract Changes) of the
Basic Provisions (Sec. 457.8)).
5. Cancellation and Termination Dates
In accordance with section 2 (Life of Policy, Cancellation, and
Termination) of the Basic Provisions (Sec. 457.8), the cancellation
and termination dates are November 20.
6. Insured Crop
(a) In accordance with section 8 (Insured Crop) of the Basic
Provisions (Sec. 457.8), the crop insured will be all the acreage in
the county of each citrus type designated in the Special Provisions
that you elect to insure and for which a premium rate is provided by
the actuarial table:
(1) In which you have a share;
(2) That is a type adapted to the area; and
(3) That is grown in a grove that, if inspected, is considered
acceptable by us.
(b) In addition to citrus not insurable in section 8 (Insured
Crop) of the Basic Provisions (Sec. 457.8), we do not insure any
citrus fruit:
(1) That is not irrigated; and
(2) That has not reached the sixth growing season after being
set out, unless we inspect and allow insurance on such acreage.
7. Insurable Acreage
In lieu of the provisions in section 9 (Insurable Acreage) of
the Basic Provisions (Sec. 457.8), that prohibit insurance attaching
to a crop planted with another crop, citrus interplanted with
another perennial crop is insurable unless we inspect the acreage
and determine it does not meet the requirements for insurability
contained in your policy.
8. Insurance Period
(a) In accordance with the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) Coverage begins on November 21 of each crop year, except
that for the first crop year, if the application is accepted by us
after November 20, insurance will attach on the 10th day after the
application, if approved, is received in our local agent's office.
(2) The calendar date for the end of the insurance period for
each crop year is:
(i) August 31 for Navel oranges and Southern California lemons;
(ii) November 20 for Valencia oranges; and
(iii) July 31 for all other types of citrus.
(b) In addition to the provisions of section 11 (Insurance
Period) of the Basic Provisions (Sec. 457.8):
(1) If you acquire an insurable share in any insurable acreage
after coverage begins, but on or before the acreage reporting date
for the crop year, and after an inspection we consider the acreage
acceptable, insurance will be considered to have attached to such
acreage on the calendar date for the beginning of the insurance
period.
[[Page 31468]]
(2) If you relinquish your insurable share on any insurable
acreage of citrus on or before the acreage reporting date for the
crop year, insurance will not be considered to have attached to such
acreage for that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a
similar form approved by us, is completed by all affected parties;
and
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date.
If you relinquish your share, no premium or indemnity will be
due unless a transfer of coverage is properly executed.
9. Causes of Loss
(a) In accordance with the provisions of section 12 (Causes of
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided
only against the following causes of loss that occur during the
insurance period:
(1) Adverse weather conditions;
(2) Fire, unless weeds and other forms of undergrowth have not
been controlled or pruning debris has not been removed from the
grove;
(3) Wildlife;
(4) Earthquake;
(5) Volcanic eruption; or
(6) Failure of irrigation water supply, if caused by an insured
peril that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not
insure against damage or loss of production due to:
(1) Disease or insect infestation, unless adverse weather
conditions:
(i) Prevents the proper application of control measures or
causes properly applied control measures to be ineffective; or
(ii) Causes disease or insect infestation for which no effective
control mechanism is available;
(2) Inability to market the citrus for any reason other than
actual physical damage from an insurable cause specified in this
section. For example, we will not pay you an indemnity if you are
unable to market due to quarantine, boycott, or refusal of any
person to accept production.
10. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 (Duties in the
Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the
following will apply:
(a) You must notify us within three 3 days of the date harvest
should have started if the crop will not be harvested.
(b) You must notify us at least 15 days before any production
from any unit will be marketed directly to consumers. We will
conduct an appraisal that will be used to determine your production
to count for direct marketed production. If damage occurs after this
appraisal, we will conduct an additional appraisal. These
appraisals, and any acceptable records provided by you, will be used
to determine your production to count. Failure to give timely notice
that production will be marketed directly to consumers will result
in an appraised amount of production to count that is not less than
the production guarantee per acre if such failure results in our
inability to make the required appraisal.
(c) If you intend to claim an indemnity on any unit, you must
notify us prior to the beginning of harvest so that we may inspect
the damaged production. You must not sell or dispose of the damaged
crop until after we have given you written consent to do so. If you
fail to meet the requirements of this section, all such production
will be considered undamaged and included as production to count.
11. Settlement Of Claim
(a) We will determine your loss on a unit basis. In the event
you are unable to provide production records:
(1) For any optional unit, we will combine all optional units
for which acceptable production records were not provided; or
(2) For any basic unit, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for each unit.
(b) In the event of loss or damage covered by this policy, we
will settle your claim by:
(1) Multiplying the insured acreage for each type by its
respective production guarantee;
(2) Multiplying each result in paragraph (1) by the respective
price election for each type, or variety within a type;
(3) Totaling the results in paragraph (2);
(4) Multiplying the total production to be counted of each type
or variety, if applicable (see section 11(c)), by the respective
price election;
(5) Totaling the results of paragraph (4);
(6) Subtracting the total of paragraph (5) from the total in
paragraph (3); and
(7) Multiplying the result of paragraph (6) by your share;
(c) The total production to count (in cartons) from all
insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) Marketed directly to consumers if you fail to meet the
requirements contained in section 10;
(C) Damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production determined to be marketable as
fresh packed fruit; and
(iv) Potential production on insured acreage that you intend to
abandon or no longer care for, if you and we agree on the appraised
amount of production. Upon such agreement, the insurance period for
that acreage will end. If you do not agree with our appraisal, we
may defer the claim only if you agree to continue to care for the
crop. We will then make another appraisal when you notify us of
further damage or that harvest is general in the area unless you
harvested the crop, in which case we will use the harvested
production. If you do not continue to care for the crop, our
appraisal made prior to deferring the claim will be used to
determine the production to count; and
(2) All harvested production marketed as fresh packed fruit from
the insurable acreage.
(3) All disposed or sold damaged citrus that was disposed or
sold without an inspection or written consent.
(d) Any production will be considered marketed or marketable as
fresh packed fruit unless, due to insurable causes, such production
was not marketed or marketable as fresh packed fruit.
(e) Citrus that cannot be marketed due to insurable causes will
not be considered production to count.
(f) If we determine that frost protection equipment was not
properly utilized or not properly reported, the indemnity for the
unit will be reduced by the percentage of premium reduction allowed
for frost protection equipment. You must, at our request, provide us
records showing the start-stop times by date for each period the
frost protection equipment was used.
12. Written Agreement
Designated terms of this policy may be altered by written
agreement in accordance with the following:
(a) You must apply in writing for each written agreement no
later than the sales closing date, except as provided in section
12(e);
(b) The application for written agreement must contain all terms
of the contract between you and us that will be in effect if the
written agreement is not approved;
(c) If approved, the written agreement will include all variable
terms of the contract, including, but not limited to, crop type or
variety, the guarantee, premium rate, and price election;
(d) Each written agreement will only be valid for one year (If
the written agreement is not specifically renewed the following
year, insurance coverage for subsequent crop years will be in
accordance with the printed policy); and
(e) An application for written agreement submitted after the
sales closing date may be approved if, after a physical inspection
of the acreage, it is determined that no loss has occurred and the
crop is insurable in accordance with the policy and written
agreement provisions.
Signed in Washington, DC., on June 13, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-15770 Filed 6-19-96; 8:45 am]
BILLING CODE 3410-FA-P
Complete official Federal Register PDF
FR Doc. 96-15725 Carcinogenicity Testing of Compounds Used in Food-Producing Animals
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31468-31469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15725]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 500
[Docket No. 95N-0417]
Carcinogenicity Testing of Compounds Used in Food-Producing
Animals
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.
-----------------------------------------------------------------------
[[Page 31469]]
SUMMARY: The Food and Drug Administration (FDA) is proposing to revise
the regulation that sets forth the requirements for the carcinogenicity
testing of compounds used in food-producing animals to allow the agency
and sponsors greater flexibility when choosing the types of studies
used for testing the carcinogenicity of compounds used in food-
producing animals. FDA is proposing to revise the study requirements
because FDA recognizes that advances in models used to assess the
carcinogenicity of compounds have been made. The specific requirement
that a sponsor must conduct oral, chronic, dose-response studies would
be deleted under the proposed regulation. Sponsors would have more
options for testing the carcinogenicity of compounds used in food-
producing animals. This proposal implements the goals stated by the
National Performance Review.
DATES: Written comments by September 3, 1996.
ADDRESSES: Written comments to the Dockets Managements Branch (HFA-
305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23,
Rockville, MD 20857. Comments should be identified with the docket
number found in brackets in the heading of this document. Received
comments may be seen at the Dockets Management Branch between 9 a.m.
and 4 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Margaret A. Miller, Center for
Veterinary Medicine (HFV-100), Food and Drug Administration, 7500
Standish Pl., Rockville, MD 20855, 301-827-0205.
SUPPLEMENTARY INFORMATION: Section 500.80(b) (21 CFR 500.80(b)) sets
forth the requirements for the carcinogenicity testing of compounds
used in food-producing animals. Specifically, the regulation states,
``The bioassays that a sponsor conducts must be oral, chronic, dose-
response studies and must be designed to assess carcinogenicity and to
determine the quantitative aspects of any carcinogenic response.''
At the time that this regulation was written, a chronic study was
considered to be the standard test for carcinogenicity. However, FDA
recognizes that advances in models used to assess carcinogenicity have
been made in recent years. For example, scientists now agree that,
depending on the compound, a chronic study (as required under current
regulations) may not measure the appropriate time point necessary to
assess carcinogenicity. Study designs other than chronic may result in
a better evaluation of the compound. Thus, FDA is proposing to remove
the requirement for oral, chronic, dose-response studies to allow
sponsors the option of using other study designs when assessing
carcinogenicity of compounds used for food-producing animals.
This proposal is aligned with the goals stated by the National
Performance Review. This proposed rule is a result of the President's
directive to conduct a comprehensive review of all rules to identify
those that are obsolete and burdensome and to delete or revise them.
The agency has determined that this rule is in need of revision as
described herein.
I. Environmental Impact
The agency has carefully considered the potential environmental
effects of this action. FDA has determined that this action is
categorically excluded under 21 CFR 25.24(a)(8). The procedure for
testing the carcinogenicity of compounds used for food-producing
animals is being revised. This revision will not cause an increase in
the existing level of use or cause a change in the intended uses of the
product or its substitutes. Therefore, neither an environmental
assessment nor an environmental impact statement is required.
II. Analysis of Impacts
FDA has examined the impacts of the proposed rule under Executive
Order 12866 and the Regulatory Flexibility Act (Pub. L. 96-354).
Executive Order 12866 directs agencies to assess all costs and benefits
of available regulatory alternatives and, when regulation is necessary,
to select regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity). The agency believes that
this proposed rule is consistent with the regulatory philosophy and
principles identified in the Executive Order. In addition, the proposed
rule is not a significant regulatory action as defined by the Executive
Order and so is not subject to review under the Executive Order.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. Because the proposed rule would clarify FDA policy
and simplify the process for submitting certain applications, the
agency certifies that the proposed rule will not have a significant
economic impact on a substantial number of small entities. Therefore,
under the Regulatory Flexibility Act, no further analysis is required.
III. Paperwork Reduction Act of 1995
The agency has determined that this proposed rule contains no
collection of information requirements under the Paperwork Reduction
Act of 1995 (44 U.S.C. chapter 35).
IV. Federalism
FDA has analyzed this proposal in accordance with the principles
and criteria set forth in Executive Order 12612 and has determined that
this proposal does not warrant the preparation of a Federalism
Assessment.
V. Request for Comments
Interested persons may, on or before September 3, 1996 submit to
the Dockets Management Branch (address above) written comments
regarding this proposal. Two copies of any comments are to be
submitted, except that individuals may submit one copy. Comments are to
be identified with the docket number found in brackets in the heading
of this document. Received comments are available for public
examination in the Dockets Management Branch between 9 a.m. and 4 p.m.,
Monday through Friday.
List of Subjects in 21 CFR Part 500
Animal drugs, Animal feeds, Cancer, Labeling, Polychlorinated
biphenyls (PCB's).
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
500 is amended as follows:
Part 500--General
1. The authority citation for 21 CFR part 500 continues to read as
follows:
Authority: Secs. 201, 301, 402, 403, 409, 501, 502, 503, 512,
701 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321, 331,
342, 343, 348, 351, 352, 353, 360b, 371).
Sec. 500.80 [Amended]
2. Section 500.80 Scope of this subpart is amended in paragraph (b)
by removing the phrase ``must be oral, chronic, dose-response studies
and.''
Dated: June 13, 1996.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 96-15725 Filed 6-19-96; 8:45 am]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-15711 Disinterments in National Cemeteries
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31479-31481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15711]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 1
RIN 2900-AI21
Disinterments in National Cemeteries
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Veterans Affairs (VA) proposes to amend
regulations concerning disinterments from national cemeteries. Current
regulations permit disinterment of persons buried in a national
cemetery with the consent of immediate family members. The definition
of immediate family members includes a surviving spouse only if
unmarried. It is proposed
[[Page 31480]]
to change the definition of immediate family members for purposes of
disinterments to include a surviving spouse regardless of whether
remarried or not. This appears to be necessary since we believe the
emotional ties of the surviving spouse would be sufficient to justify
his or her consent as a condition of disinterment. This document also
would make nonsubstantive changes for purposes of clarification.
DATES: Comments must be received on or before August 19, 1996.
ADDRESSES: Mail written comments to: Director, Office of Regulations
Management (02D), Department of Veterans Affairs, 810 Vermont Ave., NW,
Washington, DC 20420, or hand deliver written comments to: Office of
Regulations Management, Room 1176, 801 Eye Street, NW., Washington, DC
20001. Comments should indicate that they are submitted in response to
``RIN 2900-AI21.'' All written comments will be available for public
inspection in the Office of Regulations Management, Room 1176, 801 Eye
Street, NW., Washington, DC 20001 between the hours of 8:00 a.m. and
4:30 p.m., Monday through Friday (except holidays).
FOR FURTHER INFORMATION CONTACT:
Mr. Ken Greenberg, Program Analyst, Communications Division (402B1),
National Cemetery System, Department of Veterans Affairs, 810 Vermont
Avenue, NW., Washington, DC 20420. Telephone: 202-273-5179 (this is not
a toll-free number).
SUPPLEMENTARY INFORMATION: As stated in 38 CFR 1.621, burials in VA
national cemeteries are considered permanent and final and
disinterments are permitted only for cogent reasons.
The current regulations concerning disinterments from national
cemeteries (38 CFR 1.621) require the written and notarized consent of
all living immediate family members of the decedent in order for a
disinterment request to be approved. The current regulations, however,
do not require the notarized signature of the surviving spouse of the
deceased if the spouse has married again.
It appears that approving a disinterment without the consent of all
living immediate family members including a remarried surviving spouse
does not adequately serve the needs of veterans and their families. For
example, a spouse may die and be buried in a national cemetery. The
surviving spouse later remarries and the National Cemetery System (NCS)
receives a written and notarized disinterment request from all family
members except the remarried spouse. Under current regulations, NCS
takes action concerning the disinterment without the remarried spouse
being notified, thereby eliminating any opportunity to object.
Furthermore, a remarried surviving spouse may, now, upon the
termination of the remarriage, regain eligibility for burial in a
national cemetery as the surviving spouse of an eligible decedent. See
Pub. L. No. 103-446, section 802, 108 Stat. 4675 (1994); 38 U.S.C.
2402(5).
VA requires that disinterment requests be executed on VA Form 40-
4970, Request for Disinterment. VA would amend that form accordingly to
reflect the change in regulations if the proposed rule is made final.
In addition, the second sentence of current Sec. 1.621(c), which
states that the Department of Veterans Affairs or officials of the
cemetery should not be made a party to a court action regarding
disinterment, would be deleted since it has no binding effect.
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act (44 U.S.C.
3504(h)). Comments on the collection of information should be sent to
the Office of Management and Budget, Attention: Desk Officer for the
Department of Veterans Affairs, Office of Information and Regulatory
Affairs, Washington, DC 20503, with copies to the Director, Office of
Regulations Management (02D), Department of Veterans Affairs, 810
Vermont Avenue, NW, Washington, DC 20420.
This collection of information included in 38 CFR 1.621 concerns an
application for authority to disinter remains that must be submitted on
VA Form 40-4970. It is proposed to change the information on the form
to reflect that the written and notarized consent of a remarried
surviving spouse is prerequisite for a disinterment from a national
cemetery.
The Department of considers comments by the public on these
proposed collections of information in--
Evaluating whether the proposed collection(s) of
information are necessary for the proper performance of the functions
of the Department, including whether the information will have
practical utility;
Evaluating the accuracy of the Department's estimate of
the burden of the proposed collection(s) of information, including the
validity of the methodology and assumptions used;
Enhancing the quality, usefulness, and clarity of the
information to be collected; and
Minimizing the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology, e.g., permitting
electronic submission of responses.
OMB is required to make a decision concerning the proposed
collections of information contained in this document between 30 and 60
days after publication of this document in the Federal Register.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication. This does not affect
the deadline for the public to comment to the Department on the
proposed regulations.
Title: Application for a Disinterment from a National Cemetery.
Summary of collection of information: The Department requires an
application with approval of all immediate family members of a decedent
in order for VA to authorize disinterment of a decedent's remains from
a national cemetery. The requested information is necessary in order to
obtain the approval of a remarried surviving spouse of a decedent for
disinterment. Previously, a remarried surviving spouse has not been
considered an immediate family member.
Description of the need for information and proposed use of
information: The requested information is necessary to obtain the
approval of a remarried surviving spouse of a decedent for disinterment
from a national cemetery.
Description of likely respondents: Surviving remarried spouses of
decedents interred in national cemeteries.
Estimated total annual reporting burden: 33 hours.
Estimated annual burden per respondent: 10 minutes.
Estimated number of respondents: 200.
Estimated annual frequency of responses: 1.
The Secretary certifies that this proposed rule will not have a
significant economic impact on a substantial number of small entities
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. Pursuant to 5 U.S.C. 605(b), the proposed amended regulation is
exempt from the initial and final regulatory flexibility analyses
requirements of sections 603 and 604. This certification can be made
because
[[Page 31481]]
the amendment does not affect any small entities. Only individual VA
beneficiaries could be directly affected.
The proposed rule is not subject to the Office of Management and
Budget review pursuant to E.O. 12291.
Catalog of Federal Domestic Assistance Number for programs
affected by this regulation are 64.201 and 64.202.
List of Subjects in 38 CFR Part 1
Administrative practice and procedure, Cemeteries, Claims, Privacy,
Security.
Approved: June 11, 1996.
Jesse Brown,
Secretary of Veterans Affairs.
For the reasons set out in the preamble, 38 CFR part 1 is proposed
to be amended as follows:
PART 1--GENERAL PROVISIONS
1. The authority citation for part 1 continues to read as follows:
Authority: 38 U.S.C. 501(a), unless otherwise noted.
2. In Sec. 1.621, paragraph (c) is amended by removing the second
sentence; paragraph (d) and the designation ``[Reserved]'' are removed;
paragraph (e) is redesignated as paragraph (d); and paragraphs (a) and
(b)(2) are revised to read as follows:
Sec. 1.621 Disinterments from national cemeteries.
(a) Interments of eligible decedents in national cemeteries are
considered permanent and final. Disinterment will be permitted only for
cogent reasons and with the prior written authorization of the National
Cemetery Area Office Director or Cemetery Director responsible for the
cemetery involved. Disinterment from a national cemetery will be
approved only when all living immediate family members of the decedent,
and the person who initiated the interment (whether or not he or she is
a member of the immediate family), give their written consent, or when
a court order or State instrumentality of competent jurisdiction
directs the disinterment. For purposes of this section, ``immediate
family members'' are defined as surviving spouse, whether or not he or
she is remarried, all adult children of the decedent, the appointed
guardian(s) of minor children, and the appointed guardian(s) of the
surviving spouse or of the adult child(ren) of the decedent. If the
surviving spouse and all of the children of the decedent are deceased,
the decedent's parents will be considered ``immediate family members.''
(b) * * *
(1) * * *
(2) Notarized statement(s) by all living immediate family members
of the decedent, and the person who initiated the interment (whether or
not he or she is a member of the immediate family), that they consent
to the proposed disinterment.
* * * * *
[FR Doc. 96-15711 Filed 6-19-96; 8:45 am]
BILLING CODE 8320-01-M
Complete official Federal Register PDF
FR Doc. 96-15679 Atlantic Surf Clam and Ocean Quahog Fishery; Control Date
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31499-31501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15679]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
50 CFR Part 652
[Docket No. 960531155-6155-01; I.D. 050996B]
Atlantic Surf Clam and Ocean Quahog Fishery; Control Date
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Advance notice of proposed rulemaking; consideration of a
control date.
-----------------------------------------------------------------------
SUMMARY: NMFS announces that the Mid-Atlantic Fishery Management
Council (Council) is considering limiting future access to anyone
entering that portion of the ocean quahog (Arctica islandica) fishery,
commonly referred to as the Maine mahogany quahog fishery, that is
managed through the Maine Mahogany Quahog Experimental Fishery Program
after June 20, 1996 (control date). Future access to the Maine mahogany
quahog resource in the exclusive economic zone (EEZ) will not be
assured beyond the control date if a management regime is developed and
implemented under the Magnuson Fishery Conservation and Management Act
(Magnuson Act) that limits the number of participants in the fishery.
This document is intended to promote awareness of potential eligibility
criteria for future access to that portion of the ocean quahog fishery
managed through the Maine Mahogany Quahog Experimental Fishery Program
and to discourage new entries into this fishery based on economic
speculation while the Council contemplates whether and how access
should be controlled. The potential eligibility criteria may be based
on historical participation, defined as any number of trips having any
documented amount of ocean quahog landings. This document, therefore,
gives the public notice that they should locate and preserve records
[[Page 31500]]
that substantiate and verify their participation in that portion of the
Maine mahogany quahog fishery in Federal waters managed through the
Maine Mahogany Quahog Experimental Fishery Program.
DATES: Comments must be submitted by July 19, 1996.
ADDRESSES: Comments should be directed to: David R. Keifer, Executive
Director, Mid-Atlantic Fishery Management Council, 300 South New
Street, Dover DE 19904.
FOR FURTHER INFORMATION CONTACT: Myles Raizin, Fishery Policy Analyst,
508-281-9104.
SUPPLEMENTARY INFORMATION:
Background
The surf clam and ocean quahog resources were the first resources
placed under Federal management after the Magnuson Act was implemented.
Surf clams and ocean quahogs are currently managed by the individual
transferrable quota (ITQ) system that was implemented by Amendment 8 to
the Fishery Management Plan for the Atlantic Surf Clam and Ocean Quahog
Fisheries (FMP), that was effective September 30, 1990. Amendment 8
replaced an elaborate and costly effort control system with one which
limited only the outputs, or landings of the two species, and gave
harvesters the flexibility to utilize their landing allocation in
whatever manner best suited their individual needs and situations.
NMFS assigned landing allocations to historic industry
participants, which could be harvested, leased, or sold to other
individuals at the allocation holder's discretion. The major factor
employed in assigning those allocations was past participation in the
fisheries. Documentation of past participation was provided by
fishermen themselves, using logbook forms supplied by the government.
Mandatory landings reports have been a requirement for any vessel
harvesting surf clams or ocean quahogs in the EEZ since 1978.
Ocean quahogs are distributed in U.S. waters from the Canadian
border to Cape Hatteras. South of Cape Cod, the species occurs
primarily in EEZ waters, although some fishable concentrations occur in
Rhode Island Sound, and in coastal waters off Massachusetts. In the
Gulf of Maine, ocean quahogs occur both in state and EEZ waters. Two
significant and separate fisheries currently exist for ocean quahogs,
in the Middle Atlantic Bight, from Martha's Vineyard to the Delmarva
Peninsula, and in waters off eastern Maine.
In general, over 99 percent of the ocean quahog landings in weight
come from the mid-Atlantic fishery. Effort and catch per unit of effort
in the Maine fishery are also substantially less than that in the mid-
Atlantic. The Maine fishery occurs in a relatively restricted area
centered off Mt. Desert Island. Ocean quahog catches from the coast of
Maine are restricted to a narrow band inshore of the 50 fathom line.
In 1990, a problem was discovered relative to the fishery for ocean
quahogs off of Maine. While previously this small-scale fishery had
occurred primarily within Maine state waters, area closures were
required due to the presence of paralytic shellfish poisoning toxin.
These closures forced vessels to fish further offshore in the EEZ
starting in 1987.
It was not until one of the participants in the Maine ocean quahog
fishery was issued a violation notice by the U.S. Coast Guard that
Maine participants came to understand the Federal management measures
governing the quahog fishery. Some of the participants in this fishery
had mistakenly believed that the animal that was locally called a
``mahogany clam'' was a different species than the ocean quahog under
Federal management.
Although the mahogany quahog fishery that occurs off Maine uses the
same species as the ocean quahog off the mid-Atlantic, the Maine
mahogany quahog is a distinct biological group of animals. For
instance, Maine mahogany quahogs have a much slower growth rate than
ocean quahogs off the mid-Atlantic.
To address the issue of a distinct biological group of ocean
quahogs off the coast of Maine, the Director, Northeast Region, NMFS,
initiated an experimental fishery for mahogany quahogs off of downeast
Maine. The participants in this fishery are required to obtain and
carry on board their vessels a certificate issued by NMFS. Several
conditions are placed on the experimental fishery, including an area
restriction that prohibits vessels from fishing south of 43 deg.50' N.
latitude (changed from 43 deg.00' N. latitude in 1992), vessel and
dealer reporting requirements, an obligation to take observers aboard
if required by NMFS, and a requirement for vessels to sell only to
federally permitted dealers.
Significant differences exist between the Maine and mid-Atlantic
fisheries. The markets into which each type of ocean quahog are sold
also differ. The major ocean quahog fishery from the mid-Atlantic has
typically been a larger scale industrial enterprise, conducted by large
vessels operating in deep, offshore waters. Ocean quahogs are dislodged
from the seabed using large, hydraulic dredges that shoot jets of water
from their leading edge. Once on board, ocean quahogs are stored in
metal cages capable of holding 32 bu each. At the dock, cranes lift the
cages into tractor trailers for shipment to processing plants where
they are steamed open, thoroughly washed, and processed into a variety
of product forms primarily for clam chowder. Reported prices have been
relatively constant over time and have ranged from $3.00 to $4.70 per
bu in 1995.
The small-scale Maine mahogany quahog fishery utilizes small, dry
dredges on small boats typically ranging between 35 (11 m) and 45 ft
(14 m) in length. The quahogs targeted by these vessels are smaller
than in the industrial fishery, averaging between 1.5 (38 mm) and 2.5
inches (63 mm), and are destined for the fresh, half-shell market. The
average exvessel price in 1995 was $34 per bu but prices have been as
high as $45 per bu in 1991.
Significant landings (124,000 bu) of quahogs in Maine were first
recorded in 1986. For the next eight years, reported landings were on a
declining trend, falling to a low of 22,000 bu in 1994. The number of
vessels reporting landings in the Federal experimental fishery declined
from 45 boats in 1991 to 30 in 1994.
The 1995 data have not yet been finalized, however, the State of
Maine has records of landings increasing sharply to approximately
40,000 bu, due to the discovery of an extensive new bed. Indications
from officials in Maine are that this new resource site straddles the
boundary between the EEZ and state waters.
NMFS collected nonrandom samples from the coast of Maine with the
1992 and 1994 research surveys in order to map the distribution of
ocean quahogs and to examine the population size frequency
distributions. Within the 50-fathom range, ocean quahogs appear to be
restricted to a patch centered between 67 deg. and 68 deg. W.
longitude. Tows were taken to the east and west of the patch to attempt
to define the limits. The location of the patch, as defined by survey
data, agrees well with the location of recent landings. Maine is the
only area with any evidence of substantial recruitment of small quahogs
or of growth by medium-sized ocean quahogs in any region.
The 1994 stock assessment states that given the problems with the
1994 survey, it would be inappropriate to use the two surveys from
Maine to make inferences about changes in population size, because
those samples were taken
[[Page 31501]]
from nonrandom locations. In the Maine area, the population consists of
two length modes. The larger group is centered between 50-54 mm (25 mm
= 1 inch) shell length. Most clams in the smaller group measured 20-29
mm in July 1992, and 30-39 mm in August 1994. Work is currently in
progress to section these shells and estimate age and growth. The 50-54
mm long clams are estimated to be 35 to 43 years of age. The smaller
group, 30-39 mm long, are estimated to be 15 to 20 years of age.
The Council intends to address whether and how to limit entry of
commercial vessels into this fishery in Amendment 10 to the FMP. The
Council's intent in making this announcement is to discourage
speculative entry into the Maine mahogany quahog fishery while
potential management regimes to control access into the fishery are
discussed and possibly developed by the Council. The control date will
help to distinguish bona fide established fishermen from speculative
entrants to the fishery. Fishermen are notified that entering the
fishery after the control date will not assure them of future access to
the ocean quahog resource on the grounds of previous participation.
Furthermore, additional and/or other qualifying criteria also may be
applied. The Council may choose different and variably weighted methods
to qualify fishermen, based on the type and length of participation in
the fishery or on the quantity of landings. The Council may also decide
not to limit entry into this fishery after a consideration of all
reasonable alternatives for its management.
Authority: 16 U.S.C. 1801 et seq.
Dated: June 13, 1996.
Gary Matlock,
Program Management Officer, National Marine Fisheries Service.
[FR Doc. 96-15679 Filed 6-19-96; 8:45 am]
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-15670 Radio Broadcasting Services; Cross Hill, SC
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Page 31490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15670]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 96-126; RM-8815]
Radio Broadcasting Services; Cross Hill, SC
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Commission requests comments on a petition filed by Ron
Moore proposing the allotment of Channel 231A at Cross Hill, South
Carolina, as the community's first local aural transmission service.
Channel 231A can be allotted to Cross Hill in compliance with the
Commission's minimum distance separation requirements with a site
restriction of 14.7 kilometers (9.1 miles) southeast to avoid short-
spacings to the licensed sites of Station WGOR(FM), Channel 230C3,
Martinez, Georgia, and Station WMUU-FM, Channel 233C, Greenville, South
Carolina. The coordinates for Channel 231A at Cross Hill are North
Latitude 34-13-04 and West Longitude 81-51-41.
DATES: Comments must be filed on or before July 29, 1996, and reply
comments on or before August 13, 1996.
ADDRESSES: Federal Communications Commission, Washington, DC 20554. In
addition to filing comments with the FCC, interested parties should
serve the petitioner, or its counsel or consultant, as follows: Ron
Moore, 811-A Montague Ave., Greenwood, South Carolina 29649
(Petitioner).
FOR FURTHER INFORMATION CONTACT: Sharon P. McDonald, Mass Media Bureau,
(202) 418-2180.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Proposed Rule Making, MM Docket No. 96-124, adopted May 24,
1996, and released June 7, 1996. The full text of this Commission
decision is available for inspection and copying during normal business
hours in the FCC Reference Center (Room 239), 1919 M Street, NW.,
Washington, DC. The complete text of this decision may also be
purchased from the Commission's copy contractor, International
Transcription Service, Inc., (202) 857-3800, 2100 M Street, NW., Suite
140, Washington, DC. 20037.
Provisions of the Regulatory Flexibility Act of 1980 do not apply
to this proceeding.
Members of the public should note that from the time a Notice of
Proposed Rule Making is issued until the matter is no longer subject to
Commission consideration or court review, all ex parte contacts are
prohibited in Commission proceedings, such as this one, which involve
channel allotments. See 47 CFR 1.1204(b) for rules governing
permissible ex parte contacts.
For information regarding proper filing procedures for comments,
see 47 CFR 1.415 and 1.420.
List of Subjects in 47 CFR Part 73
Radio broadcasting.
Federal Communications Commission.
John A. Karousos,
Chief, Allocations Branch, Policy and Rules Division, Mass Media
Bureau.
[FR Doc. 96-15670 Filed 6-19-96; 8:45 am]
BILLING CODE 6712-01-F
Complete official Federal Register PDF
FR Doc. 96-15669 Television Broadcasting Services; Irma, WI
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Page 31490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15669]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 96-39; RM-8757]
Television Broadcasting Services; Irma, WI
AGENCY: Federal Communications Commission.
ACTION: Proposed rule; dismissal.
-----------------------------------------------------------------------
SUMMARY: This action dismisses a petition for rule making filed by
David A. White requesting the allotment of UHF Television Channel 30+
to Irma, Wisconsin. See 61 FR 10978, March 18, 1996. No comments were
received at the Commission stating an intention to file an application
for Channel 30+ at Irma, Wisconsin. It is Commission policy to refrain
from allotting a channel absent an expression of interest.
FOR FURTHER INFORMATION CONTACT: Kathleen Scheuerle, Mass Media Bureau,
(202) 418-2180.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order, MM Docket No. 96-39, adopted May 24, 1996, and released June
7, 1996. The full text of this Commission decision is available for
inspection and copying during normal business hours in the Commission's
Reference Center (Room 239), 1919 M Street, NW., Washington, DC. The
complete text of this decision may also be purchased from the
Commission's copy contractors, International Transcription Services,
Inc., 2100 M Street, NW., Suite 140, Washington, DC 20037, (202) 857-
3800.
List of Subjects in 47 CFR Part 73
Television broadcasting.
Federal Communications Commission.
John A. Karousos,
Chief, Allocations Branch, Policy and Rules Division, Mass Media
Bureau.
[FR Doc. 96-15669 Filed 6-19-96; 8:45 am]
BILLING CODE 6712-01-F
Complete official Federal Register PDF
FR Doc. 96-15668 Radio Broadcasting Services; Winner and Wessington Springs, SD
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31489-31490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15668]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 96-124; RM-8813]
Radio Broadcasting Services; Winner and Wessington Springs, SD
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Commission requests comments on a petition filed by
Midwest Radio Corporation proposing the substitution of Channel 252C1
for Channel 253C1 at Winner, the reallotment of Channel 252C1 from
Winner to Wessington Springs, South Dakota, and the modification of
Station KGGK(FM)'s construction permit accordingly. Channel 252C1 can
be allotted to Wessington Springs in compliance with the Commission's
minimum distance separation requirements without the imposition of a
site restriction. The coordinates for Channel 252C1 at Wessington
Springs are North Latitude 44-05-12 and West Longitude 98-34-24. In
accordance with Section 1.420(i) of the Commission's Rules, we will not
accept competing expressions of interest in the use of Channel 252C1 at
Wessington Springs, or require the petitioner to demonstrate the
availability of an additional equivalent class channel for use by such
parties.
DATES: Comments must be filed on or before July 29, 1996, and reply
comments on or before August 13, 1996.
ADDRESSES: Federal Communications Commission, Washington, DC 20554. In
addition to filing comments with the FCC, interested parties should
serve the petitioner, or its counsel or consultant, as follows: John S.
Neely, Esq., Miller & Miller, P.C., P.O. Box 33003, Washington, DC
20033 (Counsel for Petitioner).
[[Page 31490]]
FOR FURTHER INFORMATION CONTACT: Sharon P. McDonald, Mass Media Bureau,
(202) 418-2180.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Proposed Rule Making, MM Docket No. 96-124, adopted May 24,
1996, and released June 7, 1996. The full text of this Commission
decision is available for inspection and copying during normal business
hours in the FCC Reference Center (Room 239), 1919 M Street, NW.,
Washington, DC. The complete text of this decision may also be
purchased from the Commission's copy contractor, International
Transcription Service, Inc., (202) 857-3800, 2100 M Street, NW., Suite
140, Washington, DC 20037.
Provisions of the Regulatory Flexibility Act of 1980 do not apply
to this proceeding.
Members of the public should note that from the time a Notice of
Proposed Rule Making is issued until the matter is no longer subject to
Commission consideration or court review, all ex parte contacts are
prohibited in Commission proceedings, such as this one, which involve
channel allotments. See 47 CFR 1.1204(b) for rules governing
permissible ex parte contacts.
For information regarding proper filing procedures for comments,
see 47 CFR 1.415 and 1.420.
List of Subjects in 47 CFR Part 73
Radio broadcasting.
Federal Communications Commission.
John A. Karousos,
Chief, Allocations Branch, Policy and Rules Division, Mass Media
Bureau.
[FR Doc. 96-15668 Filed 6-19-96; 8:45 am]
BILLING CODE 6712-01-F
Complete official Federal Register PDF
FR Doc. 96-15666 Mark to Market for Dealers in Securities; Equity Interests in Related Parties and the Dealer-Customer Relationship
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31474-31479]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15666]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
26 CFR Part 1
[FI-32-95]
RIN 1545-AT94
Mark to Market for Dealers in Securities; Equity Interests in
Related Parties and the Dealer-Customer Relationship
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations that make mark-to-
market accounting inapplicable to most equity interests in related
entities. The regulations also relate to the definition of a dealer in
securities for certain federal income tax purposes. To qualify as a
dealer in securities, a taxpayer must engage in transactions with
customers. The proposed regulations concern the existence of dealer-
customer relationships. The Revenue Reconciliation Act of 1993 amended
the applicable tax law. These regulations provide guidance for
taxpayers that engage in securities transactions. This document also
provides notice of a public hearing on these proposed regulations.
DATES: Written comments and outlines of oral comments to be presented
at a public hearing scheduled for October 15, 1996, at 10 a.m., must be
received by September 18, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (FI-32-95), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (FI-32-95), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC 20224. The public hearing will be held in the
Commissioner's Conference Room, room 3313, Internal Revenue Building,
1111 Constitution Avenue NW., Washington, DC 20224.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Jo Lynn L.
Ricks, (202) 622-3920, or Robert B. Williams, (202) 622-3960;
concerning submissions and the hearing, Michael Slaughter, (202) 622-
7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information contained in this notice of proposed
rulemaking has been submitted to the Office of Management and Budget
for review in accordance with the Paperwork Reduction Act of 1995 (44
U.S.C. 3507).
Comments on the collection of information should be sent to the
Office of Management and Budget, Attn: Desk Officer for the Department
of the Treasury, Office of Information and Regulatory Affairs,
Washington, DC 20503, with copies to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, T:FP, Washington, DC 20224.
Comments on the collection of information should be received by August
19, 1996.
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number.
The collection of information is described in the Explanation of
Provisions section of the Preamble (rather than being included in the
text of the proposed regulations). The Preamble requests comments on
whether the final regulations should permit taxpayers to elect to
disregard certain inter-company transactions in determining status as a
dealer in securities. The preamble also indicates that, if the election
is allowed to be made, it is expected that taxpayers would make it by
attaching a statement to a tax return. If the final regulations allow
taxpayers to make this election in this manner, the information will be
required by the IRS to determine whether the election has been made,
and will be used for that purpose. The likely respondents will be
businesses that file consolidated tax returns. If taxpayers are allowed
to make the election, responses to this collection of information will
be required to obtain the benefit of having status as a dealer in
securities determined without regard to certain inter-company
transactions.
Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.
Estimated total annual reporting burden: 6,000 hours. The estimated
annual burden per respondent varies from .25 hour to 1 hour, depending
on individual circumstances, with an estimated average of .5 hours.
Estimated number of respondents: 12,000. Estimated annual frequency of
responses: once in the existence of each respondent.
Background
This document contains proposed regulations under section 475 of
the Internal Revenue Code, which requires mark-to- market accounting
for certain dealers in securities. Section 475 was added by section
13223 of the Revenue Reconciliation Act of 1993, Pubic Law 103-66, 107
Stat. 481, and is effective for all taxable years ending on or after
December 31, 1993.
Temporary and proposed regulations published on December 29, 1993,
(58 FR 68798) provide that stock in a 50-percent-controlled subsidiary
(and interests in 50-percent-controlled partnerships and trusts) are
deemed properly identified as held for investment and thus are excluded
from mark-to-market accounting. The IRS is reproposing this rule with
two changes. First, the IRS has concluded that the rationale for the
rule applies equally to equity interests in most related persons and
not just to persons controlled by the taxpayer. Second, after
considering various comments received, the IRS determined that this
rule prohibiting marking a security to market should not apply if two
requirements are met: (1) The security is actively traded on a national
securities exchange or through an interdealer quotation system; and (2)
the taxpayer who marks owns less than 5 percent of all shares or
interests of the same class. Comments are requested as
[[Page 31475]]
to whether it is appropriate to allow any equity interests in related
parties to be marked to market, and, if so, whether the proposed
limitations are the most appropriate ones. The provisions in this
document concerning these issues are referred to below in this preamble
as the reproposed regulations.
When commenting on the temporary and proposed regulations,
taxpayers asked the IRS to provide guidance on whether certain
transactions are entered into with customers for purposes of section
475. Whether transactions are entered into with customers can affect
both whether a taxpayer is a dealer in securities subject to mark-to-
market accounting (see section 475(c)(1)) and whether a dealer may
exempt a security from mark- to-market treatment (see section 475(b)(1)
(A) and (B) and Sec. 1.475(b)-1T(a)).
In response to these comments, on January 4, 1995, the IRS
published proposed regulations [(FI-42-94) (60 FR 397)] stating that
whether a taxpayer is transacting business with customers is determined
based on all of the facts and circumstances (see proposed
Sec. 1.475(c)-1(c), reproposed as Sec. 1.475(c)-1(a)). These proposed
regulations also provide that the term dealer in securities includes a
taxpayer that, in the ordinary course of its trade or business,
regularly holds itself out as being willing and able to enter into
either side of a transaction enumerated in section 475(c)(1)(B) (see
proposed Sec. 1.475(c)-1(c)(2), reproposed as Sec. 1.475(c)-1(a)(2)).
On March 4, 1996, the IRS published Notice 96-12 (1996-10 I.R.B.
29), stating that the IRS intended to publish additional proposed
regulations concerning when transactions with related parties may be
transactions with customers for purposes of section 475. Notice 96-12
also described the substance of rules that the proposed regulations
were expected to contain. The rules were expected to be proposed to be
effective for taxable years beginning on or after February 20, 1996.
The proposed regulations in this document generally reflect the
substance that was described in Notice 96-12.
Explanation of Provisions
Prohibition Against Marking Equity Interests in Related Persons
The reproposed regulations identify certain assets that are
inherently investments and, thus, may not be marked to market under
section 475. The new rules retain the provision in the temporary
regulations that prevents marking certain insurance products to market,
but they differ from the temporary regulations in the provisions that
prevent the marking of certain equity interests. Under the temporary
regulations, the prohibition against marking applies only if the dealer
in securities controls the issuer of an equity interest (whether it is
stock in a corporation or an interest in a widely held or publicly
traded partnership or trust). The reproposed regulations expand the
scope of this treatment so that mark-to-market accounting cannot be
used for equity interests in many related issuers. (For these purposes,
the reproposed regulations incorporate by reference the relevant
relations described in sections 267(b) and 707(b)(1).) The reproposed
regulations also narrow the scope of this prohibition against marking
so that mark-to-market accounting can be used for certain actively-
traded securities, regardless of the dealer's relation to the issuer of
the security, if the dealer owns less than five percent of the
securities. The IRS is particularly interested in receiving comments on
the scope of the reproposed rules' exception to the general prohibition
on marking to market equity interests in a related person.
These reproposed regulations also contain rules to cover situations
where a security begins, or ceases, to be subject to this deemed-
identification rule. First, if a security is being marked to market and
then, as a result of a change in facts, the regulations prohibit the
security from continuing to be marked to market, the regulations
require that the security be marked as of the close of business on the
last day before the day when the prohibition on marking first applies.
Second, the reproposed regulations also cover situations in which
the regulations have prohibited a security from being marked to market
and then the prohibition on marking ceases to apply. In these cases,
the deadline for the taxpayer to identify the security under section
475(b)(2) as exempt from mark-to-market treatment is generally extended
until the date the prohibition on marking ceases to apply. (If the
taxpayer had identified the security by the original deadline, the
extension, of course, is irrelevant.) If the identification is not made
on or before the deadline (as so extended), new changes in value are
taken into account under the mark-to-market method, but recognition of
appreciation and depreciation that occurred while the security was not
being marked is suspended. This is the approach adopted by section
475(b)(3) for securities that lose their exemption from mark-to-market
treatment. The reproposed rule is to apply both when the prohibition on
marking ceases because of a change in facts and when the prohibition on
marking ceases because the rule covering certain actively-traded
securities becomes effective.
In sum, under the reproposed regulations, the following assets held
by a dealer in securities are deemed to be properly identified as held
for investment: (1) Stock in a corporation (or a partnership or
beneficial ownership interest in a widely held or publicly traded
partnership or trust) to which the taxpayer is related (other than
certain actively-traded stock or interests); and (2) an annuity,
endowment, or life insurance contract. The provision concerning the
second category of assets continues to be proposed to apply to all
taxable years ending on or after December 31, 1993. The rules
concerning the first category of assets, however, are proposed to
prohibit only those marks to market that would have occurred on or
after June 19, 1996. If the prohibition against marking begins to apply
to a security solely because of this effective date rule, then (unlike
the situation when the onset of the prohibition is caused by a change
in facts) the security is not marked to market immediately before the
prohibition begins.
In general, the provision allowing certain actively-traded
securities to be marked to market even when the issuer of the security
is related is proposed to be effective for marks to market on or after
June 19, 1996. Thus, this effective date is the same as the effective
date in the reproposed regulations for the general prohibition on
marking to market securities issued by a related person. Until the
reproposed regulations are finalized, however, all equity interests
issued by controlled entities continue to be subject to the temporary
regulations' prohibition against being marked to market, even if the
dealer owns less than 5 percent of interests of that class and even if
the interests are actively traded.
Some commenters suggested there should be no per se rule treating
certain securities as held for investment, but instead there should be
a rebuttable presumption to this effect for these items. Other
commenters proposed to add, or delete, a variety of items to or from
those deemed to be per se held for investment. The reproposed
regulations do not adopt these suggestions.
Consolidated Returns
Under both the temporary and the reproposed regulations, there are
situations in which the mark-to-market method may apply to a
consolidated
[[Page 31476]]
group member's stock held by another member of the group. This may
result in the recognition of duplicate gain or loss. For instance, if a
common parent marks to market stock in a subsidiary to reflect
increases in the value of the subsidiary stock owned by the parent
resulting from appreciation in the value of the subsidiary's assets,
the parent will recognize gain on that stock under the mark-to-market
method. The subsidiary's subsequent sale of the assets will replicate
that gain at the subsidiary level. The gains will generate duplicate
stock basis increases under section 475 and Sec. 1.1502-32(b), creating
the potential for an offsetting loss when the stock is subsequently
marked down to fair market value under section 475. Section 1.1502-20,
however, may disallow any such offsetting loss. Comments are invited
regarding how to address the anomalies these rules may produce.
The Dealer-Customer Relationship
These proposed regulations clarify that a taxpayer's transactions
with members of its consolidated group or other related persons may be
transactions with customers for purposes of section 475. Thus, a
taxpayer may be a dealer in securities for purposes of section 475 even
if its only customer transactions are transactions with members of its
consolidated group. In enacting section 475, Congress adopted a
taxpayer-by- taxpayer approach to determining dealer status, rather
than the single-entity approach embodied in Sec. 1.1502-13.
An example in the proposed regulations clarifies that, for purposes
of section 475, transactions do not fail to be transactions with
customers solely because the parties enter into them with other than
arms-length pricing terms. Under section 482 and the regulations
thereunder, however, the district director may make allocations between
or among the members of the group if he or she determines that a member
has not reported its true taxable income.
These proposed regulations generally reflect the substance of the
rules set forth in Notice 96-12 (1996-10 I.R.B. 29). In response to
taxpayer comments, however, certain language in Notice 96-12 has been
clarified. Because of these changes, although the rules described in
Notice 96-12 were expected to be proposed to be effective for taxable
years beginning on or after February 20, 1996, these proposed
regulations are to be effective for taxable years beginning on or after
June 20, 1996. If there are any situations in which the proposed rules
lead to a different result from that which would be reached under the
rules described in the notice, a taxpayer may reasonably and
consistently apply the rules described in the notice for any taxable
year beginning on or after February 20, 1996, and before June 20, 1996.
Under these regulations, a taxpayer may be a dealer in securities
based solely on transactions with other members of its consolidated
group. The IRS requests comments on whether certain consolidated groups
should be allowed to disregard inter-member transactions in determining
a member's status as a dealer in securities. For instance, a group
might be allowed to disregard inter-member transactions if the group,
considered as a single corporation, would not be a dealer in securities
for purposes of section 475. It is likely that the election, if
permitted by the final regulations, would be made by attaching an
appropriate statement to the taxpayer's return. (See the Paperwork
Reduction Act section of this preamble, which requests comments on the
burden that might be imposed by this requirement.) The IRS hereby
requests comments on the desirability and potential terms and
conditions of any such election. Comments could also address whether
such an election should apply in determining whether a taxpayer had
made more than negligible sales for purposes of reproposed
Sec. 1.475(c)-1(c). Further, the IRS requests comments on whether the
election should be available only to groups that have not made a
separate-entity election under Sec. 1.1221-2(d)(2).
Miscellaneous
Some of the 1993 and 1995 proposed regulations are reordered.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It also has been determined
that section 553(b) of the Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do
not apply to these regulations, and, therefore, a Regulatory
Flexibility Analysis is not required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for October 15, 1996, at 10
a.m. in the Commissioner's Conference Room, room 3313, Internal Revenue
Building, 1111 Constitution Avenue NW., Washington, DC 20224. Because
of access restrictions, visitors will not be admitted beyond the
Internal Revenue Building lobby more than 15 minutes before the hearing
starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons that wish to present oral comments at the hearing must
submit written comments and submit an outline of the topics to be
discussed and the time to be devoted to each topic (signed original and
eight (8) copies) by September 18, 1996.
A period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting Information
The principal authors of these regulations are Jo Lynn L. Ricks and
Robert B. Williams, Office of Assistant Chief Counsel (Financial
Institutions & Products). However, other personnel from the IRS and
Treasury Department participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1, as proposed on
January 4, 1995, at 60 FR 401, is further amended by revising the
entries for ``Section 1.475(b)-1'', ``Section 1.475(b)-2'', and
``Section 1.475(b)-4'' to read as follows:
Authority: 26 U.S.C. 7805. * * *
Section 1.475(b)-1 also issued under 26 U.S.C. 475(a) and 26
U.S.C. 475(e).
Section 1.475(b)-2 also issued under 26 U.S.C. 475(b)(2) and 26
U.S.C. 475(e). * * *
Section 1.475(b)-4 also issued under 26 U.S.C. 475(b)(2), 26
U.S.C. 475(e), and 26 U.S.C. 6001. * * *
Par. 2. Section 1.475-0, as proposed on January 4, 1995 (60 FR
401), is amended by:
[[Page 31477]]
1. Revising the heading and entries for Secs. 1.475(b)-1, 1.475(b)-
2, and 1.475(b)-4.
2. Revising the entries under Secs. 1.475(c)-1 and 1.475(c)-2.
3. Removing the entries under Sec. 1.475(e)-1.
The revisions read as follows:
Sec. 1.475-0 Table of contents.
* * * * *
Sec. 1.475(b)-1 Scope of exemptions from mark-to-market
requirement.
(a) Securities held for investment or not held for sale.
(b) Securities deemed identified as held for investment.
(1) In general.
(2) Relationships.
(i) General rule.
(ii) Attribution.
(iii) Trusts treated as partnerships.
(3) Securities traded on certain established financial markets.
(4) Changes in status.
(i) Onset of prohibition against marking.
(ii) Termination of prohibition against marking.
(iii) Examples.
(c) Securities deemed not held for investment.
(1) General rule for dealers in notional principal contracts and
derivatives.
(2) Exception for securities not acquired in dealer capacity.
(d) Special rules.
(1) Stock, partnership, and beneficial ownership interests in
certain controlled corporations, partnerships, and trusts.
(i) In general.
(ii) Control defined.
(iii) Applicability.
(2) [Reserved].
Sec. 1.475(b)-2 Exemptions--Identification requirements.
(a) Identification of the basis for exemption.
(b) Time for identifying a security with a substituted basis.
(c) Securities involved in integrated transactions under
Sec. 1.1275-6.
(1) Definitions.
(2) Synthetic debt held by a taxpayer as a result of legging in.
(3) Securities held after legging out.
* * * * *
Sec. 1.475(b)-4 Exemptions--Transitional issues.
(a) Transitional identification.
(1) Certain securities previously identified under section 1236.
(2) Consistency requirement for other securities.
(b) Corrections on or before January 31, 1994.
(1) Purpose.
(2) To conform to Sec. 1.475(b)-1(a).
(i) Added identifications.
(ii) Limitations.
(3) To conform to Sec. 1.475(b)-1(c).
(c) Effect of corrections.
Sec. 1.475(c)-1 Definitions--Dealer in securities.
(a) Dealer-customer relationship.
(1) [Reserved].
(2) Transactions described in section 475(c)(1)(B).
(i) In general.
(ii) Examples.
(3) Related parties.
(i) In general.
(ii) Example.
(b) Sellers of nonfinancial goods and services.
(c) Taxpayers that purchase securities but do not sell more than
a negligible portion of the securities.
(1) Exemption from dealer status.
(2) Negligible portion.
(3) Special rules.
(d) Issuance of life insurance products.
Sec. 1.475(c)-2 Definitions--Security.
(a) In general.
(b) Synthetic debt held by a taxpayer as a result of an
integrated transaction under Sec. 1.1275-6.
(c) Negative value REMIC residuals.
(d) Special rules.
* * * * *
Sec. 1.475(e)-1 Effective dates.
Par. 3. Section 1.475(b)-1 as proposed on December 29, 1993 (58 FR
68798), is amended by revising paragraph (b) and adding paragraph (d)
to read as follows:
Sec. 1.475(b)-1 Scope of exemptions from mark-to-market requirement.
* * * * *
(b) Securities deemed identified as held for investment--(1) In
general. The following items held by a dealer in securities are per se
held for investment within the meaning of section 475(b)(1)(A) and are
deemed to be properly identified as such for purposes of section
475(b)(2)--
(i) Except as provided in paragraph (b)(3) of this section, stock
in a corporation, or a partnership or beneficial ownership interest in
a widely held or publicly traded partnership or trust, to which the
taxpayer has a relationship specified in paragraph (b)(2) of this
section; or
(ii) A contract that is treated for federal income tax purposes as
an annuity, endowment, or life insurance contract (see sections 817 and
7702).
(2) Relationships--(i) General rule. The relationships specified in
this paragraph (b)(2) are--
(A) those described in section 267(b)(2), (3), (10), (11), or (12);
or
(B) those described in section 707(b)(1) (A) or (B).
(ii) Attribution. The relationships described in paragraph
(b)(2)(i) of this section are determined taking into account sections
267(c) and 707(b)(3), as appropriate.
(iii) Trusts treated as partnerships. For purposes of this
paragraph (b)(2), the phrase partnership or trust is substituted for
the word partnership in sections 707(b)(1) and 707(b)(3), and a
reference to beneficial ownership interest is added to each reference
to capital interest or profits interest in those sections.
(3) Securities traded on certain established financial markets.
Paragraph (b)(1)(i) of this section does not apply to a security if--
(i) The security is actively traded within the meaning of
Sec. 1.1092(d)-1(a) taking into account only established financial
markets identified in Sec. 1.1092(d)-1(b)(1) (i) or (ii) (describing
national securities exchanges and interdealer quotation systems), and
(ii) The taxpayer owns less than 5 percent of all of the shares or
interests in the same class.
(4) Changes in status--(i) Onset of prohibition against marking--
(A) Once a security begins to be described in paragraph (b)(1) of this
section and for so long as it continues to be so described, section
475(a) does not apply to the security in the hands of the taxpayer.
(B) If a security has not been timely identified under section
475(b)(2) and, after the last day on which such an identification would
have been timely, the security begins to be described in paragraph
(b)(1) of this section, then the dealer must recognize gain or loss on
the security as if it were sold for its fair market value as of the
close of business of the last day before the security begins to be
described in paragraph (b)(1) of this section, and gain or loss is
taken into account at that time.
(ii) Termination of prohibition against marking. If a taxpayer did
not timely identify a security under section 475(b)(2) and paragraph
(b)(1) of this section applies to the security on the last day on which
such an identification would have been timely but it thereafter ceases
to apply--
(A) An identification of the security under section 475(b)(2) is
timely if made on or before the close of the day paragraph (b)(1) of
this section ceases to apply; and
(B) Unless the taxpayer timely identifies the security under
section 475(b)(2) (taking into account the additional time for
identification that is provided by paragraph (b)(4)(ii)(A) of this
section), section 475(a) applies to changes in value of the security
after the cessation in the same manner as under section 475(b)(3).
(iii) Examples. These examples illustrate this paragraph (b)(4):
[[Page 31478]]
Example 1. Onset of prohibition against marking--(A) Facts.
Corporation H owns 75 percent of the stock of corporation D, a
dealer in securities within the meaning of section 475(c)(1). On
December 1, 1995, D acquired less than half of the stock in
corporation X. D did not identify the stock for purposes of section
475(b)(2). On July 17, 1996, H acquired from other persons 70
percent of the stock of X. As a result, D and X became related
within the meaning of paragraph (b)(2)(i) of this section. The stock
of X is not described in paragraph (b)(3) of this section
(concerning securities traded on certain established financial
markets).
(B) Holding. Under paragraph (b)(4)(i) of this section, D
recognizes gain or loss on its X stock as if the stock were sold for
its fair market value at the close of business on July 16, 1996, and
the gain or loss is taken into account at that time. As with any
application of section 475(a), proper adjustment is made in the
amount of any gain or loss subsequently realized. After July 16,
1996, section 475(a) does not apply to D's X stock while D and X
continue to be related to each other.
Example 2. Termination of prohibition against marking; retained
securities identified as held for investment--(A) Facts. On July 1,
1996, corporation H owned 60 percent of the stock of corporation Y
and all of the stock of corporation D, a dealer in securities within
the meaning of section 475(c)(1). Thus, D and Y are related within
the meaning of paragraph (b)(2)(i) of this section. Also on July 1,
1996, D acquired, as an investment, 10 percent of the stock of Y.
The stock of Y is not described in paragraph (b)(3) of this section
(concerning securities traded on certain established financial
markets). When D acquired its shares of Y stock, it did not identify
them for purposes of section 475(b)(2). On December 27, 1996, D
identified its shares of Y stock as held for investment under
section 475(b)(2). On December 30, 1996, H sold all of its shares of
stock in Y to an unrelated party. As a result, D and Y cease to be
related within the meaning of paragraph (b)(2)(i) of this section.
(B) Holding. Under paragraph (b)(4)(ii)(A) of this section,
identification of the Y shares is timely if done on or before the
close of December 30, 1996. Because D timely identified its Y shares
under section 475(b)(2), it continues to refrain from marking to
market its Y stock after December 30, 1996.
Example 3. Termination of prohibition against marking; retained
securities not identified as held for investment--(A) Facts. The
facts are the same as in Example 2 above, except that D did not
identify its stock in Y for purposes of section 475(b)(2) on or
before December 30, 1996. Thus, D did not timely identify these
securities under section 475(b)(2) (taking into account the
additional time for identification provided in paragraph
(b)(4)(ii)(A) of this section).
(B) Holding. Under paragraph (b)(4)(ii)(B) of this section,
section 475(a) applies to changes in value of D's Y stock after
December 30, 1996, in the same manner as under section 475(b)(3).
Thus, any appreciation or depreciation that occurred while the
securities were prohibited from being marked to market is suspended.
Further, section 475(a) applies only to those changes occurring
after December 30, 1996.
* * * * *
(d) Special rules--(1) Stock, partnership, and beneficial ownership
interests in certain controlled corporations, partnerships, and
trusts--(i) In general. The following items held by a dealer in
securities are per se held for investment within the meaning of section
475(b)(1)(A) and are deemed to be properly identified as such for
purposes of section 475(b)(2)--
(A) Stock in a corporation that the taxpayer controls (within the
meaning of paragraph (d)(1)(ii) of this section); or
(B) A partnership or beneficial ownership interest in a widely held
or publicly traded partnership or trust that the taxpayer controls
(within the meaning of paragraph (d)(1)(ii) of this section).
(ii) Control defined. Control means the ownership, directly or
indirectly through persons described in section 267(b) (taking into
account section 267(c)), of--
(A) 50 percent or more of the total combined voting power of all
classes of stock entitled to vote; or
(B) 50 percent or more of the capital interest, the profits
interest, or the beneficial ownership interest in the widely held or
publicly traded partnership or trust.
(iii) Applicability. The rules of this paragraph (d)(1) apply only
before the date 30 days after final regulations on this subject are
published in the Federal Register.
(2) [Reserved].
Sec. 1.475 [Amended]
Par. 4. Section 1.475(b)-2, as proposed on December 29, 1993 (58 FR
68798), is redesignated as Sec. 1.475(b)-4.
Par. 5. Section 1.475(b)-4, as proposed on January 4, 1995 (60 FR
404), is redesignated as Sec. 1.475(b)-2.
Par. 6. Section 1.475(c)-1, as proposed on December 29, 1993 (58 FR
68798), and amended on January 4, 1995 (60 FR 405), is amended as
follows:
1. Paragraph (c) is removed.
2. Paragraphs (a) and (b) are redesignated as paragraphs (b) and
(c), respectively.
2. New paragraph (a) is added to read as follows:
Sec. 1.475(c)-1 Definitions--Dealer in securities.
(a) Dealer-customer relationship. Whether a taxpayer is transacting
business with customers is determined on the basis of all of the facts
and circumstances.
(1) [Reserved].
(2) Transactions described in section 475(c)(1)(B)--(i) In general.
For purposes of section 475(c)(1)(B), the term dealer in securities
includes, but is not limited to, a taxpayer that, in the ordinary
course of the taxpayer's trade or business, regularly holds itself out
as being willing and able to enter into either side of a transaction
enumerated in section 475(c)(1)(B).
(ii) Examples. The following examples illustrate the rules of this
paragraph (a)(2). In the following examples, B is a bank:
Example 1. B regularly offers to enter into interest rate swaps
with other persons in the ordinary course of its trade or business.
B is willing to enter into interest rate swaps under which it either
pays a fixed interest rate and receives a floating rate or pays a
floating rate and receives a fixed rate. B is a dealer in securities
under section 475(c)(1)(B), and the counterparties are its
customers.
Example 2. B, in the ordinary course of its trade or business,
regularly holds itself out as being willing and able to enter into
either side of positions in a foreign currency with other banks in
the interbank market. B's activities in the foreign currency make it
a dealer in securities under section 475(c)(1)(B), and the other
banks in the interbank market are its customers.
Example 3. B engages in frequent transactions in a foreign
currency in the interbank market. Unlike the facts in Example 2,
however, B does not regularly hold itself out as being willing and
able to enter into either side of positions in the foreign currency,
and all of B's transactions are driven by its internal need to
adjust its position in the currency. No other circumstances are
present to suggest that B is a dealer in securities for purposes of
section 475(c)(1)(B). B's activity in the foreign currency does not
qualify it as a dealer in securities for purposes of section
475(c)(1)(B), and its transactions in the interbank market are not
transactions with customers.
(3) Related parties--(i) In general. A taxpayer's transactions with
members of its consolidated group or with other related persons may be
transactions with customers for purposes of section 475. For example,
transactions enumerated in section 475(c)(1)(B) between members of a
consolidated group are transactions with customers if, in the ordinary
course of its business, the taxpayer holds itself out as being willing
and able to engage in these transactions on a regular basis. A taxpayer
may be a dealer in securities within the meaning of section 475(c)(1)
even if its only customer transactions are transactions with other
members of its consolidated group.
(ii) Example. The following example illustrates this paragraph
(a)(3):
Example. Risk management transactions--(1) Facts. HC, a hedging
center, provides
[[Page 31479]]
interest rate hedges to all of the members of its consolidated
group. Because of the efficiencies created by having a centralized
risk manager, group policy prohibits members other than HC from
entering into derivative interest rate positions with outside
parties. HC regularly holds itself out as being willing and able to,
and in fact does, enter into either side of interest rate swaps with
its fellow members. HC periodically computes its aggregate position
and hedges the net risk with an unrelated party. HC does not
otherwise enter into interest rate positions with persons that are
not members of the consolidated group. Because HC attempts to
operate at cost and the terms of its swaps do not factor in any risk
of default by the affiliate, HC's affiliates receive somewhat more
favorable terms then they would receive from an unrelated swaps
dealer.
(2) Holding. Because HC regularly holds itself out as being
willing and able to enter into transactions enumerated in section
475(c)(1)(B), HC is a dealer in securities for purposes of section
475(c)(1)(B) and the other members are its customers.
* * * * *
Sec. 1.475 [Amended]
Par. 7. Section 1.475(c)-2, as proposed on December 29, 1993 (58 FR
68798), and amended on January 4, 1995 (60 FR 405), is amended as
follows:
1. Paragraphs (b), (c), and (d) are redesignated as paragraphs (c),
(d), and (b), respectively.
2. Paragraph (a) and newly designated paragraph (c) are revised by
removing the phrase ``paragraph (b)'' each place it appears and
replacing it with ``paragraph (c)'' each place it appeared.
3. Newly designated paragraph (d) is revised by removing the phrase
``paragraphs (a)(3) and (b)'' and replacing it with ``paragraphs (a)(3)
and (c)''. Newly designated paragraph (d) is further revised by
removing the phrase ``this paragraph (c)(1)).'' and replacing it with
the phrase ``this paragraph (d)(1)).''.
4. Newly designated paragraph (b) is revised by removing the words
``See Sec. 1.475(b)-4(c)'' and replacing them with the words ``See
Sec. 1.475(b)-2(c)''.
Par. 8. Section 1.475(e)-1, as proposed on December 29, 1993 (58 FR
68798), and amended on January 4, 1995 (60 FR 405), is revised to read
as follows:
Sec. 1.475(e)-1 Effective dates.
(a) Section 1.475(a)-1 (concerning mark-to-market for debt
instruments) applies to taxable years beginning on or after January 1,
1995.
(b) Section 1.475(a)-2 (concerning marking a security to market
upon disposition) applies to dispositions or terminations of ownership
occurring on or after January 4, 1995.
(c) Section 1.475(a)-3 (concerning acquisition by a dealer of a
security with a substituted basis) applies to securities acquired,
originated, or entered into on or after January 4, 1995.
(d) Section 1.475(b)-1 (concerning the scope of exemptions from the
mark-to-market requirement) applies as follows:
(1) Section 1.475(b)-1(a) (concerning securities held for
investment or not held for sale) applies to taxable years ending on or
after December 31, 1993.
(2) Except as provided elsewhere in this paragraph (d)(2),
Sec. 1.475(b)-1(b)(1) (concerning securities deemed identified as held
for investment) applies to taxable years ending on or after December
31, 1993.
(i) Section 1.475(b)-1(b)(1)(i) (concerning equity interests issued
by a related person) applies on or after June 19, 1996. If, on June 18,
1996, a security is subject to mark-to-market accounting and, on June
19, 1996, Sec. 1.475(b)-1(b)(1) begins to apply to the security solely
because of the effective dates in this paragraph (d)(2) (rather than
because of a change in facts), then the rules of Sec. 1.475(b)-
1(b)(4)(i)(A) (concerning the prohibition against marking) apply, but
Sec. 1.475(b)-1(b)(4)(i)(B) (imposing a mark to market on the day
before the onset of the prohibition) does not apply.
(ii) Section 1.475(b)-1(b)(2) (concerning relevant relationships
for purposes of determining whether equity interests in related persons
are prohibited from being marked to market) applies on or after June
19, 1996.
(iii) Section 1.475(b)-1(b)(3) (concerning certain activelytraded
securities) generally applies on or after June 19, 1996 to securities
held on or after that date. In the case, however, of securities
described in Sec. 1.475(b)-1(d)(1)(i) (concerning equity interests
issued by controlled entities), Sec. 1.475(b)-1(b)(3) applies on or
after the date thirty days after final regulations on this subject are
published in the Federal Register to securities held on or after that
date. If Sec. 1.475(b)-1(b)(1) ceases to apply to a security by virtue
of the operation of this paragraph (d)(2)(ii), the rules of
Sec. 1.475(b)-1(b)(4)(ii) apply to the cessation.
(iv) Except to the extent provided in paragraph (d)(2)(i) of this
section, Sec. 1.475(b)-1(b)(4) (concerning changes in status) applies
on or after June 19, 1996.
(e) Section 1.475(b)-2 (concerning the identification requirements
for obtaining an exemption from mark-to-market treatment) applies to
identifications made on or after January 4, 1995.
(f) Section 1.475(b)-3 (concerning exemption of securities in
certain securitization transactions) applies to securities acquired,
originated, or entered into on or after January 4, 1995.
(g) Section 1.475(b)-4 (concerning transitional issues relating to
exemptions) applies to taxable years ending on or after December 31,
1993.
(h) Section 1.475(c)-1(a) (concerning the dealer-customer
relationship), except for Sec. 1.475(c)-1(a)(1), (a)(2)(ii), and
(a)(3), applies to taxable years beginning on or after January 1, 1995.
Section 1.475(c)-1(a)(2)(ii) and (a)(3) (concerning certain aspects of
the dealer-customer relationship) apply to taxable years beginning on
or after June 20, 1996.
(i) Section 1.475(c)-1(b) (concerning sellers of nonfinancial goods
and services) and (c) (concerning taxpayers that purchase securities
but do not sell more than a negligible portion of the securities)
applies to taxable years ending on or after December 31, 1993.
(j) Section 1.475(c)-1(d) (concerning the issuance of life
insurance products) applies to taxable years beginning on or after
January 1, 1995.
(k) Section 1.475(c)-2 (concerning the definition of security)
applies to taxable years ending on or after December 31, 1993. Note,
however, that, by its terms, Sec. 1.475(c)-2(a)(3) applies only to
interests or arrangements that are acquired on or after January 4,
1995, and that the integrated transactions to which Sec. 1.475(c)-2(b)
applies will exist only after the effective date of Sec. 1.1275-6.
(l) Section 1.475(d)-1 (concerning the character of gain or loss)
applies to taxable years ending on or after December 31, 1993.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-15666 Filed 6-19-96; 8:45 am]
BILLING CODE 4830-01-P
Complete official Federal Register PDF
FR Doc. 96-15665 Definition of Structure
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31473-31474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15665]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[PS-39-93]
RIN 1545-AR63
Definition of Structure
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed regulations relating to
deductions available upon demolition of a building. These proposed
regulations reflect changes to the law made by the Tax Reform Act of
1984 and affect owners and lessees of real property who demolish
buildings. This document also provides notice of a public hearing on
these regulations.
DATES: Written comments, requests to appear and outlines of topics to
be discussed at the public hearing scheduled for October 9, 1996, must
be received by September 18, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (PS-39-93), room 5228,
Internal Revenue Service, POB 7604, Ben Franklin Station, Washington,
DC 20044. In the alternative, submissions may be hand delivered between
the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (PS-39-93), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Bernard P.
Harvey, (202) 622-3110; concerning submissions and the hearing,
Christina Vasquez, (202) 622-6803 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed regulations under section 280B of
the Internal Revenue Code. Section 280B was added by the Tax Reform Act
of 1976, Public Law 94-455, 2124(b), 90 Stat. 1520, 1918 (Oct. 4,
1976), and significant amendments were made to the provision by the
Economic Recovery Tax Act of 1981, Public Law 97-34, 212(d)(2)(C) and
(e)(2), 95 Stat. 172, 239 (Aug. 13, 1981) (1981 Act) and the Tax Reform
Act of 1984, Public Law 98-369, 1063, 98 Stat. 494, 1047 (July 18,
1984) (1984 Act). Transition rules were provided in the Tax Reform Act
of 1986, Public Law 99-514, 1878(h), 100 Stat. 2085, 2904 (Oct. 22,
1986) (1986 Act). As originally enacted, section 280B required any
costs or losses incurred on account of the demolition of any certified
historic structure (a building or structure meeting certain
requirements) to be capitalized into the land upon which the demolished
structure was located. The 1981 Act modified the definition of
certified historic structure for purposes of section 280B from a
building or structure meeting certain requirements to a building (or
its structural components) meeting certain requirements. The 1984 Act
substituted ``any structure'' for ``certified historic structure.''
These proposed regulations define what ``structure'' means for purposes
of section 280B.
Explanation of Provisions
These proposed regulations define the term ``structure'' for
purposes of section 280B as a building and its structural components as
those terms are defined in Sec. 1.48-1(e) of the Income Tax
Regulations. Thus, under section 280B, a structure will include only a
building and its structural components and not other inherently
permanent structures such as oil and gas storage tanks, blast furnaces,
and coke ovens.
The proposed regulations rely on the legislative history underlying
the 1984 and 1986 Acts, which refer repeatedly to buildings rather than
to structures generally. In addition, the legislative history of the
1984 Act discusses the difficulty of applying the intent test of
Sec. 1.165-3 of the regulations, which applies to the demolition of
buildings, and indicates that the newly added language is meant to
eliminate this difficulty.
Proposed Effective Date
The regulations are proposed to be effective on and after the date
that final regulations are filed with the Federal Register.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866. Therefore,
a regulatory assessment is not required. It also has been determined
that section 553(b) of the Administrative Procedure Act (5 U.S.C.
chapter 5) and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do
not apply to these regulations, and, therefore, a Regulatory
Flexibility Analysis is not required. Pursuant to section 7805(f) of
the Internal Revenue Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments (a signed original
and eight (8) copies) that are submitted timely to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for October 9, 1996, in the
Commissioner's Conference Room. Because of access restrictions,
visitors will not be admitted beyond the Internal Revenue Building
lobby more than 15 minutes before the hearing starts.
The rules of 26 CFR 601.601(a)(3) apply to the hearing.
Persons that wish to present oral comments at the hearing must
submit written comments and an outline of the topics to be discussed
and the time to be devoted to each topic (signed original and eight (8)
copies) by September 18, 1996.
A period of 10 minutes will be allotted to each person for making
comments.
An agenda showing the scheduling of the speakers will be prepared
after the deadline for receiving outlines has passed. Copies of the
agenda will be available free of charge at the hearing.
Drafting Information
The principal author of these regulations is Bernard P. Harvey,
Office of Assistant Chief Counsel (Passthroughs and Special
Industries). However, other personnel from the IRS and Treasury
Department participated in their development.
List of Subjects in 26 CFR Part 1
Income Taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
[[Page 31474]]
Par. 2. Section 1.280B-1 is added to read as follows:
Sec. 1.280B-1 Demolition of structures.
(a) In general. Section 280B provides that, in the case of the
demolition of any structure, no deduction otherwise allowable under
chapter 1 of subtitle A shall be allowed to the owner or lessee of such
structure for any amount expended for the demolition or any loss
sustained on account of the demolition, and that the expenditure or
loss shall be treated as properly chargeable to the capital account
with respect to the land on which the demolished structure was located.
(b) Definition of structure. For purposes of section 280B, the term
structure means a building, as defined in Sec. 1.48-1(e)(1), and the
structural components of that building, as defined in Sec. 1.48-
1(e)(2).
(c) Effective date. This section applies with respect to
demolitions occurring on or after the date that the final regulations
are filed with the Federal Register.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-15665 Filed 6-19-96; 8:45 am]
BILLING CODE 4830-01-P
Complete official Federal Register PDF
FR Doc. 96-15661 Atlantic Surf Clam and Ocean Quahog Fisheries; Notice of Availability for Amendment 9
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Page 31499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15661]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
50 CFR Part 652
[I.D. 061396A]
Atlantic Surf Clam and Ocean Quahog Fisheries; Notice of
Availability for Amendment 9
AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA), Commerce.
ACTION: Notice of availability of a fishery management plan amendment;
request for comments.
-----------------------------------------------------------------------
SUMMARY: NMFS announces that the Mid-Atlantic Fishery Management
Council (Council) has submitted Amendment 9 to the Fishery Management
Plan for the Atlantic Surf Clam and Ocean Quahog Fisheries (FMP) for
Secretarial review and is requesting comments from the public. The
amendment would revise overfishing definitions for Atlantic surf clams
and ocean quahogs.
DATES: Comments must be received on or before August 13, 1996.
ADDRESSES: Send comments to Dr. Andrew Rosenberg, Regional Director,
National Marine Fisheries Service, Northeast Regional Office, 1
Blackburn Drive, Gloucester, MA 01930-3799. Mark the outside of the
envelope ``Comments on Overfishing Definitions for Clams and Quahogs.''
Copies of Amendment 9 and the environmental assessment are
available from David R. Keifer, Executive Director, Mid-Atlantic
Fishery Management Council, Room 2115 Federal Building, 300 S. New
Street, Dover, DE 19904-6790.
FOR FURTHER INFORMATION CONTACT: Myles Raizin, Fishery Policy Analyst,
508-281-9104.
SUPPLEMENTARY INFORMATION: The Magnuson Fishery Conservation and
Management Act (16 U.S.C. 1801 et seq.) (Magnuson Act) requires that
each fishery management council submit any fishery management plan or
plan amendment it prepares to the Secretary of Commerce (Secretary) for
review and approval, disapproval, or partial disapproval. The Magnuson
Act also requires that NMFS, on behalf of the Secretary, upon receiving
the plan or amendment, immediately make a preliminary evaluation of
whether the amendment is sufficient to warrant continued review, and
publish a document that the plan or amendment is available for public
review and comment. NMFS will consider the public comments in
determining whether to approve the amendment.
Amendment 9, if approved, would revise overfishing definitions for
the stocks managed under the FMP in compliance with the NOAA Guidelines
for Fishery Management Plans (50 CFR part 602).
During its discussions of the 1996 quota recommendations, the
Council considered revising the overfishing definitions specified in
the FMP. Overfishing is presently defined for both species in terms of
actual yield levels--that is, overfishing is defined as harvests in
excess of the specified quota levels. This definition does not
incorporate biological considerations to protect against overfishing.
NMFS has concluded that a harvesting strategy based on Council policy
is no longer acceptable, since it depends on the Council taking
appropriate action, rather than adhering to a rate-based biological
standard. The overfishing definition proposed by the Council for surf
clams as contained in Amendment 9 is a fishing mortality rate of
F20% (20 percent of maximum spawning potential (MSP)), which
equates to an annual exploitation rate of 15.3 percent. The overfishing
definition proposed by the Council for ocean quahogs as contained in
Amendment 9 is a fishing mortality of F25% (25 percent of MSP),
which equates to an annual exploitation rate of 4.3 percent.
The receipt date for this amendment is June 12, 1996. No proposed
or final regulations will be published for this amendment, because, if
it is approved, no changes will be needed in the codified regulatory
text that implements this FMP.
Authority: 16 U.S.C. 1801 et seq.
Dated: June 14, 1996.
Richard W. Surdi,
Acting Director, Office of Fisheries Conservation and Management,
National Marine Fisheries Service.
[FR Doc. 96-15661 Filed 6-14-96; 4:52 pm
BILLING CODE 3510-22-F
Complete official Federal Register PDF
FR Doc. 96-15585 Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Medical Waste Incinerators
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31736-31779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15585]
[[Page 31735]]
_______________________________________________________________________
Part IV
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 60
Standards of Performance for New Stationary Sources and Emission
Guidelines for Existing Sources: Medical Waste Incinerators; Proposed
Rule
Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31736]]
U.S. ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 60
[AD-FRL-5523-1]
RIN 2060-AC62
Standards of Performance for New Stationary Sources and Emission
Guidelines for Existing Sources: Medical Waste Incinerators
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of availability of supplemental information and
reopening of public comment period.
-----------------------------------------------------------------------
SUMMARY: On February 27, 1995, EPA proposed new source performance
standards (NSPS or standards) and emission guidelines (EG or
guidelines) for new and existing medical waste incinerator(s) (MWI)
that will reduce air pollution from MWI. Once implemented, these
standards and guidelines will protect public health by reducing
exposure to air pollution. In the proposal preamble, EPA made a
commitment to reconsider the proposed NSPS and EG based on new
information submitted. Today's action presents an assessment of the
supplemental information submitted following the proposal and solicits
public comment on this assessment. Today's action also serves to
address comments received on the proposal and reopens the comment
period for development of the MWI standards and guidelines.
DATES: Public Meeting. A public meeting will be held on July 10, 1996
beginning at 9:00 a.m. At the public meeting, EPA will review the
contents of this notice and answer questions so that commenters can
better prepare their written comments. See ADDRESSES below for the
location of the meeting.
Comments. Comments are requested on all information associated
with the development of MWI standards and guidelines. Written comments
must be received on or before August 8, 1996. See ADDRESSES below.
ADDRESSES: Public Meeting. The public meeting will take place at the
Holiday Inn, Hotel and Suites, 625 First Street, Alexandria, Virginia,
22314, (703) 548-6300. Persons interested in attending the meeting
should notify Ms. Donna Collins, U.S. Environmental Protection Agency,
Research Triangle Park, North Carolina 27711, telephone (919) 541-5578.
Comments. Comments should be submitted (in duplicate, if possible)
to the following: The Air and Radiation Docket and Information Center,
ATTN: Docket No. A-91-61, U.S. Environmental Protection Agency, 401 M
Street, SW, Washington, DC 20460.
Submissions containing proprietary information (Confidential
Business Information) should be sent directly to the following address,
not to the public docket, to ensure that proprietary information is not
inadvertently placed in the docket: Attention: Mr. Rick Copland, c/o
Ms. Melva Toomer, U.S. Environmental Protection Agency Confidential
Business Manager, 411 W. Chapel Hill Street, Room 944, Durham, North
Carolina 27701. See SUPPLEMENTARY INFORMATION for further discussion of
confidential business information.
Docket. Docket No. A-91-61, containing supporting information used
in developing the standards and guidelines, is available for public
inspection and copying between 8:00 a.m. and 4:00 p.m. , Monday through
Friday, at the Air and Radiation Docket and Information Center, U.S.
Environmental Protection Agency, 401 M Street, SW, Washington, DC
20460, telephone (202) 260-7548, fax (202) 260-4000. A reasonable fee
may be charged for copying. See SUPPLEMENTARY INFORMATION for a list of
documents most directly related to today's notice.
FOR FURTHER INFORMATION CONTACT: Mr. Rick Copland at (919) 541-5265 or
Mr. Fred Porter at (919) 541-5251, Emission Standards Division (MD-13),
U.S. Environmental Protection Agency, Research Triangle Park, North
Carolina 27711.
SUPPLEMENTARY INFORMATION: Regulated Entities. Entities potentially
regulated by the standards and guidelines are those which operate
medical waste incinerators. Regulated categories and entities include
those listed in Table 1.
Table 1.--Regulated Entities a
----------------------------------------------------------------------------------------------------------------
Category Examples of regulated entities
----------------------------------------------------------------------------------------------------------------
Industry.................................................... Hospitals, nursing homes, research laboratories,
other healthcare facilities, commercial waste
disposal companies.
Federal Government.......................................... Armed services, public health service, Federal
hospitals, other Federal healthcare facilities.
State/local/Tribal Government............................... State/county/city hospitals and other healthcare
facilities.
----------------------------------------------------------------------------------------------------------------
a This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely
to be regulated by the standards or guidelines for MWI. This table lists the types of entities that EPA is now
aware could potentially be regulated. Other types of entities not listed in the table could also be regulated.
To determine whether your facility is regulated by the standards or guidelines for medical waste incinerators,
you should carefully examine the applicability criteria in sections 60.50(c) and 60.51(c) of the February 1995
proposal and sections II(B), II(H), and II(I) of today's notice. If you have questions regarding the
applicability of the MWI standards and guidelines to a particular entity, consult the person listed in the
preceding FOR FURTHER INFORMATION CONTACT section.
Confidential Business Information. Commenters wishing to submit
proprietary information for consideration should clearly distinguish
such information from other comments and clearly label it
``Confidential Business Information.'' Information covered by such a
claim of confidentiality will be disclosed by the EPA only to the
extent allowed and by the procedures set forth in 40 CFR part 2. If no
claim of confidentiality accompanies a submission when it is received,
the submission may be made available to the public without further
notice to the commenter.
Documents Available Electronically. An electronic version of this
action as well as the February 1995 Federal Register proposal notice
are available for download from EPA's Technology Transfer Network
(TTN), which is a network of electronic bulletin boards developed and
operated by EPA's Office of Air Quality Planning and Standards. The TTN
provides information and technology exchange in various areas of air
pollution control. The service is free, except for the cost of a
telephone call. Dial (919) 541-5742 for data transfer of up to 14,400
bits per second. The TTN is also available on the Internet (access:
TELNET ttnbbs.rtpnc.epa.gov). For more information on the TTN, contact
the systems operator at (919) 541-5384.
Documents in the Docket. The documents listed below are not
available through the TTN, but are available through Air Docket No. A-
91-61 located at the Air and Radiation Docket and Information Center
(see the ADDRESSES section earlier in this
[[Page 31737]]
notice). These documents provide the analyses that are summarized in
this notice.
------------------------------------------------------------------------
Item No. Title
------------------------------------------------------------------------
IV-A-7................... National Dioxin Emission Estimates from
Medical Waste Incinerators.
IV-A-8................... Revised Economic Impacts: Existing Medical
Waste Incinerators.
IV-A-9................... Revised Economic Impacts: New Medical Waste
Incinerators.
IV-B-23.................. PM MACT Floor Emission Levels for Potential
Subcategories of the MWI Source Category.
IV-B-24.................. Determination of the Maximum Achievable
Control Technology (MACT) Floor for Existing
Medical Waste Incinerators that Incinerate
General Medical Waste.
IV-B-25.................. Definition of Medical Waste.
IV-B-26.................. Operator Training and Qualification and
Incinerator Inspection Requirements.
IV-B-30.................. Approach Used to Estimate the Capital and
Annual Costs for MWI Wet Scrubbers.
IV-B-32.................. Revised Costs for Dry Injection/Fabric Filter
Controls for MWI.
IV-B-33.................. Revised Costs for Secondary Chamber Retrofits
for MWI.
IV-B-37.................. Projections for New MWI Population.
IV-B-38.................. Determination of the Maximum Achievable
Control Technology (MACT) Floor for New
Medical Waste Incinerators.
IV-B-39.................. Annual Costs for the Operator Training and
Qualification Requirements for MWI
Operators.
IV-B-43.................. Alternative Methods of Medical Waste
Treatment: Availability, Efficacy, Cost,
State Acceptance, Owner Satisfaction,
Operator Safety, and Environmental Impacts.
IV-B-44.................. Determination of Medical Waste Incinerator
(MWI) Size.
IV-B-45.................. Updated Medical Waste Incinerator Data Base.
IV-B-46.................. PM, CO, and CDD/CDF Average Emission Rates
and Achievable Emission Levels for MWI with
Combustion Controls.
IV-B-47.................. Acid Gases and Metals Typical Performance and
Achievable Emission Levels for Medical Waste
Incinerators with Good Combustion Control.
IV-B-48.................. Wet Scrubber Performance Memorandum.
IV-B-49.................. Dry Scrubber Performance Memorandum.
IV-B-50.................. Cost Impacts of the Regulatory Options for
New and Existing Medical Waste Incinerator
(MWI).
IV-B-51.................. Air Emission Impacts of the Regulatory
Options for New and Existing Medical Waste
Incinerators (MWI).
IV-B-52.................. Potential Solid Waste, Wastewater, and Energy
Impacts of the New Source Performance
Standards and Emission Guidelines for New
and Existing Medical Waste Incinerators.
IV-B-54.................. Testing and Monitoring Options and Costs for
MWI--Methodology and Assumptions.
IV-B-56.................. Standards of Performance for Medical Waste
Pyrolysis Units.
------------------------------------------------------------------------
Acronyms, Abbreviations, and Measurement Units. The following list
of acronyms, abbreviations, and measurement units is provided to aid
the reader.
AHA................................. American Hospital Association
Btu................................. British thermal unit
Cd.................................. cadmium
CEMS................................ continuous emission monitoring
system(s)
CFR................................. Code of Federal Regulations
CO.................................. carbon monoxide
dioxin.............................. dioxins and dibenzofurans
DI/FF............................... dry injection/fabric filter
dscf................................ dry standard cubic foot
dscm................................ dry standard cubic meter
EG.................................. emission guidelines
EPA................................. Environmental Protection Agency
ft3................................. cubic feet
FTE................................. full time equivalent
g................................... grams
gr.................................. grains
HCl................................. hydrogen chloride
Hg.................................. mercury
hr.................................. hour
IV.................................. intravenous
lb.................................. pound
MACT................................ maximum achievable control
technology
m3.................................. cubic meter
MW.................................. megawatt
MSA................................. Metropolitan Statistical Area
Mg.................................. megagram
mg.................................. milligram
MM.................................. million
MWI................................. medical waste incinerator(s)
MWTA................................ Medical Waste Tracking Act
MWC................................. municipal waste combustor
ng.................................. nanogram
NOX................................. Oxides of nitrogen
NRDC Natural Resources Defense Council
NSPS................................ new source performance standards
NYSDOH.............................. New York State Department of
Health
O2.................................. oxygen
Pb.................................. lead
PM.................................. particulate matter
ppmdv............................... parts per million by volume (dry
basis)
SO2................................. sulfur dioxide
STAATT.............................. State and Territorial Association
of Alternate Treatment
Technologies
SWDA................................ Solid Waste Disposal Act
TEQ................................. Toxic Equivalency Quality (dioxin
emissions)
TTN................................. Technology Transfer Network
TCLP................................ Toxicity Characteristics Leachate
Procedure
yr.................................. year
Outline of this Notice. The information in this section is
organized as follows:
I. Introduction
A. The Clean Air Act
B. February 1995 Proposal
C. New Information Since Proposal
D. Purpose of this Supplemental Notice
E. New Timeline for Promulgation
II. Review of New Information
A. MWI Inventory
1. Existing Population
2. Future Installations
B. Subcategorization
C. Performance and Cost of Technology
1. Good combustion
2. Wet scrubbers
3. Dry scrubbers
D. MACT Floor
1. Existing MWI
2. New MWI
E. Baseline Emissions
F. Operator Training and Qualification
G. Testing, Monitoring, and Inspection
H. Definition of Medical Waste
I. Pyrolysis Units
J. Alternative Medical Waste Treatment Technologies
III. Regulatory Options and Impacts for Existing MWI
A. Regulatory Options
B. National Environmental and Cost Impacts
1. Analytical approach
2. Air Impacts
3. Water and solid waste impacts
4. Energy Impacts
5. Cost Impacts
C. Economic Impacts
1. Analytical approach
2. Industry-wide economic impacts
3. Facility-specific economic impacts
IV. Regulatory Options and Impacts for New MWI
A. Regulatory Options
B. National Environmental and Cost Impacts
1. Analytical approach
2. Air impacts
3. Water and solid waste impacts
[[Page 31738]]
4. Energy Impacts
5. Cost Impacts
C. Economic Impacts
1. Analytical approach
2. Industry-wide economic impacts
3. Facility-specific economic impacts
V. Inclinations for Final Rule
I. Introduction
A. The Clean Air Act
The Clean Air Act amendments of 1990 added section 129, which
includes specific requirements for solid waste combustion units.
Section 129 requires the EPA, under section 111(b), to establish NSPS
for new MWI and under section 111(d), to establish EG for existing MWI
based on maximum achievable control technology (MACT). Section 129
establishes specific criteria that must be analyzed in developing these
standards and guidelines. In general, this involves (1) determining
appropriate subcategories within a source category; (2) determining the
``MACT floor'' for each subcategory; (3) assessing available air
pollution control technology with regard to achievable emission
limitations and costs; and (4) examining the cost, nonair-quality
health and environmental impacts, and energy requirements associated
with standards and guidelines more stringent than the MACT floor.
Section 129 also directs EPA to establish operator training
requirements for new and existing MWI as well as siting requirements
for new MWI.
Section 129 requires the EPA to include numerical emission
limitations in the standards and guidelines for the following air
pollutants: particulate matter (PM), opacity, sulfur dioxide
(SO2), hydrogen chloride (HCl), oxides of nitrogen (NOx),
carbon monoxide (CO), lead (Pb), cadmium (Cd), mercury (Hg), and
dioxins and dibenzofurans (referred to in this notice as ``dioxin'').
Section 129 requires that these emission limitations reflect the
maximum degree of reduction in air emissions that the Administrator
determines is achievable, taking into consideration the cost of
achieving such emission reduction and any nonair-quality health and
environmental impacts and energy requirements. This requirement is
referred to as MACT.
The MACT for new MWI may not be less stringent than the emissions
control achieved in practice by the best controlled similar unit. The
guidelines for existing MWI may be less stringent than the standards
for new MWI; however, the guidelines may be no less stringent than the
average emission limitation achieved by the best performing 12 percent
of units in the category. These requirements that the standards and
guidelines must be no less stringent than certain levels are referred
to as the ``MACT floor.''
The Clean Air Act requires EPA to consider standards and guidelines
more stringent than the MACT floor, considering costs and other impacts
described above. If EPA concludes that more stringent standards and/or
guidelines are achievable considering costs and other impacts, then the
standards and/or guidelines would be established at these more
stringent levels (i.e., MACT would be more stringent than the MACT
floor). The EPA may establish NSPS or EG at the MACT floor only if it
concludes that NSPS or EG more stringent than the MACT floor are not
achievable, considering costs and other impacts. In no case may EPA
establish emission limitations less stringent than the MACT floor.
Because standards and guidelines developed under Section 129 are to
reflect the performance capabilities of air pollution control
technology, EPA must assess air pollution control technologies and draw
conclusions regarding their performance. This is often misunderstood
and some assume that the regulations require the use of specific
technology. However, the control technology used to achieve the
standards or guidelines is not specified in the regulations. The
regulations only include specific air pollution emission limits that a
source (i.e., an MWI) must achieve. Any control technology that can
comply with the final emission limits may be used.
B. February 1995 Proposal
On February 27, 1995 (60 FR 10654), EPA published proposed NSPS and
EG for MWI. The proposal was the result of several years of effort
reviewing available information in light of the Clean Air Act
requirements described above.
During the data-gathering phase of the project, it was difficult to
get an accurate count of MWI nationwide. In addition, it was difficult
to find MWI with add-on air pollution control systems in place.
Information from a few State surveys led to an estimated population of
3,700 existing MWI.
Subcategories were determined based on design differences among
different types of incinerators: continuous, intermittent, and batch.
These three design types roughly correlate to MWI size.
A few MWI with various levels of combustion control (no add-on air
pollution control) were tested to determine the performance of
combustion control in reducing MWI emissions. One MWI equipped with a
wet scrubber (add-on control) was tested to determine the performance
capabilities of wet scrubbing systems. A few other MWI equipped with
dry scrubbing systems (add-on control) were tested to determine the
performance capabilities of dry scrubbing systems. These systems were
considered typical of air pollution control systems available at the
time, and the data indicated that dry scrubbing systems could achieve
much lower emissions than wet scrubbing systems.
As mentioned above, the MACT floor for new MWI is to reflect the
emissions control achieved by the best controlled similar unit. Dry
scrubbing systems were identified on at least one MWI in each of the
three subcategories (continuous, intermittent, and batch).
Consequently, the MACT floor emission levels for the proposed NSPS
reflected the performance capabilities of dry scrubbing systems.
For existing MWI under the emission guidelines, State regulations
and permits were used to calculate the average emission limitation
achieved by the best performing 12 percent of units. These results were
then compared with the results of the emission tests on wet and dry
scrubbing systems. This comparison led to the conclusion that the MACT
floor for existing MWI would require the use of a dry scrubbing system,
even for small existing batch MWI.
Following determination of the MWI population, subcategories,
performance of technology, and MACT floors, the Clean Air Act requires
EPA to consider standards and guidelines that are more stringent than
the floors. However, because the MACT floors calculated for the
proposal were so stringent, EPA was left with few options to consider.
Emission limits reflecting the capability of dry scrubbing systems were
proposed for all sizes and types of new and existing MWI.
As mentioned earlier, the proposed standards and guidelines
included numerical emission limits reflecting the performance
capabilities of dry scrubbing systems; however, the proposed
regulations would not require the use of a dry scrubbing system.
Emission limits are included in these regulations rather than control
equipment requirements to encourage competition and further the
development of new technologies. Any technology capable of achieving
the emission limitations in the regulations may be used.
[[Page 31739]]
C. New Information Since Proposal
A proposal is essentially a request for public comment on the
information used, assumptions made, and conclusions drawn from the
evaluation of available information. Following proposal, more than 700
comment letters were received, some including new information and some
indicating that commenters were in the process of gathering information
for EPA to consider. The large amount of new information that was
ultimately submitted addressed every aspect of the proposed standards
and guidelines, including: the existing population of MWI, the
performance capabilities of air pollution control systems, monitoring
and testing, operator training, alternative medical waste treatment
technologies, and the definition of medical waste. In almost every
case, the new information has led to different conclusions, as outlined
below.
D. Purpose of This Supplemental Notice
This notice announces the availability of new information, reviews
EPA's assessment of the new information, provides EPA's inclination as
to how the new information might change the final standards and
guidelines, and solicits comments on EPA's assessments and
inclinations. This new information and these assessments are documented
in more detail in a series of memoranda included in Air Docket No. A-
91-61. A listing of these documents can be found at the beginning of
this notice. This action also reopens the public comment period for the
development of standards and guidelines for MWI. Today's action serves
not only as a review of new information and request for comment, but
also as a response to comments on the proposed rule.
This notice is not a reproposal. The proposal date for the MWI
standards and guidelines remains February 27, 1995. Any MWI that has
commenced construction after February 27, 1995, is considered a new MWI
and will be subject to the NSPS, while any MWI that commenced
construction on or before February 27, 1995, is considered an existing
MWI.
E. New Timeline for Promulgation
In 1993, the EPA, the Sierra Club, and the Natural Resources
Defense Council (NRDC) filed a consent decree with the U.S. District
Court for the Eastern District of New York (Nos. CV-92-2093 and CV-93-
0284) that required the EPA Administrator to sign a notice of proposed
rulemaking no later than February 1, 1995 and a notice of final
rulemaking no later than April 15, 1996.
Because of the large amount of new information and conclusions
drawn from the new information, the EPA deemed it necessary to issue
this supplemental Federal Register notice to provide the public
sufficient opportunity to comment on all information used by the Agency
in developing the NSPS and EG. The Agency requested an extension of the
April 15, 1996 court-ordered deadline, and the court order has been
revised to require the EPA Administrator to sign a notice of final
rulemaking no later than July 25, 1997.
II. Review of New Information
As mentioned earlier, more than 700 comment letters were received
following the February 27, 1995 proposal. An assessment of this
information and some of EPA's inclinations in light of this new
information are presented below.
In general, the following process was used to assess the new
information. The public comment letters were reviewed and categorized
by area of comment. Information related to specific issues (e.g., wet
scrubber performance) was reviewed; meetings were then held to discuss
specific areas of comment with relatively small groups who were
believed to have expertise in specific areas. For example, meetings
with wet scrubber vendors were held to discuss the new information
related to the performance capabilities of wet scrubbers. During the
smaller meetings, additional information was received and comment was
taken. Following the smaller meetings, EPA conducted larger public
meetings on June 15, 1995, September 26, 1995, and February 14, 1996,
to review the assessment of new information and take further public
comment. This Federal Register notice provides EPA's review of all
information received since proposal.
A. MWI Inventory
One of the essential starting points in developing EG and NSPS is
compiling an inventory of existing sources and projecting the number of
new sources expected to be built in the future. The MWI inventory is
the basis for the development of MACT floors, environmental impacts,
cost impacts, and economic impacts. The results of these analyses are
then used to determine MACT.
The inventory of existing sources used in this analysis is a
``snapshot'' of the current population of existing MWI. The inventory
of new MWI potentially subject to the NSPS is a prediction of the
number of MWI that will be built over the next 5 years in the absence
of Federal regulations. The MWI inventories are not exact, but are
representative of current and future MWI populations. Consequently,
they are adequate to allow EPA to make informed decisions in developing
standards and guidelines for new and existing MWI.
1. Existing Population
To estimate the nationwide population of existing MWI at proposal,
available State MWI inventory information was gathered. Where MWI
information was not available for a particular State, the State's human
population was used to estimate the MWI population. Human population
was selected as the basis for extrapolation because it is logical that
the amount of medical waste generated (and, therefore, the MWI
population) would correlate with human population. This extrapolation
was a straightforward computation with readily available data; however,
detailed State inventory data were only available from 11 States. This
method resulted in an estimated 3,700 MWI burning general medical
waste.
Following proposal, a number of comments were received regarding
the inventory of existing MWI. Several commenters suggested that the
population of MWI was overestimated. The American Hospital Association
(AHA) submitted comments that included a compilation of approximately
2,200 existing MWI.
To compile a new EPA inventory, the AHA inventory was used as a
starting point. Other sources of information, including State surveys
and a data base of MWI operating permits, were also used to refine the
inventory. Following this initial compilation, the inventory contained
approximately 2,600 MWI. During the September 26, 1995 public meeting,
several stakeholders voiced concern that many of the incinerators
listed in EPA's MWI inventory had ceased operation. To address this
concern, the Agency requested additional information to update the
inventory. Additional information was received from State agencies,
commercial medical waste disposal companies, and MWI vendors. Medical
waste incinerator units were deleted or added based on the new
information provided. Following these revisions, the final EPA
inventory contains approximately 2,400 MWI; this inventory is located
in the docket as item No. IV-B-45.
The inventory also contains information such as MWI type
(continuous/intermittent or batch fed), capacity, and location, as well
as State
[[Page 31740]]
regulatory or permit emission limits. Every MWI in the inventory is
assigned an MWI capacity in pounds per hour (lb/hr) or pounds per batch
(lb/batch). Location information includes rural or urban designations
based on Metropolitan Statistical Area (MSA) boundaries for the U.S.
Facilities within MSA boundaries were considered urban MWI; facilities
outside MSA boundaries were considered rural MWI. Emission limitations
were determined by examining air quality permits, where available, or
examining the emission limitations included in State regulations.
2. Future Installations
Projections of new MWI were made to estimate the costs and other
impacts associated with NSPS. To estimate the number of new MWI that
would be subject to the NSPS, historical sales data were obtained from
MWI vendors. For the proposal, it was estimated that, in the absence of
Federal regulations, 700 MWI would be installed during the 5 years
following proposal (140 MWI per year). This projection was based on
historical sales data gathered from 1985 through 1989.
To update the projection of new MWI that would be subject to the
NSPS, additional data were gathered from MWI vendors following the
proposal. Historical sales data were gathered covering years 1990 to
1995. Based on this new data, 235 MWI are expected to be installed in
the next 5 years in the absence of the NSPS (47 per year). This
projection covers the years 1996 to 2000. The memorandum documenting
the procedures used to estimate the population of new MWI is located in
the docket as item IV-B-37.
B. Subcategorization
Section 129 of the Clean Air Act states that the Administrator may
distinguish among classes, types, and sizes of units within a category
in establishing the standards and guidelines. At proposal, the Agency
concluded the MWI population should be divided into three
subcategories: (1) Continuous MWI, (2) intermittent MWI, and (3) batch
MWI. While these three subcategories were based on design differences
of the MWI, they also correlate roughly with size or MWI capacity.
During the public comment period, a number of comments were
received regarding subcategorization. Several commenters suggested that
EPA subcategorize directly by MWI size. Others suggested that EPA
subcategorize MWI based on heat input capacity. Other commenters
suggested that the Agency set standards based on the location of MWI;
these commenters expressed concern about the lack of medical waste
disposal options in remote rural locations.
Three criteria were subsequently considered in reexamining
potential subcategories: size (capacity to burn medical waste); type
(continuous/intermittent versus batch); and location (urban versus
rural). The first two are clearly identified in Section 129 and have
been used in other Federal regulations as criteria for
subcategorization. Location, by itself, is not a valid criterion for
subcategorization. However, in this case, it is used as a surrogate
measure of the availability of alternative waste disposal options.
Medical waste incinerators located in remote areas might be considered
as a separate ``class'' of incinerator because of the limited
availability of alternative waste disposal options in rural areas.
As mentioned earlier, the MACT floor is the least stringent
regulatory option allowed under the Clean Air Act. Consequently, the
MACT floors were examined using the EPA MWI inventory for various
potential MWI subcategories. Because PM is, by far, the most common
type of emission limitation in State regulations and permits, the PM
MACT floor was the focus in this analysis. Subcategories were
established when significant differences in PM MACT floors were
identified.
The most common size breaks used by States in regulating MWI occur
at 100, 200, 500, 1,000, and 2,000 lb/hr. The MACT floor emission
levels for these size breaks were evaluated to determine appropriate
size breaks for regulation. Significant differences in MACT floors were
identified at 200 lb/hr and 500 lb/hr. Consequently, the three size
ranges determined to be appropriate for the purpose of regulating MWI
are presented in Table 2.
Table 2.--Number of MWI and Size Ranges for Subcategories
------------------------------------------------------------------------
Number
MWI subcategory Size range, lb/hr of MWI
------------------------------------------------------------------------
Small................................ 200.......... 1,139
Medium............................... >200 and 500. 692
Large................................ >500.................... 542
------------------------------------------------------------------------
The three basic design types of MWI are continuous, intermittent,
and batch. A distinction between continuous and intermittent MWI based
on design type may not be appropriate because these two types of units
are essentially identical with the exception of the ash handling
system. Also, the information used to develop the population of
existing MWI does not distinguish between continuous and intermittent
MWI. Batch MWI, however, are very different from intermittent and
continuous units. As a result, batch MWI were further examined to
determine if the MACT floor emission levels are different than those
for continuous and intermittent MWI within the same size range; no
significant difference in MACT floor emission levels was found.
The final criterion considered was location (urban vs. rural). This
analysis focused on the small MWI because commenters were particularly
concerned about small, rural MWI. The MACT floor emission levels for
small urban MWI and small rural MWI, however, were found to be
essentially the same.
Based on the new information, the Agency is inclined to
subcategorize the existing and new population of MWI into three
subcategories as shown in Table 2: small (200 lb/hr), medium
(>200 and 500), and large (>500). The memorandum that
details the procedures used to assess the subcategories is found in the
docket as item IV-B-23. Further subcategorization may be considered in
examining standards and guidelines more stringent than the MACT floors
(see Sections III and IV).
Directly related to the question of using size or burning capacity
to subcategorize MWI, the proposal requested comment on a ``standard''
method of determining MWI size for the purpose of consistent, uniform,
and equitable application of whatever standards and guidelines are
adopted. Comments responding to this request focused on the design heat
release rate of the MWI expressed in British thermal units per hour per
cubic foot (Btu/hr-ft3) in the primary combustion chamber and the
heat content of medical waste expressed in British thermal units per
pound (Btu/lb). Most MWI manufacturers base their design capacities on
these two factors.
In considering and/or adopting a ``standard'' means of determining
MWI size, EPA is not attempting to establish design requirements for
MWI manufacturers. Instead, the only purpose of adopting a standard
method for determining the size of MWI is to ensure that all MWI of the
same ``size'' are subject to the same requirements.
The design heat release rate used by most vendors of continuous and
intermittent MWI is typically 15,000 Btu/hr-ft3. The heat content
of medical waste can vary substantially from 1,000 Btu/lb for
pathological waste to over 10,000 Btu/lb for waste with a high
[[Page 31741]]
plastics content. The heat content generally associated with medical
waste for the purpose of determining nameplate capacity has been 8,500
Btu/lb. The combination of 15,000 Btu/hr-ft3 and 8,500 Btu/lb
results in a volumetric waste burning capacity of 1.76 lb/hr-ft3.
The volume of the primary chamber is multiplied by 1.76 to determine
the size of the MWI. A continuous or intermittent MWI with a primary
chamber volume of 500 ft3 would be sized at 880 lb/hr for the
purpose of determining regulatory requirements.
For batch MWI, the calculation is slightly different. Batch MWI
charge all waste to be burned when the unit is cold. No additional
waste is added during the combustion cycle. The unit is then allowed to
cool before ash is removed and more waste is charged. These units are
given a designation of pounds per batch (lb/batch) rather than lb/hr
and usually take about 12 hours to completely burn the waste. The
density of medical waste is about 4.5 lb/ft3. Consequently, the
combination of 4.5 lb/ft3 and 12 hours per batch yields a
volumetric waste burning capacity of 0.375 lb/hr-ft3. The volume
of the primary chamber would be multiplied by 0.375 to determine the
size of the MWI. A batch MWI with a primary chamber volume of 500
ft3 would be sized at 188 lb/hr for the purpose of determining
regulatory requirements. A more detailed description of the MWI size
methods described above for continuous, intermittent, and batch MWI can
be found in the docket as item IV-B-44.
During a meeting with MWI vendors, it was suggested that MWI size
should be determined by the unit's operating permit rather than its
design capacity. Many States allow MWI to meet less stringent
requirements associated with smaller MWI as long as the MWI is subject
to a permit condition limiting the amount of waste burned.
Consequently, while EPA is inclined to determine MWI size by the
criteria described above, EPA is also considering inclusion of an
option to allow an MWI to change its size designation by operating
under a Federally enforceable requirement limiting the amount of waste
burned (i.e., waste feed rate--lb/hr). For example, a continuous or
intermittent MWI with a 340 ft3 primary chamber, with a design
capacity of about 600 lb/hr (i.e., ``large''), using the procedure
outlined above, could be considered a ``medium'' MWI by operating under
a Federally enforceable requirement limiting its charge rate to no more
than 500 lb/hr. A batch MWI with a 1,000 ft3 primary chamber, with
a design capacity of about 4,500 lb/batch or 375 lb/hr (i.e.,
``medium''), using the procedure outlined above, could be considered a
``small'' MWI by operating under a Federally enforceable requirement
limiting its charge rate to no more than 2,400 lb/batch (200 lb/hr).
Finally, some commenters expressed concern about facilities
installing multiple small MWI at one location in an effort to be
subject to less stringent requirements. Commenters believed this should
not be allowed. Consequently, EPA is inclined to combine the waste
burning capacity of multiple units at one location to determine size.
As stated above, such facilities could still operate under a Federally
enforceable permit limiting their operating capacity to change their
size designation.
C. Performance and Cost of Technology
Section 129 of the Clean Air Act directs the EPA to develop
regulations for MWI that are based on the use of MACT, which is defined
as the maximum reduction in emissions of air pollution the EPA
considers achievable, considering costs, environmental, and energy
impacts. However, Section 129 also states that, for existing MWI, these
regulations can be no less stringent than the average of the best 12
percent of existing MWI, and for new MWI, they can be no less stringent
than the best similar MWI. These minimum stringency requirements for
the regulations are referred to as the ``MACT floors.'' The emission
limits in the final regulations can be no less stringent than the
``MACT floor'' emission levels.
The ``MACT floors'' for the regulations are discussed in detail in
another section of this notice. However, these ``MACT floors'' are only
the starting point for determining MACT. Since MACT is the maximum
reduction in air pollution emissions that is achievable, considering
costs, environ-mental and energy impacts, if more stringent emission
levels than the MACT floor emission levels are achievable, the EPA must
identify these more stringent emission levels and consider them in
selecting the MACT emission limits for MWI.
The EPA determines whether more stringent emission levels than the
MACT floor emission levels are achievable by identifying various air
pollution control technologies used to reduce emissions from MWI. Next,
the EPA gathers and analyzes data on these technologies and draws
conclusions regarding their performance--in terms of their ability to
reduce air pollution emissions. The EPA then is able to determine MACT
as follows.
After the MACT floors have been determined, the EPA can identify
what air pollution control technologies would need to be used by MWI to
achieve or comply with regulations based on these MACT floors. Then the
EPA can identify those air pollution control technologies that are
capable of achieving more stringent emission levels than the MACT
floors. The EPA is then able to analyze and consider these more
stringent emission levels in terms of the cost, environmental, and
energy impacts associated with their use compared to the use of the air
pollution control technologies that can achieve the MACT floor emission
levels. This analysis and consideration serves as the basis for the EPA
to determine MACT.
All of this analysis, with its focus and discussion of air
pollution control technology, is often misunderstood and leads some to
assume that the regulations require the use of a specific air pollution
control technology, which is not the case. The air pollution control
technology used to achieve or comply with the regulations is not
specified in the regulations. The regulations only include emission
limits (i.e., concentration levels in the gases released to the
atmosphere) for specific air pollutants (e.g., hydrogen chloride, lead,
etc.) that an MWI must achieve. The decision on how to meet these
emission limits is left to the MWI owner or operator; an MWI owner or
operator may select any equipment or any means available to comply with
these emission limits.
At the time of proposal, relatively few emission test reports were
available to the EPA from which to draw conclusions regarding the
performance capabilities of various air pollution control systems. The
data indicated that dry scrubbing systems could achieve much lower
emission levels than wet scrubbing systems and that either type of
scrubbing system could achieve much lower emission levels than
combustion controls (i.e., good combustion) alone.
Following proposal, a number of emission test reports were
submitted to EPA. Many commenters believe that EPA misjudged the
performance capabilities of various air pollution control technologies,
especially the capabilities of wet scrubbing systems. The EPA has
reviewed the data contained in these emission test reports and, as
summarized below, EPA's conclusions regarding the performance
capabilities of various air pollution control technologies have been
revised.
Relatively few comments were received regarding EPA's estimates of
the costs of air pollution control technology. The majority of the
[[Page 31742]]
comments regarding cost pertained to wet scrubbing systems. The
reassessment of costs is discussed briefly below for each control
technology.
1. Good Combustion
Combustion controls (i.e., good combustion) are effective in
reducing emissions of combustion-related pollutants, such as PM, CO,
and dioxin, but are not effective in reducing emissions of waste-
related pollutants, such as acid gases or metals. For the combustion-
related pollutants, combustion controls can be divided into two levels
(i.e., 1-second and 2-second residence time) and the achievable
emission levels associated with the use of each of these levels have
been reassessed. In addition, achievable emission levels for waste-
related pollutants were also reassessed. For waste-related pollutants,
performance between the two levels of combustion control is not
distinguishable. The results of the reassessment of combustion control
are shown in Table 3 and are available as item Nos. IV-B-46 and IV-B-47
in the docket.
Table 3.--Achievable Emission Levels For Combustion Control
------------------------------------------------------------------------
Achievable
Pollutant/combustion level emission
levels
------------------------------------------------------------------------
PM, gr/dscf:
1-sec................................................... 0.35
2-sec................................................... 0.25
Dioxin, ng/dscm:
1-sec................................................... 9,000
2-sec................................................... 800
TEQ dioxin, ng/discm:
1-sec................................................... 275
2-sec................................................... 15
CO, ppmdv:
1-sec................................................... 700
2-sec................................................... 40
HCl, ppmdv................................................ 3,100
SO2, ppmdv................................................ 55
NOx, ppmdv................................................ 250
Pb, mg/dscm............................................... 10
Cd, mg/dscm............................................... 4
Hg, mg/dscm............................................... 7.5
------------------------------------------------------------------------
Most of the achievable emission levels associated with combustion
control have changed little from the proposal; the exceptions are the
achievable emission levels for dioxin and Hg. The conclusion drawn at
proposal regarding the achievable emission level for dioxin was driven
by two relatively high data points from two different MWI. A thorough
review of these two MWI and the tests conducted at these two MWI raise
numerous questions and doubts about whether good combustion was
actually employed at these MWI during the emission tests. Consequently,
EPA no longer considers these emission tests representative of good
combustion.
The situation is similar with regard to achievable Hg emission
levels; at proposal, the conclusion regarding achievable emission level
for Hg was driven by one very high data point. Following proposal, the
hospital operating this MWI instituted several common waste management
practices employed by other hospitals, and the MWI was retested by the
EPA. The new data point is very similar to all the other data points.
Consequently, the earlier data point is no longer considered
representative of achievable Hg emission levels.
While no specific comments were received regarding the cost of good
combustion, the costs were reassessed and updated for consistent
comparison with other costs. This information is described in more
detail in item IV-B-33 in the docket.
2. Wet Scrubbers
Following proposal, a number of comments were submitted to the EPA
concerning the performance capabilities of wet scrubbing systems. Some
commenters claimed that the wet scrubbing system tested by EPA was not
representative of current wet scrubber technology and that the scrubber
was not designed for high efficiency PM removal. The commenters
submitted a number of emission test reports from wet scrubbing systems
and urged EPA to reconsider the performance capabilities of these
systems.
The EPA has reviewed these emission test reports and revised its
previous conclusions on the performance capabilities of wet scrubbing
systems. Wet scrubbing systems are capable of achieving three different
levels of performance, depending on their design and operation. For
convenience, these three levels of performance have been termed low
efficiency, moderate efficiency, and high efficiency. A summary of
EPA's revised conclusions regarding achievable emission levels
associated with the use of wet scrubbing systems is shown in Table 4. A
full discussion of these revised conclusions is available as item No.
IV-B-48 in the docket.
Table 4.--Achievable Emission Levels For Wet Scrubbers
----------------------------------------------------------------------------------------------------------------
Achievable emission levels
Pollutant, units ------------------------------------------------------------------------------
Low Moderate High
----------------------------------------------------------------------------------------------------------------
PM, gr/dscf...................... 0.05..................... 0.03.................... 0.015.
dioxin, ng/dscm.................. 125...................... 125..................... 125.
TEQ dioxin, ng/dscm.............. 2.3...................... 2.3..................... 2.3.
HCl, ppmdv....................... 15 or 99%................ 15 or 99%............... 15 or 99%.
Pb, mg/dscm...................... 1.2 or 70%............... 1.2 or 70%.............. 1.2 or 70%.
Cd, mg/dscm...................... 0.16 or 65%.............. 0.16 or 65%............. 0.16 or 65%.
Hg, mg/dscm...................... 0.55 or 85%.............. 0.55 or 85%............. 0.55 or 85%.
----------------------------------------------------------------------------------------------------------------
Percent reflects achievable percentage reduction in emissions. No levels are shown for CO, SO2, or NOx because
wet scrubbers on MWI achieved no further reductions beyond good combustion for these pollutants.
Note that for the waste-related pollutants, the achievable emission
levels in the table are expressed as a numerical concentration level or
a percent reduction. The composition of the waste burned in an MWI is
not uniform; as a result, the concentration levels of waste-related
pollutants from an MWI varies. On occasion, however, a momentary rise
or ``spike'' in the concentration level of a waste-related pollutant
may occur; while a wet scrubbing or dry scrubbing system can reduce
this concentration level considerably, the system can not necessarily
reduce it to the concentration levels shown in the table. For this
reason, conclusions regarding
[[Page 31743]]
achievable emission levels associated with the use of wet or dry
scrubbing systems for waste-related pollutants must include a percent
reduction component to accurately reflect the performance capabilities
of wet and dry scrubbing systems.
Also note that the EPA has no emission data upon which to assess
the performance capabilities of wet scrubbing systems that might
utilize activated carbon. The EPA knows of no wet scrubbing system
currently operating on an MWI using activated carbon, although vendors
have mentioned this technique could be done. Activated carbon used with
a dry scrubber (discussed below) provides enhanced removal of Hg and
dioxin. Thus, the use of activated carbon with a wet scrubbing system,
in an appropriate manner such as a fixed bed, should achieve the same
enhanced performance levels.
Along with new information regarding the performance of wet
scrubbers, EPA received new information regarding the cost of wet
scrubbing systems. Figure 1 shows the relationship between cost and
size of MWI for each level of wet scrubber performance. These costs are
not substantially different from those used at proposal. The key
difference is the distinction in costs between wet scrubbers of
different efficiency. This information is described in more detail in
item IV-B-30 in the docket.
BILLING CODE 6560-50-P
[GRAPHIC] [TIFF OMITTED] TP20JN96.000
BILLING CODE 6560-50-C
3. Dry Scrubbers
Very few comments were submitted to EPA following proposal that
questioned EPA's conclusions on the performance capabilities of dry
scrubbing systems. These capabilities were reassessed, however, to
consider data contained in several emission test reports submitted to
EPA from dry scrubbing systems using activated carbon.
The results of this reassessment of dry scrubbing system
performance is shown in Table 5. The conclusions summarized in this
table are similar to those at proposal. Note, however, that as
discussed above under wet scrubbing systems, the achievable emission
levels associated with the use of dry scrubbing systems for waste-
related pollutants are now expressed as a numerical concentration level
or a percent reduction. A discussion of this reassessment is available
as item No. IV-B-49 in the docket.
Table 5.--Achievable Emission Levels For Dry Scrubbers With Activated
Carbon Injection
------------------------------------------------------------------------
Pollutant, units Achievable emission levels
------------------------------------------------------------------------
PM, gr/dscf............................ 0.015.
dioxin, ng/dscm........................ 25.
TEQ dioxin, ng/dscm.................... 0.6.
HCl, ppmdv............................. 100 or 93%.
Pb, mg/dscm............................ 0.07 or 98%.
Cd, mg/dscm............................ 0.04 or 90%.
Hg, mg/dscm............................ 0.55 or 85%.
------------------------------------------------------------------------
Percent reflects achievable percentage reduction in emissions. No levels
are shown for CO, SO2, or NOx because dry scrubbers on MWI's achieved
no further reductions beyond good combustion for these pollutants.
While no specific comments were received regarding the cost of dry
scrubbers, the costs were reassessed and updated for consistent
comparison with other costs. Figure 2 shows the relationship between
cost and size of MWI for dry scrubbing systems. This information is
described in more detail in item IV-B-32 in the docket.
[[Page 31744]]
[GRAPHIC] [TIFF OMITTED] TP20JN96.001
BILLING CODE 6560-50-C
D. MACT Floor
1. Existing MWI
The Clean Air Act specifies in Section 129 that the degree of
reduction in emissions that is deemed achievable for existing MWI shall
not be less stringent than the average emission limitation achieved by
the best performing 12 percent of units in a category; this requirement
is referred to as the ``MACT floor'' for existing MWI. Section 302(k)
of the Clean Air Act defines the term ``emission limitation'' as ``a
requirement established by the State or Administrator which limits the
quantity, rate, or concentration of emissions of air pollutants on a
continuous basis.''
Air quality permits and State regulations were examined to
determine the average emission limitations achieved by the best
performing 12 percent of MWI in each of the three subcategories
considered at proposal (continuous, intermittent, and batch MWI). Table
6 presents the MACT floor emission levels identified at proposal.
Table 6.--Proposed MACT Floor Emission Levels For Existing MWI
[February 1995]
----------------------------------------------------------------------------------------------------------------
MWI subcategory
Pollutant, units -----------------------------------------------
Batch Intermittent Continuous
----------------------------------------------------------------------------------------------------------------
PM, gr/dscf..................................................... 0.03 0.03 0.02
CO, ppmdv....................................................... 91 90 76
Dioxin, ng/dscm................................................. NF NF NF
HCI, ppmdv...................................................... 911 115 43
(35%) (92%) (97%)
SO2, ppmdv...................................................... NF NF NF
NOX, ppmdv...................................................... NF NF NF
Pb, mg/dscm..................................................... NF NF NF
Cd, mg/dscm..................................................... NF NF NF
Hg, mg/dscm..................................................... NF NF NF
----------------------------------------------------------------------------------------------------------------
NF=No Floor--the MACT floor emission levels for these pollutants reflect uncontrolled emissions. Numbers in
parentheses indicate percent reduction.
Note that the table indicates no floor for most pollutants. While a
numerical value was calculated for each pollutant, most pollutant MACT
floors reflected uncontrolled emissions. Nevertheless, based on
conclusions drawn at proposal regarding performance of technology, the
MACT floor values included in Table 6 for CO, PM, and HCl indicated, at
proposal, that all existing MWI would need good combustion and dry
scrubbers to meet the MACT floors for CO, PM, and HCl.
As discussed in earlier sections, the new information submitted
following proposal led to changes to the MWI inventory and
subcategories. Because these factors can influence the MACT floors, a
review of the MACT floors was conducted. Recall that the inventory
includes emission limitations for each pollutant based on State permits
and regulations. For each pollutant, the MWI inventory was sorted by
subcategory
[[Page 31745]]
and then by stringency of emission limit (most stringent to least
stringent) within each subcategory. For each pollutant, the emission
limitations for the top 12 percent of units in each subcategory were
averaged to determine the MACT floor emission levels. The results of
these calculations to determine the MACT floor emission levels for
existing MWI in each subcategory based on the new MWI inventory are
presented in Table 7.
Table 7.--Revised MACT Floor Emission Levels for Existing MWI
----------------------------------------------------------------------------------------------------------------
MWI subcategory
Pollutant, units -----------------------------------------------
Small Medium Large
----------------------------------------------------------------------------------------------------------------
PM, gr/dscf..................................................... 0.086 0.043 0.021
CO, ppmdv....................................................... 156 98 87
Dioxin, ng/dscm................................................. NF NF NF
HCI, ppmdv...................................................... NF 589 101
(57%) (93%)
SO2, ppmdv...................................................... NF NF NF
NOX, ppmdv...................................................... NF NF NF
Pb, mg/dscm..................................................... NF NF NF
Cd, mg/dscm..................................................... NF NF NF
Hg, mg/dscm..................................................... NF NF NF
----------------------------------------------------------------------------------------------------------------
NF=No Floor--the MACT floor emission levels for these pollutants reflect uncontrolled emissions. Numbers in
parentheses indicate percent reduction.
Based on the recalculated MACT floors and the new conclusions drawn
regarding the performance capabilities of air pollution control
technologies (Section II.C.), it appears that large MWI would have to
use good combustion and a high efficiency wet scrubber to achieve the
MACT floor emission levels, while a medium-sized MWI would have to
install at least good combustion and a moderate efficiency wet
scrubber. Dry scrubbers could also be used in conjunction with good
combustion to meet the MACT floor emission levels for medium and large
MWI. Available data showing the performance capabilities of good
combustion appears to indicate that the 0.086 gr/dscf PM MACT floor for
small MWI is not achievable with good combustion alone. However, MWI
manufacturers have indicated they routinely guarantee achieving 0.08
gr/dscf with good combustion. Consequently, the MACT floor for small
MWI would require the use of good combustion practices; based on the
claims of MWI manufacturers, add-on scrubbing systems would not be
needed in all cases to meet the MACT floor. Regulatory options
reflecting more stringent guidelines for existing MWI are examined in
Section III of this notice. A memorandum that documents the procedures
used to determine the MACT floors for existing MWI is located in the
docket as item IV-B-24.
2. New MWI
The Clean Air Act specifies in Section 129 that the degree of
reduction in emissions that is deemed achievable for new MWI shall not
be less stringent that the emissions control achieved by the best-
controlled similar unit; this requirement is referred to as the ``MACT
floor'' for new MWI. The MACT floor emission levels identified at
proposal for new MWI are presented in Table 8. These MACT floor values
reflect conclusions at proposal about the performance capabilities of
dry scrubbing systems because such systems were identified on at least
one MWI in each subcategory and because dry scrubbing systems were
considered capable of achieving lower emissions than wet scrubbing
systems.
Table 8.--Proposed MACT Floor Emission Levels For New MWI
[February 1995]
----------------------------------------------------------------------------------------------------------------
MWI subcategory
Pollutant, units -----------------------------------------------
Batch Intermittent Continuous
----------------------------------------------------------------------------------------------------------------
PM, gr/dscf..................................................... 0.013 0.013 0.013
CO, ppmdv....................................................... 50 50 50
Dioxin, ng/dscm................................................. 1,500 450 80
HCl, ppmdv...................................................... 42 42 42
(97%) (97%) (97%)
SO2, ppmdv...................................................... NF NF NF
NOX, ppmdv...................................................... NF NF NF
Pb, mg/dscm..................................................... 0.1 0.1 0.1
Cd, mg/dscm..................................................... 0.05 0.05 0.05
Hg, mg/dscm..................................................... NF NF 0.47
(85%)
----------------------------------------------------------------------------------------------------------------
NF=No Floor--the MACT floor emission levels for these pollutants reflect uncontrolled emissions. Numbers in
parentheses indicate percent reduction.
Again, the new information submitted following proposal led to
changes to the MWI inventory, subcategories, and conclusions about
performance of technology. Because these factors can influence the MACT
floors, a review of the MACT floors was conducted. The revised
inventory of existing MWI was examined to identify the best-controlled
[[Page 31746]]
MWI in each subcategory. The revised MACT floor emission levels for new
MWI are shown in Table 9.
Table 9.--Revised MACT Floor Emission Levels For New MWI
----------------------------------------------------------------------------------------------------------------
MWI subcategory
Pollutant, units -----------------------------------------------
Small Medium Large
----------------------------------------------------------------------------------------------------------------
PM, gr/dscf..................................................... 0.03 0.015 0.015
CO, ppmdv....................................................... 40 40 40
Dioxin, ng/dscm................................................. 125 125 25
HCl, ppmdv...................................................... 15 15 15
(99%) (99%) (99%)
SO2, ppmdv...................................................... NF NF NF
NOx, ppmdv...................................................... NF NF NF
Pb, mg/dscm..................................................... 1.2 0.07 0.07
(70%) (98%) (98%)
Cd, mg/dscm..................................................... 0.16 0.04 0.04
(65%) (90%) (90%)
Hg, mg/dscm..................................................... 0.55 0.55 0.55
(85%) (85%) (85%)
----------------------------------------------------------------------------------------------------------------
NF=No Floor--the MACT floor emission levels for these pollutants reflect uncontrolled emissions. Numbers in
parentheses indicate percent reduction.
The small MWI subcategory consists of MWI operating at a throughput
of 200 pounds per hour (lb/hr) or less of medical waste. The MACT floor
for new small MWI consists of the emission levels that are achievable
with good combustion and a moderate efficiency wet scrubber. The MACT
floor is based on these emissions levels because small existing MWI
equipped with this air pollution control have been identified. No small
existing MWI have been identified with high-efficiency wet scrubbers or
dry scrubbers.
The medium MWI category consists of MWI operating at a throughput
of greater than 200 lb/hr and less than or equal to 500 lb/hr of
medical waste. The MACT floor for new medium-sized MWI is based on
FR Doc. 96-15585 Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Medical Waste Incinerators
emission levels that are achievable with good combustion and a
combination of two control technologies, the high efficiency wet
scrubber and the dry injection/fabric filter (DI/FF) dry scrubber
system without carbon. At least one existing MWI in the medium
subcategory is controlled with a high efficiency wet scrubber and
another is equipped with a DI/FF system without carbon. The MACT floor
is based on both of these technologies (i.e., a combined dry/wet
scrubber system) because the wet scrubber achieves the lowest dioxin,
HCl, and Hg emissions, but the DI/FF without carbon injection achieves
the lowest Pb and Cd emissions. While no combined dry/wet scrubber
systems were identified on medium MWI, several such systems are
currently in operation on large MWI, as mentioned below. In addition,
as also mentioned below, spray dryer/fabric filter systems could also
meet the MACT floor emission levels for medium-sized MWI.
The large MWI subcategory consists of all MWI operating at a
throughput of greater than 500 lb/hr of medical waste. As with the MACT
floor for new medium MWI, the MACT floor for new large MWI is based on
the emission levels that are achievable with good combustion and a
combination of two control technologies, the high efficiency wet
scrubber and the DI/FF dry scrubber system with carbon. Several
existing facilities in the large category currently control emissions
with a combined dry/wet system. In addition, one existing MWI equipped
with a spray dryer/fabric filter system with carbon was tested during
the EPA testing program and this test demonstrated that this scrubbing
technology could also meet the MACT floor emission levels presented in
Table 9.
Regulatory options reflecting more stringent standards for new MWI
are examined in Section IV of this notice. A memorandum that documents
the procedures used to determine the MACT floors for new MWI is located
in the docket as item IV-B-38.
E. Baseline Emissions
To estimate the environmental impacts of the standards and
guidelines for MWI, an estimate of baseline emissions must be made
(i.e., emissions in the absence of Federal regulations). In the
February 1995 proposal, baseline emissions were estimated for PM, CO,
dioxin, HCl, SO2, NOx, Pb, Cd, and Hg. When this estimate was
developed, very little information was available regarding the actual
number of MWI and the level of air pollution control associated with
each. The emission estimate was derived from an estimated 3,700 MWI
assumed to be operating with little, if any, air pollution control.
As discussed in previous sections, new information has led to new
conclusions about the MWI inventory, performance of technology, and
control levels associated with each existing MWI. As a result, revised
estimates of baseline emissions from existing MWI have been calculated
and are presented in Table 10.
Table 10.--Annual Baseline Emissions For Existing MWI
------------------------------------------------------------------------
Baseline
Pollutant, units emissions
------------------------------------------------------------------------
PM, Mg/yr................................................. 940
CO, Mg/yr................................................. 460
Dioxin g/yr............................................... 7,200
Dioxin g TEQ/yr........................................... 150
HCl, Mg/yr................................................ 5,700
SO2, Mg/yr................................................ 250
NOx, Mg/yr................................................ 1,200
Pb, Mg/yr................................................. 11
Cd, Mg/yr................................................. 1.2
Hg, Mg/yr................................................. 15
------------------------------------------------------------------------
To convert Mg/yr to ton/yr, multiply by 1.1. To convert g/yr to lb/yr,
divided by 453.6.
The results of these emission estimates are significantly lower
than estimates developed at proposal. For example, the estimate of
baseline emissions of dioxin toxic equivalency (TEQ) was 5,100 grams
per year (g/yr) at proposal; the current estimate is 150 g/yr. At
proposal, the estimate of Hg emissions from existing MWI was 64.6 tons
per year (tons/yr); the current estimate is 16.0 tons/yr.
The primary reason for the lower baseline emission estimate is the
much greater level of emission control found
[[Page 31747]]
at existing MWI than was assumed at proposal. Comment is requested on
the methodology and assumptions used to estimate baseline emissions
from existing MWI. Where information on specific air pollution control
equipment was not available, EPA used State regulatory emission limits
to predict the type of air pollution control equipment installed on
each existing MWI. Information is requested which would more accurately
reflect the actual air pollution control equipment installed on each
existing MWI. In addition, emission factors for each type of air
pollution control equipment were developed based on compliance test
reports. Comment is requested on whether these emission factors reflect
actual air emissions from these control devices over the life of the
equipment.
At proposal, baseline emissions were also estimated for new MWI in
the fifth year after adoption of the NSPS. These estimates were based
on a projected number of new MWI and their associated emission controls
that would be installed in the five years following promulgation of the
standards. As with the estimation of baseline emissions for existing
MWI, the estimate of baseline emissions for new MWI has also changed
significantly. This change is due primarily to the lower projected
number of new MWI and the emission control level associated with each
MWI. The revised baseline emissions estimates for new MWI are presented
in Table 11.
Table 11.--Annual Baseline Emissions For New MWI
------------------------------------------------------------------------
Baseline
Pollutant, units emissions
------------------------------------------------------------------------
PM, Mg/yr................................................. 28
CO, Mg/yr................................................. 14
Dioxin g/yr............................................... 47
Dioxin g TEQ/yr........................................... 1.1
HCl, Mg/yr................................................ 64
SO2, Mg/yr................................................ 28
NOx, Mg/yr................................................ 130
Pb, Mg/yr................................................. 0.39
Cd, Mg/yr................................................. 0.051
Hg, Mg/yr................................................. 0.21
------------------------------------------------------------------------
To convert Mg/yr to ton/yr, multiply by 1.1.
To convert g/y to 1b/yr, divided by 453.6.
The memoranda documenting these revised estimates of baseline
emissions from new and existing MWI can be found in the docket as items
IV-B-51 and IV-A-6.
F. Operator Training and Qualification
The proposed standards and guidelines included operator training
and qualification requirements for each MWI operator. These operator
training and qualification requirements included completion of (1) 24
hours of classroom instruction, (2) 4 hours of hands-on training, (3)
an examination developed and administered by the course instructor, and
(4) a handbook or other documentation covering the subjects presented
during the course. The instructor of the operator training course was
not to be employed by the owner or operator of the facility. To obtain
qualification, an operator was to complete the training course and have
either a minimum level of experience or satisfy comparable or more
stringent criteria established by a national professional organization.
The proposed standards and guidelines also required the owner or
operator of the facility to develop and annually update a site-specific
operating manual. This manual would summarize regulations, operating
procedures, and reporting and recordkeeping requirements in accordance
with the proposed standards and guidelines. The proposal required that
each MWI be operated by a trained and qualified operator or by an
individual under the direct supervision of a trained and qualified
operator. The trained and qualified operator would have to be on duty
and at the facility at all times while the incinerator is in operation.
Many comments were received on the proposed operator training and
qualification requirements. The majority of the public comments on
operator training and qualification were related to the third party
training requirement and to the duration that operators must be present
while the MWI is burning waste. Many commenters stated that the EPA
should allow facilities the option of providing training by in-house
personnel because the facility's own personnel would be most familiar
with the operation and maintenance of the incinerator. The commenters
indicated that smaller facilities that do not have the personnel could
use the services of trainers and inspectors that are not affiliated
with the facility.
Many commenters stated that the amount of time that the operator
was required to be present was excessive. Under the proposal, the
operator would have to be on-duty and at the facility during the time
that the combustion air blowers are operating. Several commenters
suggested that this would require operators to be at the incinerator
even when waste was not being burned. Several commenters also suggested
that the trained and qualified operator should be easily accessible
(either at the facility or on-call) while the incinerator is operating.
The EPA is inclined to adopt the operator training and
qualification requirements briefly summarized below and discussed in
greater length in document number IV-B-26, which is available in the
Docket. Cost estimates for operator training and qualification are
documented in item IV-B-39.
The owner or operator of an MWI would be responsible for ensuring
that one or more operators at the facility are qualified. Operator
training may be obtained through a State-approved program or by
completing a training course with (1) 24 hours of classroom
instruction, (2) an examination designed and administered by the course
instructor, and (3) reference material distributed to the attendees
covering course topics.
Operators may obtain qualification by completing a training course
and having one of the following levels of experience: (1) at least 6-
months' experience as an MWI operator, (2) at least 6-months'
experience as the direct supervisor of a qualified MWI operator, or (3)
completion of at least two burn cycles under the observation of two
qualified operators. To maintain qualification, the operator would be
required to complete and pass an annual review or refresher course of
at least 4 hours.
A fully trained and qualified operator would have to be easily
accessible, either at the facility or on-call at all times while the
incinerator is in operation. The trained and qualified operator may
operate the MWI directly or be the direct supervisor of one or more
individuals that charge waste, remove ash, etc. As proposed, the
emission guidelines for existing MWI would require that, 1 year after
approval of the State plan, MWI must be operated by a trained and
qualified operator.
G. Testing, Monitoring, and Inspection
Section 129(c) of the Clean Air Act requires the EPA to develop
regulations that include monitoring and testing requirements. The
purpose of these requirements is to allow the EPA to determine whether
a source is operating in compliance with the regulations.
As mentioned earlier, at proposal relatively few emission test
reports were available to EPA to judge the performance of air pollution
control technologies. These test reports were the result of EPA
emission testing at several MWI. For a variety of reasons, EPA gathered
data during these emission tests using three, 4-hour test runs. The
results of the three test runs were then averaged at each MWI to
calculate a measured emission level. This calculated emission level
represented an
[[Page 31748]]
average emission value over the 12-hour period (i.e., three, 4-hour
runs).
As a result, EPA's assessments of the performance capabilities of
air pollution control technologies and conclusions regarding the
appropriate emission limits to include in the proposed regulations were
based on the measured performance of technology averaged over a 12-hour
period. Emission levels, however, tend to fluctuate somewhat as part of
normal operation. Consequently, during short periods of time, emission
levels may occasionally be greater or lower than the average emission
level over a 12 hour period.
In developing a regulation based on the performance of a particular
technology, the level of performance demanded by the regulation must be
consistent with the level of performance that technology can achieve.
The period of time over which emissions are measured and then averaged
to determine compliance with the regulation, therefore, must correspond
to the period of time over which emission levels were measured and
averaged in determining the emission limits included in the regulation.
If this is not the case, a regulation could include emission limits
that a technology can achieve if emissions are averaged over a
relatively long period of time, but not if emissions are averaged over
a much shorter period of time. For this reason, the proposed regulation
required emission testing to determine compliance by averaging the
results of three, 4-hour test runs, consistent with the procedures
followed in gathering the emission data used to establish the emission
limits included in the regulation.
Many comments were received regarding this proposed requirement to
determine compliance using three, 4-hour test runs. These commenters
noted that a 4-hour test run was much longer than the more conventional
test run of about 1-hour; additionally, many hospitals and healthcare
facilities would normally not have sufficient waste on hand to
accommodate three, 4-hour test runs. Finally, several commenters stated
that the proposed emission testing requirements would substantially
increase the costs associated with emission testing. Consequently,
these commenters urged EPA to revise the emission testing requirements
and adopt the more conventional approach of relying on test runs of
about an hour in length.
As mentioned earlier, more than two dozen test reports were
submitted to EPA following the proposal, and these test reports now
form the basis for revised conclusions regarding the performance
capabilities of technology and the emission limits these technologies
can achieve. The EPA test methods were used to perform the emission
testing summarized in these reports. These methods include procedures
that require the collection of a sufficient sample to accurately
measure emission levels. For most air pollutants, this sample generally
corresponds to a test run of about an hour. The revised conclusions
discussed earlier, therefore, regarding the performance capabilities of
emission control technologies and the emission limits these
technologies can achieve, are based (for the most part) on emission
test data generated by averaging the results of three test runs of
about an hour each (i.e., a 3-hour test).
For this reason, the EPA is inclined to state in the final
regulations adopted for MWI that EPA test methods be followed when
performing any emission testing required to determine compliance with
the regulations. This requirement will ensure that compliance testing
follows the same procedures used to generate the emission data upon
which the emission limits in the final regulation were based. In most
cases, three test runs of about an hour each would be necessary to
determine compliance with the final regulations.
An exception to this requirement is emission testing to measure
dioxin emissions. The procedures in the EPA test method to ensure
sufficient sample is gathered to accurately measure dioxin emissions
frequently leads to test runs longer than 1 hour. Whatever the length
of the emission test, however, the emission testing procedures included
in the EPA test method for measuring dioxin emissions were followed in
the emission test reports submitted to EPA following proposal. As
discussed earlier, these emission test reports serve as the basis for
the dioxin emission limits included in the final regulations and, as a
result, the length of testing necessary to determine compliance will
automatically be consistent with the length of testing used to
determine the emission limits included in the regulations.
The proposed regulations also would have required annual emission
testing to determine compliance. While some commenters supported
emission testing annually or even more frequently (such as every 6
months), a number of commenters believed that annual testing would be
unnecessary or that testing should be required no more than every 5
years. Commenters felt that the requirements for inspections,
monitoring, and operator training are sufficient and much less
expensive than annual emission testing.
Other commenters suggested that the annual emission testing
requirement be replaced with a requirement for annual equipment
inspection/maintenance to ensure that burner settings, air flow rates,
and other operation parameters are properly adjusted. While the
proposal includes a requirement for annual equipment inspection and
maintenance, this requirement would have applied only to existing MWI
until air pollution control equipment had been installed and the MWI
was in compliance with all the emission limits in the regulations. The
purpose of the proposed annual equipment inspection and maintenance
requirements was to ensure that the MWI was in good working order and
physically capable of operating as well as it could operate until
compliance with the emission limits was demonstrated. A MWI in poor
operating condition will likely have higher emissions than a MWI in
good operating condition.
While some commenters stated inspections are not necessary and
others suggested that EPA should let the States decide whether
inspections are necessary, most commenters were generally supportive of
annual inspection and maintenance requirements. Several commenters also
stated that biannual inspections would not be unreasonable. Many of the
commenters supportive of inspection requirements, however, suggested
that the requirement for a ``third party'' inspection be deleted. These
commenters stated in-house personnel are more familiar with the details
and operating intricacies of the equipment installed at their sites. In
addition, serious liability concerns could arise from injury or damage
caused by ``third party'' inspection or maintenance. At this point, EPA
is inclined to include inspection and maintenance requirements wherever
annual stack testing is not required (see document IV-B-26 in the
docket for a description of injection/maintenance requirements). The
inspection would not have to be conducted by a third party.
The proposal also included various monitoring requirements,
requiring the use of continuous emission monitoring systems (CEMS) for
some pollutants and the monitoring of operating parameters for other
pollutants. Some commenters supported the proposed requirements for CO,
opacity, and oxygen (O2) CEMS. Another commenter suggested that
the requirements should be extended to require CEMS for Hg, HCl, and
PM; the commenter suggested that such instruments are available. On the
other
[[Page 31749]]
hand, several other commenters objected to the CEMS requirements in the
proposed rule. These commenters stated that CEMS are not justified,
especially for small MWI, because they are too expensive. These
commenters believe that monitoring operating parameters is a sufficient
substitute for CEMS once compliance has been demonstrated by an initial
emission test.
The monitoring requirements in the proposal for monitoring
operating parameters were structured around the use of dry scrubber
systems. Those who commented on these specific requirements generally
agreed that monitoring of these operating parameters was appropriate
for dry scrubbing systems.
No monitoring requirements were included for monitoring operating
parameters for wet scrubbing systems. The EPA solicited information
regarding an appropriate set of operating parameters for wet scrubbing
systems. The EPA was inclined and is still inclined to include specific
operating parameter monitoring requirements in the final regulations
for wet scrubbing systems as well as for dry scrubbing systems. To
accommodate MWI using an air pollution control system other than a dry
or wet scrubbing system, EPA is inclined to include provisions in the
final regulations for petitioning the Administrator to monitor specific
operating parameters associated with the other air pollution control
system.
A number of commenters responded to EPA's request for suggestions
of monitoring requirements for operating parameters suitable for wet
scrubbing systems. Suggested parameters included pressure drop across
the system, liquor flow rate, flue gas temperature, liquor pH, and
horsepower or amperage. While EPA is inclined to include the same
requirements in the final regulations for monitoring operating
parameters for dry scrubbing systems as proposed, EPA is inclined to
include requirements in the final regulations for monitoring the
following operating parameters for wet scrubbing systems: scrubber exit
temperature, scrubber liquor pH, scrubber liquor flow rate, and energy
input to the scrubber (e.g., pressure drop or horsepower).
To consider the comments outlined above regarding the frequency of
emission testing and the proposed inspection and monitoring
requirements, a matrix of options was developed. This matrix of options
and their annual costs are summarized in Table 12. Each cell or box in
this table represents a combination of emission testing and monitoring
requirements (some combinations also include inspection requirements).
The range in the costs shown in each cell is a reflection of how the
cost of emission testing and monitoring is likely to vary depending on
the emission limits included in the final regulation (i.e., whether the
emission limits are based on the use of good combustion alone or good
combustion and wet or dry scrubbing). These costs vary somewhat because
the operating parameters monitored in each case would be somewhat
different.
Table 12.--Monitoring/Testing Options and Annual Costs
[Thousand $/yr]
----------------------------------------------------------------------------------------------------------------
Testing options
-----------------------------------------------
Monitoring options A Initial and B Initial C Substitute
repeat stack stack testing; stack testing;
testing inspection inspection
----------------------------------------------------------------------------------------------------------------
1--CO CEMS (App F); Opacity CEM (no App F); Operating Parameters 110-119 100-104 99-102
2--Opacity and CO CEMS (no App F); Operating Parameters......... 96-104 85-89 83-86
3--Opacity CEMS (no App. F); Operating Parameters............... 37-46 27-31 26-29
4--Operating Parameters; Quarterly Method 9..................... 10-15 7.5-11 5.8-8.8
----------------------------------------------------------------------------------------------------------------
Table 12 presents the 12 possible combinations of three emission
testing options and four monitoring options that the EPA is considering
including in the final regulations. A more detailed explanation of
these emission testing and monitoring options, as well as their costs,
is available in the docket as item IV-B-54. The following discussion,
however, briefly outlines the essential requirements of each of the
monitoring and emission testing options.
Monitoring Option 1 requires a CO CEMS with Appendix F requirements
(Appendix F requirements ensure the data generated is reliable), an
opacity CEMS without Appendix F requirements, and operating parameter
monitoring requirements for the MWI and, if applicable, for the air
pollution control device. Because the use of Appendix F is required
under this option, the CO CEMS would be used for direct enforcement of
the CO emission limit. The opacity CEMS without Appendix F requirements
would simply provide an indication of opacity and would not be used for
direct enforcement of the opacity limit. Routine opacity testing with
Reference Method 9 is included in Monitoring Option 1 to compensate for
not including Appendix F requirements on the opacity CEMS.
Monitoring Option 2 is the same as Monitoring Option 1, except that
it would not include Appendix F requirements for the CO CEMS, which
would reduce costs. Without Appendix F requirements, the CO CEMS would
provide an indication of CO emissions and would not be used for direct
enforcement of the CO emission limit. Emission testing for CO is
included in Monitoring Option 2 to compensate for excluding Appendix F
requirements on the CO CEMS. An opacity CEMS and operating parameter
monitoring would be required as in Monitoring Option 1.
Monitoring Option 3 is the same as Monitoring Option 2, except
that, instead of the more expensive CO CEMS, stack emission testing for
CO would be required. An opacity CEMS and operating parameter
monitoring would be required as in Monitoring Options 1 and 2.
Monitoring Option 4 would require no CEMS. Instead, it would rely
on manual emission test methods (including more frequent Method 9
opacity tests) and operating parameter monitoring.
For each of these monitoring options, three emission testing
options have been developed. Emission testing Option A would require
initial and annual/skip tests. With the annual/skip test requirement,
emission tests would be required for the first 3 years. If these tests
show that the facility was in compliance each of these 3 years, then
subsequent testing would be done every third year. Emission testing
Option A,
[[Page 31750]]
under all four monitoring options, would require an initial stack test
for all pollutants. Annual or skip emission testing under Monitoring
Options 1, 2, and 3 would also require emission testing of all
pollutants. However, annual or skip emission testing under Monitoring
Option 4 would only require emission testing of a few key or critical
pollutants (i.e., only those necessary to gain a good indication that
the air pollution control system is operating properly).
Emission testing Option B would require an initial emission test
for all pollutants, but would not require annual emission tests. In
lieu of annual or skip emission testing, MWI inspection/maintenance
would be required. This inspection/maintenance would be required
annually under Monitoring Options 1 and 2; however, it would be
required quarterly under Monitoring Options 3 and 4, where no CO CEMS
is required. The inspection/maintenance could be done by in-house
personnel. With regard to any necessary repairs arising from the
inspection/maintenance, the owner or operator of the MWI would be
required to contact the State (or local, if delegated by the State) air
pollution control agency and negotiate a date, within 10 operating days
following the date of the inspection/maintenance, by which the repairs
must be completed.
Emission testing Option C would permit substitute emission testing.
A substitute emission test is an emission test conducted on another,
but identical MWI. An MWI would be required to petition the State (or
local, if delegated by the State) air pollution control agency for
approval, however, and the ``burden of proof'' would be on the MWI to
demonstrate to the satisfaction of the agency that the substitute
emission test is on an identical MWI. In addition, an initial emission
test for Hg would be required; this test would ensure that appropriate
measures for managing the mercury content of the waste are utilized
(e.g., material separation, material purchasing, etc.). Inspection/
maintenance requirements would be the same as under Emission Testing
Option B.
The most direct means of ensuring compliance with emission limits
included in regulations is the use of CEMS. As a matter of policy, the
first and foremost option considered by EPA is to require the use of
CEMS in regulations to demonstrate and ensure compliance on a
continuous basis with the regulations. Only when the impacts of
including such requirements are considered unreasonable, does the EPA
consider other options.
For MWI, it appears that almost all of the emission testing and
monitoring options under consideration cost more than the emission
control system that would be installed to meet the emission limits in
the regulations; in some cases, the emission testing and monitoring
requirements could cost twice as much as the emission control system.
Consequently, the Agency is inclined to include the emission testing
and monitoring requirements under Monitoring Option 4 in the final
regulations to minimize costs. Where the regulations are based on good
combustion and wet and/or dry scrubbing systems, the EPA is inclined to
require Monitoring Option 4 with Emission Testing Option A; where the
regulations are based, in part, on the use of good combustion alone,
the EPA is inclined to require Monitoring Option 4 with Emission
Testing Option B.
The appropriate choice of emission testing and monitoring
requirements (as well as inspection/maintenance requirements) is an
area in which the EPA specifically solicits comments. Many of the MWI
visited or inspected by the EPA in the course of gathering data and
information often appeared poorly maintained and operated. Inadequate
maintenance and/or operation can cause even the best equipment to
perform poorly and result in excess emissions. The inspection/
maintenance and operator training requirements included in the final
regulations are expected to address this problem in a satisfactory
manner; however, the EPA is interested in whether others feel the
inspection/maintenance requirements and operator training requirements
should be supplemented with more extensive emission testing and/or
monitoring requirements.
In addition, CEMS vendors have expressed concern with the costs
developed by EPA for the various CEMS and operating parameter
monitoring requirements. In particular, they believe the costs of CEMS
are much lower than those estimated by EPA. As mentioned, a detailed
breakdown of the EPA estimates of the costs of these requirements is
available in the docket as item IV-B-54. The EPA solicits comments on
these costs and if costs are indeed much lower than estimated, EPA may
consider more comprehensive monitoring requirements in the final rule.
Finally, even if the costs remain similar to those previously
estimated, the EPA is considering more comprehensive emission testing
and monitoring requirements (including CEMS) for large MWI that burn
medical waste generated offsite (i.e., generated at another location
than that of the MWI).
Definition of Medical Waste
Section 129 of the Clean Air Act directs the EPA to adopt
regulations for solid waste incineration units that combust (1)
municipal waste; (2) hospital, medical, and infectious waste; (3)
commercial or industrial waste; and (4) all other solid waste. The
regulations limiting air emissions from solid waste incineration units
combusting municipal waste (otherwise known as municipal waste
combustor(s) or MWC) were promulgated on December 19, 1995 (60 FR
65387). In developing regulations to limit air emissions from solid
waste incineration units combusting hospital, medical, and infectious
waste (otherwise known as medical waste incinerator(s) or MWI), medical
waste was defined as any solid waste that is generated in the
diagnosis, treatment, or immunization of human beings or animals, in
research pertaining thereto, or in the production or testing of
biologicals.
Section 129(g)(6) states that the term ``medical waste'' shall have
the meaning ``established by the Administrator pursuant to the Solid
Waste Disposal Act'' (SWDA). For the proposed air emission standards
and guidelines for MWI, EPA adopted the definition of ``medical waste''
from solid waste regulations codified in 40 CFR part 259, subpart B
because this definition was ``established by the Administrator pursuant
to the [SWDA],'' as amended by the Medical Waste Tracking Act (MWTA).
However, 40 CFR part 259 has since been withdrawn. Consequently, there
is no definition of medical waste which has been ``established by the
Administrator pursuant to the [SWDA],'' and EPA now has the flexibility
to examine and consider other definitions of medical waste. While EPA
is inclined to adopt a specific definition described below, EPA is
considering all of the definitions discussed in this section as well as
the proposed definition and solicits comment on the merits of each
definition discussed as well as other definitions EPA should consider.
During the public comment period, the majority of the comments on
the definition of medical waste stated that the proposed definition was
too broad and that it should be narrowed. Several commenters stated
that this definition would aggravate an already confusing situation,
where the public distinction between the terms medical waste and
infectious waste has become blurred and in most cases lost; these terms
are often used synonymously in public discourse.
[[Page 31751]]
These commenters believed that a broad definition of medical waste
in the regulations for MWI would have the undesirable impact of
fostering and encouraging the use and adoption of this definition in
other areas and by other regulatory authorities. They suggested that as
this definition becomes more widespread and adopted by others,
healthcare facilities would eventually be forced to handle most, if not
all, medical waste as infectious waste--whether it was burned in an
incinerator or not.
These commenters stated the proposed definition of medical waste,
because of the loss of public distinction between this term and the
term infectious waste, and the resulting impact of eventually forcing
healthcare facilities to treat most waste as infectious waste, would
lead to a massive increase in the volume of infectious waste. This
increase would, in turn, lead to a major increase in the costs of
disposal of waste from hospitals, since most waste would have to be
handled as infectious waste.
These commenters stated that, as in implementing the MWTA,
healthcare facilities should be viewed as generating two waste streams:
a medical waste stream, which is usually defined by the potential for
disease transmission and requires special handling; and a noninfectious
waste or ``healthcare trash'' waste stream, which has no potential for
infection and is treated and handled as municipal waste. These
commenters urged EPA to narrow the definition of medical waste used in
the MWI regulations to one of infectious waste, analogous to the term
``regulated medical waste'' adopted in regulations resulting from the
MWTA.
In most--if not all--cases, these commenters indicated that, where
healthcare facilities operate medical waste incinerators, they burn
infectious medical waste or a mixture of infectious medical waste and
noninfectious waste (i.e., healthcare trash). These commenters stated
that there were very few, if any, medical waste incinerators operated
by healthcare facilities that burned only noninfectious waste or
healthcare trash.
Consequently, by defining medical waste narrowly, in a manner
consistent with infectious or regulated medical waste, and by applying
the regulations to incinerators that burn this waste or any mixture of
this waste and other waste, the EPA could achieve the objective, which
is regulating air pollution from medical waste incinerators at
healthcare facilities; this objective would be achieved without adding
to the confusion or leading to the serious impacts outlined above.
These commenters further stated the proposed definition of medical
waste would subject MWC, which burn general nonregulated and
noninfectious waste from hospitals, to the same requirements as those
proposed for MWI. Consequently, even if healthcare facilities were not
eventually forced to handle most waste as infectious waste (because MWC
that burn general nonregulated and noninfectious waste from hospitals
would be subject to the MWI regulations) this broad definition would
result in higher disposal costs for healthcare facilities which send
their general nonregulated and noninfectious waste to MWC for disposal.
Some commenters, on the other hand, support the proposed broad
definition of medical waste. These commenters pointed out that there is
little difference in the air emissions created by burning infectious
medical waste (e.g., regulated medical waste or ``red bag'' waste) and
by burning noninfectious waste (e.g., nonregulated medical waste or
healthcare trash). As a result, the regulations should apply to the
burning of all medical waste, as EPA proposed. These commenters believe
that EPA's use of the broad definition of medical waste, solely for the
purpose of defining what type of incinerator the regulations apply to,
does not imply that more waste or that all medical waste will be
considered infectious waste. Merely requiring that incinerators that
burn medical waste must limit air pollution will not require all
healthcare facilities to handle all their medical waste as infectious
waste.
In fact, these commenters indicated that many healthcare facilities
today routinely separate their waste into two types: infectious waste
(``red bag'') and noninfectious waste (``black bag''). Numerous items
of waste from healthcare facilities are not, nor need not be considered
infectious waste. On the other hand, many healthcare facilities today
do little to separate their waste streams; most waste is handled and
treated as infectious waste. If waste disposal costs were of paramount
concern to healthcare facilities, those that do little separation today
could reduce their present waste disposal costs by more carefully
segregating their waste into infectious and noninfectious waste streams
and properly disposing of these two waste streams.
Finally, several commenters questioned whether animal carcasses and
pathological waste should be included in the definition of medical
waste. These commenters were uncertain as to whether pathological waste
incinerators were to be regulated as MWI or separately. These
commenters requested clarification of this situation and urged EPA to
regulate pathological wastes separately from medical waste.
Similarly, several commenters questioned whether ``out-of-date'' or
``off-spec'' drugs, or radio-active type medical wastes, should be
included in the definition of medical waste. These commenters requested
special treatment for these types of wastes, similar to that proposed
for pathological wastes.
The EPA did not intend to add or contribute to the confusion that
presently exists in the public discourse regarding the distinction or
lack of distinction between the terms medical waste, regulated medical
waste, and infectious medical waste. In fact, the EPA would like to
state very clearly that numerous items within the medical waste stream
are noninfectious and need not be treated as infectious. In fact, the
majority of items in the medical waste stream are noninfectious, and in
terms of percentages, most authorities conclude that only 10 to 15
percent of the items in the medical waste stream are infectious, or
potentially infectious, and warrant special treatment or handling.
In considering the public comments, an interesting and unanimous
agreement emerges, even if it is not stated as such. All of the
commenters seem to agree that healthcare facilities can be viewed as
generating two waste streams: an infectious medical waste stream and a
noninfectious healthcare trash, or ``municipal waste'' type, waste
stream. The challenge for EPA, therefore, is to reconcile the agreement
in this area with the requirement of the Clean Air Act to develop
regulations for incinerators burning hospital, medical, and infectious
waste.
The Clean Air Act requires EPA to develop regulations for the
burning of medical waste; but it also requires EPA to develop
regulations for the burning of municipal waste. In fact, EPA adopted
regulations limiting air pollution from the burning of municipal waste
on December 19, 1995 (60 FR 65387). As a result, if healthcare
facilities are viewed as generating two types of waste streams, an
infectious waste stream and a municipal waste stream, then the burning
of the municipal waste stream is already covered by regulations.
The definition of municipal waste included in the regulations
covering the burning of municipal waste states:
Municipal solid waste * * * means household, commercial/retail,
and/or institutional waste * * * Commercial/retail waste includes
material discarded by stores,
[[Page 31752]]
offices, restaurants * * * Institutional waste includes materials
discarded by schools, nonmedical waste discarded by hospitals, * * *
and material discarded by other similar establishments or
facilities.
The regulations cover the burning of municipal waste discarded from
offices and institutions. Hospitals are cited as an example of an
institution and clinics and nursing homes are considered ``similar
establishment(s)''. Offices include doctors' offices, dentists'
offices, etc. Consequently, noninfectious, municipal-type waste
discarded from healthcare facilities is considered part of the
municipal waste stream and is covered by the regulations adopted for
the burning of municipal waste.
The remaining need, therefore, is to regulate the burning of the
infectious waste stream discarded from healthcare facilities, which can
be achieved by redefining medical waste in terms of infectious or
potentially infectious materials. Thus, the EPA is inclined to narrow
the applicability of the proposed regulations by adopting a definition
of medical waste that focuses on that portion of the overall medical
waste stream that is generally considered infectious or potentially
infectious.
Given the confusion and number of varying definitions of medical
waste, regulated medical waste, infectious waste, etc., at the Federal
and State level, and within the healthcare community, transportation
sector, etc., EPA does not intend to add to this confusion by creating
another definition. As a result, EPA is inclined to adopt a definition
of medical waste, for the MWI regulations, from among those already in
use.
As mentioned, numerous definitions are currently in use, such as
the definition of infectious waste created by the U.S. Department of
Transportation, the definition of regulated medical waste created by
EPA, as well as other definitions created by other regulatory agencies
and national associations, such as the Occupational Safety and Health
Administration, the New York State Department of Health, the American
Hospital Association, etc. While these are just a few of the agencies
or associations that have developed definitions of medical waste that
are currently in use, they are the ones most often cited or suggested
in the public comments. Each of these definitions are slightly
different, but all focus on infectious or potentially infectious
medical waste. These definitions are discussed in more detail in
document number IV-B-25, available in the Docket.
For the most part, infectious or potentially infectious wastes are
defined through the use of categories or classes of wastes. The classes
of wastes most commonly used include:
1. Cultures and stocks of infectious agents;
2. Human pathological wastes;
3. Human blood and blood products;
4. Used sharps;
5. Animal wastes;
6. Isolation wastes; and
7. Unused sharps.
These seven waste classes are commonly used by various agencies and
associations as the basis for defining medical wastes. However, while
the classes of wastes included in two different definitions may be
identical, the specific items included under each class and the
definitions for these items may be very different. Each agency or
association has developed different language to define each of these
waste classes in a way that best serves their purposes. For example,
some definitions include intravenous (IV) bags under class 3 wastes,
while others do not.
It appears that adoption of any one of these definitions or any
definition at all will be controversial. No uniform or widespread
agreement on a definition exists, and for each commenter who argued
strongly for adoption of one particular definition, another commenter
argued equally strongly for adoption of a different one.
Of all these definitions, EPA is inclined to adopt the New York
State Department of Health (NYSDOH) definition, which is one of the
more recently developed definitions for use in the MWI air pollution
emission regulations. This definition was subjected to intense
discussion, consideration, and review within the medical and healthcare
community. Because it was adopted fairly recently, this definition also
benefits from the various controversies and discussions generated by
adoption of earlier definitions by other agencies and associations.
Further, this definition seems to be among the more comprehensive ones
in terms of identifying and defining the various classes of infectious
or potentially infectious medical waste mentioned above.
The NYSDOH definition includes six of the seven waste classes;
isolation wastes (class 6) are not listed as a separate category. The
definitions used for waste classes 1, 2, 4, and 7 are similar to those
used by the MWTA definition. As with the AHA definition, the NYSDOH
definition differs from the MWTA definition in the specifics of class 3
wastes. Class 3 waste under the NYSDOH definition does not include
items caked with dried blood or IV bags. These wastes are included in
the MWTA definition of class 3 waste. The definitions for class 5 waste
only includes wastes from animals exposed to infectious agents during
research, the production of biologicals, or the testing of
pharmaceuticals. Pathological waste from veterinary facilities is
excluded from the MWTA definition. The NYSDOH defines class 5 wastes as
wastes from animals known to be contaminated with infectious agents or
from animals inoculated during research, the production of biologicals,
or pharmaceutical testing. Unlike the MWTA definition, the NYSDOH
definition seems to include some wastes (from animals contaminated with
infectious agents) generated by general veterinary practices. The
specifics of this definition are included in item IV-J-078 in the
docket).
Also, as stated at proposal, the EPA is inclined to exclude
crematories and incinerators used solely for burning pathological waste
(human or animal remains and tissues) from the medical waste
incinerator regulation. However, MWI that burn animal and pathological
waste co-mingled with other classes of medical waste would be subject
to the regulation. Because MWI that burn mixtures of medical and
pathological (or animal) waste would be covered by the regulation, it
is necessary to include a description of pathological and animal waste
in the definition of medical waste. Human pathological waste and animal
waste are included in the NYSDOH definition of medical waste.
In addition, the EPA is inclined to exclude from the regulation
incinerators used solely for burning ``off-spec'' or ``out of date''
drugs or pharmaceuticals, as well as incinerators used solely for
burning radio-active type medical wastes. In other words, as several
comments suggested, the EPA is inclined to treat these wastes in a
manner similar to pathological waste.
While EPA is inclined to exclude these types of wastes from the
regulation for MWI, this exclusion does not mean that EPA will not
develop regulations which will cover these wastes. The Clean Air Act
clearly directs the EPA to develop regulations to cover burning of
these wastes. Thus, this inclination to exclude them is only to
temporarily defer regulation.
The Clean Air Act directs the EPA to develop regulations for all
solid waste incinerators, and burning these wastes will be covered by
regulations developed within the next few years. The Clean Air Act also
directs the EPA to announce a schedule for development
[[Page 31753]]
of these other regulations, and the EPA has announced these regulations
will be developed by the year 2000.
I. Pyrolysis Units
Incineration is only one of several medical waste treatment
technologies. Other treatment technologies, such as autoclaves,
microwaves, and chemical treatment, where there is clearly no
combustion occurring, are referred to in this notice as ``alternative
technologies'' and are discussed further in Section II.J. These
``alternative technologies'' clearly are not subject to MWI
regulations. On the other hand, some medical waste treatment
technologies employ plasma or gasification processes (i.e., pyrolysis).
Because it appears that at least some combustion is taking place in
these devices, EPA considered these pyrolysis technologies covered by
the proposed MWI regulations.
Comments from the vendors of pyrolysis technologies indicated they
believed they could easily meet the emission limitations included in
the proposed MWI standards and guidelines. However, they believed that
their processes are unique enough to warrant a separate category for
regulation. The vendors were particularly concerned that the proposed
compliance and monitoring requirements for MWI do not apply to
pyrolysis technologies. The proposal, therefore, requested comment on
whether pyrolysis units should be regulated as MWI or as a separate
source category.
Numerous comments and suggestions were received following proposal
from vendors of pyrolysis treatment technologies. Based on these
comments and suggestions, a draft regulation for pyrolysis treatment
technologies has been developed and is available in the docket as item
IV-B-56. This draft regulatory text is incomplete at this time. It
includes placeholders and requests for information where such
information is lacking. Comments are requested to help EPA fill in this
missing information.
A separate regulation for pyrolysis treatment technologies would
look very similar to the MWI regulation in that it would contain
definitions, emissions limitations, monitoring and testing requirements
to demonstrate compliance, and reporting and recordkeeping
requirements. It would differ from the MWI regulations in that some
definitions would be different, the emission limitations would, in many
cases, be more stringent than the MWI regulations, and the monitoring
and testing requirements would reflect the operating parameters that
are unique to pyrolysis systems.
The EPA is inclined to adopt separate regulations for pyrolysis
treatment technologies. The EPA specifically requests comment on the
merits of continued development of separate regulations for pyrolysis
systems. These systems appear to be very different than incinerators.
Because they are emerging technologies, however, the normal process of
determining a MACT floor and MACT for these systems is not possible at
this time. In fact, because they appear to be inherently clean
technologies, regulation of these systems may not be warranted at this
time.
J. Alternative Medical Waste Treatment Technologies
In the proposal, it was estimated that many owners of existing
onsite MWI would discontinue use of their existing MWI in favor of less
expensive medical waste disposal options to avoid the high cost of add-
on air pollution control equipment. In addition, many facilities that
would have chosen to purchase a new onsite MWI were estimated to be
likely to choose some other method of waste disposal. This phenomenon
was labeled as ``switching'' in the proposal, and it has already
occurred in a few States that have adopted stringent MWI regulations in
the past few years.
Next to onsite incineration, the two most common methods of medical
waste disposal are (1) offsite contract disposal, which usually
involves larger, commercial incinerators dedicated to medical waste and
(2) onsite alternative medical waste treatment technologies, which
include steam autoclaving, chemical treatment, and microwave
irradiation. Because the MWI regulation may encourage switching and the
use of onsite alternatives, the possible impacts of other waste
disposal methods were assessed. Although autoclaves, chemical treatment
systems, and microwave systems are not covered by the MWI standards and
guidelines, commercial medical waste incinerators would be subject to
the MWI standards and guidelines.
Following proposal, new data on commercial disposal facilities
throughout the U.S. were obtained. Information on the costs of
commercial disposal for medical waste generators in both urban and
rural locations was obtained. Also, information on the environmental
impacts of increased transportation of medical waste was developed.
This new information pertaining to commercial disposal was factored
into the economic and environmental impacts analyses presented in
Sections III and IV of this notice. The remainder of this section will
focus on information relating to nonincineration alternative
technologies (i.e., autoclaves, chemical treatment, microwave
irradiation, etc.).
During the public comment period following proposal, several
concerns were raised regarding the availability, effectiveness, costs,
and environmental impacts of onsite alternative treatment technologies.
Concerns were also raised regarding alternative technology operator
safety and State acceptance of alternative technologies. Because of the
concerns raised during the public comment period, the Agency has
examined the available information on the effects that switching from
onsite incineration to alternative technologies could have on medical
waste generators and the environment.
Following proposal, a great deal of information on alternative
technologies was received. This information was compiled and is
presented in document No. IV-B-43. The material presented in document
IV-B-43 should not be considered an in-depth study of alternative
technologies. Instead, it is a review of the available information.
Based on this information, there appears to be no significant or
substantial adverse economic, environmental, or health and safety
issues associated with the increased use of these nonincineration
alternative medical waste treatment technologies.
The most widely used nonincineration alternative technologies are
autoclaves, chemical treatment systems, and microwave systems. In
autoclaves, the effects of heat from saturated steam and increased
pressure are used to decontaminate the medical waste. In chemical
treatment systems, an antimicrobial chemical, such as sodium
hypochlorite, chlorine dioxide, or peracetic acid, is used to
decontaminate the waste. In microwave technologies, medical waste is
wetted and heated to decontaminating temperatures with microwave
irradiation.
Most alternative technologies are equipped with a shredder or
grinder that is used to reduce the volume of the waste by up to 80
percent and render the waste unrecognizable. In some alternative
technologies, the waste is compacted, and the waste volume is reduced
by 50 percent. With most alternative technologies, the mass of the
waste is not reduced due to the entrainment of liquids that are added
during treatment.
Because shredding or grinding pathological and animal waste may
present aesthetically unacceptable
[[Page 31754]]
results, most alternative technologies are not suitable treatment
methods for these types of waste. Also, alternative technologies are
usually unable to effectively treat chemotherapy, hazardous, or low-
level radioactive wastes. The total waste stream at a typical hospital
contains less than 3 percent by weight of pathological, animal,
chemotherapy, hazardous, and low level radioactive wastes. Facilities
using alternative technologies usually package this portion of the
waste and send it to a commercial disposal facility.
The efficacy of autoclave, microwave, and other thermal treatment
technologies depends primarily on the treatment time and temperature.
The efficacy of chemical treatment systems depends on the treatment
time and the chemical concentration. The most widely used criteria for
determining the efficacy of an alternative technology in
decontaminating the waste was developed by the State and Territorial
Association of Alternate Treatment Technologies (STAATT). The STAATT
criteria recommends, as a safe and satisfactory level of medical waste
treatment, the inactivation of vegetative bacteria, fungi, lipophilic/
hydrophilic viruses, and mycobacteria at a 6 Log10 reduction or
greater and the inactivation of Bacillus subtilis or Bacillus
stearothermophilus at a 4 Log10 or greater. Efficacy test reports
indicate that autoclave systems, chemical treatment systems, and
microwave systems can meet and exceed the STAATT efficacy criteria.
Therefore, the most widely used alternative treatment technologies seem
to be effective methods of decontaminating medical waste.
In most States, alternative technologies must undergo an approval
or permitting process before they can be installed in the State. As
long as the technology can demonstrate that it meets the State's
efficacy requirements, which are usually similar to, if not the same
as, the STAATT criteria, the technology can be installed, unless the
State determines that the technology is unacceptable for some other
reason. The State approval or permitting process usually takes less
than a year. Many alternative technology vendors have gained approval
of their systems in a number of States so that less time will be
required for review of the technology by State regulatory agencies
before the system is installed.
There are some 20 vendors of alternative technologies (i.e.
autoclaves, chemical treatment systems, and microwave systems) that
have a considerable number of installations. These vendors, when
combined, have about 150 years of experience in the medical waste
business. Some of these vendors have more than 15 years of experience
alone. These vendors are responsible for approximately 975 alternative
technology installations, which range in capacity from 12 to 8,000
pounds of medical waste treated per hour. An additional 17 alternative
technology vendors were identified with systems that are under
development and are expected to appear on the market in the near
future.
Alternative technologies seem to be available, and many vendors
have been in the medical waste business for many years. With the number
of vendors that have alternative technologies under development, the
alternatives industry appears to be growing. Alternative technology
vendors claim they will be able to meet any increased demand for onsite
alternative systems due to switching.
The results from reports on the air emissions from autoclaves show
that there are some emissions of volatile organics from autoclaves.
However, the test reports also show that the emissions of Pb, Cd, Hg,
HCl, and PM from autoclaves are insignificant when compared to
emissions of the same pollutants from MWI. No information on dioxin
emissions from autoclaves was available. The available data on the air
emissions from autoclaves shows that these emissions are more organic
than the acid gas and metal emissions from MWI. Furthermore, it appears
that on a pound of pollutant per pound of waste basis, far less total
emissions are produced from treating medical waste in an autoclave than
from burning waste in an MWI.
No data is available on the air emissions from chemical treatment
systems and microwave systems. However, some States require chemical
treatment systems to obtain air permits. The emissions from microwave
systems are likely to be similar to those from an autoclave since lower
temperatures are used during microwaving and the only component added
is water.
Based on the information received, there does not appear to be any
water pollution from the liquid effluents of autoclaves and chemical
treatment systems and no liquid effluent from microwave treatment
systems. The results of Toxicity Characteristics Leachate Procedure
(TCLP) tests conducted on waste treated in an autoclave and a chemical
treatment system were far below the regulatory threshold for metals and
organics. Since the only component added to waste that is treated in a
microwave system is water, the TCLP tests conducted on microwaved waste
should produce similar results to those of autoclaved waste.
The annualized price per pound of medical waste treatment with an
alternative technology is comparable to the price per pound associated
with other methods of medical waste treatment and disposal. For
facilities that wish to treat their medical waste onsite with an
alternative technology, but do not have the capital to purchase an
alternative system, options for leasing or renting an alternative
technology are available. According to alternative technology vendors,
leasing onsite medical waste treatment technologies is a common
practice. Most lease agreements are available either through the
alternative vendor directly or through a third party leasing company.
The results from a survey of hospitals that are currently using
autoclaves, chemical treatment systems, and microwave systems indicate
that these hospitals are pleased with the operation of their
alternative medical waste treatment systems. The hospitals indicated
that problems with shredder jams are rare and that odors are minimal
with the alternative systems. The surveyed hospitals reported that the
alternative technologies are cost effective and easy to operate. The
hospitals also indicated that the waste treated in their alternative
systems is readily accepted at local landfills. Further, the hospitals
indicated that they would recommend their alternative technology as a
method of medical waste treatment.
The potential hazards associated with medical waste treatment arise
primarily from the presence and handling of infectious waste.
Therefore, the potential hazards of medical waste treatment are similar
for operators of all medical waste treatment technologies, including
MWI. Few, if any, additional hazards are associated with alternative
technologies that have not already been associated with medical waste
incineration.
III. Regulatory Options and Impacts for Existing MWI
As discussed earlier, the MACT ``floor'' defines the least
stringent emission guidelines the EPA may adopt for existing MWI.
However, as also discussed earlier, the Clean Air Act requires the EPA
to examine alternative emission guidelines (i.e., regulatory options)
more stringent than the MACT floor. The EPA must consider the cost,
environmental, and energy impacts of these regulatory options and
select one that reflects the maximum reduction in
[[Page 31755]]
emissions that EPA determines is achievable (i.e., MACT).
At proposal, the EPA concluded all existing MWI would need good
combustion and dry scrubbers to meet the MACT floors for CO, PM, and
HCl. Consequently, EPA was left to consider only two regulatory options
for MACT. The first regulatory option reflected the floor (i.e.,
emission limitations achievable with good combustion and dry
scrubbers). The second reflected emission limitations achievable with
good combustion and dry scrubbers with activated carbon injection.
Based on the cost, environmental, and energy impacts of the second
regulatory option relative to the first option, EPA selected the second
option as MACT. Consequently, EPA proposed emission guidelines for
existing MWI based on the use of good combustion and dry scrubbers with
activated carbon injection.
As discussed earlier in this notice, EPA received numerous comments
containing substantial new information following proposal. Based on
this information, new conclusions concerning the MWI inventory, MWI
subcategories, performance of emission control technologies, MACT
floors, and monitoring and testing options have been reached. As a
result, EPA now believes there are several new regulatory options that
merit consideration in selecting MACT for existing MWI. The following
sections summarize these new regulatory options and the EPA's initial
assessment of their merits.
A. Regulatory Options
As discussed earlier, new MACT floor emission levels were developed
for small, medium, and large MWI. To assess the impacts of regulatory
options, EPA must first consider what emission control technology(s)
existing MWI may need to meet regulations based on these floor emission
limits. The floor for small existing MWI appears to require good
combustion; add-on wet scrubbing systems would not be necessary to meet
the MACT floor. For medium existing MWI, the MACT floor appears to
require good combustion and a moderate efficiency wet scrubber. The
MACT floor for large existing MWI appears to require good combustion
and a high efficiency wet scrubber.
Having identified these control technologies, the EPA is now able
to review the performance capabilities of other emission control
technologies and identify those that are capable of achieving even
greater emission reductions. This review enables EPA to identify
regulatory options more stringent than the floor that could be selected
as MACT.
For small existing MWI, as mentioned above, good combustion is the
emission control technology most MWI would probably need to meet the
MACT floor emission levels. Therefore, this technology serves as the
basis for the first regulatory option for the MACT emission guidelines
for small existing MWI. Based on the performance capabilities of
various emission control technologies, however, using low efficiency
wet scrubbing systems in addition to good combustion could achieve
greater emission reductions. This combination would achieve further
emission reductions in PM and dioxins, as well as HCl, Pb, Hg, and Cd.
Therefore, these controls used together are a possible option beyond
the MACT floor emission levels for small existing MWI.
As discussed earlier in Section II.B., the availability of
alternatives for the treatment and disposal of medical waste is
generally more limited in rural areas than in urban areas. Therefore,
the potential impact of MACT regulations on small existing MWI may be
greater in rural than in urban areas. This concern was expressed in
many comments EPA received following proposal. As also discussed
earlier in Section II.B., section 129 of the Clean Air Act permits EPA
to subcategorize the MACT emission guidelines by class, consequently,
subcategorizing small existing MWI into rural and urban classes was
examined. In terms of the MACT floor emission limits, however,
subcategorizing small existing MWI into rural and urban classes made no
difference--the MACT floor emission limits are the same. As a result,
for purposes of the MACT floor, there is no merit to subcategorizing
small existing MWI into rural and urban classes.
Although subcategorizing based on location was rejected for
purposes of the MACT floor, it was considered again in identifying
regulatory options more stringent than the MACT floor. Thus, the
regulatory option of MACT emission guidelines for small existing MWI
based on the use of good combustion and low efficiency wet scrubbing
systems was subdivided to create two options. The first regulatory
option beyond the MACT floor is to base the MACT guidelines for small
existing MWI located in rural areas on good combustion only, as
required by the MACT floor, but to base MACT guidelines for small
existing MWI located in urban areas on good combustion and low
efficiency wet scrubbing systems. If this option were selected as the
basis for the final MACT emission guidelines, the emission limits for
small existing MWI located in rural areas would be different than the
emission limits for small existing MWI located in urban areas.
As discussed in Section II.B., location, by itself, is not a valid
criterion for subcategorization under the Clean Air Act. In addition,
use of location as surrogate measure of the availability of technology
may not be a valid criterion for subcategorization either. There may be
statutory limitations to this approach. As a result, the previous
discussion regarding differences in regulatory requirements based on
the location of an MWI may not be allowed under the Clean Air Act, and
EPA specifically requests comment on the validity of this approach. As
discussed later in Section V., one of the options EPA is considering
would reflect good combustion and wet scrubbers on all small existing
MWI except where an individual MWI could meet certain ``criteria,'' in
which case the individual MWI would be subject to emission limits based
on good combustion alone. Consequently, in addition to seeking comment
on the validity of identifying urban and rural MWI as separate
``classes,'' EPA also requests comment on other criteria that could be
used to make distinctions in regulatory requirements.
A third regulatory option is MACT emission guidelines for small
existing MWI located in both rural and urban areas based on good
combustion and low efficiency wet scrubbing systems. In other words, no
difference in the MACT emission limits between small existing MWI
located in rural or urban areas would exist. This third option would
achieve greater emission reductions than the second option.
Beyond these three regulatory options (i.e., the MACT floor option
and the two options more stringent than the floor), a review of the
performance capabilities of various emission control technologies
readily identifies a fourth regulatory option for small existing MWI.
This regulatory option is to base the MACT emission guidelines for
small existing MWI on the use of good combustion and moderate
efficiency wet scrubbing systems. This regulatory option would further
reduce PM emissions, however, it would not achieve further reductions
in emissions of other pollutants. As summarized earlier, moderate and
high efficiency wet scrubbing systems do not appear to achieve greater
emission reductions of dioxins, acid gases (e.g., HCl), or the metals
(i.e., Hg, Pb, or Cd) than low efficiency wet scrubbing systems.
[[Page 31756]]
Option 4 could also be subdivided into two options: (1) MACT
emission guidelines for small existing MWI in rural areas based on good
combustion and low efficiency wet scrubbing systems; and MACT
guidelines for small existing MWI in urban areas based on good
combustion and moderate efficiency wet scrubbing systems and (2) MACT
emission guidelines for small existing MWI in both rural and urban
areas based on good combustion and moderate efficiency wet scrubbing
systems. However, the cost difference between using a low efficiency
wet scrubbing system or a moderate efficiency wet scrubbing system is
not as great as that between using a low efficiency wet scrubbing
system or not using a wet scrubbing system at all. Consequently, at
this point, to limit the number of regulatory options under
consideration, the EPA has chosen not to further subdivide this
regulatory option.
Reviewing the performance capabilities of emission control
technologies identifies a fifth regulatory option for small existing
MWI. This option is to base the MACT emission guidelines for small
existing MWI on the use of good combustion and high efficiency wet
scrubbing systems. This would further reduce PM emissions, but as
outlined above, would not further reduce emissions of other air
pollutants such as dioxins, acid gases (e.g., HCl), or the metals
(i.e., Pb, Hg, Cd).
A sixth regulatory option for small existing MWI also is apparent.
This option is to base the MACT emission guidelines for small existing
MWI on the use of good combustion and dry scrubbing systems with
activated carbon injection. This possibility would further reduce
emissions of Pb, Cd, and dioxins, but would not further reduce
emissions of other air pollutants. Dry scrubbing systems, however,
generall
FR Doc. 96-15585 Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Medical Waste Incinerators
y cost about one and a half times what high-efficiency wet
scrubbing systems cost to operate annually, and the overall difference
in the emissions control performance between the two systems is
relatively small. Therefore, at this point, to limit the total number
of regulatory options under consideration, the EPA has chosen not to
include this sixth regulatory option for small existing MWI.
For medium existing MWI, as discussed earlier, the use of good
combustion and moderate efficiency wet scrubbing systems appears to be
necessary to meet the MACT floor emission limits. This option,
therefore, is the first regulatory option for medium existing MWI. The
second regulatory option is to base the emission guidelines on good
combustion and high efficiency wet scrubbing systems.
Finally, for large existing MWI, as discussed earlier, the use of
good combustion and high efficiency wet scrubbing systems appears to be
necessary to meet the MACT floor emission limits. Thus, the EPA is not
inclined at this point to consider other regulatory options for large
existing MWI.
As mentioned above, a review of the performance capabilities of
emission control technologies indicates that dry scrubbing systems can
reduce emissions of some pollutants (i.e., Pb, Cd, and dioxins) greater
than high-efficiency wet scrubbing systems. Additional regulatory
options for both medium and large existing MWI could be structured,
therefore, around the use of dry scrubbing systems. However, as also
mentioned above, the cost of these systems is much higher than that of
high-efficiency wet scrubbing systems and the overall difference in
emission control performance is relatively small. For existing MWI
already equipped with wet scrubbers, replacing a wet scrubber with a
dry scrubber would be exorbitantly expensive. As a result, at this
point, the EPA has chosen not to develop additional regulatory options
for medium and large existing MWI based on the use of dry scrubbing
systems to keep the total number of regulatory options under
consideration to a manageable number.
The regulatory options outlined above are compiled in Table 13.
This table summarizes the technology basis for the regulatory options
for the various MACT emission guidelines the EPA believes merit
consideration as MACT for existing MWI. This table is constructed only
to organize and structure an analysis of the cost, environmental, and
energy impacts associated with the various MACT emission guidelines in
order to consider these impacts in selecting MACT for existing MWI. In
reviewing this table, therefore, there are several important points to
keep in mind.
Table 13.--Level of Air Pollution Control Associated With Each Regulatory Option for Existing MWI
--------------------------------------------------------------------------------------------------------------------------------------------------------
Regulatory options
MWI size -----------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Small 200 lb/hr...... Good combustion... Good combustion on Good combustion Good combustion Good combustion Good combustion
rural; Good and low and moderate and moderate and high
combustion and efficiency wet efficiency wet efficiency wet efficiency wet
low efficiency scrubber. scrubber. scrubber. scrubber.
wet scrubber on
urban.
Medium 201-500 lb/hr............ Good combustion Good combustion Good combustion Good combustion Good combustion Good combustion
and moderate and moderate and moderate and moderate and high and high
efficiency wet efficiency wet efficiency wet efficiency wet efficiency wet efficiency wet
scrubber. scrubber. scubber. scrubber. scrubber. scrubber.
Large 500 lb/hr................. Good combustion Good combustion Good combustion Good combustion Good combustion Good combustion
and high and high and high and high and high and high
efficiency wet efficiency wet efficiency wet efficiency wet efficiency wet efficiency wet
scrubber. scrubber. scubber. scrubber. scrubber. scrubber.
--------------------------------------------------------------------------------------------------------------------------------------------------------
First, the MACT emission guidelines for existing MWI will not
include requirements to use a specific emission control system or
technology; the MACT emission guidelines will only include emission
limits, which may be met by any means or by using any control system or
technology the owner or operator of the MWI decides to use to meet
these emission limits. Second, to the extent possible (i.e., within the
constraints imposed by Section 129 of the Clean Air Act), the EPA plans
to adopt emission limits in the MACT emission guidelines that can be
met through the use of several emission control systems or
technologies. Consequently, where not constrained by
[[Page 31757]]
the Clean Air Act, the actual emission limits associated with some of
the regulatory options shown in Table 13 have been selected at a level
designed to encourage or permit the use of both wet and dry scrubbing
control systems, as outlined below.
The emission limits associated with each of the regulatory options
for small, medium, and large existing MWI are presented in Table 14.
Table 14.--Emission Limitations Associated With Each Regulatory Option for Small, Medium, and Large Existing MWI
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Regulatory
Pollutant, units options Small MWI's Medium MWI's Large MWI's
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1 2 (rural) 2 (urban)........ 3................ 4 and 5......... 6............... 1-4............. 5 and 6......... 1-6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
PM, gr/dscf..................... 0.086 0.086 0.05............. 0.05............. 0.03............ 0.015........... 0.03............ 0.015........... 0.015.
CO, ppmdv....................... 40 40 40............... 40............... 40.............. 40.............. 40.............. 40.............. 40.
CDD/CDF, ng/dscm................ 800 800 125.............. 125.............. 125............. 125............. 125............. 125............. 125.
TEQ CDD/CDF, ng/dscm............ 15 15 2.3.............. 2.3.............. 2.3............. 2.3............. 2.3............. 2.3............. 2.3.
HCI, ppmdv...................... 3,100 3,100 100 or 93%....... 100 or 93%....... 100 or 93%...... 100 or 93%...... 100 or 93%...... 100 or 93%...... 100 or 93%.
SO2, ppmdv...................... 55 55 55............... 55............... 55.............. 55.............. 55.............. 55.............. 55.
NOx, ppmdv...................... 250 250 250.............. 250.............. 250............. 250............. 250............. 250............. 250.
Pb, mg/dscm..................... 10 10 1.2 or 70%....... 1.2 or 70%....... 1.2 or 70%...... 1.2 or 70%...... 1.2 or 70%...... 1.2 or 70%...... 1.2 or 70%.
Cd, mg/dscm..................... 4 4 0.16 or 65%...... 0.16 or 65%...... 0.16 or 65%..... 0.16 or 65%..... 0.16 or 65%..... 0.16 or 65%..... 0.16 or 65%.
HG, mg/dscm..................... 7.5 7.5 0.55 or 85%...... 0.55 or 85%...... 0.55 or 85%..... 0.55 or 85%..... 0.55 or 85%..... 0.55 or 85%..... 0.55 or 85%.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Regulatory Option 1 in Table 14 reflects the performance of the
emission control system or technology needed to meet the MACT floor.
For small existing MWI, Regulatory Option 1 reflects emission limits
based on good combustion. For medium existing MWI, Regulatory Option 1
reflects emission limits based on good combustion and moderate
efficiency wet scrubbers, except for HCl (discussed below). For large
existing MWI, Regulatory Option 1 reflects emission limits based on
good combustion and high efficiency wet scrubbers, except for HCl
(discussed below).
Dry scrubbers with activated carbon injection can achieve the
emission limits associated with moderate or high efficiency wet
scrubbers, with the exception of HCl. While dry scrubbers cannot reduce
HCl emissions to the same levels as wet scrubbers, dry scrubbers can
achieve the MACT floor emission level for HCl. Consequently, Regulatory
Option 1 reflects the HCl emission limit achievable with a dry scrubber
for both medium and large existing MWI. Both technologies (wet or dry
scrubber) are capable of achieving the emission limits shown for
Regulatory Option 1.
Regulatory Option 2 is the same as Regulatory Option 1 for medium
and large existing MWI. Small existing MWI located in urban areas would
be required to meet emission limits associated with good combustion and
low efficiency wet scrubbers. Small existing MWI located in rural areas
would remain subject to the same emission limits as Regulatory Option 1
(based on good combustion). Regulatory Option 3 would establish
emission limits for all small existing MWI (urban and rural) based on
good combustion and low efficiency wet scrubbers. Regulatory Option 4
would establish emission limits for all small existing MWI based on
good combustion and moderate efficiency wet scrubbers. Requirements for
medium and large existing MWI would remain the same under Regulatory
Options 1, 2, 3, and 4. As discussed above, HCl emission limits in all
cases would allow the use of dry scrubbers.
Regulatory Option 5 would establish emission limits for small
existing MWI based on good combustion and moderate efficiency wet
scrubbers; medium existing MWI based on good combustion and high
efficiency wet scrubbers; and large existing MWI based on good
combustion and high efficiency wet scrubbers. The sixth and final
regulatory option would require all existing MWI to meet emission
limitations associated with good combustion and high efficiency wet
scrubbers. As discussed above, the HCl emission limit under Regulatory
Options 5 and 6 would allow the use of dry scrubbing systems.
B. National Environmental and Cost Impacts
This section presents a summary of the air, water, solid waste,
energy, and cost impacts of the six regulatory options described above
for existing MWI. Economic impacts are discussed in Section III.C. All
impacts are nationwide impacts resulting from the implementation of the
emission guidelines on existing MWI.
1. Analytical Approach
As discussed at proposal and within this notice, healthcare
facilities may choose from among a number of alternatives for treatment
and disposal of their medical wastes; however, these alternatives are
generally more limited for healthcare facilities located in rural areas
than for those in urban areas. In fact, as stated at proposal, most
estimates are that less than half of hospitals today currently operate
onsite medical waste incinerators. The clear trend over the past
several years has been for more and more hospitals to turn to the use
of alternative onsite medical waste treatment technologies or
commercial offsite treatment and disposal services. Consequently, even
fewer hospitals are now likely to operate onsite medical waste
incinerators.
More than half of existing hospitals today, therefore, have chosen
to use other means of treatment and disposal of their medical waste
than operation of an onsite incinerator. This is a clear
[[Page 31758]]
indication that alternatives to the use of onsite incinerators exist
and that they are readily available in many cases. (Although as
mentioned above, these alternatives--particularly the availability and
competitive cost of offsite commercial treatment and disposal
services--tend to be more limited in rural areas than in urban areas).
For other healthcare facilities, such as nursing homes, outpatient
clinics, doctors and dentists offices, etc., only very few facilities
currently operate onsite medical waste incinerators. Therefore, for
these types of healthcare facilities, the percentage of such facilities
using alternative means of treatment and disposal of medical waste--
particularly commercial treatment and disposal services--is much
higher, probably higher than 95 percent. This high percentage is
further confirmation of the availability of alternatives to onsite
incinerators for the treatment and disposal of medical waste.
A very likely reaction and outcome associated with the adoption of
MACT emission guidelines for existing MWI, therefore, is an increase in
the use of these alternatives by healthcare facilities for treatment
and disposal of medical waste. The EPA's objective is not to encourage
the use of alternatives or to discourage the continued use of onsite
medical waste incinerators; the EPA's objective is to adopt MACT
emission guidelines for existing MWI that fulfill the requirements of
Section 129 of the Clean Air Act. In doing so, however, one outcome
associated with adoption of these MACT emission guidelines is likely to
be an increase in the use of alternatives and a decrease in the
continued use of onsite medical waste incinerators. Consequently, EPA
should acknowledge and incorporate this outcome into the analyses of
the cost, environmental, and energy impacts associated with the MACT
emission guidelines.
In these analyses of the cost, environmental, and energy impacts,
the selection of an alternative form of medical waste treatment and
disposal by a healthcare facility, rather than the operation of an
onsite medical waste incinerator and purchase the emission control
technology necessary to meet the MACT emission limits, is referred to
as ``switching''. Switching was incorporated in the analyses at
proposal and was the basis for the conclusion at proposal that adoption
of the proposed MACT emission guidelines could lead to as many as 80
percent of healthcare facilities with MWI to choose an alternative
means of medical waste treatment and disposal over continued operation
of their MWI. Although switching was not EPA's objective, it was a
potential outcome of the regulations that EPA believed should be
acknowledged, considered, and discussed at proposal.
Switching has also been incorporated into the new analyses of the
cost, environmental, and energy impacts associated with the six new
regulatory options. The new analyses, however, incorporate three
scenarios; one scenario that ignores switching and two scenarios that
consider switching. Scenario A assumes that each existing MWI remains
in operation and complies with the appropriate regulatory option (i.e.,
no switching). This scenario results in the highest costs because it
assumes no existing MWI will switch to a less expensive waste disposal
method. This scenario is clearly unrealistic and grossly overstates the
national costs associated with MACT emission guidelines. It should not
be viewed as representative or even close to representative of the
impacts associated with the MACT emission guidelines. This scenario is
so misleading that the EPA considered not including it in the analysis;
some may take it out of context and use it as representative, when it
is in no way representative of the impacts of the MACT emission
guidelines. The EPA finally decided to include this scenario in the
analysis only because some may ask ``what if * * *?'' and the EPA
wanted to be in a position to answer such questions.
Switching Scenarios B and C are much more realistic and more
representative of the cost, environmental, and energy impacts
associated with the MACT emission guidelines for existing MWI. Only
these scenarios merit serious review and consideration in gauging the
potential impacts associated with the MACT emission guidelines. Both
Scenarios B and C assume switching occurs when the cost associated with
purchasing and installing the air pollution control technology or
system necessary to comply with the MACT emission guideline (i.e., a
regulatory option) is greater than the cost of choosing an alternative
means of treatment and disposal.
The difference in Scenarios B and C is the assumption of how much
separation of the medical waste stream into an infectious medical waste
stream and a noninfectious medical waste stream currently occurs at
healthcare facilities that today operate a medical waste incinerator.
Some have stated that, for the most part, hospitals that are currently
operating onsite medical waste incinerators practice little separation
of medical waste into infectious and noninfectious waste; generally all
the waste at the facility is incinerated.
Based on estimates in the literature that only 10 to 15 percent of
medical waste is potentially infectious and the remaining 85 to 90
percent is noninfectious, Scenario B assumes that only 15 percent of
the waste currently being burned at a healthcare facility operating an
onsite medical waste incinerator is potentially infectious medical
waste. The 85 percent noninfectious waste is municipal waste that needs
no special handling, treatment, transportation, or disposal. It can be
sent to a municipal landfill or municipal combustor for disposal. Thus,
under Scenario B, when choosing an alternative to continued operation
of an onsite medical waste incinerator, in response to adoption of MACT
emission guidelines, a healthcare facility need only choose an
alternative form of medical waste treatment and disposal for 15 percent
of the waste stream currently burned onsite and may send the remaining
85 percent to a municipal landfill. In other words, if a hospital is
burning 100 pounds of waste, Scenario B assumes 85 pounds are
noninfectious and 15 pounds are potentially infectious. This scenario
results in the lowest costs because 85 percent of the waste is disposed
at the relatively inexpensive cost of municipal waste disposal.
On the other hand, it is unlikely that all healthcare facilities
that currently operate an MWI will be able to or will decide to
segregate the waste stream currently being burned in their incinerator.
If a hospital is already separating medical waste into infectious and
noninfectious waste streams, for example, this hospital would be unable
to separate the waste stream any further. In other words, if a hospital
is burning 100 pounds of waste, Scenario C assumes all 100 pounds are
potentially infectious. Scenario C, therefore, assumes that all medical
waste being burned at a healthcare facility currently operating a
medical waste incinerator is potentially infectious medical waste and
must be treated and disposed of accordingly. As a result, Scenario C
leads to higher costs than Scenario B.
For the purposes of determining impacts of the emission guidelines
under switching Scenarios B and C, the MWI inventory was separated into
commercial (offsite) incinerators and onsite incinerators used to burn
healthcare waste. The commercial incinerators were not subjected to the
switching analyses under Scenarios B and C because switching to an
[[Page 31759]]
alternative method of waste disposal (e.g., commercial disposal) is not
feasible for commercial facilities. An assumption was made that
commercial facilities would add on the control associated with the
emission guidelines. Only the onsite MWI in the inventory were subject
to the switching analyses under Scenarios B and C.
Scenarios B and C represent the likely range of impacts associated
with the MACT emission guidelines for existing MWI. The actual impacts
of a MACT emission guideline (i.e., a regulatory option) is most likely
to fall somewhere within the range represented by Scenarios B and C.
2. Air Impacts
As outlined above, the impacts associated with six MACT emission
guidelines or regulatory options, under three scenarios reflecting
switching, have been assessed. Baseline emissions (i.e., emissions
today in the absence of adoption of the MACT emission guidelines) and
emissions under each MACT emission guideline or regulatory option are
summarized in Tables 15, 16, and 17. Emissions under Scenario A (no
switching) are summarized in Table 15; emissions under Scenario B
(switching with waste separation) are summarized in Table 16; and
emissions under Scenario C (switching without waste separation) are
summarized in Table 17.
Table 15.--Baseline Emissions Compared With Emissions After Implementation of the Emission Guidelines
[Scenario A]
[Metric Units]
----------------------------------------------------------------------------------------------------------------
Regulatory options
Pollutant, units Baseline -----------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
PM, Mg/yr................... 940 190 160 140 120 110 100
CO, Mg/yr................... 460 120 120 120 120 120 120
CDD/CDF, g/yr............... 7,200 420 360 300 300 300 300
TEQ CDD/CDF, g/yr........... 150 9.4 8.2 7.1 7.1 7.1 7.1
HCl, Mg/yr.................. 5,700 880 490 86 86 86 86
SO2 Mg/yr................... 250 250 250 250 250 250 250
NOX, Mg/yr.................. 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Pb, Mg/yr................... 11 3.3 2.7 2.1 2.1 2.1 2.1
Cd, Mg/yr................... 1.2 0.42 0.36 0.29 0.29 0.29 0.29
Hg, Mg/yr................... 15 1.4 1.2 1.1 1.1 1.1 1.1
----------------------------------------------------------------------------------------------------------------
To convert Mg/yr to ton/yr, multiply by 1.1. To convert g/yr to lb/yr, divide by 453.6
Table 16.--Baseline Emissions Compared with Emissions After Implementation of the Emission Guidelines
[Scenario B]
[Metric Units]
----------------------------------------------------------------------------------------------------------------
Regulatory options
Pollutant, units Baseline -----------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
PM, Mg/yr................... 940 91 78 67 67 65 65
CO, Mg/yr................... 460 83 83 82 82 81 81
CDD/CDF, g/yr............... 7,200 240 220 210 210 200 200
TEQ CDD/CDF, g/yr........... 150 5.5 5.1 4.8 4.8 4.7 4.7
HCl, Mg/yr.................. 5,700 310 180 77 77 77 77
SO2, Mg/yr.................. 250 180 170 170 170 170 170
NOX, Mg/yr.................. 1,200 830 820 810 810 810 810
Pb, Mg/yr................... 11 1.7 1.5 1.3 1.3 1.3 1.3
Cd, Mg/yr................... 1.2 0.23 0.20 0.18 0.18 0.18 0.18
Hg, Mg/yr................... 15 0.87 0.81 0.76 0.76 0.75 0.75
----------------------------------------------------------------------------------------------------------------
To convert Mg/yr to ton/yr, multiply by 1.1. To convert g/yr to lb/yr, divide by 453.6
Table 17.--Baseline Emissions Compared With Emissions After Implementation of the Emission Guidelines
[Scenario C]
[Metric Units]
----------------------------------------------------------------------------------------------------------------
Regulatory options
Pollutant, units Baseline -----------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
PM, Mg/yr................... 940 170 140 110 110 100 100
CO, Mg/yr................... 460 120 120 120 120 120 120
CDD/CDF, g/yr............... 7,200 400 350 300 300 300 300
TEQ CDD/CDF, g/yr........... 150 9.0 8.0 7.1 7.1 7.1 7.1
HCl, Mg/yr.................. 5,700 740 410 86 86 86 86
SO2, Mg/yr.................. 250 250 250 250 250 250 250
NOX, Mg/yr.................. 1,200 1,200 1,200 1,200 1,200 1,200 1,200
Pb, Mg/yr................... 11 3.1 2.6 2.1 2.1 2.1 2.1
Cd, Mg/yr................... 1.2 0.40 0.34 0.29 0.29 0.29 0.29
Hg, Mg/yr................... 15 1.3 1.2 1.1 1.1 1.1 1.1
----------------------------------------------------------------------------------------------------------------
To convert Mg/yr to ton/yr, multiply by 1.1. To convert g/yr to lb/yr, divide by 453.6.
[[Page 31760]]
As discussed in previous sections, new information has led to new
conclusions about the MWI inventory, performance of technology, and
control levels associated with each existing MWI. As a result, revised
estimates of annual baseline emissions and emissions under each
regulatory option are significantly lower than estimates developed at
proposal. There are two primary reasons for the lower emission
estimates. First, existing MWI are equipped with better emission
control than was assumed at proposal. Second, many more MWI were
assumed to exist at proposal than in the current inventory.
3. Water and Solid Waste Impacts
Estimates of wastewater impacts were developed for only Regulatory
Option 6, Scenario A, which reflects all existing MWI equipped with wet
scrubbers in the absence of switching. Assessing these impacts under
Scenario A without any consideration of the effect of switching grossly
overstates the magnitude of these impacts. Under Scenarios B and C more
than half of the existing MWI are expected to switch, resulting in
significantly lower impacts. This approach of estimating and
summarizing impacts under Scenario A, at this point, was taken as a
matter of expediency to share new information and provide an
opportunity for public comment.
Under Scenario A and Regulatory Option 6, 198 million gallons of
additional wastewater would be generated annually by existing MWI as a
result of the MACT emission guideline. This amount is the equivalent of
wastewater produced annually by four large hospitals. Therefore, when
considering the wastewater produced annually at healthcare facilities
nationwide, the increase in wastewater resulting from the
implementation of the MACT emission guidelines for existing MWI is
insignificant.
With regard to solid waste impacts, about 767 million Mg (846
million tons) of medical waste are burned annually in existing MWI
producing about 76,700 Mg/yr (84,600 tons/yr) of solid waste (bottom
ash) disposed of in landfills. To estimate the solid waste impacts for
the MACT emission guidelines, impacts were developed only for
Regulatory Option 6, Scenario B. This option is associated with the
most switching and the most separation of waste for disposal in
municipal landfills and, thus, produces the greatest estimated impact.
Under Regulatory Option 6, Scenario B, 210,000 Mg/yr (231,000 tons/
yr) of additional solid waste would result from the adoption of the
MACT emission guideline. Compared to municipal waste, which is disposed
in landfills at an annual rate of over 91 million Mg/yr (100 million
tons/yr), this increase from the implementation of the MACT emission
guideline for existing MWI is insignificant.
4. Energy Impacts
The emission control technologies used by existing MWI to comply
with the MACT emission limits consume energy. Estimates of energy
impact were developed for Regulatory Option 6, Scenario A. Under
Scenarios B and C, which include switching, it is not clear whether
overall national energy consumption would increase, decrease, or remain
the same. Alternatives to incineration require energy to operate,
however, information is not available to estimate whether these
alternatives use more or less energy than MWI.
The energy impacts associated with the MACT emission guidelines
could include additional auxiliary fuel (natural gas) for combustion
controls and additional electrical energy for operation of the add-on
control devices, such as wet scrubbers and dry scrubbers. Regulatory
Option 6, Scenario A, could increase total national usage of natural
gas for combustion controls by about 16.6 million cubic meters per year
(MMm\3\/yr) (586 million cubic feet per year [10\6\ ft\3\/yr]). Total
national usage of electrical energy for the operation of add-on control
devices could increase by about 259,000 megawatt hours per year (MW-hr/
yr) (883 billion British thermal units per year [10\9\ Btu/yr]). Once
again, compared to the amount of energy used by healthcare facilities
such as hospitals (approximately 2,460 MMm\3\/yr of natural gas and
23.2 million MW-hr/yr of electricity) the increase in energy usage that
results from implementation of the MACT emission guideline for existing
MWI is insignificant.
5. Cost Impacts
The cost impacts on individual healthcare facilities that currently
operate an MWI vary depending on the MACT emission guideline or
regulatory option; the actual cost to purchase and install any
additional air pollution control equipment; the cost of alternative
means of treatment and disposal where they are located; and other
factors, such as liability issues related to disposal and State and
local medical waste treatment and disposal requirements. In general,
facilities with smaller MWI will have a greater incentive to use
alternative means of treatment and disposal because their onsite
incineration cost (per pound of waste burned) will be higher.
Large healthcare facilities with larger amounts of waste to be
treated or healthcare facilities that serve as regional treatment
centers for waste generated at other healthcare facilities in the area
may have some cost advantages compared to smaller facilities. Due to
economies of scale, their cost of burning waste may be lower (i.e.,
dollars per pound burned), and they may have already installed some air
pollution control equipment. These facilities may only have to upgrade
this equipment to comply with the MACT emission guideline rather than
purchase and install a complete air pollution control system.
Table 18 contains the estimated increase in national annual costs
associated with each of the MACT emission guidelines or regulatory
options under Scenario A (no switching), Scenario B (switching with
separation of waste), and Scenario C (switching with no separation of
waste). As discussed earlier, Scenario A is unrealistic and grossly
overstates the national cost impacts. The costs associated with the
MACT emission guidelines under Scenarios B and C represent the likely
range of national cost impacts, and only these costs merit serious
consideration and review.
Table 18.--Costs of the Regulatory Options of the Emission Guidelines [Scenarios A, B, and C]
[Million $year]
----------------------------------------------------------------------------------------------------------------
Regulatory options
Scenario -----------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
A................................................... 120 145 173 181 190 201
B................................................... 57.0 57.1 57.4 57.4 57.7 57.7
C................................................... 108 113 118 119 122 123
----------------------------------------------------------------------------------------------------------------
[[Page 31761]]
The nationwide annual costs presented in Table 18, excluding
Scenario A, range from $57 million/yr for Regulatory Option 1 and
Scenario B to $123 million/yr for Regulatory Option 6 and Scenario C.
These nationwide annual costs are significantly lower than the $351
million/yr estimated for the proposed emission guidelines. The primary
reason for the difference in the proposed and the current nationwide
annual cost estimates is the greater level of emissions control found
at existing MWI than was assumed at proposal. The costs of upgrading
from the current level of control now known to be on existing MWI are
far less than the costs of upgrading from the mere \1/4\ sec combustion
controls assumed to be on most MWI at proposal. Also, the annual cost
of the MACT emission levels discussed in this notice is significantly
less than the proposed MACT emission level (DI/FF with activated
carbon). Another reason for the difference is that the number of MWI
assumed to exist at proposal was much greater than the number of MWI in
the current inventory. For example, the cost estimates at proposal were
based on an estimated 3,700 MWI; currently, there are approximately
2,400 MWI in the inventory.
C. Economic Impacts
Section III.B.1 described assumptions pertaining to three analysis
scenarios: no switching, switching with waste segregation, and
switching with no waste segregation. Section III.B.5 presented annual
cost estimates that have been developed for each of the six regulatory
options. This section incorporates these assumptions and cost data to
estimate potential economic impacts that might result from
implementation of these regulatory options.
The goal of the economic impact analysis is to estimate the market
response of affected industries to the emission guidelines and to
identify any adverse impacts that may occur as a result of the
regulation. Industries that operate onsite waste incinerators
(hospitals, nursing homes, research labs, and commercial waste
incinerators) and those that utilize offsite medical waste incinerators
(hospitals, nursing homes, medical/dental laboratories, funeral homes,
physicians' offices, dentist offices, outpatient care, freestanding
blood banks, fire and rescue operations, and correctional facilities)
will potentially be affected by the regulation. Industrywide impacts,
including changes in market price, output or production, revenues, and
employment for the affected industries are estimated for each
regulatory option assuming the three switching scenarios. Facility-
specific impacts are estimated for hospitals of varying sizes,
ownerships, and operating characteristics; nursing homes; commercial
research labs; and commercial waste incineration based on engineering
model plant cost estimates under each of the three switching scenarios.
1. Analytical Approach
The analytical approach to estimate industrywide and facility
specific economic impacts and evaluate the economic feasibility of
switching are briefly described. For a more detailed description refer
to docket item IV-A-8. Prices are stated at 1993 levels.
The average price changes anticipated to occur in each industry
sector for each of the regulatory options are estimated by comparing
the annual control cost estimates to annual revenues for each affected
industry. This calculation provides an indication of the magnitude of a
price change that would occur for each industry sector to fully recover
its annual control costs. The resulting cost-to-revenue ratio
represents the price increase necessary on average for firms in the
industry to recover the increased cost of environmental controls.
Percent changes in output or production are estimated using the price
impact estimate and a high and low estimate of the price elasticity of
demand. Resulting changes in revenues are estimated based upon the
estimated changes in price and output for an industry. Employment or
labor market impacts result from decreases in the output for an
industry and are assumed to be proportional to the estimated decrease
in output for each industry.
Facility-specific economic impacts are estimated by using model
plant information under the three switching scenarios. The assumption
of no switching (Scenario A) represents the highest cost and economic
impact scenario for most affected industries, while the assumption of
switching with waste segregation (Scenario B) represents the lowest
cost and economic impact scenario for most of the affected industries.
As previously stated, EPA considers Scenario A to be an unlikely
scenario; therefore, the economic impacts presented under Scenarios B
and C should be regarded as the impacts most likely to occur.
2. Industry-Wide Economic Impacts
Industry-wide impacts include estimates of the change in market
price for the services provided by the affected industries, the change
in market output or production, the change in industry revenue, and the
impact on affected labor markets in terms of full time equivalent
workers lost. These impacts are summarized in Tables 19 and 20.
Table 19.--Medical Waste Incineration Industry-Wide Price Impacts--Existing Sources Percent Increase a
[In percent]
----------------------------------------------------------------------------------------------------------------
Range for regulatory options 1-6
-----------------------------------------------
Scenario B Scenario C
Industry Scenario A No Switching with Switching with
switching waste no waste
segregation segregation
----------------------------------------------------------------------------------------------------------------
Hospitals....................................................... 0.03-0.05 0.01 0.02-0.03
Nursing homes................................................... 0.03-0.04 0.01 0.02-0.03
Laboratories:
Research.................................................... 0.08-0.13 0.04 0.07-0.08
Medical/dental.............................................. 0 0 0
Funeral homes................................................... 0 0 0
Physicians' offices............................................. 0 0 0
Dentists' offices and clinics................................... 0 0 0
Outpatient care................................................. 0 0 0
Freestanding blood banks........................................ 0 0 0
Fire and rescue operations...................................... 0 0 0
Correctional facilities......................................... 0 0 0
[[Page 31762]]
Commercial incineration......................................... 2.6 2.6 2.6
----------------------------------------------------------------------------------------------------------------
a The price increase percentages reported represent the price increase necessary to recover annualized emission
control costs for each industry.
Table 20.--Medical Waste Incineration Industry-Wide Output, Employment and Revenue Impacts--Existing Sources
----------------------------------------------------------------------------------------------------------------
Range for regulatory options 1-6
-----------------------------------------------
Scenario B Scenario C
Industry Scenario A No Switching with Switching with
switching waste no waste
segregation segregation
----------------------------------------------------------------------------------------------------------------
Hospitals:
Output decrease (%)......................................... 0-0.02 0 0-0.01
Employment decrease (FTE's)................................. 0-647 0-174 0-388
Revenue increase or (decrease) (%).......................... 0.02-0.05 0.01 0.02-0.03
Nursing homes:
Output decrease (%)......................................... 0.01-0.03 0-0.01 0.01-0.02
Employment decrease (FTE's)................................. 139-484 63-130 126-290
Revenue increase or (decrease) (%).......................... 0.01-0.03 0-0.01 0.01-0.02
Laboratories:
Research:
Output decrease (%)..................................... 0.08-0.18 0.04-0.05 0.07-0.11
Employment decrease (FTE's)............................. 124-281 56-76 112-169
Revenue increase or (decrease) (%)...................... (0.04)-0 (0.01)-0 (0.03)-0
Medical/dental:
Output decrease (%)..................................... 0 0 0
Employment decrease (FTE's)............................. 2-3 2-3 2-3
Revenue increase or (decrease) (%)...................... 0 0 0
Funeral homes:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0 0 0
Revenue increase or (decrease) (%).......................... 0 0 0
Physicians' offices:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0-1 0-1 0-1
Revenue increase or (decrease) (%).......................... 0 0 0
Dentists' offices and clinics:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 1 1 1
Revenue increase or (decrease) (%).......................... 0 0 0
Outpatient care:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0-1 0-1 0-1
Revenue increase or (decrease) (%).......................... 0 0 0
Freestanding blood banks:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0 0 0
Revenue increase or (decrease) (%).......................... 0 0 0
Fire and rescue operations:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0 0 0
Revenue increase or (decrease) (%).......................... 0 0 0
Correctional facilities:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0 0 0
Revenue increase or (decrease) (%).......................... 0 0 0
----------------------------------------------------------------------------------------------------------------
Output decreases and full time equivalents (FTE's) employment losses as a result of the regulation are shown in
this table. Revenue increases and decreases are presented with decreases noted in brackets.
[[Page 31763]]
As shown in Table 19, industries that generate medical waste (i.e.,
hospitals, nursing homes, etc.) are expected to experience average
price increases in the range of 0.00 to 0.13 percent, depending on the
industry, regulatory option, and scenario. Table 20 shows that these
industries are expected to experience output and employment impacts in
the range of 0.00 to 0.18 percent. In addition, the revenue impacts for
these industries are expected to range from an increase of 0.05 percent
to a decrease of 0.04 percent. An increase in industry revenue is
expected in cases where the price elasticity of demand for an
industry's product is less than one. A price elasticity of less than
one indicates that the percentage decrease in output will be less than
the percentage increase in price. Since total revenue is a product of
price and output, a less than proportional change in output compared to
price means that total revenue should increase.
The following example illustrates how the above price impacts could
be interpreted for the hospital industry. Table 19 shows that for
hospitals, 0.03 percent is estimated as the price increase necessary to
recover annual control costs assuming Regulatory Option 6, the most
stringent regulatory option, and Scenario C, switching with no waste
segregation. This change in price can be expressed in terms of the
increased cost of hospitalization due to the regulation. The 1993
estimate of adjusted patient days nationwide totals 304,500,000 days.
This estimate of adjusted patient-days is based on a combined estimate
of in-patient and out-patient days at hospitals. Calculating the ratio
of annual control cost ($86,167,082) to the number of adjusted patient
days provides an estimate of $0.28/day. Therefore, the average price
increase that an individual would experience for each hospital patient-
day is expected to equal 28 cents.
Table 19 also shows that the average price impact for the
commercial medical waste incinerator industry is approximately a 2.6
percent increase in price. Cost and economic impact estimates are the
same for the commercial MWI industry regardless of the regulatory
option analyzed because all six regulatory options specify identical
regulatory requirements for large MWI. Average industrywide output,
employment, and revenue impacts were not estimated for this sector
because data such as price elasticity estimates and employment levels
were not available.
3. Facility-Specific Economic Impacts
Facility-specific impacts were also estimated for the affected
industries. These estimates, presented in Tables 21 and 22, were
calculated for the three switching scenarios. A cost as a percent of
revenue ratio was calculated to provide an indication of the magnitude
of the impact of the regulation on an uncontrolled facility in each
industry sector. This calculation was then compared to the industrywide
price impact to determine if the facility's impacts differ
significantly from the average industrywide impacts (i.e., if there is
greater than a 1 percent difference).
Table 21.--Medical Waste Incineration Per Facility Impacts Assuming No Switching and Onsite Incineration--
Existing Sources Annualized Control Cost as a Percent of Revenue/Budget
[In percent]
----------------------------------------------------------------------------------------------------------------
Scenario A--No switching
-----------------------------------------------------
Industry Option
-----------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Hospitals--Short-term, excluding psychiatric:
Federal Government:
Small:
Urban................................................. 0.09 0.37 0.37 0.41 0.41 0.46
Rural................................................. 0.09 0.09 0.37 0.41 0.41 0.46
Medium.................................................. 0.20 0.20 0.20 0.20 0.22 0.22
Large................................................... 0.13 0.13 0.13 0.13 0.13 0.13
State Government:
Small:
Urban................................................. 0.20 0.80 0.80 0.87 0.87 0.99
Rural................................................. 0.20 0.20 0.80 0.87 0.87 0.99
Medium.................................................. 0.21 0.21 0.21 0.21 0.23 0.23
Large................................................... 0.07 0.07 0.07 0.07 0.07 0.07
Local Government:
Small:
Urban................................................. 0.31 1.24 1.24 1.36 1.36 1.53
Rural................................................. 0.31 0.31 1.24 1.36 1.36 1.53
Medium.................................................. 0.32 0.32 0.32 0.32 0.36 0.36
Large................................................... 0.10 0.10 0.10 0.10 0.10 0.10
Not-for-profit:
Small:
Urban................................................. 0.21 0.84 0.84 0.92 0.92 1.04
Rural................................................. 0.21 0.21 0.84 0.92 0.92 1.04
Medium.................................................. 0.23 0.23 0.23 0.23 0.26 0.26
Large................................................... 0.11 0.11 0.11 0.11 0.11 0.11
For-profit:
Small:
Urban................................................. 0.23 0.95 0.95 1.04 1.04 1.18
Rural................................................. 0.23 0.23 0.95 1.04 1.04 1.18
Medium.................................................. 0.25 0.25 0.25 0.25 0.25 0.28
Large................................................... 0.14 0.14 0.14 0.14 0.14 0.14
[[Page 31764]]
Hospitals--Psychiatric, short-term and long-term:
Small:
Urban................................................. 0.32 1.30 1.30 1.43 1.43 1.62
Rural................................................. 0.32 0.31 1.30 1.43 1.43 1.62
Medium.................................................. 0.57 0.57 0.57 0.57 0.64 0.64
Large................................................... 0.46 0.46 0.46 0.46 0.46 0.46
Nursing homes:
Tax-paying:
Urban................................................. 0.35 1.41 1.41 1.55 1.55 1.75
Rural................................................. 0.35 0.35 1.41 1.55 1.55 1.75
Tax-exempt:
Urban................................................. 0.36 1.45 1.45 1.59 1.59 1.79
Rural................................................. 0.36 0.36 1.45 1.59 1.59 1.79
Commercial research labs:
Tax-paying.............................................. 0.40 0.40 0.40 0.40 0.46 0.46
Tax-exempt.............................................. 0.40 0.40 0.40 0.40 0.46 0.46
Commercial incineration facilities........................ 8.02 8.02 8.02 8.02 8.02 8.02
----------------------------------------------------------------------------------------------------------------
table 22.--Medical Waste Incineration Per Facility Impacts Assuming
Switching From Onsite Incineration To Commercial Disposal Alternatives--
Alternative Waste Disposal Cost As A Percent Of Revenue/Budget
[In percent]
------------------------------------------------------------------------
Scenario B Scenario C
Switching with Switching
Industry waste without waste
segregation segregation
------------------------------------------------------------------------
Hospitals--Short-term, excluding
psychiatric:
Federal Government:
Small:
Urban............................... 0.03 0.10
Rural............................... 0.03 0.17
Medium:
Urban............................... 0.05 0.17
Rural............................... 0.05 0.27
Large:
Urban............................... 0.08 0.29
Rural............................... 0.09 0.47
State Government:
Small:
Urban............................... 0.06 0.22
Rural............................... 0.06 0.36
Medium:
Urban............................... 0.05 0.18
Rural............................... 0.05 0.29
Large:
Urban............................... 0.05 0.16
Rural............................... 0.05 0.27
Local Government:
Small:
Urban............................... 0.09 0.34
Rural............................... 0.10 0.56
Medium:
Urban............................... 0.07 0.27
Rural............................... 0.08 0.44
Large:
Urban............................... 0.06 0.22
Rural............................... 0.06 0.36
Not-for-profit:
Small:
Urban............................... 0.06 0.23
Rural............................... 0.07 0.38
Medium:
Urban............................... 0.05 0.20
Rural............................... 0.06 0.32
[[Page 31765]]
Large:
Urban............................... 0.07 0.25
Rural............................... 0.07 0.41
For-profit:
Small:
Urban............................... 0.07 0.26
Rural............................... 0.08 0.43
Medium:
Urban............................... 0.06 0.21
Rural............................... 0.06 0.34
Large:
Urban............................... 0.09 0.32
Rural............................... 0.09 0.52
Hospitals--Psychiatric, short-term and
long-term:
Small:
Urban............................... 0.10 0.36
Rural............................... 0.11 0.59
Medium:
Urban............................... 0.13 0.48
Rural............................... 0.14 0.78
Large:
Urban............................... 0.29 1.05
Rural............................... 0.31 1.70
Nursing homes:
Tax-paying:
Urban............................... 0.11 0.39
Rural............................... 0.11 0.64
Tax-exempt:
Urban............................... 0.11 0.40
Rural............................... 0.12 0.65
Commercial research labs:
Tax-paying:
Urban............................... 0.09 0.34
Rural............................... 0.10 0.56
Tax-exempt:
Urban............................... 0.09 0.34
Rural............................... 0.10 0.56
------------------------------------------------------------------------
Tables 21 and 22 show that facilities with onsite MWI that are
currently uncontrolled may experience impacts ranging from 0.03 to 1.79
percent, depending on the industry, regulatory option, and scenario. A
comparison of the economic impacts expected to occur under the three
switching scenarios, presented in Tables 21 and 22, indicates that the
option of switching will be attractive to some facilities currently
operating an onsite incinerator. For many of the uncontrolled model
facilities, the economic impacts of switching to an alternative method
of waste disposal are much lower than the economic impacts of choosing
to install emission control equipment. The decision to switch to an
alternative should preclude any facilities from experiencing a
significant economic impact. These results support EPA's assertion that
implementation of the regulation will likely result in either Scenarios
B or C and that the costs and economic impacts of Scenario A are
unlikely to occur.
Table 23 shows the impacts that would be incurred by medical waste
generators that currently use an offsite medical waste incineration
service. These impacts range from 0.00 to 0.02 percent and are
considered negligible impacts. These results indicate that the
incremental cost for the vast majority of medical waste generators are
expected to be small.
Table 23.--Medical Waste Incineration Per Facility Impacts For Firms
That Utilize Offsite Waste Incineration--Existing Sources Incremental
Annual Cost as a Percent of Revenue/Budget
[In percent]
------------------------------------------------------------------------
Incremental
annual cost as
Industry a percent of
revenue
------------------------------------------------------------------------
Hospitals:
<50 Beds............................................ 0-0.01
50-99 Beds.......................................... 0-0.01
100-299 Beds........................................ 0-0.01
300 + Beds.......................................... 0-0.01
Nursing homes:
0-19 Employees:
Tax-paying.......................................... 0
Tax-exempt.......................................... 0
[[Page 31766]]
20-99 Employees:
Tax-paying.......................................... 0
Tax-exempt.......................................... 0
100 + Employees:
Tax-exempt.......................................... 0
Tax-paying.......................................... 0
Commercial research labs:
Tax-paying:
0-19 Employees...................................... 0
20-99 Employees..................................... 0
100 + Employees..................................... 0
Tax-exempt............................................ 0
Outpatient care clinics:
Physicians' clinics (Amb. Care)
Tax-paying.......................................... 0
Tax-exempt.......................................... 0
Freestanding kidney dialy-sis facilities:
Tax-paying.......................................... 0
Tax-exempt.......................................... 0-0.01
Physicians' offices..................................... 0
Dentists' offices and clinics:
Offices............................................. 0
Clinics............................................. ..............
Tax-paying........................................ 0
Tax-exempt........................................ 0
Medical & dental labs:
Medical............................................. 0-0.01
Dental.............................................. 0-0.01
Freestanding blood banks................................ 0-0.02
Funeral homes........................................... 0
Fire & Rescue........................................... 0
Corrections:
Federal Government.................................. 0
State Government.................................... 0
Local Government.................................... 0
------------------------------------------------------------------------
Table 22 also presents price impact estimates for the commercial
medical waste incinerator sector. The analysis shows that uncontrolled
medical waste incinerators required to meet any of the regulatory
options would need to increase their prices by approximately 8 percent
in order to recoup their control costs. Several factors indicate that
it is unlikely these particular facilities would be able to increase
the price of their service by 8 percent.
An examination of the MWI inventory indicates that a majority of
facilities the commerc
FR Doc. 96-15585 Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Medical Waste Incinerators
ial MWI sector have already implemented controls
that would enable them to meet the requirements of any of the six
regulatory options. Only a small number of facilities in this sector
would be ``uncontrolled'' in the baseline and would, therefore, incur
the majority of the costs estimated for this sector. This distribution
suggests that commercial MWI that must install emission control
equipment will not be able to freely increase their prices due to
competition from already controlled commercial MWI. As indicated in the
industrywide impact calculations, the average industrywide price
increase is expected to be approximately 3 percent. Therefore,
commercial MWI having to incur regulatory costs will most likely be
forced to absorb some portion of their cost increase instead of passing
the increase to their customers.
Another factor indicating the likely possibility that these
commercial MWI would be required to absorb some portion of their cost
increases is based on model plant capacity information. Many MWI are
operating below full capacity, indicating that medical waste
incinerator operators with excess capacity will act as a competitive
force to keep incineration prices from rising.
One advantage that commercial MWI operators will experience due to
the regulation will be increasing demand for commercial incineration
service. Table 22 presents impact information under the assumption that
some facilities with onsite incinerators will choose to switch to a
lower cost alternative for medical waste disposal rather than install
emission control equipment to meet the requirements of the regulation.
Some facilities will probably choose one of these lower cost options,
which in many cases may be to switch to commercial incineration. If
implementation of the regulation will have such an effect, demand for
commercial incineration should increase and commercial MWI operators
should be able to offset some of their absorbed cost increases due to
increased demands for their service.
Another consideration regarding the current state of the commercial
MWI industry is that the small number of uncontrolled commercial MWI
may currently be enjoying a cost advantage compared to the majority of
controlled firms in the industry. Commercial MWI facilities that
currently operate with emission control equipment presumably operate at
a higher cost per unit than uncontrolled facilities. If the majority of
the facilities in this industry are controlled and are able to charge
prices that enable them to recapture their costs and earn reasonable
profits, then uncontrolled facilities that are probably operating at a
lower cost are likely to be enjoying profits exceeding the levels
earned by the controlled facilities in the industry.
Based on these explanations, EPA estimates that the price of
commercial incineration is likely to increase by an average of
approximately 2.6 percent. Some uncontrolled facilities in this
industry may need to absorb some of their cost increases due to
implementation of this regulation. However, due to factors such as
increased demand for commercial incineration and possible cost
advantages currently enjoyed by these facilities, the cost of the
regulation should be achievable.
This economic impact section examines possible economic impacts
that may occur in industries that will be directly affected by this
regulation. Therefore, the analysis includes an examination of
industries that generate medical waste or dispose medical waste.
Secondary impacts such as subsequent impacts on air pollution device
vendors and MWI vendors are not estimated due to data limitations. Air
pollution device vendors are expected to experience an increase in
demand for their products due to the regulation. This regulation is
also expected to increase demand for commercial MWI services. However,
due to economies of scale, this regulation is expected to shift demand
from smaller incinerators to larger incinerators. Therefore, small MWI
vendors may be adversely affected by the regulation. Lack of data on
the above effects prevents quantification of the economic impacts on
these secondary sectors.
IV. Regulatory Options and Impacts for New MWI
As discussed earlier, the MACT ``floor'' defines the least
stringent emission standards the EPA may adopt for new MWI. However, as
also discussed earlier, the Clean Air Act requires EPA to examine
alternative emission standards (i.e., regulatory options) more
stringent than the MACT floor. The EPA must consider the cost,
environmental, and energy impacts of these regulatory options and
select one that reflects the maximum reduction in emissions that EPA
determines is achievable (i.e., MACT).
At proposal, the EPA concluded all new MWI would need good
combustion and dry scrubbers to meet the MACT floors for CO, PM, and
HCl. Consequently, EPA was left to consider only two regulatory options
for MACT. The first regulatory option reflected the floor (i.e.,
emission limitations achievable with good combustion and dry
scrubbers). The second reflected emission limitations achievable with
good combustion and dry scrubbers with activated carbon injection.
Based on the cost, environmental, and energy impacts of the second
regulatory option
[[Page 31767]]
relative to the first option, EPA selected the second option as MACT.
Consequently, EPA proposed emission standards for new MWI based on the
use of good combustion and dry scrubbers with activated carbon
injection.
As discussed earlier in this notice, EPA received numerous comments
containing substantial new information following the proposal. Based on
this new information, new conclusions concerning the MWI inventory, MWI
subcategories, performance of emission control technologies, MACT
floors, and monitoring and testing options have been reached. As a
result, EPA now believes there are several new regulatory options that
merit consideration in selecting MACT for new MWI. The following
sections summarize these new regulatory options and the EPA's initial
assessment of their merits.
A. Regulatory Options
As discussed earlier, new MACT floor emission levels were developed
for small, medium, and large MWI. To assess the impacts of regulatory
options, EPA must first consider what emission control technology(s)
new MWI may need to meet regulations based on these floor emission
limits. The floor for small new MWI appears to require good combustion
and moderate efficiency wet scrubbers. For medium new MWI, the MACT
floor appears to require good combustion and a combined wet/dry
scrubbing system without activated carbon injection. The MACT floor for
large new MWI appears to require good combustion and a combined wet/dry
scrubbing system with activated carbon injection.
Having identified these control technologies, the EPA is now able
to review the performance capabilities of other control technologies
and to identify those technologies capable of achieving even greater
emission reductions. This review enables EPA to identify regulatory
options more stringent than the floor that could be selected as MACT.
For small new MWI, as mentioned above, good combustion and a
moderate efficiency wet scrubber system are the emission control
technologies most MWI would probably need to meet the MACT floor
emission levels. Therefore, these technologies serve as the basis for
the first regulatory option for the MACT emission standards for small
new MWI. A review of the performance capabilities of various emission
control technologies summarized earlier readily identifies a second
option for small new MWI. This option is to base the MACT emission
standards for small new MWI on the use of good combustion and high
efficiency wet scrubbing systems. This would achieve further reductions
in PM emissions, but it would not further reduce other pollutants. As
summarized earlier, high efficiency wet scrubbing systems do not appear
to achieve greater reductions in emissions of dioxins, acid gases
(e.g., HCl), or metals (i.e., Hg, Pb, or Cd) than do moderate
efficiency wet scrubbing systems.
Reviewing the performance capabilities of emission control
technologies also identifies a third option for small new MWI. This
regulatory option is to base the MACT emission standards for small new
MWI on the use of good combustion and a combined dry/wet scrubbing
system with activated carbon injection. This alternative would further
reduce emissions of Pb, Cd, and dioxins, but would not further reduce
emissions of other air pollutants. The combined system, however,
generally costs about two and a half times what high-efficiency wet
scrubbing systems cost to operate annually, and the overall difference
in the emissions control performance between the two systems is
relatively small. As a result, at this point, to limit and manage the
total number of regulatory options under consideration, the EPA has
chosen not to include this third regulatory option for small new MWI.
For medium new MWI, as discussed earlier, the use of good
combustion and a combined wet/dry scrubbing system without activated
carbon injection appears to be necessary to meet the MACT floor
emission limits. Therefore, this option is the first regulatory option
for medium new MWI. The second regulatory option is to base the
emission standards for medium new MWI on good combustion and a combined
wet/dry scrubbing system with activated carbon injection.
Finally, for large new MWI, as discussed earlier, the use of good
combustion and a combined wet/dry scrubbing system with activated
carbon injection appears necessary to meet the MACT floor emission
limits. Because no other air pollution control technologies have been
identified that can achieve more stringent emission limits, the EPA is
not inclined at this point to consider other regulatory options for
large new MWI.
The regulatory options outlined above are combined in Table 24.
This table summarizes the technology basis for the regulatory options
for the various MACT standards the EPA believes merit consideration as
MACT for new MWI. This table is constructed only to organize and
structure an analysis of the cost, environmental, and energy impacts
associated with the various MACT standards in order to consider these
impacts in selecting MACT for new MWI. As mentioned earlier, the MACT
standards for new MWI will not include requirements to use a specific
emission control system or technology; the MACT standards will only
include emission limits, which may be met by any means or by using any
control system or technology the owner or operator of the MWI decides
to use to meet these emission limits.
Table 24.--Level of Air Pollution Control Associated with Each Regulatory Option for New MWI
----------------------------------------------------------------------------------------------------------------
Regulatory options
MWI size ----------------------------------------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
Small 200 lb/hr......... Good combustion and Good combustion and Good combustion and
moderate efficiency wet moderate efficiency wet high efficiency wet
scrubber. scrubber. scrubber.
Medium 201-500 lb/hr............... Good combustion, dry Good combustion, dry Good combustion, dry
injection/fabric filter injection/fabric filter injection/fabric
system, and high system with carbon, and filter system with
efficiency wet scrubber. high efficiency wet carbon, and high
scrubber. efficiency wet
scrubber.
Large >500 lb/hr................... Good combustion, dry Good combustion, dry Good combustion, dry
injection/fabric filter injection/fabric filter injection/fabric
system with carbon, and system with carbon, and filter system with
high efficiency wet high efficiency wet carbon, and high
scrubber. scrubber. efficency wet
scrubber.
----------------------------------------------------------------------------------------------------------------
The emission limits associated with each of the regulatory options
for small, medium, and large new MWI are presented in Table 25.
[[Page 31768]]
Table 25.--Emission Limitations Associated With Each Regulatory Option for Small, Medium, and Large New MWI
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 and 2............... 3..................... 1..................... 2 and 3.............. 1-3
-----------------------------------
PM, gr/dscf....................... 0.03.................. 0.015................. 0.015................. 0.015................ 0.015
CO, ppmdv......................... 40.................... 40.................... 40.................... 40................... 40
CDD/CDF, ng/dscm.................. 125................... 125................... 125................... 25................... 25
TEQ CDD/CDF, ng/dscm.............. 2.3................... 2.3................... 2.3................... 0.6.................. 0.6
HCl, ppmdv........................ 15 or 99%............. 15 or 99%............. 15 or 99%............. 15 or 99%............ 15 or 99%
SO2, ppmdv........................ 55.................... 55.................... 55.................... 55................... 55
NOx, ppmdv........................ 250................... 250................... 250................... 250.................. 250
Pb, mg/dscm....................... 1.2 or 70%............ 1.2 or 70%............ 0.07 or 98%........... 0.07 or 98%.......... 0.07 or 98%
Cd, mg/dscm....................... 0.16 or 65%........... 0.16 or 65%........... 0.04 or 90%........... 0.04 or 90%.......... 0.04 or 90%
Hg, mg/dscm....................... 0.55 or 85%........... 0.55 or 85%........... 0.55 or 85%........... 0.55 or 85%.......... 0.55 or 85%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Regulatory Option 1 in Table 25 reflects the performance of the
emission control system or technology needed to meet the MACT floor.
For small new MWI, Regulatory Option 1 reflects emission limits based
on good combustion and moderate efficiency wet scrubbers. For medium
new MWI, Regulatory Option 1 reflects emission limits based on good
combustion and a combined wet/dry scrubbing system without carbon. For
large new MWI, Regulatory Option 1 reflects emission limits based on
good combustion and a combined wet/dry scrubbing system with activated
carbon injection.
Regulatory Option 1 does not reflect the most stringent emission
limits achievable for all subcategories. Consequently, the Clean Air
Act requires EPA to examine the costs and other impacts of regulatory
options more stringent than Regulatory Option 1. Each regulatory option
examined reflects slightly more stringent emission standards.
Regulatory Option 2 is the same as Regulatory Option 1 for small
and large MWI. Medium MWI would be required to meet emission limits
associated with good combustion and a combined wet/dry scrubbing system
with activated carbon injection. Regulatory Option 3 would establish
emission limits for small MWI based on good combustion and high
efficiency wet scrubbers. Requirements for medium and large MWI would
remain the same under Regulatory Option 3 as under Regulatory Option 2.
B. National Environmental and Cost Impacts
This section presents a summary of the air, water, solid waste,
energy, and cost impacts of the three regulatory options for new MWI.
Economic impacts are discussed in Section IV.C. All impacts are
nationwide resulting from the implementation of the new source
performance standards for new MWI.
1. Analytical Approach
As discussed at proposal and within this notice, healthcare
facilities may choose from among a number of alternatives for treatment
and disposal of their medical wastes; however, these alternatives are
generally more limited for healthcare facilities located in rural areas
than for those located in urban areas. In fact, as stated at proposal,
most estimates are that less than half of hospitals today currently
operate onsite medical waste incinerators. The clear trend over the
past several years has been for more and more hospitals to turn to the
use of alternative onsite medical waste treatment technologies or
commercial offsite treatment and disposal services. Consequently, even
fewer hospitals are now likely to operate onsite medical waste
incinerators.
More than half of existing hospitals today, therefore, have chosen
to use other means of treatment and disposal of their medical waste
than operation of an onsite incinerator. This is a clear indication
that alternatives to the use of onsite incinerators exist and that they
are readily available in many cases (although as mentioned above, these
alternatives--particularly the availability and competitive cost of
offsite commercial treatment and disposal services--tend to be more
limited in rural areas than in urban areas). For other healthcare
facilities, such as nursing homes, outpatient clinics, doctors and
dentists offices, etc., only very few facilities currently operate
onsite medical waste incinerators. Therefore, for these types of
healthcare facilities, the percentage of such facilities using
alternative means of treatment and disposal of medical waste--
particularly commercial treatment and disposal services--is much
higher, probably higher than 95 percent. This high percentage is
further confirmation of the availability of alternatives to onsite
incinerators for the treatment and disposal of medical waste.
A very likely reaction and outcome associated with the adoption of
MACT standards for new MWI, therefore, is an increase in the use of
these alternatives by healthcare facilities for treatment and disposal
of medical waste. The EPA's objective is not to encourage the use of
alternatives or to discourage the use of onsite medical waste
incinerators; EPA's objective is to adopt MACT emission standards for
new MWI that fulfill the requirements of Section 129 of the Clean Air
Act. In doing so, however, one outcome associated with adoption of
these MACT standards is likely to be an increase in the use of
alternatives and a decrease in the use of onsite medical waste
incinerators. Consequently, EPA should acknowledge and incorporate this
outcome into the analyses of the cost, environmental, and energy
impacts associated with the MACT emission standards.
In these analyses of the cost, environmental, and energy impacts,
the selection of an alternative form of medical waste treatment and
disposal by a healthcare facility, rather than the purchase of an
onsite medical waste incinerator and the emission control technology
necessary to meet the MACT emission limits, is referred to as
``switching''. Switching was incorporated in the analyses at proposal
and was the basis for the conclusion at proposal that adoption of the
proposed MACT emission standards could lead to as many as 80 percent of
healthcare facilities to choose an alternative means of medical waste
treatment and disposal over the purchase of an MWI. Although switching
was not EPA's objective, it was a potential outcome of the regulations
that EPA believed should be
[[Page 31769]]
acknowledged, considered, and discussed at proposal.
Switching has also been incorporated into the new analyses of the
cost, environmental, and energy impacts associated with the three new
regulatory options. The new analyses, however, incorporate three
scenarios: one scenario that ignores switching and two scenarios that
consider switching. Scenario A assumes that each new MWI will be
installed and will comply with the appropriate regulatory option (i.e.,
no switching). This scenario results in the highest costs because it
assumes no potential new MWI owner will switch to a less expensive
waste disposal method. This scenario is clearly unrealistic and grossly
overstates the national costs associated with MACT emission standards.
It should not be viewed as representative or even close to
representative of the impacts associated with the MACT emission
standards. This scenario is so misleading that EPA considered not
including it in the analysis; some may take it out of context and use
it as representative, when it is in no way representative of the
impacts of the MACT emission standards. The EPA finally decided to
include this scenario in the analysis only because some may ask ``what
if * * *?'' and the EPA wanted to be in a position to answer such
questions.
Switching Scenarios B and C are much more realistic and more
representative of the cost, environmental, and energy impacts
associated with the MACT emission standards for new MWI. Only these
scenarios merit serious review and consideration in gauging the
potential impacts associated with the MACT emission standards. Both
Scenarios B and C assume switching occurs when the cost associated with
purchasing and installing the air pollution control technology or
system necessary to comply with the MACT emission standard (i.e., a
regulatory option) is greater than the cost of choosing an alternative
means of treatment and disposal.
The difference in Scenarios B and C is the assumption of how much
separation of the medical waste stream into an infectious medical waste
stream and a noninfectious medical waste stream currently occurs at
healthcare facilities that today operate a medical waste incinerator.
Some have stated that, for the most part, hospitals that are currently
operating onsite medical waste incinerators practice little separation
of medical waste into infectious and noninfectious waste; generally all
the medical waste at the facility is incinerated.
Based on estimates in the literature that only 10 to 15 percent of
medical waste is potentially infectious and the remaining 85 to 90
percent is noninfectious, Scenario B assumes that only 15 percent of
the waste currently being burned at a healthcare facility operating an
onsite medical waste incinerator is potentially infectious medical
waste. The 85 percent noninfectious waste is municipal waste that needs
no special handling, treatment, transportation, or disposal. It can be
sent to a municipal landfill or municipal combustor for disposal. Thus,
under Scenario B, when choosing an alternative to an onsite medical
waste incinerator, in response to adoption of MACT emission standards,
a healthcare facility need only chose an alternative form of medical
waste treatment and disposal for 15 percent of the waste stream
currently burned onsite and may send the remaining 85 percent to a
municipal landfill. In other words, if a hospital plans to burn 100
pounds of waste, Scenario B assumes 85 pounds are noninfectious and 15
pounds are potentially infectious. This scenario results in the lowest
costs because 85 percent of the waste is disposed at the relatively
inexpensive cost of municipal waste disposal.
On the other hand, it is unlikely that all healthcare facilities
that consider purchasing an MWI will be able to or will decide to
segregate the waste stream to be burned in the incinerator. If a
hospital already separates medical waste into infectious and
noninfectious waste streams, for example, this hospital would be unable
to separate the waste stream any further. In other words, if a hospital
plans to burn 100 pounds of waste, Scenario C assumes all 100 pounds
are potentially infectious. Scenario C, therefore, assumes that all
medical waste to be burned at a healthcare facility that purchases a
medical waste incinerator is potentially infectious medical waste and
must be treated and disposed of accordingly. As a result, Scenario C
leads to higher costs than Scenario B.
For the purposes of determining impacts of the emission standards
under switching Scenarios B and C, new commercial (offsite)
incinerators and onsite incinerators used to burn healthcare waste were
treated separately. The commercial incinerators were not subjected to
the switching analyses under Scenarios B and C because switching to an
alternative method of waste disposal (e.g., commercial disposal) is not
feasible for commercial facilities. An assumption was made that
commercial facilities would add on the control associated with the
emission standards. Only the new onsite MWI were subject to the
switching analyses under Scenarios B and C. On the other hand, a
commercial waste disposal company does have the option of purchasing an
alternative technology (e.g., autoclave or microwave) rather than
installing a new MWI. Consequently, while switching was not included in
this analysis for commercial MWI, it is an option that could result in
lower costs.
Scenarios B and C represent the likely range of impacts associated
with the MACT emission standards for new MWI. The actual impacts of a
MACT emission standard (i.e., a regulatory option) is most likely to
fall somewhere within the range represented by Scenarios B and C.
2. Air Impacts
As outlined above, the impacts associated with three MACT emission
standards or regulatory options, under three scenarios reflecting
switching, have been assessed. Baseline emissions (i.e., emissions in
the absence of adoption of the MACT emission standards) and emissions
under each MACT emission standard or regulatory option are summarized
in Tables 26, 27, and 28. Emissions under Scenario A (no switching) are
summarized in Table 26; emissions under Scenario B (switching with
waste separation) are summarized in Table 27; and emissions under
Scenario C (switching without waste separation) are summarized in Table
28.
Table 26.--Baseline Emissions Compared with Emissions in the Fifth Year After Implementation of the NSPS
[Scenario A]
[Metric Units]
----------------------------------------------------------------------------------------------------------------
Regulatory Options
Pollutant, units Baseline -----------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
PM, Mg/yr.............................................. 28 2.7 2.7 2.3
[[Page 31770]]
CO, Mg/yr.............................................. 14 14 14 14
CDD/CDF, g/yr.......................................... 47 12 7.2 7.2
TEQ CDD/CDF, g/yr...................................... 1.1 0.28 0.17 0.17
HC1, Mg/yr............................................. 64 3.1 3.1 3.1
SO2, Mg/yr............................................. 28 28 28 28
NOx, Mg/yr............................................. 130 130 130 130
Pb, Mg/yr.............................................. 0.39 0.02 0.02 0.02
Cd, Mg/yr.............................................. 0.001 3.5 x 10-3 3.5 x 10-3 3.5 x 10-3
Hg, Mg/yr.............................................. 0.21 0.12 0.12 0.12
----------------------------------------------------------------------------------------------------------------
To convert Mg/yr to ton/yr, multiply by 1.1. To convert g/yr to lb/yr, divide by 453.6.
Table 27.--Baseline Emissions Compared With Emissions in the Fifth Year After Implementation of the Emission
Guidelines
[Scenario B]
[Metric Units]
----------------------------------------------------------------------------------------------------------------
Regulatory options
Pollutant, units Baseline --------------------------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
PM, Mg/yr.......................... 28 2.1 2.1 2.1
CO, Mg/yr.......................... 14 6.5 6.5 6.5
CDD/CDF, g/yr...................... 47 5.9 5.9 5.9
TEQ CDD/CDF, g/yr.................. 1.1 0.14 0.14 0.14
HC1, Mg/yr......................... 64 1.5 1.5 1.5
SO2, Mg/yr......................... 28 14 14 14
NOx, Mg/yr......................... 130 65 65 65
Pb, Mg/yr.......................... 0.39 0.031 0.031 0.031
Cd, Mg/yr.......................... 0.051 4.6 x 10-3 4.6 x 10-3 4.6 x 10-3
Hg, Mg/yr.......................... 0.21 0.056 0.056 0.056
----------------------------------------------------------------------------------------------------------------
To convert Mg/yr to ton/yr, multiply by 1.1 To convert g/yr to lb/yr, divide by 453.6.
Table 28.--Baseline Emissions Compared With Emissions in the Fifth Year After Implementation of the NSPS
[Scenario C]
[Metric Units]
----------------------------------------------------------------------------------------------------------------
Regulatory options
Pollutant, units Baseline --------------------------------------------------------------
1 2 3
----------------------------------------------------------------------------------------------------------------
PM, Mg/yr.......................... 28 4.1 4.1 4.1
CO, Mg/yr.......................... 14 14 14 14
CDD/CDF, g/yr...................... 47 12 12 12
TEQ CDD/CDF, g/yr.................. 1.1 0.28 0.28 0.28
HC1, Mg/yr......................... 64 3.1 3.1 3.1
SO2, Mg/yr......................... 28 28 28 28
NOx, Mg/yr......................... 130 130 130 130
Pb, Mg/yr.......................... 0.39 0.06 0.06 0.06
Cd, Mg/yr.......................... 0.051 8.9 x 10-3 8.9 x 10-3 8.9 x 10-3
Hg, Mg/yr.......................... 0.21 0.12 0.12 0.12
----------------------------------------------------------------------------------------------------------------
To convert Mg/yr to ton/yr, multiply by 1.1 To convert g/yr to lb/yr, divide by 453.6.
As discussed in previous sections, new information has led to new
conclusions about the MWI inventory, performance of technology, and
control levels associated with each new MWI. As a result, revised
estimates of annual baseline emissions and emissions under each
regulatory option are significantly lower than estimates developed at
proposal. There are two primary reasons for the lower emission
estimates. First, a greater level of emission control is expected at
new MWI than was assumed at proposal. Second, more MWI were projected
to be built at proposal than current estimates.
3. Water and Solid Waste Impacts
Estimates of wastewater impacts were developed for only Regulatory
Option 3, Scenario A, which reflects all new MWI equipped with wet
scrubbers in the
[[Page 31771]]
absence of switching. Assessing these impacts under Scenario A without
any consideration of the effect of switching grossly overstates the
magnitude of these impacts. Under Scenarios B and C more than half of
the new MWI are expected not to be built, resulting in significantly
lower impacts. This approach of estimating and summarizing impacts
under Scenario A, at this point, was taken as a matter of expediency to
share new information and provide an opportunity for public comment.
Under Regulatory Option 3, Scenario A, 3.3 million gallons of
additional wastewater would be generated in the fifth year by MWI as a
result of the NSPS. This amount is the equivalent of wastewater
produced annually by one small hospital. Therefore, when considering
the wastewater produced annually at healthcare facilities nationwide,
the increase in wastewater resulting from the implementation of the
MACT emission standards for new MWI is insignificant.
With regard to solid waste impacts, about 88,800 Mg (97,900 tons)
of medical waste would be burned in the fifth year in new MWI in the
absence of Federal regulations, producing about 8,880 Mg/yr (9,790
tons/yr) of solid waste (bottom ash) disposed of in landfills. To
determine the solid waste impacts for the NSPS, impacts were developed
for Regulatory Option 3, Scenario B. This option is associated with the
most switching and the most separation of waste for disposal in
municipal landfills and thus, produces the greatest estimated impact.
Under Regulatory Option 3, Scenario B, 43,600 Mg/yr (48,000 tons/
yr) of additional solid waste would result from the adoption of the
NSPS. However, compared to municipal waste, which is disposed in
landfills at an annual rate of over 91 million Mg/yr (100 million tons/
yr), the increase in solid waste from the implementation of the MWI
standards is insignificant.
4. Energy Impacts
The emission control technologies used by new MWI to comply with
the MACT emission limits consume energy. Estimates of energy impact
were developed for Regulatory Option 3, Scenario A. Under Scenarios B
and C, which include switching, it is not clear whether overall
national energy consumption would increase, decrease, or remain the
same. Alternatives to incineration require energy to operate; however,
information is not available to estimate whether these alternatives use
more or less energy than MWI.
The energy impacts associated with the MACT emission standards
could include additional auxiliary fuel (natural gas) for combustion
controls and additional electrical energy for operation of the add-on
control devices, such as wet scrubbers and dry scrubbers. It was
assumed that all new MWI would be installed with combustion controls in
the absence of the NSPS in order to meet State regulations for new MWI.
Therefore, there is no increase in the total national usage of natural
gas for combustion controls under Regulatory Option 3, Scenario A.
Total national usage of electrical energy for the operation of add-on
control devices would increase by about 9,800 megawatt hours per year
(MW-hr/yr) (33.4 billion British thermal units per year (10\9\ Btu/
yr)). Once again, compared to the amount of energy used by health care
facilities such as hospitals (approximately 2,460 MMm\3\/yr of natural
gas and 23.2 million MW-hr/yr of electricity) the increase in energy
usage that results from implementation of the MWI emission standards is
insignificant.
5. Cost Impacts
The cost impacts on individual healthcare facilities that consider
purchasing an MWI vary depending on the MACT emission standard or
regulatory option; the actual cost to purchase and install any
additional air pollution control equipment; the cost of alternative
means of treatment and disposal where they are located; and other
factors, such as liability issues related to disposal and State and
local medical waste treatment and disposal requirements. In general,
facilities considering purchasing smaller MWI will have a greater
incentive to use alternative means of treatment and disposal because
their onsite incineration cost (per pound of waste burned) will be
higher.
Large healthcare facilities with larger amounts of waste to be
treated or healthcare facilities that serve as regional treatment
centers for waste generated at other healthcare facilities in the area
may have some cost advantages compared to smaller facilities. Due to
economies of scale, their cost of burning waste may be lower (i.e.,
dollars per pound burned), even after purchasing and installing a
complete air pollution control system to comply with the emission
standards.
Table 29 contains the estimated increase in national annual costs
associated with each of the MACT emission standards or regulatory
options under Scenario A (no switching), Scenario B (switching with
separation of waste), and Scenario C (switching with no separation of
waste). As discussed earlier, Scenario A is unrealistic and grossly
overstates the national cost impacts. The costs associated with the
MACT emission standards under Scenarios B and C represent the likely
range of national cost impacts and only these costs merit serious
consideration and review.
Table 29.--Costs of the Regulatory Options of the NSPS
[Scenarios A, B, and C]
[Million $/year]
------------------------------------------------------------------------
Regulatory options
Scenario --------------------------
1 2 3
------------------------------------------------------------------------
A............................................ 32.3 32.8 33.7
B............................................ 10.8 10.8 10.8
C............................................ 24.0 24.0 24.0
------------------------------------------------------------------------
The nationwide annual costs presented in Table 29, excluding
Scenario A, range from $10.8 million/yr for the regulatory options
under Scenario B to $24.0 million/yr for the regulatory options under
Scenario C. These nationwide annual costs are significantly lower than
the $74.5 million/yr estimated for the proposed emission standards. The
difference in the proposed and the current nationwide annual cost
estimates can be attributed to the difference in the number of new MWI
that were predicted to be installed at proposal and the current
estimate of the number of new MWI. For example, at proposal it was
estimated that approximately 700 new MWI would be installed by the
fifth year after adoption of the emission standards. It is now
estimated that approximately 235 new MWI will be installed by the fifth
year after adoption of the standards.
C. Economic Impacts
Section IV.B.1 described assumptions pertaining to three analysis
scenarios: no switching, switching with waste segregation, and
switching with no waste segregation. Section IV.B.5 presented annual
cost estimates that have been developed for each of the six regulatory
options. This section incorporates these assumptions and cost data to
estimate potential economic impacts that might result from
implementation of these regulatory options.
The goal of the economic impact analysis is to estimate the market
response of affected industries to the emission guidelines and to
identify any adverse impacts that may occur as a result of the
regulation. Industries that
[[Page 31772]]
operate onsite waste incinerators (hospitals, nursing homes, research
labs, and commercial waste incinerators) and those that utilize offsite
medical waste incinerators (hospitals, nursing homes, medical/dental
laboratories, funeral homes, physicians' offices, dentist offices,
outpatient care, freestanding blood banks, fire and rescue operations,
and correctional facilities) will potentially be affected by the
regulation. Industrywide impacts, including changes in market price,
output or production, revenues, and employment for the affected
industries, are estimated for each regulatory option assuming the three
switching scenarios. Facility-specific impacts are estimated for
hospitals of varying sizes, ownerships, and operating characteristics;
nursing homes; commercial research labs; and commercial waste
incineration based on engineering model plant cost estimates under each
of the three switching scenarios.
1. Analytical Approach
The analytical approach to estimate industrywide and facility
specific economic impacts and evaluate the economic feasibility of
switching are briefly described. For a more detailed description refer
to docket item IV-A-9. Prices are stated at 1993 levels.
Economic impacts for new MWI are calculated under several
assumptions. First, the costs that are used to estimate the economic
impacts of the NSPS include control costs from both the EG and NSPS.
This approach is used to account for market adjustments (e.g., price,
etc.) that would have had to occur under implementation of the EG
first. This approach allows for the establishment of a future baseline
scenario. Second, due to lack of information, revenue data for each of
the affected industries were not adjusted for growth during the 5 year
time period.
The average price changes anticipated to occur in each industry
sector for each of the regulatory options are estimated by comparing
the annual control cost estimates to annual revenues for each affected
industry. This calculation provides an indication of the magnitude of a
price change that would occur for each industry sector to fully recover
its annual control costs. The resulting cost-to-revenue ratio
represents the price increase necessary on average for firms in the
industry to recover the increased cost of environmental controls.
Percent changes in output or production are estimated using the price
impact estimate and a high and low estimate of the price elasticity of
demand. Resulting changes in revenues are estimated based upon the
estimated changes in price and output for an industry. Employment or
labor market impacts result from decreases in the output for an
industry and are assumed to be proportional to the estimated decrease
in output for each industry.
Facility-specific economic impacts are estimated by using model
plant information under the three switching scenarios. The assumption
of no switching (Scenario A) represents the highest cost and economic
impact scenario for most affected industries, while the assumption of
switching with waste segregation (Scenario B) represents the lowest
cost and economic impact scenario for most of the affected industries.
As previously stated, EPA considers Scenario A to be an unlikely
scenario; therefore, the economic impacts presented under Scenarios B
and C should be regarded as the impacts most likely to occur.
2. Industry-Wide Economic Impacts
Industry-wide impacts include estimates of the change in market
price for the services provided by the affected industries, the change
in market output or production, the change in industry revenue, and the
impact on affected labor markets in terms of full time equivalent
workers lost. These impacts are summarized in Tables 30 and 31.
Table 30.--Medical Waste Incineration Industry-Wide Price Impacts--New
Sources Percent Increase
[Percent]a
------------------------------------------------------------------------
Range for regulatory options 1-6
-------------------------------------------
Scenario B Scenario C
Industry Scenario A Switching Switching
No switching with waste with no waste
segregation segregation
------------------------------------------------------------------------
Hospitals................... 0.05 0.01 0.03
Nursing homes............... 0.05 0.01 0.03
Laboratories:
Research................ 0.15-0.16 0.04 0.09
Medical/dental.......... ............ 0 0
Funeral homes............... 0 0 0
Physicians' offices......... 0 0 0
Dentists' offices and
clinics.................... 0 0 0
Outpatient care............. 0 0 0
Freestanding blood banks.... 0.01 0.01 0.01
Fire and rescue operations.. 0 0 0
Correctional facilities..... 0 0 0
Commercial incineration..... 3.8 3.8 3.8
------------------------------------------------------------------------
aThe price increase percentages reported represent the price increase
necessary to recover annualized emission control costs for each
industry.
[[Page 31773]]
Table 31.--Medical Waste Incineration Industry-Wide Output, Employment and Revenue Impacts--New Sources
----------------------------------------------------------------------------------------------------------------
Range for regulatory options 1-6
-----------------------------------------------
Scenario B Scenario C
Industry Scenario A No Switching with Switching with
switching waste no waste
segregation segregation
----------------------------------------------------------------------------------------------------------------
Hospitals:
Output decrease (%)......................................... 0-0.02 0-0.01 0-0.01
Employment decrease (FTE's)................................. 0-767 0-200 0-457
Revenue increase or (decrease) (%).......................... 0.02-0.05 0.01 0.02-0.03
Nursing homes:
Output decrease (%)......................................... 0.02-0.04 0.01 0.01-0.02
Employment decrease (FTE's)................................. 260-574 74-150 168-342
Revenue increase or (decrease) (%).......................... 0.03-0.04 0-0.01 0.01-0.02
Laboratories:
Research:
Output decrease (%)......................................... 0.15-0.21 0.04-0.06 0.09-0.13
Employment decrease (FTE's)................................. 231-333 65-87 149-199
Revenue increase or (decrease) (%).......................... (0.05)-0 (0.01)-0 (0.03)-0
Medical/dental:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 3-5 3-5 3-5
Revenue increase or (decrease) (%).......................... 0 0 0
Funeral homes:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0 0 0
Revenue increase or (decrease) (%).......................... 0 0 0
Physicians' offices:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0-2 0-2 0-2
Revenue increase or (decrease) (%).......................... 0 0 0
Dentists' offices and clinics:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 1-2 1-2 1-2
Revenue increase or (decrease) (%).......................... 0 0 0
Outpatient care:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0-1 0-1 0-1
Revenue increase or (decrease) (%).......................... 0 0 0
Freestanding blood banks:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0 0 0
Revenue increase or (decrease) (%).......................... 0-0.01 0-0.01 0-0.01
Fire and rescue operations:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0 0 0
Revenue increase or (decrease) (%).......................... 0 0 0
Correctional facilities:
Output decrease (%)......................................... 0 0 0
Employment decrease (FTE's)................................. 0 0 0
Revenue increase or (decrease) (%).......................... 0 0 0
----------------------------------------------------------------------------------------------------------------
Output decreases and full time equivalents (FTE's) employment losses as a result of the regulation are shown in
this table. Revenue increases and decreases are presented with decreases noted in brackets.
As shown in Table 30, industries that generate medical waste (i.e.,
hospitals, nursing homes, etc.) are expected to experience average
price increases in the range of 0.00 to 0.16 percent, depending on the
industry, regulatory option, and scenario. Table 31 shows that these
industries are expected to experience output and employment impacts in
the range of 0.00 to 0.21 percent. In addition, the revenue impacts for
these industries are expected to range from an increase of 0.05 percent
to a decrease of 0.05 percent. An increase in industry revenue is
expected in cases where the price elasticity of demand for an
industry's product is less than one. A price elasticity of less than
one indicates that the percentage decrease in output will be less than
the percentage increase in price. Since total revenue is a product of
price and output, a less than proportional change in output compared to
price means that total revenue should increase.
The following example illustrates how the above price impacts could
be interpreted for the hospital industry. Table 30 shows that for
hospitals, 0.03 percent is estimated as the price increase necessary to
recover annual control costs assuming Regulatory Option 3, the most
stringent regulatory option, and Scenario C, switching with no waste
segregation. This change in price can be expressed in terms of the
increased cost of hospitalization due to the regulation. The 1993
estimate of adjusted patient days nationwide totals 304,500,000 days.
This estimate of adjusted patient-days is based on a
[[Page 31774]]
combined estimate of in-patient and out-patient days at hospitals. The
total annual control cost for the EG and NSPS for hospitals required to
comply with regulatory option 3 is estimated as $101,652,807. Assuming
that the ratio of adjusted patient-days to revenue does not
significantly change over time, the expected average price increase for
each hospital patient-day is expected to equal 33 cents.
Table 30 also shows that the average price impact for the
commercial medical waste incinerator industry is approximately a 3.8
percent increase in price. Cost and economic impact estimates are the
same for the commercial MWI industry regardless of the regulatory
option analyzed because all three regulatory options specify identical
regulatory requirements for large MWI. Average industrywide output,
employment, and revenue impacts were not estimated for this sector
because data such as price elasticity estimates and employment levels
were not available.
3. Facility-Specific Economic Impacts
Facility-specific impacts were also estimated for the affected
industries. These estimates, presented in Tables 32 and 33, were
calculated for the three switching scenarios. A cost as a percent of
revenue ratio was calculated to provide an indication of the magnitude
of the impact of the regulation on an uncontrolled facility in each
industry sector. This calculation was then compared to the industrywide
price impact to determine if the facility's impacts differ
significantly from the average industrywide impacts (i.e., if there is
greater than a 1 percent difference).
Table 32.--Medical Waste Incineration Per Facility Impacts Assuming No
Switching and Onsite Incineration--New Sources Annualized Control Cost
as a Percent of Revenue Budget
[Percent]
------------------------------------------------------------------------
Industry Option 1 Option 2 Option 3
------------------------------------------------------------------------
Hospitals--Short term, excluding
psychiatric:
Federal Government
Small
Urban.............................. 0.36 0.36 0.41
Rural.............................. 0.36 0.36 0.41
Medium............................... 0.33 0.49 0.49
Large................................ 0.16 0.16 0.16
State Government
Small
Urban.............................. 0.76 0.76 0.88
Rural 0.76 0.76 0.88
Medium............................... 0.35 0.51 0.51
Large................................ 0.09 0.09 0.09
Local Government
Small
Urban.............................. 1.18 1.18 1.36
Rural.............................. 1.18 1.18 1.36
Medium............................... 0.53 0.78 0.78
Large................................ 0.12 0.12 0.12
Not-for-profit
Small
Urban.............................. 0.80 0.80 0.93
Rural.............................. 0.80 0.80 0.93
Medium............................... 0.39 0.58 0.58
Large................................ 0.14 0.14 0.14
For-profit
Small
Urban.............................. 0.91 0.91 1.04
Rural.............................. 0.91 0.91 1.04
Medium............................... 0.41 0.61 0.61
Large................................ 0.17 0.17 0.17
Hospitals--Psychiatric, short term and
long term:
Small
Urban.............................. 1.25 1.25 1.44
Rural.............................. 1.25 1.25 1.44
Medium............................... 0.95 1.40 1.40
Large................................ 0.56 0.56 0.56
Nursing Homes:
Tax-Paying
Urban.............................. 1.35 1.35 1.56
Rural.............................. 1.35 1.35 1.56
Tax-exempt
Urban.............................. 1.39 1.39 1.59
Rural.............................. 1.39 1.39 1.59
Commercial research labs:
Tax-paying......................... 0.68 1.00 1.00
Tax-exempt......................... 0.68 1.00 1.00
Commercial Incineration Facilities..... 11.82 11.82 11.82
------------------------------------------------------------------------
[[Page 31775]]
Table 33.--Medical Waste Incineration Per Facility Impacts Assuming
Switching From Onsite Incineration To Commercial Disposal Alternatives
Alternative Waste Disposal Cost as a Percent of Revenue Budget
[Percent]
------------------------------------------------------------------------
Scenario B Scenario C
Switching with Switching
Industry waste without waste
segregation segregation
------------------------------------------------------------------------
Hospitals--Short-term, excluding
psychiatric:
Federal Government:
Small
Urban............................... 0.03 0.10
Rural............................... 0.03 0.17
Medium
Urban............................... 0.05 0.17
Rural............................... 0.05 0.27
Large
Urban............................... 0.08 0.29
Rural............................... 0.09 0.47
State Government:
Small
Urban............................... 0.06 0.22
Rural............................... 0.06 0.36
Medium
Urban............................... 0.05 0.18
Rural............................... 0.05 0.29
Large
Urban............................... 0.05 0.16
Rural............................... 0.05 0.27
Local Government:
Small
Urban............................... 0.09 0.34
Rural............................... 0.10 0.56
Medium
Urban............................... 0.07 0.27
Rural............................... 0.08 0.44
Large
Urban............................... 0.06 0.22
Rural............................... 0.06 0.36
Not-for-profit:
Small
Urban............................... 0.06 0.23
Rural............................... 0.07 0.38
Medium
Urban............................... 0.05 0.20
Rural............................... 0.06 0.32
Large
Urban............................... 0.07 0.25
Rural............................... 0.07 0.41
For-profit:
Small
Urban............................... 0.07 0.26
Rural............................... 0.08 0.43
Medium
Urban............................... 0.06 0.21
Rural............................... 0.06 0.34
Large
Urban............................... 0.09 0.32
Rural............................... 0.09 0.52
Hospitals--Psychiatric, short-term and
long-term:
Small
Urban............................... 0.10 0.36
Rural............................... 0.11 0.59
Medium
Urban............................... 0.13 0.48
Rural............................... 0.14 0.78
Large
Urban............................... 0.29 1.05
Rural............................... 0.31 1.70
Nursing homes:
Tax-paying
Urban............................... 0.11 0.39
Rural............................... 0.11 0.64
Tax-exempt
Urban............................... 0.11 0.40
[[Page 31776]]
Rural............................... 0.12 0.65
Commercial research labs:
Tax-paying
Urban............................... 0.09 0.34
Rural............................... 0.10 0.56
Tax-exempt
Urban............................... 0.09 0.34
Rural............................... 0.10 0.56
------------------------------------------------------------------------
Tables 32 and 33 show that facilities with onsite MWI that are
currently uncontrolled may experience impacts ranging from 0.03 to 1.59
percent, depending on the industry, regulatory option, and scenario. A
comparison of the economic impacts expected to occur under the three
switching scenarios, presented in Tables 32 and 33, indicates that the
option of switching will be attractive to some facilities that might
have considered operating an onsite incinerator in the absence of this
regulation. For many of these facilities, the economic impacts of
switching to an alternative method of waste disposal are much lower
than the economic impacts of choosing to install emission control
equipment. The decision to switch to an alternative method of medical
waste disposal should preclude any facilities from experiencing a
significant economic impact. These results support EPA's assertion that
implementation of the regulation will likely result in either Scenarios
B or C and that the costs and economic impacts of Scenario A are
unlikely to occur.
Table 34 shows the impacts that would be incurred by medical waste
generators that currently use an offsite medical waste incineration
service. These impacts range from 0.00 to 0.02 percent and are
considered negligible impacts. These results indicate that the
incremental cost for the vast majority of medical waste generators are
expected to be small.
Table 34.--Medical Waste Incineration Per Facility Impacts for Firms
That Utilize Offsite Waste Incineration--New Sources Incremental Annual
Cost as a Percent of Revenue/Budget
[Percent]
------------------------------------------------------------------------
Incremental
annual cost
Industry as a
percent of
revenue
------------------------------------------------------------------------
Hospitals:
<50 Beds............................................... 0-0.01
50-99 Beds............................................. 0-0.01
100-299 Beds........................................... 0-0.01
300 + Beds............................................. 0-0.01
Nursing homes:
0-19 Employees
Tax-paying............................................. 0
Tax-exempt............................................. 0
20-99 Employees
Tax-paying............................................. 0-0.01
Tax-exempt............................................. 0-0.01
100 + Employees
Tax-paying............................................. 0
Tax-exempt............................................. 0
Commercial research labs:
Tax-paying
0-19 Employees......................................... 0
20-99 Employees........................................ 0
100 + Employees........................................ 0
Tax-exempt............................................. 0
Outpatient care clinics:
Physicians' clinics (Amb. Care)
Tax-paying............................................. 0-0.01
Tax-exempt............................................. 0-0.01
Freestanding kidney dialysis facilities
Tax-paying............................................. 0-0.01
Tax-exempt............................................. 0-0.01
Physicians' offices........................................ 0
Dentists' offices and clinics:
Offices................................................ 0
Clinics
Tax-paying............................................. 0
Tax-exempt............................................. 0
Medical & dental labs:
Medical................................................ 0-0.01
Dental................................................. 0-0.01
Freestanding blood banks................................... 0
FR Doc. 96-15585 Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Medical Waste Incinerators
.01-0.02
Funeral homes.............................................. 0
Fire & Rescue.............................................. 0
Corrections:
Federal Government..................................... 0
State Government....................................... 0
Local Government....................................... 0
------------------------------------------------------------------------
Table 33 also presents price impact estimates for the commercial
medical waste incinerator sector. The analysis shows that a new medical
waste incinerator required to meet any of the regulatory options would
need to increase its prices by approximately 11.82 percent in order to
recoup its control costs. The large difference between the facility-
specific price increase compared to the industry-wide price increase
(3.8 percent) for this industry suggests that it is unlikely that a new
commercial MWI would be able to increase the price of its service by
11.82 percent.
Although a ``switching'' analysis was not developed for the
commercial MWI sector, recent trends in the medical waste treatment and
disposal industry suggest that the concept of switching may also be
applicable to the commercial MWI sector. A company in this industry
that might have decided to open a new incinerator may reconsider the
option of opening an alternative
[[Page 31777]]
technology, such as autoclaving. These alternative technologies will
seem more attractive from a cost perspective due to the requirements
that regulation places on new MWI. Therefore, some companies in this
industry will have an incentive to choose to open an alternative
treatment unit, such as an autoclave unit. Some companies in the
medical waste treatment and disposal industry have already begun to
make these ``switching'' decisions. Since companies in this industry
have demonstrated the ability to operate various types of medical waste
treatment and disposal units, the option of ``switching'' should be
seen as a viable alternative for commercial MWI operators.
This economic impact section examines possible economic impacts
that may occur in industries that will be directly affected by this
regulation. Therefore, the analysis includes an examination of
industries that generate medical waste or dispose medical waste.
Secondary impacts such as subsequent impacts on air pollution device
vendors and MWI vendors are not estimated due to data limitations. Air
pollution device vendors are expected to experience an increase in
demand for their products due to the regulation. This regulation is
also expected to increase demand for commercial MWI services. However,
due to economies of scale, this regulation is expected to shift demand
from smaller incinerators to larger incinerators. Therefore, small MWI
vendors may be adversely affected by the regulation. Lack of data on
the above effects prevents quantification of the economic impacts on
these secondary sectors.
V. Inclinations for Final Rule
At various points throughout this notice, EPA has indicated
``inclinations'' regarding the final regulations for MWI, based on the
new information and revised analyses now available. For example, as
discussed in Section II of this notice, EPA is inclined to:
subcategorize MWI by size rather than by type, where judged appropriate
in the final regulations; adopt the NYSDOH definition of medical waste
for the purpose of determining what incinerators the final regulations
apply to; determine compliance with the final regulations using
parameter monitoring and routine inspection/maintenance rather than
CEMS; defer to the States the judgement of what constitutes an
acceptable operator training program; and develop a separate regulation
for medical waste ``pyrolysis'' units. In this final section, EPA
inclinations regarding the regulatory options outlined earlier are
discussed.
A note of caution should be observed and kept in mind by the
reader, however, with regard to these EPA inclinations. These
``inclinations'' should not be viewed as final or, for that matter,
even tentative EPA decisions. All options discussed in this notice and
any additional options which may arise from further public comment will
be considered in developing the final standards and guidelines for MWI.
The primary purpose of these inclinations is to solicit public comment.
It is also important to reiterate some additional points. First, as
mentioned earlier, all of the information and analyses reviewed in this
notice, particularly the discussions below with their focus on air
pollution control technology, are often misunderstood and lead some to
assume that the final regulations will require the use of a specific
air pollution control technology--this is not the case. The final
regulations must be based upon the performance capabilities of air
pollution control technology; as a result, EPA assesses air pollution
control technologies and draws conclusions regarding their performance
capabilities. These conclusions regarding performance capabilities take
the form of emission limits which could be achieved through the use of
the various air pollution control technologies. This approach permits
EPA to identify and consider the different options for the regulations,
in terms of emission limits.
The final regulations will not require use of any specific air
pollution control technology. The final regulations will include
emission limits (i.e., concentration levels in the gases released to
the atmosphere) for specific air pollutants (e.g., hydrogen chloride,
lead, etc.) that an MWI must achieve. The decision on how to meet these
emission limits is left to the MWI owner or operator; an owner or
operator may select any equipment or any means available to comply with
these emission limits.
Second, as also mentioned earlier, Section 129 of the Clean Air Act
directs EPA to develop regulations for MWI which are based on maximum
achievable control technology (MACT). Section 129 defines MACT as the
maximum reduction in emissions which is achievable, considering cost,
environmental, and energy impacts. Section 129 also states, however,
that for new MWI MACT can be no less stringent than the best similar
MWI and for existing MWI MACT can be no less stringent than the best 12
percent of existing MWI. These minimum stringency requirements for the
standards (new MWI) and the guidelines (existing MWI) are referred to
as the MACT ``floors.'' The emission limits in the final regulations
can be no less stringent than the MACT floor emission limits.
Finally, the MACT floors are only the starting point for
determining MACT. Since MACT is the maximum reduction in air pollution
emissions that is achievable, considering cost, environmental, and
energy impacts, if more stringent emission limits than the MACT floor
are achievable, EPA must identify these more stringent emission limits
and consider them in selecting the MACT emission limits for the final
regulations.
A. New MWI
As discussed in Section IV, the MACT floor for large new MWI
appears to require the use of good combustion and a combined dry/wet
scrubber with activated carbon. There is no air pollution control
technology which could achieve lower emissions than this system.
Consequently, EPA is inclined to establish emission limitations for
large new MWI based on good combustion and a combined dry/wet scrubber
system with activated carbon (i.e., the MACT floor).
For medium new MWI, the MACT floor appears to require the use of
good combustion and a combined dry/wet scrubber system without
activated carbon. In this case, one regulatory option more stringent
than the MACT floor would reflect the addition of activated carbon to
the combined dry/wet scrubber system. On a national basis, because of
switching to the use of alternative means of medical waste disposal,
the addition of activated carbon results in a negligible cost increase.
Where a typical medium new MWI was constructed, the addition of
activated carbon would reduce emissions of dioxin and would increase
air pollution control costs by less than 4 percent. As a result, EPA is
inclined to establish emission limitations for medium new MWI based on
good combustion and a combined dry/wet scrubber system with activated
carbon (i.e., more stringent than the MACT floor).
For small new MWI, four small existing MWI have been identified
which currently operate with good combustion and moderate efficiency
wet scrubbers; therefore, the MACT floor appears to require the use of
good combustion and a moderate efficiency wet scrubber. Consideration
of the impact of this MACT floor indicates that few new small MWI are
likely to be
[[Page 31778]]
constructed due to the substantial increase in the cost of a new small
MWI as a result of the moderate efficiency wet scrubber and the
availability of switching to an alternative means of medical waste
disposal.
One regulatory option more stringent than this MACT floor would
reflect the use of good combustion and a high efficiency wet scrubber.
Consideration of this option indicates that the nationwide impacts
would be negligible, primarily because few new small MWI would be
constructed (i.e., because of switching to alternative means of medical
waste disposal). Where a typical new small MWI was constructed,
however, the high efficiency wet scrubber would only reduce PM
emissions by a small amount and would increase air pollution control
costs by about 15 percent. As a result, EPA is inclined to establish
emission limitations for small new MWI based on the use of good
combustion and a moderate efficiency wet scrubber (i.e., the MACT
floor).
B. Existing MWI
As discussed in Section III, the MACT floor for large existing MWI
appears to require the use of good combustion and a high efficiency wet
scrubber. One regulatory option more stringent than this MACT floor is
the use of dry scrubbers with activated carbon. However, a dry scrubber
typically costs much more than a high efficiency wet scrubber, and a
dry scrubber with activated carbon would result in only a very small
additional reduction in dioxin, Pb, and Cd emissions. For large
existing MWI already equipped with wet scrubbers, replacing a wet
scrubber with a dry scrubber would be exorbitantly expensive. As a
result, EPA is inclined to establish emission limitations for large
existing MWI based on the use of good combustion and a high efficiency
wet scrubber (i.e., the MACT floor). As discussed in Section III, these
emission limitations could also be achieved using a dry scrubber with
activated carbon.
For medium existing MWI, the MACT floor appears to require the use
of good combustion and a moderate efficiency wet scrubber. One
regulatory option more stringent than this MACT floor would reflect the
use of good combustion and a high efficiency wet scrubber. On a nation-
wide basis, while this more stringent option would result in a
relatively small cost increase, it would also result in only a small
decrease in PM emissions. For a typical medium MWI that installed or
upgraded an existing wet scrubber to a high efficiency wet scrubber,
air pollution control costs would increase by about 15 to 25 percent.
As a result, EPA is inclined to establish emission limitations for
medium existing MWI based on the use of good combustion and a moderate
efficiency wet scrubber (i.e., the MACT floor). As mentioned above and
in Section III, these emission limitations could also be achieved using
a dry scrubber with activated carbon.
For small existing MWI, the MACT floor appears to require the use
of good combustion; add-on air pollution control would not be needed to
meet the MACT floor. One regulatory option more stringent than this
MACT floor would reflect the use of good combustion and a low
efficiency wet scrubber. Consideration of this option, as well as other
options outlined below, is the subject of the remainder of this
section. At this point, EPA has no inclination, but solicits comment on
the options available.
If the guidelines for small existing MWI were established based on
the use of good combustion and wet scrubbing, the analysis indicates
that almost all healthcare facilities operating small MWI would switch
to the use of alternative means of medical waste disposal. From a
national perspective, this would minimize emissions of PM, dioxin, acid
gases, and metals from small existing MWI at a relatively low cost
because of switching. For most healthcare facilities using small
existing MWI, the cost of switching to the use of alternative means of
medical waste disposal would be negligible. On this basis, one might
argue that EPA should establish emission guidelines for small existing
MWI based on the use of good combustion and wet scrubbers.
On the other hand, if a healthcare facility chooses to install a
wet scrubbing system on its small existing MWI, the cost of waste
disposal at this facility would more than double and the emission
reduction achieved would be relatively small. The wet scrubber-based
option would effectively preclude continued use of the MWI, whereas
guidelines based on the use of good combustion alone would permit many
healthcare facilities with small MWI to continue to use these MWI,
preserving incineration as a viable medical waste disposal option for
these healthcare facilities. On this basis, one might argue that EPA
should establish emission guidelines for small existing MWI based on
the use of good combustion alone.
As mentioned earlier in this notice, some commenters expressed
concern about the availability and/or the cost of alternative means of
medical waste disposal to healthcare facilities located in remote or
rural locations. In this case, the conclusion that costs would be
negligible because of switching would be incorrect, and such a facility
could be faced with adverse impacts. The availability and/or cost of
alternative means of medical waste disposal in urban areas, however,
does not appear to be an issue. Competition among commercial medical
waste disposal services, formation of healthcare facilities into groups
for the purpose of leading commercial disposal services to bid for
waste disposal contracts, as well as other forms of cooperation among
healthcare facilities in urban areas appears to ensure that alternative
means of medical waste disposal are readily available at reasonable
costs to healthcare facilities in urban areas.
This consideration of the potential difference in the availability
and/or cost of alternative means of medical waste disposal to
healthcare facilities located in rural or urban areas leads to
additional regulatory options. Small existing MWI could be
subcategorized into those located in urban areas and those located in
rural areas.
As mentioned, the MACT floor for small existing MWI only appears to
require the use of good combustion; it does not appear to require the
use of good combustion and a wet scrubber. The guideline for small
existing MWI located in urban areas could be based on the use of good
combustion and a low efficiency wet scrubber (i.e, beyond the MACT
floor). The guideline for small existing MWI located in rural areas,
however, could be based on the use of good combustion alone (i.e., the
MACT floor). On the other hand, the guideline for small existing MWI
located in rural areas could be based on the use of good combustion and
low efficiency wet scrubbers (i.e., beyond the MACT floor), but
permit--on a case by case basis--a healthcare facility which met
certain criteria to comply with a guideline based on the use of good
combustion alone (i.e., the MACT floor).
These options of differing requirements for small existing MWI in
urban and rural areas were examined in a broad sense under Regulatory
Option 2, which would establish emission limitations based on good
combustion alone in rural areas, but establish emission limitations
based on good combustion and wet scrubbers in urban areas. The
difference between these two options is that the second option would
establish a set of criteria (much more comprehensive than simply
``rural location'') to permit a small existing MWI in a rural location
to comply with requirements based on the use of good combustion alone.
[[Page 31779]]
The attractiveness of this second option is that it would appear to
minimize emissions from small existing MWI (urban or rural) while
providing relief--on a case by case basis--for those few small MWI
located in rural areas where the impacts of compliance might be
particularly severe due to the limited availability of alternative
means of medical waste disposal. The EPA, therefore, solicits comment
on the following options:
(1) Guidelines for small existing MWI located in both urban and
rural areas based on the use of good combustion alone;
(2) Guidelines for small existing MWI located in urban areas based
on the use of good combustion and wet scrubbing, and guidelines for
small existing MWI located in rural areas based on the use of good
combustion alone;
(3) Guidelines for small existing MWI located in urban and rural
areas based on the use of good combustion and wet scrubbers, but with
the guidelines permitting small existing MWI located in rural areas to
meet requirements based on the use of good combustion alone, provided
these MWI meet certain criteria; and
(4) Guidelines for small existing MWI in both urban and rural areas
based on the use of good combustion and wet scrubbers.
As mentioned above, EPA has no inclination with regard to the
guidelines for small existing MWI. Each of the options outlined above
merits serious consideration. Since the option outlined above with
criteria for small existing MWI located in rural areas to meet
requirements--on a case by case basis--based on the use of good
combustion alone would seem to achieve the environmental benefits, but
avoid the cost impacts, of the most stringent option, EPA specifically
solicits comment on what the criteria associated with this option might
be.
For example, these criteria might include: location with respect to
an Metropolitan Statistical Area [MSA] (i.e., either outside an MSA or
more than a specified number of miles from an MSA); location with
respect to a commercial waste disposal company or a vendor of
alternative treatment technology; some other measure of the lack of
alternative disposal options; some measure of economic impact of
switching waste disposal methods or some other reason why switching
would not be possible; etc. The criteria could also be structured to
allow good combustion alone only where a healthcare facility generates
less than some very small amount of medical waste on a daily or weekly
basis.
List of Subjects in 40 CFR Part 60
Air pollution control, New source performance standards, Emission
guidelines, Medical waste incinerators.
Dated: June 12, 1996.
Mary D. Nichols,
Assistant Administrator for Air and Radiation.
[FR Doc. 96-15585 Filed 6-19-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-15510 Operation of U.S.M.S.``North Star'' Between Seattle, Washington, and Stations of the Bureau of Indian Affairs and Other Government Agencies, Alaska
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31470-31473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15510]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
25 CFR Part 142
RIN 1076 AD66
Operation of U.S.M.S.``North Star'' Between Seattle, Washington,
and Stations of the Bureau of Indian Affairs and Other Government
Agencies, Alaska
AGENCY: Bureau of Indian Affairs, Interior.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Indian Affairs (BIA) is proposing to revise its
regulations in Alaska Resupply Operation as mandated by Executive Order
12866 to streamline the regulatory process and enhance the planning and
coordination of existing regulations.
DATES: Comments must be received on or before August 19, 1996.
ADDRESSES: Mail comments to Warren Heisler, Assistant Area Director,
Juneau Area Office, Bureau of Indian Affairs, Department of the
Interior, 709 West 9th Street, Juneau, Alaska 99802; OR, hand deliver
them to the above address. Comments will be available for inspection at
this address from 9:00 a.m. to 4:00 p.m., Monday through Friday
beginning approximately two weeks after publication of this document in
the Federal Register.
FOR FURTHER INFORMATION CONTACT: Warren Heisler, Assistant Area
Director, Juneau Area Office, Bureau of Indian Affairs at telephone
(907) 586-7177.
SUPPLEMENTARY INFORMATION:
Background
The U.S.M.S. North Star has been decommissioned. However, the need
for a resupply operation in Alaska continues. The Juneau Area Office
[[Page 31471]]
administers the Alaska Resupply Operation through the Seattle Support
Center. All accounts receivable and payable are handled by the Seattle
Support Center that also publishes a tariff of rates and conditions.
Evaluation and Certification
The authority to issue rules and regulations is vested in the
Secretary of the Interior by 5 U.S.C. 301 and sections 463 and 465 of
the Revised Statutes, 25 U.S.C. 2 and 9.
Publication of the proposed rule by the Department of the Interior
(Department) provides the public an opportunity to participate in the
rulemaking process. Interested persons may submit written comments
regarding the proposed rule to the location identified in the addresses
section of this document.
Executive Order 12778
The Department has certified to the Office of Management and Budget
(OMB) that this proposed rule meets the applicable standards provided
in sections 2(a) and 2(b)(2) of Executive Order 12778.
Executive Order 12866
This proposed rule is not a significant regulatory action under
Executive Order 12866.
Regulatory Flexibility Act
This proposed rule will not have a significant economic impact on a
substantial number of small entities under the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.)
Executive Order 12630
The Department has determined that this proposed rule does not have
``significant'' takings implications. The proposed rule does not
pertain to ``taking'' of private property interests, nor does it impact
private property.
Executive Order 12612
The Department has determined that this proposed rule does not have
significant federalism effects because it pertains solely to Federal-
tribal relations and will not interfere with the roles, rights and
responsibilities of states.
NEPA Statement
The Department has determined that this proposed rule does not
constitute a major Federal action significantly affecting the quality
of the human environment and that no detailed statement is required
pursuant to the National Environmental Policy Act of 1969.
Unfunded Mandates Act of 1995
This proposed rule imposes no unfunded mandates on any governmental
or private entity and is in compliance with the provisions of the
Unfunded Mandates Act of 1995.
Paperwork Reduction Act of 1995
There are no information collection requirements contained in this
proposed rule which require the approval of the Office of Management
and Budget under 44 U.S.C. 3501 et seq.
Drafting Information
The primary author of this document is Alan E. Mather, Traffic
Manager, Seattle Support Center, Juneau Area Office, Bureau of Indian
Affairs.
List of Subjects in 25 CFR Part 142
Indians--shipping; Indians--maritime carriers.
For the reasons given in the preamble part 142, Chapter I of Title
25 of the Code of Federal Regulations is proposed to be revised as set
forth below:
PART 142--ALASKA RESUPPLY OPERATION
Sec.
142.1 Definitions.
142.2 What is the purpose of the Alaska Resupply Operation?
142.3 Who is responsible for the Alaska Resupply Operation?
142.4 For whom is the Alaska Resupply Operation operated?
142.5 Who determines the rates and conditions of service of the
Alaska Resupply Operation?
142.6 How are the rates and conditions for the Alaska Resupply
Operation established?
142.7 How are transportation and scheduling determined?
142.8 Is economy of operation a requirement for the Alaska Resupply
Operation?
142.9 How are orders accepted?
142.10 How is freight to be prepared?
142.11 How is payment made?
142.12 What is the liability of the United States for loss or
damage?
142.13 Information collection.
Authority: 5 U.S.C. 301; R.S. 463; 25 U.S.C. 2; R.S. 465; 25
U.S.C. 9; 42 Stat. 208; 25 U.S.C. 13; 38 Stat. 586.
Sec. 142.1 Definitions.
Area Director means the Area Director, Juneau Area Office, Bureau
of Indian Affairs.
Bureau means Bureau of Indian Affairs
Department means Department of the Interior.
Manager means Manager of the Seattle Support Center.
Must is used in place of shall and indicates a mandatory or
imperative act or requirement.
Indian means any individual who is a member of an Indian tribe.
Indian tribe means an Indian or Alaska Native tribe, band, nation,
pueblo, village, or community that the Secretary of the Interior
acknowledges to exist as an Indian tribe pursuant to Pub. L. 103-454,
108 Stat. 4791.
Alaska Native means a member of an Alaska Native village or a
Native shareholder in a corporation as defined in or established
pursuant to the Alaska Native Claims Settlement Act, 43 U.S.C. 1601 et
seq.
Sec. 142.2 What is the purpose of the Alaska Resupply Operation?
The Alaska Resupply Operation provides consolidated purchasing,
freight handling and distribution, and necessary transportation
services from Seattle, Washington to and from other points in Alaska or
en route in support of the Bureau's mission and responsibilities.
Sec. 142.3 Who is responsible for the Alaska Resupply Operation?
The Seattle Support Center, under the direction of the Juneau Area
Office, is responsible for the operation of the Alaska Resupply
Operation, including the management of all facilities and equipment,
personnel, and procurement of goods and services.
(a) The Seattle Support Center is responsible for publishing the
rates and conditions that must be published in a tariff.
(b) All accounts receivable and accounts payable are handled by the
Seattle Support Center.
(c) The Manager must make itineraries for each voyage in
conjunction with contracted carriers. Preference is to be given to the
work of the Bureau.
(d) The Area Director is authorized to direct the Seattle Support
Center to perform special services that may arise and to act in any
emergency.
Sec. 142.4 For whom is the Alaska Resupply Operation operated?
The Manager is authorized to purchase and resell food, fuel,
clothing, supplies and materials, and to order, receive, stage,
package, store and transport these goods and materials for:
(a) Alaska Natives, Indian or Native owned businesses, profit or
nonprofit Alaska Native corporations, Native cooperatives or
organizations, or such other groups or individuals as may be sponsored
by any Native or Indian organization.
(b) Other Federal agencies and the State of Alaska and its
subsidiaries, as long as the ultimate beneficiaries are the Alaska
Natives or their communities.
[[Page 31472]]
(c) Non-Indians and Non-Natives and commercial establishments that
economically or materially benefit Alaska Natives or Indians.
(d) The Manager must make reasonable efforts to restrict
competition with private enterprise.
Sec. 142.5 Who determines the rates and conditions of service of the
Alaska Resupply Operation?
The general authority of the Assistant Secretary--Indian Affairs to
establish rates and conditions for users of the Alaska Resupply
Operation is delegated to the Area Director.
(a) The Manager must develop a tariff that establishes rates and
conditions for charging users.
(1) The tariff must be approved by the Area Director.
(2) The tariff must be published on or before March 1 of each year.
(3) The tariff must not be altered, amended, or published more
frequently than once each year, except in an extreme emergency.
(4) The tariff must be published, circulated and posted throughout
Alaska, particularly in the communities commonly and historically
served by the resupply operation.
(b) The tariff must include standard freight categories and rate
structures that are recognized within the industry, as well as any
appropriate specialized warehouse, handling and storage charges.
(c) The tariff must specify rates for return cargo and cargo hauled
between ports.
(1) The rates and conditions for the Bureau, other Federal
agencies, the State of Alaska and its subsidiaries must be the same as
that for Native entities.
(2) Different rates and conditions may be established for Non-
Indian and Non-Native commercial establishments, if those
establishments do not meet the standard in Sec. 142.4(c) and no other
service is available to that location.
Sec. 142.6 How are the rates and conditions for the Alaska Resupply
Operation established?
The Manager must develop tariff rates using the best modeling
techniques available to ensure the most economical service to the
Alaska Natives, Indian or Native owned businesses, profit or nonprofit
Alaska Native corporations, Native cooperatives or organizations, or
such other groups or individuals as may be sponsored by any Native or
Indian organization, without enhancing the Federal treasury.
(a) The Area Director's approval of the tariff constitutes a final
action for the Department for the purpose of establishing billing
rates.
(b) The Bureau must issue a supplemental bill to cover excess cost
in the event that the actual cost of a specific freight substantially
exceeds the tariff price.
(c) If the income from the tariff substantially exceeds actual
costs, a prorated payment will be issued to the shipper.
Sec. 142.7 How are transportation and scheduling determined?
(a) The Manager must arrange the most economical and efficient
transportation available, taking into consideration lifestyle, timing
and other needs of the user. Where practical, shipping must be by
consolidated shipment that takes advantage of economies of scale and
consider geographic disparity and distribution of sites.
(b) Itineraries and scheduling for all deliveries must be in
keeping with the needs of the users to the maximum extent possible.
Planned itineraries with dates set as to the earliest and latest
anticipated delivery dates must be provided to users prior to final
commitment by them to utilize the transportation services. Each
shipping season the final departure and arrival schedules must be
distributed prior to the commencement of deliveries.
Sec. 142.8 Is economy of operation a requirement for the Alaska
Resupply Operation?
Yes. The Manager must ensure that purchasing, warehousing and
transportation services utilize the most economical delivery. This may
be accomplished by memoranda of agreement, formal contracts, or
cooperative arrangements. Whenever possible joint arrangements for
economy will be entered into with other Federal agencies, the State of
Alaska, Alaska Native cooperatives or other entities providing services
to rural Alaska communities.
Sec. 142.9 How are orders accepted?
(a) The Manager must make a formal determination to accept an
order, for goods or services, and document the approval by issuing a
permit or similar instrument.
(b) The Seattle Support Center must prepare proper manifests of the
freight accepted at the facility or other designated location. The
manifest must follow industry standards to ensure a proper legal
contract of carriage is executed, upon which payment can be exacted
upon the successful delivery of the goods and services.
Sec. 142.10 How is freight to be prepared?
All freight must be prepared in accordance with industry standards,
unless otherwise specified, for overseas shipment, including any
pickup, delivery, staging, sorting, consolidating, packaging, crating,
boxing, containerizing, and marking that may be deemed necessary by the
Manager.
Sec. 142.11 How is payment made?
(a) Unless otherwise provided in this Part, all regulations
implementing the Financial Integrity Act, Anti-Deficiency Act, Prompt
Payments Act, Debt Collection Act of 1982, 4 CFR Ch. II Federal Claims
Collection Standards, and other like acts apply to the Alaska Resupply
Operation.
(b) Payment for all goods purchased and freight or other services
rendered by the Seattle Support Center are due and payable upon final
receipt of the goods or services. If payment is not received within the
time specified on the billing document, interest and penalty fees at
the current treasury rate will be charged, and handling and
administrative fees may be applied.
(c) Where fuel and other goods are purchased on behalf of
commercial enterprises, payment for those goods must be made within 30
days of delivery to the Seattle Support Center Warehouse. Payment for
freight must be made within 30 days from receipt of the goods by the
shipper.
Sec. 142.12 What is the liability of the United States for loss or
damage?
(a) The liability of the United States for any loss or damage to,
or non-delivery of freight is limited by 46 U.S.C. 746 and the Carriage
of Goods by Sea Act (46 U.S.C. 1300 et seq.). The terms of such
limitation of liability must be contained in any document of title
relating to the carriage of goods by sea. This liability may be further
restricted in specialized instances as specified in the tariff.
(b) In addition to the standards of conduct and ethics applicable
to all government employees, the employees of the Seattle Support
Center shall not conduct any business with, engage in trade with, or
accept any gifts or items of value from any shipper or permittee.
(c) The Seattle Support Center will continue to function only as
long as the need for assistance to Native village economies exits. To
that end, a review of the need for the serve must be conducted every
five years.
Sec. 142.13 Information collection.
In accordance with Office of Management and Budget regulations in 5
CFR 1320.4, approval of information
[[Page 31473]]
collections contained in this regulation is not required.
Dated: May 31, 1996.
Ada E. Deer,
Assistant Secretary--Indian Affairs.
[FR Doc. 96-15510 Filed 6-19-96; 8:45 am]
BILLING CODE 4310-02-P
Complete official Federal Register PDF
FR Doc. 96-15344 United States and Mexico, United States Section, Freedom of Information Act: Uniform Fee Schedule and Administrative Guidelines
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31469-31470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15344]
=======================================================================
-----------------------------------------------------------------------
[[Page 31470]]
INTERNATIONAL BOUNDARY AND WATER COMMISSION
22 CFR Part 1102
United States and Mexico, United States Section, Freedom of
Information Act: Uniform Fee Schedule and Administrative Guidelines
AGENCY: United States Section, International Boundary and Water
Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule will revise the United States Section,
International Boundary and Water Commission (IBWC) regulations that
implement the Freedom of Information Act (FOIA) fee schedule. This
revision pertains to the charge for recovery of the full, allowable
direct costs of searching for and reviewing records requested under the
FOIA and section 1102.4 of the IBWC rules, unless such fees are
restricted or waived in accordance with section 1102.6. These fees are
being revised to correspond to modifications of rates of pay approved
by the U.S. Congress.
DATES: All comments received on or before July 22, 1996, will be
considered before final action is taken on this proposed rule.
ADDRESSES: Please submit any written comments to the Freedom of
Information Act Officer, International Boundary and Water Commission,
United States Section, The Commons, Bldg. C, Suite 310, 4171 N. Mesa,
El Paso, TX 79902-1441, telephone: (915) 534-6697.
FOR FURTHER INFORMATION CONTACT:
Dell Driver, telephone (915) 534-6697.
SUPPLEMENTARY INFORMATION: The IBWC is modifying section 1102.4(a) of
the rules which pertains to the charges for searching and reviewing
records requested under the Freedom of Information Act (FOIA).
The FOIA requires Federal agencies to establish a schedule of fees
for the processing of requests for agency records in accordance with
fee guidance issued by the Office of Management and Budget (OMB). In
1987, OMB issued its Uniform Freedom of Information Act Fee Schedule
and Guidelines. However, since the FOIA requires that each agency's
fees be based upon its direct costs of providing FOIA services, OMB did
not provide a unitary, government wide selection of fees.
List of Subjects in 22 CFR Part 1102
Freedom of information.
For the reasons set out in the preamble, part 1102.4(a)(1) of title
22 of the Code of Federal Regulations is proposed to be amended as
follows:
PART 1102--FREEDOM OF INFORMATION ACT
1. The authority for this part continues to read as follows:
Authority: 5 U.S.C. 552 (Pub. L. 90-23, as amended by Pub. L.
93-502 and Pub. L. 99-570).
2. Section 1102.4 (a)(1) and (a)(2) are revised to read as follows:
Sec. 1102.4 Fees.
(a) The following shall be applicable with respect to services
rendered to the public under this subpart:
(1) Fee Schedule.
(i) Searching for records, per hour or fraction thereof, per
individual:
Professional.....................................................$23.71
Technical........................................................$16.57
Clerical.........................................................$13.38
Includes the salary of the category of employee who actually
performs the search computed at Step 5 of each grade level plus an
additional 24% of that rate for personnel benefits. These fees will
be periodically modified to correspond to changes in pay approved by
Congress.
(ii) The cost for computer searches will be calculated based on the
salary of the category of employee who actually performs the computer
search, plus 24% of that rate to include personnel benefits, plus the
direct costs of the central processing unit, input-output devices, and
memory capacity of the actual computer configuration.
(iii) Reproduction fees:
Pages no larger than 8\1/2\ x 14 inches when reproduced by
routine electrostatic copying: $0.10 per page.
Pages requiring reduction, enlargement, or other special
services will be billed at direct cost to the Section. Reproduction
by other than routine electrostatic copying will be billed at direct
cost to the Section.
(iv) Certification of each record as a true copy--$1.00.
(v) Duplication of architectural photographs and drawings:
Blueprinting..........................................$1.00 per sq. ft.
Vellum Reproducible from blueprints...................$5.00 per sq. ft.
(vi) Postage and handling. Full costs will be recovered from the
requestor if special mailing such as express mail is indicated.
Otherwise, records will be sent by first-class certified mail, domestic
addresses only, direct cost paid by the U.S. Section.
(2) Only requesters who are seeking documents for commercial use
will be charged for time spent reviewing records to determine whether
they are exempt from mandatory disclosure. The cost for review will be
calculated based on the salary of the category of the employee who
actually performed the review plus 24% of the rate to cover personal
benefits. Charges will be assessed only for the initial review (i.e.,
review undertaken the first time in order to analyze the applicability
of specific exemption(s) to a particular record or portion of record)
and not review at the administrative appeal level of the exemption(s)
already applied.
Dell Driver,
Freedom of Information Act Officer.
[FR Doc. 96-15344 Filed 6-19-96; 8:45 am]
BILLING CODE 7010-01-M
Complete official Federal Register PDF
FR Doc. 96-15271 Federal Acquisition Regulation; Certification RequirementsDrug- Free Workplace
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31814-31815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15271]
[[Page 31813]]
_______________________________________________________________________
Part XII
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Part 9, et al.
Federal Acquisition Regulation; Certification Requirements--Drug-Free
Workplace; Proposed Rule
Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31814]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 9, 13, 23 and 52
[FAR Case 96-311]
RIN 9000-AH06
Federal Acquisition Regulation; Certification Requirements--Drug-
Free Workplace
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council (CAAC) and the Defense
Acquisition Regulations Council (DARC) are proposing to amend the
Federal Acquisition Regulation (FAR) to delete the requirement for an
offeror to provide a certification regarding a drug-free workplace.
This regulatory action was not subject to Office of Management and
Budget review under Executive Order 12866, dated September 30, 1993.
This is not a major rule under 5 U.S.C. 804.
DATES: Comments should be submitted on or before August 19, 1996 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVRS), 18th & F
Streets, NW, Room 4037, Washington, DC 20405.
Please cite FAR case 96-311 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Mr. Ralph DeStefano at (202) 501-1758
in reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405; telephone:
(202) 501-4755. Please cite FAR case 96-311.
SUPPLEMENTARY INFORMATION:
A. Background
Section 4301(a) of the Fiscal Year 1996 Defense Authorization Act
(Pub. L. 104-106) amended 41 U.S.C. 701 to eliminate the requirement
for an offeror to certify that it will take certain actions to provide
a drug-free workplace. The proposed rule revises FAR Subpart 23.5 to
remove the requirement for the certification and removes the
solicitation provision at FAR 52.223-5.
B. Regulatory Flexibility Act
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Although the rule
eliminates a certification requirement, the underlying policy regarding
maintenance of a drug-free workplace has not changed. An Initial
Regulatory Flexibility Analysis has, therefore, not been performed.
Comments from small entities concerning the affected FAR subpart will
be considered in accordance with section 610 of the Act. Such comments
must be submitted separately and should cite 5 U.S.C. 601, et seq.,
(FAR case 96-311), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose recordkeeping or information
collection requirements, or collections of information from offerors,
contractors, or members of the public which require the approval of the
Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 9, 13, 23 and 52
Government procurement.
Dated: May 12, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR parts 9, 13, 23 and 52 be
amended as set forth below:
1. The authority citation for 48 CFR parts 9, 13, 23 and 52
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 9--CONTRACTOR QUALIFICATIONS
2. Section 9.406-2 is amended by revising paragraph (b)(2) to read
as follows:
9.406-2 Causes for debarment.
* * * * *
(b) * * *
(2) Violations of the Drug-Free Workplace Act of 1988 (Public Law
100-690 as indicated by--
(i) Failure to comply with the requirements of the clause at
52.223-6, Drug-Free Workplace; or
(ii) Such a number of contractor employees having been convicted of
violations of criminal drug statutes occurring in the workplace, as to
indicate that the contractor has failed to make a good faith effort to
provide a drug-free workplace (see 23.505).
* * * * *
3. Section 9.407-2 is amended by revising paragraph (a)(4) to read
as follows:
9.407.2 Causes for suspension.
(a) * * *
(4) Violations of the Drug-Free Workplace Act of 1988 (Public Law
100-690), as indicated by--
(i) Failure to comply with the requirements of the clause at
52.223-6, Drug-Free Workplace; or
(ii) Such a number of contractor employees having been convicted of
violations of criminal drug statutes occurring in the workplace, as to
indicate that the contractor has failed to make a good faith effort to
provide a drug-free workplace (see 23.504).
* * * * *
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
4. Section 13.111 is amended by revising paragraphs (h) and (i) and
removing paragraph (j) to read as follows:
13.111 Inapplicable provisions and clauses.
* * * * *
(h) 52.222-4, Contract Work Hours and Safety Standards Act--
Overtime Compensation; and
(i) 52.223-6, Drug-Free Workplace, except for individuals.
PART 23--ENVIRONMENT, CONSERVATION, OCCUPATIONAL SAFETY, AND DRUG-
FREE WORKPLACE
5. Section 23.504 is amended by revising the introductory text of
paragraph (a); revising paragraph (b); removing paragraph (c); and
redesignating paragraph (d) as (c) to read as follows:
23.504 Policy.
(a) No offeror other than an individual shall be considered a
responsible source (see 9.104-1(g) and 19.602- 1(a)(2)(i)) for a
contract that exceeds the simplified acquisition threshold, unless it
agrees that it will provide a drug-free workplace by--
* * * * *
(b) No individual shall be awarded a contract of any dollar value
unless that individual agrees that the individual will not engage in
the unlawful manufacture, distribution, dispensing, possession, or use
of a controlled
[[Page 31815]]
substance in the performance of the contract.
* * * * *
23.504 [Amended]
5b. In addition to the above, section 23.504 is amended by removing
``calendar'' from the following places:
(a) 23.504(a)(4)(ii);
(b) 23.504(a)(5);
(c) 23.504(a)(6) introductory text; and
(d) newly designated 23.504(c).
6. Section 23.505 is amended by revising the heading and the
introductory text of paragraph (a); in paragraph (a)(2) by removing ``;
or'' and inserting a period in its place; by removing paragraph (b),
redesignating (c) as (b) and revising the introductory text of newly
designated (b) to read as follows:
23.505 Contract clause.
(a) Contracting officers shall insert the clause at 52.223-6, Drug-
Free Workplace, except as provided in paragraph (b) of this section, in
solicitations and contracts--
* * * * *
(b) Contracting officers shall not insert the clause at 52.223-6,
Drug-Free Workplace, in solicitations and contracts, if--
* * * * *
7. Section 23.506 is amended by revising paragraph (d) to read as
follows:
23.506 Suspension of payments, termination of contract, and debarment
and suspension actions.
* * * * *
(d) The specific causes for suspension of contract payments,
termination of a contract for default, or suspension and debarment
are--
(1) The contractor has failed to comply with the requirements of
the clause at 52.223-6, Drug-Free Workplace; or
(2) The number of contractor employees convicted of violations of
criminal drug statutes occurring in the workplace indicates that the
contractor has failed to make a good faith effort to provide a drug-
free workplace.
* * * * *
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
52.223-5 [Reserved]
8. Section 52.223-5 is removed and reserved.
52.223-6 [Amended]
9. Section 52.223-6 is amended in the introductory text by removing
``(b)''.
[FR Doc. 96-15271 Filed 6-19-96; 8:45 am]
BILLING CODE 6820-EP-P
Complete official Federal Register PDF
FR Doc. 96-15222 Defense Federal Acquisition Regulation Supplement; U.S. European Command Supplement
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31490-31499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15222]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
48 CFR Parts 216, 222, 225, 227, 228, 229, 232, 233, 236, 246, and
252
[DFARS Case 94-D001]
Defense Federal Acquisition Regulation Supplement; U.S. European
Command Supplement
AGENCY: Department of Defense (DoD).
ACTION: Proposed rule with request for comments.
-----------------------------------------------------------------------
SUMMARY: The Department of Defense is proposing revisions to the
Defense Federal Acquisition Regulation
[[Page 31491]]
Supplement (DFARS) to incorporate certain text and clauses presently
contained in the U.S. European Command (EUCOM) Supplement. The proposed
rule generally applies only to requirements which will be performed
wholly or in part in a foreign country.
DATES: Comments on the proposed rule and/or the associated information
collection requirement should be submitted in writing to the address
shown below on or before August 19, 1996, to be considered in the
formulation of the final rule.
ADDRESSES: Interested parties should submit written comments to:
Defense Acquisition Regulations Council, ATTN: Ms. Amy Williams, PDUSD
(A&T) DP (DAR), 3062 Defense Pentagon, Washington, D.C. 20301-3062.
Telefax number (703) 602-0350. Please cite DFARS Case 94-D001 in all
correspondence related to this issue.
FOR FURTHER INFORMATION CONTACT:
Ms. Amy Williams, (703) 602-0131.
SUPPLEMENTARY INFORMATION:
A. Background
Firms awarded Department of Defense contracts to be performed in
foreign countries must meet requirements imposed by the host country's
government concerning local business, labor, environmental, tax, and
other laws in addition to meeting the requirements of the U.S.
Government and obtaining all customs and tax exemptions to which
contractors with the U.S. Government are entitled. The proposed DFARS
revisions elevate text and clauses presently contained in the U.S.
EUCOM Supplement to provide uniformity in the implementation of these
requirements overseas.
B. Regulatory Flexibility Act
The proposed DFARS rule is not expected to have a significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq.,
because the rule only applies to contracts to be solicited, awarded, or
performed overseas. More than 90 percent of such contracts are awarded
to foreign firms. Those U.S. firms performing contracts overseas are
not generally ``small entities.'' Under 5 U.S.C. 601 (3), the
definition of ``small entity'' is the same as the definition of ``small
business,'' contained in Section 3 of the Small Business Act (15 U.S.C.
631 et seq.), as implemented in 13 CFR 121.403. Section 121.403(a)
states that a ``business concern eligible for assistance as a small
business is a business entity organized for profit, with a place of
business located in the United States and which makes a significant
contribution to the U.S. economy through payment of taxes and/or use of
American products, materials and/or labor.'' The proposed rule applies
only to contracts which will be awarded or performed, wholly or in
part, in foreign countries. Firms which compete for such procurements
must meet requirements imposed by the host country's government
concerning local business, labor, environmental, tax, and other laws,
and obtain permits to operate, hire the mix of employees needed, etc.,
which are unique to conducting business within a particular country.
The nature of these procurements limits the competition for U.S.
requirements to those firms which are authorized by the local
governments to conduct business within that country. There are only a
few small businesses that qualify as ``invited contractors'' under the
Status of Forces Agreements. An Initial Regulatory Flexibility Analysis
has, therefore, not been performed. Comments are invited from small
entities and other interested parties. Comments from small entities
concerning the affected DFARS subparts will also be considered in
accordance with Section 610 of the Act. Such comments must be submitted
separately and cite DFARS Case 94-D001 in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (Pub. L. 104-13) applies
because the proposed rule contains reporting and recordkeeping
requirements. Necessary requests for approval of the information
collection requirements in the proposed rule, as well as extension of
existing requirements in Part 216 and related clauses, have been
submitted to the Office of Management and Budget under Section 3507(d)
of the Act. Information collection requirements relating to retention
of records and making books available are already covered under OMB
Clearance 9000-0034 (i.e., DFARS 252.216-7003(c) and 252.222-7004(a)).
Invoicing requirements are covered under OMB Clearance 0704-0248 (i.e.,
DFARS 252.229-7001(b), 252.229-7003(d), 252.229-7007, and 252.229-
7008(c)). Insurance requirements are covered in OMB Clearance 0704-0216
(i.e., 252.228-7007(c)).
1. Comments
Comments are invited. Particular comments are solicited on:
a. Whether the collection of information is necessary for the
proper performance of the functions of the agency, including whether
the information will have practical utility;
b. The accuracy of the agency's estimate of the burden of the
information collection;
c. Ways to enhance the quality, utility, and clarity of the
information to be collected; and
d. Ways to minimize the burden of the information collection on
respondents, including the use of automated collection techniques or
other forms of information technology.
2. Title, Associated Form, and OMB Number
a. Approval of the information collection requirements under
proposed DFARS 252.216-7003(b)(1) has been requested as a revision and
extension to ``Defense FAR Supplement, Part 216, Types of Contracts,
and Related Clauses in Part 252.216,'' OMB Number 0704-0259.
b. Approval of the information collection requirements in proposed
DFARS 252.229-710 (b) and (c) has been requested as a new clearance,
``Defense FAR Supplement Part 229, Taxes, and Related Clauses at
252.229.'' This information collection is an existing collection in use
in the U.S. European Command Supplement without an OMB control number,
which is now being incorporated in the DFARS.
3. Needs and Uses
a. The information collection required by the existing clauses,
DFARS 252.216-7000(c) and DFARS 252.216-7001, and the proposed clause,
DFARS 252.216-7003(b)(1), is necessary to enable the contracting
officer to make a prompt modification to the contract, changing
contract unit prices when appropriate. The information is used by
contracting officers to evaluate the need for price adjustments.
b. The information collection required by proposed clause DFARS
252.229-7010 is necessary to permit Her Majesty's (HM) Customs to
determine the amount of tax relief to be granted and to inform the
contracting officer that an attempt to obtain relief has been
initiated. After the Contractor obtains tax relief, the contracting
officer appropriately adjusts the contract price. If the Contractor
does not attempt to obtain relief within the time specified, the
contracting officer may deduct from the contract price the amount of
relief that would have been allowed if HM Customs and Excise had
favorably considered a request for relief.
4. Affected Public. Businesses or other for profit.
[[Page 31492]]
------------------------------------------------------------------------
Extension New
------------------------------------------------------------------------
252.216-700/7001 252.216-7003 252.229-7010
------------------------------------------------------------------------
240 48......................... 1568 96
20 6........................... 196 24
3 1............................ 2 1
60 6........................... 392 24
4 8............................ 4 4
------------------------------------------------------------------------
5. Annual Burden Hours: 1952.
6. Number of Respondents: 246.
7. Responses per Respondent: 2.
8. Number of Responses: 482.
9. Average Burden per Response: 4.
10. Frequency: On occasion.
11. Supplementary Information. a. i. DFARS 252.216-7000(c), for
which DoD is requesting extension of the existing paperwork burden
clearance, requires contractors to notify contracting officers of the
amount and effective date of each decrease in any established catalog
or market price and permits contractors to submit a written request to
increase their established prices.
ii. DFARS 252.216-7001(f), for which DoD is also requesting
extension of the paperwork burden clearance, requires contractors,
within 30 days of final delivery, to identify the correctness of the
hourly earnings of their employees that are relevant to the
computations of various labor indices and, upon request, make available
all records used in the computation of those indices.
iii. The proposed clause at DFARS 252.216-7003(b)(1) requires the
contractor to provide a written request for contract adjustment within
10 days of the increase in established wage rates or material prices,
in order for the increase in contract unit price to be effective on the
same date that the host government increases the applicable wage rates
or material prices.
b. The proposed clause at DFARS 252.229-7010, Relief from Customs
Duty (United Kingdom), requires contractors, whose contracts are
awarded in the United Kingdom and which require the use of certain
fuels and lubricants during performance, to provide specific
information to Her Majesty's (HM) Customs and Excise and to provide the
contracting officer with evidence that an attempt to obtain relief from
customs duty on fuels and lubricants has been initiated.
Lists of Subjects in 48 CFR Parts 216, 222, 225, 227, 228, 229, 232,
233, 236, 246, and 252
Government procurement.
Michele P. Peterson,
Executive Editor, Defense Acquisition Regulations Council.
Therefore, 48 CFR Parts 216, 222, 225, 227, 228, 229, 232, 233,
236, 246, and 252 are proposed to be amended as follows:
1. The authority citation for 48 CFR Parts 216, 222, 225, 227, 228,
229, 232, 233, 236, 246, and 252 continues to read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 216--TYPES OF CONTRACTS
2. Section 216.203-4-70 is amended by adding paragraph (c) to read
as follows:
216.203-4-70 Additional clauses.
* * * * *
(c) Price adjustment based on foreign government controlled wages
or material prices. (1) The price adjustment clause at 252.216-7003,
Economic Price Adjustment--Foreign Government Controlled Wages or
Materials, may be used in fixed-price supply and service contracts
when--
(i) The contract is to be performed wholly or in part in a foreign
country; and
(ii) A foreign government controls wages or material prices and
may, during contract performance, impose a mandatory change in wages or
prices of material.
(2) Verify the base wage rates and material prices prior to
contract award and prior to making any adjustment in the contract
price.
PART 222--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
3. Subpart 222.72 is added to read as follows:
Subpart 222.72--Compliance With Host Country Labor Laws
Sec.
222.7200 Scope of subpart.
222.7201 Contract clauses.
222.7200 Scope of subpart.
This subpart prescribes contract clauses, with respect to host
country labor laws, for use when contracting for services or
construction within the host country.
222.7201 Contract clauses.
(a) Use the clause at 252.222-7002, Compliance with Local Labor
Laws (Overseas), in solicitations and contracts for services or
construction to be performed outside the United States, its
possessions, or Puerto Rico.
(b) Use the clause at 252.222-7003, Permit from Italian
Inspectorate of Labor, in solicitations and contracts for porter,
janitorial, or ordinary facility and equipment maintenance services to
be performed in Italy.
(c) Use the clause at 252.222-7004, Compliance with Spanish Social
Security Laws and Regulations, in solicitations and contracts for
services or construction when contract performance will be in Spain.
PART 225--FOREIGN ACQUISITION
4. Subpart 225.9 is added to read as follows:
Subpart 225.9--Additional Foreign Acquisition Clauses
Sec.
225.970 Correspndence in English.
225.971 Authorization to Perform.
225.970 Correspondence in English.
Use the clause at 252.225-7041, Correspondence in English, in
solicitations and contracts when contract performance will be wholly or
in part in a foreign country.
225.971 Authorization to perform.
Use the clause at 252.225-7042, Authorization to Perform, in
solicitations and contracts when contract performance will be wholly or
in part in a foreign country.
PART 227--PATENTS, DATA, AND COPYRIGHTS
5. Section 227.676 is added to read as follows:
227.676 Foreign patent interchange agreements.
(a) Patent interchange agreements between the United States and
foreign governments provide for the use of patent rights, compensation,
free licenses, and the establishment of committees to review and make
recommendations on these matters. The
[[Page 31493]]
agreements also may exempt the United States from royalty and other
payments. The contracting officer shall ensure that royalty payments
are consistent with patent interchange agreements.
(b) Assistance with patent rights and royalty payments in the
United States European Command (USEUCOM) area of responsibility is
available from: HQ USEUCOM, ATTN; ECLA, Unit 30400, Box 1000, APO AE
09128, Telephone No: DSN: 430-7474, Commercial: 49-0711-680-7474,
Telefax No: 49-0711-680-7408.
PART 228--BONDS AND INSURANCE
6. Section 228.370 is amended by adding paragraph (f) to read as
follows:
228.370 Contract clauses.
* * * * *
(f) Use the clause at 252.228-7008, Compliance with Spanish Laws
and Insurance, in solicitations and contracts for services or
construction to be performed in Spain by other than Spanish contractors
or subcontractors.
PART 229--TAXES
7. Section 229.101 is amended by redesignating paragraphs (d)(i),
(d)(ii) and (d)(iii) as (d)(iii), (d)(iv) and (d)(v); and by adding new
paragraphs (d)(i), (d)(ii), and (d)(vi) to read as follows:
229.101 Resolving tax problems.
* * * * *
(d)(i) Tax relief agreements between the United States and foreign
governments in Europe which exempt the United States from payment of
specific taxes on purchases made for common defense purposes are
maintained by the United States European Command (USEUCOM). For further
information contact--HQ USEUCOM, ATTN: ECLA, Unit 30400, Box 1000, APO
AE 09128, Telephone No: DSN: 430-7474, Commercial: 49-0711-680-7474,
Telefax No: 49-0711-680-7408.
(ii) Tax relief also may be available in countries which have not
signed tax relief agreements. The potential for such relief should be
explored in accordance with paragraph (d)(iii) of this section.
* * * * *
(vi) See also subpart 229.70 for special procedures for obtaining
tax relief and duty-free import privileges when conducting United
States acquisitions in foreign countries with foreign contractors.
8. Subpart 229.4 is added to read as follows:
Subpart 229.4--Contract Clauses
Sec.
229.402 Foreign contracts.
229.402-1-70 Foreign fixed-price contracts.
229.402-70 Additional clauses.
229.402 Foreign contracts.
229.402-1-70 Foreign fixed-price contracts.
Use the clause at 252.229-7000, Invoices Exclusive of Taxes or
Duties, in solicitations and contracts when a fixed-price contract will
be awarded to a foreign contractor.
229.402-70 Additional clauses.
(a) Use the clause at 252.229-7001, Tax Relief, in solicitations
and contracts when a contract will be awarded to a foreign contractor
in a foreign country. When contract performance will be in Germany, use
the clause with its Alternate I.
(b) Use the clause at 252.229-7002, Customs Exemptions (Germany),
in solicitations and contracts requiring the import of United States
manufactured products into Germany.
(c) Use the clause at 252.229-7003, Tax Exemptions (Italy), in
solicitations and contracts when contract performance will be in Italy.
(d) Use the clause at 252.229-7004, Status of Contractor as a
Direct Contractor (Spain), in solicitations and contracts requiring the
import of supplies for construction, development, maintenance, and
operation of Spanish-American installations and facilities.
(e) Use the clause at 252.229-7005, Tax Exemptions (Spain), in
solicitations and contracts when contract performance will be in Spain.
(f) Use the clause at 252.229-7006, Value Added Tax Exclusion
(United Kingdom), in solicitations and contracts when contract
performance will be in the United Kingdom.
(g) Use the clause at 252.229-7007, Verification of United States
Receipt of Goods, in solicitations issued and contracts awarded in the
United Kingdom.
(h) Use the clause at 252.229-7008, Relief from Import Duty (United
Kingdom), in solicitations issued and contracts awarded in the United
Kingdom.
(i) Use the clause at 252.229-7009, Relief from Customs Duty and
Value Added Tax on Fuel (Passenger Vehicles) (United Kingdom) in
solicitations issued and contracts awarded in the United Kingdom for
fuels (gasoline or diesel) and lubricants used in passenger vehicles
(excluding taxis).
(j) Use the clause at 252.229-7010, Relief from Customs Duty on
Fuel (United Kingdom), in solicitations issued and contracts awarded in
the United Kingdom calling for the use of fuels (gasoline or diesel)
and lubricants in taxis or vehicles other than passenger vehicles.
9. Subpart 229.70 is added to read as follows:
Subpart 229.70--Special Procedures for Overseas Contracts
Sec.
229.7000 Scope of subpart.
229.7001 Tax exemption in Europe.
229.7002 Tax exemption in Spain.
229.7003 Tax exemption in the United Kingdom.
229.7003-1 Value added tax.
229.7003-2 Import duty.
229.7003-3 VAT/Duty problem resolution.
229.7003-4 Information required by HM Customs and Excise.
229.7000 Scope of subpart.
This subpart prescribes procedures to be used by contracting
officers to obtain tax relief and duty-free import privileges when
conducting United States Government acquisitions in foreign countries
with foreign contractors.
229.7001 Tax exemption in Europe.
When standard commercial items or services are being acquired, the
contracting officer shall require the contractor to identify and
separately state the tax amount from which the United States is exempt
and which has been excluded from the contract price. The contracting
officer will compare the excluded amount with the tax relief authorized
by tax relief agreements to ensure that the United States Government is
accorded the full benefit of all tax exemptions (see also 229.402-70(a)
and the clause at 252.229-7001).
229.7002 Tax exemption in Spain.
(a) The Joint United States Military Group (JUSMG), Spain Policy
Directive 400.4, or subsequent directive, applies to all United States
contracting offices contracting for services or supplies in Spain which
require the introduction of material or equipment into Spain.
(b) Upon award of a contract with a ``Direct Contractor,'' as
defined in the clause at 252.229-7004, the contracting officer will
notify JUSMG-MAAG Madrid, Spain, and HQ 16AF/LGTT and forward three
copies of the contract to JUSMG-MAAG, Spain.
(c) If copies of the contract are not available and duty-free
import of equipment or materials is urgent, the contracting officer
will send JUSMG-MAAG three copies of the ``Letter of Intent'' or a
similar document indicating the pending award. In these cases,
authorization for duty-free import will
[[Page 31494]]
be issued by the Government of Spain. Upon formal award, the
contracting officer will forward three copies of the completed contract
to JUSMG-MAAG, Spain.
(d) The contracting officer will notify JUSMG-MAAG, Spain, and HQ
16AF/LGTT of ports-of-entry and identify the customs agents who will
clear property on their behalf. Additional documents required for port-
of-entry and customs clearance can be obtained by contacting HQ 16AF/
LGTT. This information will be passed to the Secretaria General Tecnica
del Ministerio de Hacienda (Technical General Secretariat of the
Ministry of Finance). A list of customs agents may be obtained from the
600 ABG, APO AE 09646.
229.7003 Tax exemption in the United Kingdom.
This section contains procedures to be followed in securing relief
from the British Value Added Tax (VAT) and import duties.
229.7003-1 Value added tax.
(a) United States Government purchases qualifying for tax relief
are equipment, materials, facilities, and services for the common
defense effort and for foreign aid programs.
(b) In order to facilitate the resolution of issues concerning
specific waivers of import duty or tax exemption for United States
Government purchases (see 229.7003-3), contracting offices shall
provide the name and activity address of personnel who have been
granted warranted contracting authority to Her Majesty's (HM) Customs
and Excise at the following address: HM Customs and Excise,
International Customs Division G, Branch 4, Adelaide House, London
Bridge, London EC4R 9DB.
229.7003-2 Import duty.
No import duty shall be paid by the United States and contract
prices shall be exclusive of duty, except when the administrative cost
compared to the low dollar value of a contract makes it impracticable
to obtain relief from contract import duty. In this instance, the
contracting officer shall document the contract file with a statement
that
(1) The administrative burden of securing tax relief under the
contract was out of proportion to the tax relief involved;
(2) It is impracticable to secure tax relief;
(3) Tax relief is therefore not being secured; and
(4) The acquisition does not involve the expenditure of any funds
to establish a permanent military installation.
229.7003-3 VAT/Duty problem resolution.
In the event a VAT or import duty problem cannot be resolved at the
contracting officer's level, refer the issue to HQ Third Air Force,
Staff Judge Advocate, Unit 4840, Box 45, APO AE 09459. Direct contract
with HM Customs and Excise in London is prohibited.
229.7003-4 Information required by HM Customs and Excise.
(a) School bus contracts. Provide one copy of the contract and all
modifications to HM Customs and Excise.
(b) Road fuel contracts. For contracts which involve an application
for relief from duty on the road fuel used in performance of the
contract provide--
(1) To HM Customs and Excise--
(i) Contract number;
(ii) Name and address of contractor;
(iii) Type of work (e.g., laundry, transportation);
(iv) Area of work; and
(v) Period of performance.
(2) To the Regional Office of HM Customs and Excise to which the
contractor applied for relief from the duty on road fuel--one copy of
the contract.
(c) Other contracts awarded to United Kingdom firms. Provide
information when requested by HM Customs and Excise.
PART 232--CONTRACT FINANCING
10. Section 232.806-70 is added to read as follows:
Sec. 232.806-70 Alternate contract clause for overseas contracting.
Use the clause at 252.232-7008, Assignment of Claims (Overseas), in
place of FAR clause 52.232-23, Assignment of Claims, in solicitations
and contracts when contract performance will be in a foreign country.
PART 233--PROTESTS, DISPUTES, AND APPEALS
11. Section 233.215-70 is added to read as follows:
Sec. 233.215-70 Additional contract clause.
Use the clause at 252.233-7001, Choice of Law (Overseas), in
solicitations and contracts when contract performance will be outside
of the United States, its possessions, or Puerto Rico, unless otherwise
provided for in a Government-to-Government agreement.
PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
12. Section 236.570 is amended by adding paragraph (c) to read as
follows:
Sec. 236.570 Additional provisions and clauses.
* * * * *
(c) See also 246.710(4) for additional clause applicable to
construction contracts to be performed in Germany.
PART 246--QUALITY ASSURANCE
13. Section 246.710 is amended by adding paragraph (4) to read as
follows:
Sec. 246.710 Contract clauses.
* * * * *
(4) Use the clause at 252.246-7002, Warranty of Construction
(Germany), in solicitations and contracts for construction when a
fixed-price contract will be awarded and contract performance will be
in Germany.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
14. Section 252.216-7003 is added to read as follows:
Sec. 252.216-7003 Economic Price Adjustment--Foreign Government
Controlled Wages or Materials.
As prescribed in 216.203-4-70(c), use the following clause:
Economic Price Adjustment--Foreign Government Controlled Wages or
Materials (XXX XXXX)
(a) The Contractor represents that the prices set forth in this
contract--
(1) Are based on the wage rate(s) or material price(s)
established and controlled by the Government or ____________
(Contractor--insert name of host country); and
(2) Do not include contingency allowances to pay for possible
increases in wage rates or material prices.
(b) If wage rates or material prices are revised by the
Government named in paragraph (a) of this clause, the Contracting
Officer shall make an equitable adjustment in the contract price and
shall modify the contract to the extent that the Contractor's actual
costs of performing this contract are increased or decreased, as a
direct result of the revision, subject to the following:
(1) For increases in established wage rates or material prices,
the increase in contract unit price(s) shall be effective on the
same date that the host government increased the applicable wage
rate(s) or material price(s), but only if the Contracting Officer
receives the Contractor's written request for contract adjustment
within 10 days of the change. If the Contractor's request is
received later, the effective date shall be the date that the
Contracting Officer receives the Contractor's request.
[[Page 31495]]
(2) For decreases in established wage rates or material prices,
the decrease in contract unit price(s) shall be effective on the
same date that the host government decreased the applicable wage
rate(s) or material price(s). The decrease in contract unit price(s)
shall apply to all items delivered on and after the effective date
of the host government's rate or price decrease.
(c) No modification changing the contract unit price(s) shall be
executed until the Contracting Officer has verified the applicable
change in the rates/prices set by the host government. The
Contractor shall make available its books and records which support
a requested change in contract price.
(d) Failure to agree to any adjustment shall be a dispute under
the Disputes clause of this contract.
(End of clause)
15. Section 252.222-7002 is added to read as follows:
Sec. 252.222-7002 Compliance with Local Labor Laws (Overseas).
As prescribed in 222.7201(a), use the following clause:
Compliance With Local Labor Laws (Overseas) (XXX XXXX)
(a) The Contractor shall comply with all--
(1) Local laws, regulations, and labor union agreements
governing work hours; and
(2) Labor regulations including collective bargaining
agreements, workers' compensation, working conditions, fringe
benefits, and labor standards or labor contract matters.
(b) The Contractor indemnifies and holds harmless the United
States Government from all claims arising out of the requirements of
this clause. This indemnity includes the Contractor's obligation to
handle and settle, without cost to the United States Government, any
claims or litigation concerning allegations that the Contractor or
the United States Government, or both, have not fully complied with
local labor laws or regulations relating to the performance of work
required by this contract.
(c) Notwithstanding paragraph (b) of this clause, consistent
with Federal Acquisition Regulation 31.205-15(a) and 31.205-47(d),
the Contractor will be reimbursed for the costs of all fines,
penalties, and reasonable litigation expenses incurred as a result
of compliance with specific contract terms and conditions or written
instructions from the Contracting Officer.
(End of clause)
16. Section 252.222-7003 is added to read as follows:
252.222-7003 Permit from Italian Inspectorate of Labor.
As prescribed in 222.7201(b), use the following clause:
Permit From Italian Inspectorate of Labor (XXX XXXX)
Prior to the date set for commencement of work and services
under this contract, the Contractor shall obtain the prescribed
permit from the Inspectorate of Labor having jurisdiction over the
work site, in accordance with Article 5g of Italian Law Number 1369,
dated October 23, 1960. The Contractor shall ensure that a copy of
the permit is available at all reasonable times for inspection by
the Contracting Officer or an authorized representative. Failure to
obtain such permit may result in termination of the contract for the
convenience of the United States Government, at no cost to the
United States Government.
(End of clause)
17. Section 252.222-7004 is added to read as follows:
252.222-7004 Compliance with Spanish Social Security Laws and
Regulations.
As prescribed in 222.7201(c), use the following clause:
Compliance With Spanish Social Security Laws and Regulations (XXX XXXX)
(a) The Contractor shall comply with all Spanish Government
social security laws and regulations. Within 30 calendar days after
the start of contract performance, the Contractor shall ensure that
copies of the documents identified in paragraph (a)(1) through
(a)(5) of this clause are available at all reasonable times for
inspection by the Contracting Officer or an authorized
representative. The Contractor shall retain the records in
accordance with the Audit and Records clause of this contract.
(1) TC1--Certificate of Social Security Payments;
(2) TC2--List of employees;
(3) TC2/1--Certificate of Social Security Payments for Trainees;
(4) Nominal (pay statements) signed by both the employee and
Contractor; and
(5) INFORMA DE SITUACION DE EMPRESA (Report of the condition of
the enterprise) from the Ministerio de Trabajo y S.S., Tesoreria
General de la Seguridad Social (annotated with the pertinent
contract number(s) next to the employee's name).
(b) All TC1's, TC2's, and TC2/1's, shall contain a
representation that they have been paid by either the Social
Security Administration Office or the Contractor's bank or savings
institution. Failure by the Contractor to comply with the
requirements of this clause may result in termination of the
contract under the clause entitled ``Default.''
(End of clause)
18. Section 252.225-7041 is added to read as follows:
252.225-7041 Correspondence in English.
As prescribed in 225.970, use the following clause:
Correspondence in English (XXX XXXX)
The Contractor shall ensure that all contract correspondence
which is addressed to the United States Government is submitted in
English or with an English translation.
(End of clause)
19. Section 252.225-7042 is added to read as follows:
252.225-7042 Authorization to Perform.
As prescribed in 225.971, use the following clause:
Authorization To Perform (XXX XXXXX)
The Contractor represents that it has been duly authorized to
operate and do business in the country or countries in which this
contract is to be performed. The Contractor also represents that it
will fully comply with all laws, decrees, labor standards, and
regulations of such country or countries, during the performance of
this contract.
(End of clause)
20. Section 252.228-7008 is added to read as follows:
252.228-7008 Compliance with Spanish Laws and Insurance.
As prescribed at 228.370(f), use the following cause:
Compliance With Spanish Laws and Insurance (XXX XXXXX)
(a) The Contractor shall, without additional expense to the
United States Government, comply with all applicable Spanish
Government laws pertaining to sanitation, traffic, security,
employment of labor and all other laws relevant to the performance
of this contract. The Contractor shall hold the United States
Government harmless and free from any liability resulting from the
Contractor's failure to comply with such laws.
(b) The Contractor shall, at its own expense, provide and
maintain during the entire performance of this contract, all
workmen's compensation, employees' liability, bodily injury
insurance, and other required insurance adequate to cover the risk
assumed by the Contractor. The Contractor shall indemnify and hold
harmless the United States Government from liability resulting from
all claims for damages as a result of death or injury to personnel
or damage to real or personal property related to the performance of
this contract.
(c) The Contractor agrees to represent in writing to the
Contracting Officer, prior to commencement of work and not later
than 15 days after the date of the ``Notice to Proceed,'' that the
Contractor has obtained the required types of insurance in the
following minimum amounts. The representation shall also state that
the Contractor will promptly notify the Contracting Officer of any
notice of cancellation of insurance or material change in insurance
coverage which could affect the United States Government's
interests.
[[Page 31496]]
----------------------------------------------------------------------------------------------------------------
Type of insurance Coverage/person Coverage/accident Property damage
----------------------------------------------------------------------------------------------------------------
Comprehensive.......................................... $300,000.00 $1,000,000.00 $100,000.00
General Liability
----------------------------------------------------------------------------------------------------------------
(d) The Contractor shall provide the Contracting Officer with a
similar representation for all subcontractors who will perform work
under this contract.
(e) Insurance policies required herein shall be purchased from
Spanish insurance companies or other insurance companies legally
authorized to conduct business in Spain. Such policies shall conform
to Spanish laws and regulations and shall--
(1) Contain provisions requiring submission to Spanish law and
jurisdiction of any problem that may arise with regard to the
interpretation or application of the clauses and conditions of the
insurance policy;
(2) Contain a provision authorizing the insurance company, as
subrogee of the insured entity, to assume and attend to directly,
with respect to any person damaged, the legal consequences arising
from the occurrence of such damages;
(3) Contain a provision worded as follows: ``The insurance
company waives any right of subrogation against the United States of
America which may arise by reason of any payment under this
policy'';
(4) Not contain any deductible amount or similar limitation; and
(5) Not contain any provisions requiring submission to any type
of arbitration.
(End of clause)
21. Section 252.229-7000 is added to read as follows:
252.229-7000 Invoices Exclusive of Taxes or Duties.
As prescribed at 229.402-1-70, use the following clause:
Invoices Exclusive of Taxes or Duties (XXX XXXX)
Invoices submitted in accordance with the terms and conditions
of this contract shall be exclusive of all taxes or duties for which
relief is available.
(End of clause)
22. Section 252.229-7001 is added to read as follows:
252.229-7001 Tax Relief.
As prescribed at 229.402-70(a), use the following clause:
Tax Relief (XXX XXXX)
(a) Prices set forth in this contract are exclusive of all taxes
and duties from which the United States Government is exempt by
virtue of tax agreements between the United States Government and
the Contractor's Government. The following taxes or duties have been
excluded from the contract prices.
NAME OF TAX:-----------------------------------------------------------
(Contractor insert)
RATE (PERCENTAGE):-----------------------------------------------------
(Contractor insert)
(b) The Contractor's invoice shall separately list the gross
price, amount of tax deducted, and the net price charged.
(c) When items manufactured to United States Government
specifications are being acquired, the Contractor shall identify the
materials or components intended to be imported in order to ensure
that relief from import duties is obtained. If the Contractor
intends to use imported products from inventories on hand, the price
of which includes a factor for import duties, the Contractor shall
still ensure the United States Government's exemption from these
taxes. The Contractor may obtain a refund of the import duties from
its government or request the duty-free import of an amount of
supplies or components corresponding to that used from inventory for
this contract.
(End of clause)
Alternate I. (XXX XXXX)
As prescribed at 229.402-70(a), add the following paragraph (d)
to the basic clause (Note: The ``Offshore Steuerabkommen'' refers to
the agreement on tax relief at 252.229-7010):
(d) Tax relief will be claimed in Germany pursuant to the United
States-German Tax Agreement (Offshore Steuerabkommen). The
Contractor shall use ``Abwicklungsschein fuer abgabenbeguenstigte
Lieferungen/Leistungen nach dem Offshore Steuerabkommen''
(Performance certificate for tax-free deliveries/performance
according to the offshore tax relief agreement) or other documentary
evidence acceptable to the German tax authorities. All purchases
made and paid for on a tax-free basis during a 30-day period may be
accumulated, totaled, and reported as tax-free.
23. Section 252.229-7002 is added to read as follows:
252.229-7002 Customs Exemptions (Germany)
As prescribed at 229.402-70(b), use the following clause:
Customs Exemptions (Germany) (XXX XXXX)
Imported products required for the direct benefit of the United
States Forces are authorized to be acquired duty-free by contractors
in accordance with the provisions of the ``Agreement Between the
United States of America and Germany Concerning Tax Relief to be
Accorded by Germany to United States Expenditures in the Interest of
Common Defense.''
(End of clause)
24. Section 252.229-7003 is added to read as follows:
252.229-7003 Tax Exemptions (Italy).
As prescribed at 229.402-70(c), use the following clause:
Tax Exemptions (Italy) (XXX XXXX)
(a) The Contractor represents that the contract prices,
including the prices in subcontracts awarded hereunder, do not
include taxes from which the United States Government is exempt.
(b) The United States Government is exempt from payment of
Imposta Valore Aggiunto (IVA) tax in accordance with Article 72 of
the IVA implementing decree on all supplies and services sold to
United States Military Commands in Italy.
(1) Upon receipt of the invoice, the paying office will stamp
the following statement on one copy of the invoice:
``I represent that this invoice is true and correct and reflects
expenditures made in Italy for the Common Defense by the United
States Government pursuant to international agreements. The amount
to be paid does not include the IVA tax because this transaction is
not subject to the tax in accordance with Article 72 of Decree Law
633 of 26 October 1972.''
(2) The copy with the representation, signed by an authorized
Government official, will be returned together with payment to the
Contractor. The payment will not include the amount of the IVA tax.
(3) The Contractor must retain this copy of the invoice with the
representation to substantiate non-payment of the IVA tax.
(c) In addition to the IVA tax, purchases by the United States
Forces in Italy are exempt from the following taxes:
(1) Imposta di Fabbricazione (Production Tax for Petroleum
Products).
(2) Imposta di Consumo (Consumption Tax for Electrical Power).
(3) Dazi Doganali (Customs Duties).
(4) Tassa di Sbarco e d'Imbarco sulle Merci Transportate per Via
Aerea e per Via Marittima (Port Fees).
(5) Tassa de Circolazione sui Veicoli (Vehicle Circulation Tax).
(6) Imposta di Registro (Registration Tax).
(7) Imposta di Bollo (Stamp Tax).
(d) The Contractor's administrative procedures for claiming and
validating the exemptions are as follows:
(1) Contract offer price shall not reflect IVA or any other tax
or duty.
(2) Contract number must be set forth on Contractor invoices,
which should state the exemptions claimed pursuant to Art. 72,
Decree No. 633, dated October 26, 1972, for IVA exemption.
(3) Fiscal code for payments made by Aviano Air Base
Appropriated Funds is: 91000190933.
(4) Questions may be addressed to the Ministry of Finance, 11th
District, Room (06) 5910982.
(End of clause)
25. Section 252.229-7004 is added to read as follows:
[[Page 31497]]
252.229-7004 Status of Contractor as a Direct Contractor (Spain).
As prescribed at 229.402-70(d), use the following clause:
Status of Contractor as a Direct Contractor (Spain) (XXX XXXX)
(a) ``Direct Contractor'' means an individual, company, or
entity with whom an agency of the United States Department of
Defense has executed a written agreement which allows duty-free
import of equipment, materials and supplies into Spain for the
construction, development, maintenance, and operation of Spanish-
American installations and facilities.
(b) The Contractor is hereby designated a ``Direct Contractor''
under the provisions of Complementary Agreement 5, articles 11, 14,
15, 17, and 18 of the Agreement on Friendship, Defense and
Cooperation between the United States Government and the Kingdom of
Spain, dated July 2, 1982. The Agreement relates to contracts to be
performed in whole or part in Spain, the provisions of which are
hereby incorporated into and made a part of this contract by
reference.
(c) The Contractor shall apply to the appropriate Spanish
authorities for approval of status as a ``Direct Contractor'' in
order to complete duty-free import of non-Spanish materials and
equipment represented as necessary for contract performance by the
Contracting Officer. Material/equipment orders placed prior to
official notifications of such approval shall be at the Contractor's
own risk. The Contractor must submit its documentation in sufficient
time to assure processing by the appropriate United States and
Spanish Government agencies prior to the arrival of material/
equipment in Spain. Seasonal variations in processing times are
common and the Contractor should program its projects accordingly.
Any delay or expense arising directly or indirectly from this
process shall not excuse untimely performance (except as expressly
allowed in other provisions), constitute a direct or constructive
change, or otherwise provide a basis for additional compensation or
adjustment of any kind.
(d) To ensure that all duty-free imports are properly accounted
for, exported, or disposed of, in accordance with Spanish law, the
Contractor shall obtain a written bank letter of guaranty payable to
the Treasurer of the United States, or such other authority as may
be designated by the Contracting Officer, in the amount set forth in
paragraph (g) of this clause, prior to effecting any duty-free
imports for the performance of this contract.
(e) If the Contractor fails to obtain the required guaranty, the
Contractor agrees that the Contracting Officer may withhold a
portion of the contract payments in order to establish a fund, in
the amount set forth in paragraph (g) of this clause. The fund shall
be used for the payment of import taxes in the event that the
Contractor fails to properly account for, export, or dispose of
equipment, materials, or supplies imported duty-free.
(f) The amount of the bank letter of guaranty or size of the
fund required under paragraphs (d) or (e) of this clause shall
normally be 5 percent of the contract value. However, if the
Contractor demonstrates to the Contracting Officer's satisfaction
that the amount retained by the United States Government or
guaranteed by the bank is excessive, the amount shall be reduced to
an amount commensurate with contingent import tax and duty-free
liability. This bank guaranty or fund shall not be released to the
Contractor until the Spanish General Directorate of Customs verifies
the accounting, export, or disposition of the equipment, material,
or supplies imported on a duty-free basis.
(g) The amount required under paragraph (d), (e), or (f) of this
clause is ____________________
(Contracting Officer insert amount at time of contract award.
(h) The Contractor agrees to insert the provisions of this
clause, including this paragraph (h), in all subcontracts.
(End of clause)
26. Section 252.229-7005 is added to read as follows:
252.229-7005 Tax Exemptions (Spain).
As prescribed at 229.402-70(e), use the following clause:
Tax Exemptions (Spain) (XXX 1995)
(a) The Contractor represents that the contract prices,
including subcontract prices, do not include the taxes identified
herein, or any other taxes from which the United States Government
is exempt.
(b) In accordance with tax relief agreements between the United
States Government and the Spanish Government and because the
incumbent contract arises from the activities of the United States
Forces in Spain, the contract will be exempt from the following
excise, luxury, and transaction taxes:
(1) Derechos de Aduana (Customs Duties).
(2) Impuesto de Compensacion a la Importacion (Compensation Tax
on Imports)
(3) Transmissiones Patrionomiales (Property Transfer Tax).
(4) Impuesto Sobre el Lujo (Luxury Tax).
(5) Actos Juridocos Documentados (Legal Official Transactions).
(6) Impuesto Sobre el Trafico de Empresas (Business Trade Tax).
(7) Impuestos Especiales de Fabricacion (Special Products Tax).
(8) Impuesto Sobre el Petroleo y Derivados (Tax on Petroleum and
its by-products when CAMPSA coupons are used).
(9) Impuesto Sobre el Uso de Telefona (Telephone Tax).
(10) Impuesto General Sobre la Renta de Sociedades y demas
Entidades Juridicas (General Corporation Income Tax).
(11) Impuesto Industrial (Industrial Tax).
(12) Impuesto de Rentas sobre el Capital (Capital Gains Tax).
(13) Plus Vailia (Increase on Real Property).
(14) Contribucion Territorial Urbana (Metropolitan Real Estate
Tax).
(15) Contribucion Territorial Rustica y Pecuaria (Farmland Real
Estate Tax).
(16) Impuestos de la Diputacion (County Service Charges).
(17) Impuestos Municipal y Tasas Parafiscales (Municipal Tax and
Charges).
(End of clause)
27. Section 252.229-7006 is added to read as follows:
252.229-7006 Value Added Tax Exclusion (United Kingdom).
As prescribed at 229.402-70(f), insert the following clause:
Value Added Tax Exclusion (United Kingdom) (XXX XXXX)
The supplies or services identified in this contract or purchase
order are to be delivered at a price exclusive of Value Added Tax
under arrangements between the appropriate United States authorities
and Her Majesty's Customs and Excise (Reference Priv 46/7). By
executing this contract, the Contracting Officer certifies that
these supplies and/or services are being purchased for United States
Government official purposes only.
(End of clause)
28. Section 252.229-7007 is added to read as follows:
252.229-7007 Verification of United States Receipt of Goods.
As prescribed at 229.402-70(g), use the following clause:
Verification of United States Receipt of Goods (XXX XXXX)
The Contractor shall insert the following statement on all
Material Inspection and Receiving Reports (DD Form 250 series) for
Contracting Officer approval:
``I represent that the items listed on this invoice have been
received by the United States.''
(End of clause)
29. Section 252.229-7008 is added to read as follows:
252.229-7008 Relief from Import Duty (United Kingdom).
As prescribed at 229.402-70(h), use the following clause:
Relief From Import Duty (United Kingdom) (XXX XXXX)
Any import dutiable articles, components, or raw materials
supplied to the United States Government under this contract shall
be exclusive of any United Kingdom import duties. Any imported items
supplied for which import duty has already been paid will be
supplied at a price exclusive of the amount of import duty paid. The
Contractor is advised to contact Her Majesty's (HM) Customs and
Excise in order to obtain a refund upon completion of the contract
(Reference HM Customs and Excise Notice No. 431, February 1973,
entitled ``Relief from Customs Duty and/or Value Added Tax on United
States Government Expenditures in the United Kingdom.'')
(End of clause)
30. Section 252.229-7009 is added to read as follows:
[[Page 31498]]
252.229-7009 Relief from Customs Duty and Value Added Tax on Fuel
(Passenger Vehicles) (United Kingdom).
As prescribed at 229.402-70(i), use the following clause:
Relief From Customs Duty and Value Added Tax on Fuel (Passenger
Vehicles) (United Kingdom) (XXX XXXX)
(a) Pursuant to an agreement between the United States
Government and Her Majesty's (HM) Customs and Excise, fuels and
lubricants used by passenger vehicles (except taxis) in the
performance of this contract will be exempt from customs duty and
value added tax. Therefore, the procedures outlined in HM Customs
and Excise Notice 431B dated August 1982, and any amendment thereto,
shall be used to obtain relief from both Customs Duty and value
added tax for fuel used under the contract. These procedures shall
apply to both loaded and unloaded miles. The unit prices should be
based on the recoupment by the Contractor of Customs Duty in
accordance with the following allowances:
(1) Vehicles (except taxis) with a seating capacity of less than
29, one gallon for every 27 miles.
(2) Vehicles with a seating capacity of 29-53, one gallon for every
13 miles.
(3) Vehicles with a seating capacity of 54 or more, one gallon for
every 10 miles.
(b) In the event the mileage of any route is increased or decreased
within 10 percent, resulting in no change in route price, the Customs
Duty shall be reclaimed from HM Customs and Excise on actual mileage
performed.
(End of clause)
31. Section 252.229-7010 is added to read as follows:
252.229-7010 Relief from Customs Duty on Fuel (United Kingdom).
As prescribed at 229.402-70(j), use the following clause:
Relief From Customs Duty on Fuel (United Kingdom (XXX 1995)
(a) Pursuant to an agreement between the United States
Government and Her Majesty's (HM) Customs and Excise, it is possible
to obtain relief from customs duty on fuels and lubricants used in
support of certain contracts. If vehicle fuels and lubricants are
used in support of this contract, the Contractor shall seek relief
from customs duty in accordance with HM Customs Notice No. 431,
February 1973, entitled ``Relief from Customs Duty and/or Value
Added Tax on United States Government Expenditures in the United
Kingdom.'' Application should be sent to the contractor's local
Customs and Excise Office.
(b) Specific information should be included in the request for
tax relief, such as the number of vehicles involved, types of
vehicles, rating of vehicles, fuel consumption, estimated mileage
per contract period, and any other information which will assist HM
Customs and Excise in determining the amount of relief to be
granted.
(c) Within 30 days after the award of this contract, the
Contractor shall provide the Contracting Officer with evidence that
an attempt to obtain such relief has been initiated. In the event
the Contractor does not attempt to obtain relief within the time
specified, the Contracting Officer may deduct from the contract
price the amount of relief that would have been allowed if HM
Customs and Excise had favorably considered the request for relief.
(d) The amount of any rebate granted by HM Customs and Excise
shall be paid in full to the United States Government. Checks shall
be made payable to the Treasurer of the United States and forwarded
to the Administrative Contracting Officer.
(End of clause)
32. Section 252.232-7008 is added to read as follows:
252.232-7008 Assignment of Claims (Overseas).
As prescribed at 232.806-70, use the following clause:
Assignment of Claims (Overseas) (XXX XXXX)
(a) No claims for monies due, or to become due, shall be
assigned by the Contractor unless--
(1) Approved in writing by the Contracting Officer;
(2) Made in accordance with the laws and regulations of the
United States of America; and
(3) Permitted by the laws and regulations of the Contractor's
country.
(b) In no event shall copies of this contract or of any plans,
specifications, or other similar documents relating to work under
this contract, if marked ``Top Secret,'' ``Secret,'' or
``Confidential'' be furnished to any assignee of any claim arising
under this contract or to any other person not entitled to receive
such documents. However, a copy of any part or all of this contract
so marked may be furnished, or any information contained herein may
be disclosed, to such assignee upon the Contracting Officer's prior
written authorization.
(c) Any assignment under this contract shall cover all amounts
payable under this contract and not already paid, and shall not be
made to more than one party, except that any such assignment may be
made to one party as agent or trustee for two or more parties
participating in such financing. On each invoice or voucher
submitted for payment under this contract to which any assignment
applies, and for which direct payment thereof is to be made to an
assignee, the Contractor shall--
(1) Identify the assignee by name and complete address; and
(2) Acknowledge the validity of the assignment and the right of
the named assignee to receive payment in the amount invoiced or
vouchered.
(End of clause)
33. Section 252.233-7001 is added to read as follows:
252.233-7001 Choice of Law (Overseas).
As prescribed at 233.215-70, use the following clause:
Choice of Law (Overseas) (XXX XXXX)
This contract shall be construed and interpreted in accordance
with the substantive laws of the United States of America. By the
execution of this contract, the Contractor expressly agrees to waive
any rights to invoke the jurisdiction of local national courts where
this contract is performed and agrees to accept the exclusive
jurisdiction of the United States Armed Services Board of contract
appeals and the United States court of Federal claims for the
hearing and determination of any and all Disputes which may arise
under the Disputes clause of this contract.
(End of clause)
34. Section 252.246-7002 is added to read as follows:
252.246-7002 Warranty of Construction (Germany).
As prescribed at 246.710(4), use the following clause:
Warranty of Construction (Germany) (XXXX)
(a) In addition to any other representations in this contract,
the Contractor represents, except as provided in paragraph (j) of
this clause, that the work performed under this contract conforms to
the contract requirements and is free of any defect of equipment,
material, or design furnished, or workmanship performed by the
Contractor or any subcontractor or supplier at any tier.
(b) This warranty shall continue for the period(s) specified in
Section 13, VOB, Part B, commencing from the date of final
acceptance of the work under this contract. If the Government takes
possession of any part of the work before final acceptance, this
warranty shall continue for the period(s) specified in Section 13,
VOB, Part B, from the date the Government takes possession.
(c) The Contractor shall remedy, at the Contractor's expense,
any failure to conform or any defect. In addition, the Contractor
shall remedy, at the Contractor's expense, any damage to Government-
owned or -controlled real or personal property when that damage is
the result of--
(1) The Contractor's failure to conform to contract
requirements; or
(2) Any defect of equipment, material, workmanship, or design
furnished.
(d) The Contractor shall restore any work damaged in fulfilling
the terms and conditions of this clause.
(e) The Contracting Officer shall notify the Contractor, in
writing, within a reasonable time after the discovery of any
failure, defect, or damage.
(f) If the Contractor fails to remedy any failure, defect, or
damage within a reasonable time after receipt of notice, the
Government shall have the right to replace, repair, or otherwise
remedy the failure, defect, or damage at the Contractor's expense.
(g) With respect to all warranties, express or implied, from
subcontractors, manufacturers, or suppliers for work
[[Page 31499]]
performed and materials furnished under this contract, the
Contractor shall--
(1) Obtain all warranties that would be given in normal
commercial practice;
(2) Require all warranties to be executed, in writing, for the
benefit of the Government, if directed by the Contracting Officer;
and
(3) Enforce all warranties for the benefit of the Government as
directed by the Contracting Officer.
(h) In the event the Contractor's warranty under paragraph (b)
of this clause has expired, the Government may bring suit at its
expense to enforce a subcontractor's, manufacturer's, or supplier's
warranty.
(i) Unless a defect is caused by the Contractor's negligence, or
the negligence of a subcontractor or supplier at any tier, the
Contractor shall not be liable for the repair of any defects of
material or design furnished by the Government nor the repair of any
damage resulting form any defect in Government-furnished material or
design.
(j) This warranty shall not limit the Government's right under
the Inspection clause of this contract, with respect to latent
defects, gross mistakes, or fraud.
(End of clause)
[FR Doc. 96-15222 Filed 6-19-96; 8:45 am]
BILLING CODE 5000-04-M
Complete official Federal Register PDF
FR Doc. 96-14842 Federal Acquisition Regulation; Collection of Historically Black Colleges and Universities/ Minority Institutions Award Data
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Pages 31792-31793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14842]
[[Page 31791]]
_______________________________________________________________________
Part VII
Department of the Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 26 and 52
Federal Acquisition Regulation; Collection of Historically Black
Colleges and Universities/Minority Institutions Award Data; Proposed
Rule
Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31792]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 26 and 52
[FAR Case 95-306]
RIN 9000-AH02
Federal Acquisition Regulation; Collection of Historically Black
Colleges and Universities/ Minority Institutions Award Data
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are proposing to amend the Federal
Acquisition Regulation (FAR) to implement Executive Order 12928, which
states that agencies will provide periodic reporting on their progress
made in awards to Historically Black Colleges and Universities and
Minority Institutions. This regulatory action was not subject to Office
of Management and Budget review under Executive Order 12866, dated
September 30, 1993. This is not a major rule under 5 U.S.C. 804.
DATES: Comments should be submitted on or before August 19, 1996 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to: -
General Services Administration, FAR Secretariat (MVRS), 18th & F
Streets, NW, Room 4037, Washington, DC 20405.
Please cite FAR case 95-306 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Ms. Linda Klein at (202) 501-3775 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAR case 95-306.
SUPPLEMENTARY INFORMATION:
A. Background
This proposed rule adds a new subpart to FAR Part 26 and a
solicitation provision to Part 52 to implement Executive Order 12928,
which states that agencies will provide periodic reporting on their
progress made in awards to Historically Black Colleges and Universities
and Minority Institutions.
B. Regulatory Flexibility Act
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
primarily pertains to Government reporting requirements and merely
requires offerors to provide certain identification information with
their offers. An Initial Regulatory Flexibility Analysis has,
therefore, not been performed. Comments from small entities concerning
the affected FAR subpart will be considered in accordance with 5 U.S.C.
610 of the Act. Such comments must be submitted separately and should
cite 5 U.S.C. 601, et seq. (FAR case 95-306), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose recordkeeping or information
collection requirements, or collections of information from offerors,
contractors, or members of the public which require the approval of the
Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Parts 26 and 52
Government procurement.
Dated: June 6, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Parts 26 and 52 be amended as
set forth below:-
1. The authority citation for 48 CFR Parts 26 and 52 continues to
read as follows:
-Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 26-OTHER SOCIOECONOMIC PROGRAMS-
2. Part 26 is amended by adding Subpart 26.2 to read as follows:
Subpart 26.2--Historically Black Colleges and Universities and Minority
Institutions
Sec.
26.200 Scope of subpart.
26.201 Definitions.
26.202 General policy.
26.203 Data collection and reporting requirements.
26.204 Solicitation provision.
Subpart 26.2--Historically Black Colleges and Universities and
Minority Institutions
26.200 Scope of subpart.
(a) This subpart implements the provisions of Executive Order 12928
of September 16, 1994, which promote participation of Historically
Black Colleges and Universities (HBCU) and Minority Institutions (MI)
in Federal procurement.-
(b) This subpart does not pertain to contracts performed entirely
outside the United States, its possessions, Puerto Rico, and the Trust
Territory of the Pacific Islands.
26.201 Definitions.
As used in this subpart--
Historically Black College or University means an institution
determined by the Secretary of Education to meet the requirements of 34
CFR 608.2.-
Minority Institution means an institution of higher education
meeting the requirements of Section 1046(3) of the Higher Education Act
of 1965 (20 U.S.C. 1135d-5(3)) which for the purpose of this subpart
includes a Hispanic-serving institution of higher education as defined
in Section 316(b)(1) of the Act (20 U.S.C. 1059c(b)(1)).
26.202 General policy.-
It is the policy of the Government to promote participation of
HBCUs and MIs in Federal procurement.
26.203 Data collection and reporting requirements.-
Executive Order 12928 requires periodic reporting to the President
on the progress of departments and agencies in complying with the laws
and requirements mentioned in the Executive Order.
26.204 Solicitation provision.-
The contracting officer shall insert the provision at 52.226-xx,
Historically Black College or University and Minority Institution
Representation, in solicitations exceeding the micropurchase threshold,
for research, studies, supplies or services of the type normally
acquired from higher educational institutions.
Part 52--Solicitation Provisions and Contract Clauses
3. Section 52.226-xx is added to read as follows:
[[Page 31793]]
52.226-xx Historically Black College or University and Minority
Institution Representation.
As prescribed in 26.204, insert the following provision:
Historically Black College or University and Minority Institution
Representation (Date) -
(a) Definitions. -
Historically Black College or University means an institution
determined by the Secretary of Education to meet the requirements of
34 CFR 608.2.-
Minority Institution means an institution of higher education
meeting the requirements of Section 1046(3) of the Higher Education
Act of 1965 (20 U.S.C. 1135(d)-5(3)) which for the purpose of this
subpart includes a Hispanic-serving institution of higher education
as defined in Section 316(b)(1) of the Act (20 U.S.C. 1059c(b)(1)).-
(b) Representation. The offeror represents that it--
-{time} is, {time} is not a Historically Black College or
University;-
{time} is, {time} is not a Minority Institution.
(End of provision)
[FR Doc. 96-14842 Filed 6-19-96; 8:45 am]
BILLING CODE 6820-EP-P
Complete official Federal Register PDF
FR Doc. 96-14841 Federal Acquisition Regulation; Independent Research and Development/Bid and Proposal in Cooperative Arrangements
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Page 31796]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14841]
[[Page 31795]]
_______________________________________________________________________
Part VIII
Department of the Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Part 31
Federal Acquisition Regulation; Independent Research and Development/
Bid and Proposal in Cooperative Arrangements; Proposed Rule
Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31796]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 31
[FAR Case 95-024]
RIN 9000-AH03
Federal Acquisition Regulation; Independent Research and
Development/Bid and Proposal in Cooperative Arrangements
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Defense, General Services Administration,
and National Aeronautics and Space Administration are proposing to
amend Federal Acquisition Regulation (FAR) Part 31 to permit contractor
contributions of independent research and development (IR&D) costs
under NASA cooperative arrangements to be treated as allowable indirect
costs. This regulatory action was not subject to Office of Management
and Budget review under Executive Order 12866, dated September 30,
1993. This is not a major rule under 5 U.S.C. 804.
DATES: Comments should be submitted on or before August 19, 1996 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVRS), 18th & F
Streets, NW, Room 4037, Washington, DC 20405.
Please cite FAR case 95-024 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAR case 95-024.
SUPPLEMENTARY INFORMATION:
A. Background
NASA published a class deviation (interim rule) in the May 2, 1994,
Federal Register (59 FR 22521) with the final rule published in the
September 8, 1994, Federal Register (59 FR 46359). The class deviation
eliminates the prohibition at FAR 31.205-18(e) against treatment of
contractor IR&D contributions under NASA cooperative arrangements as
allowable indirect costs. This proposed FAR rule would eliminate the
need for the NASA class deviation.
B. Regulatory Flexibility Act
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most
contracts awarded to small entities are awarded on a competitive fixed-
price basis, and the cost principles do not apply. The cost principles
only apply to contracts for which cost or pricing data has been
submitted. An Initial Regulatory Flexibility Analysis has, therefore,
not been performed. Comments from small entities concerning the
affected FAR subpart will be considered in accordance with 5 U.S.C. 610
of the Act. Such comments must be submitted separately and should cite
FAR case 95-024 in correspondence.
C. Paperwork Reduction Act-
The Paperwork Reduction Act (Pub. L. 96-511) does not apply because
the proposed rule does not impose recordkeeping or information
collection requirements, or collections of information from offerors,
contractors, or members of the public which require the approval of the
Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 31
Government procurement.
Dated: June 6, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Part 31 be amended as set
forth below:
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
1. The authority citation for 48 CFR Part 31 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Section 31.205-18(e) is revised to read as follows:
31.205-18 Independent research and development and bid and proposal
costs.
* * * * *-
(e) Cooperative arrangements. IR&D costs may be incurred by
contractors working jointly with one or more non-Federal entities
pursuant to a cooperative arrangement (for example, joint ventures,
limited partnerships, teaming arrangements, and collaboration and
consortium arrangements). IR&D costs may also include costs contributed
by contractors in performing cooperative research and development
agreements, or similar arrangements, entered into under
(1) Section 12 of the Stevenson-Wydler Technology Transfer Act of
1980 (15 U.S.C. 3710(a));
(2) Sections 203(c) (5) and (6) of the National Aeronautics and
Space Act of 1958, as amended (42 U.S.C. 2473(c) (5) and (6));
(3) 10 U.S.C. 2371 for the Defense Advanced Research Projects
Agency, or
(4) Other equivalent authority. IR&D costs incurred by a contractor
pursuant to these types of cooperative arrangements should be
considered as allowable IR&D costs if the work performed would have
been allowed as contractor IR&D had there been no cooperative
arrangement.
[FR Doc. 96-14841 Filed 6-19-96; 8:45 am]
BILLING CODE 6820-EP-P
Complete official Federal Register PDF
FR Doc. 96-14840 Federal Acquisition Regulation; Foreign Selling Costs
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Page 31800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14840]
[[Page 31799]]
_______________________________________________________________________
Part X
Department of the Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Part 31
Federal Acquisition Regulations; Foreign Selling Costs; Proposed Rule
Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31800]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 31
[FAR Case 95-021]
RIN 9000-AH04
Federal Acquisition Regulation; Foreign Selling Costs
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Defense, General Services Administration and
National Aeronautics and Space Administration are considering
increasing the threshold for application of the foreign selling costs
allowability ceiling from $2.5 million to $5.0 million. This regulatory
action was not subject to Office of Management and Budget review under
Executive Order 12866, dated September 30, 1993. This is not a major
rule under 5 U.S.C. 804.
DATES: Comments should be submitted on or before August 19, 1996 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to: -
General Services Administration, FAR Secretariat (MVRS), 18th & F
Streets, NW, Room 4037, Washington, DC 20405.
Please cite FAR case 95-021 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAR case 95-021.
SUPPLEMENTARY INFORMATION:
A. Background
The proposed FAR rule would revise FAR 31.205-38(c)(2)(ii) by
increasing the threshold for applicability of the foreign selling costs
allowability ceiling from $2.5 million to $5.0 million. The proposed
rule also would revise FAR 31.205-38(c)(2)(iii) by deleting obsolete
language. This action is being proposed in an effort to reduce
contractors' administrative burden.
B. Regulatory Flexibility Act
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most
contracts awarded to small entities are awarded on a competitive,
fixed-price basis and the cost principles do not apply. The cost
principles only apply to contracts for which cost or pricing data has
been submitted. An Initial Regulatory Flexibility Analysis has,
therefore, not been performed. Comments from small entities concerning
the affected FAR subpart will be considered in accordance with 5 U.S.C.
610 of the Act. Such comments must be submitted separately and should
cite 5 U.S.C. 601, et seq. (FAR case 95-021), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose recordkeeping or information
collection requirements, or collections of information from offerors,
contractors, or members of the public which require the approval of the
Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 31
Government procurement.
Dated: June 6, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Part 31 be amended as set
forth below:
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
1. The authority citation for 48 CFR Part 31 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
31.205-38 [Amended]
2. Section 31.205-38(c)(2)(i) is amended by removing the semicolon
at the end and inserting '', and'' in its place; in (c)(2)(ii) by
removing ``$2,500,000'' and inserting ``$5,000,000'' in its place, by
removing the semicolon at the end and inserting a period in its place;
and by removing paragraph (c)(2)(iii).
[FR Doc. 96-14840 Filed 6-19-96; 8:45 am]
BILLING CODE 6820-EP-P
Complete official Federal Register PDF
FR Doc. 96-14839 Federal Acquisition Regulation; Costs Related to Legal/Other Proceedings
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Page 31790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14839]
[[Page 31789]]
_______________________________________________________________________
Part VI
Department of the Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Part 31
Federal Acquisition Regulation; Costs Related to Legal/Other
Proceedings; Proposed Rule
Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31790]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Part 31
[FAR Case 95-020]
RIN 9000-AH05
Federal Acquisition Regulation; Costs Related to Legal/Other
Proceedings
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are proposing to amend the Federal
Acquisition Regulation (FAR) to clarify the allowability of costs
incurred for qui tam suits in which the Government does not intervene.
The rule also clarifies, in FAR 31.205-47(e)(3), that the maximum
reimbursement contractors can receive for legal costs in connection
with agreements reached under paragraph (c) of FAR 31.205-47 is 80
percent of otherwise allowable and allocable incurred costs.This
regulatory action was not subject to Office of Management and Budget
review under Executive Order 12866, dated September 30, 1993. This is
not a major rule under 5 U.S.C. 804.
DATES: Comments should be submitted on or before August 19, 1996 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to: --
General Services Administration, FAR Secretariat (MVRS), 18th & F
Streets, NW, Room 4037, Washington, DC 20405.
Please cite FAR Case 95-020 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAR case 95-020.
SUPPLEMENTARY INFORMATION:
A. Background
This case was initiated to clarify the proper interpretation of
cost principle FAR 31.205-47 as it relates to qui tam suits not joined
in by the Government.
B. Regulatory Flexibility Act
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because most
contracts awarded to small entities are awarded on a competitive fixed-
price basis, and the cost principles do not apply. An Initial
Regulatory Flexibility Analysis has, therefore, not been performed.
Comments from small entities concerning the affected FAR subpart will
be considered in accordance with 5 U.S.C. 610 of the Act. Such comments
must be submitted separately and should cite 5 U.S.C. 601, et seq. (FAR
case 95-020) in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act does not apply because the proposed
changes to the FAR do not impose recordkeeping or information
collection requirements, or collections of information from offerors,
contractors, or members of the public which require the approval of the
Office of Management and Budget under 44 U.S.C. 3501, et seq.
List of Subjects in 48 CFR Part 31
Government procurement.
Dated: June 6, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Part 31 be amended as set
forth below:
PART 31--CONTRACT COST PRINCIPLES AND PROCEDURES
1. The authority citation for 48 CFR Part 31 continues to read as
follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
2. Section 31.205-47 is amended by revising paragraph (b)
introductory text, (c) and (e)(3) to read as follows:
31.205-47 Costs related to legal and other proceedings.
* * * * *
(b) Costs incurred in connection with any proceeding brought by a
Federal, State, local or foreign government for violation of, or a
failure to comply with, law or regulation by the contractor (including
its agents or employees) or costs incurred in connection with any
proceeding brought by a third party in the name of the United States
under the False Claims Act, 31 U.S.C. 3730, are unallowable if the
result is--
* * * * *
(c) (1) To the extent that they are not otherwise unallowable,
costs incurred in connection with any proceeding under paragraph (b) of
this subsection commenced by the United States that is resolved by
consent or compromise pursuant to an agreement entered into between the
contractor and the United States, and which are unallowable solely
because of paragraph (b) of this subsection, may be allowed to the
extent specifically provided in such agreement.
(2) In the event of a settlement of any proceeding brought by a
third party under the False Claims Act in which the United States did
not intervene, reasonable costs incurred by the contractor in
connection with such a proceeding that are not otherwise unallowable by
regulation or by separate agreement with the United States, may be
allowed if the contracting officer, in consultation with his or her
legal advisor, determines that there was very little likelihood that
the third party would have been successful on the merits.
* * * * *
(e) * * *
(3) The percentage of costs allowed does not exceed the percentage
determined to be appropriate considering the complexity of procurement
litigation, generally accepted principles governing the award of legal
fees in civil actions involving the United States as a party, and such
other factors as may be appropriate. Such percentage shall not exceed
80 percent. Agreements reached under paragraph (c) of this subsection
shall be subject to this limitation. If, however, an agreement
described in subparagraph (c)(1) explicitly states the amount of
otherwise allowable incurred legal fees and limits the allowable
recovery to 80 percent or less of the stated legal fees, no additional
limitation need be applied. The amount of reimbursement allowed for
legal costs in connection with any proceeding described in subparagraph
(c)(2) shall be determined by the cognizant contracting officer, but
shall not exceed 80 percent of otherwise allowable legal costs
incurred.
* * * * *
[FR Doc. 96-14839 Filed 6-19-96; 8:45 am]
BILLING CODE 6820-EP-P
Complete official Federal Register PDF
FR Doc. 96-14838 Federal Acquisition Regulation; Performance Incentives for Fixed- Price Contracts
[Federal Register Volume 61, Number 120 (Thursday, June 20, 1996)]
[Proposed Rules]
[Page 31798]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14838]
[[Page 31797]]
_______________________________________________________________________
Part IX
Department of the Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 16 and 52
Federal Acquisition Regulation; Performance Incentives for Fixed-Price
Contracts; Proposed Rule
Federal Register / Vol. 61, No. 120 / Thursday, June 20, 1996 /
Proposed Rules
[[Page 31798]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 16 and 52
[FAR Case 93-603]
RIN 9000-AH07
Federal Acquisition Regulation; Performance Incentives for Fixed-
Price Contracts
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are proposing to amend the Federal
Acquisition Regulation (FAR) by allowing performance incentives alone
and not just when performance incentives are coupled with cost
incentives. Thus award fees will be allowed in fixed-price contracts.
Also, they have agreed to some editorial changes to the related
clauses.This regulatory action was not subject to Office of Management
and Budget review under Executive Order 12866, dated September 30,
1993. This is not a major rule under 5 U.S.C. 804.
DATES: Comments should be submitted on or before August 19, 1996 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to: -
General Services Administration, FAR Secretariat (VRS), 18th & F
Streets, NW, Room 4037, Washington, DC 20405.
Please cite FAR case 93-603 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: Mr. Ralph DeStefano at (202) 501-1758
in reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAR case 93-603.
SUPPLEMENTARY INFORMATION:
A. Background
The FAR currently only provides for the use of performance
incentives together with cost incentives. This FAR revision proposes an
amendment to the FAR allowing performance incentives to be used alone.
This proposed change will allow agencies to recognize and reward
contractors that share the Government's commitment to quality and
perform at a level that exceeds the minimum in terms of quality,
timeliness, technical ingenuity and effective management.
B. Regulatory Flexibility Act
This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the rule
authorizes the government to use an additional type of contract under
the Federal Acquisition Regulation. The rule authorizes award fees in
fixed price contract performance incentives alone and not just when
performance incentives are coupled with cost incentives. An Initial
Regulatory Flexibility Analysis has, therefore, not been performed.
Comments from small entities concerning the affected FAR subpart will
be considered in accordance with 5 U.S.C. 610 of the Act. Such comments
must be submitted separately and should cite 5 U.S.C. 601, et seq. (FAR
case 93-603), in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Pub. L. 104-13) does not apply because
the proposed changes to the FAR do not impose recordkeeping or
information collection requirements, or collections of information from
offerors, contractors, or members of the public which require the
approval of the Office of Management and Budget under 44 U.S.C. 3501,
et seq.
List of Subjects in 48 CFR Parts 16 and 52
Government procurement.
Dated: June 6, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Parts 16 and 52 be amended as
set forth below:
1. The authority citation for 48 CFR Parts 16 and 52 continues to
read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 16-TYPES OF CONTRACTS
2. Section 16.204 is amended by removing the citation ``16.405''
and inserting ``16.406'' in its place.
3. Section 16.403-3 is added to read as follows:
16.403-3 Fixed-price contracts with award fees.
Award fee provisions may be used in fixed-price contracts as
provided in 16.405.
4. Section 16.405 is redesignated as 16.406 and a new 16.405 is
added to read as follows:
16.405 Other applications of award fees.
The ``award amount'' portion of the fee may be used in other types
of contracts under the following conditions:
(a) The Government wishes to motivate and reward a contractor for
management performance in areas which cannot be measured objectively
and where normal incentive provisions cannot be used.
(b) A ``base fee'' (fixed amount portion) is not used.
(c) A level above the contracting officer approves the use of the
``award amount.''
(d) An award review board and procedures are established for
conduct of the evaluation.
(e) The administrative costs of evaluation do not exceed the
expected benefits.
(f) The contract expressly excludes from the operation of the
disputes clause any disagreement by the contractor concerning the
amount of the award fee.
PART 52-SOLICITATION PROVISIONS AND CONTRACT CLAUSES
5. Section 52.216-16 is amended by revising the introductory
paragraph, and Alternate I introductory text to read as follows:
52.216-16 Incentive Price Revision--Firm Target.
As prescribed in 16.406(a), insert the following clause:
* * * * *
Alternate I (APR 1984). As prescribed in 16.406(a), add the
following paragraph (o) to the basic clause:
* * * * *
6. Section 52.216-17 is amended by revising the introductory
paragraph, and Alternate I introductory text to read as follows:
52.216-17 Incentive Price Revision--Successive Targets.
As prescribed in 16.406(b), insert the following clause:
* * * * *
Alternate I (APR 1984). As prescribed in 16.406(b), add the
following paragraph (q) to the basic clause:
* * * * *
[FR Doc. 96-14838 Filed 6-19-96; 8:45 am]
BILLING CODE 6820-EP-P
Continue your research in ChatGPT or Claude
Connect Omnilex to search the legal corpus from your AI assistant.