issue-1996-07-08•Federal Register proposed rules — 1996-07-08
Federal Register proposed rules — 1996-07-08
issue-1996-07-08Federal Register proposed rules — 1996-07-08Proposed 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. 96-17302 Port Access Routes; Approaches to the Cape Fear River and Beaufort Inlet, North Carolina
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35703-35705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17302]
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DEPARTMENT OF TRANSPORTATION
Coast Guard
33 CFR Part 167
[CGD 96-030]
Port Access Routes; Approaches to the Cape Fear River and
Beaufort Inlet, North Carolina
AGENCY: Coast Guard, DOT.
ACTION: Notice of study.
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SUMMARY: The Coast Guard is conducting a port access route study to
evaluate the need for vessel routing or other traffic management
measures in the approaches to the Cape Fear River and Beaufort Inlet,
NC. Concerns for the
[[Page 35704]]
safety of navigation in these areas have been expressed by the Morehead
City Pilots Association and the Coast Guard Marine Safety Office in
Wilmington, NC. This port access route study will determine what, if
any, vessel routing or other traffic management measures are needed in
the approaches to the Cape Fear River and Beaufort Inlet, NC. As a
result of the study, vessel routing measures or other vessel operating
requirements may be proposed in the Federal Register.
DATES: Comments must be received on or before October 7, 1996.
ADDRESSES: Comments should be mailed to Commander (Aow), Fifth Coast
Guard District, 431 Crawford Street, Portsmouth, VA 23704-5004. The
comments and other materials referenced in this notice will be
available for inspection and copying at 431 Crawford Street,
Portsmouth, VA, room 401. Normal office hours are 8 a.m. to 4 p.m.,
Monday through Friday, except holidays. Comments may also be hand
delivered to this address.
FOR FURTHER INFORMATION CONTACT:
LT Edward Westfall (757) 398-6559 or E.Westfall/LANT[email protected]
(Internet), or Margie Hegy (202) 267-0415 or M.Hegy/G-
M[email protected] (Internet).
SUPPLEMENTARY INFORMATION:
Request for Comments
The Coast Guard is interested in receiving information and opinions
from persons who have an interest in safe routing of ships in the study
area. Vessel owners and operators are specifically invited to comment
on any safety concerns they may have when operating in the study area.
Negative impacts that may result from the establishment of a routing
measure, such as a traffic separation scheme (TSS), or a regulated
navigation area (RNA) with vessel operating requirements should be
identified and supported with documentation of any costs or benefits.
Commenters should include their names and addresses, identify this
notice (CGD 96-030), and give reasons for each comment. Receipt of
comments will be acknowledged if a stamped, self-addressed post card or
envelope is enclosed. In addition to the specific questions asked
herein, comments from the maritime community, offshore development
concerns, environmental groups and any other interested parties are
invited. All comments received during the comment period will be
considered in the study and in development of any regulatory proposals.
The Fifth Coast Guard District will conduct the study and develop
recommendations. LT Edward Westfall, Waterways Management Section, Aids
to Navigation and Waterways Management Branch, Fifth Coast Guard
District (757) 398-6559, is the project officer responsible for the
study.
Background and Purpose
The 1978 amendments to the Ports and Waterways Safety Act (PWSA),
33 U.S.C. 1223(c), require that a port access route study be conducted
prior to establishing or adjusting fairways or TSS's. The Coast Guard
is undertaking a port access route study to determine if a vessel
routing system is needed in the study area.
An internationally recognized vessel routing system is one or more
routes or routing measures aimed at reducing the risk of casualties. A
system may include TSS's, two-way routes, recommended tracks, areas to
be avoided, inshore traffic zones, roundabouts, precautionary areas,
and deep-water routes.
A TSS is a routing measure which minimizes the risk of collision by
separating vessels into opposing streams of traffic through the
establishment of traffic lanes. Vessel use of a TSS is voluntary;
however, vessels operating in or near an International Maritime
Organization (IMO) approved TSS are subject to Rule 10 of the
International Regulations for Prevention of Collisions at Sea, 1972 (72
COLREGS).
A two-way route is a route within defined limits inside which two-
way traffic is established, aimed at providing safe passage of ships
through waters where navigation is difficult or dangerous.
A recommended track is a route which has been specially examined to
ensure so far as possible that it is free of dangers and along which
ships are advised to navigate.
An area to be avoided is a routing measure comprising an area
within defined limits in which either navigation is particularly
hazardous or it is exceptionally important to avoid casualties and
which should be avoided by all ships, or certain classes of ships.
An inshore traffic zone comprises a designated area between the
landward boundary of a TSS and the adjacent coast and is used in
accordance with Rule 10(d) of the 72 COLREGS.
A roundabout is a routing measure comprising a separation point or
circular separation zone and a circular traffic lane within defined
limits. Traffic within the roundabout is separated by moving in a
counterclockwise direction around the separation point or zone.
A precautionary area is a defined area where ships must navigate
with particular caution and within which the direction of traffic flow
may be recommended.
A deep-water route is a route within defined limits which has been
accurately surveyed for clearance of sea bottom and submerged obstacles
as indicated on nautical charts.
The approaches to the Cape Fear River and Beaufort Inlet, NC were
last studied in 1981, and the final results were published on July 22,
1982 (47 FR 31766). The study concluded that ``there is no need to
impose new ship routing measures such as TSS's or shipping safety
fairways where fixed structures would be prohibited, in any'' area off
the North Carolina coast. Vessel traffic density and channel depth and
width have changed since 1981.
The U.S. Army Corps of Engineers' Waterborne Commerce of The United
States reports that, from 1981 to 1993, annual trips to and from the
Port of Wilmington, NC increased by 128% (from 10,060 to 22,897) and
the number of trips to and from Morehead City Harbor, NC decreased by
57% (from 7,842 to 3,385). Since 1981, the actual controlling depth for
the Cape Fear River ocean bar channel has increased from 38 feet to 40
feet, the project depth. The project depth for Beaufort Inlet/Morehead
City has recently been increased from 42 to 45 feet.
The Morehead City Pilots Association requested additional aids to
navigation in the approach routes commonly used for Beaufort Inlet
because a dredge spoil area has shallowed the area. They also report
difficulty in distinguishing the range lights on Beaufort Inlet Reach
because of background lights from the town of Beaufort; and, the light
at the entrance to Gallants Channel is easily confused with the lights
marking the Morhead City Channel and could be the cause of an accident.
Because of safety concerns associated with the close proximity of
shipping lanes to shallow water, the Coast Guard's Marine Safety Office
in Wilmington, NC suggested that establishing anchorages and a vessel
routing scheme, to include pilot transfer zones, may assist safe
navigation in the study area.
Study Area
The study area is bounded by a line connecting the following
geographic positions:
------------------------------------------------------------------------
Latitude Longitude
------------------------------------------------------------------------
34 deg.40'N 77 deg.00'W
34 deg.40'N 76 deg.15'W
34 deg.10'N 76 deg.15''W
[[Page 35705]]
33 deg.15'N 77 deg.30'W
33 deg.00'N 78 deg.20'W
33 deg.50'N 78 deg.20'W
33 deg.50'N 77 deg.55'W
------------------------------------------------------------------------
The study area encompasses the approaches to the Cape Fear River
and Beaufort Inlet, as well as the area offshore of North Carolina used
by commercial vessels transiting to and between these ports.
Issues
The Coast Guard is trying to determine the scope of any safety
problems associated with vessel transit in the study area. It is
expected that information will be gathered during the study that will
identify the problems and appropriate solutions.
The study may recommend the following:
1. No vessel routing measures are needed.
2. Establish one or more of the following vessel routing measures:
(a) TSS in the Approach to Cape Fear River;
(b) TSS in the Approach to Beaufort Inlet;
(c) TSS Off North Carolina encompassing the routes typically used
by merchant and naval vessels transiting the study area;
(d) Precautionary area(s) near either or both approaches;
(e) Inshore traffic zone(s) near either or both approaches; and,
(f) Establish an area to be avoided in shallow areas where the risk
of grounding is present.
3. Create anchorage area(s).
4. Establish a regulated navigation area with specific vessel
operating requirements to ensure safe navigation in areas near shallow
water.
Procedural Requirements
In order to provide safe access routes for movement of vessel
traffic proceeding to and from U.S. ports, the PWSA directs that the
Secretary designate necessary fairways and TSS's in which the paramount
right of navigation over all other uses shall be recognized. Before a
designation can be made, the Coast Guard is required to undertake a
study of potential traffic density and the need for safe access routes.
During the study, the Coast Guard is directed to consult with
federal and state agencies and to consider the views of representatives
of the maritime community, port and harbor authorities or associations,
environmental groups, and other parties who may be affected by the
proposed action.
In accordance with 33 U.S.C. 1223(c), the Coast Guard will, to the
extent practicable, reconcile the need for safe access routes with the
needs of all other reasonable uses of the area involved. The Coast
Guard will also consider previous studies and experience in the areas
of vessel traffic management, navigation, shiphandling, the effects of
weather, and prior analysis of the traffic density in certain regions.
The results of this study will be published in the Federal
Register. If the Coast Guard determines that new routing or other
regulatory measures are needed, a notice of proposed rulemaking will be
published. It is anticipated that the study will be concluded by 31
December 1996.
Dated: June 28, 1996.
J.C. Card,
Rear Admiral, U.S. Coast Guard, Chief, Marine Safety and Environmental
Protection.
[FR Doc. 96-17302 Filed 7-5-96; 8:45 am]
BILLING CODE 4910-14-M
Complete official Federal Register PDF
FR Doc. 96-17301 Drawbridge Operation Regulations; Cerritos Channel, CA
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35702-35703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17301]
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DEPARTMENT OF TRANSPORTATION
Coast Guard
33 CFR Part 117
[CGD 11-90-03]
RIN-2115-AE47
Drawbridge Operation Regulations; Cerritos Channel, CA
AGENCY: Coast Guard, DOT.
ACTION: Supplemental notice of proposed rulemaking.
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SUMMARY: At the request of the Port of Los Angeles, the Coast Guard is
proposing a temporary change to the regulations for the Henry Ford
Avenue Railroad Bridge (Ford Bridge), across Cerritos Channel of Los
Angeles/Long Beach Harbor, mile 4.8, at Long Beach, California, to
authorize a five month (150 day) closure of the bridge to replace the
movable span and erect the support towers. The proposed closure would
start November 7, 1996 and conclude on April 7, 1997. If these dates
change, the actual 5 month closure dates will be advertised in the
Local Notice to Mariners. The bridge, also known as the Badger Avenue
Bridge, currently remains open to navigation except for the passage of
trains. This proposal is being made because the bridge needs to be
replaced to preserve rail access to Terminal Island and to insure
reliable service to vessel traffic.
DATES: Comments must be received on or before August 7, 1996.
ADDRESSES: Comments may be mailed to Commander (oan-br), Eleventh Coast
Guard District, Building 50-6, Coast Guard Island, Alameda, CA 94501-
5100, or may be delivered to the same address between 7 a.m. and 4
p.m., Monday through Friday, except Federal holidays. The telephone
number is number is (510) 437-3514. Commander (oan-br) maintains the
public docket for this rulemaking. Comments will become part of this
docket and will be available for inspection or copying at Bldg. 10,
Room 214, Coast Guard Island, Alameda.
FOR FURTHER INFORMATION CONTACT: Susan Worden, Bridge Section, Eleventh
Coast Guard District, at (501) 437-3461.
SUPPLEMENTARY INFORMATION:
Request for Additional Comments
The Coast Guard encourages interested persons to participate in
this rulemaking by submitting written data, views, or arguments.
Persons submitting comments should include their names and addresses,
identify this rulemaking (CGD 11-90-03) and the specific section of
this proposal to which each comment applies, and give the reason for
each comment. Persons wanting acknowledgement of receipt of comments
should enclose a stamped, self-addressed postcard or envelope. Comments
previously submitted have been entered into the record and need not be
resubmitted.
The Commander, Eleventh Coast Guard district will evaluate all
communications received and determine a final course of action on this
proposal. The proposed regulations may be changed in light of the
comments received.
The Cost Guard plans no public hearing, but one may be held if
written requests for a hearing are received, and it is determined that
the opportunity to make oral presentations will add to the rulemaking
process.
Discussion of the Proposal
Regulatory History
This supplements a Notice of Proposed Rulemaking dated August 28,
1990 (55 FR 35154), which discussed a six and one-half month closure of
the bridge draw for bridge rehabilitation, from February 1, 1991
through August 15, 1991. The Ford Bridge provides the only rail access
to port facilities on Terminal Island. The bridge is over 70 years old
and no longer meets California seismic standards or Federal Railroad
Administration clearance standards. The bridge owner determined that
the bridge could not be rehabilitated economically, and in 1993 applied
for a permit to replace the bridge. In 1995, the Coast Guard issued a
permit for its replacement. The new bridge is currently under
construction, and it is anticipated that the work can be accomplished
with a slightly shorter closure period. Since more than five years has
elapsed since the publication of the NPRM, an additional opportunity
for public comment is being provided. The four comments received on the
previous NPRM will be considered part of the record.
The Notice of Proposed Rulemaking (NPRM) in 1990 was for the
earlier plan to rehabilitate the bridge, a plan that is no longer
feasible. That NPRM, which involved a slightly longer closure,
generated only four comments: Pacific Towing Company requested one leaf
operation of the bridge; Jacobson Pilot Service requested the closure
period to be kept to a minimum; Dow Chemical expressed concern about
land access during construction; and the Port of Long Beach wrote
supporting the proposal.
Because of the change from rehabilitation to reconstruction, it is
not possible to have the bridge in partial service during the
construction of the towers and lift span for which the closure is
necessary. The Coast Guard has reviewed the construction plans and
determined that the proposed closure is the shortest feasible time
period consistent with safety and good engineering practice. The bridge
construction will only cause brief interruptions to rail service or
land access to nearby facilities.
The revised bridge plan has been advertised in the Federal Register
on three occasions: a Notice of Intent to prepare an Environmental
Impact Statement (EIS) (58 F.R. 28087); a Notice of Availability of the
Draft EIS (59 F.R. 6639); and a Notice of Availability of the final EIS
(59 F.R. 60631).
The circulation of the Coast Guard Environmental Impact Statement
for the Ford Bridge Replacement Project provided additional
opportunities for public comment on the bridge closure. No comments
were received addressing the closure. Because the revised plan has been
advertised extensively and no opposition has thus far been expressed,
the Coast Guard for good cause believes that a 30 day comment period is
adequate to solicit any remaining comments on this supplemental notice
of proposed rulemaking.
Current Proposal
The Port of Los Angeles has requested the bridge span closure to
allow them to safely construct the replacement bridge. The proposed
closure of the span would start November 7, 1996, and conclude on April
7, 1997. If these dates change, the actual 5 month closure dates will
be advertised in the Local Notice to Mariners.
The Ford Avenue Railroad Bridge provides vertical clearance of 14
feet above Mean Lower Low Water (9 feet above Mean High Water) when
closed. The waterway is a connecting channel in the Los Angeles/Long
Beach Harbor complex and is used by oceangoing cargo ships, tugs and
barges, tour boats,
[[Page 35703]]
commercial fishing vessels and recreational boats. The alternate route
past the bridge site is through the outer harbor, with a maximum detour
of 10 miles.
Regulatory Evaluation
This proposal is not a significant regulatory action under Section
3(f) of Executive Order 12866 and does not require an assessment of
costs under section 6(a)(3) of that order. It has not been reviewed by
the Office of Management and Budget under that order. It is not
significant under the Department of Transportation Regulatory Policies
and Procedures (44 FR 11040, February 26, 1979). The draft regulatory
evaluation prepared for the NPRM has been superceded by the economic
analysis in the Coast Guard Final Environmental Impact Statement (FEIS)
for the Ford Bridge Replacement dated November 25, 1994. A copy of the
FEIS has been placed in the rulemaking docket, and may be inspected and
copied at the address listed under ADDRESSES.
Replacement of the existing bridge was determined to be the most
feasible and prudent alternative. This replacement cannot be
accomplished without closing the bridge span for a period of months. To
minimize the impact on the maritime community, the applicant plans to
work an accelerated schedule to complete the work requiring the bridge
closure in five months. Increased costs to the marine industry are
estimated to be $1 million due to detours during a five month closure.
The overtime work schedule increases overall project costs
approximately $2.2 million. The applicant estimates that if the
contractor were required to work only a standard 40 hour work week,
they would need a closure of eleven months to complete work. Thus, the
impact to the maritime industry has been minimized. On balance, the
short term costs due to the detour will be offset by the long-term
benefits gained by the operation of a new, more reliable bridge. The
new bridge will ensure uninterrupted rail service to Terminal Island,
and timely, reliable openings of the bridge for waterborne traffic.
Construction of a new bridge will minimize the possibility of
congestion or delays in transit times, which would occur if the
existing bridge malfunctioned, or was damaged by seismic activity.
Small Entities
Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the
Coast Guard must consider whether this proposal will have a significant
economic impact on a substantial number of small entities. ``Small
entities'' include independently owned and operated small businesses
that are not dominant in their field and that otherwise qualify as
``small business concerns'' under section 3 of the Small Business Act
(15 U.S.C. 632). During the environmental review process, the Coast
Guard determined that the economic impact to navigation would be
approximately $1 million. Almost half of that impact was on the towing
and tour boat operations of one company who does not qualify as a
``small business concern''. The remaining economic impact was on
recreational mariners berthed at nearby marinas and two other towing
companies. Recreational mariners would have small additional costs to
travel as much as 5 miles further to fuel docks, pumpout stations, etc.
The cost per recreational vessel is estimated to be less than $100. the
towing companies would have additional costs for personnel and fuel to
travel as much as 5 miles further to towing assignments. The cost per
towing company is estimated to be less than $100 thousand. These
companies will all benefit from the reliable operation of the new
bridge span for many years to come. Since there are only a few small
entities affected by the 5 month closure, and the effect is short-time,
the Coast Guard certifies under section 605(b) of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) that this rule will not have a
significant impact on a substantial number of small entities.
Federalism
The Coast Guard has analyzed this proposal under the principles and
criteria contained in Executive Order 12612 and has determined that
this rule does not raise sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
Environment
The Coast Guard considered the environmental impact of this
proposal together with the overall impacts of the replacement project
in their FEIS for the Henry Ford (Badger Avenue) Bridge Replacement
Project dated November 25, 1994. The principal environmental impact of
the project was the loss of the existing, historic bridge. The
environmental impacts of this rule were marine transportation
disruptions, economic impacts to waterway users, and minor increases in
air pollution from detouring marine vessels. The Coast Guard determined
that there was no feasible and prudent alternative to the loss of the
historic bridge to meet the needs of future transportation and safety.
A new bridge will allow for increased carriage of goods to and from the
port by rail, rather than by truck, resulting in a net decrease in air
pollution. On balance, the short-term impacts to navigation will be
offset by long-term benefits to navigation from construction of a new,
more reliable bridge. The FEIS supercedes the draft Environmental
Assessment prepared for the NPRM. The FEIS is available for review at
the address under ADDRESSES.
Collection of Information
This proposal contains no collection of information requirements
under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
List of Subjects in 33 CFR Part 117
Bridges
Regulation: For the reasons set out in the preamble, the Coast
Guard proposes to amend 33 CFR Part 117 as follows:
1. The authority citation for Part 117 continues to read as
follows:
Authority: 33 U.S.C. 499; 49 CFR 1.46; and 33 CFR 1.05-1(g);
section 117.255 also issued under the authority of Pub. L. 102-587,
106 Stat. 5039.
2. Section 117.147 is amended by suspending paragraph (b) and
adding a new paragraph (c) to read as follows:
Sec. 117.147 Cerritos Channel.
* * * * *
(c) During the period November 7, 1996 through April 7, 1997 the
Henry Ford Avenue railroad bridge, mile 4.4 at Long Beach, will be
undergoing reconstruction and the draw need not open for the passage of
vessels.
Dated: June 20, 1996.
D.D. Polk,
Captain, U.S. Coast Guard, Commander, Eleventh Coast Guard District
Acting.
[FR Doc. 96-17301 Filed 7-5-96; 8:45 am]
BILLING CODE 4910-14-M
Complete official Federal Register PDF
FR Doc. 96-17296 Airworthiness Directives; Raytheon Aircraft Corporation (formerly Beech Aircraft Corporation) Models 1900C, 1900D, and 2000 Airplanes
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35695-35696]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17296]
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DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 96-CE-30-AD]
RIN 2120-AA64
Airworthiness Directives; Raytheon Aircraft Corporation (formerly
Beech Aircraft Corporation) Models 1900C, 1900D, and 2000 Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: This document proposes to adopt a new airworthiness directive
(AD) that would apply to certain Raytheon Aircraft Corporation
(Raytheon) Models 1900C, 1900D, and 2000 airplanes. The proposed action
would require inspecting (one-time) the fuel filter assemblies to
detect any bypass valve that is glued shut. If a bypass valve is glued
shut, the proposal would require replacing the associated fuel filter
assembly. Three in-flight occurrences where the low fuel pressure light
illuminated prompted the proposed action. In each of the instances, a
bypass valve on the affected engine was glued shut with anaerobic
thread lock adhesive and when the fuel filter became clogged, proper
fuel flow to the engine was not obtained. The actions specified by the
proposed AD are intended to prevent lack of fuel to the engine and
eventual engine shutdown caused by a clogged fuel filter and a
contaminated fuel filter by-pass valve.
DATES: Comments must be received on or before September 6, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Central Region, Office of the Assistant Chief
Counsel, Attention: Rules Docket No. 96-CE-30-AD, Room 1558, 601 E.
12th Street, Kansas City, Missouri 64106. Comments may be inspected at
this location between 8 a.m. and 4 p.m., Monday through Friday,
holidays excepted.
Service information that applies to the proposed AD may be obtained
from the Raytheon Aircraft Corporation, P.O. Box 85, Wichita, Kansas
67201-0085. This information also may be examined at the Rules Docket
at the address above.
FOR FURTHER INFORMATION CONTACT: Mr. Karl Schletzbaum, Aerospace Safety
Engineer, FAA, Wichita Aircraft Certification Office, 1801 Airport
Road, Mid-Continent Airport, Wichita, Kansas 67209; telephone (316)
946-4146; facsimile (316) 946-4407.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Communications should identify the Rules Docket number
and be submitted in triplicate to the address specified above. All
communications received on or before the closing date for comments,
specified above, will be considered before taking action on the
proposed rule. The proposals contained in this notice may be changed in
light of the comments received.
Comments are specifically invited on the overall regulatory,
economic, environmental, and energy aspects of the proposed rule. All
comments submitted will be available, both before and after the closing
date for comments, in the Rules Docket for examination by interested
persons. A report that summarizes each FAA-public contact concerned
with the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this notice must submit a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to Docket No. 96-CE-30-AD.'' The postcard will be date stamped and
returned to the commenter.
Availability of NPRMs
Any person may obtain a copy of this NPRM by submitting a request
to the FAA, Central Region, Office of the Assistant Chief Counsel,
Attention: Rules Docket No. 96-CE-30-AD, Room 1558, 601 E. 12th Street,
Kansas City, Missouri 64106.
Discussion
The FAA has received three reports of in-flight occurrences
involving Ratheon Model 1900 D airplanes, where the low fuel pressure
light illuminated. Fortunately, the airplane landed safely in these
incidents. In each of the instances, a bypass valve on the affected
engine was glued shut with anaerobic thread lock adhesive and when the
fuel filter became clogged, proper fuel flow to the engine was not
obtained. Further investigation has revealed that some fuel filter
assemblies were contaminated with anaerobic thread lock adhesive during
the manufacturing process.
Raytheon reports that the following airplane models and serial
numbers could have fuel filter assemblies contaminated with anaerobic
thread lock adhesive:
------------------------------------------------------------------------
Models Serial numbers
------------------------------------------------------------------------
1900C..................................... UC-1 through UC-174
1900C (C-12J)............................. UD-1 through UD-6
1900D..................................... UE-1 through UE-205
2000...................................... NC-4 through NC-53
------------------------------------------------------------------------
Raytheon has issued Service Bulletin (SB) No. 2677 (for Model
2000), dated March, 1996; and Beechcraft SB No. 2678 (for Models 1900C
and 1900D), dated May, 1996. These service bulletins specify procedures
for (1) inspecting the fuel filter assemblies to detect any bypass
valves glued shut; and (2) replacing the fuel filter assembly.
After examining the circumstances and reviewing all available
information related to the incidents described above, including the
referenced service information, the FAA has determined that AD action
should be taken to prevent lack of fuel to the engine and eventual
engine shutdown caused by a clogged fuel filter and a contaminated fuel
filter by-pass valve.
Explanation of the Provisions of the Proposed AD
Since an unsafe condition has been identified that is likely to
exist or develop in other Raytheon Models 1900C, 1900D, and 2000
airplanes of the same type design that were manufactured during the
period when the fuel filter assembly bypass valves were susceptible to
anaerobic thread lock adhesive contamination, the FAA is proposing AD
action. The proposed AD would require inspecting (one-time) the fuel
filter assemblies to detect any bypass valve that is glued shut. If a
bypass valve is glued shut, the proposal would require replacing the
fuel filter assembly. Accomplishment of the inspection and replacement
(if necessary) would be in accordance with Raytheon SB No. 2677 (for
Model 2000), dated March, 1996; or Beechcraft SB No. 2678 (for Models
1900C and 1900D), dated May, 1996, as applicable.
Cost Impact
The FAA estimates that 379 airplanes in the U.S. registry would be
affected by the proposed AD, that it would take approximately 2
workhours per airplane to accomplish the proposed inspection,
[[Page 35696]]
and that the average labor rate is approximately $60 an hour. Based on
these figures, the total cost impact of the proposed AD on U.S.
operators is estimated to be $45,480. This figure only takes into
account the cost of the inspection and does not take into account the
cost of replacing any fuel filter assembly found to have a
nonfunctional bypass valve. A fuel filter assembly replacement would
take approximately 1 workhour (possible two fuel filter assembly
replacements per airplane) at approximately $60 per hour. The
manufacturer will provide parts at no cost to the owner/operator. The
FAA knows of no affected airplane owner/operator that has already
accomplished the proposed action.
Regulatory Impact
The regulations proposed herein would not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated,
will not have a significant economic impact, positive or negative, on a
substantial number of small entities under the criteria of the
Regulatory Flexibility Act. A copy of the draft regulatory evaluation
prepared for this action has been placed in the Rules Docket. A copy of
it may be obtained by contacting the Rules Docket at the location
provided under the caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Safety.
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration proposes to amend
part 39 of the Federal Aviation Regulations (14 CFR part 39) as
follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding a new airworthiness directive
(AD) to read as follows:
Raytheon Aircraft Corporation (formerly Beech Aircraft Corporation):
Docket No. 96-CE-30-AD.
Applicability: The following airplane model and serial numbers,
certificated in any category:
------------------------------------------------------------------------
Models Serial numbers
------------------------------------------------------------------------
1900C..................................... UC-1 through UC-174
1900C (C-12J)............................. UD-1 through UD-6
1900D..................................... UE-1 through UE-205
2000...................................... NC-4 through NC-53
------------------------------------------------------------------------
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (c) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required within the next 50 hours time-in-service
after the effective date of this AD, unless already accomplished.
To prevent lack of fuel to the engine and eventual engine
shutdown caused by a clogged fuel filter and a contaminated fuel
filter by-pass valve, accomplish the following:
(a) Inspect (one-time) the fuel filter assemblies to detect any
bypass valve that is glued shut. If a bypass valve is glued shut,
prior to further flight, replace the associated fuel filter
assembly. Accomplish the inspection and replacement (if necessary)
in accordance with Raytheon Service Bulletin (SB) No. 2677 (for
Model 2000), dated March, 1996; and Beechcraft SB No. 2678 (for
Models 1900C and 1900D), dated May, 1996.
(b) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(c) An alternative method of compliance or adjustment of the
compliance time that provides an equivalent level of safety may be
approved by the Manager, Wichita Aircraft Certification Office
(ACO), 1801 Airport Road, Room 100, Mid-Continent Airport, Wichita,
Kansas 67209. The request shall be forwarded through an appropriate
FAA Maintenance Inspector, who may add comments and then send it to
the Manager, Wichita ACO.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Wichita ACO.
(d) All persons affected by this directive may obtain copies of
the documents referred to herein upon request to the Raytheon
Aircraft Corporation, P.O. Box 85, Wichita, Kansas 67201-0085; or
may examine these documents at the FAA, Central Region, Office of
the Assistant Chief Counsel, Room 1558, 601 E. 12th Street, Kansas
City, Missouri 64106.
Issued in Kansas City, Missouri, on June 25, 1996.
James E. Jackson,
Acting Manager,
Small Airplane Directorate, Aircraft Certification Service.
[FR Doc. 96-17296 Filed 7-5-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-17295 Airworthiness Directives; Aerospace Technologies of Australia Pty Ltd. (formerly Government Aircraft Factory) Models N22B, N24A, and N22S Airplanes
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35693-35695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17295]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
14 CFR Part 39
[Docket No. 95-CE-103-AD]
Airworthiness Directives; Aerospace Technologies of Australia Pty
Ltd. (formerly Government Aircraft Factory) Models N22B, N24A, and N22S
Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This document proposes to adopt a new airworthiness directive
(AD) that would apply to Aerospace Technologies of Australia Pty Ltd.
(ASTA) Models N22B, N24A, and N22S airplanes that are not equipped with
a part number (P/N) 1E/N-12-57 fuselage stub fin plate (MOD N759). The
proposed action would require replacing the existing fuselage stub fin
plate with one of improved design, P/N 1E/N-12-57. Several reports of
cracks along the forward flange of the fuselage stub fin plate in the
area of Rib Water Line (WL) 138.87 prompted the proposed action. The
actions specified by the proposed AD are intended to prevent structural
failure of the fuselage area caused by a cracked stub fin plate, which,
if not detected and corrected, could result in loss of control of the
airplane.
DATES: Comments must be received on or before September 6, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Central Region, Office of the Assistant Chief
Counsel, Attention: Rules Docket No. 95-CE-103-AD, Room 1558, 601 E.
12th Street, Kansas City, Missouri 64106. Comments may be inspected at
this location between 8 a.m. and 4 p.m., Monday through Friday,
holidays excepted.
ADDRESSES: Service information that applies to the proposed AD may be
obtained from Aerospace Technologies of Australia Pty Ltd., ASTA
DEFENCE, Private Bag No. 4, Beach Road Lara 3212, Victoria, Australia.
This information also may be examined at the Rules Docket at the
address below. Send comments on the proposal in triplicate to the
Federal Aviation Administration (FAA), Central Region, Office of the
Assistant Chief Counsel, Attention: Rules Docket No. 95-CE-103-AD, Room
1558, 601 E. 12th Street, Kansas City, Missouri 64106. Comments may be
inspected at this location between 8 a.m. and 4 p.m., Monday through
Friday, holidays excepted.
FOR FURTHER INFORMATION CONTACT: Mr. Ron Atmur, Aerospace Engineer,
FAA, Los Angeles Aircraft Certification Office, 3960 Paramount
Boulevard, Lakewood, California 90712; telephone (310) 627-5224;
facsimile (310) 627-5210.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Communications should identify the Rules Docket number
and be submitted in triplicate to the address specified above. All
communications received on or before the closing date for comments,
specified above, will be considered before taking action on the
proposed rule. The proposals contained in this notice may be changed in
light of the comments received.
Comments are specifically invited on the overall regulatory,
economic, environmental, and energy aspects of the proposed rule. All
comments submitted will be available, both before and after the closing
date for comments, in the Rules Docket for examination by interested
persons. A report that summarizes each FAA-public contact concerned
with the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this notice must submit a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to Docket No. 95-CE-103-AD.'' The postcard will be date stamped and
returned to the commenter.
Availability of NPRMs
Any person may obtain a copy of this NPRM by submitting a request
to the FAA, Central Region, Office of the Assistant Chief Counsel,
Attention: Rules Docket No. 95-CE-103-AD, Room 1558, 601 E. 12th
Street, Kansas City, Missouri 64106.
Discussion
The Civil Aviation Safety Authority (CASA), which is the
airworthiness authority for Australia, recently notified the FAA that
an unsafe condition may
[[Page 35694]]
exist on certain ASTA Models N22B, N24A, and N22S airplanes. The CASA
reports several incidents of cracks along the forward flange of the
fuselage stub fin plate in the area of Rib Water Line (WL) 138.87.
Investigation has revealed fretting and fatigue of this plate, part
number (P/N) 1D/N-12-57. These conditions, if not detected and
corrected, could result in structural failure of the fuselage area,
which could result in loss of control of the airplane.
ASTA has issued Nomad Service Bulletin (SB) ANMD- 53-13, Revision
3, dated October 24, 1995, which specifies procedures for installing a
fuselage stub fin plate of improved design, P/N 1E/N-12-57.
The CASA of Australia classified this service bulletin as mandatory
and issued FCAA AD/GAF-N22/63, amendment 1, dated July 1994, in order
to assure the continued airworthiness of these airplanes in Australia.
This airplane model is manufactured in Australia and is type
certificated for operation in the United States under the provisions of
section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and
the applicable bilateral airworthiness agreement. Pursuant to this
bilateral airworthiness agreement, the CASA of Australia has kept the
FAA informed of the situation described above. The FAA has examined the
findings of the CASA of Australia, reviewed all available information
including the service information referenced above, and determined that
AD action is necessary for products of this type design that are
certificated for operation in the United States.
Explanation of the Provisions of the Proposed AD
Since an unsafe condition has been identified that is likely to
exist or develop in other ASTA Models N22B, N24A, and N22S airplanes of
the same type design that are registered in the United States and are
not equipped with a P/N 1E/N-12-57 fuselage stub fin plate (MOD N759),
the proposed AD would require replacing the existing fuselage stub fin
plate with one of improved design, P/N 1E/N-12-57. Accomplishment of
the proposed installation would be in accordance with Nomad SB ANMD-53-
13, Revision 3, dated October 24, 1995.
Cost Impact
The FAA estimates that 15 airplanes in the U.S. registry would be
affected by the proposed AD, that it would take approximately 22
workhours per airplane to accomplish the proposed action, and that the
average labor rate is approximately $60 an hour. Parts cost
approximately $150 per airplane. Based on these figures, the total cost
impact of the proposed AD on U.S. operators is estimated to be $22,050
or $1,470 per airplane. This figure is based on the assumption that no
affected owner/operator of the affected airplanes has accomplished the
proposed replacement.
ASTA has informed the FAA that it has no records of parts
distribution. The FAA believes that several of the affected airplanes
already have the proposed replacement incorporated, which would reduce
the cost impact upon the public.
Regulatory Impact
The regulations proposed herein would not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this action (1) is
not a ``significant regulatory action'' under Executive Order 12866;
(2) is not a ``significant rule'' under DOT Regulatory Policies and
Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated,
will not have a significant economic impact, positive or negative, on a
substantial number of small entities under the criteria of the
Regulatory Flexibility Act. A copy of the draft regulatory evaluation
prepared for this action has been placed in the Rules Docket. A copy of
it may be obtained by contacting the Rules Docket at the location
provided under the caption ADDRESSES.
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Safety.
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration proposes to amend
part 39 of the Federal Aviation Regulations (14 CFR part 39) as
follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40101, 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding a new airworthiness directive
(AD) to read as follows:
Aerospace Technologies of Australia PTY Ltd: Docket No. 95-CE-103-
AD.
Applicability: Models N22B, N24A, and N22S airplanes (all serial
numbers), certificated in any category, that are not equipped with a
part number (P/N) 1E/N-12-57 fuselage stub fin plate (MOD N759).
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (c) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not been
eliminated, the request should include specific proposed actions to
address it.
Compliance: Required within the next 100 hours time-in-service
after the effective date of this AD, unless already accomplished.
To prevent structural failure of the fuselage area caused by a
cracked stub fin plate, which, if not detected and corrected, could
result in loss of control of the airplane, accomplish the following:
(a) Replace the fuselage stub fin plate with one of improved
design, P/N 1E/N-12-57 (MOD N759), in accordance with the
ACCOMPLISHMENT INSTRUCTIONS section of Nomad Service Bulletin ANMD-
53-13, Revision 3, dated October 24, 1995.
(b) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
(c) An alternative method of compliance or adjustment of the
compliance time that provides an equivalent level of safety may be
approved by the Manager, FAA, Los Angeles Aircraft Certification
Office (ACO), 3960 Paramount Boulevard., Lakewood, California 90712.
The request shall be forwarded through an appropriate FAA
Maintenance Inspector, who may add comments and then send it to the
Manager, Los Angeles ACO.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the Los Angeles ACO.
(d) All persons affected by this directive may obtain copies of
the document referred to herein upon request to Aerospace
Technologies of Australia Pty Ltd., ASTA DEFENCE, Private Bag No. 4,
Beach Road Lara 3212, Victoria, Australia; or may examine this
document at the FAA, Central Region, Office of the Assistant Chief
Counsel, Room 1558, 601 E. 12th Street, Kansas City, Missouri 64106.
[[Page 35695]]
Issued in Kansas City, Missouri, on June 25, 1996.
James E. Jackson,
Acting Manager, Small Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-17295 Filed 7-5-96; 8:45 am]
BILLING CODE 4910-13-U
Complete official Federal Register PDF
FR Doc. 96-17218 Airworthiness Directives; Bombardier Model CL-600-2B16 (CL-601-3A and -3R) and CL-600-2B19 (Regional Jet Series 100) Series Airplanes
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35691-35693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17218]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. 95-NM-247-AD]
RIN 2120-AA64
Airworthiness Directives; Bombardier Model CL-600-2B16 (CL-601-3A
and -3R) and CL-600-2B19 (Regional Jet Series 100) Series Airplanes
AGENCY: Federal Aviation Administration, DOT.
ACTION: Notice of proposed rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: This document proposes the adoption of a new airworthiness
directive (AD) that is applicable to certain Bombardier Model CL-600-
2B16 and CL-600-2B19 series airplanes. This proposal would require a
one-time inspection of the spring bungee assembly of the nose landing
gear (NLG) to ensure proper torque of the collar and correct clearance
between the collar and the body of the bungee, and replacement of the
spring bungee assembly with a serviceable unit, if necessary. This
proposal is prompted by reports of failure of the NLG to extend when
the landing gear selector was placed in the ``DOWN'' position, and
failure of the NLG doors to open when the NLG door switch was set in
the ``SAFETY/DOOR OPEN'' position; these conditions may have been
caused by a reduced stroke of the spring bungee. The actions specified
by the proposed AD are intended to prevent improper operation of the
NLG door and consequent inability to extend the NLG due to a reduced
stroke of the spring bungee.
DATES: Comments must be received by August 16, 1996.
ADDRESSES: Submit comments in triplicate to the Federal Aviation
Administration (FAA), Transport Airplane Directorate, ANM-103,
Attention: Rules Docket No. 95-NM-247-AD, 1601 Lind Avenue, SW.,
Renton, Washington 98055-4056. Comments may be inspected at this
location between 9:00 a.m. and 3:00 p.m., Monday through Friday, except
Federal holidays.
The service information referenced in the proposed rule may be
obtained from Bombardier, Inc., Canadair, Aerospace Group, P.O. Box
6087, Station Centre-ville, Quebec H3C 3G9, Canada. This information
may be examined at the FAA, Transport Airplane Directorate, 1601 Lind
Avenue, SW., Renton, Washington; or at the FAA, Engine and Propeller
Directorate, New York Aircraft Certification Office, 10 Fifth Street,
Third Floor, Valley Stream, New York.
FOR FURTHER INFORMATION CONTACT: Danko Kramar, Aerospace Engineer,
Systems and Flight Test Branch, ANE-172, FAA, New York Aircraft
Certification Office, Engine and Propeller Directorate, 10 Fifth
Street, Third Floor, Valley Stream, New York; telephone (516) 256-7509;
fax (516) 568-2716.
SUPPLEMENTARY INFORMATION:
Comments Invited
Interested persons are invited to participate in the making of the
proposed rule by submitting such written data, views, or arguments as
they may desire. Communications shall identify the Rules Docket number
and be submitted in triplicate to the address specified above. All
communications received on or before the closing date for comments,
specified above, will be considered before taking action on the
proposed rule. The proposals contained in this notice may be changed in
light of the comments received.
Comments are specifically invited on the overall regulatory,
economic, environmental, and energy aspects of the proposed rule. All
comments submitted will be available, both before and after the closing
date for comments, in the Rules Docket for examination by interested
persons. A report summarizing each FAA-public contact concerned with
the substance of this proposal will be filed in the Rules Docket.
Commenters wishing the FAA to acknowledge receipt of their comments
submitted in response to this notice must submit a self-addressed,
stamped postcard on which the following statement is made: ``Comments
to Docket Number 95-NM-247-AD.'' The postcard will be date stamped and
returned to the commenter.
Availability of NPRMs
Any person may obtain a copy of this NPRM by submitting a request
to the FAA, Transport Airplane Directorate, ANM-103, Attention: Rules
Docket No. 95-NM-247-AD, 1601 Lind Avenue, SW., Renton, Washington
98055-4056.
Discussion
Transport Canada Aviation, which is the airworthiness authority for
Canada, recently notified the FAA that an unsafe condition may exist on
certain Bombardier Model CL-600-2B16 (CL-601-3A and -3R), and CL-600-
2B19 (Regional Jet Series 100) series airplanes. Transport Canada
Aviation advises that it received reports indicating that, during
flight of a Model CL-600-2B19 series airplane, the nose landing gear
(NLG) did not extend when the landing gear selector was placed in the
``DOWN'' position. The NLG did extend following cycling of the selector
valve. Transport Canada Aviation also advises that it received a report
indicating that, during a pre-flight check of a Model CL-600-2B16
series airplane, the NLG doors did not open when the NLG door switch
was set in the ``SAFETY/DOOR OPEN'' position. The cause of these
occurrences has been attributed to a defective spring bungee assembly
of the NLG door mechanism. Investigation revealed that the spring
[[Page 35692]]
bungee may have a reduced stroke due to incorrect clearance between the
collar and the body of the spring bungee. This incorrect clearance was
the result of incorrect assembly during manufacture. This condition, if
not corrected, could result in improper operation of the NLG door,
which could result in inability to extend the NLG.
Explanation of Relevant Service Information
The manufacturer has issued Canadair Regional Jet Alert Service
Bulletin A601R-32-037, Revision ``A,'' dated December 2, 1994 (for
Model CL-600-2B19 series airplanes), and Canadair Challenger Service
Bulletin 601-0454, dated May 15, 1995, as amended by Service Bulletin
Information Sheet 601-0454, dated July 14, 1995 (for Model CL-600-2B16
series airplanes). These service bulletins describe procedures for a
one-time inspection of the spring bungee assembly of the NLG to ensure
proper torque of the collar and correct clearance between the collar
and the body of the bungee, and replacement of the spring bungee
assembly with a serviceable (new or reworked) unit, if necessary.
Transport Canada Aviation classified these service bulletins as
mandatory and issued Canadian airworthiness directive CF-95-10, dated
June 27, 1995, in order to assure the continued airworthiness of these
airplanes in Canada.
FAA's Conclusions
These airplane models are manufactured in Canada and are type
certificated for operation in the United States under the provisions of
section 21.29 of the Federal Aviation Regulations (14 CFR 21.29) and
the applicable bilateral airworthiness agreement. Pursuant to this
bilateral airworthiness agreement, Transport Canada Aviation has kept
the FAA informed of the situation described above. The FAA has examined
the findings of Transport Canada Aviation, reviewed all available
information, and determined that AD action is necessary for products of
this type design that are certificated for operation in the United
States.
Explanation of Requirements of Proposed Rule
Since an unsafe condition has been identified that is likely to
exist or develop on other airplanes of the same type design, the
proposed AD would require a one-time inspection of the spring bungee
assembly of the NLG to ensure proper torque of the collar and correct
clearance between the collar and the body of the bungee, and
replacement of the spring bungee assembly with a serviceable (new or
reworked) unit, if necessary. The actions would be required to be
accomplished in accordance with the service bulletins described
previously.
Explanation of Differences between Service Bulletins and the
Proposed Rule
Operators should note that the compliance time specified in this
proposed AD (within 90 days after the effective date of the AD) differs
from the times recommended in the referenced service bulletins. [The
compliance time recommended in Canadair Challenger Service Bulletin
601-0454 for Model CL-600-2B16 series airplanes is ``at the next 300-
hour check.'' Canadair Regional Jet Alert Service Bulletin A601R-32-037
(for Model CL-600-2B19 series airplanes) recommends a compliance time
of no later than the next ``A'' check or within the next three months
after receipt of the alert service bulletin.] The FAA finds that the
compliance time should not differ for each airplane model, since the
spring bungee installed on both models has the same part number. In
developing an appropriate compliance time for this AD, the FAA also
considered not only the degree of urgency associated with addressing
the subject unsafe condition, but availability of replacement parts and
the maximum interval of time allowable for all affected airplanes to
continue to operate without compromising safety. The FAA finds 90 days
to be an appropriate compliance time for accomplishing these actions.
Cost Impact
The FAA estimates that 101 airplanes of U.S. registry would be
affected by this proposed AD, that it would take approximately 4 work
hours per airplane to accomplish the proposed actions, and that the
average labor rate is $60 per work hour. Based on these figures, the
cost impact of the proposed AD on U.S. operators is estimated to be
$24,240, or $240 per airplane.
The cost impact figure discussed above is based on assumptions that
no operator has yet accomplished any of the proposed requirements of
this AD action, and that no operator would accomplish those actions in
the future if this AD were not adopted.
Regulatory Impact
The regulations proposed herein would not have substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. Therefore, in
accordance with Executive Order 12612, it is determined that this
proposal would not have sufficient federalism implications to warrant
the preparation of a Federalism Assessment.
For the reasons discussed above, I certify that this proposed
regulation (1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under the DOT
Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);
and (3) if promulgated, will not have a significant economic impact,
positive or negative, on a substantial number of small entities under
the criteria of the Regulatory Flexibility Act. A copy of the draft
regulatory evaluation prepared for this action is contained in the
Rules Docket. A copy of it may be obtained by contacting the Rules
Docket at the location provided under the caption ``ADDRESSES.''
List of Subjects in 14 CFR Part 39
Air transportation, Aircraft, Aviation safety, Safety.
The Proposed Amendment
Accordingly, pursuant to the authority delegated to me by the
Administrator, the Federal Aviation Administration proposes to amend
part 39 of the Federal Aviation Regulations (14 CFR part 39) as
follows:
PART 39--AIRWORTHINESS DIRECTIVES
1. The authority citation for part 39 continues to read as follows:
Authority: 49 U.S.C. 106(g), 40113, 44701.
Sec. 39.13 [Amended]
2. Section 39.13 is amended by adding the following new
airworthiness directive:
Bombardier, Inc. (Formerly Canadair): Docket 95-NM-247-AD.
Applicability: Model CL-600-2B16 (CL-601-3A and -3R), serial
numbers 5100 through 5166 inclusive; and Model CL-600-2B19 (Regional
Jet Series 100) series airplanes, serial numbers 7003 through 7048
inclusive; certificated in any category.
Note 1: This AD applies to each airplane identified in the
preceding applicability provision, regardless of whether it has been
modified, altered, or repaired in the area subject to the
requirements of this AD. For airplanes that have been modified,
altered, or repaired so that the performance of the requirements of
this AD is affected, the owner/operator must request approval for an
alternative method of compliance in accordance with paragraph (d) of
this AD. The request should include an assessment of the effect of
the modification, alteration, or repair on the unsafe condition
addressed by this AD; and, if the unsafe condition has not
[[Page 35693]]
been eliminated, the request should include specific proposed
actions to address it.
Compliance: Required as indicated, unless accomplished
previously.
To prevent improper operation of the nose landing gear (NLG)
door and consequent inability to extend the NLG due to a reduced
stroke of the spring bungee, accomplish the following:
(a) Within 90 days after the effective date of this AD: Perform
a one-time inspection of the spring bungee assembly of the NLG to
ensure proper torque of the collar and correct clearance between the
collar and the body of the bungee; in accordance with Canadair
Regional Jet Alert Service Bulletin A601R-32-037, Revision `A,'
dated December 2, 1994 (for Model CL-600-2B19 series airplanes); or
Canadair Challenger Service Bulletin 601-0454, dated May 15, 1995,
as amended by Service Bulletin Information Sheet 601-0454, dated
July 14, 1995 (for Model CL-600-2B16 series airplanes); as
applicable.
(b) If improper torque of the collar is found, or if incorrect
clearance between the collar and the body of the bungee is found:
Prior to further flight, replace the spring bungee assembly with a
serviceable (new or reworked) unit that has been inspected in
accordance with Canadair Regional Jet Alert Service Bulletin A601R-
32-037, Revision ``A'', dated December 2, 1994 (for Model CL-600-
2B19 series airplanes); or Canadair Challenger Service Bulletin 601-
0454, dated May 15, 1995, as amended by Service Bulletin Information
Sheet 601-0454, dated July 14, 1995 (for Model CL-600-2B16 series
airplanes); as applicable. Accomplish the replacement in accordance
with the applicable service bulletin.
(c) As of the effective date of this AD, no person shall install
a spring bungee assembly having part number 600-86115-1 (for Model
CL-600-2B16 series airplanes) or 600-86115-5/70 (for Model CL-600-
2B19 series airplanes) on any airplane unless that assembly has been
inspected and reworked, as necessary, in accordance with paragraph
(a) of this AD.
(d) An alternative method of compliance or adjustment of the
compliance time that provides an acceptable level of safety may be
used if approved by the Manager, New York Aircraft Certification
Office (ACO), FAA, Engine and Propeller Directorate. Operators shall
submit their requests through an appropriate FAA Principal
Maintenance Inspector, who may add comments and then send it to the
Manager, New York ACO.
Note 2: Information concerning the existence of approved
alternative methods of compliance with this AD, if any, may be
obtained from the New York ACO.
(e) Special flight permits may be issued in accordance with
sections 21.197 and 21.199 of the Federal Aviation Regulations (14
CFR 21.197 and 21.199) to operate the airplane to a location where
the requirements of this AD can be accomplished.
Issued in Renton, Washington, on July 1, 1996.
S. R. Miller,
Acting Manager, Transport Airplane Directorate, Aircraft Certification
Service.
[FR Doc. 96-17218 Filed 7-5-96; 8:45 am]
BILLING CODE 4910-13-P
Complete official Federal Register PDF
FR Doc. 96-17192 Radio Broadcasting Services; Negaunee, MI
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35705-35706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17192]
=======================================================================
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 96-137; RM-8823]
Radio Broadcasting Services; Negaunee, MI
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: This document requests comments on a petition filed by Todd
Stuart Noordyk requesting the allotment of Channel 270A to Negaunee,
Michigan, with cut-off protection and modification of his application
for Channel 258A to specify operation on Channel 270A at Negaunee. The
coordinates for Channel 270A at Negaunee are 46-28-18 and 87-36-55.
Since Negaunee is located within 320 kilometers (200 miles) of the
U.S.-Canadian border, concurrence of the Canadian government will be
requested for this allotment. This proposal would enable the settlement
of a mutually exclusive proceeding between two applicants for Channel
258A at Negaunee, Michigan.
DATES: Comments must be filed on or before August 12, 1996, and reply
comments on or before August 27, 1996.
ADDRESSES: Federal Communications Commission, Washington, DC 20554. In
addition to filing comments with the FCC, interested parties should
serve the petitioner's counsel, as follows: Cary S. Tepper, Booth,
Freret & Imlay, P.C., 1233 - 20th Street, NW., Suite 204, Washington,
DC 20036.
FOR FURTHER INFORMATION CONTACT: Kathleen Scheuerle, Mass Media Bureau,
(202) 418-2180.
[[Page 35706]]
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Proposed Rule Making, MM Docket No. 96-137, adopted June 14,
1996, and released June 21, 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.
Provision 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 contact.
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. 96-17192 Filed 7-5-96; 8:45 am]
BILLING CODE 6712-01-F
Complete official Federal Register PDF
FR Doc. 96-17024 Leather Tanning and Finishing Effluent Limitations Guidelines Pretreatment Standards New and Existing Sources
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Page 35705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17024]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR PART 425
[FRL-5530-7]
RIN 2040-AC48
Leather Tanning and Finishing Effluent Limitations Guidelines
Pretreatment Standards New and Existing Sources
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed regulation.
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SUMMARY: EPA is proposing to modify the pretreatment standards for
existing and new sources applicable to certain facilities in the
leather tanning and finishing point source category that conduct
unhairing operations and that discharge process wastewater to publicly
owned treatment works (``POTW''). In the final rules section of this
Federal Register, EPA is promulgating these changes as a ``direct''
final rule because the Agency does not expect significant adverse or
critical comments. EPA also wants to provide prompt implementation of
the rule to minimize any potential hazards to worker safety and health
that may occur in the absence of this rule.
DATES: Comments on the proposed rules must be received by September 6,
1996.
ADDRESSES: Send comments in triplicate on this proposal to Mr. Ed
Terry, Engineering and Analysis Division (4303), U.S. EPA, 401 M St.
S.W., Washington, DC 20460.
FOR FURTHER INFORMATION CONTACT: Mr. Ed Terry, Engineering and Analysis
Division (4303), U.S. EPA, 401 M St., S.W., Washington, DC 20460, or
telephone 202-260-7128.
SUPPLEMENTARY INFORMATION: See the information provided in the direct
final action which is located in the rules section of this Federal
Register.
List of Subjects in 40 CFR Part 425
Leather, leather tanning and finishing, water pollution control,
wastewater treatment and disposal, pretreatment standards for existing
and new sources.
Dated: June 26, 1996.
Carol M. Browner,
Administrator.
[FR Doc. 96-17024 Filed 7-5-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-17004 Allocation of Loss on Disposition of Stock
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35696-35702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17004]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[INTL-4-95]
RIN 1545-AT41
Allocation of Loss on Disposition of Stock
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed Income Tax Regulations
relating to the allocation of loss realized on the disposition of
stock. These regulations will affect United States and foreign
shareholders of stock in domestic and foreign corporations. The
regulations are necessary to modify existing guidance with respect to
stock losses. This document also contains a notice of public hearing on
the regulations.
DATES: Written comments must be received by October 7, 1996. Outlines
of topics to be discussed at the public hearing scheduled for November
6, 1996, at 10 a.m. must be received by October 16, 1996.
ADDRESSES: Send submissions to: CC:DOM:CORP:R (INTL-4-95), 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 (INTL-4-95), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC. The public hearing will be held in room 2615, Internal
[[Page 35697]]
Revenue Building, 1111 Constitution Avenue NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Seth B.
Goldstein, (202) 622-3850; concerning submissions and the hearing,
Evangelista Lee, (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 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 September 6, 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 under section 865(j)(1) is in
Sec. 1.865-2(e)(2)(ii). The proposed regulations provide that in order
for taxpayers to elect retroactive application of the regulations,
taxpayers must comply with the reporting requirements contained in
Sec. 1.865-2(e)(2)(ii). This information is required by the IRS as a
condition for a taxpayer to elect to apply the rules of Sec. 1.865-2
retroactively. This information will be used to determine whether a
taxpayer properly applied the regulations. The respondents generally
will be U.S. corporations or individuals that sell or otherwise dispose
of stock in a foreign corporation of which the seller owns more than
10% of the vote or value.
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: 4,000 hours. The estimated
annual burden per respondent varies from 1 hour to 5 hours, depending
on individual circumstances, with an estimated average of 2 hours.
Estimated number of respondents: 2,000.
Estimated annual frequency of responses: Once.
Background
This document contains proposed regulations amending the Income Tax
Regulations (26 CFR Part 1) under sections 861, 865, and 904 of the
Internal Revenue Code. These regulations are also issued under
authority contained in section 7805 of the Internal Revenue Code.
Explanation of Provisions
This notice of proposed rulemaking provides rules under section
865(j) relating to the treatment of losses from the sale or other
disposition of stock.
Section 1.865-1 provides that the allocation of loss on the
disposition of property not governed by Sec. 1.865-2 continues to be
governed by the generally applicable rules of Sec. 1.861-8, except as
provided in other administrative pronouncements. For example, Notice
89-58 (1989-1 C.B. 699) remains in effect with respect to losses
described in that Notice. The treatment of portfolio stock, which is
excluded from Sec. 1.865-2, will be reviewed in the context of a
broader project dealing with similar portfolio investments, including
debt instruments and derivative financial products. Allocation of loss
on the disposition of stock of a regulated investment company and stock
of an S corporation also will continue to be governed by Secs. 1.861-
8(e)(7)(i) and (ii).
Section 1.865-2(a) provides the general rule that stock losses are
allocated in the same manner as stock gains (determined without regard
to sections 1248 and 865(f)). Thus, stock loss generally is allocated
to the residence of the seller. Loss recognized by a United States
resident on the disposition of stock attributable to a foreign branch
is allocated to foreign source income if a gain would have been taxable
by the foreign country and the highest marginal rate of tax imposed in
that foreign country is at least 10 percent. Loss recognized by a
nonresident alien individual or foreign corporation with respect to
stock constituting a United States real property interest reduces
United States source income, in accordance with section 897.
Section 1.865-2(b) provides exceptions to the general rule. Section
1.865-2(b)(1) provides a dividend recapture rule that applies to losses
realized on a disposition of stock within 24 months following the
inclusion of a dividend or similar amount. To the extent of the
dividend recapture amount, the loss shall be allocated to the same
class of income as the dividend. Under a de minimis rule, the recapture
rule will not apply if the sum of all dividend recapture amounts is
less than 10 percent of the realized loss.
A dividend recapture amount includes an actual dividend, a subpart
F or qualified electing fund inclusion attributable to a dividend
received by a controlled foreign corporation in a separate limitation
category other than that for passive income, and an inclusion
attributable to section 956 or 956A. Dividends from foreign
corporations, which often are sheltered from United States tax by
foreign tax credits and do not reduce the shareholder's basis in the
stock, may reduce the selling price of the stock, thereby creating or
increasing a loss on sale. Similarly, the identified subpart F
inclusions may increase the shareholder's stock basis without
substantially affecting the value of the stock, offering similar
opportunities to create a tax mismatch from an economic ``wash'' by
pairing tax-sheltered foreign source inclusions and United States
source loss.
Section 1.865-2(b)(2) provides a consistency rule requiring
generally that loss recognized on the disposition of an 80%-owned
foreign affiliate reduces foreign source passive income if, within the
past five years, the seller or any member of its consolidated group
recognized gain on the disposition of a foreign affiliate that was
sourced under section 865(f). In order to provide relief for taxpayers
that could have taken steps to avoid section 865(f) treatment on gain
sales occurring prior to the publication of these proposed regulations,
the five-year lookback period will be phased in so that losses will be
tainted only by reason of gains recognized after September 6, 1996.
Section 1.865-2(b)(3) provides anti-abuse rules designed to prevent
taxpayers from changing the allocation of a loss with respect to stock
or other property by entering into certain transactions.
Section 1.865-2(c) provides rules of general application. Section
1.865-2(c)(1) provides that a partner's distributive share of loss
resulting from a disposition of stock by a partnership is allocated as
if the partner disposed of the stock. In an appropriate case the loss
may be attributable to a fixed place of business of the partnership
rather than to the partner's residence.
Section 1.865-2(c)(2) provides that worthlessness shall be treated
as a disposition for purposes of the stock loss allocation rules.
Section 1.865-2(d) provides definitions.
[[Page 35698]]
Under Sec. 1.865-2(e), the regulations are proposed to be effective
for taxable years beginning after 60 days after the date final
regulations are published in the Federal Register. However, a taxpayer
may elect to apply the regulations retroactively to stock losses in all
open post-1986 taxable years. A taxpayer generally may make the
election by attaching a statement to an original or amended federal
income tax return filed after final regulations are published in the
Federal Register. However, the election will not be effective unless
amended returns are filed within 120 days of the date final regulations
are published in the Federal Register.
Section 1.904-4(c) is proposed to be amended to provide rules
specifically addressing the treatment of loss allocated to the section
904(d) separate category for passive income. The proposed amendments
provide that, for purposes of the grouping rules relating to the high-
tax kick-out described in section 904(d)(2)(F), a passive loss is
initially allocated to a group based on the foreign tax that was, or
would have been, imposed on the transaction had the sale resulted in a
gain under foreign law. If, after allocation and apportionment of all
deductions, net income in a group is less than zero, any taxes imposed
with respect to the group are considered related to general limitation
income. The net loss is not considered related to general limitation
income, but proportionately reduces income in the other passive income
groups. The determination of whether income in the positive income
groups is high-taxed is made after this allocation of loss groups. Any
net loss in the section 904(d) separate category for passive income
constitutes a separate limitation loss governed by section 904(f)(5).
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866. Therefore, a regulatory assessment is not required. It is hereby
certified that these regulations do not have a significant economic
impact on a substantial number of small entities. This certification is
based on the fact that these regulations will primarily affect U.S.
owners of significant interests in foreign corporations, which owners
generally are large multinational corporations. This certification is
also based upon the fact that, even in cases in which the regulation
applies to small entities, the burden imposed by the collection of
information in the regulation, which is merely an election to apply the
regulation to prior taxable years, is not substantial and, therefore,
the collection of information will not impose a significant economic
impact on such entities. Therefore, a Regulatory Flexibility Analysis
under the Regulatory Flexibility Act (5 U.S.C. chapter 6) 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 their 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 (signed original
and eight (8) copies) that are timely submitted to the IRS. All
comments will be available for public inspection and copying.
A public hearing has been scheduled for November 6, 1996, at 10
a.m., in room 2615, Internal Revenue Building, 1111 Constitution Avenue
NW., Washington DC. Because of access restrictions, visitors will not
be admitted beyond the 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 by October 7, 1996 and submit an outline of topics to be
discussed and time to be devoted to each topic (signed original and
eight (8) copies) by October 16, 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 Seth B. Goldstein, of
the Office of the Associate Chief Counsel (International), IRS.
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.
Adoption of 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 is amended by adding
entries in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.865-1 is also issued under 26 U.S.C. 865(j)(1).
Section 1.865-2 is also issued under 26 U.S.C. 865(j)(1).
Par. 2. Section 1.861-8 is amended by adding paragraph (e)(7)(iii)
to read as follows:
Sec. 1.861-8 Computation of taxable income from sources within the
United States and from other sources and activities.
* * * * *
(e) * * *
(7) * * *
(iii) Special rules for allocation of loss from disposition of
stock. See Sec. 1.865-2 for special rules regarding the allocation of
loss recognized on certain dispositions of stock in taxable years
beginning after December 31, 1986.
Par. 3. Sections 1.865-1 and 1.865-2 are added under the
undesignated center heading ``Determination of Sources of Income'' to
read as follows:
Sec. 1.865-1 Loss from the disposition of personal property.
Allocation of loss on the sale or other disposition of portfolio
stock, stock of a regulated investment company (as defined in section
851), stock of an S corporation (as defined in section 1361), and other
personal property not governed by Sec. 1.865-2 is governed by
Sec. 1.861-8 or other administrative pronouncements. Portfolio stock
is, with respect to a taxpayer, stock in a corporation in which the
taxpayer owns, or is considered to own under the rules of section
267(c), less than 10 percent of the total combined voting power of all
classes of stock entitled to vote of such corporation and less than 10
percent of the total value of the stock of such corporation.
Sec. 1.865-2 Loss from the disposition of certain stock.
(a) General rules for allocation of loss on disposition of stock--
(1) Allocation against gain. Except as otherwise provided in
Sec. 1.865-1 and paragraph (b) of this section, loss recognized on the
sale or other disposition of stock shall be allocated to the class of
gross income and, if necessary, apportioned between the statutory
grouping of gross income (or among the statutory groupings) and the
residual grouping of gross income, with respect to which gain (other
than gain treated as a dividend under section 1248) from the sale of
such stock would give rise in the hands of the seller
[[Page 35699]]
(without regard to section 865(f)). For purposes of section 904, any
such loss shall be allocated to the separate category to which such
gain would have been assigned (without regard to section
904(d)(2)(A)(iii)(III)). For purposes of Sec. 1.904-4(c)(2)(ii)(A), any
loss allocated to passive income shall be allocated (prior to the
application of Sec. 1.904-4(c)(2)(ii)(B)) to the group of passive
income to which gain on the sale would have been assigned if the sale
of the stock had resulted in the recognition of a gain under the law of
the relevant foreign jurisdiction or jurisdictions. See section
904(f)(5) and the regulations under that section for rules regarding
the treatment of separate limitation losses.
(2) Stock attributable to foreign office. Except as otherwise
provided in Sec. 1.865-1 and paragraph (b) of this section, in the case
of loss on the sale or other disposition of stock (other than stock
constituting inventory) by a United States resident that is
attributable to an office or other fixed place of business in a foreign
country within the meaning of section 865(e)(3), the loss shall be
allocated to reduce foreign source income if a gain would have been
taxable by the foreign country and the highest marginal rate of tax
imposed in the foreign country is at least 10 percent.
(3) Stock constituting a United States real property interest. Loss
recognized by a nonresident alien individual or a foreign corporation
on the sale or other disposition of stock that constitutes a United
States real property interest shall be allocated to reduce United
States source income. For additional rules governing the treatment of
such loss, see section 897 and the regulations thereunder.
(b) Exceptions--(1) Dividend recapture exception--(i) In general.
Except as otherwise provided in Sec. 1.865-1, if a taxpayer realizes a
loss on a disposition of stock, and the taxpayer included in income a
dividend recapture amount (or amounts) with respect to such stock at
any time during the recapture period, then, to the extent of the
dividend recapture amount (or amounts), the loss shall be allocated and
apportioned on a proportionate basis to the class or classes of gross
income or the statutory or residual grouping or groupings of gross
income to which the dividend recapture amount was assigned.
(ii) Exception for de minimis amounts. Paragraph (b)(1)(i) of this
section shall not apply to a loss realized by a taxpayer on the
disposition of stock if the sum of all dividend recapture amounts
included in income by the taxpayer with respect to such stock during
the recapture period is less than 10 percent of the realized loss.
(2) Consistency exception--(i) In general. Except to the extent
provided in paragraph (b)(1) of this section, loss recognized by a
taxpayer with respect to the sale or other disposition of stock of a
foreign affiliate (or of a corporation that was a foreign affiliate
within the five-year period preceding the date of the sale) or a
foreign affiliate holding company shall be allocated to reduce foreign
source income if the taxpayer (or, in the case of a taxpayer that is a
member of a consolidated group (within the meaning of Sec. 1.1502-1(h))
at the time the loss is recognized, the consolidated group) recognized
gain on the disposition of any stock that was sourced under section
865(f) within the five-year period ending on the last day of the
taxable year in which the loss was recognized. See paragraph (a)(1) of
this section for rules relating to the allocation of the loss to
separate categories described in section 904(d).
(ii) Phased-in lookback period. The rule of paragraph (b)(2)(i) of
this section shall apply only if gain sourced under section 865(f) was
recognized after September 6, 1996.
(3) Anti-abuse rules. If one of the principal purposes of a
reorganization within the meaning of section 368(a), liquidation under
section 332, transfer to a corporation under section 351, transfer to a
partnership under section 721, transfer to a trust, distribution by a
partnership, distribution by a trust, or transfer to or from a
qualified business unit (within the meaning of section 989(a)) is to
change the allocation of a built-in loss on the disposition of stock
(or other personal property), the loss shall be allocated as if it were
recognized on the disposition of the stock (or other personal property)
immediately prior to the reorganization, liquidation, transfer, or
distribution. In addition, if a loss recognized by a taxpayer with
respect to the sale or other disposition of stock in a corporation is
primarily attributable to loss with respect to one or more financial
instruments held by the corporation, and one of the taxpayer's
principal purposes for holding the financial instrument or instruments
through the corporation is to allocate loss under Sec. 1.865-2, the
stock loss shall be allocated under Sec. 1.865-1 as if it were
recognized on the disposition of such financial instrument or
instruments. Whether a taxpayer has a principal purpose to allocate
loss under Sec. 1.865-2 shall be determined by taking into account all
the facts and circumstances, including whether the corporation engages
in business activities (other than trading financial instruments) and
whether the taxpayer or any related person or persons (within the
meaning of section 267(b) or 954(d)(3)) hold positions that offset loss
positions held by the corporation. For purposes of this paragraph
(b)(3), positions are offsetting if the risk of loss of holding one or
more positions is substantially diminished by holding one or more other
positions. A person may have a principal purpose of affecting loss
allocation even though this purpose is outweighed by other purposes
(taken together or separately).
(4) Example. The application of this paragraph (b) may be
illustrated by the following example:
Example. (i) P, a domestic corporation, is a United States
shareholder of N, a controlled foreign corporation. N has never had
any subpart F income and all of its earnings and profits are
described in section 959(c)(3). On August 5, 1997, N distributes a
dividend to P in the amount of $100. The dividend gives rise to a $5
foreign withholding tax, and P is deemed to have paid an additional
$45 of foreign income tax with respect to the dividend under section
902. Under section 904(d)(3) the dividend is general limitation
income described in section 904(d)(1)(I).
(ii) On February 6, 1998, P sells its shares of N and recognizes
a $110 loss. In 1998, P has the following taxable income, excluding
the loss on the sale of N:
(A) $1,000 of foreign source income that is general limitation
income described in section 904(d)(1)(I), which is subject to
foreign taxes of $400;
(B) $1,000 of foreign source capital gain that is passive income
described in section 904(d)(1)(A) attributable to gain on the sale
of stock in a foreign affiliate that is sourced under section
865(f), which is subject to foreign taxes of $30.
(iii) The $100 dividend paid in 1997 is a dividend recapture
amount that was included in P's income within the recapture period
preceding the disposition of the N stock. The de minimis exception
of paragraph (b)(1)(ii) of this section does not apply because the
$100 dividend recapture amount exceeds 10 percent of the $110 loss.
Therefore, to the extent of the $100 dividend recapture amount, the
loss must be allocated under paragraph (b)(1)(i) of this section to
the separate limitation category to which the dividend was assigned
(general limitation income).
(iv) Because P recognized gain on the sale of stock in a foreign
affiliate that was sourced under section 865(f) within the period
described in paragraph (b)(2)(i) of this section, P's remaining $10
loss on the disposition of the N stock is allocated to foreign
source passive income under paragraph (b)(2)(i) of this section.
(v) After allocation of the stock loss, P's taxable income in
1998 consists of $900 of foreign source general limitation income
and $990 of foreign source passive income.
(c) Rules of application--(1) Loss recognized by partnership. A
partner's
[[Page 35700]]
distributive share of loss resulting from the sale or other disposition
of stock by a partnership shall be allocated and apportioned in
accordance with this section as if the partner had disposed of the
stock. If a sale of stock is attributable to an office or other fixed
place of business of the partnership within the meaning of section
865(e)(3), such office or fixed place of business shall be considered
to be an office of the partner for purposes of this section.
(2) Worthless stock. For purposes of this section, worthlessness
giving rise to a deduction under section 165(g) (including section
165(g)(3)) with respect to stock shall be treated as a disposition.
(d) Definitions--(1) Terms defined in Sec. 1.861-8. See Sec. 1.861-
8 for the meaning of class of gross income, statutory grouping of gross
income, and residual grouping of gross income.
(2) Dividend recapture amount. A dividend recapture amount is a
dividend (except for an amount treated as a dividend under section 78),
an inclusion described in section 951(a)(1)(A)(i) (but only to the
extent attributable to a dividend included in the earnings of a
controlled foreign corporation that is included in foreign personal
holding company income under section 954(c)(1)(A) and that, pursuant to
section 904(d)(3)(B), is treated as income in a separate category other
than the separate category for passive income described in section
904(d)(2)(A)), an inclusion described in section 951(a)(1)(B) or (C),
and an inclusion described in section 1293(a)(1) (but only to the
extent attributable to a dividend that is included in the earnings of a
qualified electing fund and that, pursuant to section 904(d)(3)(I), is
treated as income in a separate category other than the separate
category for passive income described in section 904(d)(2)(A)).
(3) Foreign affiliate. A foreign affiliate is a foreign corporation
that is a member of the affiliated group (within the meaning of section
1504(a) without regard to section 1504(b)) that includes the taxpayer.
(4) Foreign affiliate holding company. A foreign affiliate holding
company is any corporation, substantially all the assets of which
consist of stock of one or more foreign affiliates, held directly or
indirectly. For purposes of this paragraph, any assets acquired or held
by a corporation with a principal purpose of avoiding foreign affiliate
holding company status shall be disregarded.
(5) Recapture period. A recapture period is the 24-month period
preceding the date on which a taxpayer realizes a loss on a disposition
of stock, increased by any period of time in which the taxpayer has
diminished its risk of loss in a manner described in section 246(c)(4)
and the regulations thereunder.
(6) Taxpayer. A taxpayer shall include all predecessors or
successors of the taxpayer.
(7) United States resident. See section 865(g) and the regulations
thereunder for the definition of United States resident.
(e) Effective date--(1) In general. This section is effective for
taxable years beginning after the date that is 60 days after the date
these regulations are published as final regulations in the Federal
Register.
(2) Prior year election--(i) In general. A taxpayer may elect to
apply the rules of this section to all (but not less than all) of its
taxable years that begin after December 31, 1986, and on or before the
date that is 60 days after the date these regulations are published as
final regulations in the Federal Register, and with respect to which
the statute of limitations expires after the date that is 120 days
after the date these regulations are published as final regulations in
the Federal Register. The election shall be effective only if the
taxpayer satisfies all the applicable requirements specified in
paragraph (e)(2)(ii) of this section.
(ii) Requirements for election--(A) Statement filed with original
or amended return. For each taxable year subject to the election, a
taxpayer shall file an original or amended federal income tax return
that reflects the rules of this section and includes the statement
described in paragraph (e)(2)(ii)(C) of this section. Amended returns
filed pursuant to this section must be filed on or before the date that
is 120 days after the date these regulations are published as final
regulations in the Federal Register.
(B) Presentation of statement upon audit. A taxpayer that is under
examination with respect to any taxable year subject to the election on
the date that is 120 days after the date these regulations are
published as final regulations in the Federal Register must furnish a
copy of the statement described in paragraph (e)(2)(ii)(C) of this
section for all years subject to the election to the revenue agent
responsible for examining its federal income tax returns on or before
the date that is 140 days after the date these regulations are
published as final regulations in the Federal Register. For purposes of
this paragraph (e)(2)(ii)(B), a taxpayer is under examination beginning
on the date the taxpayer (or any member of the consolidated group of
which the taxpayer is a member) has been contacted in any manner by a
representative of the Internal Revenue Service for the purpose of
scheduling any type of examination of any of its federal income tax
returns and ending on the earliest of the date: the taxpayer (or
consolidated group of which the taxpayer is a member) receives a ``no
change'' letter; the taxpayer (or consolidated group of which the
taxpayer is a member) pays the deficiency (or proposed deficiency); or
on which a deficiency, jeopardy, termination, bankruptcy, or
receivership assessment is made. An electing taxpayer that is not under
examination with respect to any taxable year subject to the election on
the date that is 120 days after the date these regulations are
published as final regulations in the Federal Register and is contacted
thereafter by a representative of the Internal Revenue Service for the
purpose of scheduling any type of examination of any of its federal
income tax returns for a year subject to the election must furnish a
copy of the statement described in paragraph (e)(2)(ii)(C) of this
section for all years subject to the election to the revenue agent
responsible for examining its federal income tax returns within 20 days
of being contacted.
(C) Contents of statement. The statement shall be entitled
``ELECTION UNDER Sec. 1.865-2(e)(2) TO APPLY RETROACTIVELY Sec. 1.865-2
STOCK LOSS ALLOCATION RULES.'' The statement shall identify, for the
taxable year subject to the election, each loss from the disposition of
stock that is subject to this section and that was incurred by the
taxpayer or by any controlled foreign corporation (within the meaning
of section 953(c)(1)(B) or 957) with respect to which the taxpayer is a
United States shareholder (within the meaning of section 951(b) or
953(c)(1)(A)). For each such loss, the statement shall provide the name
and identifying number of the entity that incurred the loss, the amount
of the loss, and the paragraph of this section under which the loss is
allocated. Each loss subject to paragraph (b)(1) of this section shall
be separately identified with a notation stating ``Subject to dividend
recapture under Sec. 1.865-2(b)(1).'' The statement shall also include
the following declaration: ``No losses, other than those so identified
herein, are subject to Sec. 1.865-2(b)(1).'' The statement shall
indicate whether the taxpayer or any controlled foreign corporation
(within the meaning of section 953(c)(1)(B) or 957) with respect to
which the taxpayer is a United States
[[Page 35701]]
shareholder (within the meaning of section 951(b) or 953(c)(1)(A))
acquired the stock after July 8, 1996 as a result of a transaction
described in paragraph (b)(3) of this section (regardless of the
purpose or purposes of the transaction). An election shall not be
effective unless each statement required by this paragraph (e)(2)(ii)
contains all the information specified herein.
Par. 4. Section 1.904-0 is amended by revising the entry for
Sec. 1.904-4(c)(2)(ii) and adding entries for paragraphs (c)(2(ii)(A)
and (B) of that section to read as follows:
Sec. 1.904-0 Outline of regulation provisions for section 904.
* * * * *
Sec. 1.904-4 Separate application of section 904 with respect to
certain categories of income.
* * * * *
(c) * * *
(2) * * *
(ii) Grouping rules.
(A) Initial allocation and apportionment of deductions.
(B) Reallocation of loss groups.
Par. 5. Section 1.904-4 is amended by revising paragraphs (c)(1)
and (c)(2) and adding paragraph (c)(8) Example 11 and Example 12 to
read as follows:
(c) High-taxed income--(1) In general. Income received or accrued
by a United States person that would otherwise be passive income shall
not be treated as passive income if the income is determined to be
high-taxed income. Income shall be considered to be high-taxed income
if, after allocating expenses, losses and other deductions of the
United States person to that income under paragraph (c)(2)(ii) of this
section, the sum of the foreign income taxes paid or accrued by the
United States person with respect to such income and the foreign taxes
deemed paid or accrued by the United States person with respect to such
income under section 902 or section 960 exceeds the highest rate of tax
specified in section 1 or section 11, whichever applies (and with
reference to section 15 if applicable), multiplied by the amount of
such income (including the amount treated as a dividend under section
78). If, after application of this paragraph (c), income that would
otherwise be passive income is determined to be high-taxed income, such
income shall be treated as general limitation income, and any taxes
imposed on that income shall be considered related to general
limitation income under Sec. 1.904-6. If, after application of this
paragraph (c), passive income is less than zero, the loss shall
constitute a passive separate limitation loss (subject to the rules of
section 904(f)(5) and the regulations under that section), but any
taxes imposed on passive income shall be considered related to general
limitation income under Sec. 1.904-6. For additional rules regarding
losses related to passive income, see paragraph (c)(2) of this section.
Income and taxes shall be translated at the appropriate rates, as
determined under sections 986, 987 and 989 and the regulations under
those sections, before application of this paragraph (c). For purposes
of allocating taxes to groups of income, United States source passive
income is treated as any other passive income. In making the
determination whether income is high-taxed, however, only foreign
source income, as determined under United States tax principles, is
relevant. See paragraph (c)(8) Examples (10), (11) and (12) of this
section for examples illustrating the application of this paragraph
(c)(1) and paragraph (c)(2) of this section.
(2) Grouping of items of income in order to determine whether
passive income is high-taxed income--(i) Effective date. For purposes
of determining whether passive income is high-taxed income, the
grouping rules of paragraphs (c)(3), (c)(4), and (c)(5) of this section
apply to taxable years beginning after December 31, 1987. See notice
87-6 for the grouping rules applicable to taxable years beginning after
December 31, 1986 and before January 1, 1988. Paragraph (2)(ii)(B) of
this section is effective for taxable years beginning after the date
that is 60 days after the date these regulations are published as final
regulations in the Federal Register.
(ii) Grouping rules--(A) Initial allocation and apportionment of
deductions. For purposes of determining whether passive income is high-
taxed, expenses, losses and other deductions shall be allocated and
apportioned initially to each of the groups of passive income
(described in paragraphs (c)(3), (4), and (5) of this section) under
the rules of Secs. 1.861-8 through 1.861-14T, 1.865-1, and 1.865-2.
Taxpayers that allocate and apportion interest expense on an asset
basis may nevertheless apportion passive interest expense among the
groups of passive income on a gross income basis. If loss from the
disposition of property gives rise to foreign tax (e.g., the
transaction giving rise to the loss is treated under foreign law as
having given rise to a gain), the foreign tax shall be allocated to the
group of passive income to which the loss is allocated under this
paragraph (c)(2)(ii)(A), without regard to paragraph (c)(2)(ii)(B) of
this section. A determination of whether passive income is high-taxed
shall be made only after application of paragraph (c)(2)(ii)(B) of this
section (if applicable).
(B) Reallocation of loss groups. If, after allocation and
apportionment of expenses, losses and other deductions under paragraph
(c)(2)(ii)(A) of this section, the sum of the allocable deductions
exceeds the gross income in one or more groups, the excess deductions
shall proportionately reduce income in the other groups (but not below
zero), and any taxes imposed with respect to such loss group or groups
shall be considered related to general limitation income.
* * * * *
(8) * * *
Example 11. P, a domestic corporation, earns the following items
of gross income: $100 of foreign source, passive limitation interest
income not subject to any foreign tax, $200 of foreign source,
passive limitation royalty income subject to a 5 percent foreign
withholding tax (foreign tax paid is $10), $1300 of foreign source,
passive limitation rental income subject to a 25 percent foreign
withholding tax (foreign tax paid is $325), $500 of foreign source,
general limitation income that gives rise to a $250 foreign tax, and
$2000 of U.S. source capital gain that is not subject to any foreign
tax. P has a $700 deduction allocable to its passive rental income.
P's only other deduction is a $500 capital loss on a sale of stock
that is allocated to foreign source passive limitation income under
Sec. 1.865-2(b)(2). If P had recognized a gain on the stock sale
under foreign law, the gain would not have been subject to foreign
tax. The $500 capital loss is initially allocated to the group of
passive income not subject to any foreign tax, and the $400 amount
by which the capital loss exceeds the income in the group must be
reapportioned to the other groups under paragraph (c)(2)(ii)(B) of
this section. The net royalty income is thus reduced by $100 to $100
($200-($400 x (200/800))) and the net rental income is reduced by
$300 to $300 ($1300-$700-($400 x (600/800))). The $100 net royalty
income is not high-taxed and remains passive income. The $300 net
rental income is high-taxed because the foreign taxes exceed the
highest United States rate of tax on that income. Under the high-tax
kick-out, the $300 of net rental income (the gross rental income and
expenses allocated and apportioned thereto) and the $325 of
associated foreign tax are assigned to the general limitation
category.
Example 12. The facts are the same as in Example 11 except the
amount of the capital loss that is allocated under Sec. 1.865-
2(b)(2) and paragraph (c)(2) of this section to the group of foreign
source passive income subject to no foreign tax is $1100. Under
paragraph (c)(2)(ii)(B) of this section, the excess deductions of
$1000 must be reapportioned to the $200 of net royalty income
subject to a 5% withholding tax and the $600 of net rental income
subject to a
[[Page 35702]]
25% withholding tax. The income in each of these groups is reduced
to zero, and the foreign taxes imposed on the rental and royalty
income are considered related to general limitation income. The
remaining loss of ($200) constitutes a separate limitation loss with
respect to passive income.
* * * * *
Margaret Milner Richardson,
Commissioner of Internal Revenue.
[FR Doc. 96-17004 Filed 7-5-96; 8:45 am]
BILLING CODE 4830-01-P
Complete official Federal Register PDF
FR Doc. 96-16853 Fees for Commodity Inspection
[Federal Register Volume 61, Number 131 (Monday, July 8, 1996)]
[Proposed Rules]
[Pages 35687-35691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16853]
========================================================================
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. 131 / Monday, July 8, 1996 / Proposed
Rules
[[Page 35687]]
DEPARTMENT OF AGRICULTURE
Grain Inspection, Packers and Stockyards Administration
7 CFR Part 868
RIN 0580-AA48
Fees for Commodity Inspection
AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Grain Inspection Service (FGIS), a program of the
Grain Inspection, Packers and Stockyards Administration (GIPSA), is
proposing to make the following changes to fees charged for inspection
services for commodities, other than rice, performed under the
Agricultural Marketing Act of 1946: Increase hourly and unit fees;
charge actual travel and per diem costs; charge for sanitation
inspections, pre-inspection conferences, and related services;
establish hourly fees at time and one-half for service provided on
Saturdays, Sundays, and Federal holidays; eliminate the provisions for
entering into a contract for service; and change in the fee structure
for stowage examinations from an hourly rate to a unit fee.
These revisions are designed to generate revenue sufficient to
cover, as nearly as practicable, the projected operating costs,
including related supervisory and administrative costs, for commodity
inspection services rendered and to maintain an appropriate operating
reserve.
DATES: Written comments must be submitted on or before August 7, 1996.
ADDRESSES: Written comments must be submitted to George Wollam, USDA-
GIPSA-ART, Room 0623--South Building, 1400 Independence Avenue, SW.,
Washington, DC 20090-6454, or FAX (202) 720-4628. Comments may be sent
by electronic mail or Internet to: [email protected].
All comments received will be available for public inspection
during regular business hours in Room 062--South Building, 1400
Independence Avenue, SW., Washington, DC (7 CFR 1.27(b)).
FOR FURTHER INFORMATION CONTACT:
George Wollam at the address above or by telephone at (202) 720-0292.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be significant for the purposes of
Executive Order 12866 and, therefore, has been reviewed by the Office
of Management and Budget. The five changes being proposed are designed
to generate revenue sufficient to recover the operating costs for
commodity inspection services and to maintain an appropriate operating
reserve. FGIS is proposing the following changes: (1) Increase in the
hourly and unit fees for commodity inspection services, (2) begin
charging actual travel costs for airlines, rental cars, etc. and per
diem for travel beyond 25 miles of an official assigned duty location,
(3) begin charging for sanitation inspections, pre-inspection
conferences, and related services, (4) establish new hourly fees at
time and one-half for service provided on Saturdays, Sundays, and
Federal holidays, (5) eliminate the provisions for entering into a
contract for service; and (6) change in the fee structure for stowage
examinations from an hourly rate to a unit fee.
Fees for commodity inspection services were last increased on June
28, 1984 (49 FR 26547). For nearly 10 years, the 1984 fee schedule
sufficiently recovered operating expenses and maintained a minimum 3-
month operating reserve. However, by fiscal year (FY) 95, increased
operating costs coupled with reductions in the number of services
requested rendered the 1984 fee schedule inadequate for generating
sufficient revenue to cover operating expenses. The operating reserve,
which has been funding losses to the commodity inspection program for
the past 4 years, was drawn down to the minimum 3-month operating
reserve. Given these conditions, the Administrator of GIPSA determined
that a fee necessary to meet rising costs and maintain an adequate
reserve balance.
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. It is not intended to have a retroactive effect,
nor will this proposed rule preempt any State or local laws,
regulations, or policies unless they present irreconcilable conflict
with this rule. No administrative procedures must be exhausted prior to
any judicial challenge to provisions of this rule.
Regulatory Flexibility Act Certification
James R. Baker, Administrator, GIPSA, has determined that this
proposed rule will not have a significant economic impact on a
substantial number of small entities as defined in the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.) because most users of the
commodity inspection services do not meet the requirements for small
entities. In addition, FGIS is required by statute to recover the costs
of commodity inspection services, as nearly as practicable.
Information Collection and Record Keeping Requirements
In compliance with the Paperwork Reduction Act of 1980 (44 U.S.C.
Chapter 35), the previously approved information collection and
recordkeeping requirements for applications for inspection services,
including official commodity inspections, have been approved by the
Office of Management and Budget under control number 0580-0013.
Background
The commodity inspection fees were last amended effective June 28,
1984 (49 FR 26547). These fees were to cover, as nearly as practicable,
the operating costs for the program. They presently appear in
Sec. 868.90, Tables 1 and 2, of the regulations (7 CFR 868.90, Tables 1
and 2).
The majority of processed commodity inspections performed under the
Agricultural Marketing Act of 1946 are on purchases made by the Farm
Service Agency (FSA) formerly Agricultural Soil Conservation Service.
Historically, approximately 92 percent of the services performed have
been for FSA purchases. Defense Personnel Support Center (DPSC)
inspections account for approximately 2 percent of the inspections; the
remaining 6 percent are performed under nongovernment contracts.
Approximately 65 percent of graded commodity inspections are for
government purchases, and the
[[Page 35688]]
remaining 35 percent are for commercial sales.
Several actions have caused a general decrease in the number of
inspections performed for both graded and processed commodities.
Beginning in FY 92, FSA commodity purchases began to decline as a
result of the success of a market-oriented farm program that virtually
eliminated government-owned commodity grain stocks and, in turn, the
portion of processed commodities derived from these stocks. In
addition, in FY 94, responsibility for inspecting many products for
DPSC was transferred from FGIS to AMS.
Processed commodities comprise approximately 90 percent of the
program's revenue. In FY 91, FGIS inspected 26,218 lots. By FY 92, the
number of inspected lots dropped to 24,004; in FY 93, 17,494 lots were
inspected; and FY 94 saw a slight increase to 19,664. In FY 95,
however, the total again decreased to 15,065, or a 43 percent reduction
from the number of lots inspected in FY 91. Corresponding decreases
have also been experienced for graded commodities.
Revenue collected in FY 91 totaled $6,562,940 and operating costs
totaled $5,987,299 for a positive margin of $575,570. Revenue in FY 92
dropped to $5,158,903 due to the decrease in inspections and resulted
in a $179,396 loss to the program. Losses were incurred in each of the
following years: $1,184,602 in FY 93, $764,865 in FY 94, and $1,456,944
in FY 95. At the same time, FGIS reduced operating costs for the
program from $5,987,370 in FY 91 to $5,468,059 in FY 95.
FGIS maintains an operating reserve specifically to cover the cost
of shutting down the program in case of an emergency. Agency policy is
to maintain the reserve at a level equal to 3 months operating
expenses. In FY 91, the reserve was $4,942,934, which represented 10
months of operating costs. The loss of $179,396 in FY 92 was covered by
this reserve.
In FY 92, FGIS reviewed the program's operating reserve to
determine if the fund was being maintained at an adequate level. The
Agency determined that, while the level exceeded the three-month
reserve minimum, it would not be prudent to decrease the reserve
because of anticipated downturns in the number of service requests and
the consequent need to cover program losses while restructuring the
program.
Again in FY 93, the $1,184,602 loss was covered by the reserve,
which was drawn down to a year-end total of $3,889,429. Even with the
loss, the fund still represented an 8.5 month reserve. By FY 94, the
reserve had dropped to $3,173,033, or the equivalent of 7 months'
operating costs. The losses incurred in FY 95 reduced the margin to
$1,716,090, which is a 3.2 month reserve and represents the target
level for the fund.
In FY 94, FGIS responded to the decline in services requests by
initiating a field restructuring plan that continued into FY 95. During
this time period, three field offices and one suboffice that were
directly involved with providing services were closed and consolidated.
This eliminated the cost of maintaining a field office and streamlined
overall operations. On two separate occasions, retirement incentives
(buyouts) were offered to employees which reduced the staffing levels
in this program. Other personnel were transferred to field offices and
redirected to other programs. In FY 91, approximately 103 staff years
where devoted to this program. By FY 95, the staffing level had been
reduced by 35 percent to 67 staff years. The FY 95 level of 15,065
services performed is expected to remain fairly constant in the future.
Large numbers of service requests as seen in the late 1980s and early
1990s are not forecasted. However, further losses are projected if
adjustments to the fee schedule are not made.
Due to reduced and sporadic FSA purchases, efficiencies gained
through volume inspections have disappeared. Fluctuations in service
demand have increased, even at locations that routinely requested
service on a daily basis. These changes have impacted on FGIS' ability
to maintain qualified staff at some locations and especially those that
are large distances from a field office. In addition, there has been an
increase in the proportion of inspections requested by facilities that
may need service only one or two weeks per year. Many of these
locations are far from field offices. The result is a great deal of
long-distance travel from field offices to remote locations for one or
two week jobs. Such travel has increased operating costs and, in some
instances, has offset the savings gained through the restructuring.
The 1984 fee schedule was designed to recover all costs associated
with performing commodity inspection service, including overtime,
travel, per diem, and other related services. For nearly ten years, the
1984 fee schedule generated sufficient revenue to cover operating
expenses. This was due, in large part, to continuously improved
efficiencies in service delivery and strong market demand for
inspection services. Although additional costs saving measures were
implemented during fiscal years 94 and 95, operating expenses and
service demand have reached a level at which the 1984 fee schedule no
longer generates sufficient revenue to cover costs of providing
service.
Since FY 90, there has been a 40 percent decrease in the amount of
commodity inspections requested. The commodity inspection program
experienced a $1,642,720 loss (revenue $4,011,116 and cost $5,468,059)
during FY 95. The commodity program's retained earnings are currently
$1,476,487, a 3.8-month operating reserve. Further losses are projected
if adjustments to the 1984 fee schedule are not made.
Proposed Action
Section 203 of the AMA (7 U.S.C. 1622) provides for the
establishment and collection of fees that are reasonable and, as nearly
as practicable, cover the costs of the services rendered. In accordance
with this section, FGIS proposes the following changes to maintain the
current commodity inspection program: (1) Increase hourly and unit
fees; (2) charge actual travel and per diem costs; (3) charge for
sanitation inspections, pre-inspection conferences, and related
services; (4) establish hourly fees at time and one-half for service
provided on Saturdays, Sundays, and Federal holidays; (5) eliminate the
provisions for entering into a contract for service; and (6) change in
the fee structure for stowage examinations from an hourly rate to a
unit fee.
1. Hourly Rates. The proposed new hourly rates are divided into two
categories: Regular Workday (Monday through Friday) and Nonregular
Workday (Saturday, Sunday, and Holiday). Section 868.90, Tables 1 and
3, currently define Saturday as a Regular Workday. The revised Table 1
redefines a Nonregular Workday as a Saturday, Sunday, and Holiday and
the hourly rate reflects time and one-half paid to employees. In
addition, the two separate hourly rates for regular and nonregular
workdays contained in Tables 1 and 3 are combined into one set of
hourly rates in a revised Table 1 that covers all services.
Section 868.90, Tables 1 and 3, currently provide for reduced
hourly fees for applicants who elect to enter into a contract with
FGIS. No applicants have used this provision since it was introduced in
1984. Because the current trends of decreasing service requests and
increasing demand fluctuations indicate less likelihood for applicants
to use this provision in the future, it is eliminated.
[[Page 35689]]
The rate for a Regular Workday will increase to $33.00 and
Nonregular Workday will increase to $42.80. These new hourly fees cover
FGIS' administrative and supervisory costs for the performance of
official services. These costs include personnel compensation and
benefits, rent, communications, utilities, contractual services,
supplies, and equipment.
2. Unit Rates. Section 868.90, Table 2 currently provides unit fees
for the grading of beans, peas, lentils, hops, and other nongraded,
nonprocessed commodities. These rates are increased and the current
Table 2 is deleted and combined with proposal Table 1. The new unit
rates cover FGIS' administrative and supervisory costs for performing
the official service, including costs for personnel compensation and
benefits, rent, communication, utilities, contractual services,
supplies, and equipment.
3. Travel and Per Diem. FGIS is making changes to Sec. 868.92 of
the regulations concerning the application of fees covered in Table 1.
Specifically, service, as provided under Sec. 868.90, Table 1, will
include service provided within 25 miles of the employee's assigned
duty point. Travel, per diem, and other related costs will be assessed
for providing service beyond the 25-mile limit. Section 868.91, Table
1, Fees for certain Federal rice inspection services, remain unchanged;
travel, per diem, and other related costs continue to be included in
the hourly rate.
4. Services Other Than Inspections. FGIS is proposing a change in
the fee structure for stowage examinations from an hourly fee that
recovers all costs to a service-specific fee structure currently funded
by the hourly rate. The service-specific fee will be a unit fee and
will apply only to stowage examinations.
FGIS is revising Footnote 1 to include provisions for charging for
sanitation examinations, pre-inspection conferences, and other related
services for which FGIS does not currently charge.
5. Fees for Laboratory Testing Services. Fees For Laboratory Test
Services, Table 4, Fees for Official Laboratory Test Services Performed
At the FGIS Commodity Testing Laboratory at Beltsville, Maryland, For
Processed Agricultural Products is revised to read: Table 2--Commodity
Testing Laboratory.
List of Subjects in 7 CFR Part 868
Administrative practice and procedure, Agricultural commodities.
For reasons set out in the preamble, 7 CFR part 868 is proposed to
be amended as follows:
PART 868--GENERAL REGULATIONS AND STANDARDS FOR CERTAIN
AGRICULTURAL COMMODITIES
1. The authority citation for part 868 continues to read as
follows:
Authority: Secs. 202-208, 60 Stat. 1087, as amended (7 U.S.C.
1621 et seq.)
2. Section 868.90 is revised to read as follows:
Sec. 868.90 Fees for certain Federal inspection services.
(a) The fees shown in Table 1 apply to Federal Commodity Inspection
Services specified below.
Table 1.--Hourly Rates \1\ \3\
[Fees for Inspection of Commodities Other Than Rice]
------------------------------------------------------------------------
------------------------------------------------------------------------
Hourly Rates (per service representative):
Monday to Friday--$33.00
Saturday, Sunday, and Holidays--$42.80
Miscellaneous Processed Commodities \2\:
(1) Additional Tests (cost per test, assessed in
addition to the hourly rate):
(i) Aflatoxin Test (Thin Layer Chromatography)... $51.40
(ii) Falling Number.............................. 12.00
)iii) Aflatoxin Test Kit......................... 7.50
Graded Commodities (Beans, Peas, Lentils, Hops, and
Pulses):
(1) Additional Tests--Unit Rates (Beans, Peas,
Lentils):
(i) Field run (per lot or sample)................ 22.70
(ii) Other than field run (per lot or sample).... 13.50
(iii) Factor analysis (per factor)............... 5.50
(2) Additional Tests--Unit Rates (Hops)--(i) Lot or
sample (per lot or sample).......................... 29.00
(3) Additional Tests--Unit Rates (Nongraded
Nonprocessed Commodities--(i) Factor analysis (per
factor)............................................. 5.50
(4) Stowage examination (service-on-request) \4\:
(i) Ship (per stowage space)..................... 50.00
(minimum
$250 per ship)
(ii) Subsequent ship examinations (same as original)
(minimum
$150 per ship)
(iii) Barge (per examination).................... 40.00
(iv) All other carriers (per examination)........ 15.00
------------------------------------------------------------------------
\1\ Fees for original commodity inspection and appeal inspection
services include, but are not limited to, sampling, grading, weighing,
stowage examinations, pre-inspection conferences, sanitation
inspections, and other services requested by the applicant and that
are performed within 25 miles of the field office. Travel and related
expenses (commercial transportation costs, mileage and per diem) will
be assessed in addition to the hourly rate for service beyond the 25-
mile limit. Refer to Secs. 868.92, Explanation of service fees and
additional fees for all other service fees except travel and per diem.
\2\ When performed at a location other than at the commodity testing
laboratory.
\3\ Faxed and extra copies of certificates will be charged at $3.00 per
copy.
\4\ If performed outside of normal business, 1\1/2\ times the applicable
unit fee will be charged.
(b) In addition to the fees, if any, for sampling or other
requested service, a fee will be asssessed for each laboratory test
(original, retest, or appeal) listed in Table 2.
(c) If a requested test is to be reported on a specified moisture
basis, a fee for a moisture test will also be assessed.
[[Page 35690]]
(d) Laboratory tests referenced in Table 2 will be charged at the
applicable laboratory fee when performed at field locations other than
at the applicant's facility.
Table 2.--Fees for Laboratory Test Services \1\
------------------------------------------------------------------------
Laboratory tests Fees
------------------------------------------------------------------------
(1) Alpha monoglycerides................................... $18.00
(2) Aflatoxin test (other than TLC or Minicolumn method)... 22.50
(3) Aflatoxin (TLC)........................................ 48.00
(4) Aflatoxin (Minicolumn method).......................... 25.00
(5) Appearance & odor...................................... 3.00
(6) Ash.................................................... 8.50
(7) Bacteria count......................................... 10.00
(8) Baking test (cookies).................................. 28.00
(9) Bostwick (cooked)...................................... 12.60
(10) Bostwick (uncooked/cook test/dispersibility).......... 6.50
(11) Brix.................................................. 8.00
(12) Calcium............................................... 12.50
(13) Carotenoid color...................................... 12.50
(14) Cold test (oil)....................................... 10.00
(15) Color test (syrups)................................... 6.50
(16) Cooking test (other than corn soy blend).............. 7.00
(17) Crude fat............................................. 10.00
(18) Crude fiber........................................... 13.00
(19) Dough handling (baking)............................... 8.50
(20) E. coli............................................... 19.00
(21) Falling number........................................ 12.00
(22) Fat (acid hydrolysis)................................. 14.00
(23) Fat stability (A.O.M.)................................ 27.00
(24) Flash point (open & close cup)........................ 14.00
(25) Free fatty acid....................................... 12.00
(26) Hydrogen ion activity (ph)............................ 9.50
(27) Iron enrichment....................................... 15.00
(28) Iodine number/value................................... 9.50
(29) Linolenic acid (fatty acid profile)................... 50.00
(30) Lipid phosphorous..................................... 47.00
(31) Livibond color........................................ 10.00
(32) Margarine (nonfat solids)............................. 23.60
(33) Moisture.............................................. 6.00
(34) Moisture average (crackers)........................... 4.00
(35) Moisture & volatile matter............................ 8.50
(36) Performance test (prepared bakery mix)................ 32.00
(37) Peroxide value........................................ 13.50
(38) Phosphorus............................................ 14.00
(39) Popcorn kernels (total defects)....................... 19.00
(40) Popping ratio/value popcorn........................... 19.00
(41) Potassium bromate..................................... 20.00
(42) Protein............................................... 7.50
(43) Rope spore count...................................... 31.50
(44) Salmonella............................................ 40.00
(45) Salt or sodium content................................ 12.50
(46) Sanitation (filth light).............................. 24.00
(47) Sieve test............................................ 5.00
(48) Smoke point........................................... 22.00
(49) Solid fat index....................................... 85.00
(50) Specific volume (bread)............................... 21.80
(51) Staphylococcus aureus................................. 24.50
(52) Texture............................................... 6.50
(53) Tilletia controversa kuhn (TCK) (Qualitative)......... 25.20
(54) Tilletia controversa kuhn (TCK) (Qualitative)......... 76.00
(55) Unsaponifiable matter................................. 25.00
(56) Urease activity....................................... 12.50
(57) Visual exam (hops pellet)............................. 7.50
(58) Visual exam (insoluble impurities oils & shortenings). 5.00
(59) Visual exam (pasta)................................... 10.50
(60) Visual exam (processed grain products)................ 12.00
(61) Visual exam (total foreign material other than cereal
grains)................................................... 6.50
(62) Vitamin enrichment.................................... 7.00
(63) Vomitoxim (TLC)....................................... 40.00
(64) Vomitoxin (Qualitative)............................... 30.00
(65) Vomitoxin (Quantitative).............................. 40.00
(66) Water activity........................................ 20.00
(67) Wiley melting point................................... 12.50
[[Page 35691]]
(68) Other laboratory tests................................ (\2\)
------------------------------------------------------------------------
\1\ When laboratory test service is provided for GIPSA by a private
laboratory, the applicant will be assessed a fee which, as nearly as
practicable, covers the costs to GIPSA for the service provided.
\2\ Fees for other laboratory tests not referenced above will be based
on the noncontract hourly rate listed in Table 1.
3. Section 868.92 (a)(2) is revised to read as follows:
Sec. 868.92 Explanation of service fees and additional fees.
(a) * * *
(2) The cost of per diem, subsistence, mileage, or commercial
transportation to perform the service for rice inspection only in
Sec. 868.91, Table 1, Fees for certain Federal rice inspection
services. See Sec. 868.90, Table 1, footnote 1 for Fees for Inspection
of Commodities Other Than Rice.
* * * * *
Dated: June 25, 1996.
Michael V. Dunn,
Assistant Secretary, Marketing and Regulatory Programs.
[FR Doc. 96-16853 Filed 7-5-96; 8:45 am]
BILLING CODE 3410-EN-M
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