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WednesdayJune 11, 1997Vol. 62 No. 112

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Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997

FEDERAL REGISTER Published daily, Monday through Friday,(not published on Saturdays, Sundays, or on official holidays),by the Office of the Federal Register, National Archives andRecords Administration, Washington, DC 20408, under the FederalRegister Act (49 Stat. 500, as amended; 44 U.S.C. Ch. 15) andthe regulations of the Administrative Committee of the FederalRegister (1 CFR Ch. I). Distribution is made only by theSuperintendent of Documents, U.S. Government Printing Office,Washington, DC 20402.

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FEDERAL REGISTER WORKSHOP

THE FEDERAL REGISTER: WHAT IT IS ANDHOW TO USE IT

FOR: Any person who uses the Federal Register and Code of FederalRegulations.

WHO: Sponsored by the Office of the Federal Register.WHAT: Free public briefings (approximately 3 hours) to present:

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3. The important elements of typical Federal Registerdocuments.

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research Federal agency regulations which directly affect them.There will be no discussion of specific agency regulations.

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Conference Room800 North Capitol Street, NW.Washington, DC(3 blocks north of Union Station Metro)

RESERVATIONS: 202–523–4538

Contents Federal Register

III

Vol. 62, No. 112

Wednesday, June 11, 1997

Agricultural Marketing ServiceRULESSpearmint oil produced in Far West, 31704–31707NOTICESAgency information collection activities:

Proposed collection; comment request, 31779–31780

Agriculture DepartmentSee Agricultural Marketing ServiceSee Animal and Plant Health Inspection ServiceSee Forest ServiceSee Grain Inspection, Packers and Stockyards

AdministrationNOTICESAgency information collection activities:

Submission for OMB review; comment request, 31779

Air Force DepartmentNOTICESPrivacy Act:

Systems of records, 31793–31798

Animal and Plant Health Inspection ServiceNOTICESEnvironmental statements; availability, etc.:

Genetically engineered organisms; field test permits—Rice plants, etc., 31780–31781

Uruguay Round Agreements (URAA):International sanitary and phytosanitary standard-setting

activities, 31781–31785

Army DepartmentNOTICESEnvironmental statements; availability, etc.:

Camp Roberts Army National Guard Training Site, CA;combined-forces training activities, etc., 31798–31799

Joint Vaccine Acquisition Program, 31799

Arts and Humanities, National FoundationSee National Foundation on the Arts and the Humanities

Centers for Disease Control and PreventionNOTICESGrants and cooperative agreements; availability, etc.:

Occupational safety and health—Composting; respiratory exposure hazards assessment,

31825–31830Uranium milling; epidemiologic studies to evaluate

health effects, 31822–31825

Coast GuardRULESDrawbridge operations:

California, 31723–31724Mississippi, 31722–31723

Commerce DepartmentSee Export Administration BureauSee International Trade AdministrationSee National Oceanic and Atmospheric Administration

Commodity Futures Trading CommissionRULESBankruptcy:

Chicago Board of Trade—London International FinancialFutures and Options Exchange Trading Link;distribution of customer property related to trading,31708–31713

Consumer Product Safety CommissionNOTICESMeetings; Sunshine Act, 31793

Customs ServiceRULESMerchandise, special classes:

Archaeological and ethnological material from—Peru, 31713–31721

Defense DepartmentSee Air Force DepartmentSee Army DepartmentSee Defense Logistics Agency

Defense Logistics AgencyNOTICESPrivacy Act:

Computer matching programs, 31799–31801

Education DepartmentNOTICESAgency information collection activities:


Employment and Training AdministrationNOTICESAgency information collection activities:

Proposed collection; comment request, 31845–31846Job Training Partnership Act:

Annual Service Delivery Area ReportCorrection, 31865

Employment Standards AdministrationNOTICESMinimum wages for Federal and federally-assisted

construction; general wage determination decisions,31846–31848

Energy DepartmentSee Federal Energy Regulatory Commission

Environmental Protection AgencyRULESAir quality implementation plans; approval and

promulgation; various States:Arizona, 31734–31738Pennsylvania, 31732–31734, 31738–31740

PROPOSED RULESAir pollutants, hazardous; national emission standards:

Hazardous air pollutants list; additions and deletions—Research and development facilities, 31776–31777

IV Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Contents

Air quality implementation plans; approval andpromulgation; various States:

Arizona, 31775–31776Pennsylvania, 31775, 31776

NOTICESPesticide registration, cancellation, etc.:

Carbaryl et al., 31816–31819

Executive Office of the PresidentSee Presidential Documents

Export Administration BureauNOTICESAgency information collection activities:

Proposed collection; comment request; correction, 31786

Farm Credit AdministrationNOTICESMeetings; Sunshine Act, 31819–31820

Federal Aviation AdministrationRULESAirworthiness standards:

Special conditions—LET Aeronautical Works model L610G airplane,

31707–31708PROPOSED RULESAirworthiness directives:

Fairchild, 31766–31769Class E airspace, 31769–31771NOTICESAdvisory circulars; availability, etc.:

Airport lighting, 31859Auxiliary power unit rotor failure and uncontained

turbine engine; design considerations for minimizinghazards, 31860

Environmental statements; availability, etc.:Los Angeles International Airport, CA; meetings, 31860–

31861Exemption petitions; summary and disposition, 31861–

31862Passenger facility charges; applications, etc.:

T.F. Green State Airport, RI, 31862

Federal Communications CommissionRULESCommon carrier services:

Access charges—Local exchange carriers; price cap performance review,

etc., 31868–31939Local exchange carriers; price cap performance review,

31939–31941PROPOSED RULESPersonal communication services:

Broadband PCS C and F block installment paymentissues, 31777–31778

Federal Election CommissionNOTICESMeetings; Sunshine Act, 31820

Federal Energy Regulatory CommissionNOTICESElectric rate and corporate regulation filings:

American Ref-Fuel Co. of Delaware County, L.P., et al.,31811–31813

Northeast Empire L.P. No. 2, 31813–31815Environmental statements; notice of intent:

Idaho Power Co., 31815–31816

Applications, hearings, determinations, etc.:ANR Pipeline Co., 31801CEA Philippines Holdings LLC, 31802CNG Transmission Corp., 31802Colorado Interstate Gas Co., 31802–31803Columbia Gas Transmission Corp., 31803El Paso Electric Co., 31803El Paso Natural Gas Co., 31804Gas Transport, Inc., 31804Granite State Gas Transmission, Inc., 31804Great Lakes Gas Transmission L.P., 31804Iroquois Gas Transmission System, L.P., 31805Kern River Gas Transmission Co., 31805KN Interstate Gas Transmission Co., 31805Koch Gateway Pipeline Co., 31805–31806National Fuel Gas Supply Corp., 31806NorAm Gas Transmission Co., 31806–31807Ozark Gas Transmission System, 31807Pacific Gas & Electric Co., 31807Pacific Gas Transmission Co., 31807–31808Southern Natural Gas Co., 31808–31809South Georgia Natural Gas Co., 31808Tampa Electric Co., 31809Texas Gas Transmission Corp., 31809Transcontinental Gas Pipe Line Corp., 31809–31810West Texas Gas, Inc., 31810Williams Natural Gas Co., 31810Williston Basin Interstate Pipeline Co., 31810–31811Wisconsin Public Service Corp., 31811

Federal Reserve SystemNOTICESBanks and bank holding companies:

Change in bank control, 31820Formations, acquisitions, and mergers, 31820–31821

Federal Trade CommissionNOTICESProhibited trade practices:

Sears, Roebuck, and Co., 31821–31822

Fish and Wildlife ServiceRULESEndangered and threatened species:

Golden paintbrush, 31740–31748Guajon, 31757–31762Steller’s eider (Alaska breeding population), 31748–31757

Food and Drug AdministrationRULESFood for human consumption:

Canning low-acid foods in hermetically sealed containers;safe manufacturing, processing, and packagingprocedures; technical amendment, 31721–31722

PROPOSED RULESMedical devices:

General and plastic surgery devices—Tweezer-type epilator; reclassification, 31771–31775

NOTICESAgency information collection activities:

Proposed collection; comment request, 31830–31831GRAS or prior-sanctioned ingredients:

Beatrice Foods, Inc.; withdrawn, 31831Medical devices; premarket approval:

Millenium Medical Supply, Inc.; Needle-Ease 2501,31831–31832

VFederal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Contents

Meetings:Center for Biologics Evaluation and Research; refusal to

file practices use, standing oversight committeereview, 31832

Forest ServiceNOTICESEnvironmental statements; notice of intent:

Hiawatha National Forest, MI; Perkins-Manistique 138 kVtransmission line project, 31785–31786

General Services AdministrationRULESFederal property management:

Motor equipment management—Fuel economy standard, etc.; correction, 31740

Government Ethics OfficeRULESConflict of interests:

Post-emmployment restrictions; exemption of positionsand revision of departmental componentdesignations

Correction, 31865

Grain Inspection, Packers and Stockyards AdministrationRULESFees:

Official inspection and weighing services, 31701–31704

Health and Human Services DepartmentSee Centers for Disease Control and PreventionSee Food and Drug AdministrationSee Health Resources and Services AdministrationSee National Institutes of HealthSee Public Health Service

Health Resources and Services AdministrationNOTICESAgency information collection activities:


Housing and Urban Development DepartmentRULESCommunity facilities:

Youthbuild program; application and grant award processremoved, 31954–31955

PROPOSED RULESCommunity development block grants:

New York small cities program, 31944–31951NOTICESGrants and cooperative agreements; availability, etc.:

Milton S. Eisenhower Foundation, 31837–31838Public and Indian housing—

Drug Elimination Technical Assistance Program;correction, 31838–31839

Real Estate Settlement Procedures Act:Special information booklet; revision, 31982–32011

Interior DepartmentSee Fish and Wildlife ServiceSee Land Management BureauSee National Park ServiceNOTICESMeetings:

Exxon Valdez Oil Spill Public Advisory Group, 31839

International Trade AdministrationNOTICESAntidumping:

Cut-to-length carbon steel plate from—People’s Republic of China, 31972–31979Russian Federation, 31967–31972South Africa, 31963–31967Ukraine, 31958–31963

Hot-rolled lead and bismuth carbon steel products from—United Kingdom, 31787–31789

Welded stainless steel pipe from—Korea, 31789–31790

Antidumping and countervailing duties:Administrative review requests, 31786–31787

Justice DepartmentSee National Institute of CorrectionsRULESConflict of interests

Correction, 31865NOTICESPollution control; consent judgments:

Gold Fields Mining Corp., 31843–31844

Labor DepartmentSee Employment and Training AdministrationSee Employment Standards AdministrationSee Occupational Safety and Health AdministrationNOTICESAgency information collection activities:


Land Management BureauNOTICESEnvironmental statements; availability, etc.:

Salt Lake District, Box Elder Resource Management Plan,UT, 31839

Environmental statements; notice of intent:Kingman, AZ; scoping period; meetings, 31839–31840

Maritime AdministrationNOTICESAgency information collection activities:

Proposed collection; comment request, 31862–31863Meetings:

Voluntary Intermodal Sealift Agreement, 31863

National Archives and Records AdministrationRULESPublic availability and use:

Restrictions on use of records—USIA materials, prepared for dissemination abroad, in

custody; domestic distribution, 31724–31725

National Foundation on the Arts and the HumanitiesNOTICESMeetings:

Combined Arts Advisory Panel, 31849–31850

National Institute of CorrectionsNOTICESMeetings:

Advisory Board, 31845

National Institutes of HealthNOTICESInventions, Government-owned; availability for licensing,

31836

VI Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Contents

Meetings:Division of Research Grants Special Emphasis Panel,

31835–31836National Cancer Institute, 31836–31837

National Oceanic and Atmospheric AdministrationNOTICESGulf of Mexico and southeastern U.S. Atlantic coastal

waters; shrimp virus risk assessment and meetings,31790–31791

Meetings:Gulf of Mexico Fishery Management Council, 31791Mid-Atlantic Fishery Management Council, 31791–31792Modernization Transition Committee, 31792North Pacific Fishery Management Council, 31792Pacific Fishery Management Council, 31792–31793

National Park ServiceNOTICESNative American human remains and associated funerary

objects:Anthropology Department, Central Washington

University—Inventory from Prince William Sound, AK, 31841Inventory from Washington State, 31840–31841

Burke Museum, University of Washington, WA—Inventory from Hartstine Island, 31841–31842

Milwaukee Public Museum, WI; cultural items, 31842Springfield Science Museum, MA; inventory from

Hawaii, 31842–31843

National Science FoundationNOTICESMeetings:

Human Resource Development Special Emphasis Panel,31850

Materials Research Special Emphasis Panel, 31850Physics Special Emphasis Panel, 31850–31851Research, Evaluation and Communication Special

Emphasis Panel, 31851

Northeast Dairy Compact CommissionNOTICESMeetings, 31851

Nuclear Regulatory CommissionNOTICESAgency information collection activities:

Submission for OMB review; comment request, 31851–31852

Reports; availability, etc.:Tritium producing burnable absorber rod lead test

assembly, 31853Applications, hearings, determinations, etc.:

Northern States Power Co., 31852–31853

Occupational Safety and Health AdministrationNOTICESAgency information collection activities:


Peace CorpsNOTICESAgency information collection activities:


Personnel Management OfficePROPOSED RULESPay administration:

Child support, alimony and commercial garnishment ofFederal employees’ pay; processing, 31763–31766

Postal ServiceRULESCivil and criminal forfeitures, remission or mitigation

petitions; procedures, 31726–31732

Presidential DocumentsADMINISTRATIVE ORDERSAlbania, Belarus, Kazakstan, Kyrgyzstan, Tajikistan,

Turkmenistan, and Uzbekistan; Trade Act of 1974;Continuation of waiver authority (PresidentialDetermination No. 97–28 of June 3, 1997), 32019

Armenia, Azerbaijan, Georgia, Moldova, and Ukraine; TradeAct of 1974; emigration policies (PresidentialDetermination No. 97–27 of June 3, 1997), 32017

Yugoslavia, Federal Republic (Serbia and Montenegro);assistance, waiver of prohibition (PresidentialDetermination No. 97–26 of May 30, 1997), 32015

Public Health ServiceSee Centers for Disease Control and PreventionSee Food and Drug AdministrationSee Health Resources and Services AdministrationSee National Institutes of HealthNOTICESNational toxicology program:

Toxicology and carcinogenesis studies—Phenolphthalein, 31837

Securities and Exchange CommissionNOTICESSelf-regulatory organizations; proposed rule changes:

National Association of Securities Dealers, Inc., 31854–31857

Pacific Exchange, Inc., 31857–31858

Small Business AdministrationNOTICESAgency information collection activities:


Surface Transportation BoardNOTICESRailroad operation, acquisition, construction, etc.:

Paducah & Louisville Railway, 31863

Transportation DepartmentSee Coast GuardSee Federal Aviation AdministrationSee Maritime AdministrationSee Surface Transportation BoardNOTICESAgency information collection activities:


Treasury DepartmentSee Customs ServiceNOTICESNotes, Treasury:

Large position reports, call for; 6 1/4 percent notes(February 2007), 31863–31864

VIIFederal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Contents

United States Information AgencyNOTICESArt objects; importation for exhibition:

Holocaust, a living memorial, 31864

Separate Parts In This Issue

Part IIFederal Communications Commission, 31868–31941

Part IIIDepartment of Housing and Urban Development, 31944–

31951

Part IVDepartment of Housing and Urban Development, 31954–

31955

Part VDepartment of Commerce, International Trade

Administration, 31958–31979

Part VIDepartment of Housing and Urban Development, 31982–

32011

Part VIIThe President, 32015–32019

Reader AidsAdditional information, including a list of public laws,telephone numbers, reminders, and finding aids, appears inthe Reader Aids section at the end of this issue.

Electronic Bulletin BoardFree Electronic Bulletin Board service for Public Lawnumbers, Federal Register finding aids, and a list ofdocuments on public inspection is available on 202–275–1538 or 275–0920.

CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in theReader Aids section at the end of this issue.

VIII Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Contents

3 CFRAdministrative Orders:Presidential Determinations:No. 97–26 of May 30,

1997 .............................32015No. 97–27 of June 3,

1997 .............................32017No. 97–28 of June 3,

1997 .............................32019

5 CFR2641.................................318663801.................................31866Proposed Rules:581...................................31763582...................................31763

7 CFR800...................................31701985...................................31704

14 CFR25.....................................31707Proposed Rules:39.....................................3176671 (2 documents) ...........31769,

31770

17 CFR190...................................31708

19 CFR12.....................................31713

21 CFR113...................................31721Proposed Rules:878...................................31771

24 CFR585...................................31954Proposed Rules:570...................................31944

28 CFR45.....................................31866

33 CFR117 (2 documents) .........31722,

31723

36 CFR1256.................................31724

39 CFR233...................................31726

40 CFR52 (3 documents) ...........31732,

31734, 31738Proposed Rules:52 (3 documents) ...........31775,

3177663.....................................31776

41 CFR101–38.............................31740

47 CFR61 (2 documents) ...........31868,

3193969.....................................31868Proposed Rules:1.......................................31777

50 CFR17 (3 documents) ...........31740,

31748, 31757

This section of the FEDERAL REGISTERcontains regulatory documents having generalapplicability and legal effect, most of whichare keyed to and codified in the Code ofFederal Regulations, which is published under50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold bythe Superintendent of Documents. Prices ofnew books are listed in the first FEDERALREGISTER issue of each week.

Rules and Regulations Federal Register

31701

Vol. 62, No. 112


DEPARTMENT OF AGRICULTURE

Grain Inspection, Packers andStockyards Administration

7 CFR Part 800

RIN 0580–AA52

Fees for Official Inspection and OfficialWeighing Services

AGENCY: Grain Inspection, Packers andStockyards Administration, USDA.ACTION: Final rule.

SUMMARY: The Federal Grain InspectionService (FGIS) of the Grain Inspection,Packers and Stockyards Administration(GIPSA) is increasing by approximately3 percent fees it charges for certain of itsofficial inspection and weighingservices performed in the United Statesunder the United States Grain StandardsAct (USGSA), as amended. The increasecovers hourly rates and certain unitrates on tests performed at other than anapplicant’s facility. The increase isdesigned to generate additional revenuerequired to recover operational costscreated by mandated cost-of-livingincreases to Federal salaries in fiscalyear 1997.EFFECTIVE DATE: June 15, 1997.FOR FURTHER INFORMATION CONTACT:George Wollam, USDA–GIPSA–ART,Room 0623-South Building, STOP 3649,1400 Independence Avenue, S.W.,Washington, D.C., 20250–3649,Telephone (202) 720–0292, or FAX(202) 720–4628, or E-Mail—[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to benonsignificant for the purpose ofExecutive Order 12866 and, therefore,has not been reviewed by the Office ofManagement and Budget.

Executive Order 12988This final rule has been reviewed

under Executive Order 12988, CivilJustice Reform. This action is notintended to have a retroactive effect.The USGSA provides in § 87g that nosubdivision may require or impose anyrequirements or restrictions concerningthe inspection, weighing, or descriptionof grain under the Act. Otherwise, thisfinal rule will not preempt any State orlocal laws, regulations, or policiesunless they present irreconcilableconflict with this final rule. There areno administrative procedures whichmust be exhausted prior to any judicialchallenge to provisions of this final rule.

Effects on Small EntitiesJames R. Baker, Administrator,

GIPSA, has determined that this finalrule will not have a significanteconomic impact on a substantialnumber of small entities, as defined inthe Regulatory Flexibility Act (5 U.S.C.601 et seq.). Most users of the officialinspection and weighing services do notmeet the requirements for small entities.FGIS is required by statute to makeservices available and to recover costs ofproviding such services, as nearly aspracticable.

The fee revision is primarilyapplicable to entities engaged in theexport of grain. Under provisions of theUSGSA, most grain exported from U.S.export port locations must be officiallyinspected and weighed. Mandatoryinspection and weighing services areprovided by FGIS on a fee basis at 37export facilities. All of the exportfacilities are owned and managed bymulti-national corporations, largecooperatives, or public entities that donot meet the criteria for small entities asdefined under the Regulatory FlexibilityAct and the regulations issuedthereunder. Some users who requestnon-mandatory official inspection andweighing services at other than exportlocations could be considered smallentities. However, this fee increasemerely reflects the cost-of-livingincreases in Federal salaries for hourlyand certain unit fees. The approximate3-percent increase in fees will not havea significant impact on either small orlarge entities. Additional revenueestimated for fiscal year 1997 isprojected to be $218,100 for a total of$22.21 million in revenue projected forfiscal year 1997.

Information Collection andRecordkeeping Requirements

In compliance with the PaperworkReduction Act of 1995 (44 U.S.C.Chapter 35), the previously approvedinformation collection andrecordkeeping requirements have beenapproved by the Office of Managementand Budget under control number 0580–0013.

BackgroundOn May 13, 1997, GIPSA published in

the Federal Register (62 FR 26252) aproposal to increase by approximately 3percent certain fees it charges for officialinspection and weighing services. Acorrection docket was published in theFederal Register (62 FR 28922) on May28, 1997, which made non substantiveformat and editorial changes to Table 1of schedule A of section 800.71(a).

The USGSA requires FGIS to chargeand collect reasonable fees forperforming official inspection andweighing services. The fees are to cover,as nearly as practicable, FGIS’ costs forperforming these services, includingrelated administrative and supervisorycosts.

The approximate 3-percent increasein fees is designed to generateadditional revenue required to recoveroperational costs created by mandatedcost-of-living increases to Federalsalaries for GIPSA employees in fiscalyear 1997. The average salary increasefor GIPSA employees in fiscal year 1997is approximately 3 percent. The finalaction is being taken immediately toincrease fiscal year 1997 revenue tocover, in part, projected fiscal year 1997operational costs.

The current USGSA fees werepublished in the Federal Register onAugust 22, 1996 (61 FR 43301), andbecame effective on October 1, 1996.The current fee schedule is projected togenerate approximately $22 millionrevenue for fiscal year 1997. Thisrevenue is insufficient to recoveroperating expenses in fiscal year 1997.This is 5.2 percent below estimatedfiscal year 1997 costs of $23.2 million.Similar losses have occurred over thepast 3 years with $753,000 in fiscal year1994; $630,000 in fiscal year 1995; and$1,273,000 in fiscal year 1996. Theselosses resulted in a retained earningsbalance of only $922,000 at thebeginning of fiscal year 1997,significantly below a desired 3-month

31702 Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Rules and Regulations

operating reserve of $6 million. With thefee increase, it is estimated that$218,100 in additional revenue will begenerated for fiscal year 1997. Totalcosts for fiscal year 1997 are projectedto be $23.2 million and revenues withthe fee increase for the last period offiscal year 1997 are projected to be$22.21 million.

A further adjustment of fees,including an adjustment to the permetric ton administrative fee to recoverthe indirect costs of field offices andheadquarters and replenish theoperating reserve, is being consideredand will be addressed in futurerulemaking.

Comment Review

FGIS received three comments fromtrade associations during the 15-daycomment period. One commentor didnot oppose the proposed increases toexisting fees; one was neutral on theproposed fee increase; and one did notaddress the merits of the fee increaseitself. All the commentors, however,encourage GIPSA to strengthen itsefforts to trim overhead and improveoperating efficiencies throughout theorganization. GIPSA continuouslymonitors its costs and strives to lessenoverhead and improve operatingefficiencies.

One commentor also was of the viewthat the 15-day comment period did notallow enough time to notify its membersof the proposed action. As stated in theproposal, a 15-day comment period wasdeemed appropriate because projectedexports and the associated requests forofficial services for such grain areprojected to decrease in the comingmonths due to seasonal and otheradjustments. Accordingly, given thecurrent level of the operating reserve, itwas deemed necessary to implementany fee increase that may result fromthis rulemaking as soon as possible.

Final ActionGIPSA is applying an approximate 3-

percent increase to those hourly andcertain unit rates in 7 CFR 800.71, Table1—Fees for Official Services Performedat an Applicant’s Facility in an OnsiteFGIS Laboratory; Table 2—ServicesPerformed at Other Than an Applicant’sFacility in an FGIS Laboratory; andTable 3—Miscellaneous Services.

In reviewing the fee schedule toidentify fees that require a 3-percentincrease, FGIS identified several feesthat under the current fee schedule areat levels that do not require any change.Accordingly, those fees will remain thesame at this time.

It is found that good cause exists fornot postponing the effective date of this

rule until 30 days after publication inthe Federal Register (5 U.S.C. 553)because: (1) Projected exports and theassociated requests for official servicesfor such grain are projected to decreasein the coming months due to seasonaland other adjustments; (2) given thecurrent level of the operating reserve,the fee increase should be implementedas soon as possible; and the effectivedate coincides with beginning of abilling cycle.

List of Subjects in 7 CFR Part 800

Administrative practice andprocedure; Grain.

For the reasons set out in thepreamble, 7 CFR part 800 is revised asfollows:

PART 800—GENERAL REGULATIONS

1. The authority citation for part 800continues to read as follows:

Authority: Pub. L. 94–582, 90 Stat. 2867,as amended (7 U.S.C. 71 et seq.)

2. Section 800.71 is amended byrevising Schedule A to read as follows:

§ 800.71 Fees assessed by the Service.

(a) * * *

Schedule A.—Fees for OfficialInspection and Weighing ServicesPerformed in the United States

TABLE 1.—FEES FOR OFFICIAL SERVICES PERFORMED AT AN APPLICANT’S FACILITY IN AN ONSITE FGIS LABORATORY 1

Monday toFriday (6a.m to 6

p.m.)

Monday toFriday (6p.m. to 6

a.m.)

Saturday,Sunday,

and Over-time 2

Holidays

(1) Inspection and Weighing Services Hourly Rates (per service representative)

1-year contract .................................................................................................................. $23.80 $25.60 $33.40 $40.206-month contract ............................................................................................................... 25.80 27.60 35.40 46.203-month contract ............................................................................................................... 29.60 30.80 38.60 48.00Noncontract ...................................................................................................................... 34.00 36.00 44.20 54.20

(2) Additional Tests (cost per test, assessed in addition to the hourly rate) 3

(i) Aflatoxin (other than Thin Layer Chromatography) ..................................................... .................... .................... .................... $8.50(ii) Aflatoxin (Thin Layer Chromatography method) ......................................................... .................... .................... .................... 20.00(iii) Soybean protein and oil (one or both) ....................................................................... .................... .................... .................... 1.50(iv) Wheat protein (per test) ............................................................................................. .................... .................... .................... 1.50(v) Sunflower oil (per test) ................................................................................................ .................... .................... .................... 1.50(vi) Vomitoxin (qualitative) ................................................................................................ .................... .................... .................... 7.50(vii) Vomitoxin (quantitative) ............................................................................................. .................... .................... .................... 12.50(viii) Waxy corn (per test) ................................................................................................. .................... .................... .................... 1.50(ix) Fees for other tests not listed above will be based on the lowest noncontract hour-

ly rate. ........................................................................................................................... .................... .................... .................... ....................(x) Other services ............................................................................................................. .................... .................... .................... ....................

(a) Class Y Weighing (per carrier) ............................................................................ .................... .................... .................... ....................(1) Truck/container ............................................................................................. .................... .................... .................... .30(2) Railcar ........................................................................................................... .................... .................... .................... 1.25(3) Barge ............................................................................................................ .................... .................... .................... 2.50

(3) Administrative Fee (assessed in addition to all other applicable fees, only one administrative fee will be assessed when inspectionand weighing services are performed on the same carrier).

(i) All outbound carriers (per-metric-ton) 4

(a) 1–1,000,000 ......................................................................................................... .................... .................... .................... $ 0.090

31703Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Rules and Regulations

TABLE 1.—FEES FOR OFFICIAL SERVICES PERFORMED AT AN APPLICANT’S FACILITY IN AN ONSITE FGIS LABORATORY 1—Continued

Monday toFriday (6a.m to 6

p.m.)

Monday toFriday (6p.m. to 6

a.m.)

Saturday,Sunday,

and Over-time 2

Holidays

(b) 1,000,001-1,500,000 ............................................................................................ .................... .................... .................... 0.082(c) 1,500,001—2,000,000 .......................................................................................... .................... .................... .................... 0.042(d) 2,000,001—5,000,000 ......................................................................................... .................... .................... .................... 0.032(e) 5,000,001—7,000,000 ......................................................................................... .................... .................... .................... 0.017(f) 7,000,001— .......................................................................................................... .................... .................... .................... 0.002

(ii) Additional services (assessed in addition to all other fees) 3

(a) Submitted sample (per sample—grade and factor) ..................................... .................... .................... .................... 1.50(b) Submitted sample—Factor only (per factor) ................................................ .................... .................... .................... 0.70

1 Fees apply for original inspection and weighing, reinspection, and appeal inspection service include, but are not limited to, sampling, grading,weighing, prior to loading stowage examinations, and certifying results performed within 25 miles of an employee’s assigned duty station. Traveland related expenses will be charged for service outside 25 miles as found in § 800.72 (a).

2 Overtime rates will be assessed for all hours in excess of 8 consecutive hours that result from an applicant scheduling or requesting servicebeyond 8 hours, or if requests for additional shifts exceed existing staffing.

3 Appeal and reinspection services will be assessed the same fee as the original inspection service.4 The administrative fee is assessed on an accumulated basis beginning at the start of the Service’s fiscal year (October 1 each year).

TABLE 2.—SERVICES PERFORMED AT OTHER THAN AN APPLICANT’S FACILITY IN AN FGIS LABORATORY 1 2

(1) Original Inspection and Weighing (Class X) Services(i) Sampling only (use hourly rates from Table 1)(ii) Stationary lots (sampling, grade/factor, & checkloading)

(a) Truck/trailer/container (per carrier) ...................................................................................................................................... $17.80(b) Railcar (per carrier) .............................................................................................................................................................. 27.25(c) Barge (per carrier) ................................................................................................................................................................ 174.00(d) Sacked grain (per hour per service representative plus an administrative fee per hundredweight) (CWT) ...................... 0.02

(iii) Lots sampled online during loading (sampling charge under (i) above, plus):(a) Truck/trailer container (per carrier) ...................................................................................................................................... 9.75(b) Railcar (per carrier) .............................................................................................................................................................. 19.00(c) Barge (per carrier) ................................................................................................................................................................ 108.00(d) Sacked grain (per hour per service representative plus an administrative fee per hundredweight) (CWT) ...................... 0.02

(iv) Other services(a) Submitted sample (per sample—grade and factor) ............................................................................................................ 10.25(b) Warehouseman inspection (per sample) ............................................................................................................................. 17.25(c) Factor only (per factor—maximum 2 factors) ...................................................................................................................... 4.20(d) Checkloading/condition examination (use hourly rates from Table 1, plus an administrative fee per hundredweight if

not previously assessed) (CWT) ........................................................................................................................................... 0.02(e) Reinspection (grade and factor only. Sampling service additional, item (i) above) ............................................................ 11.25(f) Class X Weighing (per hour per service representative) ..................................................................................................... 45.00

(v) Additional tests (excludes sampling)(a) Aflatoxin (per test—other than TLC method) ...................................................................................................................... 25.25(b) Aflatoxin (per test—TLC method) ........................................................................................................................................ 100.75(c) Soybean protein and oil (one or both) ................................................................................................................................. 7.85(d) Wheat protein (per test) ....................................................................................................................................................... 7.85(e) Sunflower oil (per test) ......................................................................................................................................................... 7.85(f) Vomitoxin (qualitative) ........................................................................................................................................................... 25.25(g) Vomitoxin (quantitative) ....................................................................................................................................................... 30.25(h) Waxy corn (per test) ............................................................................................................................................................ 9.10(i) Canola (per test—00 dip test) ............................................................................................................................................... 9.10(j) Pesticide Residue Testing 3

(1) Routine Compounds (per sample) ............................................................................................................................... 200.00(2) Special Compounds (per service representative) ........................................................................................................ 100.00

(k) Fees for other tests not listed above will be based on the lowest noncontract hourly rate from Table 1.(2) Appeal inspection and review of weighing service4

(i) Board Appeals and Appeals (grade and factor) 74.85(a) Factor only (per factor—max 2 factors) ............................................................................................................................... 38.25(b) Sampling service for Appeals additional (hourly rates from Table 1).

(ii) Additional tests (assessed in addition to all other applicable fees)(a) Aflatoxin (per test, other than TLC) ..................................................................................................................................... 25.25(b) Aflatoxin (TLC) ..................................................................................................................................................................... 110.30(c) Soybean protein and oil (one or both) ................................................................................................................................. 15.45(d) Wheat protein (per test) ....................................................................................................................................................... 15.45(e) Sunflower oil (per test) ......................................................................................................................................................... 15.45(f) Vomitoxin (per test—qualitative) ........................................................................................................................................... 35.25(g) Vomitoxin (per test—quantitative) ........................................................................................................................................ 40.25(h) Vomitoxin (per test—HPLC Board Appeal) ......................................................................................................................... 126.00(i) Pesticide Residue Testing 3

(1) Routine Compounds (per sample) ............................................................................................................................... 200.00(2) Special Compounds (per service representative) ........................................................................................................ 100.00


TABLE 2.—SERVICES PERFORMED AT OTHER THAN AN APPLICANT’S FACILITY IN AN FGIS LABORATORY 1 2—Continued

(j) Fees for other tests not listed above will be based on the lowest noncontract hourly rate from Table 1.(iii) Review of weighing (per hour per service representative) 65.40

(3) Stowage examination (service-on-request) 3

(i) Ship (per stowage space) (minimum $250 per ship) ................................................................................................................... 50.00(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 apply for original inspection and weighing, reinspection, and appeal inspection service include, but are not limited to, sampling, grading,weighing, prior to loading stowage examinations, and certifying results performed within 25 miles of an employee’s assigned duty station. Traveland related expenses will be charged for service outside 25 miles as found in § 800.72 (a).

2 An additional charge will be assessed when the revenue from the services in Schedule A, Table 2, does not cover what would have been col-lected at the applicable hourly rate as provided in § 800.72 (b).

3 If performed outside of normal business, 1–1/2 times the applicable unit fee will be charged.4 If, at the request of the Service, a file sample is located and forwarded by the Agency for an official agency, the Agency may, upon request,

be reimbursed at the rate of $2.50 per sample by the Service.

TABLE 3.—MISCELLANEOUS SERVICES 1

(1) Grain grading seminars (per hour per service representative) 2 ....................................................................................................... $45.00(2) Certification of diverter-type mechanical samplers (per hour per service representative) 2 .............................................................. 45.00(3) Special weighing services (per hour per service representative) 2

(i) Scale testing and certification ...................................................................................................................................................... 45.00(ii) Evaluation of weighing and material handling systems .............................................................................................................. 45.00(iii) NTEP Prototype evaluation (other than Railroad Track Scales) ............................................................................................... 45.00(iv) NTEP Prototype evaluation of Railroad Track ....................

Scales (plus usage fee per day for test car) ................................................................................................................................ 45.00100.00

(v) Mass standards calibration and reverification ............................................................................................................................. 45.00(vi) Special projects .......................................................................................................................................................................... 45.00

(4) Foreign travel (per day per service representative) ........................................................................................................................... 420.00(5) Online customized data EGIS service ............................................................................................................................................... ....................

(i) One data file per week for 1 year ................................................................................................................................................ 500.00(ii) One data file per month for 1 year .............................................................................................................................................. 300.00

(6) Samples provided to interested parties (per sample) ........................................................................................................................ 2.50(7) Divided-lot certificates (per certificate) ............................................................................................................................................... 1.50(8) Extra copies of certificates (per certificate) ........................................................................................................................................ 1.50(9) Faxing (per page) ............................................................................................................................................................................... 1.50(10) Special mailing (actual cost) ............................................................................................................................................................ ....................(11) Preparing certificates onsite or during other than normal business hours (use hourly rates from Table 1)

1 Any requested service that is not listed will be performed at $45.00 per hour.2 Regular business hours-Monday thru Friday-service provided at other than regular hours charged at the applicable overtime hourly rate.

Dated: June 6–5, 1997.David R. Shipman,Acting Administrator.[FR Doc. 97–15267 Filed 6–10–97; 8:45 am]BILLING CODE 3410–EN–P


Agricultural Marketing Service

7 CFR Part 985

[FV96–985–3 FIR]

Spearmint Oil Produced in the FarWest; Revision of the Salable Quantityand Allotment Percentage for Class 3(Native) Spearmint Oil for the 1996–97Marketing Year

AGENCY: Agricultural Marketing Service,USDA.ACTION: Final rule.

SUMMARY: The Department ofAgriculture (Department) is adopting asa final rule, without change, an interim

final rule increasing the quantity ofClass 3 (Native) spearmint oil producedin the Far West that handlers maypurchase from, or handle for, producersduring the 1996–97 marketing year. Thisrule was recommended by theSpearmint Oil AdministrativeCommittee (Committee), the agencyresponsible for local administration ofthe marketing order for spearmint oilproduced in the Far West. TheCommittee recommended this rule toavoid extreme fluctuations in suppliesand prices and thus help to maintainstability in the Far West spearmint oilmarket.

EFFECTIVE DATE: June 11, 1997.

FOR FURTHER INFORMATION CONTACT:Robert J. Curry, Northwest MarketingField Office, Marketing OrderAdministration Branch, Fruit andVegetable Division, AMS, USDA, 1220SW Third Avenue, room 369, Portland,Oregon 97204–2807; telephone: (503)326–2043; Fax: (503) 326–7440; orCaroline C. Thorpe, Marketing Order

Administration Branch, Fruit andVegetable Division, AMS, USDA, room2525, South Building, P.O. Box 96456,Washington, DC 20090–6456; telephone:(202) 720–8139; Fax: (202) 720–5698.Small businesses may requestinformation on compliance with thisregulation by contacting: Jay Guerber,Marketing Order AdministrationBranch, Fruit and Vegetable Division,AMS, USDA, P.O. Box 96456, room2525-S, Washington, DC 20090–6456;telephone (202) 720–2491; Fax: (202)720–5698.

SUPPLEMENTARY INFORMATION: This ruleis issued under Marketing Order No.985 (7 CFR part 985), regulating thehandling of spearmint oil produced inthe Far West (Washington, Idaho,Oregon, designated parts of Nevada, andUtah), hereinafter referred to as the‘‘order.’’ This order is effective underthe Agricultural Marketing AgreementAct of 1937, as amended (7 U.S.C. 601–674), hereinafter referred to as the‘‘Act.’’


The Department is issuing this rule inconformance with Executive Order12866.

This rule has been reviewed underExecutive Order 12988, Civil JusticeReform. Under the provisions of themarketing order now in effect, salablequantities and allotment percentagesmay be established for classes ofspearmint oil produced in the Far West.This rule continues an increase in thequantity of Native spearmint oilproduced in the Far West that may bepurchased from or handled forproducers by handlers during the 1996–97 marketing year, which ended on May31, 1997. This rule will not preempt anyState or local laws, regulations, orpolicies, unless they present anirreconcilable conflict with this rule.

The Act provides that administrativeproceedings must be exhausted beforeparties may file suit in court. Undersection 608c(15)(A) of the Act, anyhandler subject to an order may filewith the Secretary a petition stating thatthe order, any provision of the order, orany obligation imposed in connectionwith the order is not in accordance withlaw and request a modification of theorder or to be exempted therefrom. Ahandler is afforded the opportunity fora hearing on the petition. After thehearing the Secretary would rule on thepetition. The Act provides that thedistrict court of the United States in anydistrict in which the handler is aninhabitant, or has his or her principalplace of business, has jurisdiction toreview the Secretary’s ruling on thepetition, provided an action is filed notlater than 20 days after the date of theentry of the ruling.

The Far West spearmint oil industryis characterized by producers whosefarming operations generally involvemore than one commodity and whoseincome from farming operations is notexclusively dependent on theproduction of spearmint oil. The U.S.production of spearmint oil isconcentrated in the Far West, primarilyWashington, Idaho, and Oregon (part ofthe area covered by the order).Spearmint oil is also produced in theMidwest. The production area coveredby the order normally accounts forapproximately 75 percent of the annualU.S. production of spearmint oil.

This rule finalizes an interim finalrule that increased the quantity ofNative spearmint oil that handlers maypurchase from, or handle for, producersduring the 1996-97 marketing year,which ends on May 31, 1997. Thus, thisrule finalizes the increase in the salablequantity from 1,074,902 pounds to1,213,692 pounds and the allotmentpercentage from 54 percent to 61

percent for Native spearmint oil for the1996–97 marketing year.

The salable quantity is the totalquantity of each class of oil thathandlers may purchase from, or handlefor, producers during a marketing year.The salable quantity calculated by theCommittee is based on the estimatedtrade demand. The total salable quantityis divided by the total industryallotment base to determine anallotment percentage. Each producer isallotted a share of the salable quantityby applying the allotment percentage tothe producer’s individual allotment basefor the applicable class of spearmint oil.

The initial salable quantity andallotment percentages for Scotch andNative spearmint oils for the 1996–97marketing year were recommended bythe Committee at its September 26,1995, meeting. The Committeerecommended salable quantities of989,303 pounds and 1,074,902 pounds,and allotment percentages of 55 percentand 54 percent, respectively, for Scotchand Native spearmint oils. A proposedrule was published in the January 24,1996, issue of the Federal Register (61FR 1855). Comments on the proposedrule were solicited from interestedpersons until February 23, 1996. Nocomments were received. Accordingly,based upon analysis of availableinformation, a final rule establishing thesalable quantities and allotmentpercentages for Scotch and Nativespearmint oils for the 1996–97marketing year was published in theMarch 20, 1996, issue of the FederalRegister (61 FR 11291).

Pursuant to authority contained in§§ 985.50, 985.51, and 985.52 of theorder, at its November 14, 1996,meeting, the Committee unanimouslyrecommended that the allotmentpercentage for Native spearmint oil forthe 1996-97 marketing year be increasedby 7 percent from 54 percent to 61percent. This final rule increases the1996–97 marketing year salable quantityof 1,074,902 pounds to 1,213,692pounds.

However, some Native spearmint oilproducers did not produce all of theirindividual salable quantities for the1996–97 marketing year, or fill theirdeficiencies from the prior year’sproduction. The marketing orderauthorizes such producers to have theirdeficiencies filled by other producerswho have production in excess of theirsalable quantities. This is optional forproducers, but must be done beforeNovember 1 of each marketing year.

The original total industry allotmentbase for Native spearmint oil for 1996–97 was established at 1,990,559 poundsand was revised to 1,989,659 pounds to

reflect loss of base due to non-production of producer’s total annualallotments. This adjustment resulted ina 900 pound loss of total industry base,which is reflected in the calculations forthe revised salable quantity.

This final rule finalizes the interimfinal rule that made an additionalamount of Native spearmint oilavailable by increasing the salablequantity which releases oil from thereserve pool. Only producers withNative spearmint oil in the reserve poolwill be able to use this increase in thesalable quantity. Prior to November 1,1996, producers without reserve pool oilor producers with an insufficient supplyof reserve oil could have deficiencies inmeeting their salable quantities filled byproducers having excess Nativespearmint oil. If all producers could usetheir salable quantity, this 7 percentincrease in the allotment percentagewould have made an additional 135,276pounds of Native spearmint oil available(1,989,659 x 7 percent). However,Native spearmint oil producers having25,546 pounds of Native spearmint oilwill not be able to use their reserve pooldeficiencies this marketing year.Deficiencies usually exist because ofunplanned problems that may reducespearmint production. Thus, rather than135,276 additional pounds being madeavailable, this action continues to make113,730 additional pounds of Nativespearmint oil available to the market.

The following table summarizes theCommittee recommendation:

Native Spearmint Oil Recommendation

(a) Actual Carry In on June 1, 1996:45,632 pounds

(b) 1995–96 Salable Quantity: 1,074,902pounds

(c) 1995–96 Available Supply: 1,120,534pounds (a + b)

(d) Total Sales as of November 14, 1996:1,036,058 pounds

(e) Calculated Available Supply as ofNovember 14, 1996: 84,476 pounds(c–d)

(f) Reserve Deficiency Affecting SalableQuantity: 25,546 pounds

(g) Revised Total Allotment Base:1,989,659 pounds

(h) Recommended Allotment Percentageas of November 14, 1996: 61 percent

(i) Calculated Revised Salable Quantity:1,213,692 pounds (g x h)

(j) Actual Oil Available as SalableQuantity: 1,188,146 pounds (i–f)The Department, based on its analysis

of available information, has determinedthat an allotment percentage of 61percent should be established for Nativespearmint oil for the 1996–97 marketingyear. This percentage will provide an


increased salable quantity of 1,213,692and a new allotment percentage from 54percent to 61 percent for Nativespearmint oil for the 1996–97 marketingyear.

This rule relaxes the regulation ofNative spearmint oil and will allowgrowers to meet market needs andimproved returns. In conjunction withthe issuance of this rule, the Departmenthas reviewed the Committee’s revisedmarketing policy statement for the1996–97 marketing year. TheCommittee’s marketing policy statementhas been reviewed under the provisionsas set forth in 7 CFR 985.50 and withother USDA guidelines.

Pursuant to requirements set forth inthe Regulatory Flexibility Act (RFA),AMS has considered the economicimpact of this action on small entities.Accordingly, AMS has prepared thisfinal regulatory flexibility analysis.

The purpose of the RFA is to fitregulatory actions to the scale ofbusiness subject to such actions in orderthat small businesses will not be undulyor disproportionately burdened.Marketing orders issued pursuant to theAct, and rules issued thereunder, areunique in that they are brought aboutthrough group action of essentiallysmall entities acting on their ownbehalf. Thus, both statutes have smallentity orientation and compatibility.

There are 8 spearmint oil handlerssubject to regulation under themarketing order and approximately 250producers of spearmint oil in theregulated production area. Of the 250producers, approximately 135 producershold Class 1 (Scotch) oil allotment base,and approximately 115 producers holdClass 3 (Native) oil allotment base.Small agricultural service firms aredefined by the Small BusinessAdministration (SBA)(13 CFR 121.601)as those having annual receipts of lessthan $5,000,000, and small agriculturalproducers have been defined as thosewhose annual receipts are less than$500,000.

Based on the SBA’s definition ofsmall entities, it is estimated that noneof the eight handlers regulated by theorder would be considered smallentities. All of the handlers are largecorporations involved in theinternational trading of essential oilsand the products of such essential oils.It is also estimated that 20 of the 135Scotch spearmint oil producers and 10of the 115 Native spearmint oilproducers would be classified as smallentities under the SBA definition. Thisis based on production informationgathered from assessments. Thus, amajority of handlers and producers of

Far West spearmint oil may not beclassified as small entities.

The Far West spearmint oil industryis characterized by producers whosefarming operations generally involvemore than one commodity, and whoseincome from farming operations is notexclusively dependent on theproduction of spearmint oil. Croprotation is an essential cultural practicein the production of spearmint for weed,insect, and disease control. A normalspearmint producing operation wouldhave enough acreage for rotation suchthat the total acreage required toproduce the crop would be about one-third spearmint and two-thirdsrotational crops. An average spearmintproducing farm would thus have to haveconsiderably more acreage than wouldbe planted to spearmint during anygiven season. To remain economicallyviable with the added costs associatedwith spearmint production, mostspearmint producing farms would fallinto the category of large businesses.

Small spearmint oil producersrepresent a minority of farmingoperations and are more vulnerable tomarket fluctuations. Such small farmersgenerally need to market their entireannual crop and do not have theresources to cushion seasons with poorspearmint oil returns. Conversely, largediversified producers have the potentialto endure one or more seasons of poorspearmint oil markets because ofstronger incomes from alternate cropswhich could support the operation for aperiod of time. Despite the advantage oflarger producers, increasing the Nativesalable quantity and allotmentpercentage will help both large andsmall producers by improving returns.In addition, this change may potentiallybenefit the small producer more thanlarge producers. This is because thechange ensures that small producers aremore likely to maintain a profitable cashflow and meet annual expenses.

In making this latest recommendation,the Committee considered all availableinformation on supply and demand. The1996–97 marketing year began on June1, 1996. As required under § 985.50, theCommittee reviewed at a public meetingand submitted to the Department, amarketing policy that included thefollowing Native spearmint oilinformation: estimated quantity;estimated demand; prospectiveproduction; estimated total allotmentbase; quantity of reserve oil; oil prices;market conditions; and whether theaverage price was expected to exceedparity. Handlers have indicated thatwith this action, the available supply ofboth Scotch and Native spearmint oils

appears adequate to meet anticipateddemand through May 31, 1997.

Without the increase in Nativespearmint oil, the Committee believesthe industry would not be able to meetmarket needs. As of November 14, 1996,84,476 pounds of Native spearmint oilwas available for market. Demand forNative spearmint oil from December 1 toMay 31 over the past five years hasranged from a high of 245,661 poundsin 1991–92 to a low of 92,658 poundsin 1992–93. The five year average is157,531 pounds. Therefore, given thispast history the industry would beunlikely to meet market demandwithout this change. When theCommittee made its initialrecommendation for the establishmentof the Native spearmint oil salablequantity and allotment percentage forthe 1996–97 marketing year, it hadanticipated that the year would endwith an ample available supply. Thisrevision adds 113,730 pounds of Nativespearmint oil to the amount availablefor market during the remainder of the1996–97 marketing year.

Alternatives to this rule included notto increase the available supply ofNative spearmint oil, which couldpotentially hurt small producers. TheCommittee believes that the levelrecommended will meet market needs.

Annual salable quantities andallotment percentages have been issuedfor both classes of spearmint oil sincethe order’s inception. Reporting andrecordkeeping requirements haveremained the same for each year ofregulation. Accordingly, this action willnot impose any additional reporting orrecordkeeping requirements on eithersmall or large spearmint oil producersand handlers. All reports and formsassociated with this program arereviewed periodically in order to avoidunnecessary and duplicitousinformation collection by industry andpublic sector agencies. The Departmenthas not identified any relevant Federalrules that duplicate, overlap, or conflictwith this rule.

Finally, the Committee’s meeting waswidely publicized throughout thespearmint oil industry and all interestedpersons were invited to attend andparticipate on all issues. Interestedpersons were also invited to submitinformation on the regulatory andinformational impacts of this action onsmall businesses.

The interim final rule regarding thisaction was issued on January 3, 1997,and published in the Federal Register(62 FR 1246, January 9, 1997), with aneffective date of January 9, 1997. Thatrule amended § 985.215 of the rules andregulations in effect under the order.


That rule provided a 30-day commentperiod which ended February 10, 1997.No comments were received.

After consideration of all relevantmatter presented, including thatcontained in the prior proposed, interimfinal, and final rules in connection withthe establishment of the salablequantities and allotment percentages forScotch and Native spearmint oils for the1996–97 marketing year, theCommittee’s recommendation and otheravailable information, it is found that torevise § 985.215 (61 FR 11291) to changethe salable quantity and allotmentpercentage for Native spearmint oil aseffective in the interim final rule (62 FR1246), as hereinafter set forth, will tendto effectuate the declared policy of theAct.

It is further found that good causeexists for not postponing the effectivedate of this rule until 30 days afterpublication in the Federal Register (5U.S.C. 553) because this rule applies tospearmint produced during the 1996–97marketing year, which ended May 31,1997. Further, handlers are aware of thisrule, which was recommended at apublic meeting. Also, a 30-day commentperiod was provided in the interim finalrule and no comments were received.

List of Subjects in 7 CFR Part 985Marketing agreements, Oils and fats,

Reporting and recordkeepingrequirements, Spearmint oil.

PART 985—SPEARMINT OILPRODUCED IN THE FAR WEST

Accordingly, the interim final ruleamending 7 CFR part 985 which waspublished at 61 FR 1246 on January 9,1997, is adopted as a final rule withoutchange.

Dated: June 4, 1997.Robert C. Keeney,Director, Fruit and Vegetable Division.[FR Doc. 97–15253 Filed 6–10–97; 8:45 am]BILLING CODE 3410–02–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 25

[Docket No. NM–131, Special ConditionsNo. 25–ANM–128]

Special Conditions: LET AeronauticalWorks Model L610G Airplane

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Final special conditions.

SUMMARY: These final special conditionsare issued for the LET Aeronautical

Works Model L610G airplane. Thisairplane will have a novel or unusualdesign feature associated with the use ofthe landing gear fairing as an assistmeans during an emergency evacuation.These special conditions contain theadditional safety standards that theAdministrator considers necessary toestablish a level of safety equivalent tothat established by the airworthinessstandards of 14 CFR part 25.EFFECTIVE DATE: July 11, 1997.FOR FURTHER INFORMATION CONTACT:Frank Tiangsing, Regulations Branch,ANM–114, Transport AirplaneDirectorate, Aircraft CertificationService, FAA 1601 Lind Avenue SW,Renton WA 98055–4056, (425) 227–121.


BackgroundOn April 25, 1990, LET Aeronautical

Works applied for a type certificate forthe Model L610G airplane. On March28, 1995, they applied for an extensionof the original application in accordancewith 14 CFR 21.17(d)(2). The L610G isa twin-engine, 40 passenger, high-wingairplane with a passenger emergencyexit configuration consisting of one pairof Type I exits located at the aft end ofthe cabin and a pair of Type III exitsunder the wing near the middle of thecabin.

Type III exits are typically installedover the wings of the airplane. The areallowed by part 25 to have a 27-inchstep-down from the exit sill to the wing.Additionally, if the escape route on thewing terminates at a point more than sixfeet above the ground, means must beprovided to assist evacuees to reach theground. If the termination point is lessthan six feet above the ground, then theassist means is not required.

Since this airplane is of a high-wingconfiguration, it is not practicable toincorporate overwing Type III exits. Part25 permits non-overwing, non-floorlevel exits when certain conditions aresatisfied. Included in these conditions isthe requirement for an assist means forpassengers and crew to egress from theairplane to the ground when the exit sillheight is more than six feet. This assistmeans must be an automatically erectedescape slide or equivalent, and must beself-supporting on the ground. The sillof the Type III exits on the L610G willbe more than six feet above the ground;therefore, an assist means will benecessary.

LET has positioned the Type III exitsabove the landing gear fairing such thatthe fairing will form a surface forevacuees to use in lieu of what wouldbe provided by a wing. The evacueeswould then slide or jump off the fairing

to the ground in much the same manneras they would off a wing trailing edge.

LET’s use of the landing gear fairingas an assist means results in featureswhich are characteristic of both escapeslides and overwing evacuation routes;therefore, the requirements for eitherconfiguration are insufficient bythemselves to assure that minimumstandards are established.

These special conditions includerequirements pertinent to both overwingand non-overwing exits, as well asadditional criteria for this specific exit.

Type Certification Basis

Under the provisions of 14 CFR 21.17,LET must show the Model L610G meetsthe applicable provisions of part 25 asamended by Amendments 15–1 through25–70 thereon, except as follows:§ 25.365 Amendment 25–71§ 25.571(e)(2) Amendment 25–72§ 25.729 Amendment 25–75§ 25.905(d) Amendment 25–72

If the Administrator finds that theapplicable airworthiness regulations(i.e., part 25 as amended) do not containadequate or appropriate safety standardsfor the Model 610G because of a novelor unusual design feature, specialconditions are prescribed under theprovisions of 14 CFR 21.16. In additionto the applicable airworthinessregulation and special conditions, theLET Aeronautical Works Model L610Gmust comply with the fuel vent andexhaust emission requirements of 14CFR part 34 and the noise certificationrequirements of 14 CFR part 36.

Special conditions, as appropriate, areissued in accordance with 14 CFR 11.49after public notice, as required by 14CFR 11.28 and 11.29(b), and becomepart of the type certification basis inaccordance with 14 CFR 21.17(a)(2).

Special conditions are initiallyapplicable to the model for which theyare issued. Should the type certificatefor that model be amended later toinclude any other model thatincorporates the same novel or unusualdesign feature, the special conditionswould also apply to the other modelunder the provisions of 14 CFR21.101(a)(1).

Novel or Unusual Design Features

The Model L610G will incorporate thefollowing novel or unusual designfeature: a Type III exit will be locatedunder each wing such that an evacueeusing the exit would step out onto themain landing gear fairing. The evacueewould then slide or jump from thelanding gear fairing to the ground.

14 CFR 25.809(f) requires all non-overwing exits more than six feet above


the ground to be equipped with anapproved means to assist occupants indescending to the ground.

14 CFR 25.809(h) similarly requiresall overwing exits having an escaperoute which terminates at a point morethan six feet above the ground to beequipped with an assist means. The exitfor the Model L610G will be more thansix feet from the ground; however, thelanding gear fairing surface will bewithin 27 inches of the lower exit sill.This distance corresponds to theallowable step-down for an overwingTyping III exit. The distance from thelanding gear fairing to the ground is lessthan six feet.

14 CFR 25.809(f) also requires thatassist means be automatically erectedduring exit opening. Strictly speaking,the landing gear fairing does not satisfythis requirement since opening the exitis not correlated to the availability of theassist means; however, since the fairingis a fixed piece of airplane structure itis always available for use.

The regulations also require that anassist means be self-supporting on theground. This requirement has beeninterpreted to mean that the assistmeans rests on the ground when in usesuch that an evacuee does not have tojump to the ground from the bottom ofthe assist means. In the case of anoverwing exit where the terminatingedge of the escape route is less than sixfeet from the ground, it is likely thatevacuees might have to jump a shortdistance from the wing to the ground.The Model L610G incorporates aspectsof both of these exit arrangements,which are addressed in these specialconditions.

Other features of the exit arrangementwhich involve both overwing and non-overwing exit considerations includemarking, visibility, and width of theescape route. For the purposes of thesespecial conditions, this exit will betreated as an overwing exit with respectto these requirements.

Other areas which are of particularconcern for this unusual exitarrangement are the effectiveness of theexit in the event of landing gear collapseand the proximity of the escape route tothe engines and wheel wells. Since acollapse of the landing gear could resultin some form of collapse of the landinggear fairing, the exit must bedemonstrated to be usable and providefor safe evacuation, considering allconditions of landing gear collapse.

Since the Type III exits are directlyabove the main landing gear, it ispossible that a fire originating in thelanding gear assembly could rendersuch an exit unusable. Due to the designof the Model L610G, it is considered

necessary to address the possibility thata fire on one side of the airplane couldalso render the opposite side unusable.

These special conditions are intendedto provided requirements which resultin an evacuation system that is aseffective and safe as those envisioned bythe regulations. Where appropriate,requirements have been drawn fromexisting regulations. In other cases, newrequirements have been developed topreserve the level of safety which isinherent in the design of moreconventional exit arrangements or assistmeans.

Discussion of CommentsNotice of Proposed Special

Conditions No. SC–96–4–NM for theLET Aeronautical Works Model L610Gairplane, was published in the FederalRegister on August 16, 1996. Nocomments were received.

ApplicabilityAs discussed above, these special

conditions are applicable to the LETAeronautical Works Model L610Gairplane. Should LET AeronauticalWorks apply at a later date for a changeto the type certificate to include anothermodel incorporating the same novel orunusual design feature, the specialconditions would apply to that model aswell under the provisions of 14 CFR21.101(a)(1).

ConclusionThis action affects only certain novel

or unusual design features on one modelof airplanes. It is not a rule of generalapplicability, and it affects only theapplicant who applied to the FAA forapproval of these features on theairplane.

List of Subjects in 14 CFR Part 25Air transportation, Aircraft, Aviation

safety, Safety.The authority citation for these

proposed special conditions is asfollows:

Authority: 49 U.S.C. 106(g), 40113, 44701,44702, 44704.

The Special Conditions

Accordingly, pursuant to theauthority delegated to me by theAdministrator, the following specialconditions are issued as part of the typecertification basis for the LETAeronautical Works L610G airplane.

1. The landing gear fairing must beestablished as an escape route inaccordance with the dimensional,reflectance, and slip resistant surfacerequirements of § 25.803(e).

2. The step-down distance from theexit sill to the surface of the landing

gear fairing, where an evacuee wouldmake first contact, shall not exceed 27inches (ref. § 25.807(a)(3)).

3. The assist means must provide forsafe evacuation of occupants,considering all conditions of landinggear collapse. In addition, safeevacuation must be afforded via theType III exit in the event of mainlanding gear non-deployment.

4. Exterior emergency lighting mustbe provided for the assist means and allareas of likely ground contact inaccordance with §§ 25.812(g)(1) (i) and(ii), and § 25.812(h)(1), as amendedthrough Amendment 25–58.

5. The assist means must bedemonstrated to provide an adequateegress rate for the number of passengersrequested. The passenger capacity, aspermitted by § 25.807(c)(1), Table 1,may be reduced if satisfactory Type IIIexit performance cannot bedemonstrated.

6. It must be shown that a landinggear fire occurring on one side of theairplane is unlikely to render theopposite exit unusable.

7. The assist means must be shown tobe as reliable as an escape slidefollowing exposure to the emergencylanding conditions that may beencountered in service. In addition, safeevacuation from the airplane must beafforded following the crash conditionsspecified in § 25.561(b).

Issued in Renton, Washington, on June 3,1997.Darrell M. Pederson,Acting Manager, Transport AirplaneDirectorate, Aircraft Certification Service,ANM–100.[FR Doc. 97–15311 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–M

COMMODITY FUTURES TRADINGCOMMISSION

17 CFR Part 190

Distribution of Customer PropertyRelated to Trading on the ChicagoBoard of Trade—London InternationalFinancial Futures and OptionsExchange Trading Link

AGENCY: Commodity Futures TradingCommission.ACTION: Final rules.

SUMMARY: The Commodity FuturesTrading Commission (‘‘Commission’’)has adopted an additional amendmentto Appendix B of its bankruptcy rules togovern the distribution of propertywhere the debtor is a futurescommission merchant (‘‘FCM’’) thatmaintains customer accounts that carry


1 The proposal to establish a Link arrangementbetween CBT and LIFFE was approved by theCommission on May 6, 1997.

2 62 FR 195303 Designated CBT Contracts currently consist of

U.S. Treasury Bond futures and futures options. Ata later date, it is anticipated that 10 year U.S.Treasury Note futures and futures options and 5year U.S. Treasury Note futures and futures optionswill be added.

4 Designated LIFFE Contracts currently consist ofGerman Government Bond futures and futuresoptions. At a later date, it is anticipated that BritishGilt futures and futures options and futures optionson the Italian Government Bond will be added.

5 Comm. Fut. L. Rep., ¶ 23,997 (December 3,1987).

6 17 CFR part 190.7 11 U.S.C. 761–766.8 48 FR 8716 (March 1, 1983).9 59 FR 17468 (April 13, 1994).

or trade positions in Designated ChicagoBoard of Trade (‘‘CBT’’) Contracts atLondon International Financial Futuresand Options Exchange (‘‘LIFFE’’) orDesignated LIFFE Contracts at CBT(‘‘Link Accounts’’) as well as non-Linkaccounts. This new distributionalframework is intended to assure thatnon-Link customers of such an FCMwould not be adversely affected by ashortfall in Section 4d(2) segregatedfunds caused by the operation of theLink.1EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT: LoisJ. Gregory, Attorney, Division of Tradingand Markets, Commodity FuturesTrading Commission, Three LafayetteCentre, 1155 21st Street, N.W.,Washington, D.C. 20581. Telephone:(202) 418–5483.


I. IntroductionOn April 22, 1997, the Commission

published a proposed amendment toAppendix B of its bankruptcy rules togovern the distribution of propertywhere the debtor is an FCM thatmaintains customer accounts that carryor trade positions in Link accounts aswell as non-Link accounts, and allowed15 days for comment thereon.2 TheCommission received one writtencomment in response to the proposal,from the Chicago Mercantile Exchange(‘‘CME’’), which expressed its view thatit does not want the same approachautomatically applied to linkagearrangements CME may develop withother exchanges. The Commission hasconsidered this comment and hasdetermined to adopt the additionalamendment to Appendix B of itsbankruptcy rules as it was proposed.The new Framework 2 governs thedistribution of customer propertyrelated to trading on the CBT–LIFFELink, specifically.

II. Trading in Link ContractsThe CBT, LIFFE and their respective

clearing houses have commencedoperation of a trading link (Link)whereby Designated CBT Contracts 3 aretraded on LIFFE, initially cleared by theLondon Clearing House Limited(‘‘LCH’’), and transferred to the Board ofTrade Clearing Corporation (‘‘BOTCC’’),

and Designated LIFFE Contracts 4 aretraded on the CBT, initially cleared byBOTCC and transferred to LCH.

In the case of Designated CBTContracts traded on LIFFE, the U.S.FCM maintains a customer omnibusaccount with a LIFFE clearing member.Each day, LCH marks futures positionsto a closing price, pays to and collectsfrom the LIFFE clearing member thedifference between trade price and markprice, pays and collects optionpremiums and, at the request of theLIFFE clearing member, nets positionsprior to their transfer to BOTCC atapproximately 10:00 a.m. Chicago time.Bank settlement commitments arerequired in response to instructions forLink variation obligations on trade date(‘‘T’’), with payment made to LCH onthe next day (‘‘T+1’’). Also, if the CBTis closed for a holiday, LCH will holdpositions in Designated CBT Contractsovernight and can call for margin.Property of the customers of the U.S.FCM that accrues to such customers asthe result of such trades or contractsprior to their transfer to BOTCC orwhich is deposited to margin, guaranteeor secure trades or contracts inDesignated CBT Contracts at LIFFE isdeemed to be ‘‘Link property.’’ Duringthe interval before transfer back fromLCH to BOTCC, Link property at LCHmay for operational purposes be held ina foreign depository consistent withCFTC Advisory 87–5.5

In the case of Designated LIFFEContracts traded on CBT, propertyreceived by the U.S. FCM to margin,secure or guarantee trades is included inthe foreign futures and foreign optionssecured amount, pursuant toCommission Regulation 30.7. TheCommission granted BOTCC its requestfor a no action position to permit certainexcess foreign currency contained insuch secured amount account andseparately accounted for at the clearingorganization to be used by FCM clearingmembers to meet original marginrequirements for U.S. contracts underSection 4d(2) of the Act. Such excessproperty held in a combined BOTCCaccount but applied to marginrequirements for U.S. contracts asSection 4d(2) property is also treated as‘‘Link property’’ under Appendix B.

To the extent that positions inDesignated CBT Contracts executed onLIFFE and property supporting oraccruing from those positions are

deemed to be customer property underSection 4d(2) of the Act, or certainforeign currency margin deposited inrespect of Designated LIFFE Contracts isheld in a Section 4d(2) clearing account,any customer net equity claim in respectof such Link property held by an FCMin a Link account would be treated asa customer net equity claim under Part190 of the Commission’s rules 6 andsubchapter IV of chapter 7 of theBankruptcy Code (the commoditybroker liquidation provisions).7 In thecase of an FCM bankruptcy, thecommodity broker liquidationprovisions of the Bankruptcy Code andPart 190 of the Commission’s rulesprovide for a pro rata distribution ofassets in proportion to net equity claimsamong the Section 4d(2) customerswhose accounts are carried by suchFCM. Thus, absent some provision tothe contrary, if a participating FCMdefaulted due to losses in its Link-related account(s), non-Link customerscould be forced to share in lossesgenerated by a shortfall in Linkproperty. To avoid that result, the newframework provides a rule ofdistribution that operates to subordinateclaims for Link property to Section4d(2) claims overall.

III. New Bankruptcy Distribution in theContext of the CBT–LIFFE Link

When the Commission adopted itsPart 190 bankruptcy regulations,8 itincluded an Appendix intended tofacilitate the execution of a trustee’sduties, forms concerning customerinstructions for return of non-cashproperty and transfer of hedge contracts,and a proof of claim form. TheCommission later adopted Appendix Bto provide guidance to a trustee on theappropriate distribution of propertywhere an FCM’s customers cross-margined non-proprietary futurespositions with certain securitiespositions.9

The Commission has now adopted anextension of Appendix B which willsubordinate claims for Link property toclaims for non-Link property when ashortfall in Link property is greater thanthe shortfall, if any, of non-Link relatedproperty. The new amendment followsthe guiding principles of Appendix B toPart 190: to assure that generally thereis pro rata distribution to customers ofthe customer property in the bankruptFCM’s commodity interest estate andthat the satisfaction of non-Linkcustomer claims are not adversely


10 See examples 1, 2, 5 and 6 of Appendix B topart 190, Framework 2.

11 See examples 3 and 4 of Appendix B to part190, Framework 2.

affected by a shortfall in the pool ofLink property. The new amendmentwill assure that non-Link claims willnever receive less than they would havereceived in the absence of the Link, butthe distributional rule will not requireLink-related claims to be subordinatedin every instance.

Under new Framework 2, abankruptcy trustee handling thecommodity interest estate of a bankruptFCM with Link property first willdetermine the respective shortfalls, ifany, in the pools of Link customer andnon-Link customer segregated funds.The trustee then will calculate theshortfall in each pool as a percentage ofthe segregation requirement for the pool.In making this determination, anyshortfall in Link property held overseascould be offset in whole or in part byany excess funds held by the FCM insegregation in the United States.

If there is: (1) No shortfall in either ofthe two pools; (2) an equal percentageshortfall in the two pools; (3) a shortfallin the non-Link pool only; or (4) agreater percentage of shortfall in thenon-Link pool than in the Link pool,then the two pools of segregated fundswould be combined and Link customersand non-Link customers would sharepro rata in the combined pool.10

However, if there were (1) a shortfallin the Link pool only, or (2) a greaterpercentage of shortfall in the Link poolthan in the non-Link pool, then the twopools of segregated funds would not becombined.11 Rather, Link customerswould share pro rata in the pool of Linksegregated funds (including any excessfunds held by the FCM in segregation inthe U.S.), while non-Link customerswould share pro rata in the pool of non-Link segregated funds. Further, if a poolof property initially would be treated asif it had a shortfall because frozen orotherwise unavailable as the result ofgovernment action, and later the freezewere lifted or funds became available,subsequent distribution would not bepermitted to result in customers forwhom funds were frozen receiving anygreater distribution than a pro ratadistribution for Section 4d (segregatedfunds) customers as a whole. Tofacilitate this distributional framework,two subclasses of customer accounts, aLink account and a non-Link accountare recognized.

Like the existing distribution systemfor a bankrupt FCM with customerclaims related to cross-margining, thenew amendment would assure that non-

Link customers would never receive lessthan they would have received in theabsence of the Link. The newFramework to the Appendix is intendedto eliminate the need for each customerwho seeks to trade pursuant to the Linkto execute a separate subordinationagreement.

IV. Effective Date

The Administrative Procedure Actrequires the publication of a finalsubstantive rule not less than 30 daysbefore its effective date unless otherwiseprovided by the agency for good causefound and published with the rule. See5 U.S.C. 553(d)(3) (1994). TheCommission is making this amendmenteffective as of June 11, 1997. TheCommission has determined that goodcause exists to make this amendment toAppendix B of its bankruptcy ruleseffective upon publication because adistributional framework for property ofa U.S. FCM that participates in thecurrently operational CBT–LIFFEtrading link must be put into placeimmediately in the unlikely event suchFCM should become bankrupt.

V. Related Matters

A. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA),5 U.S.C. § 601–611 (1988), requires thatagencies consider the impact of thoserules on small businesses. These ruleswill affect distributees of a bankruptFCM’s estate where the FCM hasentered into a Link Clearing Agreementwith a clearing member of LIFFE totransfer or accept the transfer ofpositions in Designated Link Contracts.The Chairperson, on behalf of theCommission, hereby certifies pursuantto 5 U.S.C. 605(b), that the action takenherein will not have a significanteconomic impact on a substantialnumber of small entities. The newFramework will eliminate the need forcustomers of FCMs who wish toparticipate in the Link to execute asubordination agreement. Further, thedistributional framework is intended toassure that non-Link customers of suchFCM would not be disadvantaged by ashortfall in the pool of Link funds.Persons participating in the Link will beprovided with special risk disclosurewhich includes disclosure covering thetreatment of Link customer funds. Theadoption of this bankruptcydistributional rule merely provides aframework for fairly distributingcustomer funds in the event of an FCMbankruptcy. As customers elect toundertake Link transactions customersneed not take the risks of the Link ifupon reviewing the relevant disclosures

they do no elect to do so, thus theinception of Framework 2 of AppendixB. It should not in itself have asignificant economic impact but rathershould operate to facilitate the Linkarrangement and to prevent unintendedeconomic consequences to customersnot electing to participate in the Link.

B. Paperwork Reduction ActThe Paperwork Reduction Act of 1995

(Pub. L. 104–13 (May 13, 1996)) imposescertain requirements on federal agencies(including the Commission) inconnection with their conducting orsponsoring any collection ofinformation as defined by thePaperwork Reduction Act. While thisrule has no burden, the group of rules(3038–0021) of which this is a part hasthe following burden:Average burden hours per response—

0.35Number of Respondents—802Frequency of response—on occasionCopies of the OMB approvedinformation collection packageassociated with this rule may beobtained from Desk Officer, CFTC,Office of Management and Budget,Room 10202, NEOB Washington, D.C.20503, (202) 395–7340.

List of Subjects in 17 CFR Part 190Bankruptcy.Accordingly, the Commission

pursuant to the authority contained inthe Commodity Exchange Act and, inparticular, Sections 1a, 2(a), 4c, 4d, 4g,5, 5a, 8a, 15, 19 and 20 thereof, 7 U.S.C.1a, 2 and 4a, 6c, 6d, 6g, 7, 7a, 12a, 19,23 and 24 (1994), and in the BankruptcyCode and, in particular Sections 362,546, 548, 556 and 761–766 thereof, 11U.S.C. 362, 546, 548, 556 and 761–766(1994), hereby amends Part 190 ofChapter I of title 17 of the Code ofFederal Regulation as follows:

PART 190—BANKRUPTCY

1. The authority citation for Part 190continues to read as follows:

Authority: 7 U.S.C. 1a, 2, 4a, 6c, 6d, 6g, 7,7a, 12, 19, 23 and 24 and 11 U.S.C. 362, 546,548, 566 and 761–766.

2. Part 190 is amended by adding atthe end of Appendix B the followingFramework 2:

Appendix B to Part 190—SpecialBankruptcy Distributions

* * * * *

Framework 2—Special Distribution ofCustomer Funds When FCM Participated inthe Trading of Designated Link ContractsPursuant to the CBT–LIFFE Link

The Commission has established thefollowing distributional convention with


1 Because Link property will be located offshore,it is possible that such property could be frozen bygovernmental action or become unavailable as theresult of sovereign events. In that situation, shouldsuch property subsequently become available, theLink property account may acquire no greaterdistributional share than Section 4d(2) (segregatedfunds) customers generally.

2 Certain other property of the customers of theU.S. FCM also will be treated as ‘‘Link property’’and part of the Link account for purposes of thisFramework 2. In the case of Designated LIFFEContracts traded on CBT, property received by theU.S. FCM to margin, guarantee or secure trades isincluded in the foreign futures and foreign optionssecured amount, pursuant to CommissionRegulation 30.7. The Order approving the CBT/LIFFE Link permits BOTCC to commingle certain

foreign currency with a Section 4d(2) account topermit certain property in excess of the requiredsecured amount to be used to meet original marginrequirements for U.S. contracts under Section 4d(2)of the Act. Such excess property held in a‘‘combined’’ account but applied to marginrequirements for U.S. contracts as Section 4d(2)property would also be ‘‘Link property’’ under thisFramework.

respect to Section 4d customer funds held bya futures commission merchant (FCM) thatparticipates in the trading of Chicago Boardof Trade (‘‘CBT’’)-designated contractsexecuted on the London InternationalFinancial Futures and Options Exchange(‘‘LIFFE’’) or LIFFE-designated contractsexecuted on CBT (‘‘Designated LinkContracts’’) pursuant to the CBT–LIFFE Link(‘‘Link’’) which shall apply if customers ofthe FCM have been provided with a noticewhich makes reference to this distributionalrule and the form of such notice has beenapproved by the Commission by rule,regulation or order. The maintenance ofproperty in a Link account would result insubordination of the claim for such propertyto certain non-Link customer claims incertain circumstances. This results insubclasses of customer accounts required tobe segregated for purposes of Section 4d(2) ofthe Commodity Exchange Act: a Link accountand a non-Link account (a person could holdeach type of account), and results in twopools of customer segregated funds: a Linkpool and a non-Link pool.

In the event that there is a shortfall in thenon-Link pool of customer segregated funds,and there is no shortfall in the Link pool ofcustomer segregated funds, customer netequity claims, whether or not they arise out

of the Link subclass of accounts, will becombined and will be paid pro rata out of thetotal pool of available Link and non-Linkcustomer funds. In the event that there is ashortfall in the Link pool of customersegregated funds, and there is no shortfall inthe non-Link pool of customer segregatedfunds, customer net equity claims arisingfrom the non-Link subclass of accounts shallbe satisfied from the non-Link customersegregated funds, and customer net equityclaims arising from the Link subclass ofaccounts shall be paid from the Linkcustomer segregated funds (and, ifapplicable, any excess funds held by theFCM in segregation in the U.S.). Furthermore,in the event that there is a shortfall in boththe non-Link and Link pools of customersegregated funds: (1) If the non-Link shortfallas a percentage of the segregationrequirement in the non-Link pool is greaterthan or equal to the Link shortfall as apercentage of the segregation requirement inthe Link pool, customer net equity claimswill be paid pro rata; and (2) if the Linkshortfall as a percentage of the segregationrequirement in the Link pool is greater thanthe non-Link shortfall as a percentage of thesegregation requirement of the non-Linkpool, non-Link customer net equity claimswill be paid pro rata out of the available non-

Link segregated funds, and Link customer netequity claims will be paid pro rata out of theavailable Link segregated funds. In this way,non-Link customers would never beadversely affected by a Link shortfall.1

The following examples illustrate theoperation of this distributional convention.The examples assume that the FCM has twocustomers, one with exclusively Linkaccounts and one with exclusively non-Linkaccounts. In practice, the FCM would have acustomer omnibus account with a LIFFEclearing member or would itself be a LIFFEclearing member with its own customeromnibus account. Positions in DesignatedCBT Contracts traded at LIFFE and initiallycleared by LCH would be allocated to thiscustomer omnibus account; following thetransfer of the positions via the Link, theFCM would allocate the positions and anygains or losses to its customers’ accounts.Accordingly, a customer who tradesDesignated CBT Contracts at LIFFE may havethe portion of his account which reflects hisactivity in the customer omnibus account atLIFFE deemed a Link account and theremainder of the account a non-Link account.Effectively this will result in the customerhaving two claims—one against Linkproperty and one against non-Link property.2

Non-link Link Total

1. Sufficient Funds to Meet Non-Link and Link Customer Claims:

Funds in segregation ................................................................................................ 150 ............................ 150 ............................ 300Segregation Requirement ........................................................................................ 150 ............................ 150 ............................ 300Shortfall (dollars) ...................................................................................................... 0 ................................ 0 ................................ ....................Shortfall (percent) ..................................................................................................... 0 ................................ 0 ................................ ....................Distribution ................................................................................................................ 150 ............................ 150 ............................ 300

There are adequate funds available, and both the non-Link and Link customer claims would be paid in full.

2. Shortfall in Non-Link Only:

Funds in segregation ................................................................................................ 100 ............................ 150 ............................ 250Segregation Requirement ........................................................................................ 150 ............................ 150 ............................ 300Shortfall (dollars) ...................................................................................................... 50 .............................. 0 ................................ ....................Shortfall (percent) ..................................................................................................... 50/150=33.3 .............. 0 ................................ ....................Pro Rata (percent) .................................................................................................... 150/300=50 ............... 150/300=50 ............... ....................Pro Rata (dollars) ..................................................................................................... 125 ............................ 125 ............................ ....................Distribution ................................................................................................................ 125 ............................ 125 ............................ 250

Due to the non-Link account, there are insufficient funds available to meet both the non-Link and the Link customer claims in full. Each cus-tomer will receive his or her pro rata share of the funds available, or 50% of the $250 available, or $125.

3. Shortfall in Link Only:

Funds in segregation ................................................................................................ 150 ............................ 100 ............................ 250Segregation Requirement ........................................................................................ 150 ............................ 150 ............................ 300Shortfall (dollars) ...................................................................................................... 0 ................................ 50 .............................. ....................Shortfall (percent) ..................................................................................................... 0 ................................ 50/150=33.3 .............. ....................Pro Rata (percent) .................................................................................................... 150/300=50 ............... 150/300=50 ............... ....................Pro Rata (dollars) ..................................................................................................... 125 ............................ 125 ............................ ....................Distribution ................................................................................................................ 150 ............................ 100 ............................ 250


Non-link Link Total

Due to the Link account, there are insufficient funds available to meet both the non-Link and Link Customer claims in full. Accordingly, theLink funds and non-Link funds are treated as separate pools, and the non-Link customer will be paid in full, receiving $150, while the Link cus-tomer would receive the remaining $100.

4. Shortfall in Both, Link Shortfall Exceeding Non-Link Shortfall:

Funds in segregation ................................................................................................ 125 ............................ 100 ............................ 225Segregation Requirement ........................................................................................ 150 ............................ 150 ............................ 300Shortfall (dollars) ...................................................................................................... 25 .............................. 50 .............................. ....................Shortfall (percent) ..................................................................................................... 25/150=16.7 .............. 50/150=33.3 .............. ....................Pro Rata (percent) .................................................................................................... 150/300=50 ............... 150/300=50 ............... ....................Pro Rata (dollars) ..................................................................................................... 112.50 ....................... 112.50 ....................... ....................Distribution ................................................................................................................ 125 ............................ 100 ............................ 225

There are insufficient funds available to meet both the non-Link and Link customer claims in full, and the Link shortfall exceeds the non-Linkshortfall. The non-Link customer will receive $125 available with respect to non-Link claims while the Link customer will receive the $100 avail-able with respect to the Link claims.

5. Shortfall in Both, With Non-Link Shortfall Exceeding Link Shortfall:

Funds in segregation ................................................................................................ 100 ............................ 125 ............................ 225Segregation Requirement ........................................................................................ 150 ............................ 150 ............................ 300Shortfall (dollars) ...................................................................................................... 50 .............................. 25 .............................. ....................Shortfall (percent) ..................................................................................................... 50/150=33.3 .............. 25/150=16.7 .............. ....................Pro Rata (percent) .................................................................................................... 150/300=50 ............... 150/300=50 ............... ....................Pro Rata (dollars) ..................................................................................................... 112.50 ....................... 112.50 ....................... ....................Distribution ................................................................................................................ 112.50 ....................... 112.50 ....................... 225

There are insufficient funds available to meet both the non-Link and Link customer claims in full, and the non-Link shortfall exceeds the Linkshortfall. Each customer would receive 50% of the $225 available, or $112.50.

6. Shortfall in Both, Non-Link Shortfall=Link Shortfall:

Funds in segregation ................................................................................................ 100 ............................ 100 ............................ 200Segregation Requirement ........................................................................................ 150 ............................ 150 ............................ 300Shortfall (dollars) ...................................................................................................... 50 .............................. 50 .............................. ....................Shortfall (percent) ..................................................................................................... 50/150=33.3 .............. 50/150=33.3 .............. ....................Pro Rata (percent) .................................................................................................... 150/300=50 ............... 150/300=50 ............... ....................Pro Rata (dollars) ..................................................................................................... 100 ............................ 100 ............................ ....................Distribution ................................................................................................................ 100 ............................ 100 ............................ 200

There are insufficient funds available to meet both the non-Link and the Link customer claims in full, and the non-Link shortfall equals theLink shortfall. Each customer will receive 50% of the $200 available, or $100.

7. Shortfall in Link Account Caused by Freeze That is Subsequently Lifted, Where Non-Link Account Had Actual Shortfall But LinkAccount Did Not Subsequent to Lifting of Freeze Order:

Funds in segregation ................................................................................................ 100 ............................ Frozen ....................... 100Segregation Requirement ........................................................................................ 150 ............................ 150 ............................ 300Shortfall (dollars) ...................................................................................................... 50 .............................. 150 ............................ ....................Shortfall (percent) ..................................................................................................... 50/150=33.3 .............. 150/150=100 ............. ....................Pro Rata (percent) .................................................................................................... 150/300=50 ............... 150/300=50 ............... ....................Pro Rata (dollars) ..................................................................................................... 50 .............................. 50 .............................. ....................Initial Distribution ...................................................................................................... 100 ............................ 0 ................................ 100Freeze Lifted: Funds Previously Frozen .................................................................. 0 ................................ 150 ............................ 150Subsequent Distribution ........................................................................................... 25 .............................. 125 ............................ ....................Total Distribution ...................................................................................................... 125 ............................ 125 ............................ 250

Through the time of the initial distribution, this situation would follow the pattern of Example 4 because the shortfall in the Link account waslarger. After the freeze was lifted, it would follow the pattern of Example 2 because the shortfall in the non-Link account was larger.

These examples illustrate the principle that Pro rata distribution across both accounts is the preferable approach except when a shortfall inthe Link account could harm non-Link customers. Thus, pro rata distribution occurs in Examples 1, 2, 5 and 6. Separate treatment of the Linkand non-Link accounts occurs in Examples 3 and 4. In Example 7, separate treatment occurs where the funds are frozen. It is adjusted to be-come pro rata treatment after the freeze is lifted.


Issued in Washington, D.C. on June 5, 1997by the Commission.Jean A. Webb,Secretary of the Commission.[FR Doc. 97–15246 Filed 6–10–97; 8:45 am]BILLING CODE 6351–01–P

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 12

[T.D. 97–50]

RIN 1515–AC17

Archaeological and EthnologicalMaterial From Peru

AGENCY: U.S. Customs Service,Department of the Treasury.ACTION: Final rule.

SUMMARY: This document amends theCustoms Regulations to reflect theimposition of import restrictions oncertain archaeological material of Peru’spre-Columbian past dating to theColonial period and certain Colonialethnological materials of Peru. Theserestrictions are being imposed pursuantto an agreement between the UnitedStates and Peru which has been enteredinto under the authority of theConvention on Cultural PropertyImplementation Act in accordance withthe United Nations Educational,Scientific and Cultural Organization(UNESCO) Convention on the Means ofProhibiting and Preventing the IllicitImport, Export and Transfer ofOwnership of Cultural Property. Thedocument also contains the DesignatedList of Archaeological and EthnologicalMaterial which describes the articles towhich the restrictions apply. Thisdocument also amends the CustomsRegulations by removing the listing ofPeru and identification of the culturalproperty to which emergency importrestrictions have been imposed. Articleswhich had been protected under thatprovision are also covered under thenew listing.EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT:Legal Aspects: Donnette Rimmer,Intellectual Property Rights Branch(202) 482–6960.

Operational Aspects: Louis Alfano,Commercial Enforcement, Office ofField Operations (202) 927–0005.


Background

The value of cultural property,whether archaeological or ethnological

in nature, is immeasurable. Such itemsoften constitute the very essence of asociety and convey importantinformation concerning a people’sorigin, history, and traditional setting.The importance and popularity of suchitems regrettably makes them targets oftheft, encourages clandestine looting ofarchaeological sites, and results in theirillegal export and import.

The U.S. shares in the internationalconcern for the need to protectendangered cultural property. Theappearance in the U.S. of stolen orillegally exported artifacts from othercountries where there has been pillagehas, on occasion, strained our foreignand cultural relations. This situation,combined with the concerns ofmuseum, archaeological, and scholarlycommunities, was recognized by thePresident and Congress. It becameapparent that it was in the nationalinterest for the U.S. to join with othercountries to control illegal trafficking ofsuch articles in international commerce.

The U.S. joined international effortsand actively participated indeliberations resulting in the 1970UNESCO Convention on the Means ofProhibiting and Preventing the IllicitImport, Export and Transfer ofOwnership of Cultural Property (823U.N.T.S. 231 (1972)). U.S. acceptance ofthe 1970 UNESCO Convention wascodified into U.S. law as the‘‘Convention on Cultural PropertyImplementation Act’’ (Pub.L. 97–446, 19U.S.C. 2601 et seq.) (‘‘the Act’’). Thiswas done to promote U.S. leadership inachieving greater internationalcooperation towards preserving culturaltreasures that are of importance not onlyto the nations whence they originate,but also to greater internationalunderstanding of mankind’s commonheritage. The U.S. is, to date, the onlymajor art importing country toimplement the 1970 Convention.

During the past several years, importrestrictions have been imposed on aemergency basis on archaeological andethnological artifacts of a number ofsignatory nations as a result of requestsfor protection received from thosenations.

Peru has been one of the countrieswhose archaeological material has beenafforded emergency protections. In T.D.90–37, § 12.104g(b), CustomsRegulations, was amended to reflect thatarchaeological material from the SipanArchaeological Region forming part ofthe remains of the Moche culturereceived import protection under theemergency protection provisions of theAct. This protection was extended inT.D. 94–54. Import restrictions are nowbeing imposed on certain pre-

Columbian archaeological materials ofPeru dating to the Colonial period andcertain Colonial ethnological materialfrom Peru as the result of a bilateralagreement entered into between theUnited States and Peru. This agreementwas entered into on June 9, 1997,pursuant to the provisions of 19 U.S.C.2602. Protection of the archaeologicalmaterial from the Sipan regionpreviously reflected in § 12.104g(b) willbe continued through the bilateralagreement without interruption.Accordingly, § 12.104g(a) of theCustoms Regulations is being amendedto indicate that restrictions have beenimposed pursuant to the agreementbetween the United States and Peru andthe emergency import restrictions oncertain archaeological material fromPeru is being removed from § 12.104g(b)as those restrictions are nowencompassed in § 12.104g(a).

This document contains theDesignated List of Archaeological andEthnological Material representing thecultures of the native peoples of Peruwhich are covered by the agreement.Importation of articles on this list isrestricted unless the articles areaccompanied by an appropriate exportcertificate issued by the Government ofPeru.

In reaching the decision torecommend extension of protection, theDeputy Director, United StatesInformation Agency, determined that,pursuant to the requirements of the Act,with respect to categories of pre-Columbian archaeological materialproposed by the Government of Peru forU.S. import restrictions, ranging in datefrom approximately 12,000 B.C. to A.D.1532, and including, but not limited to,objects comprised of textiles, metals,ceramics, lithics, perishable remains,and human remains that representcultures that include, but are not limitedto, the Chavin, Paracas, Vincus, Moche(including objects derived from thearchaeological zone of Sipan), Viru,Lima, Nazca, Recuay, Tiahuanaco,Huari, Chimu, Chancay, Cuzco, andInca; that the cultural patrimony of Peruis in jeopardy from the pillage of theseirreplaceable materials representing pre-Columbian heritage; and that withrespect to certain categories ofethnological material of the Colonialperiod, ranging in date from A.D. 1532to 1821, proposed by the Government ofPeru for U.S. import restrictions butlimited to (1) objects directly related tothe pre-Columbian past, whose pre-Columbian design and function aremaintained with some Colonialcharacteristics and may include textiles,metal objects, and ceremonial wood,ceramic and stone vessels; and (2)


objects used for religious evangelismamong indigenous peoples andincluding Colonial paintings andsculpture with distinct indigenousiconography; that the culturalpatrimony of Peru is in jeopardy ofpillage of these irreplaceable materialsas documented by the request.

List of Designated Archaeological andEthnological Material From Peru

Pursuant to a Memorandum ofUnderstanding between the UnitedStates and the Republic of Peru, thefollowing contains descriptions of thecultural materials for which the UnitedStates imposes import restrictions underthe Convention on Cultural PropertyImplementation Act (Pub. L. 97–446),the legislation enabling implementationof the 1970 UNESCO Convention on theMeans of Prohibiting and Preventing theIllicit Import, Export and Transfer ofOwnership of Cultural Property. TheDesignated List includes archaeologicalmaterials known to originate in Peru,

ranging in date from approximately12,000 B.C. to A.D. 1532, and including,but not limited to, objects comprised oftextiles, metals, ceramics, lithics,perishable remains, and human remainsthat represent cultures that include, butare not limited to, the Chavin, Paracas,Vicus, Moche, Viru, Lima, Nazca,Recuay, Tiahuanaco, Huari, Chimu,Chancay, Cuzco, and Inca cultures. TheDesignated List also includes certaincategories of ethnological materials fromPeru dating to the Colonial period (A.D.1532–1821), limited to: (1) objectsdirectly related to the pre-Columbianpast, whose pre-Columbian design andfunction are maintained with someColonial characteristics and mayinclude textiles, metal objects, andceremonial wood, ceramic and stonevessels; and (2) objects used forreligious evangelism among indigenouspeoples and including Colonialpaintings and sculpture with distinctindigenous iconography. TheDesignated List below also subsumes

those categories of Moche objects fromthe Sipan Archaeological Region of Perufor which emergency import restrictionshave been in place since 1990. Withpublication of the Designated Listbelow, protection of the Sipan materialcontinues without interruption.

The list is divided into sevencategories of objects:

I. Pre-Columbian TextilesII. Pre-Columbian MetalsIII. Pre-Columbian CeramicsIV. Pre-Columbian LithicsV. Pre-Columbian Perishable RemainsVI. Pre-Columbian Human RemainsVII. Ethnological Objects

A. Objects Directly Related to the Pre-Columbian Past

B. Objects Used for Religious EvangelismAmong Indigenous Peoples

What follows immediately is a chartof chronological periods and culturalclassifications currently widely used foridentifying archaeological remains inPeru. All dates are approximate.

Rowe Lumbreras

1440–1532 A.D ............................................................ Late Horizon ................................................................ Inca Empire.1100–1440 A.D ............................................................ Late Intermediate Period ............................................. Regional states and kingdoms.600–1100 A.D .............................................................. Middle Horizon ............................................................ Huari Empire.200 B.C.–600 A.D ........................................................ Early Intermediate Period ............................................ Regional Cultures.1000–200 B.C .............................................................. Early Horizon ............................................................... Middle and Late Formative.1700–1000 B.C ............................................................ Initial Period ................................................................. Early Formative.2500–1800 B.C ............................................................ Late Pre-ceramic ......................................................... Late Archaic.4500–2500 B.C ............................................................ Middle Pre-ceramic ..................................................... Middle Archaic.6000–4500 B.C ............................................................ Early Pre-ceramic ........................................................ Early Archaic.12000–6000 B.C .......................................................... Early Pre-ceramic ........................................................ Hunter-Gatherers.

The following Designated List isrepresentational and may be amendedas appropriate.

I. Pre-Columbian TextilesTextiles representing these principal

cultures and main classes of objects:

A. ChimuPillow—Piece of cloth sewn into a bag

shape and stuffed with cotton of vegetalfibers. Generally the cloth is made intapestry technique. 60 cm. x 40 cm.

Painted Cloth—Flat cloth of cotton onwhich designs are painted. Rangebetween 20 cm. and 6.1 m.

Headdress—Headdresses are usuallymade of feathers, especially white,green, and dark brown, which areattached to cloth and fitted to a cane orbasketry frame. Feathers on the upperpart are arranged to stand upright.

Feather Cloth—Cloth decorated withbird feathers, especially panels andtunics. They vary in shape and size;generally they depict geometric motifand volutes. Vary from 20 cm.—3 m. inlength, and may be up to 1.5 m. inwidth.

Panels—Chimu panels may be of twotypes: tapestry weave or plain-weavecotton. Isolated anthropomorphicdesigns predominate and may beassociated with zoomorphic motifs.Vary from 20 cm. x 20 cm. to 2.0 m. x1.8 m.

Belts and Sashes—Generally made intapestry technique, and predominantlyof red, white, ocher, and black. As withother Chimu textiles, they generallydepict human figures with rayedheaddresses. Up to 2.20 m. in length.

B. ChancayLoom—Looms are commonly found in

Chancay culture, sometimes with piecesof the textile still on the loom. Oftenthese pieces of cloth show variedtechniques and are referred to as‘‘samples.’’ 50 cm. x 20 cm.

Loincloth—Triangular panels of clothwith tapestry woven borders.

Dolls—Three dimensional humanfigures stuffed with vegetal fiber towhich hair and other decorations areadded. Sometimes they depict lonefemales; in other cases they are arrangedin groups. Most important, the eyes are

woven in tapestry technique; in fakes,they have embroidered features. Usually20 cm. tall and 8 cm. wide.

False Head—In Chancay culture, falseheads are made on a cotton of vegetalfiber cushion covered with plain-weavecloth, decorated with shells, beads,metal, wood, or painting to depict facialfeatures. They sometimes have real hair.Usually 30 cm. x 35 cm.

Unku/Tunic—Varied sizes and styles.Some are in plain weave, others ingauze, still others are in tapestrytechnique or brocade. They arerecognized by their iconography, whichincludes geometric motifs, birds, fish,plants, and human figures. Miniaturesare tiny; regular size examples are about50 cm. x 50 cm.

Belt—Chancay belts are multicolored,with geometric motifs rendered intapestry technique. Sometimes the endsare finished in faux-velour technique. 2m. x 5 cm.

Panels—Chancay panels may be madein tapestry technique or may be paintedon plain weave cloth. In these lattercases, the panels may depict fish,


parrots, monkeys, viszcachas, felines,foxes, and human figures. Vary in sizefrom miniatures to 4 m. x 2 m.

Standards—Chancay standards aresupported on a frame of straight reedscovered with cotton cloth which ispainted in anthropomorphic designs inochers and black. Sometimes they havea handle. 20 cm. x 20 cm.

Gauze—Pieces of cloth made inopenwork gauze technique, with veryfine cotton threads. May haveembroidered designs in the same threadthat depict birds or other flora andfauna. Usually 80 cm. x 80 cm.; someare smaller.

C. Nazca

Three-Dimensional Cloth—Clothmade in three dimensions, usingneedles. Of many and bright colors,knitted in long strips. Each figure isapprox. 5 cm. long x 2 cm. wide.

Unku/Tunic—These includeminiature and regular-sized tunics.They are generally of one color, mostlylight brown. The neck edges, hem, andfringes have multicolored geometricdesigns. Fringes end in woven braids.Vary in size from miniatures up toapprox. 1.5 m. x .8 m.

Bags—There are bags of many sizes,from miniatures to large ones, generallywith a narrow opening and a widepouch. Some are decorated with fringe.Their iconography resembles the unku(tunic), stylized designs in yellow, red,and dark and light blue.

Sash—Nazca sashes are made onspecial looms. Their ends are decoratedwith plied fringe.

Tie-Dye (Painted) Cloth—Mostcommon are those made in the tie-dyetechnique, in which the textile isknotted and tied before it is dyed, sothat when it is untied, there are negativeimages of diamonds, squared, andconcentric dots. Most common areorange, red, blue, green, and yellowcolors. Vary from approx. 20 cm. x 20cm. to 2.0 m. x 1.8 m.

Patchwork Cloth—Variant of the Tie-Dye cloth, in which little panels aremade and later sewn together so that theresulting textile includes rectangles oftie-dyed panels of different colors. Thecloth may have a decorative fringe. Varyfrom 20 cm. x 20 cm. to 2.0 m. x 1.8 m.

Wara/Loincloth—Generally made of aflat piece of cloth with colorful bordersdepicting stylized geometric motifs.They terminate in fringe. 50 cm. x 30cm.

Fans—The frame is of vegetal fiberprovided with twisted cord into whichfeathers are inserted. Commonly twocolors of feathers are attached in thisway, such as orange and green, oryellow and blue. 30 cm. x 20 cm.

D. Huari

Panel—Characterized by a complexand abstract iconography. Made intapestry technique with a range ofcolors, including browns, beiges,yellows, reds, oranges, and greens. Varyfrom 20 cm. x 20 cm. to 2.0 m. x 1.8 m.

Unku/tunic—Large with an abstractand geometric iconography. Commonlythe designs repeat in vertical bands.Generally these tunics have a cottonwarp and camelid fiber weft. Some areso finely woven that there are 100threads per cm 2. Vary in size fromminiatures up to 1.5 m. x 80 cm.

Caps—Most common are the so-called‘‘four-corner hats’’ made in a faux-velour technique that results in avelvety texture. On the base cloth, smalltufts of brightly-colored wool areinserted.

Vincha/headband or sashes—Thesegarments are made in tapestry weave orfaux-velour technique and depictgeometric motifs.

Bags—Bags have an opening which issomewhat narrower than the body, withdesigns depicting felines, camelids,human faces, and faces with animalattributes.

E. Paracas

Esclavina/Small shoulder poncho—Paracas esclavinas are unique for theirdecoration with brightly colored imagesin Paracas style such as birds, flowers,animals, and human figures. Vary insize from miniatures up to 60 cm. x 30cm.

Mantle—Paracas mantles can bedivided into five types, based on theirdecoration. All are approximately 2.5 m.x 1.6 m.

a. Mantles with a plain field andwoven borders;

b. Mantles with decorative(embroidered) borders and plain field;

c. Mantles with decorative(embroidered) borders and a decorativestripe in the center field;

d. Mantles with embroidered bordersand center field embroidered incheckerboard-fashion;

e. Mantles with embroidered bordersand alternating diagonals ofembroidered figures in the center field.

Gauzes—Paracas gauzes are made ofone color, such as lilac, yellow, red, orgrey. They are generally rectangular andhave a soft and delicate texture. Approx.1 m. x 1 m.

Panels—Paracas panels are generallyof cloth and may have been used forutilitarian purposes. They are generallyundecorated. Vary from 20 cm. x 20 cm.to 2 m. x 1.8 m.

Skirts—Paracas skirts are of twotypes: some are plain, made of cotton

with decoration reserved for the ends;there are others that are elaboratelyembroidered with colorful imagesrendered in wool. These often form setswith mantles and other garments. Skirtsare rectangular and very wide, with twofringed ties. 3 m. long and 70 cm. wide.

Wara/Loincloth—Made of cotton, notas large as skirts, and may haveembroidered edges.

Slings—Paracas slings are decoratedin Cavernas style, made of vegetal fiber,and are of small size, generally 1.5 m.x 5 cm.

Furs—There are numerous examplesof animal skins reported from Paracascontexts, including the skins of the fox,vizcacha, guinea pig. Most are poorlypreserved.

F. Moche

Bags—Moche bags are usually square,small, and have a short handle. They aremade in tapestry technique withbrightly-woven designs. Principal colorsused are white, black, red, light blue,and ocher.

Panels—Recognizable by theiriconography, these tapestry-techniquepanels may show people on balsa-reedrafts surrounded by a retinue. They arerendered in a geometric fashion, and areoutlined in black and shown in profile.Scenes of marine life and faunapredominate. Vary from 20 cm. x 20 cm.to 2 m. x 1.8 m.

Ornamental canes—Small canes are‘‘woven’’ together in a twill techniqueusing colorful threads that depictanthropomorphic designs. Approx. 10cm. x 10 cm.

G. Lambayeque

Panels—Lambayeque panels aresmall, made in tapestry technique, ofcotton and wool. Vary from 20 cm. x 20cm. to 2 m. x 1.8 m.

H. Inca

Sling—There are two types of Incaslings. Ceremonial ones are oversize andelaborately decorated with geometricmotifs, with long fringes. The other typeis smaller and utilitarian, almost alwayswith decoration only on the pouch andfar ends. The decoration is geometricand the slings have fringed ends.

Unku/tunic—Inca tunics are well-made and colorful, mostly in red, olivegreen, black, and yellow. Decorativeelements may be arrayed checkerboardfashion and are found on the upper andlower part of the garment. Vary in sizefrom miniatures up to approx. 1.5 m. x80 cm.

Bags—Recognized by their brightcolors, they have an opening that isnarrower than the body and a widepouch with long fringe and handle. Vary


in size from miniatures up to 30 cm. x20 cm.

Panels—Some are made in cottonusing the double-cloth technique, basedon light brown and beige. Lines ofgeometrically-rendered llamaspredominate. Vary in size from 20 cm.x 20 cm. to 2 m. x 1.8 m.

Mantles—Inca mantles are of standarddimensions, sometime more than ameter long, generally rectangular. Theyare multi-colored and made of cottonwarp and wool weft. Most commoncolors are dark red, olive green, white,and black. Generally 2.5 m. x 1.6 m.

Kipu/quipu—Inca quipus (knottedstring mnemonic devices) are made ofcotton and wool cords, sometimes withthe two fibers plied together. Rarely istheir original color preserved, thoughsometime one sees light blues andbrowns. Some are wrapped withcolorful threads on the ends of thecords. 80 cm. x 50 cm.

II. Pre-Columbian Metal Objects

A. Idols

Anthropomorphic or zoomorphicfigures, some of which are hollow andothers which are solid. They may be ofgold and silver, they may be gilded, orof copper, or bronze. Sizes vary from 2cm.—20 cm. in height.

B. Small Plaques

Thin sheets of gold, silver, copper, orgilded copper, used to cover the bodyand made in pieces. They have repousseor punched designs on the edge andmiddle of the sheet. Average .6 cm inheight.

C. Axes

Almost always T-shaped and solid.There are also axes in a traditionalaxehead shape. May be of bronze orcopper.

D. Mace Heads

These come in a great variety ofshapes, including star-shaped, flat, or oftwo or three levels. They may be madeof copper or bronze. Most have a centralhole through which a wooden handlewas affixed.

E. Musical Instruments

Trumpets: Wind instrument with atubular body and flaring end, fastened atthe joint. May be of copper or bronze.

Bells: Of varying shapes and materials(including gold, silver, copper, andsilver-plated copper).

Conos: Instrument shaped from asheet of hammered metal, with orwithout a clapper. Can be of copper orsilver. Up to .5 m. in height.

Rattles: Musical instrument with acentral hold to accommodate a handle.

May be of copper or bronze. Vary from6 cm.–25 cm. in height.

Jingle Bells: Spherical bells with anopening on the lower part and a handleon the upper part so they can besuspended from a sash or other garment.They contain a small stone or a littleball of metal. The handles may bedecorated. Jingle bells may decorateanother object, such as rhythm sticks,and may be of gold, silver, or bronze.Used in all pre-Columbian cultures ofPeru.

Chalchachas: Instruments shaped likea bivalve with repousse decoration.Made of copper.

Quenas (flutes): Tubular instruments,generally of silver, with perforations tovary the tone.

F. KnivesKnives vary depending on their

provenance. They can have little or nodecoration and can be of differentmetals or made of two metals. The bestknown are the tumis from the Sicanculture, which have a straight ortrapezoidal handle and a half-moonblade. The solid handle may havecarved or stamped designs. Generallymade of gold, silver, or copper. Inceremonial examples, the blade andupper part may depict ananthropomorphic figure standing orseated, or simply a face or mask with anelaborate headdress, earspools, andinset semi-precious stones. Tumihandles can be triangular, rectangular,or trapezoidal, and blades can beovaloid or shaped like a half-moon.

G. PinsWith a straight shaft and pointed end,

pins can be flat or cylindrical in cross-section. Most are hammered, and someare hollow. They can be of gold, silver,copper, bronze, gold-plated silver ormay be made of two metals. Some pinsare zoomorphic; others have floralimages, and still others depict fish.Some have a round head; others have aflat, circular head; still others have theshape of a half-moon. There are hollow-headed rattle pins; others have solidanthropomorphic images. Most are up to50 cm. in length, with heads that are upto 10 cm. in diameter. The small pinsare about 5 cm. in length.

H. VesselsThere are a variety of metal vessels;

they may be made of gold, silver, gildedsilver, gilded copper, silver-coveredcopper, and bronze. There areminiatures, as well as full-size vessels.Such vessels are known from allcultures. Forms include beakers, bowls,open plates, globular vessels, andstirrup-spout bottles. The exact form

and surface decoration varies fromculture to culture. Shapes includebeakers, bowls, and plates. Average .5m.–.3 m. in height.

I. [Reserved]

J. Masks

May be made of gold, silver, gildedsilver, copper, gilded copper, silver-covered copper, or may be made of twometals. They vary greatly in shape anddesign. The best known examples comefrom the following cultures: Moche,Sican, Chimu, Huari, Inca, Nazca, andChincha. The northern coast examplesoften have insets of shell, precious orsemi-precious stones, and may haveplant resins to depict the eyes and teeth.Almost all examples that have not beencleaned have a surface coloring of redcinnabar. Examples from Sican measureup to 49 cm. in width by 29 cm. inheight. Miniature examples can measure7 cm. × 5 cm. Miniature masks are alsoused as decorations on other objects.Copper examples generally show heavyoxidation.

K. Crowns

Thin or thick sheets of metal made toencircle the head. They may be of silver,gold, copper, gilded silver, silver-covered copper, or may be made of twometals. Some examples have a curvedcentral part, and may be decorated withpieces of metal and real or artificialfeathers that are attached with smallclamps. Found in all cultures.

L. Penachos (Stylized Metal Feathers)

Stylized metal feathers used todecorate crowns. May be made of gold,silver, copper, or silver-covered copper.

M. Tocados (Headdresses)

Headdress ornaments which may besimple or complex. They may be madeof one part, or may include manypieces. Found in all cultures. They maytake the form of crowns, diadems, orsmall crowns. They may have twostylized feathers to decorate the crownand to hold it to the hair (especially theChimu examples). Paracas examplesgenerally have rayed appendages, withpierced disks suspended from the endsof the rays.

N. Turbans

Long pieces of cloth that are wrappedaround the head. Metal ornaments maybe sewn on turbans. Found in allcultures; the metal decorations and thecloth vary from culture to culture.

O. Spoons

Utilitarian object of gold, silver, orcopper.


P. Lime Spatulas

Miniature spatula: a straight handlehas a slightly spoon-shaped end. Thehandle may have an anthropomorphicfigure. Made of gold, silver, or copper.

Q. Ear Spools

Ear spools are generally made of alarge cylinder which fits through theearlobe and an even larger disk ordecorative sheet on one side. The diskmay be decorated with repousse,stamped, or engraved designs, or mayhave inset stone or shell. May be madeof gold, silver, copper, or made of twometals. Ear spools are found in allcultures. The largest measure up to 15cm. height; typical diameter: 5 cm.–14cm.

R. Nose Ornaments

Of varied shapes, nose ornaments canbe as simple as a straight tube or ascomplex as a flat sheet with repoussedesign. In the upper part, there are twopoints to attach the ornament to theseptum. They may be of gold, silver, orcopper or may be made of two metals.

S. Earrings

Decoration to be suspended from theearlobes.

T. Rings

Simple bands with or withoutdesigns. Some are two bands united byfiligree spirals. Some have inset stones.May be of silver, gold, copper, or alloys.

U. Bracelets

Bracelets are made of sheets of metalwith a straight or slightly trapezoidalshape, with stamped or repoussedesigns. Some are simple, narrowbands. Found in all cultures and withvaried designs. May be of gold, silver,bronze, or alloys of copper. Generally 4cm.–14 cm. in width.

V. Necklaces

Necklaces are made of beads and/orsmall carved beads. May be of shell,bone, stone, gold, silver, copper, orbronze. The beads are of varied shapes.All beads have two lateral perforationsto hold the cord.

W. Tweezers

Made in one piece, with two identicalends and a flexed central handle. Theyare of varied shapes, includingtriangular, trapezoidal, and ovaloid. Themiddle of the handle may have a holeso the tweezers can be suspended froma cord.

X. Feather Carrier

Conical objects with a pointed,hollow end, into which feathers, llama

skin, or monkey tails are inserted andheld in place with tar. They may bemade of gold, silver, or gilded or silver-plated copper.

III. Pre-Columbian Ceramics

A. Chavın

Date: 1200–200 B.C.

Characteristics

Decoration: A grey-black color.Incised, modeled, and high and low-relief are combined to work out designsin grays and browns. The surface mayalso juxtapose polishing and mattefinish in different design zones.

Forms: Bottles, plates, and bowls.Size: 5 cm.–30 cm.Identifying: Characteristic traits of

Cupisnique and Chavın ceramicsinclude: globular body with a flat baseand stirrup spout; thick neck with anobvious and everted lip. Chavin stylealso includes long-necked bottles, bowlswith flaring walls, and highly-polishedrelief-decorated surfaces.

Styles: Chavin influence is seen inCupisnique, Chongoyape, Poemape,Tembladera, Patapo, and Chilete.

B. Vicus

Date: 900 B.C.–A.D. 500

Characteristics

Decoration: Geometric designs inwhite on red, made using negativetechnique. There are also monochromeexamples.

Forms: Anthropomorphic,zoomorphic and plant-shaped vessels.Some have a double body linked by atube or common opening.

Size: 30 cm.–40 cm. tall.

C. Viru or Gallinazo

Characteristics

Decoration: Negative technique overorange background.

Forms: Faced anthropomorphic andzoomorphic vessels, face bottles fordaily use in dwellings, ‘‘cancheros’’(type of pot without a neck and with ahorn-shaped handle).

Size: Up to 15 cm. high.Identifying: The surface is basically

orange; the vessels have a truncatedspout, an arched bridge (like a tube) ashandle, and geometric symbols innegative technique (concentric circles,frets and wavy lines). When the vesselsrepresent a face, the eyes are like ‘‘coffeebeans,’’ applied on the surface and witha transverse cut.

D. Pucara

Date: 300 B.C.–300 A.D.

Characteristics

Decoration: Slip-painted and incised.Modeled elements include stylizedfelines and camelids, along with ananthropomorphic imagecharacteristically depicted with a staffin each hand. Vessels are typicallydecorated in yellows, black, and whiteon the red background of the vessel.Designs are characteristically outlinedby incision. There may be modeleddecoration, such as feline heads,attached to the vessels.

Shapes: Tall bowls with annular ringbases predominate, along with vesselsthat depict anthropomorphic images.

Size: Bowls are up to 20 cm. indiameter and 20 cm. in height.

E. Paracas

Date: Developed around 200 B.C.

Characteristics

Vessels are typically incised, withpost-fired resin painting on a blackbackground.

Size: 10 cm.–15 cm. high

F. Nazca

Date: A.D. 100–600.

Characteristics

Color: Typically very colorful, with arange of slips including cream, black,red, violet, orange, gray, all in a rangeof tones.

Slip: Background slip is generallycream or orange.

Shapes: Cups, bowls, beakers, plates,double-spout-and-bridge bottles,anthropomorphic figures, and musicalinstruments.

Decoration: Realistic drawings offantastic creatures, including the‘‘Flying God.’’ In late Nazca, bottles arebroader and flatter and the designs arearrayed in broad bands. Typically havedecorations of trophy heads, geometricmotifs, and painted female faces.

Size: 5 cm.—20 cm.

G. Recuay

Date: A.D. 100–700.

Characteristics

Slip: Both positive and negative slip-painting is found, generally in colors ofblack, cream and red.

Shapes: Sculptural, especiallyceremonial jars known as ‘‘Paccha’’which have an elaborate outlet to servea liquid.

Decoration: Usually show groups ofreligious or mythical personages.

Size: 20 cm.—35 cm. in height.

H. Pashash

Date: A.D. 1–600.


Characteristics

Decoration: Positive decoration inblack, red, and orange on a creamy-white background. Some show negativepainting.

Shapes: Anthropomorphic vessels,bottles in the form of snakes, bowls withannular base, and large vessels withlids.

Size: The anthropomorphic vesselsare up to 20 cm. in height, serpentbottles are around 25 cm. wide x 10 cm.tall, and lidded vessels are more than 30cm. in height.

Motifs: The decorations are renderedin positive or negative painting in zonesthat depict profile-face images ofzoomorphic figures, serpents, or worms,seen from above and with trapezoidalheads.

I. Cajamarca

Date: A.D. 500–900.

Characteristics

Decoration: Pre-fired slip paintingwith geometric designs, includingstepped triangles, circles, lines, dots,and rows of volutes. They may includestylized birds, felines, camelids,batrachians, and serpents. Spiral figuresmay include a step-fret motif in the baseof the bowls.

Shapes: Pedestal base bowls, tripodbowls, bottles with annular ring base,goblets, spoons with modeled handles,bowls with carinated edges.

J. Moche

Date: A.D. 200–700.

Characteristics

Forms: Stirrup-spout vessels, vesselsin the shape of humans, animals, orplants.

Colors: Generally red and white.Manufacture: Often mold-made.Size: 15 cm.—25 cm. in height.Decoration: Wide range of images

showing scenes of real life or mythicalscenes depicting gods, warriors, andother images.

K. Tiahuanaco

Date: A.D. 200–700.

Characteristics

Decoration: Pre-fired slip painting ona highly polished surface. Background isgenerally a red-orange, with depictionsof human, animal, and geometricimages, generally outlined in black andwhite lines.

Shapes: Plates, cups, jars, beakers,open-backed incense burners on a flatbase.

L. Lima

Date: A.D. 200–700.

Characteristics

Decoration: Pre-fired slip paintingwith interlocking fish and snakedesigns, geometric motifs, including zig-zags, lines, circles, and dots.

Shapes: Breast-shaped bottles, cups,plates, bowls, and cook pots.

Styles: Related to Playa Grande,Nieveria, and Pachacamac styles.

M. Huari

Date: A.D. 500–1000.

Characteristics

Colors: Orange, cream, violet, white,black, and red.

Motifs: Anthropomorphic,zoomorphic, and plant shapes, bothstylized and realistic. In Pachacamacstyle one finds vessels with a globularbody and long, conical neck. In Atarcostyle, there is slip painting that retainsNazca motifs, especially in the full-bodyfelines shown running.

Slip: Background slip is commonlycream, red, or black.

Styles: Related to Vinaque, Atarco,Pachacamac, Qosqopa, Robles Moqo,Conchopata, and Caquipampa styles.

Size: Most are around 25 cm. tall.Robles Moqo urns may be up to 1 m. inheight.

N. Santa

Date: Derived from Huari style,around A.D. 800.

Characteristics

Decoration: Slip painted with figuresand designs in black and white on a redbackground. There are also face-neckjars.

Shapes: Effigy vessels, face-neck jars,double-body vessels.

Sizes: 12 cm.—20 cm. tall.Shapes: Jars have a globular body and

face on the neck. The border may haveblack and white checkerboard. The bodysometimes takes the shape of a stylizedllama head. Common are white linesdotted with black. Double-body vesselsgenerally have an anthropomorphicimage on the front vessel, and a plainback vessel.

O. Chancay

Date: A.D. 1000–1300.

Characteristics

Treatment: Rubbed surface.Slip: White or cream with black or

dark brown designs.Molds: Molds are commonly used,

especially for the anthropomorphicfigures called ‘‘cuchimilcos,’’ whichrepresent naked male and female figureswith short arms stretched to the sides.

Size: 3 cm.—1 m.

P. Ica-Chincha

Date: Began to be developed in A.D.1200.

Characteristics

Decoration: Polychrome painting inblack and white on red.

Designs: Geometric motifs combinedwith fish and birds.

Shapes: Bottles with globular bodiesand tall necks and with flaring rims.Cups and pots.

Size: 5 cm.—30 cm. high.

Q. Chimu

Date: A.D. 900–1500.

Characteristics

Slip: Monochrome. Usually black orred.

Shapes: Varied shapes. Commonlymade in molds. They may representfish, birds, animals, fruit, people, andarchitectural forms. One sees globularbodies with a stirrup spout and a smallbird or monkey at the base of the neck.

Size: Between 30 cm.—40 cm. inheight.

R. Lambayeque

Date: A.D. 700–1100.

Characteristics

Color: Generally black; a few arecream with red decoration.

Shapes: Double spout and bridgevessels on a pedestal base are common.At the base of the spout one seesmodeled heads and the bridge also oftenhas modeled heads.

Size: 15 cm.—25 cm. in height.

S. Inca

Date: A.D. 1300–1500.

Characteristics

Decoration: Slip painted in black, red,white, yellow, and orange.

Designs: Geometric designs(rhomboids and triangles) and stylizedbees, butterflies, and animals.

Sizes: 1 cm. to 1.5 m. in height.

IV. Pre-Columbian Lithics

A. Chipped Stone: Projectile Points

Paijan Type Points

Size: 8 cm.—18 cm.Shape: Triangular or heart-shaped.Color: Generally reddish, orange, or

yellow. Can be made of quartz.

Leaf-Shaped Points

Size: 2.5 cm.—15 cm.Shape: Leaf-shaped. Can be ovaloid or

lanceolate.Color: Generally bright reds, yellows,

ochers, quartz crystals, milky whites,greens and blacks.


Paracas Type Points

Size: .3 cm.—25 cm.Shape: Triangular and lanceolate.

Show marks of pressure-flaking. Oftenthey are broken.

Color: Generally black.

Chivateros-Type Blanks

Size: .8 cm.—18 cm.Shape: Concave indentations on the

surface from working.Color: Greens, reds, and yellows.

B. Polished Stone

Bowl—Vessels of dark colored-stone,sometimes streaked. They have a highlypolished, very smooth surface. Someshow external carved decoration.Diameters range from 12 cm—55 cm.

Cups—Also vessels of dark-coloredstone. Generally have flaring sides.Typical of the Late Horizon. They arehighly polished and may have externalcarved designs or may be in the shapeof heads. 18 cm.—28 cm. in height.

Conopas—Small vessels in the formof camelids with a hollow opening onthe back. They are black to greenish-black and highly polished. .8 cm.—16cm. in length.

Idols—Small anthropomorphicfigurines, frequently found in MiddleHorizon contexts. The almond-shapedeyes with tear-bands are characteristicof the style. Larger examples tend to beof lighter-colored stone while thesmaller ones are of dark stones. 12cm.—28 cm. in height.

Mace head—Varying shapes, mostcommonly are doughnut-shaped or star-shaped heads, generally associated withLate Intermediate Period and Incacultures. Commonly black, gray, orwhite, .8 cm.—20 cm. in diameter.

Metal-working hammer—Elongatedshapes, frequently with one flat surface;highly polished. Generally of dark-colored stone, 3 cm.—12 cm.

C. Carved Material

Tenon head—These heads have ananthropomorphic face, prominent lips,and enormous noses. Some, especiallythose carved of diorite, have snake-liketraits. The carved surface is highlypolished.

Tablets—Tablets with high-reliefdesign. The upper surface has a patina.They range from 20 cm. to more than 1m. in length.

V. Pre-Columbian Perishable Remains

A. Wood

Keros (Beakers)—The most commonform is a bell-shaped beaker with a flatbase, though some have a pedestal likea goblet. Decoration varies with theperiod:

Pre-Inca: Very rare, they have straightsides and incised or high-reliefdecoration. Some have inset shells.

Inca: Generally they are incised withgeometric designs on the entire exterior.

Colonial Inca: Lacquer painted on theexterior to depict scenes of daily life,nature, and war.

Staffs—Objects of ritual or ceremonialuse made of a single piece of wood.They can be distinguished on the basisof two or three of the following traits:

On the lower third, the staff may havea metal decoration.

The body itself is cylindrical and ofvariable length.

The upper third may havedecorations, including inset shell, stone,or metal. Some staffs function as rattles,and in these cases, the rattle is in theupper part.

Carvings—Worked blocks of wood,such as wooden columns (orcones) tosupport the roofs of houses: Chincha,Chimu, and Chancay cultures.Individuals may be depicted standing orseated on a pedestal. In the upper partthere is a notch to support the beams,which generally has a face, sometimespainted, at the base of the notch. Theirlength varies, but they are generally atleast a meter or more.

Box—Small lidded boxes, carved oftwo pieces of wood. Generally the outersurface of box and lid are carved inrelief. Chimu-Inca cultures. Theymeasure approximately 20 cm. × 10 cm.

Mirror—Wooden supports for areflective surface of polished anthraciteor pyrite. In some cases the upper partof backs of mirrors are worked in reliefor have inset of shell. Moche culture.

Paddle and rudder—Large carvingsmade of a single piece of wood. Paddleshave three parts: the blade and thehandle (sometimes decorated), and anupper decorated part, which can havemetal plaques or decorative painting.Rudders have two parts: the blade anda handle which may be carved in relief.Chincha culture. Paddles can be 2.30 m.in length and rudders are up to 1.4 m.

Utensils—Bowls and spoons made ofwood decorated with zoomorphic oranthropomorphic motifs.

Musical instruments—Trumpets andwhistles. Trumpets can be up to 1.2 m.long and are generally decorated on theupper third of the instrument. Whistlesvary a great deal from the undecoratedto those decorated with human forms.Moche, Huari, and Inca cultures.

B. Bone

Worked bone—Most interesting areChavın pieces with incised decorations.The bones are generally the long bonesof mammals. They vary from 10 cm.–25cm. in length.

Balance weights—Flat rectangles ofbone about 10 cm. in length. Chinchaculture.

Musical instruments—Quenas (flutes)and antaras (panpipes) in variousshapes. Paracas, Chincha, and Anconcultures.

C. GourdsVessels—Bowls, pots, and holders for

lime (for coca chewing). Mostinteresting are those which are carved orpyroengraved. Produced from thePreceramic onward.

Musical instruments—Ocarinas, smallflutes, and whistles. Inca examples mayhave incised decoration, or decorationwith cords and feathers.

D. CaneMusical instruments—Flutes

(especially in Chancay culture),panpipes, and whistles. Flutes are oftenpyroengraved. Panpipes can have one ortwo tiers of pipes, which may be lashedtogether with colored thread. Nazcaculture.

E. StrawWeaving baskets—Basketry over a

cane armature, in the shape of a liddedbox. Sometimes the basketry is made ofseveral colors of fiber to work outgeometric designs. Some still hold theiroriginal contents: needles, spindlewhorls, spindles, balls of thread, loosethread, etc. Chancay culture.

F. ShellMusical instruments—Marine shells

(Strombus galeatus, Malea ringens, etc.),some, especially those from theFormative Period, with inciseddecoration.

Jewelry—Small beads and charmsworked of shell, chiefly Spondylusprinceps, used mainly in necklaces andpectorals. Moche, Chimu, and Incacultures.

VI. Pre-Columbian Human RemainsThe human remains included in this

listing demonstrate modifications of theremains due to ritualistic practices orother intentional treatment of thedeceased.

A. MummiesPeruvian mummies were formed by

natural mummification due to theconditions of burial; they have generallynot been eviscerated. Usually found inflexed position, with extremities tiedtogether, resulting in a fetal position. Inmany cases the cords used to tie thebody in this position are preserved.

B. Deformed SkullsMany ancient Peruvian cultures

practiced cranial deformation. Such


skulls are easily recognized by theirunnatural shapes.

C. Skulls Displaying Trepanation

Trepanation is an operationperformed on a skull; the resulting cuts,easily visible on a bare skull, takevarious forms. Cuts may be less easilydistinguished if skin and hair arepresent:

Principal Techniques

a. Straight cuts: these cuts are pointedat the ends and wider in the center.Openings made this way have apolygonal shape.

b. Cylindrical-conical openings: theopenings form a discontinuous line. Theresulting opening has a serrated edge.

c. Circular: generally made by a file.The resulting hole is round or elliptical,with beveled or straight edges. This isthe most common form of trepanation.

D. Pre-Columbian Trophy Heads

Trophy heads can be identified by thehole made in the forehead toaccommodate a carrying cord. When theskin is intact, the eyes and the mouthare held shut with cactus thorns.Finally, the occiput is missing since thatis how the brain was removed when thetrophy head was prepared.

E. Shrunken Trophy Heads From theAmazon

These heads have had the bonesremoved and then have been cured toshrink them. They are recognizablebecause they conserve all the traits ofthe original skin, including hair andhair follicles. The mouth is sewn shutand generally there are carrying cordsattached. There may be an obvious seamto repair the cuts made when the skinwas removed from the skull. Finally, theskin is thick (up to 2.5 mm.) and has adark color. Trophy heads vary between9.5 cm. and 15.5 cm. in height.

F. Tattoos

Tattooing in pre-Columbian Peru waspracticed mainly on the wrists. Mostcommon are geometric designs,including bands of triangles andrhomboids of a bluish color.

G. False Shrunken Heads

False shrunken heads can berecognized because they are made of theskin of a mammal, with some of the furleft where the human hair would be.The skin is first smoked, then pressedinto a mold to give it a face-like shape.The eyes, nose, mouth and ears aresimple bumps without real holes.Further, the skin is very thin andyellowish in color. Often the ‘‘heads’’have eyebrows and moustaches formed

by leaving some of the animal hair, butthese features are grotesque becausethey appear to grow upside down.

VII. Ethnological Objects

A. Objects directly related to the pre-Columbian past, whose pre-Columbiandesign and function are maintainedwith some Colonial modifications oradditions in technique and/oriconography.

Colonial Indigenous Textiles

Predominant materials: cotton andwool.

Description: These textiles arecharacterized by the cut of the cloth,with the four borders or selvagesfinished on the same loom. Clothes areuntailored and made from smallerpieces of convenient sizes which werethen sewn together. Colonial indigenoustextiles of the period are differentiatedfrom pre-Columbian textiles primarilyby their decoration: western motifs suchas lions, heraldic emblems, and Spanishpersonages are incorporated into thedesigns; sometimes fibers distinct fromcotton or wool (threads of silver, gold,and silk) are woven into the cloth; andthe colors tend to be more vivid becausethe fabrics were made more recently.Another important characteristic of theclothing is the presence of tocapus orhorizontal bands of small squares withanthropomorphic, zoomorphic,phytomorphic and geometric ideographsand designs. Characteristic textilesinclude:

Panels: Rectangular or square piecesof various sizes.

Anacus: Untailored woman’s dressconsisting of two or three longhorizontal pieces of cloth sewn togetherthat was wound around the body andheld in place with ‘‘tupus’’ (pins).

Unku/Tunic: Man’s shirt with anopening for the head. Sometimes hassleeves.

Lliclla/Shoulder Mantle: Rectangularpiece of cloth that women put over theirshoulders and held in place by a tupu;standard size: 40′′×45′′. Generally has atripartite design based on contrastingpanels that alternate bands withdecoration and bands with solid colors.

Chumpi/Belt: A woven belt, generallyusing tapestry technique.

Tupus

Material: Silver, gilded silver, copper,bronze. May have inlays of precious orsemi-precious stones.

Description: Tupus were used to holdin place llicllas and ancus. They arepins with a round or elliptical head,with piercing, repousse, and inciseddecorations. The difference betweenpre-Columbian and ethnological tupus

can be seen in the introduction ofWestern designs, for example bi-frontaleagles and heraldic motifs.

Keros

Material: wood.Description: The most common form

is a beakerlike cup with truncated base.After the Conquest, keros started to bedecorated with pictorial scenes. Themost frequently used techniquesinclude incision, inlaying pigments inwood, and painting. Ideographyincludes geometric designs, figuresunder a rainbow (an Inca symbol),ceremonial rituals, scenes of war, andagricultural scenes. Sometimes are inthe form of human or zoomorphicheads.

Cochas or Cocchas

Material: ceramic.Description: Ceremonial vessels with

two or more concentric interiorcompartments which are linked. Oftendecorated with volutes representingreptiles.

Aribalos

Material: ceramic.Description: The post-Conquest

aribalos have a flat base, often using aglaze for finishing, and the decorationincludes Inca and Hispanic motifs.

Pacchas

Material: Stone, ceramic.Description: One of the characteristics

of pacchas is that they have a drainwhich is used to sprinkle an offering onthe ground. They have pictorial orsculpted relief decorations symbolizingthe benefits hoped for from the ritual.

B. Objects that were used for religiousevangelism among indigenous peoples.

In Colonial paintings and sculpturesWestern religious themes werereinterpreted by indigenous and mestizoartists who added their own images andother characteristics to create a distincticonography.

Specific types of objects used forreligious evangelism during the Colonialperiod include the following:

Sculpture

Types of statues include:A three-dimensional sculpted image:

In the Peruvian Colonial period thesewere made of maguey (a soft wood) andoccasionally of cedar or walnut.

Images made of a dough composed ofsawdust, glue and plaster: After they aresculpted, figures are dressed with clothdipped in plaster.

Images to be dressed: These arewooden frames resembling mannequins,with only the head and arms sculptedin wood (cedar or maguey). The images


are dressed with embroidered clothesand jewelry. Frequently other elementswere added, such as teeth and falseeyelashes, wigs of real hair, eyes ofcolored glass, and palates made of glass.

Paintings

Catholic priests provided indigenousand mestizo artists with canvases andreproductions of Western works of art,which the artists then ‘‘interpreted’’with their own images and otherindigenous characteristics. These mayinclude symbolically associatingChristian religious figures withindigenous divinities, or rendering thefigures with Andean facialcharacteristics or in traditional Andeancostume. In addition, each church,convent, monastery, and town veneratedan effigy of its patron or tutelar saint,some of them native to Peru.

Retables

Retables (retablos) are architectonicstructures made of stone, wood, or othermaterial that are placed behind the altarand include attached paintings,sculptures or other religious objects.

Liturgical Objects

Objects Used for Mass Ritual:Chalices, cibaries, candelabras, vials forchristening or consecrated oil,reliquaries, vessels for wine and water,incense burners, patens, monstrances,pelicans and crucifixes. Made out ofsilver, gold or gilded silver, often inlaidwith pearls or precious stones.Techniques: casting, engraving,piercing, repousse, filigree.

Fixtures for sculpted images: Areoles,crowns, scepters, halo, halos in the formof rays, and books carried by religiousscholars and founders of religiousorders.

Ecclesiastical vestments: Someecclesiastical vestments werecommissioned by indigenousindividuals or communities for thecelebrations of their patron saint andthus are part of the religious legacy ofa particular town. In such cases, thevestment has the name of the donor andof the town or church as well as thedate.

Votive Offerings: These arerepresentations of miracles or favorsreceived from a particular saint. Theycan be made of different materials,usually metal or wood, and come in avariety of forms according to the type offavor received, usually representingparts of the human body in reference tothe organ healed or agriculturalproducts in recognition of a goodharvest or increase in a herd.

Inapplicability of Notice and DelayedEffective Date

Because the amendment to theCustoms Regulations contained in thisdocument imposing import restrictionson the above-listed Peruvian culturalproperty is being made in response to abilateral agreement entered into infurtherance of the foreign affairsinterests of the United States, pursuantto section 553(a)(1) of theAdministrative Procedure Act, no noticeof proposed rulemaking or publicprocedure is necessary. For the samereason, a delayed effective date is notrequired.

Regulatory Flexibility Act

Because no notice of proposedrulemaking is required, the provisionsof the Regulatory Flexibility Act (5U.S.C. 601 et seq.) do not apply.Accordingly, this final rule is notsubject to the regulatory analysis orother requirements of 5 U.S.C. 603 and604.

Executive Order 12866

This amendment does not meet thecriteria of a ‘‘significant regulatoryaction’’ as described in E.O. 12866.

Drafting Information

The principal author of this documentwas Peter T. Lynch, Regulations Branch,Office of Regulations and Rulings, U.S.Customs Service. However, personnelfrom other offices participated in itsdevelopment.


Customs duties and inspections,Imports, Cultural property.

Amendment to the Regulations

Accordingly, Part 12 of the CustomsRegulations (19 CFR Part 12) isamended as set forth below:

PART 12—[AMENDED]

1. The general authority and specificauthority citation for Part 12, in part,continue to read as follows:

Authority: 5 U.S.C. 301, 19 U.S.C. 66, 1202(General Note 20, Harmonized TariffSchedule of the United States (HTSUS)),1624;

* * * * *Sections 12.104 through 12.104i also

issued under 19 U.S.C. 2612;

* * * * *

§ 12.104g [Amended]2. In § 12.104g, paragraph (a), the list

of agreements imposing importrestrictions on described articles ofcultural property of State Parties isamended by adding ‘‘Peru’’ in

appropriate alphabetical order under thecolumn headed ‘‘State party’’, thedescription ‘‘Archaeological artifactsand ethnological material from Peru’’under the column headed ‘‘Culturalproperty’’, and the reference ‘‘T.D. 97—50’’ under the column headed ‘‘T.D.No.’’

3. In § 12.104g, paragraph (b), the listof emergency actions imposing importrestrictions on described articles ofcultural property of State Parties isamended by removing the entry for‘‘Peru’’ in its entirety.George J. Weise,Commissioner of Customs.

Approved: June 5, 1997.John P. Simpson,Deputy Assistant Secretary of the Treasury.[FR Doc. 97–15428 Filed 6–10–97; 8:45 am]BILLING CODE 4820–02–P

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Food and Drug Administration

21 CFR Part 113

[Docket No. 75N–0333]

Thermally Processed Low-Acid FoodsPackaged in Hermetically SealedContainers; Technical Amendment

AGENCY: Food and Drug Administration,HHS.ACTION: Final rule; technicalamendment.

SUMMARY: The Food and DrugAdministration (FDA) is amending itscurrent good manufacturing practices(CGMP’s) regulations for canning low-acid foods in hermetically sealedcontainers, to correct a typographicalerror. This action is being taken toensure the accuracy of the regulations.EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT:LaJuana D. Caldwell, Office of Policy(HF–27), Food and DrugAdministration, 5600 Fishers Lane,Rockville, MD 20857, 301–443–2994.SUPPLEMENTARY INFORMATION: In a finalrule published in the Federal Registerof March 16, 1979 (44 FR 16209), FDArevised the specific CGMP’s for canninglow-acid foods to ensure safemanufacturing, processing, andpackaging procedures for low-acidcanned foods in hermetically sealedcontainers. The document waspublished with a typographical error in21 CFR 113.40(b)(10)(ii). This documentcorrects that error.

Publication of this documentconstitutes final action on this change


under the Administrative Procedure Act(5 U.S.C. 553). Notice and publiccomment are unnecessary because FDAis merely correcting a nonsubstantiveerror.

List of Subjects in 21 CFR Part 113Food and Drug Administration, Food

packaging, Foods, Reporting andrecordkeeping requirements.

Therefore, under the Federal Food,Drug, and Cosmetic Act and underauthority delegated to the Commissionerof Food and Drugs, 21 CFR part 113 isamended as follows:

PART 113—THERMALLY PROCESSEDLOW-ACID FOODS PACKAGED INHERMETICALLY SEALEDCONTAINERS

1. The authority citation for 21 CFRpart 113 continues to read as follows:

Authority: Secs. 402, 701, 704 of theFederal Food, Drug, and Cosmetic Act (21U.S.C. 342, 371, 374); sec. 361 of the PublicHealth Service Act (42 U.S.C. 264).

§ 113.40 [Amended]2. Section 113.40 Equipment and

procedures is amended in paragraph(b)(10)(ii) by removing the word‘‘warm’’ and adding in its place theword ‘‘warn’’.

Dated: June 3, 1997.William K. Hubbard,Associate Commissioner for PolicyCoordination.[FR Doc. 97–15166 Filed 6–10–97; 8:45 am]BILLING CODE 4160–01–F


Coast Guard

33 CFR Part 117

[CGD08–96–056]

RIN 2115–AE47

Drawbridge Operation Regulation;Industrial Seaway Canal, Mississippi

AGENCY: Coast Guard, DOT.ACTION: Final rule.

SUMMARY: The Coast Guard is changingthe regulation governing the operationof the double leaf bascule spandrawbridge on Lorraine-Cowan Road,across the Industrial Seaway Canal, mile11.3, near Handsboro, Harrison County,Mississippi. The new operatingschedule allows the draw to remainclosed to navigation from 6:30 a.m. to8:30 a.m. and from 4:30 p.m. to 6 p.m.,Monday through Friday, except Federalholidays. The new schedule willprovide relief for congested vehicular

traffic during these periods and stillprovide for the reasonable needs ofnavigation.DATES: This regulation becomeseffective on July 11, 1997.FOR FURTHER INFORMATION CONTACT:Mr. Phil Johnson, Bridge AdministrationBranch, Eighth Coast Guard District,telephone (504) 589–2965.

SUPPLEMENTARY INFORMATION: .

Regulatory History

The Coast Guard published a notice ofproposed rulemaking on March 3, 1997(62 FR 9408). No comments werereceived in response to the proposedrule. No public hearing was requestedand none was held.

Discussion of the Rule

Growing industry and commercialretail development in the area over thepast few years has increased vehiculartraffic on Lorraine-Cowan Road. Thetraffic has become unreasonably delayedduring bridge openings in the morningsand afternoons when local residents areenroute to work and school.

Data submitted by the HarrisonCounty Board of Supervisors showedthat, on average, 50,540 vehicles crossand 8 vessels pass each month duringthe morning from 6:30 a.m. to 8:30 a.m.and 46,000 vehicles cross and 3 vesselspass each month during the afternoonfrom 4:30 p.m. to 6 p.m. The notice ofproposed rulemaking proposed to allowthe bridge to remain closed during thesetime periods. No comments werereceived on the notice of proposedrulemaking. Few vessels pass the brideduring the bridge closure periods andthe revised schedule discontinues theone-hour noon closure. Vessel operatorswill be able to adjust their arrival timesat the bridge to avoid the temporaryclosure periods with very littleinconvenience or added expense. TheCoast Guard is, therefore, revising thedraw opening schedule as proposed.

Regulatory Evaluation

This rule is not a significantregulatory action under section 3(f) ofExecutive Order 12866 and does notrequire an assessment of potential costand benefits under section 6(a)(3) of thatorder. It has not been reviewed by theOffice of Management and Budget underthat order. It is not significant under theregulatory policies and procedures ofthe Department of Transportation (DOT)(44 FR 11040; February 26, 1979). TheCoast Guard expects the economicimpact of this rule to be so minimal thata full Regulatory Evaluation underparagraph 10e of the regulatory policiesand procedures of DOT is unnecessary.

Small EntitiesUnder the Regulatory Flexibility Act

(5 U.S.C. 601 et seq.) the Coast Guardmust consider whether this rule willhave a significant economic impact ona substantial number of small entities.‘‘Small entities’’ may include (1) smallbusinesses and not-for-profitorganizations that are independentlyowned and operated and are notdominant in their field and (2)governmental jurisdictions withpopulations of less than 50,000. Apublic notice was issued, requestingcomments or objections to this proposedrule, specifying how the proposed rulewould create a hardship on theobjector’s method of operation. Thepublic notice was mailed to a list of allbusiness owners and operators whichare located on the Industrial SeawayCanal. No letters of objection werereceived from any of the businesses.Therefore, the Coast Guard certifiesunder 5 U.S.C. 605(b) that thisrulemaking will not have a significanteconomic impact on a substantialnumber of small entities.

Collection of InformationThis final rule contains no collection

of information requirements under thePaperwork Reduction Act (44 U.S.C.3501 et seq.).

FederalismThis action has been analyzed in

accordance with the principles andcriteria contained in Executive Order12612 and it has been determined thatthis rule making does not havesufficient federalism implications towarrant the preparation of a FederalismAssessment.

EnvironmentThe Coast Guard considered the

environmental impact of this final ruleand concluded that under paragraph2.B.2.g(5) of Commandant InstructionM16475.1B, this rulemaking iscategorically excluded from furtherenvironmental documentation. A‘‘Categorical Exclusion Determination’’has been prepared and placed in therulemaking docket.

List of Subjects in 33 CFR Part 117Bridges.

RegulationsIn consideration of the foregoing, part

117 of title 33, Code of FederalRegulations, is amended as follows:

PART 117—DRAWBRIDGEOPERATION REGULATIONS



Authority: 33 U.S.C 499; 49 CFR 1.46; 33CFR 1.05–1(g); section 117.255 also issuedunder the authority of Pub. L. 102–587, 106Stat. 5039.

2. Section 117.680 is revised to readas follows:

§ 117.680 Industrial Seaway Canal.The draw of the Lorraine-Cowan Road

Bridge across the Industrial SeawayCanal, mile 11.3, need not be openedfrom 6:30 a.m. to 8:30 a.m. and from4:30 p.m. to 6 p.m., Monday throughFriday, except Federal holidays.

Dated: May 21, 1997.Paul J. Prokop,Captain, U.S. Coast Guard, Commander,Eighth Coast Guard District, Acting.[FR Doc. 97–15286 Filed 6–10–97; 8:45 am]BILLING CODE 4910–14–M


Coast Guard

33 CFR Part 117

[CG11–90–03]

RIN–2115–A47

Drawbridge Operation Regulations;Cerritos Channel, CA

AGENCY: Coast Guard, DOT.ACTION: Temporary final rule; change ofeffective date.

SUMMARY: At the request of the Port ofLos Angeles, the Coast Guard istemporarily extending the effective datefor the temporary change to theregulation for operation of the HenryFord Avenue Railroad Bridge (FordBridge), across Cerritos Channel of LosAngeles/Long Beach, mile 4.8 LongBeach, California to authorize it toremain in the closed to navigationposition for an additional period fromJuly 1 to October 2, 1997. The action isnecessary both to facilitatereconstruction of the bridge and toavoid disrupting essential rail serviceduring reconstruction. The closureperiod was most recently established asFebruary 1 to June 30, 1997; however,the project has been delayed, and theclosure actually began on May 6, 1997.EFFECTIVE DATES: This temporary finalrule is effective from June 30 throughOctober 2, 1997.ADDRESSES: Unless otherwise indicated,documents referred to in this preambleare available for inspection or copyingat the office of Commander (Pow),Eleventh Coast Guard District, Building50–6, Coast Guard Island, Alameda, CA94501–5100 between 7 a.m. and 4 p.m.,Monday through Friday, except Federal

holidays. The telephone number is (510)437–3514. Commander (Pow) maintainsthe public docket for this rulemaking.FOR FURTHER INFORMATION CONTACT:Susan Worden, Bridge Administrator,Eleventh Coast Guard District, (510)437–3514.


Regulatory History

On August 28, 1990, the Coast Guardpublished a notice of proposedrulemaking NPRM in the FederalRegister (55 FR 35154) concerningclosure of the Henry Ford AvenueRailroad Bridge (Ford Bridge), acrossCerritos Channel of Los Angeles/LongBeach, mile 4.8 Long Beach, California,for rehabilitation. On July 8, 1996, theCoast Guard published a supplementalnotice of proposed rulemaking (SNPRM)in the Federal Register (61 FR 35702)concerning closure of the bridge forreplacement. On November 20, 1996 theCoast Guard published a TemporaryFinal Rule in the Federal Register (61FR 59025) changing the bridge operationregulation, allowing closure duringreplacement. On May 6, 1997, theCaptain of the Port issued a safety zone(COTP Los Angeles-Long Beach, CA;97–002; 33 CFR § 165.T11–057)prohibiting general navigation in adefined regulated area around the bridgeduring replacement.

Background and Purpose

At the request of the Port of LosAngeles, the Coast Guard is extendingthe closure period for the Ford Bridgereplacement project because the projectis behind schedule. The Ford Bridge,also known as the Badger AvenueBridge, provides the only rail access toTerminal Island. It crosses a waterwayused by oceangoing cargo ships, tugsand barges, tour boats, commercialfishing vessels, and recreational boats.The permanent regulations governing itsoperation require the bridge to remainfully open except for the passage oftrains or for maintenance.

The bridge is over 70 years old and nolonger meets California seismicstandards or Federal RailroadAdministration clearance standards.Interruption or delay of rail and watertraffic is likely if the existing bridgewere either to malfunction or to bedamaged by seismic activity. In 1995,the Coast Guard issued a permit toreplace the bridge. Replacement cannotbe accomplished without closing thebridge span for a period of five months.Closure of the bridge will requiremaritime traffic to use an alternate routethrough the outer harbor. Detours of 5miles are expected; maximum detours of

10 miles may be experienced. The shortterm costs attributable to these detoursare outweighed by the long-termbenefits to be gained by the installationof a new bridge likely to provideuninterrupted rail service and timely,reliable openings for waterborne trafficfor many years.

This temporary rule extends theeffective date of the previously issuedtemporary rule authorizing a five month(150 day) closure of the bridge. Closurefor 5 months is necessary both tofacilitate replacement of the span andreconstruction of the bridge supporttowers, as well as to avoid disruptingessential rail service duringreconstruction. The SNPRM advertiseda closure beginning in November 1996.Due to construction delays, thetemporary final rule established thechange in operating regulation effectiveFebruary 1, 1997. Additionalconstruction delays were experiencedand actual closure of the span did notbegin until May 6, 1997, necessitatingthis extension of the effective period.

Regulatory EvaluationThis rule is not a significant

regulatory action under section 3(f) ofExecutive Order 12866 and does notrequire an assessment of potential costsand benefits under section 6(a)(3) of thatOrder. It has been exempted fromreview by the Office of Management andBudget under that order. It is notsignificant under the Department ofTransportation Regulatory Policies andProcedures (44 FR 11040, February 26,1979). The Coast Guard previouslycalculated the expected economicimpact of this rule to be approximately$1 million to waterways users (to detouraround the work site) and $2.5 millionto the bridge owner (to expedite work).Although the current extension maycause these figures to be elevated, theCoast Guard estimates that they remainbelow the threshold levels requiring aformal Regulatory Evaluation. (Since theoriginal figures contemplate detoursaround the work site, the additionaleconomic impact of the safety zone ismarginal.) The draft economic analysispublished with the NPRM wassuperseded by a more detailedeconomic analysis in the EnvironmentalImpact Statement, which is available inthe docket for inspection or copyingwhere indicated under ADDRESSES.

Small EntitiesUnder the Regulatory flexibility Act (5

U.S.C. 601 et seq.) the Coast Guard mustconsider whether this rule will have asignificant economic impact on asubstantial number of small entities.‘‘Small entities’’ may include (1) small


businesses and not-for-profitorganizations that are independentlyowned and operated and are notdominant in their fields and (2)governmental jurisdictions withpopulation of less than 50,000. Theestimated cost to each recreationalmariner affected by this extendedregulation and the safety zone is lessthan $100. The estimated cost per‘‘small business’’ towing company forpersonnel hours and fuel consumptionduring detours remains less than$100,000. Because the impact of thisproposal is expected to be limited andof relatively short duration, the CoastGuard certifies under section 605(b) ofthe Regulatory Flexibility Act (5 U.S.C.601 et seq.) that this rule will not havea significant impact on a substantialnumber of small entities.

Collection of Information

This rule contains no collection ofinformation requirements under thePaperwork Reduction Act (44 U.S.C.3501 et seq.)

Federalism

The Coast Guard has analyzed thisproposal under the principles andcriteria contained in Executive Order12612 and has determined that this ruledoes not raise sufficient federalismimplications to warrant the preparationof a Federalism Assessment.

Environment

The Coast Guard has considered theenvironmental impact of this rule. TheCoast Guard prepared an EnvironmentalImpact Statement for the replacement ofthis historic bridge. The EIS analyzedthe environmental and economic impactof a 5 month bridge closure. The draftEnvironmental Assessment publishedwith the NPRM has been superseded bythe more detailed environmentalanalysis in the Final EIS, which isavailable in the docket for inspection ofcopying where indicated underADDRESSES.


Bridges.

For the reasons set out in thepreamble, the Coast Guard is amending33 CFR Part 117 as follows:

PART 117—[AMENDED]


Authority: 33 U.S.C. 499; 49 CFR 1.46; and33 CFR 1.05–1(g); section 117.255 also issuedunder the authority of Pub. L. 102–587, 106Stat. 5039.

§ 117.147 [Amended]2. Effective June 30, 1997 through

October 2, 1997, § 117.147 is amendedby suspending paragraph (b) andrevising paragraph (c) to read as follows:

§ 117.147 Cerritos Channel

* * * * *(c) During the period June 30, 1997

through October 2, 1997, the bridge willbe undergoing reconstruction and thedraw need not open for the passage ofvessels.

Dated: May 29, 1997.J.C. Card,Vice Admiral, U.S. Coast Guard, Commander,Eleventh Coast Guard District.[FR Doc. 97–15284 Filed 6–10–97; 8:45 am]BILLING CODE 4910–14–M

NATIONAL ARCHIVES AND RECORDSADMINISTRATION

36 CFR Part 1256

RIN 3095–AA55

Domestic Distribution of United StatesInformation Agency Materials in theCustody of the National Archives

AGENCY: National Archives and RecordsAdministration.ACTION: Final rule.

SUMMARY: The National Archives andRecords Administration (NARA) isissuing regulations which govern thedomestic distribution of USIA materialsprepared for dissemination abroad thatare in the custody of NARA. Public Law101–246, section 202, requires theArchivist of the United States to issuenecessary regulations to ensure thatpersons seeking release of such USIAmaterials in the United States havesecured and paid for necessary rightsand licenses. This rule affects membersof the public who wish to use or obtaincopies of USIA audiovisual recordstransferred to NARA.EFFECTIVE DATE: July 11, 1997.FOR FURTHER INFORMATION CONTACT:Nancy Allard at 301–713–7360,extension 226.SUPPLEMENTARY INFORMATION: NARApublished a proposed rule for publiccomment on January 31, 1997 (62 FR4669). No comments were received. Theproposed rule is adopted as finalwithout change.

On February 16, 1990, Public Law101–246 (104 Stat. 49) amended theUnited States Information andEducational Exchange Act (22 U.S.C.1461) to provide for the domesticrelease of motion pictures, videotapes,sound recordings and other materials 12

years after initial dissemination abroad,or, if not disseminated, 12 years fromthe preparation of the material.Previously, section 501 of the UnitedStates Information and EducationalExchange Act of 1948 (22 U.S.C. 1461)had prevented the domesticdissemination by the United StatesInformation Agency of such materialsprepared for dissemination abroad inperpetuity unless specifically andindividually released by Congressionallegislation. The amended law allowsrelease and dissemination once the 12-year threshold has been met andinstructs NARA to provide regulationsto ensure that any copyrights orunderlying rights that may exist in theseUSIA materials have been protected andreleases obtained prior to disseminationin the United States. For the public thisamended law provides access andpotential use of over 35,000 USIAmotion picture films, 3,000 USIAvideotape productions, and over 20,000sound recordings of Voice of America(VOA) radio broadcasts that have beenselected as permanently valuableaudiovisual records and have beentransferred into the custody of theMotion Picture, Sound and VideoBranch of NARA. These regulationsonly apply to USIA records in NARA’scustody that were prepared fordissemination abroad.

This final rule is not a significantregulatory action for purposes ofExecutive Order 12866 of September 30,1993, and has not been reviewed by theOffice of Management and Budget. Asrequired by the Regulatory FlexibilityAct, it is hereby certified that this rulewill not have a significant impact onsmall entities. This rule does notcontain any information collectionssubject to the Paperwork Reduction Act.This rule is not a major rule as definedin 5 U.S.C. chapter 8, CongressionalReview of Agency Rulemaking.

List of Subjects in 36 CFR Part 1256Archives and records, Copyright,

Reporting and recordkeepingrequirements.

For the reasons set forth in thepreamble, part 1256 of title 36, ChapterXII of the Code of Federal Regulationsis amended as follows:

PART 1256—RESTRICTIONS ON THEUSE OF RECORDS

1. The authority citation for Part 1256is revised to read as follows:

Authority: 44 U.S.C. 2101–2118; 22 U.S.C.1461(b).

2. A new subpart C, consisting of§§ 1256.50 through 1256.60, is added topart 1256 as follows:


Subpart C—Domestic Distribution of UnitedStates Information Agency Materials in theNational Archives of the United StatesSec.1256.50 Scope of subpart.1256.52 Purpose.1256.54 Definition.1256.56 Transfer of USIA audiovisual

records to NARA.1256.58 Domestic distribution of USIA

audiovisual records transferred toNARA.

1256.60 Fees.

§ 1256.50 Scope of subpart.This subpart prescribes procedures

governing the public availability ofaudiovisual records and other materialssubject to 22 U.S.C. 1461(b) that havebeen transferred to the NationalArchives of the United States by theUnited States Information Agency(USIA).

§ 1256.52 Purpose.This subpart implements section 501

of the United States Information andEducational Exchange Act of 1948 (22U.S.C. 1461), as amended by section 202of Public Law 101–246 (104 Stat. 49,Feb. 16, 1990). This subpart prescribesprocedures by which the public mayinspect and obtain copies of USIAaudiovisual records and other materialsprepared for dissemination abroad thathave been transferred to NARA forpreservation and domestic distribution.

§ 1256.54 Definition.For the purposes of this subpart—

Audiovisual records mean motionpicture films, videotapes, and soundrecordings, and other materialsregardless of physical form orcharacteristics that were prepared fordissemination abroad.

§ 1256.56 Transfer of USIA audiovisualrecords to NARA.

The provisions of 44 U.S.C. 2107 and36 CFR part 1228 apply to the transferof USIA audiovisual records to NARA,and to their deposit with the NationalArchives of the United States. At thetime the audiovisual records aretransferred to NARA, the Director ofUSIA, in accordance with § 1228.184(e)of this chapter, will also transfer anyproduction or title files bearing on theownership of rights in the productionsin connection with USIA’s officialoverseas programming.

§ 1256.58 Domestic distribution of USIAaudiovisual records transferred to NARA.

No USIA audiovisual records in theNational Archives of the United Statesthat were prepared for disseminationabroad will be available for copyinguntil it has been at least 12 years sincesuch materials were first disseminated

abroad, or, in the case of materialsprepared for foreign dissemination butnot disseminated abroad, until it hasbeen at least 12 years since thepreparation of the materials.

(a) Access to USIA audiovisualrecords that neither have copyrightprotection nor contain copyrightmaterial. USIA audiovisual recordsprepared for dissemination abroad thatNARA determines neither havecopyright protection nor containcopyrighted material are available forexamination and copying in accordancewith the regulations set forth in parts1252, 1253, 1254, 1256, and 1258 of thischapter. In determining whethermaterials have copyright protection orcontain copyrighted material, NARAwill rely on information containedwithin or affixed to individual records(e.g., copyright notices); informationcontained within relevant USIAproduction, title, or other files that havebeen transferred to NARA by USIA;information provided by requesterspursuant to paragraph (b)(2) of thissection (e.g., evidence from theCopyright Office that copyright haslapsed or expired); and informationprovided by copyright or licenseholders.

(b) Reproduction of USIA audiovisualrecords that either have copyrightprotection or contain copyrightedmaterial.

(1) USIA audiovisual recordsprepared for dissemination abroad thatNARA determines may have copyrightprotection or may contain copyrightedmaterial will be made available forexamination in NARA research facilitiesin accordance with the regulations setforth in this Title.

(2) Copies of USIA audiovisualrecords prepared for disseminationabroad that NARA determines may havecopyright protection or may containcopyrighted material will be provided topersons seeking the release of suchmaterials in the United States onceNARA has

(i) Ensured, in accordance withparagraph (b)(3) of this section, that thepersons seeking copies have securedand paid for necessary United Statesrights and licenses;

(ii) Been provided with evidence fromthe Copyright Office sufficient todetermine that copyright protection inthe materials sought, or relevantportions therein, has lapsed or expired;or

(iii) Received a requester’s signedcertification in accordance withparagraph (b)(4) of this section that thematerials sought will be used only forpurposes permitted by the CopyrightAct of 1976, as amended, including the

fair use provisions of 17 U.S.C. 107. Nocopies of USIA audiovisual records willbe provided until the fees authorizedunder part 1258 of this chapter havebeen paid to NARA.

(3) If NARA has determined that aUSIA audiovisual record prepared fordissemination abroad may havecopyright protection or may containcopyrighted material, persons seekingthe release of such material in theUnited States may obtain copies of thematerial by submitting to NARA writtenevidence from all copyright and/orlicense owner(s) that any necessary feeshave been paid or waived and anynecessary licenses have been secured.

(4) If NARA has determined that aUSIA audiovisual record prepared fordissemination abroad may havecopyright protection or may containcopyrighted material, persons seekingthe release of such material in theUnited States may obtain copies of thematerial by submitting to NARA thefollowing certification statement:

I, (printed name of individual), certify thatmy use of the copyrighted portions of the(name or title and NARA identifier of workinvolved) provided to me by the NationalArchives and Records Administration(NARA), will be limited to private study,scholarship, or research purposes, or forother purposes permitted by the CopyrightAct of 1976, as amended. I understand thatI am solely responsible for the subsequentuse of the copyrighted portions of the workidentified above.

(c) In every instance where a copy ofan audiovisual record is provided underthis subpart, and NARA has determinedthat the work being reproduced mayhave copyright protection or maycontain copyrighted material, NARAshall provide a warning notice ofcopyright.

(d) Nothing in this section shall limitNARA’s ability to make copies of USIAaudiovisual records for preservation,arrangement, repair and rehabilitation,description, exhibition, security, orreference purposes.

§ 1256.60 Fees.

Copies or reproductions ofaudiovisual records will only beprovided under this subpart uponpayment of fees in accordance with 44U.S.C. 2116(c) and 22 U.S.C. 1461(b)(3).

Dated: June 4, 1997.

John W. Carlin,Archivist of the United States.[FR Doc. 97–15258 Filed 6–10–97; 8:45 am]

BILLING CODE 7515–01–P


POSTAL SERVICE

39 CFR Part 233

Revision of Regulations Governing theRemission or Mitigation of Forfeitures

AGENCY: Postal Service.ACTION: Final rule.

SUMMARY: This rule amends and adoptsregulations that govern the processing ofpetitions for remission and mitigation offorfeitures by the United States PostalInspection Service. The amendments aremade in an effort to ameliorate the harshresults in individual forfeiture cases andto provide relief to innocent personswhose property is used by others forcriminal purposes. The revisedregulations parallel those promulgatedby the Department of Justice at 62 FR314–322 on January 3, 1997.EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT:Associate Counsel Maria D. Perez,Postal Inspection Service, (202) 268–5477.SUPPLEMENTARY INFORMATION: UnitedStates Postal Service regulationspertaining to seizures and forfeituresconducted by the Postal InspectionService were promulgated by the PostalService in 1987 and are codified at 39CFR 233.7, Forfeiture authority andprocedures.

A grant of a petition for remission offorfeiture provides for the return offorfeited property or the return of anappropriate property interest toindividuals who can show that theyacted without willful negligence.Mitigation provides for the partial ortotal relief from forfeiture through thereturn of some or all of the propertyand/or the imposition of monetary orother conditions.

This new rule establishes acomprehensive set of procedures,understandable by individuals and theirattorneys, that will govern the handlingand processing of petitions forremission or mitigation in theoverwhelming majority of Postal Serviceforfeiture cases.

In addition to establishing aconsistent petition process, this newrule seeks to: (1) Clarify provisions inexisting rules; (2) distinguish betweenthe bases for the remission of forfeitureand the mitigation of forfeiture; (3)address inadequacies that have beendetected in current rules due, in part, tothe increased use of forfeiture by federallaw enforcement agencies; (4) promoteconsistent and predictable decisions onpetitions; and (5) recognize the interestsof victims of crime in forfeited moneysand other properties.

This rule amends 39 CFR 233.7(j) sothe Postal Inspection Service cantransfer forfeited assets to victims of theoffense or related offenses underlyingparticular forfeiture actions. Under thecurrent regulations, standing to seekremission or mitigation is limited toparties having a present legallycognizable interest in the forfeitedproperty (e.g., owners, lienholders), andunless a particular victim has such aninterest, forfeited assets cannot be usedto restore property to those victimizedby the criminal conduct. Theamendments permit the agency totransfer certain forfeited assets tovictims of certain fraud-type offenseswho lack a present ownership interestin particular forfeited assets, but whoare victims of the offense underlying theforfeiture or related offense where theapplicable statutes allow such a transfer.

The current procedures in § 233.7(j)permit remission and mitigation tovictims of crime when the property wasforfeited under a statute that specificallyprovides for the restoration or remissionof forfeited property to victims. Anexample of such a statute is 18 U.S.C.1963(g), which authorizes the AttorneyGeneral to ‘‘restore forfeited property tovictims of a violation of this chapter.’’Some statutes, however, do not soprovide, and instead adopt theprovisions of customs laws relating toremission. For example, 21 U.S.C.881(d) provides that ‘‘[t]he provisions oflaw relating to the seizure, summaryand judicial forfeiture, andcondemnation of property for violationof customs laws; * * * the remission ormitigation of such forfeitures; and thecompromise of claims shall apply toseizures and forfeitures incurred * * *under any of the provisions of thissubchapter.’’ This new rule does notpermit remission or mitigation tovictims where the forfeiture occursunder statutes that adopt the provisionsof the customs laws without includinglanguage specifically authorizingrestoration or remission to victims ofcrimes (e.g., forfeitures pursuant to thecivil money laundering statute, 18U.S.C. 981(a)(1)(A)). In such cases, theremission process is governed solely bythe customs laws (specifically, 19 U.S.C.1613 and 1618), which do not authorizeremission to those who lack a legallycognizable interest in the property.However, the amended rules will permitremission to victims should theapplicable forfeiture statutes beamended to provide specifically for therestoration or remission of forfeitedproperties to victims. At the presenttime, most of the criminal forfeiturestatutes as well as 18 U.S.C.

981(a)(1)(C), a civil forfeiture statute,specifically provide for restoration orremission to victims and, therefore, arecovered by § 233.7(j), as amended.


Administrative practice andprocedure, Crime, Seizures andforfeitures.

Accordingly, Title 39, part 233, of theCode of Federal Regulations is amendedas follows:

PART 233—[AMENDED]


Authority: 39 U.S.C. 101, 401, 402, 403,404, 406, 410, 411, 3005(e)(1); 12 U.S.C.3401–3422; 18 U.S.C. 981, 1956, 1957, 2254,3061; 21 U.S.C. 881; Inspector General Act of1978, as amended (Pub. L. No. 95–452, asamended), 5 U.S.C. App. 3.

2. Section 233.7 is amended byrevising paragraph (j) to read as follows:

§ 233.7 Forfeiture authority andprocedures.

* * * * *(j) Remission or mitigation of

administrative, civil, and criminalforfeitures.—(1) Authority, purpose, andscope.—(i) Purpose. This section setsforth the procedures for PostalInspection Service officials to followwhen considering remission ormitigation of administrative forfeituresunder the jurisdiction of the PostalService. The purpose of theseregulations is to provide a basis forameliorating the effects of forfeiturethrough the partial or total remission offorfeiture for individuals who have aninterest in the forfeited property butwho did not participate in, or haveknowledge of, the conduct that resultedin the property being subject toforfeiture and, where required, took allreasonable steps under thecircumstances to ensure that suchproperty would not be used, acquired,or disposed of contrary to law.Additionally, these regulations providefor partial or total mitigation of theforfeiture and imposition of alternativeconditions in appropriatecircumstances.

(ii) Authority to grant remission andmitigation. (A) Remission andmitigation functions in administrativeforfeitures are performed by the agencyseizing the property. Within the PostalInspection Service, authority to grantremission and mitigation is delegated tothe Independent Counsel, Office of theChief Inspector, Washington, DC.

(B) Remission and mitigationfunctions in judicial cases are withinthe jurisdiction of the Criminal Division


of the Department of Justice. Within theCriminal Division, authority to grantremission and mitigation has beendelegated to the Chief, Asset Forfeitureand Money Laundering Section.

(C) The powers and responsibilitieswithin these regulations may beredelegated to attorneys or managersworking under the supervision of thedesignated officials.

(D) The time periods and internalrequirements established in theseregulations are designed to guide theorderly administration of the remissionand mitigation process and are notintended to create rights or entitlementsin favor of individuals seekingremission or mitigation. Theseregulations will apply to all decisionson petitions for remission or mitigationmade on or after July 1, 1997. Theseregulations will apply to decisions onrequests for reconsideration of a denialof a petition under paragraphs (j)(3)(x)and (3)(xi) of this section only if theinitial decision on the petition wasmade under the provisions of this parteffective July 1, 1997.

(E) This section governs any petitionfor remission or mitigation filed withthe Chief Postal Inspector andsupersedes any Postal Service regulationgoverning petitions for remission ormitigation to the extent such regulationis inconsistent with this section.

(2) Definitions. As used in this part:(i) The term administrative forfeiture

means the process by which propertymay be forfeited by an investigativeagency rather than through judicialproceedings.

(ii) The term appraised value meansthe estimated market value of an assetat the time and place of seizure if suchor similar property was freely offered forsale between a willing seller and awilling buyer.

(iii) The term Attorney General meansthe Attorney General of the UnitedStates or his or her designee.

(iv) The term beneficial owner meansa person with actual use of, as well asan interest in, the property subject toforfeiture.

(v) The term general creditor meansone whose claim or debt is not securedby a specific right to obtain satisfactionagainst the particular property subject toforfeiture.

(vi) The term judgment creditormeans one who has obtained a judgmentagainst the debtor but has not yetreceived full satisfaction of thejudgment.

(vii) The term judicial forfeituremeans either a civil or criminalproceeding in a United States DistrictCourt that may result in a finaljudgment and order of forfeiture.

(viii) The term lienholder means acreditor whose claim or debt is securedby a specific right to obtain satisfactionagainst the particular property subject toforfeiture. A lien creditor qualifies as alienholder if the lien:

(A) Was established by operation oflaw or contract;

(B) Was created as a result of anexchange of money, goods, or services;and

(C) Is perfected against the specificproperty forfeited for which remissionor mitigation is sought (e.g., a real estatemortgage, a mechanic’s lien).

(ix) The term net equity means theamount of a lienholder’s monetaryinterest in property subject to forfeiture.Net equity shall be computed bydetermining the amount of unpaidprincipal and unpaid interest at the timeof seizure, and by adding to that sumunpaid interest calculated from the dateof seizure through the last full monthprior to the date of the decision on thepetition. Where a rate of interest is setforth in a security agreement, the rate ofinterest to be used in this computationwill be the annual percentage rate sospecified in the security agreement thatis the basis of the lienholder’s interest.In this computation, however, thereshall be no allowances for attorneys’fees, accelerated or enhanced interestcharges, amounts set by contract asdamages, unearned extended warrantyfees, insurance, service contract chargesincurred after the date of seizure,allowances for dealer’s reserve, or anyother similar charges.

(x) The term owner means the personin whom primary title is vested orwhose interest is manifested by theactual and beneficial use of theproperty, even though the title is vestedin another. A victim of an offense asdefined in paragraph (j) (2)(xxi) of thissection may also be an owner if he orshe has a present legally cognizableownership interest in the propertyforfeited. A nominal owner of propertywill not be treated as its true owner ifhe or she is not its beneficial owner.

(xi) The term person means anindividual, partnership, corporation,joint business enterprise, estate, or otherlegal entity capable of owning property.

(xii) The term petition means apetition for remission or mitigation offorfeiture under these regulations. Thisdefinition includes a petition forrestoration of the proceeds of sale offorfeited property and a petition for thevalue of forfeited property placed intoofficial use.

(xiii) The term petitioner means theperson applying for remission,mitigation, restoration of the proceeds ofsale, or for the appraised value of

forfeited property under theseregulations. A petitioner may be anowner of forfeited property as defined inparagraph (j)(2)(x) of this section; alienholder as defined in paragraph(j)(2)(viii) of this section; or a victim asdefined in paragraph (j)(2)(xxi) of thissection subject to the limitations ofparagraph (j)(8) of this section.

(xiv) The term Postal Service Fundmeans the United States Postal Fundestablished under 39 U.S.C. 2003.

(xv) The term property means real orpersonal property of any kind capable ofbeing owned or possessed.

(xvi) The term record means a seriesof arrests for related crimes, unless thearrestee was acquitted or the chargeswere dismissed for lack of evidence; aconviction for a related crime orcompletion of sentence within ten yearsof the acquisition of the property subjectto forfeiture; or two convictions for arelated crime at any time in the past.

(xvii) The term related crime as usedin paragraphs (j)(2)(xvi) and (6)(v) ofthis section means any crime similar innature to that which gives rise to theseizure of property for forfeiture. Forexample, where property is seized for aviolation of the federal laws dealingwith drugs, a related crime would beany offense involving a violation of thefederal laws relating to drugs or the lawsof any state or political subdivisionthereof relating to drugs.

(xviii) The term related offense asused in paragraph (j)(8) of this sectionmeans:

(A) Any predicate offense charged ina Federal Racketeer Influenced andCorrupt Organizations Act (RICO) countfor which forfeiture was ordered; or

(B) An offense committed as part ofthe same scheme or design, or pursuantto the same conspiracy, as was involvedin the offense for which the forfeiturewas ordered.

(xix) The term Ruling Official meansany official to whom decision makingauthority has been delegated pursuantto paragraph (j)(1)(ii) of this section.

(xx) The term seizing agency meansthe federal agency that seized theproperty or adopted the seizure ofanother agency for federal forfeiture.

(xxi) The term victim means a personwho has incurred a pecuniary loss as adirect result of the commission of theoffense underlying a forfeiture. A druguser is not considered a victim of a drugtrafficking offense under this definition.A victim does not include one whoacquires a right to sue the perpetrator ofthe criminal offense for any loss byassignment, subrogation, inheritance, orotherwise from the actual victim, unlessthat person has acquired an actual


ownership interest in the forfeitedproperty.

(xxii) The term violator means theperson whose use or acquisition of theproperty in violation of the lawsubjected such property to seizure forforfeiture.

(3) Petitions in administrativeforfeiture cases.—(i) Notice of seizure.The notice of seizure and intent toforfeit the property shall advise anypersons who may have a presentownership interest in the property tosubmit their petitions for remission ormitigation within thirty (30) days of thedate they receive the notice in order tofacilitate processing. Petitions shall beconsidered any time after notice untilthe forfeited property is placed intoofficial use, sold, or otherwise disposedof according to law, except in casesinvolving petitions to restore theproceeds from the sale of forfeitedproperty. A notice of seizure shallinclude the title of the seizing agency,the Ruling Official, the mailing andstreet address of the official to whompetitions should be sent, and an assetidentifier number.

(ii) Persons who may file. A petitionfor remission or mitigation must be filedby a petitioner as defined in paragraph(j)(2)(xiii) of this section or as prescribedin paragraphs (j)(9) (vii) and (viii) of thissection.

(iii) Contents of petition. (A) Allpetitions must include the followinginformation in clear and concise terms:

(1) The name, address, and socialsecurity or other taxpayer identificationnumber of the person claiming aninterest in the seized property who isseeking remission or mitigation;

(2) The name of the seizing agency,the asset identifier number, and the dateand place of seizure;

(3) A complete description of theproperty including make, model, andserial numbers, if any; and

(4) A description of the petitioner’sinterest in the property as owner,lienholder, or otherwise, supported byoriginal or certified bills of sale,contracts, deeds, mortgages, or otherdocumentary evidence.

(B) Any factual recitation ordocumentation of any type in a petitionmust be supported by a sworn affidavit.

(iv) Releases. In addition to thecontents of the petition for remission ormitigation set forth in paragraph(j)(3)(iii) of this section, upon request,the petitioner shall also furnish theagency with an instrument executed bythe titled or registered owner and anyother known claimant of an interest inthe property releasing interest in suchproperty.

(v) Filing petition with agency. (A) Apetition for remission or mitigation ofan administrative forfeiture by thePostal Inspection Service shall be sentto the Chief Postal Inspector, UnitedStates Postal Service, 475 L’Enfant PlazaSW, Washington, DC 20260–2100.

(B) The petition shall be sworn to bythe petitioner or by the petitioner’sattorney upon information and belief,supported by the client’s sworn noticeof representation pursuant to 28 U.S.C.1746, as set out in paragraph (j)(9)(vii)of this section.

(vi) Agency investigation. Uponreceipt of a petition, the PostalInspection Service shall investigate themerits of the petition and prepare awritten report containing the results ofthat investigation. This report shall besubmitted to the Ruling Official forreview and consideration.

(vii) Ruling. Upon receipt of thepetition and the agency report, theRuling Official shall review the petitionand the report, and shall rule on themerits of the petition. No hearing shallbe held.

(viii) Petitions granted. If the RulingOfficial grants a remission or mitigationof the forfeiture, a copy of the decisionshall be sent by certified mail to thepetitioner, or, if represented by anattorney, to the petitioner’s attorney. Acopy of the decision shall also be sentto the U.S. Marshals Service or otherproperty custodian. The writtendecision shall include the terms andconditions, if any, upon which theremission or mitigation is granted andthe procedures the petitioner mustfollow to obtain release of the propertyor the monetary interest therein.

(ix) Petitions denied. If the RulingOfficial denies a petition, a copy of thedecision shall be sent by certified mailto the petitioner, or, if represented by anattorney, to the petitioner’s attorney ofrecord. A copy of the decision shall alsobe sent to the U.S. Marshals Service orother property custodian. The writtendecision shall specify the reason thatthe petition was denied. The decisionshall advise the petitioner that a requestfor reconsideration of the denial of thepetition may be submitted to the RulingOfficial in accordance with paragraph(j)(3)(x) of this section.

(x) Request for reconsideration. (A) Arequest for reconsideration of the denialof the petition shall be considered if:

(1) It is postmarked or received by theoffice of the Ruling Official within ten(10) days from the receipt of the noticeof the denial of the petition by thepetitioner; and

(2) The request is based oninformation or evidence not previouslyconsidered that is material to the basis

for the denial or presents a basis clearlydemonstrating that the denial waserroneous.

(B) In no event shall a request forreconsideration be decided by the sameRuling Official who ruled on theoriginal petition.

(C) Only one request forreconsideration of a denial of a petitionshall be considered.

(xi) Restoration of proceeds from sale.(A) A petition for restoration of theproceeds from the sale of forfeitedproperty, or for the appraised value offorfeited property when the forfeitedproperty has been retained by ordelivered to a government agency forofficial use, may be submitted by anowner or lienholder in cases in whichthe petitioner:

(1) Did not know of the seizure priorto the entry of a declaration of forfeiture;and

(2) Could not reasonably have knownof the seizure prior to the entry of adeclaration of forfeiture.

(B) Such a petition shall be submittedpursuant to paragraphs (j)(3)(ii) through(v) of this section within ninety (90)days from the date the property is soldor otherwise disposed of.

(4) Petitions in judicial forfeiturecases.—(i) Procedure for filing petition.If the forfeiture proceedings are judicial,a petition for remission or mitigation ofa judicial forfeiture shall be addressedto the Attorney General; shall be swornto by the petitioner or by the petitioner’sattorney upon information and belief,supported by the client’s sworn noticeof representation pursuant to 28 U.S.C.1746; and shall be submitted to theUnited States Attorney for the district inwhich the judicial forfeitureproceedings are brought. A petitioneralso shall submit a copy of the petitionto the Chief Postal Inspector if the PostalInspection Service was the seizingagency.

(ii) Ruling. Department of Justiceregulations on petitions for remission ormitigation in judicial forfeiture cases arestated in 29 CFR 9.4.

(5) Criteria governing administrativeremission and mitigation.—(i)Remission. (A) The Ruling Official shallnot grant remission of a forfeiture unlessthe petitioner establishes that:

(1) The petitioner has a valid, goodfaith and legally cognizable interest inthe seized property as owner orlienholder as defined in theseregulations; and

(2) The petitioner is innocent withinthe meaning of the innocent ownerprovisions of the applicable civilforfeiture statute, is a bona fidepurchaser for value without cause tobelieve that the property was subject to


forfeiture at the time of the purchase, oris one who held a legally cognizableinterest in the seized property at thetime of the violation underlying theforfeiture superior to that of thedefendant within the meaning of theapplicable criminal forfeiture statute,and is thereby entitled to recover his orher interest in the forfeited property bystatute. (If the applicable civil forfeiturestatute contains no innocent ownerdefense, the innocent owner provisionsapplicable to 21 U.S.C. 881(a)(4) shallapply.) Unless otherwise provided bystatute, in the case of petitioners whoacquired their interest in the propertyafter the time of the violationunderlying the forfeiture, the questionof whether the petitioner hadknowledge of the violation shall bedetermined as of the point in time whenthe interest in the property wasacquired.

(B) The knowledge andresponsibilities of petitioner’srepresentative, agent, or employee inparagraph (j)(5)(i)(A)(2) of this sectionare imputed to the petitioner where therepresentative, agent, or employee wasacting in the course of his or heremployment and in furtherance of thepetitioner’s business.

(C) The petitioner has the burden ofestablishing the basis for granting apetition for remission or mitigation offorfeited property, a restoration ofproceeds of sale or appraised value offorfeited property, or a reconsiderationof a denial of such a petition. Failure toprovide information or documents andto submit to interviews, as requested,may result in a denial of the petition.

(D) The Ruling Official shall presumea valid forfeiture and shall not considerwhether the evidence is sufficient tosupport the forfeiture.

(E) Willful, materially false statementsor information, made or furnished bythe petitioner in support of a petition forremission or mitigation of forfeitedproperty, the restoration of proceeds orappraised value of forfeited property, orthe reconsideration of a denial of anysuch petition, shall be grounds fordenial of such petition and possibleprosecution for the filing of falsestatements.

(ii) Mitigation. (A) The Ruling Officialmay grant mitigation to a party notinvolved in the commission of theoffense underlying forfeiture:

(1) Where the petitioner has not metthe minimum conditions for remission,but the Ruling Official finds that somerelief should be granted to avoidextreme hardship and that return of theproperty combined with imposition ofmonetary and/or other conditions ofmitigation in lieu of a complete

forfeiture will promote the interest ofjustice and will not diminish thedeterrent effect of the law. Extenuatingcircumstances justifying such a findinginclude those circumstances that reducethe responsibility of the petitioner forknowledge of the illegal activity,knowledge of the criminal record of auser of the property, or failure to takereasonable steps to prevent the illegaluse or acquisition by another for somereason, such as a reasonable fear ofreprisal; or

(2) Where the minimum standards forremission have been satisfied but theoverall circumstances are such that, inthe opinion of the Ruling Official,complete relief is not warranted.

(B) The Ruling Official may in his orher discretion grant mitigation to a partyinvolved in the commission of theoffense underlying the forfeiture wherecertain mitigating factors exist,including, but not limited to: The lackof a prior record or evidence of similarcriminal conduct; if the violation doesnot include drug distribution,manufacturing, or importation, the factthat the violator has taken steps, such asdrug treatment, to prevent furthercriminal conduct; the fact that theviolation was minimal and was not partof a larger criminal scheme; the fact thatthe violator has cooperated with federal,state, or local investigations relating tothe criminal conduct underlying theforfeiture; or the fact that completeforfeiture of an asset is not necessary toachieve the legitimate purposes offorfeiture.

(C) Mitigation may take the form of amonetary condition or the imposition ofother conditions relating to thecontinued use of the property, and thereturn of the property, in addition to theimposition of any other costs that wouldbe chargeable as a condition toremission. This monetary condition isconsidered as an item of cost payable bythe petitioner, and shall be depositedinto the Postal Service Fund as anamount realized from forfeiture inaccordance with the applicable statute.If the petitioner fails to accept theRuling Official’s mitigation decision orany of its conditions, or fails to pay themonetary amount within twenty (20)days of the receipt of the decision, theproperty shall be sold, and the monetaryamount imposed and other costschargeable as a condition to mitigationshall be subtracted from the proceeds ofthe sale before transmitting theremainder to the petitioner.

(6) Special rules for specificpetitioners. (i) General creditors. Ageneral creditor may not be grantedremission or mitigation of forfeiture

unless he or she otherwise qualifies asa petitioner under these regulations.

(ii) Rival claimants. If the beneficialowner of the forfeited property and theowner of a security interest in the sameproperty each file a petition, and if bothpetitions are found to be meritorious,the claim of the beneficial owner shalltake precedence.

(iii) Voluntary bailments. A petitionerwho allows another to use his or herproperty without cost, and who is not inthe business of lending money securedby property or of leasing or rentingproperty for profit, shall be grantedremission or mitigation of forfeiture inaccordance with the provisions ofparagraph (j)(5) of this section.

(iv) Lessors. A person engaged in thebusiness of leasing or renting real orpersonal property on a long-term basiswith the right to sublease shall not beentitled to remission or mitigation of aforfeiture of such property unless thelessor can demonstrate compliance withall the requirements of paragraph (j)(5)of this section.

(v) Straw owners. A petition by anyperson who has acquired a propertyinterest recognizable under theseregulations and who knew or had reasonto believe that the interest was conveyedby the previous owner for the purposeof circumventing seizure, forfeiture, orthese regulations, shall be denied. Apetition by a person who purchases orowns property for another who has arecord for related crimes as defined inparagraph (j)(2)(xvii) of this section, ora petition by a lienholder who knows orhas reason to believe that the purchaseror owner of record is not the realpurchaser or owner, shall be deniedunless both the purchaser of record andthe real purchaser or owner meet therequirements of paragraph (j)(5) of thissection.

(vi) Judgment creditors. (A) Ajudgment creditor will be recognized asa lienholder if:

(1) The judgment was duly recordedbefore the seizure of the property forforfeiture;

(2) Under applicable state or otherlocal law, the judgment constitutes avalid lien on the property that attachedto it before the seizure of the propertyfor forfeiture; and

(3) The petitioner had no knowledgeof the commission of any act or actsgiving rise to the forfeiture at the timethe judgment became a lien on theforfeited property.

(B) A judgment creditor will not berecognized as a lienholder if theproperty in question is not property ofwhich the judgment debtor is entitled toclaim ownership under applicable stateor other local law (e.g., stolen property).


A judgment creditor is entitled underthese regulations to no more than theamount of the judgment, exclusive ofany interest, costs, or other feesincluding attorney’s fees associated withthe action that led to the judgment or itscollection.

(C) A judgment creditor’s lien must beregistered in the district where theproperty is located if the judgment wasobtained outside the district.

(7) Terms and conditions of remissionand mitigation.—(i) Owners. (A) Anowner’s interest in property that hasbeen forfeited is represented by theproperty itself or by a monetary interestequivalent to that interest at the time ofseizure. Whether the property or amonetary equivalent will be remitted toan owner shall be determined at thediscretion of the Ruling Official.

(B) If a civil judicial forfeiture actionagainst the property is pending, releaseof the property must await anappropriate court order.

(C) Where the government sells ordisposes of the property prior to thegrant of the remission, the owner shallreceive the proceeds of that sale, lessany costs incurred by the government inthe sale. The Ruling Official, at his orher discretion, may waive the deductionof costs and expenses incident to theforfeiture.

(D) Where the owner does not complywith the conditions imposed uponrelease of the property by the RulingOfficial, the property shall be sold.Following the sale, the proceeds shall beused to pay all costs of the forfeitureand disposition of the property, inaddition to any monetary conditionsimposed. The remaining balance shallbe paid to the owner.

(ii) Lienholders. (A) When theforfeited property is to be retained forofficial use or transferred to a state orlocal law enforcement agency or foreigngovernment pursuant to law, andremission or mitigation has beengranted to a lienholder, the recipient ofthe property shall assure that:

(1) In the case of remission, the lienis satisfied as determined through thepetition process; or

(2) In the case of mitigation, anamount equal to the net equity, less anymonetary conditions imposed, is paid tothe lienholder prior to the release of theproperty to the recipient agency orforeign government.

(B) When the forfeited property is notretained for official use or transferred toanother agency or foreign countrypursuant to law, the lienholder shall benotified by the Ruling Official of theright to select either of the followingalternatives:

(1) Return of property. The lienholdermay obtain possession of the propertyafter paying the United States, throughthe Ruling Official, the costs andexpenses incident to the forfeiture, theamount, if any, by which the appraisedvalue of the property exceeds thelienholder’s net equity in the property,and any amount specified in the RulingOfficial’s decision as a condition toremit the property. The Ruling Official,at his or her discretion, may waive costsand expenses incident to the forfeiture.The Ruling Official shall forward a copyof the decision, a memorandum ofdisposition, and the original releases tothe U.S. Marshals Service or otherproperty custodian who shall thereafterrelease the property to the lienholder; or

(2) Sale of Property and Payment toLienholder—Subject to the provisions ofparagraph (j)(9)(i) of this section, uponsale of the property, the lienholder mayreceive the payment of a monetaryamount up to the sum of thelienholder’s net equity, less theexpenses and costs incident to theforfeiture and sale of the property, andany other monetary conditions imposed.The Ruling Official, at his or herdiscretion, may waive costs andexpenses incident to the forfeiture.

(iii) If the lienholder does not notifythe Ruling Official of the selection ofone of the two options set forth abovein paragraph (j)(7)(ii)(B) of this sectionwithin twenty (20) days of the receipt ofsuch notification, the Ruling Officialshall direct the U.S. Marshal or otherproperty custodian to sell the propertyand pay the lienholder an amount up tothe net equity, less the costs andexpenses incurred incident to theforfeiture and sale, and any monetaryconditions imposed. In the event alienholder subsequently receives apayment of any kind on the debt owedfor which he or she has already receivedpayment as a result of the granting ofremission or mitigation, the lienholdershall reimburse the Postal Service Fundto the extent of the payment received.

(iv) Where the lienholder does notcomply with the conditions imposedupon the release of the property, theproperty shall be sold after forfeiture.From the proceeds of the sale, all costsincident to the forfeiture and sale shallfirst be deducted, and the balance up tothe net equity, less any monetaryconditions, shall be paid to thelienholder.

(8) Provisions applicable to victims.The provisions of this section apply to

victims of an offense underlying theforfeiture of property, or of a relatedoffense, who do not have a presentownership interest in the forfeitedproperty (or, in the case of multiple

victims of an offense, who do not havea present ownership interest in theforfeited property that is clearlysuperior to that of other petitionervictims). The provisions of this sectionapply only with respect to propertyforfeited pursuant to statutes thatexplicitly authorize restoration orremission of forfeited property tovictims. Victims who have a superiorpresent legally cognizable ownershipinterest in forfeited property may filepetitions as other owners, subject to theregulations set forth in paragraph(j)(7)(i) of this section. The claims ofsuch owner victims, like those of anyother owners, shall have priority overthe claims of any non-owner victimswhose claims are recognized pursuantto this section.

(i) Qualifications to file. A victim, asdefined in paragraph (j)(2)(xxi) of thissection, of an offense that was theunderlying basis for the criminal, civil,or administrative forfeiture of specificproperty, or a victim of a related offense,may be granted remission of theforfeiture of that property, if in additionto complying with the other applicableprovisions of this section, the victimsatisfactorily demonstrates that:

(A) A pecuniary loss of a specificamount has been directly caused by thecriminal offense, or related offense, thatresulted in the forfeiture, or by a relatedoffense, and that the loss is supportedby documentary evidence includinginvoices and receipts;

(B) The pecuniary loss is the directresult of the illegal acts and is not theresult of otherwise lawful acts whichwere committed in the course of acriminal offense;

(C) The victim did not knowinglycontribute to, participate in, benefitfrom, or act in a willfully blind mannertowards the commission of the offense,or related offense, that was theunderlying basis of the forfeiture;

(D) The victim has not in fact beencompensated for the wrongful loss ofthe property by the perpetrator orothers; and

(E) The victim does not have recoursereasonably available to other assets fromwhich to obtain compensation for thewrongful loss of the property.

(ii) Pecuniary loss. The amount of thepecuniary loss suffered by a victim forwhich remission may be granted islimited to the fair market value of theproperty of which the petitioner wasdeprived as of the date of the occurrenceof the loss. No allowance shall be madefor interest foregone or for collateralexpenses incurred to recover lostproperty or to seek other recompense.

(iii) Torts. A tort associated withillegal activity that formed the basis for


the forfeiture shall not be a basis forremission, unless it constitutes theillegal activity itself, nor shall remissionbe granted for physical injuries to apetitioner or for damage to a petitioner’sproperty.

(iv) Denial of petition. In the exerciseof his or her discretion, the RulingOfficial may decline to grant remissionwhere:

(A) There is substantial difficulty incalculating the pecuniary loss incurredby the victim or victims;

(B) The amount of the remission, ifgranted, would be small compared withthe amount of expenses incurred by thegovernment in determining whether togrant remission; or

(C) The total number of victims islarge and the monetary amount of theremission so small as to make itsgranting impractical.

(v) Pro rata basis. In grantingremission to multiple victims pursuantto this section, the Ruling Officialshould generally grant remission on apro rata basis to recognized victimswhen petitions cannot be granted in fulldue to the limited value of the forfeitedproperty. However, the Ruling Officialmay consider, among others, thefollowing factors in establishingappropriate priorities in individualcases:

(A) The specificity and reliability ofthe evidence establishing a loss;

(B) The fact that a particular victim issuffering an extreme financial hardship;

(C) The fact that a particular victimhas cooperated with the government inthe investigation related to the forfeitureor to a related prosecution or civilaction; and

(D) In the case of petitions filed bymultiple victims of related offenses, thefact that a particular victim is a victimof the offense underlying the forfeiture.

(vi) Reimbursement. Any petitionergranted remission pursuant to thissection shall reimburse the PostalService Fund for the amount received tothe extent the individual later receivescompensation for the loss of theproperty from any other source. Thepetitioner shall surrender thereimbursement upon payment from anysecondary source.

(vii) Claims of financial institutionregulatory agencies. In cases involvingproperty forfeitable under 18 U.S.C.981(a)(1)(C) or (a)(1)(D), the RulingOfficial may decline to grant a petitionfiled by a petitioner in whole or in partdue to the lack of sufficient forfeitablefunds to satisfy both the petition andclaims of the financial institutionregulatory agencies pursuant to 18U.S.C. 981 (e)(3) or (7). Generally,claims of financial regulatory agencies

pursuant to 18 U.S.C. 981(e)(3) or (7)shall take priority over claims ofvictims.

(9) Miscellaneous Provisions—(i)Priority of payment. Except whereotherwise provided in this section, costsincurred by the Postal InspectionService and other agencies participatingin the forfeiture that were incident tothe forfeiture, sale, or other dispositionof the property shall be deducted fromthe amount available for remission ormitigation. Such costs include, but arenot limited to, court costs, storage costs,brokerage and other sales-related costs,the amount of any liens and associatedcosts paid by the government on theproperty, costs incurred in paying theordinary and necessary expenses of abusiness seized for forfeiture, awards forinformation as authorized by statute,expenses of trustees or other assistantspursuant to paragraph (j)(9)(iii) of thissection, investigative or prosecutivecosts specially incurred incident to theparticular forfeiture, and costs incurredincident to the processing of thepetition(s) for remission or mitigation.The remaining balance shall beavailable for remission or mitigation.The Ruling Official shall direct thedistribution of the remaining balance inthe following order of priority, exceptthat he or she may exercise discretion indetermining the priority betweenpetitioners belonging to classesdescribed in paragraphs (j)(9)(iii) and(9)(iv) of this section in exceptionalcircumstances:

(A) Owners;(B) Lienholders;(C) Federal financial institution

regulatory agencies (pursuant toparagraph (j)(9)(vi) of this section, notconstituting owners or lienholders); and

(D) Victims not constituting owners orlienholders (pursuant to paragraph (j)(8)of this section).

(ii) Sale or disposition of propertyprior to ruling. If forfeited property hasbeen sold or otherwise disposed of priorto a ruling, the Ruling Official may grantrelief in the form of a monetary amount.The amount realized by the sale of theproperty is presumed to be the value ofthe property. Monetary relief shall notbe greater than the appraised value ofthe property at the time of seizure andshall not exceed the amount realizedfrom the sale or other disposition. Theproceeds of the sale shall be distributedas follows:

(A) Payment of the government’sexpenses incurred incident to theforfeiture and sale, including court costsand storage charges, if any;

(B) Payment to the petitioner of anamount up to his or her interest in theproperty;

(C) Payment to the Postal ServiceFund of all other costs and expensesincident to the forfeiture;

(D) In the case of victims, payment ofany amount up to the amount of his orher loss; and

(E) Payment of the balance remaining,if any, to the Postal Service Fund.

(iii) Trustees and other assistants. Inthe exercise of his or her discretion, theRuling Official may use the services ofa trustee, other government official, orappointed contractors to notify potentialpetitioners, process petitions, and makerecommendations to the Ruling Officialon the distribution of property topetitioners. The expense for suchassistance shall be paid out of theforfeited funds.

(iv) Other agencies of the UnitedStates. Where another agency of theUnited States is entitled to remission ormitigation of forfeited assets because ofan interest that is recognizable underthese regulations, or is eligible for suchtransfer pursuant to 18 U.S.C. 981(e)(6),such agency shall request the transfer inwriting, in addition to complying withthe provisions of paragraphs (j)(3)through (5) of this section. The decisionto make such transfer shall be made inwriting by the Ruling Official.

(v) Financial institution regulatoryagencies. A Ruling Official may directthe transfer of property under 18 U.S.C.981(e) to certain federal financialinstitution regulatory agencies or anentity acting in their behalf, uponreceipt of a written request, in lieu ofruling on a petition for remission ormitigation.

(vi) Transfers to foreign governments.A Ruling Official may decline to grantremission to any petitioner other thanan owner or lienholder so that forfeitedassets may be transferred to a foreigngovernment pursuant to 18 U.S.C.981(i)(1), 19 U.S.C. 1616a(c)(2), or 21U.S.C. 881(e)(1)(E).

(vii) Filing by attorneys. (A) A petitionfor remission or mitigation may be filedby a petitioner or by his or her attorneyor legal guardian. If an attorney files onbehalf of the petitioner, the petitionmust include a signed and swornstatement by the client-petitioner statingthat:

(1) The attorney has the authority torepresent the petitioner in thisproceeding;

(2) The petitioner has fully reviewedthe petition; and

(3) The petition is truthful andaccurate in every respect.

(B) Verbal notification ofrepresentation is not acceptable.Responses and notification of rulingsshall not be sent to an attorney claimingto represent a petitioner unless a written


notice of representation is filed. Noextensions of time shall be granted dueto delays in submission of the notice ofrepresentation.

(viii) Consolidated petitions. At thediscretion of the Ruling Official inindividual cases, a petition may be filedby one petitioner on behalf of otherpetitioners, provided the petitions arebased on similar underlying facts, andthe petitioner who files the petition haswritten authority to do so on behalf ofthe other petitioners. This authoritymust be either expressed in documentsgiving the petitioner the authority to filepetitions for remission, or reasonablyimplied from documents giving thepetitioner express authority to fileclaims or lawsuits related to the courseof conduct in question on behalf ofthese other petitioners. An insurer or anadministrator of an employee benefitplan, for example, which itself hasstanding to file a petition as a ‘‘victim’’within the meaning of paragraph(j)(2)(xxi) of this section, may also filea petition on behalf of all its insured orplan beneficiaries for any claims theymay have based on co-payments madeto the perpetrator of the offenseunderlying the forfeiture or theperpetrator of a ‘‘related offense’’ withinthe meaning of paragraph (j)(2)(xviii) ofthis section, if the authority to fileclaims or lawsuits is contained in thedocument or documents establishing theplan. Where such a petition is filed, anyamounts granted as a remission must betransferred to the other petitioners, notthe party filing the petition; although, inhis or her discretion, the Ruling Officialmay use the actual petitioner as anintermediary for transferring theamounts authorized as a remission tothe other petitioners.Stanley F. Mires,Chief Counsel, Legislative.[FR Doc. 97–15303 Filed 6–10–97; 8:45 am]BILLING CODE 7710–12–U

ENVIRONMENTAL PROTECTIONAGENCY

40 CFR Part 52

[SIPTRAX No. PA–4057a; FRL–5835–4]

Approval and Promulgation of AirQuality Implementation Plans;Pennsylvania; Approval of VOC andNOX RACT Determinations forIndividual Sources

AGENCY: Environmental ProtectionAgency (EPA).

ACTION: Direct final rule.

SUMMARY: EPA is approving a StateImplementation Plan (SIP) revisionsubmitted by the Commonwealth ofPennsylvania. This revision establishesand requires volatile organiccompounds (VOC) and nitrogen oxides(NOX) reasonably available controltechnology (RACT) on five majorsources located in Pennsylvania. Theintended effect of this action is toapprove source-specific plan approvalsand operating permits that establish theabove-mentioned RACT requirements inaccordance with the Clean Air Act. Thisaction is being taken under section 110of the Clean Air Act.DATES: This action will become effectiveAugust 11, 1997 unless notice isreceived on or before July 11, 1997 thatadverse or critical comments will besubmitted. If the effective date isdelayed, timely notice will be publishedin the Federal Register.ADDRESSES: Comments may be mailed toDavid Campbell, Air, Radiation, andToxics Division, Mailcode 3AT22, U.S.Environmental Protection Agency,Region III, 841 Chestnut Building,Philadelphia, Pennsylvania 19107.Copies of the documents relevant to thisaction are available for publicinspection during normal businesshours at the Air, Radiation, and ToxicsDivision, U.S. Environmental ProtectionAgency, Region III, 841 ChestnutBuilding, Philadelphia, Pennsylvania19107; the Air and Radiation Docketand Information Center, U.S.Environmental Protection Agency, 401M Street, SW, Washington, DC 20460;Pennsylvania Department ofEnvironmental Protection, Bureau of AirQuality Control, P.O. Box 8468, 400Market Street, Harrisburg, Pennsylvania17105.FOR FURTHER INFORMATION CONTACT:Ruth E. Knapp, (215) 566–2191, at theEPA Region III office or via e-mail atknapp.ruth@epamail. epa.gov. Whileinformation may be requested via e-mail, any comments must be submittedin writing to the above Region IIIaddress.SUPPLEMENTARY INFORMATION: OnDecember 8, 1995, February 20, 1996,March 21, 1996, April 16, 1996, andSeptember 13, 1996, the Commonwealthof Pennsylvania submitted formalrevisions to its State ImplementationPlan (SIP). Each source subject to thisrulemaking will be identified anddiscussed below. Any plan approvalsand operating permits submitted

coincidentally with those beingapproved in this notice, and notidentified below, will be addressed in aseparate rulemaking action.

Pursuant to sections 182(b)(2) and182(f) of the Clean Air Act (CAA),Pennsylvania is required to implementRACT for all major VOC and NOX

sources by no later than May 31, 1995.The major source size is determined byits location, the classification of thatarea and whether it is located in theozone transport region (OTR), which isestablished by the CAA. ThePennsylvania portion of thePhiladelphia ozone nonattainment areaconsists of Bucks, Chester, Delaware,Montgomery, and Philadelphia Countiesand is classified as severe. Theremaining counties in Pennsylvania areclassified as either moderate or marginalnonattainment areas or are designatedattainment for ozone. However, undersection 184 of the CAA, at a minimum,moderate ozone nonattainment arearequirements (including RACT asspecified in sections 182(b)(2) and182(f)) apply throughout the OTR.Therefore, RACT is applicable statewidein Pennsylvania. The Pennsylvaniasubmittals that are the subject of thisnotice are meant to satisfy the RACTrequirements for five sources inPennsylvania.

Summary of SIP Revision

The details of the RACT requirementsfor the source-specific plan approvalsand operating permits can be found inthe docket and accompanying technicalsupport document (TSD) and will not bereiterated in this notice. Briefly, EPA isapproving a revision to thePennsylvania SIP pertaining to thedetermination of RACT for five majorsources. Several of the plan approvalsand operating permits containconditions irrelevant to thedetermination of VOC or NOX RACT.Consequently, these provisions are notbeing included in this approval forsource-specific VOC or NOX RACT.

RACT Determinations

The following table identifies theindividual plan approvals and operatingpermits EPA is approving. The specificemission limitations and other RACTrequirements for these sources aresummarized in the accompanyingtechnical support document, which isavailable upon request from the EPARegion III office listed in the ADDRESSESsection of this notice.


PENNSYLVANIA—VOC AND NOX RACT DETERMINATIONS FOR INDIVIDUAL SOURCES

Source CountyPlan approval (PA #),

operating permit (OP #),compliance permit (CP #),

Source type ‘‘Major source’’pollutant

CNG Transmission Corp., Ellisburg .. Potter ................ PA 53–0004A, OP 53–0004, CP 53–0004A.

Natural Gas Transmission NOX, VOC.

CNG Transmission Corp., Greenlick Potter ................ PA 53–0003A, OP 53–0003, CP 53–0003A.

Natural Gas Transmission NOX, VOC.

CNG Transmission Corp., Crayne .... Greene ............. OP 30–000–089 ................................ Natural Gas Transmission NOX.CNG Transmission Corp., State Line

Station.Potter ................ OP 53–0008 ...................................... Natural Gas Transmission NOX, VOC.

CNG Transmission Corp., Big Run ... Jefferson ........... PA 33–147 ......................................... Natural Gas Transmission NOX.

Several of the plan approvals/operating permits contain a provisionthat allows for future changes to theemission limitations based onContinuous Emissions Monitoring(CEM) or other monitoring data. SinceEPA cannot approve emissionlimitations that are not currently beforeit, any changes to the emissionlimitations as submitted to EPA onDecember 8, 1995, February 20, 1996,March 21, 1996, April 16, 1996, andSeptember 13, 1996, must beresubmitted to and approved by EPA inorder for these changes to beincorporated into the Pennsylvania SIP.Consequently, the source-specific RACTemission limitations that are beingapproved into the Pennsylvania SIP arethose that were submitted on the above-mentioned dates and are the subject ofthis rulemaking notice. These emissionlimitations will remain unless and untilthey are replaced pursuant to 40 CFRpart 51 and approved by the U.S. EPA.In addition, several of the planapprovals and operating permits containa general provision that would allowcompliance date extensions at therequest of the source and approval byPennsylvania without EPA approval.While EPA does not automaticallydismiss the possibility of compliancedate extensions, EPA cannot pre-approve compliance date extensionsthrough a general provision such as thatwhich occurs in those plan approvalsand operating permits.

EPA is approving this SIP revisionwithout prior proposal because theAgency views this as a noncontroversialamendment and anticipates no adversecomments. However, in a separatedocument in this Federal Registerpublication, EPA is proposing toapprove the SIP revision should adverseor critical comments be filed. Thisaction will be effective August 11, 1997unless, within 30 days of publication,adverse or critical comments arereceived.

If EPA receives such comments, thisaction will be withdrawn before the

effective date by publishing asubsequent notice that will withdrawthe final action. All public commentsreceived will then be addressed in asubsequent final rule based on thisaction serving as a proposed rule. EPAwill not institute a second commentperiod on this action. Any partiesinterested in commenting on this actionshould do so at this time. If no suchcomments are received, the public isadvised that this action will be effectiveon August 11, 1997. If adversecomments are received that do notpertain to all documents subject to thisrulemaking action, those documents notaffected by the adverse comments willbe finalized in the manner describedhere. Only those documents that receiveadverse comments will be withdrawn inthe manner described here.

Final Action

EPA is approving three planapprovals, four operating permits andtwo compliance permits as RACT forfive individual sources. Nothing in thisaction should be construed aspermitting or allowing or establishing aprecedent for any future request forrevision to any state implementationplan. Each request for revision to thestate implementation plan shall beconsidered separately in light of specifictechnical, economic, and environmentalfactors and in relation to relevantstatutory and regulatory requirements.

Administrative Requirements

A. Executive Order 12866

This action has been classified as aTable 3 action for signature by theRegional Administrator under theprocedures published in the FederalRegister on January 19, 1989 (54 FR2214–2225), as revised by a July 10,1995 memorandum from Mary Nichols,Assistant Administrator for Air andRadiation. The Office of Managementand Budget (OMB) has exempted thisregulatory action from E.O. 12866review.

B. Regulatory Flexibility Act

Under the Regulatory Flexibility Act,5 U.S.C. 600 et seq., EPA must preparea regulatory flexibility analysisassessing the impact of any proposed orfinal rule on small entities. 5 U.S.C. 603and 604. Alternatively, EPA may certifythat the rule will not have a significantimpact on a substantial number of smallentities. Small entities include smallbusinesses, small not-for-profitenterprises, and government entitieswith jurisdiction over populations ofless than 50,000.

SIP approvals under section 110 andsubchapter I, part D of the Clean Air Actdo not create any new requirements butsimply approve requirements that theState is already imposing. Therefore,because the Federal SIP approval doesnot impose any new requirements, theAdministrator certifies that it does nothave a significant impact on any smallentities affected. Moreover, due to thenature of the Federal-State relationshipunder the CAA, preparation of aflexibility analysis would constituteFederal inquiry into the economicreasonableness of state action. TheClean Air Act forbids EPA to base itsactions concerning SIPs on suchgrounds. Union Electric Co. v. U.S. EPA,427 U.S. 246, 255–66 (1976); 42 U.S.C.7410(a)(2).

C. Unfunded Mandates

Under Section 202 of the UnfundedMandates Reform Act of 1995(‘‘Unfunded Mandates Act’’), signedinto law on March 22, 1995, EPA mustprepare a budgetary impact statement toaccompany any proposed or final rulethat includes a Federal mandate thatmay result in estimated costs to State,local, or tribal governments in theaggregate; or to private sector, of $100million or more. Under Section 205,EPA must select the most cost-effectiveand least burdensome alternative thatachieves the objectives of the rule andis consistent with statutoryrequirements. Section 203 requires EPAto establish a plan for informing and


advising any small governments thatmay be significantly or uniquelyimpacted by the rule.

EPA has determined that the approvalaction proposed/promulgated does notinclude a Federal mandate that mayresult in estimated costs of $100 millionor more to either State, local, or tribalgovernments in the aggregate, or to theprivate sector. This Federal actionapproves pre-existing requirementsunder State or local law, and imposesno new Federal requirements.Accordingly, no additional costs toState, local, or tribal governments, or tothe private sector, result from thisaction.

D. Submission to Congress and theGeneral Accounting Office

Under section 801(a)(1)(A) as addedby the Small Business RegulatoryEnforcement Fairness Act of 1996, EPAsubmitted a report containing this ruleand other required information to theU.S. Senate, the U.S. House ofRepresentatives and the ComptrollerGeneral of the General AccountingOffice prior to publication of the rule intoday’s Federal Register. This rule isnot a ‘‘major rule’’ as defined by section804(2).

E. Petitions for Judicial Review

Under section 307(b)(1) of the CleanAir Act, petitions for judicial review ofthis action must be filed in the UnitedStates Court of Appeals for theappropriate circuit by August 11, 1997.Filing a petition for reconsideration bythe Regional Administrator of this finalrule does not affect the finality of thisrule for the purposes of judicial reviewnor does it extend the time withinwhich a petition for judicial review maybe filed, and shall not postpone theeffectiveness of such rule or action. Thisaction to approve VOC and NOX RACTdeterminations for a number ofindividual sources in Pennsylvania as arevision to the Commonwealth’s SIPmay not be challenged later inproceedings to enforce its requirements.(See section 307(b)(2).)


Environmental protection, Airpollution control, Hydrocarbons,Incorporation by reference,Intergovernmental relations, Nitrogendioxide, Ozone, Reporting andrecordkeeping requirements.

Dated: May 21, 1997.W. T. Wisniewski,Acting, Regional Administrator, Region III.

40 CFR part 52, subpart NN of chapterI, title 40 is amended as follows:

PART 52—[AMENDED]


Authority: 42 U.S.C. 7401–7671q.

Subpart NN—Pennsylvania

2. Section 52.2020 is amended byadding paragraph (c)(121) to read asfollows:

§ 52.2020 Identification of plan.

* * * * *(c) * * *(121) Revisions to the Pennsylvania

Regulations, Chapter 129.91 pertainingto VOC and NOX RACT, submitted onDecember 8, 1995, February 20, 1996,March 21, 1996, April 16, 1996, andSeptember 13, 1996 by the PennsylvaniaDepartment of Environmental Resources(now known as the PennsylvaniaDepartment of EnvironmentalProtection):

(i) Incorporation by reference.(A) Five letters submitted by the

Pennsylvania Department ofEnvironmental Resources (now, thePennsylvania Department ofEnvironmental Protection) transmittingsource-specific VOC and/or NOX RACTdeterminations in the form of planapprovals or operating permits on thefollowing dates: December 8, 1995,February 20, 1996, March 21, 1996,April 16, 1996, and September 13, 1996.

(B) Plan approvals (PA), Operatingpermits (OP), Compliance permits (CP):

(1) CNG Transmission Corporation—Ellisburg, Potter County, OP–53–0004,effective February 29, 1996, except forthe expiration date of the operatingpermit; PA–53–0004A effectiveFebruary 29, 1996, except for theexpiration date of the plan approval;and CP–53–0004A except for theexpiration date, except for item #6regarding future compliance extensions.

(2) CNG Transmission Corporation—Greenlick Compressor Station, PotterCounty, PA–53–0003A, effectiveDecember 18, 1995, except for the planapproval expiration date, except for theportion of item #3 regarding carbonmonoxide (CO) emissions increases,except the portion of item #4 regardingCO emission limitations; OP–53–0003,effective December 18, 1995 except forthe operating permit expiration date;and CP–53–0003A, except for theexpiration date of the compliancepermit, except for item #6 regardingfuture compliance extensions.

(3) CNG Transmission Corporation—Crayne Station, Greene County, OP 30–000–089, effective December 22, 1995except for the expiration date of theoperating permit, except for the portion

of item #4 regarding CO emissionlimitations, except for item #9 regardingemission limitation revisions.

(4) CNG Transmission Corporation—State Line Station, Potter County, OP–53–0008, effective January 10, 1996except for the expiration date of theoperating permit, except for the portionsof item #22 regarding CO emissionlimitations.

(5) CNG Transmission Corporation—Big Run, Jefferson County, PA 33–147,effective June 27, 1995, except for item#9 regarding emission limitationrevisions.

(ii) Additional Material.(A) Remainder of the Commonwealth

of Pennsylvania’s December 8, 1995,February 20, 1996, March 21, 1996,April 16, 1996, and September 13, 1996submittals pertaining to the RACTdeterminations for the five sourceslisted in (i) above.

[FR Doc. 97–15095 Filed 6–10–97; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 52

[AZ 68–0011; FRL–5835–8]

Approval and Promulgation of StateImplementation Plans; Arizona—Maricopa County OzoneNonattainment Area

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Direct final rule.

SUMMARY: EPA is taking direct finalaction approving a StateImplementation Plan (SIP) revisionsubmitted by the State of Arizona onApril 29, 1997, establishing asummertime gasoline Reid VaporPressure (RVP) limit of 7.0 pounds persquare inch (psi) for gasoline distributedin the Maricopa County (Phoenix) ozonenonattainment area. Arizona haslowered the summertime RVP limit forthis area to reduce emissions of volatileorganic compounds (VOC) inaccordance with the requirements of theClean Air Act, as amended in 1990(CAA). Arizona’s fuel requirement is notpreempted by federal fuels requirementsbecause EPA is finding that the controlmeasure is necessary for the Maricopaarea to attain the national ambient airquality standards (NAAQS) for ozoneand is approving the measure into theArizona SIP.DATES: This direct final rule is effectiveon August 11, 1997, unless EPA receivesadverse or critical comments by July 11,


1 The Maricopa area is classified as a ‘‘moderate’’ozone nonattainment area under the CAA. 40 CFR81.303.

2 This section is currently codified in the ARS assection 41–2083(F).

1997. If such comments are received,EPA will withdraw this direct final ruleand publish a timely notice in theFederal Register.ADDRESSES: Written comments shouldbe sent to the Region IX contact listedbelow. Copies of the SIP revision areavailable in the docket (#AZ–RVP–97)for this rulemaking, which is open forpublic inspection at the addressesbelow. A copy of this notice is alsoavailable on EPA, Region IX’s website athttp://www.epa.gov/region09.Air Planning Office (AIR–2), Air

Division, Region IX, U.S.Environmental Protection Agency, 75Hawthorne Street, San Francisco, CA94105

Arizona Department of EnvironmentalQuality, Office of Outreach andInformation, First Floor, 3033 N.Central Avenue, Phoenix Arizona85012

FOR FURTHER INFORMATION CONTACT:Roxanne Johnson, Air Planning Office,AIR–2, Air Division, U.S.Environmental Protection Agency,Region IX, 75 Hawthorne Street, SanFrancisco, CA 94105, Telephone: (415)744–1225.


I. Reid Vapor Pressure

Reid Vapor Pressure (RVP) is ameasure of a gasoline’s volatility and isa measurement of the rate at whichgasoline evaporates and emits VOC; thelower the RVP, the lower the rate ofevaporation. The RVP of gasoline can belowered by reducing the amount of itsvolatile components, such as butane.Lowering RVP in the summer monthscan offset the effect of summertemperature upon the volatility ofgasoline, which, in turn, lowersemissions of VOC. However, becauseVOC is a necessary component in theproduction of ground level ozone in hotsummer months, reduction of RVP willhelp ozone nonattainment areas like theMaricopa (Phoenix), Arizona, area attainthe NAAQS for ozone 1 and therebyproduce benefits for human health andthe environment.

The primary emission benefits fromlow RVP gasoline come from reductionsin evaporative emissions; exhaustemission reductions are very small ornonexistent. Because oxides of nitrogen(NOX) are a product of combustion, theywill not be found in evaporativeemissions, and low RVP gasoline willhave little or no effect on NOX.

II. State SubmittalSection 13 of Arizona House Bill

(H.B.) 2001 (1993 Special Session),originally codified in Arizona RevisedStatutes (ARS) at section 41–2083(E) 2,was passed by the Arizona legislatureon November 12, 1993. This provisionlimits the maximum summer vaporpressure (or Reid vapor pressure) ofgasoline fuel sold in the Maricopa areato 7.0 psi beginning May 31, 1995through September 30, 1995, and willcontinue to apply from May 31 throughSeptember 30 of each year thereafter.Gasoline distributed in the Maricopaarea by refineries, importers, carriers,retail stations and other end users whosell or dispense gasoline must meet the7.0 psi limit during those periods. TheState of Arizona submitted section 13 ofH.B. 2001 to EPA as a SIP revision onApril 29, 1997.

III. Clean Air Act RequirementsIn determining the approvability of a

SIP revision, EPA must evaluate theproposed revision for consistency withthe requirements of the CAA and EPAregulations, as found in section 110 andpart D of the CAA and 40 CFR part 51(Requirements for Preparation,Adoption, and Submittal ofImplementation Plans).

For SIP revisions addressing fuelmeasures, an additional statutoryrequirement applies. CAA section211(c)(4)(A) prohibits state regulation ofa fuel characteristic or component forwhich EPA has adopted a control orprohibition, unless the state control isidentical to the federal control. Section211(c)(4)(C) provides an exception tothis preemption if the measure isapproved in a SIP. EPA can approvesuch a SIP provision if it finds that thecontrol or prohibition is necessary toachieve a NAAQS. EPA can make thisfinding if no other measures exist thatwould bring about timely attainment orif other measures exist and aretechnically possible to implement, butare unreasonable or impracticable. Seesection 211(c)(4)(C). The requirementsof section 211(c)(4) are discussed infurther detail below.

IV. EPA Evaluation

A. General SIP Requirements

As discussed below, EPA hasevaluated the submitted SIP revisionand has determined that it is consistentwith the requirements of the CAA andEPA regulations. On May 8, 1997, EPAfound that the April 29, 1997 SIPrevision conformed to EPA’s

completeness criteria in 40 CFR part 51,Appendix V.

The SIP submittal contains: ARS 41–2083(E) (now section (F)) as establishedin section 13 of 1993 Special SessionHouse Bill 2001; documentation of thepublic notice and hearing regarding theSIP revision, dated March 17, 1994;evidence of State legal authority; andVOC air quality modeling. Additionalsupporting information regardingenforcement and compliance assurancefor the SIP revision can be found in theARS (specifically in Chapter 15,Department of Weights and Measures, oftitle 41) and the Arizona AdministrativeCode (ARC).

Arizona Department of Weights andMeasures implements the RVP limit andhas the necessary authority under theARS and ARC to obtain samples (ARS41–2066(A)), test (ARS 41–2083(c) andARC R20–2–720), prohibit the sale ofnon-conforming gasoline (ARS 41–2066(A)(2) and ARC R20–2–110), and toimpose civil penalties on any personwho violates the fuel requirements ofany provision of ARS 41–2083 (ARS 41–2115(a)). EPA has concluded that theseprovisions confer on the State therequisite authority to enforcecompliance with the 7 psi RVP limit.

B. Section 211(c)(4)

1. Federal Preemption

CAA section 211(c)(4)(A) preemptscertain state fuel regulations byprohibiting a state from prescribing orattempting to enforce any control orprohibition on any characteristic orcomponent of a fuel or fuel additive forthe purposes of motor vehicle emissioncontrol if the Administrator hasprescribed under section 211(c)(1) acontrol or prohibition applicable to suchcharacteristic or component of the fuelor fuel additive, unless the stateprohibition is identical to theprohibition or control prescribed by theAdministrator.

EPA first proposed to regulatesummertime gasoline RVP in 1987 (52FR 31274). EPA’s gasoline RVP proposalresulted in a two-phased final regulationthat Congress incorporated into the CAAat section 211(h). Phase I of theregulation took effect in 1990 (54 FR11868) for the years 1990 and 1991.Phase II of the regulation becameeffective in 1992 (55 FR 23658). Theseregulations are found in 40 CFR 80.27.Under the regulations, the continentalUnited States is divided into twocontrol regions, Class B and Class C.Generally speaking, the Class B statesare the warmer southern and westernstates, and Class C states are the coolernorthern states. The Phase II regulation


3 By letter dated January 17, 1997, GovernorSymington of the State of Arizona applied to EPAto include the Maricopa County moderate ozonenonattainment area in the federal RFG program.Pursuant to the Governor’s letter and section211(k)(6) of the CAA, EPA proposed an effectivedate for the federal RFG program of June 1, 1997or 30 days after the publication of the final notice,whichever was later. See 62 FR 7164 (February 18,1997).

4 The State RFG program for the Maricopa areahas two phases. By June 1, 1998, gasoline sold mustmeet standards similar to EPA’s Phase I RFGprogram or California’s Phase II RFG program.Starting May 1, 1999, gasoline must meet standardssimilar to EPA’s Phase II RFG program orCalifornia’s Phase II RFG program.

5 1999 was chosen as the modeling year becauseit is the next ozone attainment date in the Clean AirAct after 1996. See CAA 181(a)(1).

6 The State is continuing to evaluate the resultsof the UAM modeling in the VEOP. See ‘‘StatusReport on the Metropolitan Phoenix VoluntaryEarly Ozone Plan,’’ April 1997. This continuingevaluation may change some of the modelingresults, such as the effect of NOX controls on ozoneconcentrations. Given the continued exceedances ofthe ozone standard in the Maricopa area and thearea’s rapid rate of growth, it is very unlikely thatrevised modeling would show that implementationof all identified control measures, including the 7psi RVP limitation, will reduce emissions morethan is necessary for timely attainment.

limits the volatility of gasoline soldduring the high ozone season to 9.0 psiRVP for Class C areas and 7.8 psi RVPfor Class B ozone nonattainment areas.Arizona is a Class B state and istherefore required under the federal ruleto meet the 7.8 psi RVP standard.

Arizona has recently requested to optinto EPA’s reformulated gasolineprogram (RFG). Should that opt in beapproved as has been proposed, thenthe applicable federal standard for RVPin the Maricopa ozone nonattainmentarea would be dictated by therequirements of the RFG program. Likethe RVP rule, the RFG regulation alsodivides the continental United Statesinto two control regions: Region 1 andRegion 2. The Maricopa area is inRegion 1 and would be subject to amaximum RVP limitation of 7.2 psiunder the federal RFG program. See 40CFR 80.41.

Because Arizona’s fuel requirementfor the Maricopa nonattainment arealimiting summertime RVP to 7.0 psi isnot identical to the federal fuelstandards applicable to the fuelcharacteristic RVP (i.e., federal phase IIvolatility limit of 7.8 psi or federalphase I RFG RVP limit of 7.2 psi),Arizona’s requirement is preemptedunless it is in the Arizona SIP.

2. Finding of Necessity

Section 211(c)(4)(C) allows a state toprescribe and enforce controls orprohibitions on the use of a fuel or fueladditive for the purposes of motorvehicle emission control if the controlor prohibition is contained in theapplicable SIP. Section 211(c)(4)(C)states that the Administrator mayapprove such provisions in a SIP:if [s]he finds that the State control orprohibition is necessary to achieve thenational primary or secondary ambient airquality standard which the plan implements.The Administrator may find that a statecontrol or prohibition is necessary to achievethat standard if no other measures that wouldbring about timely attainment exist, or ifother measures exist and are technicallypossible to implement, but are unreasonableor impracticable. The Administrator maymake a finding of necessity under thissubparagraph even if the plan for the areadoes not contain an approved demonstrationof timely attainment.

Thus, to implement a state low RVPrequirement, a state must submit a SIPrevision adopting the state fuel controland must include specific informationshowing the measure is necessary tomeet the ozone NAAQS, based on thestatutory specifications for showingnecessity.

The State, the Maricopa County airpollution control agency, and the local

jurisdictions in Maricopa County haveadopted and implemented a broad rangeof ozone control measures including thesummertime low RVP limit of 7.0 psi,an enhanced inspection andmaintenance (I/M) program, stage IIvapor recovery, an employer tripreduction program, many transportationcontrol measures, and numerousstationary and area VOC controls. Seethe MAG 1993 Ozone Plan andAddendum, Maricopa Association ofGovernments, March 1994.

The State has also recently adoptedadditional ozone control measures andundertaken additional planning efforts.In January of this year, the Staterequested that the Maricopanonattainment area be included inEPA’s reformulated gasoline (RFG)program to help avoid any ozoneNAAQS exceedances.3 Legislationpassed in the 1997 session includedadoption of California’s off-road enginestandards, a state reformulated gasolineprogram,4 and new standards forindustrial cleaning solvents. Finally, theArizona Department of EnvironmentalQuality (ADEQ) has developed aVoluntary Early Ozone Plan (VEOP)including air quality modeling andadditional control measures beyondthose included in the legislation.

The State’s RVP SIP submittalincludes the Urban Airshed Model(UAM) modeling demonstration fromthe draft VEOP. See Exhibit 6, AppendixB of the SIP submittal. The modelingused 1996 as the base year andevaluated the effects of existing andfuture control measures. Arizona’s lowRVP requirement is built into the 1996base year inventory and modeled out tothe 1999 5 and 2010 projectedattainment years.

In addition to a low RVP requirement,Arizona evaluated all reasonable andpracticable additional control measuresthat could be implemented in theMaricopa area. The fifteen controlmeasures that were evaluated for 1999

are: (1) purge test in I/M (evaluated for2010); (2) final I/M cutpoints; (3) I/Mtesting of constant 4-by-4 vehicles; (4)federal RFG (both Phase I and Phase IIRFG at 7.2 psi RVP; (5) adoption ofCalifornia standards for off-road mobilesources; (6) voluntary catalystreplacement program; (7) voluntaryvehicle retirement program; (8)voluntary commercial lawn mowerreplacement; (9) new standards for theuse of industrial cleaning solvents; (10)alternative fuels tax incentives; (11)Motor Vehicle Division registrationenforcement and mandatory insurance;(12) pollution prevention; (13)temporary power at construction sites;(14) alternative-fueled buses; and (15)traffic light synchronization. See Exhibit5 of the SIP submittal.

Results from the VOC modelingdemonstration showed that, using 7.0psi RVP gasoline plus all other measuresidentified including federal RFG, theMaricopa area still fails to attain the12.0 ppm ozone NAAQS in 1999.6 SeeExhibit 5 of the SIP submittal. Giventhis result, it is clear that the State’s lowRVP requirement is a necessarycomponent of the strategy to achievetimely attainment of the ozone strategyin the Maricopa area and that there areno other measures that are reasonableand practicable that would bring abouttimely attainment.

C. Adjustment of the RVP Lower Limitin the Federal Reformulated GasProgram

The federal RFG program includesstandards for the RVP of gasoline. Themaximum RVP of RFG is controlledprimarily because of the increased VOCemissions that result from gasoline withhigher RVP levels.

In addition, the minimum RVPstandard addresses vehicle driveabilityproblems, such as poor starting andrunning, that can occur when lowvolatility gasoline does not vaporize inthe vehicle engine. As a result, under 40CFR 80.42(c)(1), the nationwidesummertime minimum RVP allowed forRFG is 6.6 psi, although under 40 CFR80.45(f)(1) this minimum RVP standardchanges to 6.4 psi beginning in 1998.


Arizona has requested that EPAapprove a SIP revision setting amaximum summertime volatilitystandard for the Maricopa area of 7.0psi. As a result of today’s approval ofthis SIP revision as well as Arizona’sopt-in to federal RFG, refiners supplyingRFG for the Maricopa area for useduring the summer will have to meet anRVP standard of 6.6 psi minimum (afederal standard) and 7.0 psi maximum(the State imposed standard). At theMarch 18, 1997, public hearing and insubsequent comments to the Agencyregarding the Maricopa area opt-in,various refiners suggested that thisnarrow RVP range would create gasolineproduction problems because of testingvariability, but that this problem wouldbe resolved if the RVP minimumstandard were 6.4 psi. In addition, theAmerican Automobile ManufacturersAssociation has indicated in a letter toEPA, dated April 4, 1997, that asummertime minimum RVP of 6.4 psifor use in the Maricopa area would notcreate vehicle performance problems.(See docket AZ–RVP–97.)

For these reasons, EPA believes it isappropriate to allow a minimum RVP of6.4 psi for VOC-controlled RFG in theMaricopa area. As a result, EPA willforego enforcement of the 6.6 psiminimum RVP standard under section80.42(c)(1) for VOC-controlled RFG usedin the Maricopa area, including RFGproduced for the Maricopa market thatis used in non-RFG areas aroundMaricopa, provided the followingconditions are met.

(1) RFG must meet a minimum RVPstandard of 6.4 psi during the periodMay 1 through October 31.

(2) All other RFG must meet aminimum RVP standard of 6.6 psi.

(3) The refiner or importer mustspecify in the product transferdocuments, required in section 80.77,the VOC-controlled RFG is for use onlyin the Maricopa covered area.

Enforcement of the RFG requirementsin this manner will expire on January 1,1998. (See EPA letter dated, April 18,1997, to Urvan Sternfels, President,National Petroleum Refiners Associationfrom Steven A. Herman, AssistantAdministrator).

D. ConclusionEPA has evaluated the submitted SIP

revision and has determined that it isconsistent with the CAA and EPAregulations. EPA has also found thatArizona’s 7 psi RVP limit is necessaryfor attainment in the Maricopa ozonenonattainment area, as required bysection 211(c)(4)(C) for approval into theSIP. Therefore, Arizona’s requirement tolimit summertime low RVP gasoline is

being approved into the Arizona SIPunder section 110(k)(3) of the CAA asmeeting the requirements of section110(a) and part D.

Nothing in this action should beconstrued as permitting or allowing orestablishing a precedent for any futureimplementation plan. Each request forrevision to the state implementationplan shall be considered separately inlight of specific technical, economic,and environmental factors and inrelation to relevant statutory andregulatory requirements.

EPA is publishing this documentwithout prior proposal because theAgency views this as a noncontroversialamendment and anticipates no adversecomments. However, in a separatedocument in this Federal Registerpublication, EPA is proposing toapprove the SIP revision should adverseor critical comments be filed. Thisaction will be effective August 11, 1997,unless, within 30 days of itspublication, adverse or criticalcomments are received.

If the EPA receives such comments,this action will be withdrawn before theeffective date by publishing asubsequent document that willwithdraw the final action. All publiccomments received will then beaddressed in a subsequent final rulebased on this action serving as aproposed rule. The EPA will notinstitute a second comment period onthis action. Any parties interested incommenting on this action should do soat this time. If no such comments arereceived, the public is advised that thisaction will be effective August 11, 1997.

V. Administrative Requirements



B. Regulatory Flexibility

Under the Regulatory Flexibility Act,5 U.S.C. 600 et seq., EPA must preparea regulatory flexibility analysisassessing the impact of any proposed orfinal rule on small entities. 5 U.S.C. 603and 604. Alternatively, EPA may certifythat the rule will not have a significantimpact on a substantial number of smallentities. Small entities include small

businesses, small not-for-profitenterprises, and government entitieswith jurisdiction over populations ofless than 50,000.

This federal action authorizes andapproves requirements previouslyadopted by the State, and imposes nonew requirements. Therefore, becausethis action does not impose any newrequirements, the Administratorcertifies that it does not have asignificant impact on any small entitiesaffected. Moreover, due to the nature ofthe Federal-State relationship under theCAA, preparation of a flexibilityanalysis would constitute Federalinquiry into the economicreasonableness of state action. TheClean Air Act forbids EPA to base itsactions concerning SIPs on suchgrounds. Union Electric Co. v. U.S. EPA,427 U.S. 246, 255–66 (1976); 42 U.S.C.7410(a)(2).

C. Unfunded MandatesUnder Section 202 of the Unfunded

Mandates Reform Act of 1995(‘‘Unfunded Mandates Act’’), signedinto law on March 22, 1995, EPA mustprepare a budgetary impact statement toaccompany any proposed or final rulethat includes a Federal mandate thatmay result in expenditures to State,local, and tribal governments in theaggregate, or to the private sector, of$100 million or more in any one year.Under Section 205, EPA must select themost cost-effective and leastburdensome alternative that achievesthe objectives of the rule and isconsistent with statutory requirements.Section 203 requires EPA to establish aplan for informing and advising anysmall governments that may besignificantly or uniquely impacted bythe rule.

EPA has determined that thisapproval action does not include aFederal mandate that may result inexpenditures of $100 million or more toeither State, local, and tribalgovernments in the aggregate, or to theprivate sector in any one year. ThisFederal action authorizes and approvesrequirements previously adopted by theState, and imposes no newrequirements. Accordingly, noadditional costs to State, local, or tribalgovernments, or to the private sector,will result from this action.


Under section 801(a)(1)(A) of theAdministrative Procedure Act (APA) asamended by the Small BusinessRegulatory Enforcement Fairness Act of1996, EPA submitted a report containingthis rule and other required information


to the U.S. Senate, the U.S. House ofRepresentatives and the ComptrollerGeneral of the General AccountingOffice prior to publication of the rule intoday’s Federal Register. This rule isnot a ‘‘major rule’’ as defined by section804(2) of the APA as amended.

E. Petitions for Judicial Review

Under section 307(b)(1) of the CleanAir Act, petitions for judicial review ofthis action must be filed in the UnitedStates Court of Appeals for theappropriate circuit by August 11, 1997.Filing a petition for reconsideration bythe Administrator of this final rule doesnot affect the finality of this rule for thepurposes of judicial review nor does itextend the time within which a petitionfor judicial review may be filed, and itwill not postpone the effectiveness ofsuch rule or action. This action may notbe challenged later in proceedings toenforce its requirements. (See section307(b)(2).)

List of Subjects in 40 CFR Part 52:

Environmental protection, Airpollution control, Hydrocarbons,Incorporation by reference,Intergovernmental relations, Ozone,Volatile organic compounds.

Note: Incorporation by reference of theState Implementation Plan for the State ofArizona was approved by the Director of theFederal Register on July 1, 1982.

Dated: May 28, 1997.Felicia Marcus,Regional Administrator.

For the reasons stated in thepreamble, part 52, chapter I, title 40 ofthe Code of Federal Regulations isamended as follows:

PART 52—[AMENDED]

Subpart D—Arizona





* * * * *(c) * * *(87) New and amended fuel

regulations for the following ArizonaDepartment of Environmental Qualityplan revisions were submitted on April29, 1997, by the Governor’s designee.

(i) Incorporation by reference.(A) Arizona Revised Statutes.

(1) Section 13 of H.B, 2001 (A.R.S.§ 41–2083(E)), adopted on November 12,1993.



40 CFR Part 52

[PA83–4062a; FRL–5835–2]

Approval and Promulgation of AirQuality Implementation Plans;Pennsylvania; Approval of Source-Specific VOC and NOX RACTDeterminations

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Direct final rule.

SUMMARY: EPA is approving a StateImplementation Plan (SIP) revisionsubmitted by the Commonwealth ofPennsylvania. This revision establishesand requires volatile organiccompounds (VOC) and nitrogen oxides(NOX) reasonably available controltechnology (RACT) on one major source.The intended effect of this action is toapprove source-specific plan approvals.This action is being taken under section110 of the Clean Air Act.DATES: This final rule is effective July28, 1997 unless within July 11, 1997,adverse or critical comments arereceived. If the effective date is delayed,timely notice will be published in theFederal Register.ADDRESSES: Comments may be mailed toDavid J. Campbell, Pennsylvania RACTTeam Leader, Mailcode 3AT22, U.S.Environmental Protection Agency,Region III, 841 Chestnut Building,Philadelphia, Pennsylvania 19107.Copies of the documents relevant to thisaction are available for publicinspection during normal businesshours at the Air, Radiation, and ToxicsDivision, U.S. Environmental ProtectionAgency, Region III, 841 ChestnutBuilding, Philadelphia, Pennsylvania19107; the Air and Radiation Docketand Information Center, U.S.Environmental Protection Agency, 401M Street, SW, Washington, DC 20460;and the Pennsylvania Department ofEnvironmental Protection, Bureau of AirQuality, P.O. Box 8468, 400 MarketStreet, Harrisburg, Pennsylvania 17105.FOR FURTHER INFORMATION CONTACT:Janice M. Lewis, (215) 566–2185, or bye-mail at [email protected] information may be requested viae-mail, comments must be submitted inwriting to the above Region III address.

SUPPLEMENTARY INFORMATION: OnDecember 8, 1995 the Commonwealth ofPennsylvania submitted a formalrevision to its State ImplementationPlan (SIP). The SIP revision consists ofone plan approval for one individualsource of volatile organic compounds(VOCs) and/or nitrogen oxides (NOX)located in Pennsylvania. Any planapprovals and operating permitssubmitted coincidentally with thosebeing approved in this notice, and notidentified below, will be addressed in aseparate rulemaking action. Thisrulemaking addresses one plan approvalpertaining to the following source: (1)Pennzoil Products Company(Rouseville, Venango County)—petroleum refinery.

Pursuant to sections 182(b)(2) and182(f) of the Clean Air Act (CAA),Pennsylvania is required to implementRACT for all major VOC and NOX

sources by no later than May 31, 1995.The major source size is determined byits location, the classification of thatarea and whether it is located in theozone transport region (OTR), which isestablished by the CAA. ThePennsylvania portion of thePhiladelphia ozone nonattainment areaconsists of Bucks, Chester, Delaware,Montgomery, and Philadelphia Countiesand is classified as severe. Theremaining counties in Pennsylvania areclassified as either moderate or marginalnonattainment areas or are designatedattainment for ozone. However, undersection 184 of the CAA, at a minimum,moderate ozone nonattainment arearequirements [including RACT asspecified in sections 182(b)(2) and182(f)] apply throughout the OTR.Therefore, RACT is applicable statewidein Pennsylvania.

The December 8, 1995 Pennsylvaniasubmittals that are the subject of thisnotice are meant to satisfy the RACTrequirements for one source inPennsylvania.

Summary of SIP RevisionThe details of the RACT requirements

for the source-specific plan approvalscan be found in the docket andaccompanying technical supportdocument and will not be reiterated inthis notice. Briefly, EPA is approvingone plan approval as RACT.

RACTEPA is approving the plan approval of

the following facility located inPennsylvania: (1) Pennzoil ProductsCompany (Rouseville, VenangoCounty)—petroleum refinery—majorsource of NOX emissions.

The specific emission limitations andother RACT requirements for these


sources are summarized in theaccompanying technical supportdocument, which is available from theEPA Region III office.

EPA is approving this SIP revisionwithout prior proposal because theAgency views this as a noncontroversialamendment and anticipates no adversecomments. However, in a separatedocument in this Federal Registerpublication, EPA is proposing toapprove the SIP revision should adverseor critical comments be filed. Thisaction will be effective July 28, 1997unless within July 11, 1997, adverse orcritical comments are received.

If EPA receives such comments, thisaction will be withdrawn before theeffective date by publishing asubsequent document that willwithdraw the final action. All publiccomments received will then beaddressed in a subsequent final rulebased on this action serving as aproposed rule. EPA will not institute asecond comment period on this action.Any parties interested in commentingon this action should do so at this time.If no such comments are received, thepublic is advised that this action will beeffective on July 28, 1997.

Final Action

EPA is approving two plan approvalsas RACT for one individual sourcelocated in Pennsylvania.

Administrative Requirements



B. Regulatory Flexibility Act

Under the Regulatory Flexibility Act,5 U.S.C. 600 et seq., EPA must preparea regulatory flexibility analysisassessing the impact of any proposed orfinal rule on small entities. 5 U.S.C. 603and 604. Alternatively, EPA may certifythat the rule will not have a significantimpact on a substantial number of smallentities. Small entities include smallbusinesses, small not-for-profitenterprises, and government entitieswith jurisdiction over populations ofless than 50,000.

SIP approvals under section 110 andsubchapter I, part D of the Clean Air Act

do not create any new requirements butsimply approve requirements that theState is already imposing. Therefore,because the Federal SIP approval doesnot impose any new requirements, theAdministrator certifies that it does nothave a significant impact on any smallentities affected. Moreover, due to thenature of the Federal-State relationshipunder the CAA, preparation of aflexibility analysis would constituteFederal inquiry into the economicreasonableness of state action. TheClean Air Act forbids EPA to base itsactions concerning SIPs on suchgrounds. Union Electric Co. v. U.S. EPA,427 U.S. 246, 255–66 (1976); 42 U.S.C.7410(a)(2).

C. Unfunded MandatesUnder section 202 of the Unfunded

Mandates Reform Act of 1995(‘‘Unfunded Mandates Act’’), signedinto law on March 22, 1995, EPA mustprepare a budgetary impact statement toaccompany any proposed or final rulethat includes a Federal mandate thatmay result in estimated costs to State,local, or tribal governments in theaggregate; or to private sector, of $100million or more. Under section 205,EPA must select the most cost-effectiveand least burdensome alternative thatachieves the objectives of the rule andis consistent with statutoryrequirements. Section 203 requires EPAto establish a plan for informing andadvising any small governments thatmay be significantly or uniquelyimpacted by the rule.

EPA has determined that the approvalaction proposed/promulgated does notinclude a Federal mandate that mayresult in estimated costs of $100 millionor more to either State, local, or tribalgovernments in the aggregate, or to theprivate sector. This Federal actionapproves pre-existing requirementsunder State or local law, and imposesno new Federal requirements.Accordingly, no additional costs toState, local, or tribal governments, or tothe private sector, result from thisaction.


Under section 801(a)(1)(A) as addedby the Small Business RegulatoryEnforcement Fairness Act of 1996, EPAsubmitted a report containing this ruleand other required information to theU.S. Senate, the U.S. House ofRepresentatives and the ComptrollerGeneral of the General AccountingOffice prior to publication of the rule intoday’s Federal Register. This rule isnot a ‘‘major rule’’ as defined by section804(2).

E. Petitions for Judicial ReviewUnder section 307(b)(1) of the Clean

Air Act, petitions for judicial review ofthis action must be filed in the UnitedStates Court of Appeals for theappropriate circuit by July 28, 1997.Filing a petition for reconsideration bythe Administrator of this final rule doesnot affect the finality of this rule for thepurposes of judicial review nor does itextend the time within which a petitionfor judicial review may be filed, andshall not postpone the effectiveness ofsuch rule or action. This action,pertaining to the VOC and NOX RACTdetermination for one source inPennsylvania, may not be challengedlater in proceedings to enforce itsrequirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52Environmental protection, Air

pollution control, Incorporation byreference, Intergovernmental relations,Nitrogen dioxide, Ozone, Reporting andrecordkeeping requirements.

Dated: May 23, 1997.James W. Newsom,Acting Regional Administrator, Region III.

40 CFR part 52, subpart NN of chapterI, title 40 is amended as follows:

PART 52—[AMENDED]



Subpart NN—Pennsylvania



* * * * *(c) * * *(124) Revisions to the Pennsylvania

Regulations, Chapter 129.91 pertainingto VOC and NOX RACT, submitted onDecember 8, 1995 by the PennsylvaniaDepartment of Environmental Resources(now known as the PennsylvaniaDepartment of EnvironmentalProtection):

(i) Incorporation by reference.(A) Two letters, dated December 8,

1995 and September 13, 1996, from thePennsylvania Department ofEnvironmental Protection transmittingsource-specific VOC and/or NOX RACTdeterminations in the form of one planapproval for the following source:Pennzoil Products Company(Rouseville, Venango County)—petroleum refinery.

(B) Plan Approval (PA):(1) Pennzoil Products Company

(Rouseville)—(PA–61–016) effective


September 8, 1995, except for conditionNos. 9 pertaining to non-VOC and non-NOX pollutants and expiration date ofthe plan approval.

(ii) Additional Material.(A) Remainder of the Commonwealth

of Pennsylvania’s December 8, 1995submittal.

(B) Additional material submitted byPennsylvania dated May 23, 1997,providing clarifying information relatedto Pennzoil Products Company planapproval.


GENERAL SERVICESADMINISTRATION

41 CFR Part 101–38

[FPMR Amendment G–111]

RIN 3090–AG26

Motor Vehicles

AGENCY: Office of GovernmentwidePolicy, GSA.ACTION: Final rule; correction.

SUMMARY: This document containscorrections to a final rule published inthe Federal Register on Friday, January3, 1997, 62 FR 322. FPMR AmendmentG–111, which governs the managementof motor vehicles.EFFECTIVE DATE: January 3, 1997.FOR FURTHER INFORMATION CONTACT:Sharon A. Kiser, Federal AcquisitionPolicy Division (202–501–216).SUPPLEMENTARY INFORMATION: In ruledocument 97–52 appearing at 62 FR322, GSA revised Part 101–38. Thisdocument corrects three errors.

Corrections

§ 101.38 [Corrected]1. On page 324, second column,

‘‘PART 101–38—MOTOR EQUIPMENTMANAGEMENT’’ is corrected to read‘‘PART 101–38—MOTOR VEHICLEMANAGEMENT.’’

2. On page 325, the table in 101–38.104(b)(3) is corrected by adding thefollowing footnotes.

‘‘1 Established by section 502 of theMotor Vehicle Information and Cost SavingsAct (89 Stat. 902, 15 U.S.C. 2002) and theSecretary of Transportation.

2 Established by the Secretary ofTransportation and mandated by ExecutiveOrder 12003 through fiscal year 1981 and byExecutive Order 12375 beginning in fiscalyear 1982.

3 Fleet average fuel economy for lighttrucks is the combined fleet average fueleconomy for all 4x2 and 4x4 light trucks.

4 Requirements not yet established by theSecretary of Transportation.’’

3. On page 328, first column,instruction 13 is corrected to read ‘‘13.Section 101–38.401–1 is amended byremoving the introductory text,removing paragraph (b), redesignatingparagraph (c) as paragraph (b), andrevising paragraph (a) introductory textto read as follows:’’

Dated: June 5, 1997.Sharon A. Kiser,FAR Secretariat.[FR Doc. 97–15229 Filed 6–10–97; 8:45 am]BILLING CODE 6820–34–P

DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

50 CFR Part 17

RIN 1018–AC52

Endangered and Threatened Wildlifeand Plants; Determination ofThreatened Status for Castillejalevisecta (Golden Paintbrush)

AGENCY: Fish and Wildlife Service,Interior.ACTION: Final rule.

SUMMARY: The U.S. Fish and WildlifeService (Service) determines threatenedstatus pursuant to the EndangeredSpecies Act of 1973, as amended (Act),for the plant Castilleja levisecta (goldenpaintbrush). This species once occurredfrom Oregon to Vancouver Island inBritish Columbia, Canada. Tenpopulations of this plant now exist inopen grasslands ranging from south ofOlympia in Thurston County,Washington, north through the PugetTrough to southwest British Columbia,Canada. Threats to the species includecompetition with encroaching nativeand non-native plant species; habitatmodification through succession in theabsence of fire; and grazing byherbivores. Direct human-caused threatsinclude conversion of habitat forresidential and commercialdevelopment, conversion to agriculture,and possible damage associated withroad maintenance. This rule implementsthe Federal protections afforded by theAct for this plant.EFFECTIVE DATE: July 11, 1997.ADDRESSES: The complete file for thisrule is available for inspection, byappointment, during normal businesshours at the Western Washington Office,North Pacific Coast Ecoregion, U.S. Fishand Wildlife Service, 510 DesmondDrive S.E., Suite 101, Lacey,Washington 98503–1273.FOR FURTHER INFORMATION CONTACT:Dave Frederick, Supervisor, at the above

Lacey address (telephone 360/753–9440).


Background

Castilleja levisecta (goldenpaintbrush) was first collected near MillPlain, Washington, by Thomas JeffersonHowell in 1880 and was described byJesse More Greenman in 1898(Greenman 1898). A perennial herb ofthe figwort family (Scrophulariaceae), C.levisecta typically has 1 to 15 erect tospreading unbranched stems, reaches aheight of 30 centimeters (cm) (12 inches(in)), and is covered with soft, stickyhairs. The lower leaves are entire andnarrowly pointed; the upper leaves arebroader, usually with one to three pairsof short lateral lobes on the distal end.The flower, mostly hidden by theoverlapping bracts, has a calyx 15 to 18millimeters (mm) (0.6 to 0.7 in) long anddeeply cleft, and a corolla 20 to 23 mm(0.8 to 0.9 in) long, with a slender galea(concave upper lip) three to four timesthe length of the unpouched lower lip(Hitchcock and Cronquist 1973). It isdistinguished from the other Castillejaspecies within its range by brilliantgolden to yellow floral bracts. The plantflowers from April to June. When notflowering, the plant is less conspicuous.The species may be semi-parasitic likeother members of the genus Castilleja,possibly requiring a host plant forseedling development in its nativehabitat (Heckard 1962, Sheehan andSprague 1984). However, greenhouseexperiments indicate it does not requirea host to survive and flower (Wentworth1994).

The plant tends to grow in clumps.One genetic individual may consist of 1to 15 stems, making the determinationof exact numbers of individual plants inthe field difficult. The number of stemsper plant varies site to site. In addition,researchers have used a variety ofcensus methods over the years.Therefore, population estimates canvary and a consistent approach isneeded. Experimentally designedsampling surveys have been conductedwhere individual plants were taggedand counted (Wentworth 1994). Year toyear variation in population densitiescan be high (G. Douglas, ConservationData Center, British Columbia Ministryof Environment, Lands and Parks, pers.comm. 1996; Wentworth 1994).

Castilleja levisecta occurs in opengrasslands at elevations below 100meters (m) (328 feet (ft)) around theperiphery of the Puget Trough. Mostpopulations occur on glacially derivedsoils, either gravelly glacial outwash orclayey glacio-lacustrine sediments


(Sheehan and Sprague 1984, Gamon1995). Associated species includeFestuca idahoensis, F. rubra, Camassiaquamash, Holcus lanatus, Achilleamillefolium, Pteridium aquilinum, Viciaspp., and Bromus spp. (Gamon 1995).Frequent, low intensity fires can beimportant in maintaining habitat forplant species such as C. levisecta.Historically, periodic fires in the PugetTrough were instrumental inmaintaining native grassland habitat bylimiting successional encroachment oftrees and shrubs (Agee 1993, Kruckeberg1991, Sheehan and Sprague 1984).

Historically, Castilleja levisecta hasbeen reported from over 30 sites in thePuget Trough of Washington and BritishColumbia, and as far south as theWillamette Valley of Oregon (Sheehanand Sprague 1984, Gamon 1995). In1984, the Service granted funding to theWashington Natural Heritage Program(Washington Department of NaturalResources) to conduct an assessment ofthe status of the species throughout itsrange. The plant was found to beextirpated from more than 20 historicsites (Sheehan and Sprague 1984,Gamon 1995). Many populations werefound to be extirpated due to conversionof habitat to agricultural, residential,and commercial development. InOregon, C. levisecta historicallyoccurred in the grasslands and prairie ofthe Willamette Valley; the species hasbeen extirpated from all of these sites asthe habitat has disappeared. The areaaround the type locality at Mill Plain,Washington, was converted to pastureand orchards some time after the plantwas first collected there in 1880.Housing developments currently occupythe site (Sheehan and Sprague 1984,Gamon 1995).

Western Oregon and Washington (andsouthern Vancouver Island) have amaritime climate, characterized by wet,mild winters and cool, relatively drysummers. Annual precipitation averages800 to 1350 mm (31 to 53 in) in thePuget-Willamette Trough (Sheehan andSprague 1984).

Castilleja levisecta is now knownfrom 10 extant populations. Eightpopulations occur in Washington—1population south of Olympia inThurston County, 5 populations onWhidbey Island in Island County, 1population on San Juan Island in SanJuan County, and 1 population on LopezIsland, Island County. The Lopez Islandpopulation consisted of 4 plants in May1996 (J. Wentworth, Washington NaturalHeritage Program, Botanist, pers. comm.1996). A population of fewer than fiveindividuals likely is not viable (J.Gamon, Washington Natural HeritageProgram, scientist, pers. comm. 1996).

In British Columbia, Canada, 2populations exist on islands off of thesouthern coast of Vancouver Island(Ryan and Douglas 1994). A historicpopulation at Beacon Hill in Victoria onVancouver Island, British Columbia,Canada, has been surveyed annuallyfrom 1991 through 1996. Three plantswere observed in 1991 but subsequentsurveys have not found any plants andthe site is presumed to be extirpated(Gamon 1995; G. Douglas, pers. comm.1996).

The southernmost population ofCastilleja levisecta occurs at the RockyPrairie site south of Olympia, inThurston County, Washington. The siteis owned by the WashingtonDepartment of Natural Resources and isdesignated as a Natural Area Preservethat is managed primarily for protectionof C. levisecta and Aster curtus (white-topped aster), and conservation of theremnant native grasslands of Festucaidahoenis (Idaho fescue) (J. Gamon,pers. comm. 1996). In 1983, the time ofthe last complete census, 15,000 plantswere sporadically distributedthroughout the 15-hectare (ha) (37-acre)site. A fire in 1985 reduced thesouthernmost patch of C. levisecta, andin 1991 the total population wasestimated to be about 7,000 plants (R.Schuller, pers. comm. 1991, 1996).

Five populations are located on thenorth half of Whidbey Island, IslandCounty, in Puget Sound. Three of thesepopulations are located within theadministrative boundary of the Ebey’sLanding National Historic Reserve(Ebey’s Landing, Fort Casey, and Bockerproperty), and are managed by a privatelandowner, Washington State Parks, andSeattle Pacific University, respectively.

The largest of the Whidbey Islandpopulations occurs near Forbes Point atCrescent Harbor and is owned by theDepartment of Defense (Whidbey IslandNaval Air Station). A census conductedfor Castilleja levisecta in 1985 countedmore than 10,000 flowering stems at thesite (Clampitt 1985); the number ofindividual plants was not provided. Thepopulation was monitored in 1990,when it was estimated to be in thethousands, and again in 1991, when areduction in density of about 25 percentwas observed. A census was completedin May 1995. The population numbered1,346 plants with 5,243 stems;approximately 50 percent of the 1985total (Gamon 1995). The site has beenmapped and measures about 20 by 60 m(66 by 197 ft) (Matt Klope, WhidbeyIsland Naval Air Station, pers. comm.1996).

A second population on WhidbeyIsland is located at Fort Casey State Parkwhere approximately 230 plants occur

on a 0.04-ha (0.10-acre) site (Gamon1995). The population declined frombetween 500 and 1,000 plants in theearly 1980’s, to 120 plants in 1993(Gamon 1993; Fayette Krause, TheNature Conservancy, in litt., 1994), andcurrently harbors about 230 individuals(Gamon 1995). This State-ownedhistoric site is managed as a park forrecreational use (Ken Hageman, FortCasey State Park Manager, WashingtonDepartment of Parks, pers. comm. 1994).

A third Whidbey Island population ofCastilleja levisecta occurs on andadjacent to the Bocker property. Thispopulation consists of 3 colonies—1colony is 60×150 m (197×492 ft) on theproperty, a second colony is adjacent tothe property in a 4 m2 (43 ft2) area, anda third colony is located near the‘‘Admiral’s’’ house and covers an area of4.5×9 m (15×30 ft). In 1996, 306individual plants existed (Wentworth,pers. comm. 1996), down from anestimated 1,200 plants in the mid-1980’s(Krause, in litt. 1994). The property isowned by Seattle Pacific University andis used for environmental educationcourses (Keith Ludemann,Environmental Education Supervisor,Bocker Environmental Preserve, pers.comm. 1992), but no covenants or otherrestrictions on the property exist thatprevent development.

A fourth Whidbey Island populationoccurs at Ebey’s Landing in a 10–20 m×100 m (33–66 ft×328 ft) area. Thispopulation on private land wasestimated to be from 300 to 400 plantsin 1984 (Sheehan and Sprague 1984)and more than 4,000 individuals in1993 (Sheehan, in litt., 1994; Gamon1995). Differences in estimationtechniques, such as countingindividuals rather than flowering stemsand estimates based on sampledpopulation density are thought tocontribute to the differences inpopulation estimates between 1984 and1993.

The fifth Whidbey Island populationof Castilleja levisecta is located at WestBeach, on a site less than 0.40 ha (1acre) in size. The property is privatelyowned and is bisected by a county road.In 1991, the east side of the roadsupported 10 to 20 plants (M. Klope,pers. comm. 1991), whereas the entireWest Beach population was estimated atapproximately 200 plants in 1984(Sheehan and Sprague 1984). A 1993census of the site found 496 plants,while the 1995 census counted 550plants west of the road (Gamon 1995).The apparent increase in thispopulation may represent (1) a realincrease in the population, (2) naturalyear-to-year fluctuation in populationsize, (3) differences in the way


individual plants were determinedbetween 1993 and 1995, or (4) a morecomplete count was conducted in 1995.In a letter to the Island County engineer,a citizen reported that roadsidemaintenance activities by the countyhad resulted in the elimination of theplants on the east side of the road (SteveErickson, Whidbey EnvironmentalAction Network, in litt., 1991).Subsequent field inspection byWashington Natural Heritage Programstaff confirmed that the population onthe east side of the road had beenreduced to about five plants; however,the direct cause of the decline east ofthe road is unknown (Sheehan, in litt.,1992; 1994).

The population on San Juan Island(San Juan County) is located on aprivately owned parcel near the MarVista Resort at False Bay. The site is lessthan 1 acre in size, and supports apopulation of 128 plants (Gamon 1995).

The remaining population ofCastilleja levisecta from the UnitedStates is on private land at Davis Pointon Lopez Island, Island County,Washington. When first discovered in1994, this occurrence consisted of asingle plant. A census conducted inMay 1996 found four plants. Theviability of this population isquestionable. Recently locatedphotographic evidence from within thelast 2 decades but prior to 1994,indicates the population washistorically larger, with an estimatedpopulation size of approximately 100plants. However, the area is nowdominated by non-native grasses thatlikely have outcompeted C. levisecta atthe site (Sheehan, in litt. 1994; J.Wentworth, pers. comm. 1996).

Two extant populations of Castillejalevisecta occur in British Columbia,Canada, on small islands near Victoria.Historically, C. levisecta wasdocumented from nine sites onsoutheastern Vancouver Island, and ontwo adjacent islands. All but the twopopulations found on islands areextirpated or of unknown status butlikely have been extirpated (Ryan andDouglas 1994). One population islocated on Alpha Islet, consisting of1,000 plants in an area of 100 m2 (33 by33 ft), and is under the management ofthe Ministry of Parks (Ryan and Douglas1994). A second population, estimatedat 2,560 plants, in an area of about 0.5ha (1.2 acre), is located on the TrialIslands and is currently managed by theMinistry of Parks as an EcologicalReserve (G. Douglas, pers. comm. 1996).

Castilleja levisecta is threatened byhabitat modification through successionof grassland to shrub and forest habitat.Potential for expansion and persistence

of refugia is low due to reduction ofhabitat. In addition, because the currentdistribution of the species has beengreatly fragmented and reduced fromthe historic distribution, the species isvulnerable to other threats such asinterspecific competition with nativeand alien woody species, reduced vigorand reproductive potential due tograzing by herbivores, and trampling orcollecting during public recreational useof sites. Five sites are vulnerablebecause they are zoned for residentialdevelopment or commercial use.

Previous Federal ActionFederal action on this species began

when the Service published a Notice ofReview for plants on December 15, 1980(45 FR 82480). In this notice, Castillejalevisecta was included as a category 1candidate. Category 1 candidates wereformerly designated as those species forwhich the Service had on filesubstantial information on biologicalvulnerability and threats to supportpreparation of listing proposals, but forwhich listing proposals had not beenprepared due to other higher prioritylisting actions. Pending completion ofupdated status surveys, the status waschanged to category 2 in the November28, 1983, supplement to the Notice ofReview (48 FR 53640). Category 2candidates were formerly designated asthose species for which information inpossession of the Service indicated thatproposing to list as endangered orthreatened was possibly appropriate,but for which conclusive data onbiological vulnerability and threat werenot currently available to support aproposed rule. Castilleja levisectaremained a category 2 candidate in theSeptember 27, 1985, Notice of Reviewfor plants (50 FR 39526). In the February21, 1990, Notice of Review (55 FR 6184),C. levisecta was elevated to category 1status, based on additional datacollected by the Washington NaturalHeritage Program. The species remainedin category 1 in the September 30, 1993,Notice of Review for plants. On May 10,1994, the Service published in theFederal Register (59 FR 24106) aproposal to list C. levisecta asthreatened. The Service noted that thespecies was a proposed threatenedspecies in the February 28, 1996, Noticeof Review for Plants and Animals (61 FR7596).

The 1994 proposal to list Castillejalevisecta as threatened was basedprimarily on information contained instatus reports prepared by theWashington Natural Heritage Programand on personal communications withknowledgeable resource scientists andsite managers. The comment period,

originally scheduled to close on July 11,1994, was extended for 30 days in a July7, 1994, Federal Register publication(59 FR 34784) and closed on August 11,1994.

The processing of this final ruleconforms with the Service’s listingpriority guidance published in theFederal Register on December 5, 1996(61 FR 64475). The guidance clarifiesthe order in which the Service willprocess rulemakings following tworelated events—1) The lifting, on April26, 1996, of the moratorium on finallistings imposed on April 10, 1995 (Pub.L. 104–6), and 2) the restoration offunding for listing through passage ofthe Omnibus Budget Reconciliation lawon April 26, 1996, following severefunding constraints imposed by anumber of continuing resolutionsbetween November 1995 and April1996. The guidance calls for givinghighest priority to handling emergencysituations (Tier 1) and second highestpriority (Tier 2) to resolving the listingstatus of the outstanding proposedlistings. This final rule falls under Tier2. At this time there are no pending Tier1 actions. This rule has been updated toreflect any changes in distribution,status and threats since the effectivedate of the listing moratorium. Thisadditional information was not of anature to alter the Service’s decision tolist the species.

Summary of Comments andRecommendations

In the May 10, 1994, proposed rule(59 FR 24106) and associatednotifications, all interested parties wererequested to submit factual reports orinformation that might contribute to thedevelopment of a final rule. AppropriateFederal and State agencies, countygovernments, scientific organizations,The Nature Conservancy, and otherinterested parties were contacted andrequested to comment. The Servicepublished newspaper notices in TheSeattle Times, The Olympian, TheWhidbey News Times, The CentraliaChronicle, and The Journal of the SanJuan Islands on July 13, 1994, invitinggeneral public comment. Elevencomments, including those of oneFederal agency (National Park Service),one State agency (WashingtonDepartment of Natural ResourcesNatural Heritage Program), one countyagency, three conservationorganizations, one university, twoCanadian agencies, and two individuals,were received during the open commentperiod. All commenters supported thelisting of Castilleja levisecta under theEndangered Species Act.


Several commenters providedinformation on the status of variouspopulations of Castilleja levisecta thatupdated the information presented inthe proposed rule. That information hasbeen incorporated into the Backgroundand Summary of Factors sections of thisfinal rule. The primary issue of concernraised by commenters is the Service’sintent to list this species as threatenedrather than endangered. The fivecommenters that raised this issue allbelieve that endangered designationmore accurately reflects the status of C.levisecta. Several arguments wereexpressed to support the contention thatendangered status is warranted forCastilleja levisecta. Commenters statedthat few populations of this species canbe considered secure, even thoughseveral sites are designated as preservesor parks; the 2 populations at Fort CaseyState Park and the Bocker property havedocumented declines; 5 privatelyowned sites (False Bay, Davis Point,Bocker property, Ebey’s Landing, andWest Beach) have the potential fordevelopment; populations in BritishColumbia, Canada, should not beassumed to be secure because theService has little if any influence overhow these populations are managed; thenumber of populations is down from atleast 30 to only 10; and sites with fewerthan 10 to 30 plants likely are not viablepopulations. The Service responds tothe issue of preferred status as follows.

The Service considered several factorsin proposing threatened status forCastilleja levisecta, including thenumber of populations, number ofplants, rate of decline, distribution ofthe populations, current management ofpopulations, and availability oftechniques for reversing the decline.Castilleja levisecta was historicallyreported from more than 30 sites inWashington, Oregon, and BritishColumbia; today 10 sites are extant.These 10 sites are distributed in 3counties in Washington and two islandsin British Columbia, Canada. Five of the10 extant populations contain 1,000 ormore plants. Though 2 populations havedeclined in number by over 50 percentin the last decade, 2 populations containhigher numbers of plants than reportedin the proposed rule. Activemanagement to benefit C. levisecta isoccurring at 4 sites (Rocky Prairie, FortCasey, Forbes Point and West Beach).The Service agrees that designation ofsites as preserves or parks does not inand of itself guarantee the reduction orremoval of threats to a species such asC. levisecta. However, thesedesignations do afford some level ofprotection against certain threats such

as destruction of habitat, and canprovide greater potential forimplementing conservation measures tobenefit the plant. With half thepopulations containing significantnumbers of plants (i.e., 1,000 or greater),and the distribution spread acrossseveral counties in the United Statesand into southwestern Canada, theService believes that threatened status isappropriate for C. levisecta.

Peer ReviewThe Service solicited the expert

opinions of appropriate andindependent specialists regardingpertinent scientific or commercial datarelating to the biological and ecologicalinformation for Castilleja levisecta.Comments provided by John Gamon andJane Wentworth, botanists with theWashington Department of NaturalResources’ Natural Heritage Programwere incorporated into the final rule.Mr. Gamon and Ms. Wentworthprovided information supporting theposition of the Service that C. levisectawas threatened by several factors at eachoccurrence of the species found inwestern Washington. Dr. GeorgeDouglas, Director, Conservation DataCenter, Victoria, British Columbia,provided information supporting theposition of the Service that C. levisectawas facing several threats at the twooccurrences found in British Columbia,Canada.

Summary of Factors Affecting theSpecies

After a thorough review andconsideration of all informationavailable, the Service has determinedthat Castilleja levisecta should beclassified as a threatened species.Procedures found at section 4 of theEndangered Species Act (16 U.S.C.1533) and regulations implementing thelisting provisions of the Act (50 CFRpart 424) were followed. A species maybe determined to be an endangered orthreatened species due to one or moreof the five factors described in section4(a)(1). These factors and theirapplication to C. levisecta Greenman(golden paintbrush) are as follows:

A. The present or threateneddestruction, modification, orcurtailment of its habitat or range.Historic loss of prairie and grasslandhabitat in the Puget Trough has reducedthe range of Castilleja levisecta, andhabitat loss continues to be the primarythreat to remaining populations.Currently, encroachment by native andalien woody species, as discussed inmore detail under Factor E, is theprimary cause of this habitatmodification.

Development for residential orcommercial use is a potential threat atfive of the privately owned sites, FalseBay, Davis Point, Bocker property,Ebey’s Landing and West Beach. Thethree sites on Whidbey Island (Bockerproperty, Ebey’s Landing and WestBeach) are zoned for residentialdevelopment (County Planning, IslandCo. pers. comm. 1996). The site on SanJuan Island (False Bay) is designatedrural (Planning Department, San JuanIsland County, pers. comm. 1996),indicating that the area is dominated byagricultural, forestry and recreationaluses and can be used for the extractionof sand, gravel, and mineral deposits.This designation also allows residentialdevelopment. The Davis Pointpopulation on Lopez Island is‘‘designated conservancy’’ (PlanningDepartment, San Juan Island County,pers. comm., 1996), which allows theconstruction of homes and themanagement of resources on asustained-yield basis. Although noplans for development have beeninitiated at these sites, the habitat forthese populations remains vulnerable tothreats from adjacent areas that receivehigh human use (see Factor E for a moredetailed discussion), and to thepotential for development on theseprivately owned sites.

In recent history (since 1850), thesuppression of fire has played a criticalrole in the reduction of grassland habitatin the Puget Trough (Kruckeberg 1991)and, therefore, in the reduction innumbers and sizes of Castilleja levisectapopulations. In contrast, a large, highintensity fire at any of the remainingsites where C. levisecta occurs mayeliminate populations, although theService is unaware of permanentextirpations of this species due to fire.

Loss of suitable habitat from eitherencroachment of woody species ordevelopment in the areas surroundingthe disjunct populations preventsexpansion of the species and affords norefugia in the case of catastrophic eventsthat affect existing populations. Becausethe grassland habitat in the areassurrounding the existing populationshas been lost, it is doubtful that thepopulations would expand naturally.Thus, the continued existence ofCastilleja levisecta is threatened by theabsence of available habitat forrecruitment and colonization.

B. Overutilization for commercial,recreational, scientific, or educationalpurposes. Castilleja levisecta has noknown commercial use. Because of itsshowy golden-yellow bracts, C. levisectais vulnerable to picking and collectionat public sites. Fort Casey State Park,Bocker property, and Forbes Point are


sites with high levels of public usewhere collection and/or trampling arethreats (see Factor E). For example, FortCasey State Park receives a high amountof recreational use, and the potential forovercollection is considered a genuinethreat. Visitor use has increased withinthe last decade, and park users havebeen observed picking the floweringplant (K. Hageman, pers. comm. 1994).Once numbering over 500 plants(Hageman, pers. comm. 1994; Krause, inlitt. 1994), the Fort Casey State Parkpopulation had declined toapproximately 230 individuals by 1995(J. Gamon 1995; Krause, in litt. 1994).Castilleja levisecta may becomevulnerable to collection by concernedcitizens, amateur botanists and thegeneral public as a result of increasedpublicity following publication of thefinal rule.

C. Disease or predation. Disease is notknown to be a factor threateningCastilleja levisecta. Populations mayhave been reduced from historical levelsby grazing by livestock and rabbits(Sheehan and Sprague 1984, Gamon1995, J. Wentworth, pers. comm. 1996).Grazing of the flowering stems of C.levisecta, probably by rabbits and/ordeer, has been observed at the Bockerproperty. Though the effect is unknown,presumably grazing affects seed numberand reproductive viability (K.Ludemann, pers. comm. 1991; J.Wentworth, pers. comm. 1996)).Livestock and exotic feral rabbits alsograze the False Bay population (Sheehanand Sprague 1984). In 1990 and 1991 atthe Forbes Point site, Klope (pers.comm. 1996) observed heavy predationon herbaceous material and seeds byrodents. Grazing also was noted atForbes Point in 1984 and 1985 (Clampitt1985), which may be reducing thereproductive potential at that site. AtFort Casey State Park, all floweringstems of a small colony of C. levisectawere eaten by rabbits during the springof 1996, thus eliminating seed set andreproduction for the current year (J.Wentworth, pers. comm. 1996).

The Rocky Prairie Natural AreaPreserve population of Castillejalevisecta has historically harbored apopulation of the Whulge checkerspotbutterfly (Euphydryas editha taylori), aState sensitive species that is a potentialseed predator. Because C. levisecta isnot a specific host and no individualbutterflies were observed at the site in1991, the threat is likely low (M.Sheehan, pers. comm. 1991; F. Krause,The Nature Conservancy, pers. comm.1996). Insect larvae have been observedfeeding on inflorescences (floweringparts) of C. levisecta (Gamon 1995).Although several species of caterpillar

were known to prey on C. levisecta(Sheehan and Sprague 1984, Evans et al.1984), they are not believed to currentlypose a threat (J. Wentworth, pers. comm.1996).

Predation (grazing and seedpredation) by native species is one ofthe natural pressures historically facedby Castilleja levisecta, but populationsthat have been reduced or stressed dueto other factors are more vulnerable todecline and are less able to reboundafter periods of heavy predation.

D. The inadequacy of existingregulatory mechanisms. Currently, noregulatory mechanism provides for theprotection of Castilleja levisecta or itshabitat. Castilleja levisecta is listed asendangered by the Washington NaturalHeritage Program (Washington NaturalHeritage Program 1994). However, noState Endangered Species Act exists forplants in Washington and no legalprotection is provided by theWashington Natural Heritage Programlisting classification of endangered. Theprovince of British Columbia uses TheNature Conservancy’s rating system andhas designated C. levisecta as a categoryG1S1 species (critically imperilled dueto extreme rarity or because ofvulnerability to extinction, and withtypically less than 5 occurrences) (G.Douglas, pers. comm. 1996). Four sitesare included among the Natural HeritageProgram’s Registry of Natural Areas(Laura Smith, Associate Director, TheNature Conservancy, Washington StateOffice, pers. comm. 1996). All of thesedesignations are important because theyrecognize the sensitive status of thespecies and encourage private landowners and management agencies toconsider the species in managementplans; however, they provide no legalprotection. Therefore, changing landmanagement priorities or inadequatefunding for protection could leave thespecies vulnerable at several of the sites.

The Rocky Prairie Natural AreaPreserve population has the highestlevel of protection of the 10 sites. ThisState-owned site has been activelymanaged to eliminate alien species,including the use of prescribed burningand hand removal of invasive plants.Seven acres of the encroaching Douglas-fir (Pseudotsuga menziesii) weredirectionally felled and removed fromRocky Prairie during the winter of 1996.This effort was accomplished through acooperative agreement between theService’s Washington State EcosystemsConservation Program and theWashington Department of NaturalResource’s Natural Heritage Program.Despite these efforts to restore prairiecomposition and structure by reducingshade onto the site and improve the

conditions of the native prairie habitat,continued funding of restoration cannotbe assured. Additionally, efforts by theWashington Department of NaturalResources to eliminate the invasiveCytisus scoparius (Scotch broom) andHieracium pilosella (mouse-earhawkweed) at this site are voluntary andnot statutorially required. Thispopulation continues to face threatsfrom invasion of woody species.

Another publicly-owned populationoccurs in Fort Casey State Park. Parkmanagers have implemented vegetationmanagement measures (mowing,clipping and removing vegetation) toimprove the conditions of the grasslandhabitat, and protective measures(fencing) to restrict trampling theCastilleja levisecta plants. However, theplant continues to be vulnerable toencroaching vegetation, picking (seeFactor B), trampling, grazing and seedpredation.

The Forbes Point population occurson Federal land at Whidbey IslandNaval Air Station. The Department ofDefense is participating in theWashington Registry of Natural AreasProgram. A Navy staff biologist hasundertaken measures to evaluate thestatus of the population. Efforts havealso been made to eradicate someinvasive non-native species. A fence hasbeen constructed to restrict peopletrampling or picking the plants and tokeep rabbits from browsing Castillejalevisecta; however, rodents still enterthe fenced area and consume seed (M.Klope, pers. comm. 1996). Signs havebeen erected designating the site as aresearch area, but the Navy does notprohibit public use of this site, whichreceives occasional foot trafficassociated with a nearby popular beach(M. Klope, pers. comm. 1996).

The populations of Castilleja levisectaat Ebey’s Landing and the Bockerproperty are also listed on theWashington Registry of Natural Areas.Ebey’s Landing is on private propertywithin the designated boundary ofEbey’s Landing National HistoricReserve. The Bocker property, owned bySeattle Pacific University, is currentlymanaged as a natural area used foreducation purposes with no activemanagement to retain grassland habitat.The Bocker property is also locatedwithin the designated boundary ofEbey’s Landing National HistoricReserve. Although C. levisecta isconsidered in the current managementof the Historic Reserve, management isnot specifically directed toward thelong-term conservation of the plant. Asa result, the population is threatened bypredation and invasion of nativeDouglas-fir and alien woody plants.


Ebey’s Landing, Bocker property, WestBeach, Davis Point, and False Baypopulations of the species are on privateproperty and receive no legal protection.

The Ebey’s Landing National HistoricReserve was established by thecombined efforts of the local landowners, the National Park Service, andthe U.S. Congress to give recognition tothe local land owners for maintainingtheir dwellings and landscapes in aspecific historic fashion. The HistoricReserve designation serves as a form ofcovenants that restrict the type oflandscaping and architectural designused for the maintenance or remodelingof any existing structures or theconstruction of new structures withinEbey’s Landing National HistoricReserve. The National Historic Reservedesignation does not prohibitdevelopment or extraction of naturalresources and provides no protection forbiological resources. The National ParkService’s jurisdiction over Ebey’sLanding National Historic Reserve isonly advisory in nature and is limitedto providing technical assistance toState and local governments and localland owners in the management,protection, and interpretation of theHistoric Reserve (Gretchen Luxenberg,National Park Service, pers. comm.1997; Curt Soper, Director of AgencyRelations, The Nature Conservancy,pers. comm. 1997; Stacey Tucker, IslandCounty Planning and CommunityDevelopment Department, pers. comm.1997).

The Castilleja levisecta populations inCanada receive no regulatory protection.Legislation to protect endangeredspecies has been proposed to the BritishColumbia government, but currently noFederal or Provincial law protectssensitive species. The Trial Islands,offshore from the city of Victoria, aredesignated as an Ecological Reserve bythe British Columbia Ministry of Parks.The small population at Alpha Islet alsois located within a designatedEcological Reserve. Ecological Reservesare protected areas that generallyrequire permits for entry and do notallow consumptive activities, like plantcollection or other activities destructiveto resources (L. Ramsey, ConservationData Center, Ministry of Environment,Lands and Parks, British Columbia,pers. comm. 1997). However, theEcological Reserve designation does notrequire specific managementrecommendations for the plant. Becausethis designation is an administrativeone, it could potentially be reversed byadministrative decision, and the sitecould be used for other purposes (G.Douglas, pers. comm. 1996).

In summary, most populations occurin areas designated as reserves or parks;4 sites receive active management tobenefit the species and help preventhabitat destruction. However, habitatmanagement for Castilleja levisecta isnot assured nor coordinated among thevarious population sites.

E. Other natural or manmade factorsaffecting its continued existence.Grassland habitat has historically beenmaintained by periodic fires thatprevented encroachment of woody plantspecies (Sheehan and Sprague 1984; J.Agee, pers. comm. 1996). Firesuppression in recent years has led toinvasion of grasslands by native speciessuch as Douglas-fir, Rosa sp. (wild rose),and Berberis aquifolium (barberry).Encroachment by alien species such asCytisus scoparius and Hieraciumpilosella also occurs. These species areinvasive and can dominate some areasand compete with Castilleja levisecta forspace, light, and nutrients.

Interspecific competition is a seriousthreat to the continued existence ofCastilleja levisecta. Loss of grasslandhabitat due, in part, to invasion ofwoody species threatens the plant at theRocky Prairie Natural Area Preserve (J.Wentworth, pers. comm. 1996; Krause,in litt. 1994; Sheehan, in litt. 1994),Bocker property (K. Ludemann, pers.comm. 1991; Krause, in litt. 1994;Sheehan, in litt. 1994; J. Wentworth,pers. comm. 1996), Ebey’s Landing (JimLarson, Chief, Division of NaturalResources, National Park Service, pers.comm. 1991; J. Gamon pers. comm.1996), West Beach (M. Mills, pers.comm. 1996; Krause, in litt. 1994;Sheehan, in litt. 1994), and Forbes Point(M. Klope, pers. comm. 1996; Krause, inlitt. 1994; Sheehan, in litt. 1994) sites.Castilleja levisecta cannot survive undera closed canopy, such as that formed byDouglas-fir, wild rose, barberry and thealien Cytisus scoparius. Those speciesmay also outcompete C. levisecta forroot space and nutrients (Sheehan andSprague 1984). The species appears tobe unable to compete successfullyagainst species that tend towardmonoculture (J. Gamon, pers. comm.1996).

Four populations of Castillejalevisecta on Whidbey Island (Fort CaseyState Park, Forbes Point, Bockerproperty, and West Beach) are alsothreatened with tree and/or shrubsuccession. If left unchecked,encroachment of wild rose and Rubussp. (blackberry) will eliminate thepopulation at the West Beach site (M.Mills, pers. comm. 1996). Clampitt(1985) noted the encroachment ofseveral aggressive plants into C.levisecta habitat at Forbes Point, like

blackberry, Vicia sp. (vetch), andTrifolium sp. (clover). Invasive shrubsand Douglas-fir, which shades out C.levisecta, are competing with C.levisecta at the Bocker property site.Numbering over 1,200 individuals in1984, the population had declined to295 individuals by 1995 (J. Gamon1995).

While fire may improve the grasslandhabitat for Castilleja levisecta, theimpacts associated with fire preventionmay be a threat. An example of this tookplace August 9–11, 1996, in ThurstonCounty, Washington. A fire was ignitedfrom the spark of a train that runsadjacent to Rocky Prairie. The fireburned grasses and shrubs for greaterthan 10 miles of the railroad right-of-way and emergency vehicles wereactivated to suppress the fire. To accessthe fire adjacent to Rocky Prairie, thefence surrounding Rocky Prairie NaturalArea Preserve was cut at two locationsto allow access of fire preventionvehicles. Vehicles ran directly over aportion of the C. levisecta population,breaking and compacting individualplants. Damage to plants and habitat areoften the result of the fire suppressionactivities associated with wildfires(James Agee, pers. comm. 1996).

Trampling by recreationists maythreaten the plant at Fort Casey StatePark on Whidbey Island where pathshad been worn into the soil and passdirectly through a Castilleja levisectapopulation. A decorative fence erectedin 1995 partially restricts foot trafficthrough the C. levisecta population andtrampling by the public at this site hasbeen reduced (J. Gamon, pers. comm.1996), although invasion by wild roseremains a threat. The few plants thatformerly occurred in Beacon HillMunicipal Park in Victoria were locatedin a heavily used area of the park.Trampling by the public may havecontributed to the species extirpation atBeacon Hill (G. Douglas, pers. comm.1996).

None of the private ownerships havebeen fenced or are otherwise protected.The West Beach occurrence of Castillejalevisecta is surrounded by beach fronthomes and foot traffic passes throughthe population to access the beach.Adjacent property owners maintaintheir lawns with fertilizers andherbicides. Aerial drift from thesechemical treatments that come incontact with C. levisecta is a potentialthreat. Across Fort Casey Road fromseveral new homes, the population onthe Bocker property is threatened byfoot traffic. At False Bay, several footpaths have been established through thepopulation and individual plants havebeen trampled. The only access to the


beach from the resort at False Bay isthrough the population. At Davis Point,C. levisecta is found on a small patchwithin a 30-acre overgrown lot; pasturegrasses and wild rose are abundant andthreaten to overtake C. levisecta. Thissite has not been managed and the C.levisecta population has declined fromabout 100 plants prior to 1994 to 4individuals in 1996 (Wentworth 1996).The Ebey’s Landing occurrence isadjacent to a road on a steep hillslopeoverlooking the ocean. Erosion andslumping have occurred on the slopeand potentially threaten the species atthis location. Ebey’s Landing is arecreation area with foot paths leadingto the plants and trampling has beendocumented (Jane Wentworth, pers.comm. 1997).

The Service has carefully assessed thebest scientific and commercialinformation available regarding the past,present, and future threats faced by thisspecies in determining to list Castillejalevisecta as threatened. Threats to C.levisecta include habitat modificationthrough succession of prairie andgrassland habitats to shrub and forestlands; development of property forcommercial, residential and agriculturaluse; low potential for expansion andrefugia due to constriction of habitat;recreational picking; and herbivory.

Several of the sites are designated aspreserves or afforded some level ofprotection from certain threats throughcurrent management efforts, and 50percent of the populations contain 1,000or more individuals. The Service,therefore, believes the species is notcurrently in danger of extinction.However, because the remainingpopulations are threatened by thechronic factors described above, likesuccessional modification and potentialdevelopment of its habitat, Castillejalevisecta is likely to become endangeredwithin the foreseeable future throughoutall or a significant portion of its range.The species, therefore, fits the definitionof threatened as defined by the Act.Critical habitat is not being proposed forthis species for reasons discussed in theCritical Habitat section of this rule.

Critical HabitatSection 4(a)(3) of the Act, as

amended, requires that, to the maximumextent prudent and determinable, theSecretary designate critical habitatconcurrently with determining a speciesto be endangered or threatened. TheService finds that designation of criticalhabitat is not prudent for this species.Such a determination would provide noadditional protection to Castillejalevisecta and could increase the degreeof threat to the species. As discussed

above under Factor B in the Summaryof Factors Affecting the Species, C.levisecta is vulnerable to collecting.Publication of precise maps and criticalhabitat descriptions in the FederalRegister would be likely to increase thedegree of threats from collecting andvandalism, and would increaseenforcement problems.

Critical habitat protections apply onlyto Federal actions and, therefore, criticalhabitat provides no protection forpopulations occurring on State orprivate land absent a Federal nexus. Inaddition, even where such a nexusoccurs, designation of critical habitatgenerally provides no additionalprotection beyond that provided bylisting. In particular, even though threepopulations of Castilleja levisectalocated within the administrativeboundary of Ebey’s Landing NationalHistoric Reserve (the first population ison private property, the secondpopulation is on State park land, andthe third population is owned by SeattlePacific University), the enablinglegislation (National Parks andRecreation Act, 1978, P.L. 95–625,section 508) that established Ebey’sLanding National Historic Reserve doesnot provide the National Park Servicethe authority to manage biologicalresources on the private or Stateproperty within this National HistoricReserve. The National Park Service’sjurisdiction over Ebey’s LandingNational Historic Reserve is onlyadvisory in nature (G. Luxenberg,National Park Service, pers. comm.1997).

Critical habitat receives considerationunder section 7 of the Act with regardto actions carried out, authorized, orfunded by a Federal agency. As such,designation of critical habitat may affectnon-Federal lands only where such aFederal nexus exists. Federal agenciesmust insure that their actions do notresult in destruction or adversemodification of critical habitat. Asidefrom this added consideration undersection 7, the Act does not provide anyadditional protection to landsdesignated as critical habitat.Designating critical habitat does notcreate a management plan for the areaswhere the listed species occurs; doesnot establish numerical populationgoals or prescribe specific managementactions (inside or outside of criticalhabitat); and does not have a directeffect on areas not designated as criticalhabitat.

In addition, all involved parties andlandowners have been notified of theimportance of the species’ habitat.Protection of its habitat can beaddressed through the recovery and

section 7 consultation processes.Therefore, the Service finds thatdesignation of critical habitat forCastilleja levisecta is not prudent at thistime, because a designation wouldincrease the threat posed by taking (i.e.,vandalism, collection) and other humanactivities, and because the designationof critical habitat would not bebeneficial to the species.

Available Conservation MeasuresConservation measures provided to

species listed as endangered orthreatened under the Act includerecognition, recovery actions,requirements for Federal protection, andprohibitions against certain activities.Recognition through listing canencourage and result in conservationactions by Federal, State, and privateagencies, groups, and individuals.Recovery efforts encouragecommunication and cooperative effortsamong various land managers andowners. The Act provides for possibleland acquisition and cooperation withthe State and requires that recoveryactions be carried out for all listedspecies. Funding may be availablethrough section 6 of the Act for the Stateto conduct recovery activities. This mayassist in protection and recovery effortsat Rocky Prairie Natural Area Preserveand Fort Casey State Park, sites ownedby the State of Washington. Theprotection required by Federal agenciesand prohibitions against certainactivities involving listed plants arediscussed, in part, below.

Section 7(a) of the Act, as amended,requires Federal agencies to evaluatetheir actions with respect to any speciesthat is proposed or listed as endangeredor threatened. Regulationsimplementing this interagencycooperation provision of the Act arecodified at 50 CFR part 402. Section7(a)(2) of the Act requires Federalagencies to insure that activities theyauthorize, fund, or carry out are notlikely to jeopardize the continuedexistence of a listed species. If a Federalaction may affect a listed species,regardless of whether the activity occurson Federal or non-Federal lands, theresponsible Federal agency must enterinto formal consultation with theService. The population of Castillejalevisecta at Forbes Point occurs onFederal land at Whidbey Island NavalAir Station. Federal actions there wouldbe subject to section 7 requirements.The National Park Service administersEbey’s Landing National HistoricReserve, where three populations of C.levisecta are located on private lands.The National Park Service’s jurisdictionover the Reserve is advisory in nature.


However, in the event the National ParkService funded or carried out anyactivities that may affect the species, itwould be required to consult with theService. In addition, sections 2(c)(1) and7(a)(1) of the Act require Federalagencies to utilize their authorities infurtherance of the purposes of the Actto carry out conservation programs forendangered and threatened species.

The Act and implementingregulations found at 50 CFR 17.71 and17.72 set forth a series of generalprohibitions and exceptions that applyto all threatened plants. With respect toCastilleja levisecta, all tradeprohibitions of section 9(a)(2) of the Act,implemented by 50 CFR 17.61, wouldapply. These prohibitions, in part, makeit illegal any for any person subject tothe jurisdiction of the United States toimport or export endangered orthreatened plants; transport any suchplant in interstate or foreign commercein the course of a commercial activity;sell or offer for sale such species ininterstate or foreign commerce; removeand reduce such species to possessionfrom areas under Federal jurisdiction.Seeds from cultivated specimens ofthreatened plant species are exemptfrom these prohibitions provided that astatement of ‘‘cultivated origin’’ appearson their containers. Certain exceptionsapply to agents of the Service and Stateconservation agencies. The Act and 50CFR 17.62, 17.63 and 17.72 also providefor the issuance of permits to carry outotherwise prohibited activitiesinvolving endangered and threatenedplant species under certaincircumstances. It is anticipated that fewtrade permits would ever be sought orissued because the species is notcommon in cultivation or in the wild.

The proposal incorrectly stated thatthe Act prohibits any person fromremoving, cutting, digging up,damaging, or destroying any endangeredor threatened plant on areas that are notunder Federal jurisdiction in knowingviolation of any State law or regulationor in the course of any violation of aState criminal trespass law. Thisprohibition under section 9(a)(2)(B)currently applies only to plant specieslisted as endangered. Section 4(d) of theAct allows for the provision of suchprotection to threatened plants throughregulation. This protection may apply tothreatened plants including Castillejalevisecta in the future if regulations arepromulgated.

It is the policy of the Service (59 FR34272) to identify to the maximumextent practicable at the time a speciesis listed those activities that would orwould not constitute a violation ofsection 9 of the Act. Such informationis intended to clarify the potential

impacts of a species’ listing on proposedand ongoing activities within the rangeof the species. In the case of Castillejalevisecta, unauthorized collection atForbes Point would constitute aviolation of section 9 because this siteis under Federal jurisdiction; collectionoccuring under a Federal threatenedspecies permit for scientific or recoverypurposes would not result in a violationof section 9. Collection or destruction ofC. levisecta on private or other non-Federal lands are not a violation ofsection 9. However, when a projectoccurring on non-Federal lands requiresFederal authorization, funding orpermiting and the project may affectlisted species, including listed plants,the action agency must consult with theService under section 7 of the Act toensure that the Federal action (e.g.,issuance of a Federal permit) will notjeopardize the survival of the species.Absent a Federal action, the Act doesnot provide protection to threatenedplants on private lands. Questionsregarding whether specific activitieswill constitute a violation of section 9should be directed to the Supervisor,Western Washington Office, NorthPacific Coast Ecoregion, U.S. Fish andWildlife Service, 510 Desmond Drive,S.E., Suite 101, Lacey, Washington98503–1273, telephone 360/753–9440.

Requests for copies of the regulationson plants and inquiries regarding them,including permits, may be addressed tothe U.S. Fish and Wildlife Service,Ecological Services, Endangered SpeciesPermits, 911 NE 11th Avenue, Portland,Oregon 97232–4181, telephone 503/231–2063.

Required DeterminationsThe Fish and Wildlife Service has

determined that EnvironmentalAssessments and Environmental ImpactStatements, as defined under theauthority of the National EnvironmentalPolicy Act of 1969, need not beprepared in connection with regulationsadopted pursuant to section 4(a) of theEndangered Species Act. A noticeoutlining the Service’s reasons for thisdetermination was published in theFederal Register on October 25, 1983(48 FR 49244).

The Service has examined thisregulation under the PaperworkReduction Act of 1995 and found it tocontain no information collectionrequirements.

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Northwest Forests. Island Press. 493 pp.Clampitt, C. 1985. Report: Census of

Castilleja levisecta population at ForbesPoint. Prepared for L. Smith, The NatureConservancy, Washington Field Office,Seattle, Washington. 4pp.

Evans, S., R. Schuller, and E. Augenstein.1984. A report on Castilleja levisectaGreenman at Rocky Prairie, ThurstonCounty, Washington. Unpubl. Report toThe Nature Conservancy, WashingtonField Office, Seattle, Washington. 56pp.

Gamon, J. G. 1995. Report on the status ofCastilleja levisecta (Greenman).Washington Natural Heritage Program,Department of Natural Resources,Olympia, Washington. 55pp.

Gamon, J. 1993. Castilleja levisecta WithinEbey’s Landing National HistoricReserve: A report on the current status ofthe species, including preliminarymanagement recommendations.Washington Natural Heritage Program,Department of Natural Resources,Olympia, Washington. 7pp.

Goodman, D. 1987. The demography ofchance extinction. Pages 11–34 in M.E.Soule’, editor. Viable populations forconservation. Cambridge UniversityPress, Cambridge, England.

Greenman, J.M. 1898. Some new and othernoteworthy plants of the PacificNorthwest. Bot. Gaz. 25:261–269.

Heckard, L.R. 1962. Root parasitism inCastilleja. Bot. Gaz. 124:21–29.

Hitchcock, C.L., and A. Cronquist. 1973.Flora of the Pacific Northwest. Univ. ofWashington Press, Seattle.

Kruckeberg, A.R. 1991. The Natural Historyof the Puget Sound Country. Universityof Washington Press, Seattle,Washington.

Ryan, M. and G. W. Douglas. 1994. Statusreport on the golden paintbrushCastilleja levisecta Greenm.Unpublished, draft report prepared bythe British Columbia Ministry ofEnvironment, Lands and Parks. Victoria,B.C.

Sheehan, M., and N. Sprague. 1984. Reporton the status of Castilleja levisecta.Unpubl. Report submitted to the U.S.Fish and Wildlife Service, Portland,Oregon. 82pp.

Washington Natural Heritage Program. 1994.Endangered, threatened and sensitivevascular plants of Washington.Department of Natural Resources,Olympia. Second printing. 52pp.

Wentworth, Jane. 1994. The demography andpopulation dynamics of Castillejalevisecta, an endangered perennial.Unpublished Master’s thesis. Universityof Washington. 53pp.

Wentworth, J. 1996. Conservationrecommendations for Castilleja levisectain Washington. Washington NaturalHeritage Program, WashingtonDepartment of Natural Resources,Olympia, Washington.

Authors:

The authors of this final rule areLeslie Propp and Ted Thomas, U.S.


Fish and Wildlife Service (seeADDRESSES section).

List of Subjects in 50 CFR Part 17Endangered and threatened species,

Exports, Imports, Reporting andrecordkeeping requirements,Transportation.

Regulation PromulgationAccordingly, part 17, subchapter B of

chapter I, title 50 of the Code of Federal

Regulations, is amended as set forthbelow:

PART 17—[AMENDED]


Authority: 16 U.S.C. 1361–1407; 16 U.S.C.1531–1544; 16 U.S.C. 4201–4245; Pub. L. 99–625, 100 Stat. 3500, unless otherwise noted.

2. Section 17.12(h) is amended byadding the following, in alphabetical

order under Flowering Plants, to the Listof Endangered and Threatened Plants, toread as follows:

§ 17.12 Endangered and threatened plants.

* * * * *(h) * * *

SpeciesHistoric range Family Status When listed Critical

habitatSpecialrulesScientific name Common name

FLOWERING PLANTS

* * * * * * *Castilleja levisecta ... Golden paintbrush .. U.S.A. (OR, WA),

Canada (B.C.).Scrophulariaceae .... T 615 NA NA

* * * * * * *

Dated: May 16, 1997.Jay L. Gerst,Acting Director, U.S. Fish and WildlifeService.[FR Doc. 97–15245 Filed 6–10–97; 8:45 am]BILLING CODE 4310–55–P



50 CFR Part 17

RIN 1018–AC19

Endangered and Threatened Wildlifeand Plants; Threatened Status for theAlaska Breeding Population of theSteller’s Eider


SUMMARY: The U.S. Fish and WildlifeService (Service) determines the Alaskabreeding population of the Steller’seider (Polysticta stelleri) to bethreatened pursuant to the EndangeredSpecies Act of 1973, as amended. Thisdetermination is based upon asubstantial decrease in the species’nesting range in Alaska, a reduction inthe number of Steller’s eiders nesting inAlaska, and the resulting increasedvulnerability of the remaining breedingpopulation to extirpation. This ruleimplements the Federal protection andrecovery provisions of the Act for thisspecies. Critical habitat is not beingdesignated at this time.EFFECTIVE DATE: July 11, 1997.ADDRESSES: The complete file for thisrule is available for inspection, by

appointment, during normal businesshours at the Ecological ServicesFairbanks Field Office, U.S. Fish andWildlife Service, 101 12th Avenue, Box19, Fairbanks, Alaska, 99701, telephone(907) 456–0441 or facsimile (907) 456–0208.

FOR FURTHER INFORMATION CONTACT: TedSwem, Wildlife Biologist, at the aboveaddress (telephone (907) 456–0441).


Background

The Steller’s eider is the smallest offour eider species. It was first describedby Pallas in 1769 as Anas stelleri andwas subsequently grouped with theother eiders in the genus Somateria. TheSteller’s eider is now recognized as amonotypic genus, Polysticta stelleri(American Ornithologists’ Union 1983).

The adult male Steller’s eider has awhite head with a greenish tuft and asmall black eye patch, a black back,white shoulders, and a chestnut breastand belly with a black spot on each side.Adult females and juveniles are mottleddark brown. Both adult sexes have ablue wing speculum with a whiteborder. The Inupiat Eskimo name forthis eider is Iginikkauktuk and YupikEskimos call them Anarnissaguq. TheSiberian Yupik name used by residentsof St. Lawrence Island is Aglekesegak.

Steller’s eiders are sea ducks thatspend the majority of the year inshallow, near-shore marine waterswhere they feed by diving and dabblingfor molluscs and crustaceans (Petersen1980). Principal foods in marine areasinclude bivalves, crustaceans,polychaete worms, and molluscs

(Petersen 1980, Troy and Johnson 1987,Metzner 1993).

During the breeding season, Steller’seiders move inland in coastal areas,where they nest adjacent to shallowponds or within drained lake basins(King and Dau 1981, Flint et al. 1984,Quakenbush and Cochrane 1993). Ininland areas, their diet includes aquaticinsects (primarily chironomid larvae),plant materials, crustaceans, andmollusks (Cottam 1939, Quakenbushand Cochrane 1993).

The current breeding distribution ofthe Steller’s eider encompasses thearctic coastal regions of northern Alaskafrom Wainwright to Prudhoe Bay up to90 kilometers (km)(54 miles) inland(King and Brackney 1993), and Russiafrom the Chukotsk Peninsula west to theTaimyr, Gydan and Yamal peninsulas(American Ornithologists’ Union 1983,Yesou and Lappo 1992). Actualnumbers nesting in Alaska and Russiaare unknown but the majority ofSteller’s eiders nest in arctic Russia(Palmer 1976, Bellrose 1980).

After the nesting season, Steller’seiders return to marine habitats wherethey molt (Jones 1965; Petersen 1980,1981). Concentrations of moltingSteller’s eiders have been noted inRussia (Gerasimov in Kistchinski 1973),near St. Lawrence Island in the BeringSea (Fay 1961), and along the northernshore of the Alaska Peninsula (Jones1965; Petersen 1980, 1981). In someyears, groups of tens of thousands maymolt in the bays and lagoons along theAlaska Peninsula, in particular NelsonLagoon and Izembek Lagoon (Petersen1980). In other years, many of the birdscomplete their molt before arriving onthe Peninsula (Jones 1965). Band


recoveries show that both Russia andAlaska nesting Steller’s eiders cometogether to molt in southwesternAlaskan waters (Jones 1965).

During winter, most of the world’sSteller’s eiders concentrate along theAlaska Peninsula from the easternAleutian Islands to southern Cook Inletin shallow, near-shore marine waters(Palmer 1976). They also occur,although in lesser numbers, in thewestern Aleutian Islands and along thePacific coast, occasionally to BritishColumbia (Palmer 1976). A smallnumber also winter along the Asiancoast, from the Commander Islands tothe Kuril Islands (Palmer 1976), andsome are found along the north Siberiancoast west to the Baltic States andScandinavia (Dement’ev and Gladkov1967, Frantzen 1985, Petraitis 1991,Frantzen and Henricksen 1992). Inspring, large numbers concentrate inBristol Bay before migration; in 1992, anestimated 138,000 Steller’s eiderscongregated before sea ice conditionsallowed movement northward (Larnedet al. 1994).

Species Status, WorldwideThe status of Steller’s eiders

worldwide has been poorlydocumented. The species occursprimarily in Russia during the nestingseason, where few population censuseshave been conducted. The rest of theyear is spent in marine areas wherelarge-scale surveys are difficult andexpensive, and distribution varieswithin and among years in response toweather and other factors (Jones 1965).Therefore, the variance in repeatedcounts in specific areas is too high toidentify statistically significantpopulation trends (Robert Stehn, U.S.Fish and Wildlife Service, pers. comm.,1994). Also, relative to many otherwaterfowl species, Steller’s eiders havenot been an important sport orsubsistence species so have receivedless attention.

Although the factors mentioned abovehave contributed to the lack ofpopulation information, anecdotalobservations suggest that Steller’s eidernumbers may have been decliningrange-wide for a number of decades.Dement’ev and Gladkov (1952) reportedthat the enormous flocks wintering nearthe Commander Islands at the turn ofthe century were greatly reduced by the1930s. Similarly, Murie (1959) wrote ‘‘itis also clear that there has been a greatdiminution in numbers.’’

More recently, the number ofwintering Steller’s eiders may havedeclined along the Alaska Peninsula,where the majority of the worldwidepopulation winters (Larned et al. 1994).

Several biologists who have studied orcensused the species in this area believethat Steller’s eider numbers havedecreased, possibly to a considerabledegree, during the past few decades(Chris Dau, U.S. Fish and WildlifeService, pers. comm., 1994; Jim King,U.S. Fish and Wildlife Service, ret.,pers. comm., 1994; Margaret Petersen,National Biological Service, pers.comm., 1994; Robert Stehn, NationalBiological Service, pers. comm., 1994).However, disagreement exists as to thecertainty and extent of a populationdecline.

In summary, there is concern thatSteller’s eiders may be declining innumber range-wide, but the magnitudeof any change in population size isunknown because of a lack of precisepopulation estimates. The worldwidepopulation is still sizable; 138,000 werecounted in Bristol Bay in 1992 (Larnedet al. 1994), and it is likely that thiscount did not include the entireworldwide population. Thus, this ruledoes not include the entire range of thespecies but includes only those Steller’seiders that nest in Alaska.

Species Status, Alaska BreedingPopulation

Historically, Steller’s eiders nested inAlaska in two general regions: westernAlaska, where the species has beenessentially extirpated, and the NorthSlope, where the species still occurs. Inwestern Alaska, Steller’s eiders occurredprimarily in the coastal fringe of theYukon-Kuskokwim (Y–K) Delta, wherethe species was common at some areasin the 1920s, was still present in the1960s, but is virtually absent as abreeder today (Kertell 1991). On theNorth Slope, Steller’s eiders historicallyoccurred from Wainwright east, nearlyto the United States-Canada border(Anderson 1913, Brooks 1915). Thespecies may have abandoned the easternNorth Slope in recent decades, but itstill occurs at low densities fromWainwright to at least as far east asPrudhoe Bay.

Trends in Distribution—Informationon both historical and currentdistribution of Steller’s eiders in Alaskais limited. However, it is certain thatSteller’s eiders once nested over aconsiderably larger area in Alaska thanthey do now. Although the species nolonger nests on the Y–K Delta, earlyqualitative assessments indicated thespecies was ‘‘common’’ at severalcoastal sites in the central Y–K Delta(Murie 1924, Conover 1926, Brandt1943). Specifically, the species wasfound nesting near Kokechik Bay(Brandt 1943), along the Kokechik River(Murie 1924, Conover 1926), and near

Hooper Bay (Dufresne 1924).Additionally, Alaska Natives reportedthat large numbers nested on NelsonIsland in 1924 (Murie 1959) andGillham (1941) found them ‘‘inconsiderable number’’ in the intertidalreaches of the lower Kashunuk River in1941. No systematic searches wereconducted for Steller’s eiders on the Y–K Delta during this period, so the extentof their nesting distribution andabundance was never determined.

By the 1960s or 70s, the species hadlargely vanished from the Y–K Delta.Researchers (Johnsgard 1964, Kessel etal. 1964, Holmes and Black 1973) failedto find any nests in the Kokechik Bayarea in the 1960s, whereas the specieswas described as ‘‘surprisinglycommon’’’ in the area in 1924 (Brandt1943). Although pairs displayingnesting behavior were observed near theKashunuk River as late as 1973, no nestswere found in the area after 1963(Kertell 1991). Nesting was documentedalong the Opagyarak River in 1969 andagain in 1975; the single nest found in1975 was the last documented nestingattempt on the Y–K Delta (Kertell 1991)until a pair nested unsuccessfully nearthe Kashunuk River in 1994 (Paul Flint,National Biological Service, pers.comm., 1994).

Steller’s eiders also apparently nestedin low numbers in southwestern Alaska,on the Seward Peninsula, and on St.Lawrence Island. The species wasreported to nest ‘‘sparingly’’ on AgattuIsland in the western Aleutians in the1880s and a nest was found at Unalaskain the eastern Aleutians in 1872. A‘‘few’’ nested at the western end of theAlaska Peninsula in the 1880s or 1890s(Murie 1959). A single nest was foundon the Seward Peninsula in 1879(Portenko 1981) and a few nests werefound on St. Lawrence Island as late asthe 1950s (Fay and Cade 1959). Nonehave been found nesting in any of theseareas since. Apparently, Steller’s eidersnested in several widely scattered areasin western Alaska in addition to the Y–K Delta, but presumably in lownumbers, and they probably ceasednesting in these areas many years ago.

Near Barrow, at the northernmost tipof Alaska, Steller’s eiders still occurregularly, though not annually. In someyears, up to several dozen pairs maybreed in a few square kilometers. Thearea immediately surrounding Barrow isrelatively accessible, and bird studieshave been conducted there for decades.As a result, there are records of thespecies’ presence or absence from 1900(Stone 1900, in Gabrielson and Lincoln1959), 1958 (Myres 1958), and 1975–1981 (Myers and Pitelka 1975, Myers etal. 1976–1981). In 1991, more intensive


studies on the nesting biology,predation, and habitat selection ofSteller’s eiders in the area were initiated(Quakenbush et al. 1995). In contrast,elsewhere on the North Slope, thespecies apparently occurs at extremelylow densities over a huge area and useof specific areas appears to be irregular.Evidence of nesting elsewhere fromBarrow has been documented onlytwice in recent years; females withyoung were seen in 1993 near PrudhoeBay (Michele Johnson, University ofCalifornia, Davis, pers. comm., 1994)and in 1987 along the Colville River (T.Swem, unpubl. Service data). As aresult, the vast majority of bothhistorical and recent observations of thespecies on the North Slope come fromBarrow. While part of this distinctionmay be attributable to the differences inaccessibility and search effort betweenBarrow and elsewhere, it is also truethat Steller’s eiders seem to favor theBarrow vicinity. Unfortunately, becauseof the scarcity of observationselsewhere, it is currently impossible todetermine how important the Barrowarea is to the Alaska breedingpopulation as a whole.

Sightings made during extensiveaerial waterfowl breeding pair surveysprovide the most comprehensive viewof the distribution of Steller’s eiders onthe North Slope. Waterfowl are countedannually from systematically locatedtransects that sample approximately 2percent of the 63,210 sq km (24,404.12sq mi) of waterbird habitat on the arcticcoastal plain of Alaska between thenorthwest coast of Alaska and theAlaska-Canada border (Brackney andKing 1993). Between 1989 and 1995,Steller’s eiders were seen on 76 separateoccasions during these surveys, withsightings ranging from single birds up toflocks containing 20 individuals(Brackney and King 1993, King andBrackney 1995). All 76 sightings werewest of the Colville River or in theColville River drainage (Alan Brackney,U.S. Fish and Wildlife Service, pers.comm., 1994; Rod King, U.S. Fish andWildlife Service, pers. comm., 1995),indicating that the species currentlyoccurs predominantly in thenorthwestern portion of the NorthSlope. Within the large area in whichbirds were seen, sightings were widelydistributed and ranged up to about 90km (54 mi) inland from the coast.Despite the large area over whichsightings occurred, very few wereobserved. In 1993, for example, only 20of 2,617 ducks seen along 3,300 km(1,980 mi) of transects were Steller’seiders (Brackney and King 1993), an

average of one Steller’s eider per 165 kmof survey route.

In recent years, efforts have beenmade to search for eiders or, in somecases, specifically for Steller’s eiders, onthe North Slope. From 1992 to 1996,extensive aerial searches for nestingeiders were conducted on the arcticcoastal plain of the North Slope. Thesesearches sampled approximately 4percent of a 42,000 sq. km (16,215 sq.mi) area. A maximum of 12 Steller’seiders per year was recorded duringthese searches (Larned et al. 1992;Larned and Balogh 1994; Balogh andLarned 1994; Bill Larned, U.S. Fish andWildlife Service, in litt., 1995; B.Larned, pers. comm., 1996). In 1994, 59plots, 2.6 sq. km (1 sq mi) in size, wereintensively searched for Steller’s eidersfrom a helicopter in a 7,041 sq. km(2,718.39 sq. mi) area (Laing 1995); nonewere encountered. In 1995, intensiveaerial searches were conducted in twospecific areas, near Teshekpuk Lake andnear the mouth of the Chipp River,where Steller’s eiders have beenobserved previously; none wereobserved (Robert Ritchie, ABR Inc., inlitt., 1995). The low number of Steller’seiders observed during extensivesearches of suitable habitat andintensive searches of previouslyoccupied areas indicates that the speciesoccurs at extremely low densities on theNorth Slope.

Steller’s eiders have been observedrecently near Prudhoe Bay duringintensive eider searches conducted fromthe ground. Although the species wasnot recorded during the 1980s (North1990; Declan Troy, Troy EcologicalResearch and Associates, pers. comm.,1995), a few pairs were seen each yearbetween 1992 and 1994 (D. Troy, pers.comm., 1995), and a female with youngwas seen in 1992 (M. Johnson, pers.comm., 1994).

Observations of local residents andearly naturalists indicate that thespecies originally occupied the easternNorth Slope, whereas none have beenseen in this region for several decades.For instance—(1) Bill Patkotak, aresident of Wainwright, saw Steller’seiders near Collinson Point, CamdenBay in the 1930s, but none have beenseen in this area for many years; (2)Anderson (1913) recorded the species atBarter Island but none have beenreported there for many years; and (3)Brooks (1915) noted the species atDemarcation Bay but none have beenseen there since. It is unknown howwidespread or numerous the Steller’seider was throughout the eastern NorthSlope, but apparently the species hasabandoned this region in recentdecades.

In the central North Slope, Steller’seiders have also abandoned some localareas where they historically nested.Steller’s eiders nested near Cape Halkett(north of Teshekpuk Lake) in the 1940s,and bred commonly at Nikilik on theColville River Delta (P. Sovalik in Myres1958). Although these areas are withinthe broad region occupied by Steller’seiders, none have been seen in thesespecific areas for decades, despitecontinued observation (Jim Helmericks,pers. comm., 1995).

Trends in NumbersAlthough Steller’s eiders are seen and

counted during extensive waterfowlsurveys and breeding eider surveys,these observations cannot be used toprecisely estimate the number ofSteller’s eiders on the North Slope forthree reasons—1) the species-specificprobability of detecting Steller’s eidersduring aerial surveys has not beendetermined (Rod King, pers. comm.,1994), therefore it is impossible to usethe number of sightings in the areasampled to estimate the number of birdsactually present in the sample area; 2)so few Steller’s eiders are seen duringsurveys that confidence intervalsaround estimates of the total number inthe study area are extremely wide; and3) it is unknown whether Steller’s eidersare evenly or unevenly distributed, anddifferences in distribution greatly affectthe precision of population sizeestimates (Alan Brackney, pers. comm.,1995). As a result, no statisticallymeaningful population size estimatesare available for the North Slope.However, two waterfowl researcherswho have conducted extensive aerialwaterfowl surveys on the North Slope inrecent years subjectively estimate thathundreds to a few thousand Steller’seiders inhabit the region (Bill Larned,pers. comm., 1995; Rod King, pers.comm., 1995).

Since there are no reliable counts ofSteller’s eiders from which to calculatea trend, all conclusions about trendsmust be made by inferring that thenumber of Steller’s eiders decreased asthe species’ range in Alaska contracted.It is unknown how many Steller’s eidersnested historically on the Y–K Delta, butKertell (1991) estimated that amaximum of 3,500 pairs may havenested on the Delta. This estimate wasmade by extrapolating from the numbernesting in one sample plot in 1951 and1961–1966 to the entire vegetatedintertidal zone of the central Y–K Delta.This estimate could be biased, however,if the number in this study plot was notrepresentative of coastal areas in thecentral delta in general, or if numbers inthe 1960s were not representative of


historical population size. Regardless ofthe number occurring historically on thedelta, however, the number of Alaskabreeding Steller’s eiders decreased withits extirpation from western Alaska,including the Y–K Delta, the Aleutians,Alaska and Seward Peninsulas, and St.Lawrence Island.

Similarly, the number of Steller’seiders nesting on the North Slope hasalso likely decreased in recent decadesas a result of their abandonment ofseveral previously used nesting areas.Although birds using these areas couldhave shifted to other areas of the NorthSlope, there have been no indicationsthat numbers have increased in otherareas or that Steller’s eiders havecolonized previously unused areas inrecent decades.

Additionally, anecdotal observationssuggest that numbers may havedecreased in one area on the NorthSlope in which Steller’s eiders are stillfound. Inupiat elders from Wainwrightrecall that the species was common nearWainwright many years ago, whichcorresponds with the observations ofBailey (1948) and D. Bodfish (in Myres1958). Now, Steller’s eiders areconsidered rare near Wainwright andnone have been found nesting there forseveral years (Quakenbush 1993).

In addition to changes in distributionand numbers, anecdotal observationssuggest that Steller’s eiders may besuccessfully nesting in fewer locationsthan in previous decades. In recentdecades, nesting Steller’s eiders havebeen documented in only three areas—(1) at Barrow; (2) on the lower ColvilleRiver, where a female with young wasseen in 1987 (T. Swem, unpubl. data);and (3) near Prudhoe Bay, where afemale with young was seen in 1993 (M.Johnson, pers. comm., 1994). In earlierdecades, Steller’s eiders were foundnesting at Wainwright (Bailey 1948),inland on the Meade River (Bailey1948), Admiralty Bay (Reed 1965), at theconfluence of the Chipp and IkpikpukRivers (Bailey 1948), the mouth of theIkpikpuk River (nest and oologicalrecords from the Western Foundation ofVertebrate Zoology), the TopagurukRiver (Bee 1958), and Pitt Point(Gabrielson and Lincoln 1959).Although birds have been detected inthese general areas in recent years, nonests have been found despiteincreasing interest in the species.Breeding may resume in these areas;Steller’s eiders near Barrow showconsiderable annual variation inreproductive effort and performance(Myers and Pitelka 1975a,b; Myers et al.1977–1981; Quakenbush et al. 1995, L.Quakenbush, U.S. Fish and WildlifeService, pers. comm., 1996).

In summary, the breeding range ofSteller’s eiders in Alaska has contractedin recent decades. The species no longernests on the Y–K Delta or other areas inwestern Alaska, and is now foundexclusively on the North Slope.Breeding range on the North Slope mayalso have contracted. Apparently thespecies is no longer found in areashistorically occupied on the easternNorth Slope and in at least two otherareas on the central North Slope.Current and historical population sizesremain unknown, but overall numbershave likely declined. Steller’s eidersstill occur over a large area on the NorthSlope, but at such low densities thatonly hundreds or a few thousandoccupy the huge expanse of seeminglysuitable habitat. Although dozens ofpairs periodically nest near Barrow,only two nests have been documentedelsewhere on the North Slope in recentyears.

Petition BackgroundOn December 10, 1990, the Service

received a petition from Mr. James G.King of Juneau, Alaska, dated December1, 1990, to list the Steller’s eider asendangered throughout its range and todesignate critical habitat on the YukonDelta National Wildlife Refuge and theNational Petroleum Reserve in Alaska.Pursuant to section 4(b)(3)(B) of theEndangered Species Act of 1973, asamended (16 U.S.C. 1531 et seq.) (Act),the Service determined on May 8, 1992,that listing the Steller’s eider waswarranted, but precluded by listingactions for higher priority species (57FR 19852).

In August 1993, the Service reviewedthe status of the species and concludedthat the available information did notsupport listing range-wide, but didsupport listing the Alaska breedingpopulation. On July 14, 1994, theService proposed to list this populationas threatened (59 FR 35896).

At the time of publication of theproposed rule, the Service implementeda policy requiring that listing proposalsbe reviewed by at least threeindependent specialists (59 FR 34270).To comply with the new Service policyrequiring peer review the Servicereopened the public comment period onJune 30, 1995 (60 FR 34225), andsolicited the opinions of sevenindependent specialists.

The completion of the listing processfor this species was also affected bylegislation (Public Law 104–6) signedinto law on April 10, 1995, thatprevented the Service from making finaldeterminations on listing actions duringFiscal Year 1995. This moratorium wasextended until April 26, 1996, by

continuing budget resolutions. Whenthe moratorium was lifted, the Serviceestablished listing priority guidance (61FR 24722) that gave highest priority toemergency situations (Tier 1) andsecond highest priority (Tier 2) toresolving the listing status ofoutstanding proposed listings.Following receipt of its fiscal year 1997appropriation, the Service issuedrevised listing priority guidelines (61 FR64475). However, the Tier 1 and Tier 2priorities are unchanged from theprevious guidelines. This final rule fallsunder Tier 2. At this time there are nopending Tier 1 actions; therefore, theprocessing of this final listing ruleconforms with the Service’s currentlisting priority guidance.

This rule constitutes the finaldetermination resulting from the listingproposal and all comments receivedduring both comment periods.


In the July 14, 1994, proposed rule (59FR 35896) and associated publications,all interested parties were requested tosubmit factual reports or informationthat might contribute to thedevelopment of a proposed rule.Appropriate Federal and State agencies,borough, city, and village governments,scientific organizations, and otherinterested parties were contacted andrequested to comment. Notices invitingpublic comments were published in theAnchorage Daily News and FairbanksDaily News-Miner. On June 30, 1995,the comment period was reopened (FR60 FR 34225), and again, appropriateparties were contacted and invited tocomment. Comments were receivedfrom a total of nine parties during thetwo comment periods, including theNorth Slope Borough, the AlaskaDepartment of Fish and Game, theFederal Aviation Administration, threeconservation organizations, two oilcompanies, and one private individual.No one requested a public hearing onthe proposal. Of the comments, foursupported listing, four were neutral, andone, the Alaska Department of Fish andGame, opposed listing.

Peer reviewers were selected from agroup of recognized experts on seaduckor eider population monitoring,modeling, or management. Individualswith possible conflicts of interest inlisting were not selected to ensure anunbiased review. Seven individuals,who had published a combined total of453 articles on relevant topics in peer-reviewed scientific journals, wereselected. Four were employed by theCanadian Wildlife Service, two byuniversities, and one by the U.S.


National Biological Service (now theU.S. Geological Survey BiologicalResources Division). Five of the sevenindividuals that were selected reviewedthe proposal and supporting documents.All five supported listing the Alaskabreeding population as threatened, andone of the five suggested that thepopulation should be classified asendangered.

Written comments received duringthe comment periods are addressed inthe following summary. Comments fromall respondents, including the peerreviewers, are combined. Becausemultiple respondents offered similarcomments in some cases, comments ofa similar nature or point are grouped.These comments and the Service’sresponses are as follows:

Comment: The Alaska Department ofFish and Game does not believe that theAlaska breeding population is currently,or ever was, a discrete or significant partof the world population. Therefore, theybelieve it is inappropriate to considerthis segment of the population a listableentity, and they are opposed to listing.

Service response: In recognizingdistinct vertebrate population segmentsfor purposes of listing, delisting, orreclassifying species under theEndangered Species Act, the Servicecurrently uses guidelines published inthe Federal Register on February 7,1996 (61 FR 4721). To qualify as alistable vertebrate population, thepopulation must be both discrete inrelation to the remainder of the speciesto which it belongs, and significant tothe species to which it belongs.

A population segment of a vertebratespecies may be considered discrete if itsatisfies either one of the followingconditions:

1. It is markedly separated from otherpopulations of the same taxon as aconsequence of physical, physiological,ecological, or behavioral factors; or

2. It is delimited by internationalgovernmental boundaries within whichdifferences in control of exploitation,management of habitat, conservationstatus, or regulatory mechanisms existthat are significant in light of section4(a)(1)(D) of the Act.

In the case of Alaska breedingSteller’s eiders, the population isdiscrete by both criteria above. First,Alaska breeding Steller’s eiders arephysically separated from Asia nestingpopulations by hundreds of kilometersacross the Bering and Chukchi seas.Second, the Alaska breeding populationof Steller’s eiders is delimited byinternational boundaries. Within theseinternational boundaries differences inconservation status exist. Whileavailable information suggests that the

species in Russia also may havedeclined, population numbers areestimated to range well over 100,000birds. However, the status of thebreeding population in the U.S., asinferred by the contraction of nestingrange, is reduced considerably fromhistoric times, despite the existence ofregulatory protections and anabundance of seemingly suitablehabitat.

If a population is considered discreteunder one or both of the aboveconditions, its biological and ecologicalsignificance will then be considered inlight of Congressional guidance (SenateReport 151, 96th Congress, 1st Session)that the authority to list distinctvertebrate population segments be used‘‘sparingly’’’ while encouraging theconservation of genetic diversity. Incarrying out this examination, theService considers available scientificevidence of the discrete populationsegment’s importance to the taxon towhich it belongs. This considerationmay include, but is not limited to, thefollowing:

1. Persistence of the distinctvertebrate population segment in anecological setting unusual or unique forthe taxon;

2. Evidence that loss of the distinctvertebrate population segment wouldresult in a significant gap in the rangeof a taxon;

3. Evidence that the distinctvertebrate population segmentrepresents the only surviving naturaloccurrence of a taxon that may be moreabundant elsewhere as an introducedpopulation outside its historic range; or

4. Evidence that the distinctvertebrate population segment differsmarkedly from other populations of thespecies in its genetic characteristics.

Loss of the Alaska breedingpopulation of Steller’s eiders wouldrepresent a significant reduction in thespecies’ breeding range worldwide.Steller’s eiders nested historically alongmany hundreds of kilometers ofcoastline in southwestern Alaska andthe North Slope, which are twoseparate, major biogeographic regions ofthe State. On the North Slope, thespecies currently occurs from the northcoast to as much as 90 km inland, andfrom Wainwright in the west to PrudhoeBay in the east, so its current rangecovers a sizable area. Additionally,because it historically also occurred onthe Y–K Delta, other areas insouthwestern Alaska, and the easternNorth Slope, its historical range inAlaska was considerably moreextensive.

In addition, the Service finds thatanother factor is pertinent. Alaska is the

only location in the United States wherethe species breeds. As such, Alaska isthe only portion of the species’ breedingrange over which the United Statesgovernment can exercise its authority toprovide for the conservation of thespecies during nesting. If, as someresearchers believe, the species isdeclining range-wide (Jim King, pers.comm., 1994, Margaret Peterson, pers.comm., 1994, Chris Dau, pers. comm.,1994, Robert Stehn, pers. comm., 1994),the importance of providing for theconservation of the species in Alaskawill increase. Furthermore, by securingthe survival of the Alaska breedingpopulation, access to the species forscientists to identify the factorscontrolling the population and causingdeclines in other areas will befacilitated. Ultimately, this may beessential to the survival of the speciesas a whole. As a result of the extent ofthe species’ historical breeding range inAlaska, and the potential futureimportance to the worldwidepopulation, the Service finds that thedisappearance of the Alaska breedingpopulation of Steller’s eiders would bea significant loss to the species as awhole.

Comment: Accounts suggest that theabundance of Steller’s eiders nearBarrow has varied widely among years.It is likely that Steller’s eiders havealways been rare on the North Slope andreflect a failure to thrive, typical of birdsin suboptimal range.

Service response: Little is known ofannual variation in Steller’s eiderpopulation size and breedingperformance. However, recent studieshave found Steller’s eider numbers inthe Lena River Delta in Siberia to varytremendously among years, as well(Diane Solovieva, Lena Delta NatureReserve, pers. comm., 1995 to L.Quakenbush). This suggests that thevariation in abundance seen at Barrowmay be typical of Steller’s eiders ingeneral, rather than peculiar to Barrowor symptomatic of birds on theperiphery of the eastern end of thespecies’ range. Furthermore, althoughSteller’s eiders occur at low densities onthe North Slope, they occur over anextensive area so that possibly hundredsor as many as a few thousand may occurthere (Bill Larned, pers. comm., 1994;Rod King, pers. comm., 1994)Historically, they were likely even morenumerous, as they have apparentlyabandoned the eastern North Slope andsome other local areas in thenorthwestern North Slope. Therefore,although historical abundance isimpossible to determine, the Servicedoes not agree that the current apparent


scarcity of the species implies that theNorth Slope is suboptimal habitat.

Comment: Kertell’s (1991) estimate ofthe number of Steller’s eiders nesting onthe Y–K delta was a gross extrapolationfrom a single small plot surveyed onlyseven times during 16 years. The use ofKertell’s estimate is a poor basis for alisting action. Furthermore, it isdoubtful that the species was ever veryabundant on the Y–K Delta, and theiroccurrence in this region was marginal.

Service response: Kertell’s (1991)estimate of the number of Steller’seiders was not the basis for this listing.His estimate was based upon anextrapolation from one small plot to alarge expanse of habitat deemed to besimilar at a very coarse scale. Thisextrapolation would have overestimatedhistorical population size if the densitywithin that single plot exceeded theaverage density in the areas outside theplot, which is quite possible.Conversely, if density within the plothad declined by the 1950s and 1960s,this extrapolation would haveunderestimated historical populationsize. The latter case is supported by theobservation that Steller’s eiders haddisappeared from nearby Kokechik Bayby the 1960s although the species wascommon there in 1924 (Brandt 1943).For these reasons, the Service agreesthat it is impossible to retrospectivelyestimate historical population size withany degree of accuracy.

However, while we have no reliableestimate of historical population size,Steller’s eiders were considered to becommon by several observers in severallocations in the Y–K delta (Murie 1924,Dufresne 1924, Conover 1926, Gillam1941, Brandt 1943, Murie 1959). IfSteller’s eiders were equally common inlarge areas with comparable habitat, thetotal number occupying the delta wouldhave been sizable.

Comment: Steller’s eiders should belisted throughout their range, not justthe population that breeds in Alaska.

Service response: Concern thatSteller’s eiders have declined in numberrange-wide remains a concern butadditional data are needed. Regardlessof any possible worldwide populationdecline, at least 138,000 Steller’s eiderswintered in southwest Alaska in 1992(Larned et al. 1993). Based upon thislarge recent count, the Service finds thatthe species is neither in danger ofextinction nor likely to becomeendangered within the foreseeablefuture (the definitions of endangeredand threatened species, respectively).

Comment: The Alaska breedingpopulation should be listed asendangered.

Service response: As defined in theAct, an ‘‘endangered species’’’ is indanger of extinction while a ‘‘threatenedspecies’’’ is likely to become anendangered species within theforeseeable future. The informationcurrently available to the Serviceindicates that the species regularlyoccurs in low numbers near Barrow.Although no more than a few dozenpairs occur there, there is no suggestionthat the number near Barrow hasdeclined since the late 1960s, when theearliest observations were made.Elsewhere on the North Slope, thespecies is thought to number in thehundreds to a few thousand (BillLarned, pers. comm., 1994; Rod King,pers. comm., 1994). This informationindicates that threatened status is themost appropriate designation at thistime. The Service will continue toactively collect and evaluate statusinformation on Steller’s eiders and maypropose reclassification at any time,should this become warranted.

Comment: Critical habitat should beestablished in order to protect nesting,molting, and wintering areas.

Service response: This issue isaddressed under the section entitled‘‘Critical Habitat’’’ in this rule.

Comment: The impacts of oil and gasdevelopment have been inadequatelyaddressed.

Service response: The past andpotential future impacts of oil and gasdevelopment remain largely unknown.Currently, considerable effort isexpended to research and monitor theeffects of oil and gas activities and theresultant habitat alteration uponspectacled eiders and other birds nearPrudhoe Bay. Likewise, one of theobjectives of ongoing studies of theecology of Steller’s eiders near Barrowis to identify the effects of all forms ofhuman disturbance upon the species,including those of the local gas pipelineand the accompanying service road.Knowledge of the impacts of oil and gasdevelopment will increase as thesestudies proceed. It is important to note,however, that it appears that the speciesmay be tolerant of oil and gasdevelopment. Steller’s eiders regularlynest within a few hundred meters of agas pipeline near Barrow, and themajority of nests found in recent yearsin Alaska have been in proximity to‘‘Gaswell Road,’’’ which parallels thispipeline. Furthermore, one of the onlytwo successful nests found elsewherefrom Barrow in recent years was locatednear Prudhoe Bay, the most heavilydeveloped oil field in Alaska.

In addition to comments pertaining tolisting or the designation of criticalhabitat, several respondents suggested

management or research objectives thatcould assist in conservation efforts.Specific recommendations were:

(1) A conservation plan to protectimportant Steller’s eider habitat shouldbe explored;

(2) Educational programs at villageswithin the range of Steller’s eidersshould be expanded to reduce shootingand egging and to encourage thereporting of sightings of the species; and

(3) More information on the impactsof hunting should be gathered,including subsistence harvest, andaccidental and illegal shooting by sporthunters.

The Service agrees that thesesuggested actions have potential forcontributing significantly to theconservation of the species in Alaska.Each will be thoroughly consideredduring development of recoverystrategies.


After a thorough review andconsideration of all informationavailable, the Service has determinedthat the Alaska breeding population ofthe Steller’s eider should be classified asa threatened species. Procedures foundat section 4(a)(1) of the Act andregulations implementing the listingprovisions of the Act (50 CFR Part 424)were followed. A species may bedetermined to be an endangered orthreatened species due to one or moreof the five factors described in section4(a)(1). These factors and theirapplication to the Alaska breedingpopulation of the Steller’s eider(Polysticta stelleri) are as follows:

A. Present or threatened destruction,modification, or curtailment of itshabitat or range. Habitat destruction isnot known to be a major factor in thedecline of Steller’s eiders in Alaska. Thespecies disappeared from the Y–K Deltaand the eastern North Slope althoughonly a very small portion of the habitatin those areas has been affected byhuman activities. Other waterfowlspecies continue to nest in largenumbers in these areas, demonstratingthat what little habitat modification hastaken place has not precluded waterfowlnesting. Habitat modification anddestruction do not appear to haveplayed a major role in the decline ofbreeding Steller’s eiders in Alaska.However, the factor or factors causingthe decline are not understood.

On the North Slope, the current rangeof Steller’s eiders is largely containedwithin the National Petroleum Reserve-Alaska (NPR–A), which was set asidefor oil and gas development. TheNational Petroleum Reserve Productions


Act of 1976 encourages expeditiousleasing and permitting of oil explorationand development activities in PetroleumReserves. Although very little of NPR–A has been leased, future leasing ispossible in areas where industry interestis sufficient. Potential impacts of oil andgas exploration and development onnesting Steller’s eiders are not knownbut Steller’s eiders have nestedsuccessfully at Barrow within a fewhundred meters of a gas pipeline andthe accompanying service road andSteller’s eiders frequently feed in pondswithin meters of the pipeline (LoriQuakenbush, pers. comm., 1995).

All but two recent, known nests ofSteller’s eiders in Alaska have been nearBarrow, which is the largest Nativevillage in northern Alaska. The humanpopulation of Barrow increased 58percent in 10 years, from 2267 in 1980to 3469 in 1990 (Harcharek 1992), andvillage expansion is likely to continuein the future. Housing developments,gas field access and development, andconveyance of land from the UkpeagvikInupiat Corporation to shareholderscould lead to nesting habitat loss anddisturbance to nesting birds. (Also seediscussion of increasing predatorsaround human use areas under factor C.)Although Steller’s eiders nestsuccessfully along heavily used all-terrain vehicle trails and directly underapproach lanes to the airport that areused daily by large jets and numeroussmaller aircraft (Lori Quakenbush, pers.comm., 1995), the indirect effects ofdevelopment and human presence canbe detrimental to Steller’s eiders. Of 15adult Steller’s eiders found dead nearBarrow in 1991–1994, one presumablydied from striking wires and five hadbeen shot (Quakenbush et al. 1995).

Much of the former Steller’s eiderbreeding range in western Alaska iswithin the Yukon Delta NationalWildlife Refuge and is protected frommajor development although some ofthe habitat where the species previouslybred is on Alaska Native land whereFederal involvement in protection islow. However, the likelihood that large-scale development will take place inthis remote region is limited. Because ofthe large amount of unaltered habitatavailable on the Y–K Delta, it is unlikelythat the recovery of Steller’s eiders andthe development of Native-ownedprivate lands in the area will bothproceed to the point that they conflict.

Steller’s eiders occupy a vast expanseof marine habitat during the non-nestingseason. Within the marine distributionof the Steller’s eider the environmenthas likely been affected by any numberof human activities, including marinetransport, commercial fishing, and

environmental pollutants. However,there is no evidence that modificationsof the marine environment have causedthe decline of the Alaska breedingpopulation of Steller’s eiders.Substantial portions of the importantmolting and wintering areas have beendesignated as National Wildlife Refuges,State Game Refuges, or State CriticalHabitat Areas.

B. Overutilization for commercial,recreational, scientific, or educationalpurposes. Because of the small numberstaken, overutilization is unlikely to havecaused the decline of Alaska Steller’seiders or their extirpation from theYukon-Kuskokwim Delta. In the past,some Steller’s eider eggs were collectedin Alaska for avicultural exhibition andtrade but the issuance of Federalpermits for collecting Steller’s eider eggsfor avicultural purposes was terminatedin 1987. A few dozen Steller’s eiderswere taken annually before 1991 bycollectors and sport waterfowl hunterson the Alaska Peninsula and Kodiak andNunivak islands (Robin West, U.S. Fishand Wildlife Service, pers. comm.,1991), but this was prohibited byService policy in 1991. The Service willcontinue to collect information on anytaking of Steller’s eiders. The Servicewill consider listing the Russianpopulation when in Alaska under thesimilarity of appearance provision ofsection 4(e) of the Act if such is deemednecessary to facilitate enforcement oftaking of the Alaska breedingpopulation.

C. Disease or predation. Disease is notknown to be affecting the population atpresent, but small, restrictedpopulations are more vulnerable to alldecimating factors, including disease.

Natural predators of Steller’s eiders inAlaska include raptors, gulls, jaegers,ravens, and foxes. Kertell (1991)hypothesized that arctic foxes (Alopexlagopus) may have contributed to theextirpation of Steller’s eiders on theYukon-Kuskokwim Delta by increasingpredation pressure when major goosepopulations in the region crashedduring the 1960s, but this remainsunproven.

Some predators may be increasing innumber as a result of human habitationand development. Predators andscavengers such as gulls, ravens, andfoxes have increased in number due tothe availability of refuse and handouts(Paul O’Neil, Animal and Plant HealthInspection Service, Animal DamageControl, pers. comm., 1993). Gulls andravens are effective predators of eidereggs and young, and foxes depredateeggs, young, and adults. Predation islikely to increase near communitieswhere refuse is available and could

significantly affect eiders in these areas.In fact, of 15 adult Steller’s eiders founddead near Barrow between 1991 and1994, 7 were believed to have beenkilled by predators. In addition, of 26nests found, 17 failed and 8 of thesefailures were believed to have beencaused by avian predators or foxes(Quakenbush et al. 1995). It is unknownhow the rate of predation of eiders andeider nests has been affected by thepossible artificial increase of predatorsin the Barrow area.

D. The inadequacy of existingregulatory mechanisms. Subsistenceand sport hunting of waterfowl areregulated under authority of theMigratory Bird Treaty Act (16 U.S.C.703–711). Spring and summersubsistence hunting of eiders in Alaskais currently in violation of the MigratoryBird Treaty Act, which prohibitshunting for most migratory birdsbetween March 10 and September 1.The Service recognizes, however, thatresidents of certain rural areas in Alaskadepend on waterfowl as a customaryand traditional source of food. As aresult, the Service has exerciseddiscretion in enforcing seasonalrestrictions to allow for traditionalsubsistence use of many species.Starting in 1994, the Service includedSteller’s eiders on the closed seasonspecies list, indicating that restrictionson taking Steller’s eiders during allseasons would be enforced as violationsof the Migratory Bird Treaty Act.Recently, modifications to the treatyhave been made to legalize subsistenceharvest during spring and summer,although implementation awaitsratification by the U.S. Senate. Onceratified, hunting between March 10 andSeptember 1 will be permissible aftersuitable regulations are adopted. Theseregulations will be formulated toaccommodate the conservation needs ofindividual species, such as Steller’seiders.

Historically, Alaska Natives huntedSteller’s eiders and their eggs for food atseveral villages (Braund et al. 1989;Wentworth 1993; James Sheridan, U.S.Fish and Wildlife Service, pers. comm.,1993), but many villages along theSteller’s eider migration route have notbeen surveyed so the total annualsubsistence harvest is unknown(Cynthia Wentworth, U.S. Fish andWildlife Service, pers. comm., 1993).However, Steller’s eiders are not apreferred species (Quakenbush andCochrane 1993), and they have beentaken in far fewer numbers than theother three eider species (Klein 1966,Nelson 1969, Johnson 1971). While notan important subsistence species,Steller’s eiders are occasionally killed


incidental to hunting of preferredspecies. Although apparently limited,this take may threaten the smallbreeding segment near Barrow andpossibly near other villages. OngoingService information and educationprograms aimed at gaining support inNative villages for protection of Steller’sand spectacled eiders continue.

Sport hunting of Steller’s eiders wasprohibited in 1991. A few may still beshot accidentally or illegally by sporthunters but the number taken, althoughunknown, is likely small.

E. Other natural or manmade factorsaffecting its continued existence. Somenatural or manmade factor(s), currentlyunknown, caused the extirpation of theSteller’s eider from the Y–K Delta andthe eastern North Slope in Alaska.Several possible factors have beenproposed but supporting evidence islacking. Two possible factors warrantingdiscussion are changes in the Bering Seaenvironment where Steller’s eiders moltand winter, and ingestion of lead shoton the Y–K Delta.

Recent changes in the Bering Seaecosystem have been proposed as apossible factor affecting the spectacledeider (Stehn et al. 1993), which wasclassified as threatened in 1993 due torapid population declines on the Y–KDelta and elsewhere within its range.Increasing Pacific walrus (Odobenusrosmarus), gray whale (Eschrichtiusrobustus), and sea otter (Enhydra lutris)populations may have restructured themarine community that forms the preybase of these species (Stehn et al. 1993,Kvitek et al. 1992), and this in turn mayhave affected other members of thecommunity. Similarly, changes incommercial fishing pressure may alsohave affected the marine ecosystem withpossible effects upon marine birds,including eiders (Stehn et al. 1993).

Recently, other species in the BeringSea have declined in numbers,including Steller’s sea lions(Eumatopias jubatus) and oldsquaws(Clangula hyemalis (Stehn et al. 1993).Declines in these species may have beencaused by the restructuring of thetrophic system outlined above or,alternatively, the declines may suggest ageneral deterioration of the Bering Seaecosystem caused by contamination orother factors. There is currently nodocumentation of a link betweenchanges in the marine environment inAlaska and a contraction of the breedingrange of Steller’s eiders in Alaska.

It has recently been shown that leadshot, used for hunting waterfowl formany decades on the Y–K Delta, isbeing ingested by spectacled eiders withpotentially serious effects upon adultsurvival (Margaret Petersen, pers.

comm., 1994). Although nontoxic shotis now legally required for waterfowlhunting, illegal use of lead shot on thedelta continues. Furthermore, it appearsthat lead shot may remain in tundrawetland areas for many years, possiblydecades, after deposition (MargaretPetersen, pers. comm., 1994). There isno evidence indicating that ingestion oflead shot caused the extirpation ofSteller’s eiders on the Y–K Delta but theingestion of lead shot may have affectedthe species in some heavily huntedareas. Furthermore, residual lead shotcould potentially impair recovery of thespecies if Steller’s eiders ingest leadshot which remains in areas thatSteller’s eiders recolonize. The AlaskaDepartment of Fish and Game and U.S.Fish and Wildlife Service areimplementing educational programs, tobe followed by increasing enforcement,aimed at eliminating the use of leadshot.

Steller’s eiders that nest on Alaska’sNorth Slope are the only remainingbreeding population within thejurisdiction of the United States. As aresult of their low numbers andrestricted breeding range, the Alaskabreeding population is at risk fromnatural and human-caused factors.Major storms, predation or disturbancecould severely deplete Steller’s eidersnumbers on the North Slope and lead toextirpation of this remnant population.The Service has carefully assessed thebest scientific and commercialinformation available regarding the past,present, and future threats faced by thisspecies in determining to make thisfinal rule. Based on this evaluation, thepreferred action is to list the Alaskabreeding population of the Steller’seider as threatened. While probably notin immediate danger of extinction,Steller’s eiders that breed in Alaskacould become endangered in theforeseeable future if the populationdeclines further.

Critical HabitatSection 4(a)(3) of the Act, as

amended, and implementing regulations(50 CFR 424.12) require that, to themaximum extent prudent anddeterminable, the Secretary designatecritical habitat at the time the species isdetermined to be endangered orthreatened. The Service finds thatdesignation of critical habitat is notprudent for the Alaska breedingpopulation of Steller’s eiders at thistime. Service regulations (50 CFR424.12(a)(1) state that designation ofcritical habitat is not prudent when oneor both of the following situationsexist—(1) the identification of criticalhabitat can be expected to increase the

degree of threat to the species, or (2)such designation of critical habitatwould not be beneficial to the species.

Section 7(a)(2) and regulationscodified at 50 CFR Part 402 requireFederal agencies to ensure, inconsultation with the Service, thatactivities they authorize, fund or carryout are not likely to jeopardize thecontinued existence of listed species ordestroy or adversely modify theirhabitat. The current nesting range of theSteller’s eiders on the North Slope islargely contained within the NPR–A.Upon this rule taking effect, oil and gasexploration and other activities that mayaffect the continued existence of theAlaska breeding population of Steller’seider will be addressed through thesection 7 consultation process to ensurethat these activities do not jeopardizethe survival and recovery of the species.In addition, wetland filling and otheractivities subject to Federalauthorization will undergo consultationto avoid detrimental impacts. In the fall,winter, and spring, the eiders disperseto marine areas in southern Alaska alsoused by large numbers of otherwaterfowl and birds. Most of theseareas, including Y–K Delta where theSteller’s eider historically nested, havebeen designated as National WildlifeRefuges and are currently managed toensure that Federal and other activitiesdo not deleteriously affect these birdconcentrations. The Service believesthat Federal involvement in both thenesting and wintering areas where thespecies may occur can be identified andaddressed without the designation ofcritical habitat. Therefore, the Servicefinds that designation of critical habitatis not prudent at this time because itwould result in no known benefit to thespecies not already afforded by the Act.Protection of this species’ habitat willalso be addressed through the section 7and recovery processes and, asappropriate, through the section 10habitat conservation planning process.

Available Conservation MeasuresConservation measures provided for

species listed as endangered orthreatened under the EndangeredSpecies Act include recognition,recovery actions, requirements forFederal protection, and prohibitionsagainst certain practices. Recognitionthrough listing encourages and resultsin conservation actions by Federal, Stateand local governments and privateorganizations, groups and individuals.The Act provides for possible landacquisition and cooperation with theStates and requires that recovery actionsbe carried out for all listed species. Theprotection required of Federal agencies


and the prohibitions against taking andharm are discussed below.

Section 7(a) of the Act, as amended,requires Federal agencies to evaluatetheir actions with respect to any speciesthat is proposed or listed as endangeredor threatened, and with respect to itsdesignated critical habitat. Regulationsimplementing this interagencycooperation provision of the Act arecodified at 50 CFR Part 402. Section7(a)(4) of the Act requires Federalagencies to confer with the Service onany action that is likely to jeopardizethe continued existence of a proposedspecies or result in destruction oradverse modification of proposedcritical habitat. Section 7(a)(2) requiresFederal agencies to ensure that activitiesthey authorize, fund, or conduct are notlikely to jeopardize the continuedexistence of endangered or threatenedspecies or to destroy or adverselymodify its critical habitat. If an actionmay affect a listed species or its criticalhabitat, the responsible Federal agencymust enter into formal consultation withthe Service.

The Service anticipates consultationwith the U.S. Army Corps of Engineersand the U.S. Department ofTransportation to avoid impacts toSteller’s eiders from wetland fillpermitting and other activities on theNorth Slope. Consultations to identifypotential effects on Steller’s eiders arealso expected with the U.S. Bureau ofLand Management for NPR-A landsissues, the Minerals ManagementService for outer continental shelf oiland gas lease sales, and the NationalMarine Fisheries Service for commercialfishing regulations.

The Service will initiate developmentof a recovery plan for the Steller’s eiderpromptly upon listing. This recoveryplan, prepared in cooperation with theaffected agencies and communities, willestablish recovery goals and set recoverytask priorities. An educational programto gain public support for the protectionof Steller’s eiders has already beeninitiated and will be expandedcooperatively with affectedcommunities.

The Act and implementingregulations found at 50 CFR 17.21 and17.31 set forth a series of generalprohibitions and exceptions that applyto all threatened wildlife. Theseprohibitions, in part, make it illegal forany person subject to the jurisdiction ofthe United States to take (includesharass, harm, pursue, hunt, shoot,wound, kill, trap, capture, collect, or toattempt any of these), import or export,ship in interstate commerce in thecourse of commercial activity, or sell oroffer for sale in interstate or foreign

commerce any listed species. It is alsoillegal to possess, sell, deliver, carry,transport, or ship any such wildlife thathas been taken illegally. Certainexceptions apply to agents of theService and State conservation agencies.

Permits may be issued to carry outotherwise prohibited activitiesinvolving threatened wildlife speciesunder certain circumstances.Regulations governing permits are in 50CFR 17.22, 17.23, and 17.32. Suchpermits are available for scientificpurposes, to enhance the propagation orsurvival of the species, and/or forincidental take in connection withotherwise lawful activities. Forthreatened species, permits are alsoavailable for zoological exhibition,educational purposes, or specialpurposes consistent with the purposesof the Act.

It is the policy of the Service,published in the Federal Register onJuly 1, 1994 (59 FR 34272), to identifyto the maximum extent practicable atthe time a species is listed thoseactivities that would or would notconstitute a violation of section 9 of theAct. The intent of this policy is toincrease public awareness of the effectof this listing on proposed and ongoingactivities within the species’ range. TheService believes that the followingactions will not result in a violation ofsection 9, provided the activities arecarried out in accordance with anyexisting regulations and permitrequirements:

(1) Unintentional flushing ordisturbing of Steller’s eiders on thespecies’ Alaska nesting or winteringgrounds.

(2) Federally approved projects thatinvolve activities such as, drilling,discharge of fill material, draining,ditching, or aleration of surface orground water into or out of a wetland(i.e., due to roads, impoundments,discharge pipes, etc.) when such activityis conducted in accordance with anyreasonable and prudent measures givenby the Service in accordance withsection 7 of the Act.

(3) Hunting endangered andthreatened species for subsistencepurposes is permissible under theEndangered Species Act under certaincircumstances (section 10(e)of the Act,see further discussion below); however,all hunting of Steller’s eiders remainsprohibited under other provisions oflaw.

Activities that the Service believescould potentially result in ‘‘take’’ of theAlaska breeding population of Steller’seiders include, but are not limited to,the following activities:

(1) Unauthorized trapping, capturing,or collecting of the Alaska breedingpopulation of Steller’s eiders. Researchactivities, where birds are trapped orcaptured will require a permit undersection 10(a)(1)(A) of the EndangeredSpecies Act.

(2) Intentional or accidental shootingor Steller’s eiders during the sporthunting season. This take will beaddressed in the annual section 7consultation conducted on themigratory bird sport hunting season.Wanton killing or injury of Steller’seiders is illegal under both theEndangered Species Act, MBTA, andother Federal and State laws.

Other activities not identified in theabove two paragraphs will be reviewedon a case-by-case basis to determine ifa violation of section 9 of the Act maybe likely to result from such activity.Questions regarding any specificactivities should be directed to the FieldSupervisor of the Service’s FairbanksField Office (see ADDRESSES section).

Section 10(e) of the Act exempts anyIndian, Aleut, or Eskimo who is anAlaska Native who resides in Alaska, orany nonnative permanent resident of anAlaska Native village, from prohibitionson taking any endangered or threatenedspecies if such taking is primarily forsubsistence purposes. Regulationsprohibiting or limiting subsistenceharvest may be established pursuant tosection 10(e)(4) of the Act if theSecretary determines that such takingmaterially and negatively affects thethreatened or endangered species. TheService is not considering specialregulations under section 10(e)(4) of theAct at this time, because all hunting ofSteller’s eiders is currently restrictedunder provisions of other Federal andState laws.

National Environmental Policy ActThe Fish and Wildlife Service has

determined that an EnvironmentalAssessment or Environmental ImpactStatement, as defined under authority ofthe National Environmental Policy Actof 1969, need not be prepared inconnection with regulations adoptedpursuant to section 4(a) of theEndangered Species Act of 1973, asamended. A notice outlining theService’s reasons for this determinationwas published in the Federal Registeron October 25, 1983 (48 FR 49244).

Required DeterminationsThe Service has examined this

regulation under the PaperworkReduction Act of 1995 and found it tocontain no information collectionrequirements. This rulemaking was notsubject to review by the Office of


Management and Budget underExecutive Order 12866.

References CitedA complete list of all the references

cited herein, as well as others, isavailable upon request from theFairbanks Ecological Services FieldOffice (see ADDRESSES section).

Authors: The primary author of thisdocument is Ted Swem (see ADDRESSESsection). Lori Quakenbush, U.S. Fishand Wildlife Service, contributed dataand editorial assistance. Bill Larned andRod King, U.S. Fish and WildlifeService, contributed survey data.


Endangered and threatened species,Exports, Imports, Reporting andrecordkeeping requirements,Transportation.

Regulation Promulgation

Accordingly, part 17, subchapter B ofchapter I, title 50 of the Code of FederalRegulations, is amended as set forthbelow:

PART 17—[AMENDED]



2. Section 17.11(h) is amended byadding the following, in alphabeticalorder under BIRDS, to the List ofEndangered and Threatened Wildlife, toread as follows:

§ 17.11 Endangered and threatenedwildlife.

* * * * *(h) * * *

SpeciesHistoric range Vertebrate population where endan-

gered or threatened Status Whenlisted

Criticalhabitat

SpecialrulesCommon name Scientific name

* * * * * * *BIRDS

* * * * * * *Eider, Steller’s ...... Polysticta stelleri .. U.S.A. (AK), Rus-

sia.U.S.A. (AK breeding population only) T 616 NA NA

* * * * * * *

Dated: March 21, 1997.John G. Rogers,Acting Director, Fish and Wildlife Service.[FR Doc. 97–15244 Filed 6–10–97; 8:45 am]BILLING CODE 4310–55–P



50 CFR Part 17

RIN 1018–AD52

Endangered and Threatened Wildlifeand Plants; Threatened Status for theGuajon


SUMMARY: The Fish and Wildlife Service(Service) determines the guajon(Eleutherodactylus cooki) to be athreatened species pursuant to theEndangered Species Act (Act) of 1973,as amended. The guajon is endemic toPuerto Rico and is restricted to thePandura mountain range in thesoutheastern part of the island. It isthreatened in this area by agricultural,rural, and industrial development andthe associated infrastructure. This finalrule will implement the Federalprotection and recovery provisionsafforded by the Act for E. cooki.EFFECTIVE DATE: July 11, 1997.

ADDRESSES: The complete file for thisrule is available for inspection, byappointment, during normal businesshours at the Boqueron Field Office, U.S.Fish and Wildlife Service, P.O. Box 491,Boqueron, Puerto Rico 00622, and at theService’s Southeast Regional Office,1875 Century Boulevard, Atlanta,Georgia 30345.

FOR FURTHER INFORMATION CONTACT: Ms.Susan Silander at the Caribbean FieldOffice address (787/851–7297) or Ms.Gloria Bell at the Atlanta RegionalOffice address (404/679–7100).


Background

Eleutherodactylus is the largestvertebrate genus with over 400described species. Two major centers ofspecies diversity occur: northwesternSouth America and the West Indies.Almost all species share twocharacteristics—‘‘T-shaped’’ terminalphalanges, probably an adaptation forclimbing, and direct development,allowing for reproduction away fromwater. In the West Indies,Eleutherodactylus species are adominant amphibian group. No singlespecies is naturally found on more thanone of the four Greater Antilles, andmost are restricted to small areas withinan island (Hedges 1989). Seventeenspecies of this genus are known fromPuerto Rico and, collectively, they are

commonly known as ‘‘coquıs’’ (Rivero1978, Moreno 1991).

The guajon (Eleutherodactylus cooki),also known commonly as ‘‘demon ofPuerto Rico’’ or ‘‘demonio de PuertoRico,’’ is a relatively large frog,approximately 8.5 centimeters (3.3inches) in length. It is solid brown incolor, although attending and callingmales may have a yellow throat. Theguajon may be the only species ofEleutherodactylus in Puerto Rico thatexhibits sexual dimorphism in color(Joglar et al. 1996). In both sexes, thefrogs have large, white-rimmed eyes,giving the species a specter or phantom-like appearance. The species ischaracterized by having large truncatediscs and by a peculiar, melodious andlow voice which is completely differentfrom any other species ofEleutherodactylus in Puerto Rico(Rivero 1978). Rivero (1978) states thatits peculiar calling and phantom-likeappearance made many local peoplefearful of the species, believing that themere sight of an animal would be fatal.

The guajon, first collected byChapman Grant in 1932, is known onlyfrom the Pandura range in southeasternPuerto Rico and west to Patillas/SanLorenzo where it lives in crevices andgrottoes in and among boulders (Joglaret al. 1996). Such grottoes arecommonly referred to as guajonales. It isfrom the grottoes or guajonales wherethe species lives that the frog derives itsname, the guajon. The species is


apparently limited in distribution by therock formation where it occurs (Rivero1978, Joglar 1992). Joglar et al. (1996)documented population fluctuations,apparently related to precipitation andtemperature. Numbers are lowest duringthe winter months, during the period ofleast rainfall and lowest temperatures.The number of egg clutches andjuveniles was observed to be greatestduring the months of October andSeptember. Eggs are laid on the humidfaces of boulders in protectedmicrohabitats within the grottoes andup to 59 eggs, which may actually bemultiple clutches, are apparentlyguarded by the males (Rivero 1978,Joglar et al. 1996). Diurnal activity of E.cooki occurs only inside the caves.Many guajones, however, have beenobserved leaving the caves at dusk,presumably to forage and rehydrate, andreturning before dawn (Joglar et al.1996).

During surveys conducted by Drewry(1986), Joglar (1992), and Joglar et al.(1996), the guajon was found at itshistorical localities, all of which occurwithin the municipalities of Yabucoaand San Lorenzo. Dr. Fernando Bird(pers. comm.) also reports the speciesfrom the municipalities of Las Piedrasand Humacao. Little historical data isavailable on abundance; therefore,reductions in populations are difficultto document. Nevertheless, E. cooki isendemic to Puerto Rico and is extremelyrestricted in geographical distribution.Further, it is a habitat specialist (i.e.,requires a particular habitat type) andoccurs only on privately-owned lands.Threats to the species includedeforestation and earth movement foragricultural activities and ruraldevelopment, road construction,including the construction of a majorfour-lane highway, and the constructionof a reservoir.

Previous Federal ActionIn the Service’s notices of review for

vertebrate candidates published in theFederal Register of December 30, 1982(47 FR 58454), September 18, 1985 (50FR 37958), January 6, 1989 (55 FR17475) and November 21, 1991 (56 FR58804), Eleutherodactylus cooki wasincluded as a category 2 species. At thattime, Category 2 species were those thatwere being considered for possibleaddition to the Federal List ofEndangered and Threatened Wildlife,but insufficient data on biologicalvulnerability and threat were notcurrently available to support such anaction. Designation of Category 2species was discontinued in theDecember 5, 1996, Federal Registernotice (61 FR 64481).

During a symposium/workshop onPuerto Rican reptiles and amphibiansheld in Puerto Rico in April of 1990,Moreno (1991) believed that the guajonwas declining and in urgent need of astatus survey. Status surveys conductedin 1991 and 1992 indicated that theguajon is extremely restricted indistribution and currently facessignificant threats (Joglar 1992). Joglar etal. (1996) recommended that, althoughstudies of 2 specific areas conductedbetween 1991 and 1994 did not indicatethat those particular populations weredeclining, protecting the species wasessential due to its limited distributionand rapid development of its habitat.The Service elevated this species to acandidate and proposed it forthreatened status on October 2, 1995 (60FR 51432). Because additionalinformation became availableconcerning the species’ distribution andbiology, the Service reopened thecomment period on October 4, 1996 (61FR 51878).

The processing of this final ruleconforms with the Service’s final listingpriority guidance published in theFederal Register on December 5, 1996(61 FR 64475). The guidance clarifiesthe order in which the Service willprocess rulemakings during fiscal year1997. The guidance calls for givinghighest priority to handling emergencysituations (Tier 1) and second highestpriority (Tier 2) to resolving the listingstatus of the outstanding proposedlistings. This rule falls under Tier 2.Presently, there are no pending Tier 1actions in Region 4. In the developmentof this final rule, the Service hasconducted an internal review of allavailable information on the species andits habitat.


In the October 2, 1995, proposed ruleand associated notifications, allinterested parties were requested tosubmit factual reports of informationthat might contribute to thedevelopment of a final rule. Appropriateagencies of the Commonwealth ofPuerto Rico, Federal agencies, scientificorganizations, and other interestedparties were requested to comment. Anewspaper notice inviting generalpublic comment was published in TheSan Juan Star on October 31, 1995, andin the El Nuevo Dıa on October 25,1995. The Service also solicited theexpert opinions of three appropriate andindependent specialists regardingpertinent scientific or commercial dataand assumptions relating todistribution, abundance, status andbiological and ecological information for

the guajon. In response to the proposedrule, four comment letters werereceived, three of which were fromspecialists. One specialist providedadditional distributional data on thespecies, increasing its known range toinclude the municipalities of LasPiedras and Humacao in southeasternPuerto Rico and agreed that the species’habitat is threatened by human relatedactivity. A second specialist stated thatthe range of the guajon is limited andthat any significant alteration of itshabitat might have an effect on itsexistence. Comments supplyingsupplemental data have beenincorporated into the Backgroundsection of this rule, as appropriate. Apublic hearing was neither requestednor held.

On October 4, 1996, the Servicereopened the comment period. TheService again solicited the expertopinions of three appropriate andindependent specialists. In response tothe proposed rule, five comment letterswere received, three of which were fromspecialists. The Natural ResourceConservation Service, U.S. Departmentof Agriculture, stated that the listing ofthe guajon was important and expressedinterest in coordinating with the Fishand Wildlife Service in order to identifyagricultural land where the speciesoccurs.

The following is a summary of othercomments and concerns (referred to as‘‘Issues’’ for the purposes of thissummary) regarding the proposed rulethat were expressed in writing.Comments of similar content have beengrouped together.

Issue 1: Two commenters indicatedthat without the designation of criticalhabitat the listing of the species wouldnot be beneficial.

Response: The Service believes that,because the guajon occupies anextremely restricted geographic area inPuerto Rico, protection of its habitat canbe accomplished through the Section 7jeopardy standard and through Section9 prohibitions against take. Harm in thedefinition of ‘‘take’’ in the Act (50 CFR17.3) means an act which actually killsor injures wildlife. Such an act mayinclude significant habitat modificationor degradation where it actually kills orinjures wildlife by impairing essentialbehavioral patterns, including breeding,feeding or sheltering. This issue is alsoaddressed in the ‘‘Critical Habitat’’section of this rule.

Issue 2: Two commentersrecommended that the species remain acandidate for its protection until anongoing study of the guajon’sreproductive biology is completed.


Response: Candidate species receiveno statutory protection under the Act.Thus, having it remain a candidatewould not provide the maximumconservation benefit to the guajon. TheAct requires the Service to make alisting determination based upon thebest scientific and commercial dataavailable. The Service believes thatsufficient information on status andthreats is available to warrant listing thespecies as threatened. Informationderived from the ongoing study ofreproductive biology will be valuablefor recovery purposes and will beincorporated into the recovery plan.

Issue 3: A commenter indicated thatwhile scientific collection had notadversely affected the species, otherhuman-related factors do affect theguajon. Another commenter indicatedthat collecting by artisans was probablynot a threat due to the difficulty and thedanger of entering the caves, but statedthat scientific collecting should beregulated.

Response: The rule states thatcollection has been identified as aproblem by scientists for other speciesof Eleutherodactylus; therefore, itshould be considered as a potentialthreat for the guajon. This issue isaddressed in the ‘‘Summary of FactorsAffecting the Species’’ section is thisrule.


After a thorough review andconsideration of all informationavailable, the Service has determinedthat the guajon should be classified asa threatened species. Procedures foundat Section 4(a)(1) of the Act andregulations implementing the listingprovisions of the Act (50 CFR part 424)were followed. A species may bedetermined to be an endangered orthreatened species due to one or moreof the five factors described in section4(a)(1). These factors and theirapplication to the guajon(Eleutherodactylus cooki) are as follows:

A. The Present or ThreatenedDestruction, Modification, orCurtailment of Its Habitat or Range

The guajon is only known from themunicipalities of Yabucoa, San Lorenzo,Humacao, and Las Piedras in thePandura range in the extremesoutheastern corner of Puerto Rico.Deforestation and earth movement foragricultural and rural development haveencroached upon known habitat of thespecies. Deforestation may result inincreased flash flooding, resulting in thedrowning of adults and the destructionof nests. The practice of planting crops

right up to the entrance of theguajonales may eliminate nocturnalhabitat of the species and increase thepesticide and fertilizer run-off into thewater flowing under the caves. Cavesare also often used as garbage dumps.Road construction and the associatedcut and fill has eliminated habitat(Drewry 1986). A major four-linehighway is currently proposed throughthe area, as is the construction of amajor reservoir.

B. Overutilization for Commercial,Recreational, Scientific, or EducationalPurposes

Although not previously identified asa determinant factor in the decline ofthe guajon specifically, scientificcollecting of related species of coquı inPuerto Rico may have contributed todeclines. In a survey of only sevenmuseums in both Puerto Rico and theUnited States, numerous specimens ofthe web-footed coquı (E. karlschmidti)and the mottled coquı (E. eneidae) werelocated, with a total of 473 preservedindividuals of the former and 325 of thelatter species (Joglar 1992). Both of theserelated species’ status are underevaluation by the Service because oftheir extreme rarity. Collection of otherEleutherodactylus sp. for use in local arthas also been documented, and thisactivity is currently being evaluated bythe Commonwealth government forpossible regulation.

C. Disease or PredationDisease has not been documented as

a factor in the decline of this species.However, examination of both preservedand live specimens of the guajonrevealed that the species is parasitizedby the tick Ornithodoros talaje.Nevertheless, the effect of this parasiteon the guajon has yet to be studied(Joglar 1992, Joglar et al. 1996).Introduced species such as cats, rats,and mongoose, active at night, mayadversely affect densities of this speciesby feeding on the frogs and their eggs.

D. The Inadequacy of ExistingRegulatory Mechanisms

The Commonwealth of Puerto Ricohas adopted a regulation that recognizesand provides protection for certainCommonwealth listed species. However,the guajon is not yet on theCommonwealth list. Federal listingwould provide immediate protectionunder the Act, and by virtue of anexisting section 6 CooperativeAgreement with the Commonwealth,will also assure the addition of thisspecies to the Commonwealth list andenhance its protection and possibilitiesfor funding needed research.

E. Other Natural or Manmade FactorsAffecting Its Continued Existence

The decline in populations ofamphibians has become apparentglobally. Factors which may beresponsible for the decline ofamphibians include habitat destructionand modification, acid rain, pesticidecontamination, introduction of non-native predators and competitors,agriculture, mining and logging,increased levels of ultraviolet radiation,collection, and global climatic change(Wake and Morowitz 1991, Joglar andBurrowes 1996).

Flash floods, droughts, andcatastrophic storms, such as HurricaneHugo which occurred in 1989, may havecaused localized extirpations of otherspecies of Eleutherodactylus in specificareas in Puerto Rico (Burrowes andJoglar 1991, Joglar 1992, Joglar andBurrowes 1996). Hurricane Hugonegatively affected the abundance of E.portoricensis, a species which is notabundant and is restricted indistribution (Joglar and Burrowes 1991).The guajon is endemic to Puerto Rico,a habitat specialist, and extremelyrestricted in distribution. It is knownonly from the southeastern part of theisland.

The Service has carefully assessed thebest scientific and commercialinformation available regarding the past,present, and future threats faced by thisspecies in determining to make this rulefinal. Based on this evaluation, thepreferred action is to listEleutherodactylus cooki as threatened,because the species is extremelyrestricted in distribution and isspecialized in habitat utilization.Activities such as dam and roadconstruction and land conversion toagriculture threaten to significantlyreduce available habitat. While not inimmediate danger of extinction, theguajon is likely to become anendangered species in the foreseeablefuture if present threats continue. Thereasons for not designating criticalhabitat for this species are discussedbelow in the ‘‘Critical Habitat’’ section.

Critical Habitat

Critical habitat is defined in section 3of the Act as: (i) The specific areaswithin the geographical area occupiedby a species, at the time it is listed inaccordance with the Act, on which arefound those physical or biologicalfeatures (I) essential to the conservationof the species and (II) that may requirespecial management considerations orprotection and; (ii) specific areasoutside the geographical area occupiedby a species at the time it is listed, upon


a determination that such areas areessential for the conservation of thespecies. ‘‘Conservation’’ means the useof all methods and procedures neededto bring the species to the point atwhich listing under the Act is no longernecessary.

Section 4(a)(3) of the Act, asamended, and implementing regulations(50 CFR 424.12) require that, to themaximum extent prudent anddeterminable, the Secretary designatecritical habitat at the time the species isdetermined to be endangered orthreatened. The Service finds that thedesignation of critical habitat is notprudent for the guajon. Serviceregulations (50 CFR 424.12(a)(1)) statethat designation of critical habitat is notprudent when one or both of thefollowing situations exist—(1) Thespecies is threatened by taking or otherhuman activity, and identification ofcritical habitat can be expected toincrease the degree of threat to thespecies, or (2) such designation ofcritical habitat would not be beneficialto the species.

While collection has not beendocumented as contributing to thedecline of the guajon specifically, largenumbers of other Eleutherodactylusspecies, including several identified asspecies at risk, have been documentedin scientific collections. Collection ofEleutherodactylus sp. has beendocumented for use by local artisans,and such collection is currently underevaluation by the Commonwealthgovernment for possible regulation. Inaddition, due to the appearance of theanimal, Rivero (1978) stated that localpeople were fearful of them. This fearcould lead to killing of guajon.

The guajon is rare and restricted inrange, and taking for scientific andprivate collection would pose a seriousthreat to the species if specific siteinformation were released. Thepublication of critical habitat maps inthe Federal Register and localnewspapers and other publicityaccompanying critical habitatdesignation would likely increase thecollection threat and increase thepotential for vandalism if such habitatwere designated. The Service believes,therefore, that the identification ofcritical habitat may increase the threatto the species. The locations ofpopulations of this species haveconsequently been described only ingeneral terms in the final rule. Anyexisting precise locality data would beavailable to appropriate Federal, State,and local governmental agencies fromthe Service office described in theADDRESSES section.

Regulations promulgated forimplementing Section 7 of the Actprovide for both a jeopardy standard,based on listing alone, and for adestruction or adverse modificationstandard, in cases where critical habitathas been designated. The guajonoccupies an extremely restrictedgeographic area in Puerto Rico and,once listed, the Service believes thatprotection of guajon habitat can beaccomplished through the Section 7jeopardy standard, and through Section9 prohibitions against take.

Available Conservation Measures

Conservation measures provided tospecies listed as endangered orthreatened under the EndangeredSpecies Act include recognition,recovery actions, requirements forFederal protection, and prohibitionsagainst certain practices. Recognitionthrough listing results in conservationactions by Federal, Commonwealth, andprivate agencies, and individuals. TheAct provides for possible landacquisition and cooperation with theCommonwealth and requires thatrecovery actions be carried out for alllisted species. Such actions are initiatedby the Service following listing. Theprotection required of Federal agenciesand the prohibitions against taking andharm are discussed, in part, below.

Section 7(a) of the Act, as amended,requires Federal agencies to evaluatetheir actions with respect to any speciesthat is proposed or listed as endangeredor threatened and with respect to itscritical habitat, if any is beingdesignated. Regulations implementingthis interagency cooperation provisionof the Act are codified at 50 CFR part402. Section 7(a)(2) requires Federalagencies to ensure that activities theyauthorize, fund, or carry out are notlikely to jeopardize the continuedexistence of the species or destroy oradversely modify its critical habitat. If aFederal action may affect a listedspecies or its critical habitat, theresponsible Federal agency must enterinto formal consultation with theService.

Federal agency actions that mayrequire consultation as described in thepreceding paragraph include the ArmyCorps of Engineers and/or NationalResource Conservation Service(previously Soil Conservation Service)involvement in the construction of areservoir; Rural Development (formerlyFarmer’s Home Administration) fundingof water, sewer, and power lines, as wellas residential developments; and theFederal Highway Administration’sinvolvement in the construction of

small roads and a major highwaythrough the area.

The Act and its implementingregulations set forth a series of generaltrade prohibitions and exceptions thatapply to all threatened wildlife. Theprohibitions, codified at 50 CFR 17.21and 17.31, in part, make it illegal for anyperson subject to the jurisdiction of theUnited States to take (includes harass,harm, pursue, hunt, shoot, wound, kill,trap, or collect; or to attempt any ofthese), import or export, ship ininterstate commerce in the course ofcommercial activity, or sell or offer forsale in interstate or foreign commerceany listed species. It is also illegal topossess, sell, deliver, carry, transport, orship any such wildlife that has beentaken illegally. Certain exceptions applyto agents of the Service andCommonwealth conservation agencies.

Permits may be issued to carry outotherwise prohibited activitiesinvolving threatened wildlife speciesunder certain circumstances.Regulations governing permits are at 50CFR 17.32. Such permits are availablefor scientific purposes, to enhance thepropagation or survival of the species,and/or for incidental take in connectionwith otherwise lawful activities. Forthreatened species, permits are alsoavailable for zoological exhibition,educational purposes, or specialpurposes consistent with the purposesof the Act. Requests for copies of theregulations regarding listed wildlife andinquiries about prohibitions and permitsmay be addressed to the Service’sSoutheast Regional Office, 1875 CenturyBoulevard, Suite 200, Atlanta, Georgia30345 (404/679–7313).

It is the policy of the Service (59 FR34272) to identify to the maximumextent practicable those activities thatwould or would not constitute aviolation of section 9 of the Act at thetime of listing. The intent of this policyis to increase public awareness of theeffect of listing on proposed or ongoingactivities. The only known populationsof guajon are located on privately-owned land. The Service believes that,based on the best available information,the following actions will not result ina violation of section 9, provided theseactivities are carried out in accordancewith existing regulations and permitrequirements:

(1) Possession of legally acquiredguajon, under Service-approvedpermitted conditions; and

(2) Federally funded or regulatedprojects that involve activities, such asdam and road construction, earthmovement for agricultural activities andrural development, or diversion oralteration of surface or ground water


flow into or out of grottoes (e.g., due toroads, impoundments, discharge pipes,storm water detention basins, etc.),when such activity is conducted inaccordance with any reasonable andprudent measures given by the Servicein accordance with section 7 of the Act.

Activities that the Service believescould potentially result in ‘‘take’’ of theguajon, include, but are not limited to:

(1) Unauthorized collecting or captureof the species;

(2) Purposeful introduction of exoticspecies, such as cats, rats, andmongoose, that may adversely affectdensities of this species by feeding onadults or eggs;

(3) Unauthorized destruction/alteration of the species’ habitat (e.g.,rock removal, discharge of fill materials,earth movement for agriculturalactivities and rural development, ordiversion or alteration of surface orground water flow into or out ofgrottoes) when such activity is notconducted in accordance with section 7of the Act;

(4) Pesticide applications in violationof label restrictions; and

(5) Discharges or dumping of toxicchemicals, silt, or other pollutants intoareas supporting this species.

Questions regarding whether specificactivities will constitute a violation ofsection 9 should be directed to the FieldSupervisor of the Service’s BoqueronField Office (see ADDRESSES section).Requests for copies of the regulations onlisted species and inquiries regardingprohibitions and permits should beaddressed to the U.S. Fish and WildlifeService, Ecological Services, 1875Century Boulevard, Atlanta, Georgia30345–3301 (404/679–7313).

National Environmental Policy Act

The Fish and Wildlife Service hasdetermined that an EnvironmentalAssessment, as defined under theauthority of the National EnvironmentalPolicy Act of 1969, need not beprepared in connection with regulationsadopted pursuant to section 4(a) of theEndangered Species Act of 1973, asamended. A notice outlining theService’s reasons for this determinationwas published in the Federal Registeron October 25, 1983 (48 FR 49244).

Required DeterminationsThe Service has examined this

regulation under the PaperworkReduction Act of 1995 and found it tocontain no information collectionrequirements.

References Cited

Burrowes, P.A. and R.L. Joglar. 1991. Asurvey of the population status and anecological evaluation of three PuertoRican frogs. Pp. 42–46 in J.A. Moreno,ed., Status y Distribucion de los Anfibiosy Reptiles de Puerto Rico. Publ. Cien.Misc. No.1. Departamento de RecursosNaturales y Ambientales, San Juan,Puerto Rico.

Drewry, G.E. 1986. Golden coqui recoverysurvey and brief status evaluation of fiveother Puerto Rican Eleutherodactylusspecies. Trip report prepared for theCaribbean Field Office, U.S. Fish andWildlife Service. 49 pp.

Hedges, S.B. 1989. Evolution andbiogeography of West Indian frogs of thegenus Eleutherodactylus: slow-evolvingloci and the major groups. Pp.305–370 inBiogeography of the West Indies.

Joglar, R.L. 1992. Status survey of fourspecies of Eleutherodactylus: Finalreport. Report prepared for the CaribbeanField Office, U.S. Fish and WildlifeService. 41 pp.

Joglar, R.S. and P.A. Burrowes. 1991. Elefecto del Huracan Hugo sobre unacomunidad de anfibios en El Yunque,Puerto Rico y algunas recomendacionespara la proteccion de las especies delgenero Eleutherodactylus. Pp. 47–52 inJ.A. Moreno, ed., Status y Distribucionde los Anfibios y Reptiles de PuertoRico. Publ. Cien. Misc. No.1.Departamento de Recursos Naturales yAmbientales, San Juan, Puerto Rico.

Joglar, R.S. and P.A. Burrowes. 1996.Declining amphibian populations inPuerto Rico. Pp. 371–380 in R. Powelland R.W. Henderson, eds., Contributionsto West Indian Herpetology: A Tribute toAlbert Schwartz. Society for the Study ofAmphibians and Reptiles, Ithaca (NewYork). Contributions to Herpetology, vol.12.

Joglar, R.S., P.A. Burrowes, and N. Rios.1996. Biology of the Puerto Rican cave-dwelling frog, Eleutherodactylus cooki,and some recommendations for itsconservation. Pp. 251–258 in R. Powelland R.W. Henderson, eds., Contributionsto West Indian Herpetology: A Tribute toAlbert Schwartz. Society for the Study ofAmphibians and Reptiles, Ithaca (NewYork). Contributions to Herpetology, vol.12.

Moreno, J.A. (ed.) 1991. Status y Distribucionde los Anfibios y Reptiles de PuertoRico. Publ. Cien. Misc. No. 1.Departamento de Recursos Naturales yAmbientales de Puerto Rico. San Juan,Puerto Rico 67 pp.

Rivero, J.A. 1978. Los Anfibios y Reptiles dePuerto Rico. U.P.R. EditorialUniversitaria. San Juan, Puerto Rico 152pp.

Wake, D.B. and H.J. Morowitz. 1991.Declining amphibian populations—aglobal phenomenon? Findings andrecommendations. Alytes 9(2): 33–42.

Author

The primary author of this final ruleis Ms. Susan Silander, Boqueron FieldOffice, U.S. Fish and Wildlife Service,P.O. Box 491, Boqueron, Puerto Rico00622 (809/851–7297).


Endangered and threatened species,Exports, Imports, Reporting andrecordkeeping requirements, andTransportation.

Regulation Promulgation

Accordingly, part 17, subchapter B ofchapter I, title 50 of the Code of FederalRegulations, is amended as set forthbelow:

Part 17—[AMENDED]



2. Section 17.11(h) is amended byadding the following, in alphabeticalorder under AMPHIBIANS, to the List ofEndangered and Threatened Wildlife toread as follows:

§ 17.11 Endangered and threatenedwildlife.

* * * * *(h) * * *

SpeciesHistoric range

Vertebrate popu-lation where endan-gered or threatened

Status When listed Criticalhabitat


* * * * * * *Amphibians


SpeciesHistoric range

Vertebrate popu-lation where endan-gered or threatened

Status When listed Criticalhabitat


* * * * * * *Guajon ..................... Eleutherodactylus

cooki.U.S.A. (PR) ............. NA ........................... T 617 NA NA

* * * * * * *

Dated: May 16, 1997.Jay L. Gerst,Acting Director, Fish and Wildlife Service.[FR Doc. 97–15300 Filed 6–10–97; 8:45 am]BILLING CODE 4310–55–P

This section of the FEDERAL REGISTERcontains notices to the public of the proposedissuance of rules and regulations. Thepurpose of these notices is to give interestedpersons an opportunity to participate in therule making prior to the adoption of the finalrules.

Proposed Rules Federal Register

31763

Vol. 62, No. 112


OFFICE OF PERSONNELMANAGEMENT

5 CFR Parts 581 and 582

RIN 3206–AH43

Processing Garnishment Orders forChild Support and Alimony andCommercial Garnishment of FederalEmployees’ Pay

AGENCY: Office of PersonnelManagement.ACTION: Proposed rulemaking.

SUMMARY: The Office of PersonnelManagement (OPM) proposes to amendthe rules for processing garnishmentorders for child support and alimonyand the rules for processing commercialgarnishment orders. The majority of theamendments to the child support andalimony garnishment regulations(‘‘support regulations’’) are mandated bythe provisions of the PersonalResponsibility and Work OpportunityReconciliation Act of 1996.

In addition, OPM proposes to amendboth the support regulations and thecommercial garnishment regulations toprovide that while the FederalGovernment’s sovereign immunity hasbeen waived to allow for processinggarnishment orders, this waivernecessarily limited and that the FederalGovernment is not liable to pay moneydamages for failure to comply with legalprocess.DATES: Comments should be received byAugust 11, 1997.ADDRESSES: Send or deliver commentsto Lorraine Lewis, General Counsel,Office of Personnel Management, Room7355, 1900 E Street NW., Washington,DC 20415.FOR FURTHER INFORMATION CONTACT:Murray M. Meeker, Senior Attorney,Office of the General Counsel, (202)606–1701.SUPPLEMENTARY INFORMATION: Inaccordance with the PersonalResponsibility and Work OpportunityReconciliation Act of 1996, Public Law104–193, enacted on August 22, 1996,

OPM proposes to revise the definition of‘‘child support’’ to permit thegarnishment of attorney fees relating tothe garnishment action. OPM alsoproposes to include three more types ofFederal payments, that will be subject togarnishment: pension paymentsdisbursed by the Department ofVeterans Affairs; compensation fordeath payments; and ‘‘black lung’’benefits payable under any Federalprogram.

While not expressly mandated byPublic Law 104–193, OPM believes thatit was the intent of Congress in enactingthis law, that awards for makingsuggestions as authorized by 5 U.S.C.4503 be subject to support garnishment.OPM is, therefore, proposing to deletethe exception for suggestion awards insection 581.104(j). These awards remainexempt from commercial garnishmentorders.

OPM proposes amendments to clarifysection 581.105 concerning theprecedence of tax levies and section581.402 concerning the applicability ofthe maximum limitation of theConsumer Credit Protection Act, 15U.S.C. 1673, in the unusual situationwhere an employee-obligor receivesremuneration from more than onegovernmental entity.

In compliance with the NationalDefense Authorization Act (NDAA) forFiscal Year 1996, Public Law 104–106,enacted on February 10, 1996, OPMproposes to amend section 582.305(k) torequire employing agencies to deductthe agency’s administrative costsincurred in complying with commercialgarnishment orders. In accordance withthe intent of Congress as evidenced bythe applicable legislative history of theNDAA, the creditor will be required topay these costs.

As requested by the Department ofJustice, OPM is also proposing to amendsection 582.305(c) where an appeal of acommercial garnishment action is filedand to amend section 582.305(g) inresponse to an issue raised in a recentjudicial decision, First Virginia Bank v.Randolph, 920 F.Supp. 213 (D.D.C.1996), rev’d, No. 96–5205 (D.C. Cir.April 11, 1997). Section 582.305(g)currently provides that where anemploying agency initially determinesthat legal process should not behonored, if it subsequently determinesthat the initial determination waserroneous, the agency may correct its

initial determination and honor thelegal process. The district courtindicated that the current section582.305(g) supported the court’s holdingthat Congress had waived the FederalGovernment’s immunity in instanceswhere an employing agency failed tocomply with a commercial garnishmentorder. OPM’s regulations are neitherintended, nor may they be properlyconstructed, as support for theconclusion that Congress has waived theFederal Government’s sovereignimmunity in a manner that would makethe Federal Government liable fordamages as a result of a failure tocomply with legal process. Theproposed amendment to section582.305(g) would delete both thatportion of the paragraph that discussesan agency’s authority to correct an errorand the conclusion that under nocircumstances will an agency berequired to pay more than if it hadoriginally honored the legal process, asthis provision may be mistakenlyconstrued as acknowledgingGovernment liability and a concomitantwaiver of sovereign immunity.

OPM also proposed, in accordancewith a request from the JusticeDepartment, to amend section581.305(e) to state the Government’ssimilar absence of liability in thecontext of improperly effectuatedsupport garnishment orders. It is theFederal Government’s position that thesupport garnishment statute did notwaive sovereign immunity in a mannerthat would make the FederalGovernment liable for damages as aresult of failure to comply with legalprocess. This amendment to the supportgarnishment regulations altersregulatory language that has been ineffect since 1980. The current regulatorylanguage is incorrect as a matter of law.This amendment is in accordance withseveral important judicial decisionsconcerning sovereign immunity,including the decision recentlyannounced by the United States Court ofAppeals for the District of ColumbiaCircuit in Department of the Army v.Federal Labor Relations Authority, 56F.3d 273 (1995).

In accordance with the MinimumWage Increase Act of 1996, section 2104of Public Law 104–188, OPM isamending section 582.402. EffectiveOctober 1, 1996, section 2104 set theminimum hourly wage at $4.75, and

31764 Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Proposed Rules

effective September 1, 1997, theminimum hourly wage will be $5.15.


I certify that these regulations will nothave significant economic impact on asubstantial number of small entitiesbecause their effects are limited toFederal employees and their creditors.

Executive Order 12866, RegulatoryReview

This rule has been reviewed by theOffice of Management and Budget inaccordance with Executive Order 12866.

List of Subjects in 5 CFR Parts 581 and582

Alimony, Child support, Claims,Government employees, and Wages.U.S. Office of Personnel Management.James B. King,Director.

Accordingly, OPM is proposing toamend parts 581 and 582 of Title 5,Code of Federal Regulations, as follows:

PART 581—PROCESSINGGARNISHMENT ORDERS FOR CHILDSUPPORT AND ALIMONY

1. The authority citation for part 581is revised as follows:

Authority: 42 U.S.C. 659; 15 U.S.C. 1673;E.O. 12105 43 FR 59465 and 3 CFR, 1979Comp., p. 262.


§ 581.101 Purpose.

(a) Notwithstanding any otherprovision of law (including section 407of title 42, United States Code, section5301 of title 38, United States Code, andsections 8346 and 8470 of title 5, UnitedStates Code), section 659 of title 42,United States Code, as amended,provides that moneys, the entitlement towhich is based upon remuneration foremployment, due from, or payable by,the United States or the District ofColumbia to any individual, shall besubject, in like manner and to the sameextent as if the United States or theDistrict of Columbia were a privateperson:

(1) To legal process for theenforcement of an obligor’s legalobligations to provide child support,alimony, or both, resulting from anaction brought by an individual obligee;and

(2) To withholding in accordancewith State law enacted pursuant tosubsections (a)(1) and (b) of section 666of title 42, United States Code, and toregulations of the Secretary of Healthand Human Services under such

subsections, and to any other legalprocess brought by a State agencysubject to regulations of the Secretary ofHealth and Human Services that isadministering a program under anapproved State plan to enforce the legalobligations of obligors to provide childsupport and alimony.

(b) Section 659 of title 42, UnitedStates Code, as amended, providesfurther that each governmental entityshall be subject to the samerequirements as would apply if thegovernmental entity were a privateperson, except as set forth in this part.

3. In § 581.102, paragraphs (d) and (f)are revised and paragraph (k) is addedto read as follows:

§ 581.102 Definitions.

* * * * *(d) Child support means the amounts

required to be paid for the support andmaintenance of a child, including achild who has attained the age ofmajority under the law of the issuingState, or a child and the parent withwhom the child is living, who providesfor monetary support, health care,arrearages or reimbursement, and whichmay include other related costs andfees, interest and penalties, incomewithholding, attorney’s fees, and otherrelief.* * * * *

(f) Legal process means any writ,order, summons, notice to withholdincome pursuant to subsection (a)(1) or(b) of section 666 of title 42, UnitedStates Code, or other similar process inthe nature of garnishment, which mayinclude an attachment, writ ofexecution, or court ordered wageassignment, which—

(1) Is issued by:(i) A court of competent jurisdiction,

including Indian tribal courts, withinany State, territory, or possession of theUnited States, or the District ofColumbia;

(ii) A court of competent jurisdictionin any foreign country with which theUnited States has entered into anagreement that requires the UnitedStates to honor such process; or

(iii) An authorized official pursuant toan order of a court of competentjurisdiction or pursuant to State or locallaw; or

(iv) A State agency authorized to issueincome withholding notices pursuant toState or local law or pursuant to therequirements of section 666(b) to title 42of the United States Code; and

(2) Is directed to, and the purpose ofwhich is to compel, a governmentalentity, to make a payment from moneysotherwise payable to an individual, toanother party to satisfy a legal obligation

of the individual to provide childsupport, alimony, or both* * * * *

(k) Individual obligee means anyindividual or entity other than a Stateagency authorized to issue incomewithholding notices pursuant to therequirements of section 666(b) to title 42of the United States Code.

4. In § 581.103, paragraph (c) isrevised to read as follows:

§ 581.103 Moneys which are subject togarnishment.

* * * * *(c) For obligors generally:(1) Periodic benefits, including a

periodic benefit as defined in section429(h)(3) of title 42 of the United StatesCode, title II of the Social Security Act,to include a benefit payable in a lumpsum if it is commutation of, or asubstitute for, periodic payments; orother payments to these individualsunder the programs established bysubchapter II of chapter 7 of title 42 ofthe United States Code (Social SecurityAct); pension payments made by theDepartment of Veterans Affairs; andpayments under chapter 9 of title 45 ofthe United States Code (RailroadRetirement Act) or any other system,plan, or fund established by the UnitedStates (as defined in section 662(a) oftitle 42 of the United States Code) whichprovides for the payment of:

(i) Pensions;(ii) Retirement benefits;(iii) Retired/retainer pay;(iv) Annuities; and(v) Dependents’ or survivors’ benefits

when payable to the obligor;(2) Refunds of retirement

contributions where an application hasbeen filed;

(3) Employee contributions andGovernment contributions to theobligor’s Thrift Savings Fund account inaccordance with section 8437(e) of title5 of the United States Code;

(4) Amounts received under anyFederal program for compensation forwork injuries; and

(5) Benefits received under theLongshoremen’s and Harbor Workers’Compensation Act.

(6) Compensation for death under anyFederal program, including deathgratuities authorized under 5 U.S.C.8133(f); 5 U.S.C. 8134(a); Public Law103–332, section 312; and Public Law104–208, section 651.

(7) Any payment under any Federalprogram established to provide ‘‘blacklung’’ benefits;

(8) Any payment by the Secretary ofVeterans Affairs as compensation for aservice-connected disability paid by theSecretary to a former member of the

31765Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Proposed Rules

Armed Forces who is in receipt ofretired or retainer pay if the formermember has waived either the entireamount or a portion of the retired orretainer pay in order to receive suchcompensation. In such cases, only thatpart of the Department of VeteransAffairs payment that is in lieu of thewaived retired pay or waived retainerpay is subject to garnishment.

§ 581.104 [Amended]5. In § 581.104, paragraph (j) is

removed and paragraph (k) isredesignated as paragraph (j).

6. In § 581.105, paragraph (a) isrevised to read as follows:

§ 581.105 Exclusions.

* * * * *(a) Are owed by the individual to the

United States, except that anindebtedness based on a levy for incometax under section 6331 of title 26 of theUnited States Code, shall not beexcluded in complying with legalprocess for the support of minorchildren if the legal process was enteredprior to the date of the levy;* * * * *

7. In § 581.202, paragraphs (a) and (b)are revised to read as follows:

§ 581.202 Service of process.(a) A party using this part shall serve

legal process on the agent designated inappendix A to this part, or if no agenthas been designated for thegovernmental entity having paymentresponsibility for the moneys involved,then upon the head of thatgovernmental entity, which has moneysdue and payable to the obligor. Wherethe legal process is directed to, and thepurpose of the legal process is to compela governmental entity which holdsmoneys which are otherwise payable toan individual, to make a payment fromsuch moneys in order to satisfy a legalobligation of such individual to providechild support or make alimonypayments, the legal process need notexpressly name the governmental entityas a garnishee.

(b) Service shall be accomplishedpursuant to State procedures in effectpursuant to subsection (a)(1) or (b) ofsection 666 of title 42 of the UnitedStates Code. The designated agent shallnote the date and time of receipt on thelegal process. The governmental entityshall make every reasonable effort tofacilitate proper service of process on itsdesignated agent(s). If legal process isnot directed to any particular officialwithin the entity, or if it is addressed tothe wrong individual, the recipientshall, nonetheless, forward the legalprocess to the designated agent.

However, valid service is notaccomplished until the legal process isreceived in the office of the designatedagent.* * * * *

8. In § 581.303, paragraph (a) isrevised to read as follows:

§ 581.303 Response to legal process orinterrogatories.

(a) Whenever the designated agent isvalidly served with legal processpursuant to State procedures in effectpursuant to subsection (a)(1) or (b) ofsection 666 of title 42, United StatesCode, within 30 calendar days, orwithin such longer period as may beprescribed by applicable State law, theagent shall comply with all applicableprovisions of section 666, including asfollows:

(1) If an agent is served with noticeconcerning amounts owed by an obligorto more than one person, the agent shallcomply with section 666(b)(7);

(2) Allocation of moneys due andpayable to an individual under section666(b) shall be governed by section666(b) and the regulations prescribedunder such section by the Secretary ofHealth and Human Services;

(3) Such moneys as remain aftercompliance with paragraphs (a)(1) and(a)(2) of this section shall be available tosatisfy any other such legal process ona first-come, first-served basis, with anysuch legal process being satisfied out ofsuch moneys as remain after thesatisfaction of all such legal processwhich have been previously served.

(4) The agent shall also respondwithin 30 days to interrogatories whichaccompany legal process.* * * * *

9. In § 581.305, paragraphs (d) and (e)are revised to read as follows:

§ 581.305 Honoring legal process.

* * * * *(d) If a governmental entity is served

with more than one legal process for thesame moneys due or payable to anindividual, the entity shall comply with§ 581.303(a). Provided, That in no eventwill the total amount garnished for anypay or disbursement cycle exceed theapplicable limitation set forth in§ 581.402.

(e)(1) Neither the United States, anydisbursing officer, nor any governmentalentity shall be liable for any paymentmade from moneys due from, or payableby, the United States to any individualpursuant to legal process regular on itsface, if such payment is made inaccordance with this part.

(2) Neither the United States, anydisbursing officer, nor any governmentalentity shall be liable under this part to

pay money damages for failure tocomply with legal process.* * * * *

10. In subpart D, § 581.402 is revisedto read as follows:

§ 581.402 Maximum garnishmentlimitations.

(a) Except as provided in paragraph(b) of this section, pursuant to section1673(b)(2) (A) and (B) of title 15 of theUnited States Code (the ConsumerCredit Protection Act, as amended),unless a lower maximum garnishmentlimitation is provided by applicableState or local law, the maximum part ofthe aggregate disposable earningssubject to garnishment to enforce anysupport order(s) shall not exceed:

(1) Fifty percent of the obligor’saggregate disposable earnings for anyworkweek, where the obligor asserts byaffidavit, or by other acceptableevidence, that he or she is supporting aspouse, a dependent child, or both,other than the former spouse, child, orboth, for whose support such order isissued, except that an additional fivepercent will apply if it appears on theface of the legal process, or from otherevidence submitted in accordance with§ 581.202(d), that such earnings are toenforce a support order for a periodwhich is 12 weeks prior to thatworkweek. An obligor shall beconsidered to be supporting a spouse,dependent child, or both, only if theobligor provides over half of the supportfor a spouse, dependent child or both.

(2) Sixty percent of the obligor’saggregate disposable earnings for anyworkweek, where the obligor fails toassert by affidavit or establishes by otheracceptable evidence, that he or she issupporting a spouse, dependent child,or both, other than a former spouse,child, or both, with respect to whosesupport such order is issued, except thatan additional five percent will apply ifit appears on the face of the legalprocess, or from other evidencesubmitted in accordance with§ 581.202(d), that such earnings are toenforce a support order for periodwhich is 12 weeks prior to thatworkweek.

(3) Where, under § 581.302(a)(2), anobligor submits evidence that he or sheis supporting a second spouse, child, orboth a second spouse and dependentchild, copies of the evidence shall besent by the governmental entity to thegarnishor, or the garnishor’srepresentative, as well as the court, orother authority as specified in§ 581.102(f)(1), together withnotification that the obligor’s supportclaim will be honored. If the garnishordisagrees with the obligor’s support


claim, the garnishor should immediatelyrefer the matter to the court, or otherauthority, for resolution.

(b) In instances where an obligor isreceiving remuneration from more thanone governmental entity, an authoritydescribed in § 581.102(f)(1) may applythe limitations described in paragraph(a) of this section to the totalremuneration, i.e., to the combinedaggregate disposable earnings receivedby the obligor.

PART 582—COMMERCIALGARNISHMENT OF FEDERALEMPLOYEES’ PAY

11. The authority citation for part 582is revised as follows:

Authority: 5 U.S.C. 5520a; 15 U.S.C. 1673;Pub. L. 104–106, section 643; E.O. 12897, 3CFR, 1995 Comp., p. 858.

12. In § 582.305, paragraphs (c), (g),and (k) are revised to read as follows:

§ 582.305 Honoring legal process.* * * * *

(c) (1) The filing of an appeal by anemployee-obligor will not generallydelay the processing of a garnishmentaction. If the employee-obligorestablishes to the satisfaction of theemployee-obligor’s agency that the lawof the jurisdiction which issued thelegal process provides that theprocessing of the garnishment actionshall be suspended during an appeal,and if the employee-obligor establishesthat he or she has filed an appeal, theemploying agency shall comply with theapplicable law of the jurisdiction anddelay or suspend the processing of thegarnishment action.

(2) Notwithstanding paragraph (c)(1)of this section, the employing agencyshall not be required to establish anescrow account to comply with legalprocess even if the applicable law of thejurisdiction requires private employersto do so.* * * * *

(g) (1) Neither the United States, anexecutive agency, nor any disbursingofficer shall be liable for any paymentmade from moneys due from, or payableby, the United States to any individualpursuant to legal process regular on itsface, if such payment is made inaccordance with this part.

(2) Neither the United States, anexecutive agency, nor any disbursingofficer shall be liable under this part topay money damages for failure tocomply with legal process.* * * * *

(k) The agency’s administrative costsincurred in executing a garnishmentshall be paid by the creditor. Theamount garnished, including the

amount deducted as a administrativecosts, may not exceed the limitations in§ 582.401

[Example to paragraph (k): Where theemployee-obligor’s aggregate disposableearnings are $1,000; the commercialgarnishment is at the 25% maximumpercentage; and the cost of processing thecommercial garnishment order is $25 pergarnishment action: $225 would be remittedin compliance with the order and $25 wouldbe deducted as the administrative cost for adeduction total of $250. However, while only$225 would be remitted, the agency wouldreduce the balance due as if $250 had beenremitted.]

* * * * *13. In § 582.402, paragraph (a) is

revised to read as follows:

§ 582.402 Maximum garnishmentlimitations.* * * * *

(a) Unless a lower maximumlimitation is provided by applicableState or local law, the maximum part ofan employee-obligor’s aggregatedisposable earnings subject togarnishment to enforce any legal debtother than an order for child support oralimony, including any amountswithheld to offset administrative costsas provided for in § 582.305(k), shall notexceed 25 percent of the employee-obligor’s aggregate disposable earningsfor any workweek. As appropriate, Stateor local law should be construed asproviding a lower maximum limitationwhere legal process may only beprocessed on a one at a time basis.Where an agency is garnishing 25percent or more of an employee-obligor’s aggregate disposable earningsfor any workweek in compliance withlegal process to which an agency issubject under sections 459, 461, and 462of the Social Security Act, no additionalamount may be garnished in compliancewith legal process under this part.Furthermore, the following dollarlimitations, which are contained in title29 of the Code of Federal Regulations,part 870, must be applied indetermining the garnishable amount ofthe employee’s aggregate disposableearnings:

(1) If the employee-obligor’s aggregatedisposable earnings for the workweekare in excess of 40 times the Fair LaborStandard Act (FLSA) minimum hourlywage, 25 percent of the employee-obligor’s aggregate disposable earningsmay be garnished. For example,effective September 1, 1997, when theFLSA minimum wage rate is $5.15 perhour, this rate multiplied by 40 equals$206.00 and thus, if an employee-obligor’s aggregate disposable earningsare in excess of $206.00 for a workweek,25 percent of the employee-obligor’s

aggregate disposable earnings aresubject to garnishment.

(2) If the employee-obligor’s aggregatedisposable earnings for a workweek areless than 40 times the FLSA minimumhourly wage, garnishment may notexceed the amount by which theemployee-obligor’s aggregate disposableearnings exceed 30 times the currentminimum wage rate. For example, at anFLSA minimum wage rate of $5.15 perhour, the amount of aggregatedisposable earnings which may not begarnished is $154.50 [$5.15 x 30]. Onlythe amount above $154.50 isgarnishable.

(3) If the employee-obligor’s aggregatedisposable earnings in a workweek areequal to or less than 30 times the FLSAminimum hourly wage, the employee-obligor’s earnings may not be garnishedin any amount.* * * * *[FR Doc. 97–15182 Filed 6–10–97; 8:45 am]BILLING CODE 6325–01–M



14 CFR Part 39

[Docket No. 96–CE–58–AD]

RIN 2120–AA64

Airworthiness Directives; FairchildAircraft Incorporated Models SA226–TC, SA226–T, SA226–T(B), and SA226–AT Airplanes

AGENCY: Federal AviationAdministration, DOT.ACTION: Notice of proposed rulemaking(NPRM).

SUMMARY: This document proposes toadopt a new airworthiness directive(AD) that would apply to certainFairchild Aircraft Incorporated(Fairchild) Models SA226–TC, SA226–T, SA226–T(B), and SA226–ATairplanes. The proposed AD wouldrequire inspecting the center flap hingeand wing trailing edge ribs at the flapactuator attach brackets for cracks and ifno cracks are found, installing a doubleron the rib, or replacing a cracked ribwith a new rib assembly that isreinforced with a doubler. Fatiguecracks at the center flap hinge and thesupport link has resulted inconcentrated stress on the wing trailingedge ribs which prompted the proposedaction. The actions specified by theproposed AD are intended to preventasymmetrical flap deflection forcing theairplane into an uncommanded roll and


could cause loss of control of theairplane.DATES: Comments must be received onor before August 11, 1997.ADDRESSES: Submit comments intriplicate to the Federal AviationAdministration (FAA), Central Region,Office of the Assistant Chief Counsel,Attention: Rules Docket No. 96–CE–58–AD, Room 1558, 601 E. 12th Street,Kansas City, Missouri 64106. Commentsmay be inspected at this locationbetween 8 a.m. and 4 p.m., Mondaythrough Friday, holidays excepted.

Service information that applies to theproposed AD may be obtained fromFairchild Aircraft Inc., P.O. Box 32486,San Antonio, Texas, 78284; telephone(210) 824–9421. This information alsomay be examined at the Rules Docket atthe address above.FOR FURTHER INFORMATION CONTACT: Mr.Hung Viet Nguyen, Aerospace Engineer,FAA, Fort Worth Airplane CertificationOffice, 2601 Meacham Boulevard, FortWorth, Texas 76193–0150; telephone(817) 222–5155; facsimile (817) 222–5960.


Comments Invited

Interested persons are invited toparticipate in the making of theproposed rule by submitting suchwritten data, views, or arguments asthey may desire. Communicationsshould identify the Rules Docketnumber and be submitted in triplicate tothe address specified above. Allcommunications received on or beforethe closing date for comments, specifiedabove, will be considered before takingaction on the proposed rule. Theproposals contained in this notice maybe changed in light of the commentsreceived.

Comments are specifically invited onthe overall regulatory, economic,environmental, and energy aspects ofthe proposed rule. All commentssubmitted will be available, both beforeand after the closing date for comments,in the Rules Docket for examination byinterested persons. A report thatsummarizes each FAA-public contactconcerned with the substance of thisproposal will be filed in the RulesDocket.

Commenters wishing the FAA toacknowledge receipt of their commentssubmitted in response to this noticemust submit a self-addressed, stampedpostcard on which the followingstatement is made: ‘‘Comments toDocket No. 96–CE–58–AD.’’ Thepostcard will be date stamped andreturned to the commenter.

Availability of NPRMs

Any person may obtain a copy of thisNPRM by submitting a request to theFAA, Central Region, Office of theAssistant Chief Counsel, Attention:Rules Docket No. 96–CE–58–AD, Room1558, 601 E. 12th Street, Kansas City,Missouri 64106.

Events Leading to the Proposed AD

The FAA has received reports of threeincidents on certain Fairchild SA226series airplanes with fatigue cracks inthe wing trailing edge rib at the centerflap hinge. Further investigation showsthat the cracking is relieving the stressload at the support link. This preventsthe flaps from extending to fulldeflection, which could result inasymmetrical flap deflection and causethe airplane to go into an uncommandedroll.

Related Service Information

Fairchild has issued Service Bulletin(SB) SB 57–016, Issued: June 25, 1981;Revised: December 9, 1981, thatspecifies procedures for inspecting thewing trailing edge ribs for cracks, if nocracks are found, installingreinforcement doublers on the ribs, andreplacing ribs that have cracks with newrib assemblies.(Note: The compliance time in this AD takesprecedence over the compliance time in theFairchild Service Bulletin referenced above.)

FAA’s Determination

After examining the circumstancesand reviewing all available informationrelated to the incidents and serviceinformation described above, the FAAhas determined that AD action shouldbe taken to prevent asymmetrical flapdeflection forcing the airplane into anuncommanded roll and could cause lossof control of the airplane.

Explanation of the Provisions of theProposed AD

Since an unsafe condition has beenidentified that is likely to exist ordevelop in other Fairchild ModelsSA226–TC, SA226–T, SA226–T(B), andSA226A–T airplanes of the same typedesign, the proposed AD would require:

—Inspecting wing trailing edge ribs atwing stations (WS) 98.385 and100.635 for cracks,

—Replacing any cracked rib with a newrib assembly (part number (P/N) 27–31085–1/2 or 27–31086–1/2 or FAAequivalent), and

—Installing a reinforcement doubler (P/N 27K36075–7 or FAA equivalent),whether or not cracks are found.

Cost Impact

The FAA estimates that 240 airplanesin the U.S. registry would be affected bythe proposed AD, that it would takeapproximately 100 workhours perairplane to accomplish the proposedinstallation of the doubler and 180workhours per airplane to accomplishthe proposed installation of the new ribassembly and doubler, and that theaverage labor rate is approximately $60an hour. Parts cost approximately $133for both wing rib assemblies perairplane. The doubler can bemanufactured from local materials.Based on these figures, the total costimpact of the proposed AD on U.S.operators is estimated to be $2,623,920for the U.S. fleet or $10,933 per airplanefor the rib assembly and doublerinstallations. The labor cost for thedoubler installation is $6,000 perairplane and the doubler can bemanufactured from local materials.

Regulatory Flexibility Determinationand Analysis

The Regulatory Flexibility Act of 1980(RFA) was enacted by Congress toensure that small entities are notunnecessarily or disproportionatelyburdened by government regulations.The RFA requires government agenciesto determine whether rules would havea ‘‘significant economic impact on asubstantial number of small entities,’’and, in cases where the rule would havean economic impact, the agency makingthe rule is obligated to conduct aRegulatory Flexibility Analysis in whichalternatives to the rule are considered.FAA Order 2100.14A, RegulatoryFlexibility Criteria and Guidance,outlines FAA procedures and criteria forcomplying with the RFA. Small entitiesare defined as small businesses, smallnot-for-profit organizations that areindependently owned and operated, orairports operated by small governmentaljurisdictions. A ‘‘substantial number’’ isdefined as a number that is not less than11 and that is more than one-third of thesmall entities subject to a proposed rule,or any number of small entities judgedto be substantial by the rulemakingofficial. A ‘‘significant economicimpact’’ is defined by an annualized netcompliance cost, adjusted for inflation,which is greater than a threshold costlevel for defined entity types.

There are an estimated 240 FairchildSA226 series airplanes in the U.S.registry that could be affected by theproposed action. For many of theseairplanes, it is believed that the actionsthat are proposed have already beencompleted. The entities affected by theproposed AD are largely grouped in the


Standard Industrial Classification (SIC)4512, Operators of Aircraft for Hire,classified as ‘‘Unscheduled.’’ FAAOrder 2100.14A, Regulatory FlexibilityCriteria and Guidance, defines a smallentity in this classification as one thatowns or operates nine or fewer aircraft.

In order to experience a significanteconomic impact under Order2100.14A, an operator of aircraft forhire, unscheduled, would have to incurannualized costs of $4975 (1996 dollars)or more. Costs are estimated to beapproximately $6,000 per airplane ifonly the doubler plates are installed, oras much as $10,933 per airplane if anyribs are found cracked and a ribassembly replacement is required, inaddition to installing the doubler plate.Annualized costs are dependent on therequired work, the cost of capital forairplane owners/operators, and theexpected length of time that therequired changes are expected to be inuse. Since the changes are assumed tobe permanent, the service life of thechanges is the remaining life of theairplane. The cost of capital for theairplane owners/operators is assumed tobe 15 percent. Under these conditions,no owner/operator of a single airplanewould be subject to significant costs ifthe expected remaining service life ofthe aircraft were more than:

(a) 1.43 years (approximately 17months), if the doubler plate installationis required; or

(b) 2.9 years (approximately 35months) if both the doubler plateinstallation and rib replacement isrequired.

Ownership of the new SA226 seriesairplanes (i.e.: the airplanes other thanthe older Model SA226TC) is verywidely dispersed. There are fiveseparate entities (excluding Swearingen)that show ownership of newer SA226series airplanes in the U.S. Registry,each of which owns two SA226 seriesairplanes. According to themanufacturer, these airplanes arerelatively new with typically less than10,000 hours total time-in-service (TIS),and are employed primarily as corporateaircraft with usage rates atapproximately 400 hours TIS per year.Allocating a nominal remaining servicelife of 25,000 hours total TIS (out of atotal service life of 35,000 hours) at therate of 500 hours TIS per year, suggestsremaining lives on the order of 50 years.Even with a remaining service life ofhalf of this, or 25 years, annualizedcosts for both doubler plate installationand rib replacement would be on theorder of $1,715. Thus, an owner of twosuch airplanes would experienceannualized costs for the proposed AD of

approximately $3,430, which is a figureless than 70 percent of threshold valuefor significant cost.

The manufacturer indicates that mostof the older Fairchild Model SA226–TCairplanes (80 of which were listed in theU.S. Registry records), have probablybeen modified under the 1981 servicebulletin that will be made mandatory bythe AD. Fairchild Model SA226–TCairplanes in service have averagecumulative usage of approximately25,000 to 30,000 hours total TIS, with alikely average annual usage in cargoservice of 1,000 to 1,500 hours TIS, andan economic life of 35,000 hours totalTIS. This suggests that most FairchildModel SA226–TC airplanes haveremaining lives of about five years (evenwithout prospective modifications thatare likely to extend the life of theaircraft). A five-year life for an airplanethat would be required to carry out bothmodifications implies that annualizedcosts would be approximately $3,300.Thus, an owner of a single agingunmodified Fairchild Model SA226–TCairplane would not experience asignificant economic impact.

According to U.S. Registry records,there are 12 entities (excludingSweringen) that own 2 or moreFairchild Model SA226–TC airplanes,accounting for a total of 49 airplanes.Because of the age of the aircraft and thelikelihood of compliance with theoriginal service bulletin (dated 1981),the FAA believes that significantimpacts will not be felt by most ownersof the these airplanes. In addition, theeight owners of two or more of theseairplanes account for less than one-tenthof the affected entities. For thesereasons, the FAA has determined thatthe proposed AD would not have asignificant economic impact on asubstantial number of small aircraftoperators. The FAA solicits commentsconcerning the impact of this proposedAD on small entity owners of affectedairplanes. Based on the possibility thatthis proposed AD could have asignificant impact on a substantialnumber of small entities, the FAAconducted a regulatory flexibilityanalysis.

A copy of the full Cost Analysis andRegulatory Flexibility Determination forthe proposed action may be examined atthe FAA, Central Region, Office of theAssistant Chief Counsel, Attention:Rules Docket No. 96–CE–58–AD, Room1558, 601 E. 12th Street, Kansas City,Missouri.

FAA’s Aging Commuter Aircraft Policy

This action is consistent with theFAA’s aging commuter airplane policy.

This policy simply states that relianceon repetitive inspections of critical areason airplanes utilized in commuterservice carries an unnecessary safetyrisk when a design change exists thatcould eliminate or, in certain instances,reduce the number of those criticalinspections. The alternative to installingthe doubler or the new rib assemblywould be relying on repetitiveinspections to detect damaged wingribs.

Regulatory Impact

The regulations proposed hereinwould not have substantial direct effectson the States, on the relationshipbetween the national government andthe States, or on the distribution ofpower and responsibilities among thevarious levels of government. Therefore,in accordance with Executive Order12612, it is determined that thisproposal would not have sufficientfederalism implications to warrant thepreparation of a Federalism Assessment.

For the reasons discussed above, Icertify that this action (1) is not a‘‘significant regulatory action’’ underExecutive Order 12866; (2) is not a‘‘significant rule’’ under DOTRegulatory Policies and Procedures (44FR 11034, February 26, 1979); and (3) ifpromulgated, will not have a significanteconomic impact, positive or negative,on a substantial number of small entitiesunder the criteria of the RegulatoryFlexibility Act. A copy of the draftregulatory evaluation prepared for thisaction has been placed in the RulesDocket. A copy of it may be obtained bycontacting the Rules Docket at thelocation provided under the captionADDRESSES.


Air transportation, Aircraft, Aviationsafety, Safety.

The Proposed Amendment

Accordingly, pursuant to theauthority delegated to me by theAdministrator, the Federal AviationAdministration proposes to amend part39 of the Federal Aviation Regulations(14 CFR part 39) as follows:

PART 39—AIRWORTHINESSDIRECTIVES


Authority: 49 USC 106(g), 40113, 44701.


§39.13 [Amended]2. Section 39.13 is amended by

adding a new airworthiness directive(AD) to read as follows:Fairchild Aircraft Inc.: Docket No. 96–CE–

58–AD.Applicability: The following Models and

serial numbered airplanes, certificated in anycategory.

Models Serial Nos.

SA226–TC .......... TC201 through TC379.SA226–T ............. T201 through T275, and

T277 through T291.SA226–T(B) ........ T(B)275, and T(B)292

through T(B)378.SA226–AT .......... AT001 through AT069.

Note 1: This AD applies to each airplaneidentified in the preceding applicabilityprovision, regardless of whether it has beenmodified, altered, or repaired in the areasubject to the requirements of this AD. Forairplanes that have been modified, altered, orrepaired so that the performance of therequirements of this AD is affected, theowner/operator must request approval for analternative method of compliance inaccordance with paragraph (c) of this AD.The request should include an assessment ofthe effect of the modification, alteration, orrepair on the unsafe condition addressed bythis AD; and, if the unsafe condition has notbeen eliminated, the request should includespecific proposed actions to address it.

Compliance: Required within the next 500hours time-in-service (TIS) after the effectivedate of this AD, unless already accomplished.

Note 2: The compliance time of this ADtakes precedence over the compliance time inthe Fairchild Service Bulletin referencedbelow.

To prevent asymmetrical flap deflectionforcing the airplane into an uncommandedroll and cause loss of control of the airplane,accomplish the following:

(a) Inspect both wing trailing edge ribs atthe center flap actuator attach brackets, wingstations (WS) 98.385 and 100.635, for cracksin accordance with the AccomplishmentInstructions section, Part A, of FairchildService Bulletin (SB) 57–016, Issued: June 25,1981; Revised: December 9, 1981.

(1) If no cracks are found, prior to furtherflight, install the reinforcement doubler, partnumber (P/N) 27K36075–7 or an FAAapproved, in accordance with theAccomplishment Instructions section, Part Bof Fairchild SB 57–016, Issued: June 25,1981; Revised: December 9, 1981.

(2) If any cracks are found, prior to furtherflight, replace any cracked rib with a new ribassembly (P/N 27–31085–1/2 or 27–31086–1/2 or an FAA-approved) and install the newreinforcement doubler (P/N 27K36075–7 oran FAA equivalent) in accordance with theAccomplishment Instructions section, Part Band Part C of Fairchild SB 57–016, Issued:June 25, 1981; Revised: December 9, 1981.

(b) Special flight permits may be issued inaccordance with sections 21.197 and 21.199of the Federal Aviation Regulations (14 CFR21.197 and 21.199) to operate the airplane to

a location where the requirements of this ADcan be accomplished.

(c) An alternative method of compliance oradjustment of compliance time that providesan equivalent level of safety may be approvedby the Manager, Fort Worth AirplaneCertification Office, 2601 MeachamBoulevard, Fort Worth, Texas 76193–0150.The request shall be forwarded through anappropriate FAA Maintenance Inspector,who may add comments and then send it tothe Manager, Fort Worth AirplaneCertification Office.

Note 3: Information concerning theexistence of approved alternative methods ofcompliance with this AD, if any, may beobtained from the Fort Worth AirplaneCertification Office.

(d) All persons affected by this directivemay obtain copies of the document referredto herein upon request to Fairchild Aircraft,Inc., P. O. Box 32486, San Antonio, Texas,78284; or may examine this document at theFAA, Central Region, Office of the AssistantChief Counsel, Room 1558, 601 E. 12thStreet, Kansas City, Missouri 64106.

Issued in Kansas City, Missouri, on June 4,1997.John R. Colomy,Acting Manager, Small Airplane Directorate,Aircraft Certification Service.[FR Doc. 97–15174 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–U



14 CFR Part 71

[Airspace Docket No. 97–AAL–8]

Proposed Revision of Class EAirspace; Ketchikan, AK

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Notice of proposed rulemaking.

SUMMARY: This proposal will revise theClass E airspace designated as thesurface area for Ketchikan InternationalAirport, Ketchikan, AK. The KetchikanInternational Airport’s surface area iscurrently effective 24 hours a day andhas a mandatory communicationrequirement. The wording in the lasttwo sentences in the current descriptionapply to surface areas with less than 24hour operations. These last twosentences will be deleted. The intendedeffect of this proposal is to modify theKetchikan, AK, surface area descriptionto indicate a continuous, 24 houroperation.DATES: Comments must be received onor before July 28, 1997.ADDRESSES: Send comments on theproposal in triplicate to: Manager,System Management Branch, AAL–530,Docket No. 97–AAL–8, Federal Aviation

Administration, 222 West 7th Avenue,Box 14, Anchorage, AK 99513–7587.

The official docket may be examinedin the Office of the Assistant ChiefCounsel for the Alaskan Region at thesame address.

An informal docket may also beexamined during normal business hoursin the Office of the Manager, SystemManagement Branch, Air TrafficDivision, at the address shown aboveand on the Internet at the AlaskanRegion’s homepage at http://www.alaska.faa.gov/at.

FOR FURTHER INFORMATION CONTACT:Robert van Haastert, SystemManagement Branch, AAL–538, FederalAviation Administration, 222 West 7thAvenue, Box 14, Anchorage, AK 99513–7587; telephone number: (907) 271–5863; email:[email protected].


Comments Invited

Interested parties are invited toparticipate in this proposed rulemakingby submitting such written data, views,or arguments as they may desire.Comments that provide the factual basissupporting the views and suggestionspresented are particularly helpful indeveloping reasoned regulatorydecisions on the proposal. Commentsare specifically invited on the overallregulatory, aeronautical, economic,environmental, and energy-relatedaspects of the proposal.Communications should identify theairspace docket number and besubmitted in triplicate to the addresslisted above. Commenters wishing theFAA to acknowledge receipt of theircomments on this notice must submitwith those comments a self-addressed,stamped postcard on which thefollowing statement is made:‘‘Comments to Airspace Docket No. 97–AAL–8.’’ The postcard will be date/timestamped and returned to thecommenter. All communicationsreceived on or before the specifiedclosing date for comments will beconsidered before taking action on theproposed rule. The proposal containedin this notice may be changed in lightof comments received. All commentssubmitted will be available forexamination in the System ManagementBranch, Air Traffic Division, FederalAviation Administration, 222 West 7thAvenue, Box 14, Anchorage, AK, bothbefore and after the closing date forcomments. A report summarizing eachsubstantive public contact with FAApersonnel concerned with thisrulemaking will be filed in the docket.


Availability of NPRM’s

Any person may obtain a copy of thisNotice of Proposed Rulemaking (NPRM)by submitting a request to the SystemManagement Branch, AAL–530, FederalAviation Administration, 222 West 7thAvenue, Box 14, Anchorage, AK 99513–7587. Communications must identifythe notice number of this NPRM.Persons interested in being placed on amailing list for future NPRM’s shouldalso request a copy of Advisory CircularNo. 11–2A which describes theapplication procedure.

The Proposal

The FAA is considering anamendment to part 71 of the FederalAviation Regulations (14 CFR part 71) torevise the Class E airspace designated asthe surface area for KetchikanInternational Airport, Ketchikan, AK.The Ketchikan International Airport’ssurface area is currently effective 24hours a day and has mandatorycommunication requirements. Thewording in the last two sentences of thecurrent description are for surface areaswith less than 24 hour operations. Theselast two sentences will be deleted. Thecoordinates for this airspace docket arebased on North American Datum 83.The Class E airspace areas designated assurface areas are published in paragraph6002 of FAA Order 7400.9D, AirspaceDesignations and Reporting Points,dated September 4, 1996, and effectiveSeptember 16, 1996, which isincorporated by reference in 14 CFR71.1 (61 FR 48403; September 13, 1996).The intended effect of this proposal isto modify the Ketchikan, AK, surfacearea description to indicate continuous,24 hour operation. The Class E airspacedesignation listed in this documentwould be published subsequently in theOrder.

The FAA has determined that theseproposed regulations only involve anestablished body of technicalregulations for which frequent androutine amendments are necessary tokeep them operationally current. It,therefore—(1) is not a ‘‘significantregulatory action’’ under ExecutiveOrder 12866; (2) is not a ‘‘significantrule’’ under DOT Regulatory Policiesand Procedures (44 FR 11034; February26, 1979); and (3) does not warrantpreparation of a regulatory evaluation asthe anticipated impact is so minimal.Since this is a routine matter that willonly affect air traffic procedures and airnavigation, it is certified that this rule,when promulgated, will not have asignificant economic impact on asubstantial number of small entities

under the criteria of the RegulatoryFlexibility Act.

List of Subjects in 14 CFR Part 71Airspace, Incorporation by reference,

Navigation (air).

The Proposed AmendmentIn consideration of the foregoing, the

Federal Aviation Administrationproposes to amend 14 CFR part 71 asfollows:

PART 71—[AMENDED]

1. The authority citation for 14 CFRPart 71 continues to read as follows:

Authority: 49 U.S.C. 40103, 40113, 40120;E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963Comp., p. 389; 49 U.S.C. 106(g); 14 CFR11.69.

§ 71.1 [Amended]2. The incorporation by reference in

14 CFR 71.1 of Federal AviationAdministration Order 7400.9D, AirspaceDesignations and Reporting Points,dated September 4, 1996, and effectiveSeptember 16, 1996, is amended asfollows:* * * * *

Paragraph 6002 Class E airspace areaslisted below are designated as a surface areafor an airport.

* * * * *

AAL AK E2 Ketchikan, AK

Ketchikan International Airport, Ketchikan,AK

(lat. 55°21′20′′ N, long. 131°42′49′′ W)Ketchikan Localizer

(lat. 55°20′ 51′′ N, long. 131°42′ 00′′ W)Within a 3-mile radius of the Ketchikan

International Airport and within 1 mile eachside of the Ketchikan localizer northwest/southeast courses extending from the 3-mileradius to 4.6 miles northwest and 4.1 milessoutheast of the airport.

* * * * *Issued in Anchorage, AK, on June 3, 1997.

Willis C. Nelson,Manager, Air Traffic Division, AlaskanRegion.[FR Doc. 97–15309 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–P



14 CFR Part 71

[Airspace Docket No. 97–AAL–7]

Proposed Establishment of Class EAirspace; Huslia, AK

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Notice of proposed rulemaking.

SUMMARY: This action establishes ClassE airspace at Huslia, AK. Thedevelopment of Very High Frequency(VHF) omni-directional radio range(VOR) and VOR/Distance MeasuringEquipment (DME) instrumentapproaches to RWY 3 and RWY 21 havemade this action necessary. This actionwill change the airport status fromVisual Flight Rules (VFR) to InstrumentFlight Rules (IFR). The area would bedepicted on appropriate aeronauticalcharts thereby enabling pilots tocircumnavigate the area or otherwisecomply with IFR procedures. Theintended effect of this proposal is toprovide adequate controlled airspace forIFR operations, segregating aircraftusing instrument conditions from otheraircraft operating in visual weatherconditions, at Huslia Airport, AK.DATES: Comments must be received onor before July 28, 1997.ADDRESSES: Send comments on theproposal in triplicate to: Manager,System Management Branch, AAL–530,Docket No. 97–AAL–7, Federal AviationAdministration, 222 West 7th Avenue,Box 14, Anchorage, AK 99513–7587.

The official docket may be examinedin the Office of the Assistant ChiefCounsel for the Alaskan Region at thesame address.

An informal docket may also beexamined during normal business hoursin the Office of the Manager, SystemManagement Branch, Air TrafficDivision, at the address shown aboveand on the Internet at the AlaskanRegion’s homepage at http://www.alaska.faa.gov/at.FOR FURTHER INFORMATION CONTACT:Robert van Haastert, SystemManagement Branch, AAL–538, FederalAviation Administration, 222 West 7thAvenue, Box 14, Anchorage, AK 99513–7587; telephone number: (907) 271–5863; email:[email protected].


Comments InvitedInterested parties are invited to

participate in this proposed rulemakingby submitting such written data, views,or arguments as they may desire.Comments that provide the factual basissupporting the views and suggestionspresented are particularly helpful indeveloping reasoned regulatorydecisions on the proposal. Commentsare specifically invited on the overallregulatory, aeronautical, economic,environmental, and energy-relatedaspects of the proposal.Communications should identify theairspace docket number and besubmitted in triplicate to the address


listed above. Commenters wishing theFAA to acknowledge receipt of theircomments on this notice must submitwith those comments a self-addressed,stamped postcard on which thefollowing statement is made:‘‘Comments to Airspace Docket No. 97–AAL–7.’’ The postcard will be date/timestamped and returned to thecommenter. All communicationsreceived on or before the specifiedclosing date for comments will beconsidered before taking action on theproposed rule. The proposal containedin this notice may be changed in lightof comments received. All commentssubmitted will be available forexamination in the System ManagementBranch, Air Traffic Division, FederalAviation Administration, 222 West 7thAvenue, Box 14, Anchorage, AK, bothbefore and after the closing date forcomments. A report summarizing eachsubstantive public contact with FAApersonnel concerned with thisrulemaking will be filed in the docket.

Availability of NPRM’sAny person may obtain a copy of this

Notice of Proposed Rulemaking (NPRM)by submitting a request to the SystemManagement Branch, AAL–530, FederalAviation Administration, 222 West 7thAvenue, Box 14, Anchorage, AK 99513–7587. Communications must identifythe notice number of this NPRM.Persons interested in being placed on amailing list for future NPRM’s shouldalso request a copy of Advisory CircularNo. 11–2A which describes theapplication procedure.

The ProposalThe FAA is considering an

amendment to part 71 of the FederalAviation Regulations (14 CFR part 71) toestablish Class E airspace toaccommodate aircraft executing theVOR instrument approach procedures atHuslia, AK. Controlled airspaceextending upward from 700 to 1200 feetabove the ground (AGL) is needed tocontain aircraft executing the approach.This action will change the airportstatus from Visual Flight Rules (VFR) toInstrument Flight Rules (IFR). Thecoordinates for this airspace docket arebased on North American Datum 83.The Class E airspace areas designated as700/1200 foot transition areas arepublished in paragraph 6005 of FAAOrder 7400.9D, Airspace Designationsand Reporting Points, dated September4, 1996, and effective September 16,1996, which is incorporated byreference in 14 CFR 71.1 (61 FR 48403;September 13, 1996). The intendedeffect of this proposal is to provideadequate controlled airspace for IFR

operations, segregating aircraft usinginstrument conditions from otheraircraft operating in visual weatherconditions, at Huslia Airport, AK. TheClass E airspace designation listed inthis document would be publishedsubsequently in the Order.

The FAA has determined that theseproposed regulations only involve anestablished body of technicalregulations for which frequent androutine amendments are necessary tokeep them operationally current. It,therefore—(1) is not a ‘‘significantregulatory action’’ under ExecutiveOrder 12866; (2) is not a ‘‘significantrule’’ under DOT Regulatory Policiesand Procedures (44 FR 11034; February26, 1979); and (3) does not warrantpreparation of a regulatory evaluation asthe anticipated impact is so minimal.Since this is a routine matter that willonly affect air traffic procedures and airnavigation, it is certified that this rule,when promulgated, will not have asignificant economic impact on asubstantial number of small entitiesunder the criteria of the RegulatoryFlexibility Act.

List of Subjects in 14 CFR Part 71Airspace, Incorporation by reference,

Navigation (air).

The Proposed AmendmentIn consideration of the foregoing, the

Federal Aviation Administrationproposes to amend 14 CFR part 71 asfollows:

PART 71—[AMENDED]

1. The authority citation for 14 CFRPart 71 continues to read as follows:

Authority: 49 U.S.C. 40103, 40113, 40120;E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963Comp., p. 389; 49 U.S.C. 106(g); 14 CFR11.69.

§ 71.1 [Amended]2. The incorporation by reference in

14 CFR 71.1 of Federal AviationAdministration Order 7400.9D, AirspaceDesignations and Reporting Points,dated September 4, 1996, and effectiveSeptember 16, 1996, is amended asfollows:* * * * *

Paragraph 6005 Class E airspace extendingupward from 700 feet or more above thesurface of the earth.* * * * *

AAL AK E5 Huslia, AKHuslia Airport, AK(Lat. 65° 41′ 50′′ N, long. 156° 23′ 21′′ W)

That airspace extending upward from 700feet above the surface within a 6.5-mileradius of the Huslia Airport.

* * * * *

Issued in Anchorage, AK, on June 3, 1997.Willis C. Nelson,Manager, Air Traffic Division, AlaskanRegion.[FR Doc. 97–15308 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–P



21 CFR Part 878


General and Plastic Surgery Devices:Reclassification of the Tweezer-TypeEpilator

AGENCY: Food and Drug Administration,HHS.ACTION: Proposed rule.

SUMMARY: The Food and DrugAdministration (FDA) is proposing toreclassify the tweezer-type epilator fromclass III to class I when intended toremove hair. FDA also proposes toexempt this device from the premarketnotification requirements. Thisreclassification is being proposed on theSecretary of Health and HumanServices’ own initiative based on newinformation. This action is being takenunder the Federal Food, Drug, andCosmetic Act (the act), as amended bythe Medical Device Amendments of1976 (the 1976 amendments) and theSafe Medical Devices Act of 1990 (theSMDA).DATES: Written comments by September9, 1997. FDA proposes that any finalregulation based on this proposalbecome effective 30 days after date ofpublication in the Federal Register.ADDRESSES: Submit written commentsto the Dockets Management Branch(HFA–305), Food and DrugAdministration, 12420 Parklawn Dr.,rm. 1–23, Rockville, MD 20857.FOR FURTHER INFORMATION CONTACT:Stephen P. Rhodes, Center for Devicesand Radiological Health (HFZ–410),Food and Drug Administration, 9200Corporate Blvd., Rockville, MD 20850,301–594–3090.SUPPLEMENTARY INFORMATION:

I. Regulatory Authorities

The act, as amended by the 1976amendments (Pub. L. 94–295) and theSMDA (Pub. L. 101–629), established acomprehensive system for the regulationof medical devices intended for humanuse. Section 513 of the act (21 U.S.C.360c) established three categories(classes) of devices, depending on the


regulatory controls needed to providereasonable assurance of their safety andeffectiveness. The three categories ofdevices are class I (general controls),class II (special controls), and class III(premarket approval).

Under section 513 of the act, devicesthat were in commercial distributionbefore May 28, 1976 (the date ofenactment of the amendments),generally referred to as preamendmentsdevices, are classified after FDA has: (1)Received a recommendation from adevice classification panel (an FDAadvisory committee); (2) published thepanel’s recommendation for comment,along with a proposed regulationclassifying the device; and (3) publisheda final regulation classifying the device.FDA has classified mostpreamendments devices under theseprocedures.

Devices that were not in commercialdistribution prior to May 28, 1976,generally referred to as post amendmentdevices, are classified automatically bystatute (section 513(f) of the act) intoclass III without any FDA rulemakingprocess. Those devices remain in classIII and require premarket approval,unless and until FDA issues an orderfinding the device to be substantiallyequivalent, under section 513(i) of theact, to a predicate device that does notrequire premarket approval. The agencydetermines whether new devices aresubstantially equivalent to previouslyoffered devices by means of premarketnotification procedures in section 510(k)of the act (21 U.S.C. 360(k)) and 21 CFRpart 807 of the regulations.

A preamendments device that hasbeen classified into class III may bemarketed, by means of premarketnotification procedures, withoutsubmission of a premarket approvalapplication (PMA) until FDA issues afinal regulation under section 515(b) ofthe act (21 U.S.C. 360e(b)) requiringpremarket approval.

Reclassification of classifiedpreamendments devices is governed bysection 513(e) of the act. This sectionprovides that FDA may, by rulemaking,reclassify a device (in a proceeding thatparallels the initial classificationproceeding) based upon ‘‘newinformation.’’ The reclassification canbe initiated by FDA or by the petitionof an interested person. The term ‘‘newinformation,’’ as used in section 513(e)of the act, includes informationdeveloped as a result of a reevaluationof the data before the agency when thedevice was originally classified, as wellas information not presented, notavailable, or not developed at that time.(See, e.g., Holland Rantos v. UnitedStates Department of Health, Education,

and Welfare, 587 F.2d 1173, 1174 n.1(D.C. Cir. 1978); Upjohn v. Finch, 422F.2d 944 (6th Cir. 1970); Bell v.Goddard, 366 F.2d 177 (7th Cir. 1966).)

Reevaluation of the data previouslybefore the agency is an appropriate basisfor subsequent regulatory action wherethe reevaluation is made in light ofchanges in ‘‘medical science.’’ (SeeUpjohn v. Finch, supra, 422 F.2d at951.) However, regardless of whetherdata before the agency are past or newdata, the ‘‘new information’’ on whichany reclassification is based is requiredto consist of ‘‘valid scientific evidence,’’as defined in section 513(a)(3) of the actand 21 CFR 860.7(c)(2). FDA relies upon‘‘valid scientific evidence’’ in theclassification process to determine thelevel of regulation for devices. For thepurpose of reclassification, the validscientific evidence upon which theagency relies must be publicly available.Publicly available information excludestrade secret and/or confidentialcommercial information, e.g., thecontents of a pending PMA (see section520(c) of the act (21 U.S.C. 360j(c)).

Section 513(d)(2)(A) of the actauthorizes FDA to exempt, byregulation, a generic type of class Idevice from, among other things, therequirement of premarket notification insection 510(k) of the act after stating thereasons for making such requirementinapplicable. Such exemption permitsmanufacturers to introduce intocommercial distribution generic types ofdevices without first submitting apremarket notification to FDA. If FDAhas concerns about certain types ofchanges to a particular class I device,the agency may grant a limitedexemption from premarket notificationfor that generic device.

In 1990, the SMDA added section515(i) to the act. This section of the actrequires FDA to issue an order tomanufacturers of preamendment classIII devices and substantially equivalentpostamendments devices for which nofinal regulation requiring thesubmission of PMA’s has been issued.This order requires such manufacturersto submit to the agency a summary of,and a citation to, any informationknown or otherwise available to themrespecting such devices, includingadverse safety and effectivenessinformation that has not been submittedunder section 519 of the act (21 U.S.C.360i). Section 519 of the act requiresmanufacturers, importers, distributors,and device user facilities to submitadverse event reports of certain device-related events and reports of certaincorrective actions taken. Section 515(i)of the act also directs FDA to eitherrevise the classification of the device

into class I or class II or require thedevice to remain in class III andestablish a schedule for the issuance ofa rule requiring the submission ofPMA’s for those devices remaining inclass III.

In the Federal Register of May 6, 1994(59 FR 23731), FDA announced theavailability of a document setting forthits strategy for implementing theprovisions of SMDA that require FDA toreview the classification ofpreamendments class III. Under thisplan, the agency divided preamendmentclass III devices into the following threegroups: Group 1 devices are devices thatFDA believes raise significant questionsof safety and/or effectiveness, but are nolonger used or are in very limited use;Group 2 devices are devices that FDAbelieves have a high potential for beingreclassified; and Group 3 devices aredevices that FDA believes are currentlyin commercial distribution and are notlikely candidates for reclassification.FDA also announced its intention to callfor submission of PMA’s for the 15highest priority devices in Group 3, andfor all Group 1 devices. The agency alsoannounced its intention to issue anorder under section 515(i) of the act forthe remaining Group 3 devices and forall Group 2 devices.

In the Federal Register of August 14,1995 (60 FR 41984 and 41986), FDApublished two orders for certain class IIIdevices requiring the submission ofsafety and effectiveness information inaccordance with the PreamendmentsClass III Strategy document forimplementing section 515(i) of the act.The orders describe in detail the formatfor submitting the type of informationrequired by section 515(i) of the act sothat the information submitted wouldclearly support either reclassification ofthe device into class I or II or retentionof the device in class III. The orders alsoscheduled the required submissions ingroups of nine devices at 6-monthintervals beginning with August 14,1996. The devices proposed in thisregulation were included in the August14, 1995, Docket No. 94N–0417 Orderon Group 2 devices.

II. Regulatory History of the DeviceIn the Federal Register of January 19,

1982 (47 FR 2810), FDA published aproposed rule to classify the tweezer-type epilator into class III. The preambleincluded the classificationrecommendation of the General andPlastic Surgery Devices ClassificationPanel (the panel). The panel’srecommendation included a summary ofthe reasons why the device should besubject to premarket approval andidentified certain risks to health


presented by the device, including: (1)Cataract formation: Nonionizationradiation emitted from the device maycause heating of the lens of the eyeleading to cataract formation (opacity ofthe lens of the eye); (2) pacemakerinterference: Patients with pacemakersmay experience arrhythmias from theuse of the device; and (3) nonionizingradiation exposure: The 27 megahertz(MHz) electromagnetic radiation emittedfrom the tip of the tweezer may bepotentially hazardous to organs otherthan the eye.

In the Federal Register of June 24,1988 (53 FR 23856), FDA published afinal rule classifying the tweezer-typeepilator into class III (21 CFR 878.5360).

In the Federal Register of May 6, 1994(59 FR 23731), FDA categorized thetweezer-type epilator as a Group 2device, which FDA believes has a highpotential for being reclassified. Theagency also announced its intent toissue an order under section 515(i) ofthe act for Group 2 devices.

In the Federal Register of August 14,1995 (60 FR 41986), FDA published anorder requiring manufacturers oftweezer-type epilators to submit safetyand effectiveness information inaccordance with the PreamendmentsClass III Strategy document forimplementing section 515(i) of the act.Between August 8, 1996, and September24, 1996, four summaries of safety andeffectiveness information weresubmitted to the agency (Refs. 1 through4). These summaries recommended thatthe tweezer-type epilator be reclassifiedinto class I or class II and providedinformation to assist FDA inreclassifying the device.

III. Device DescriptionFDA is proposing the following

device description based on theagency’s review: The tweezer-typeepilator is a device intended to removehair by destroying the dermal papilla ofa hair. The energy provided at the tip ofthe tweezer used to remove hair may beradio frequency, galvanic (directcurrent), or a combination of radiofrequency and galvanic energy. Thisnew device description reflects theentire array of energy sources oftweezer-type epilators on the market.

IV. Proposed ReclassificationFDA is proposing that the tweezer-

type epilator intended to remove hairshould be reclassified from class III toclass I. FDA believes that class I wouldprovide a reasonable assurance of safetyand effectiveness of the device for itsintended use. FDA is also proposingthat the device be exempt frompremarket notification requirements.

V. Risks to Health

When the tweezer-type epilator wasproposed for classification into class IIIin 1982, the panel identified certainrisks to health that they believed use ofthe device presented. The risks to healthidentified were: (1) Cataract formation:Nonionization radiation emitted fromthe device may cause heating of the lensof the eye leading to cataract formation(opacity of the lens of the eye); (2)pacemaker interference: Patients withpacemakers may experiencearrhythmias from the use of the device;and (3) nonionizing radiation exposure:The 27 MHz electromagnetic radiationemitted from the tip of the tweezer maybe potentially hazardous (47 FR 2810).No other risks to health were identifiedby FDA when the device was classifiedinto class III in 1988 (53 FR 23856).

One of the 515(i) submissionsidentified an additional potential risk tohealth, burning of the skin, associatedwith the use of electronic tweezer-typeepilators (Ref. 2). If the tweezers touchthe skin accidentally during theprocedure, the skin is instantly burnedand the burned tissue is pulled away onthe tip of the tweezer. Another 515(i)submission stated that heat buildupduring the use of galvanic tweezer-typeepilators could potentially result insmoking, sizzling, and even a mildshock (Ref. 3).

VI. Summary of the Reasons for theReclassification

In accordance with section 513(e) ofthe act and 21 CFR 860.130, based onnew information with respect to thedevice, FDA, on its own initiative, isproposing to reclassify the tweezer-typeepilator from class III to class I whenintended to remove hair because generalcontrols would provide reasonableassurance of safety and effectiveness.FDA is also proposing to exempt thedevice from premarket notificationprocedures because: (1) There is nohistory of significant risks to health; (2)the characteristics of the devicenecessary for safety and effectivenessare established; (3) any anticipatedchanges that could affect safety andeffectiveness of the device could bereadily detected and will not likelyresult in a change of classification of thedevice; and (4) there is no significanthistory of false and misleading claimsassociated with the use of the device.

Another reason for proposingreclassification of the tweezer-typeepilator into class I is that the needleepilator also intended to remove hair bydestroying the dermal papilla of hairwas reclassified from class II into classI and exempted from premarket

notification procedures in 1996 (61 FR44013, August 27, 1996). FDA believesproposing reclassification of thetweezer-type epilator into class Iprovides consistency in theclassification of the device.

VII. Summary of Data Upon Which theReclassification is Based

A. Previously Identified Risks to Health

No reports of cataract formation,pacemaker interference, or any otheradverse nonionizing radiation exposureeffects associated with the use of thetweezer-type epilator were found in theliterature, in FDA’s voluntary DeviceExperience Network (DEN) andMandatory Device Reporting (MDR) databases, or in the 515(i) submissions (Refs.1 through 4).

One of the 515(i) submissions (Ref. 4)did address the possible risks to healthof cataract formation and pacemakerinterference. This submitter had itsdevice tested for radio frequency andmicrowave radiation emission. Therewas no detectable emission from thedevice in the 10–300 MHz range. Radiofrequency tweezer-type epilators utilize13.56, 27.12 or 40.68 MHz to removehair. Thus, the probability of the use ofradio frequency tweezer-type epilatorsleading to cataract formation andcausing pacemaker interference is lowduring the proper use of the device.

B. Burning of the Skin and ElectricalShock

Although one 515(i) submissionidentified burning of the skin as apotential risk to health (Ref. 2) andanother 515(i) submission identifiedelectrical shock as another potential riskto health (Ref. 3), no reports of burningof the skin or electrical shock associatedwith use of the device were found in theliterature or in the agency’s DEN orMDR data bases.

C. Adverse Experience Reports

The DEN data base included somereports of lack of clinical effectivenessand misleading claims of permanenthair removal associated with use of thedevice. There also was one report ofpain, infection, and inadequatedirections; one report of scarring; andtwo reports of ingrown/infected hairs.There were no reports of these or anyother adverse effects associated with theuse of the device found in the MDR database. There also were no reports ofadverse effects in the records of theConsumer Product Safety Commission.

Based on the new informationsubmitted to it, and the agency’s ownreview of the literature and its DEN andMDR data bases, FDA has concluded


that the risks to health identified whenthe device was classified into class IIIand the new potential identified risks tohealth do not appear to be risks tohealth when the device is usedproperly. FDA now believes that generalcontrols are sufficient to reasonablyensure that the device is safe andeffective for its intended use. FDA alsobelieves that the device should beexempted from the premarketnotification procedures because agencyreview of premarket notificationsubmissions will not increase the safetyand effectiveness of the device.

D. Benefits of the DeviceThe psychological stress of

embarrassingly excessive hair growth iswell documented, and the eliminationof unwanted hair through destruction ofthe papilla of the hair follicle is fairlywell characterized (Refs. 5 through 9).FDA has concluded from the literatureand its knowledge of the device that thetweezer-type epilator can remove hairand that the performance parameters ofthe device in regards to safety are alsowell documented and understood. Thedevice has had a reasonable record ofsafety for over 20 years of use.

There is little published informationin regards to the claims of hair removalby tweezer-type epilators and only onepublished clinical study (Ref. 8)specifically investigating the use oftweezer-type epilators. In this study,eight subjects were treated with atweezer-type epilator. The same area ofskin area on each subject was retreatedwith the device 5 to 7 months later andthe epilated hairs were counted. In threeof the subjects, fewer hairs werecounted, and more hairs were countedin five subjects. The differences in haircounts were not significant in any of thesubjects.

Two of the 515(i) submissions (Refs.3 and 4) provided unpublished clinicalinformation supporting the effectivenessof tweezer-type epilators for hairremoval. Although the numbers ofsubjects in both studies are low, thesestudy results are suggestive of clinicaleffectiveness. In one study (Ref. 4), 12subjects with 14 epilation sites weretreated monthly for 6 months with botha radio frequency tweezer-type epilatorand the same tweezer-type epilator withthe radio frequency energy sourcedisabled. Use of the radio frequencydisabled device was consideredequivalent to manual plucking. Theepilated hairs were counted at 6 monthsand at 9 months after 3 months of notreatment. After 6-month treatment,there were fewer hairs in both groups(52.3 percent fewer in the radiofrequency tweezer-type epilator group

and 19.1 percent fewer in the radiofrequency disabled tweezer-typeepilator group). After 3 months offollowup with no treatment, the radiofrequency treated group had 46.3percent fewer hairs indicating that hairloss persisted 3 months after the lasttreatment. The radio frequency disabledtweezer-type epilator group had thesame number of hairs as beforetreatment indicating there was nooverall hair loss after the last treatment.

In the second unpublished study (Ref.3), use of a radio frequency tweezer-typeepilator weekly for 4 months wascompared to use ‘‘at an earlier time’’ ofa galvanic epilator in seven subjects for9 weeks. The radio frequency tweezer-type epilator subjects were examined(hair counts) at 15 and 30 days after thelast treatment given at 4 months. Hairloss was reported to be 79 percent in theradio frequency epilator group andabout 60 percent in the galvanic epilatorgroup. Because the treatment schedulesof the two groups are not identical, it isnot possible to draw a definitiveconclusion from this report other than itis suggestive of sustained hair removal.

Use of the noninvasive tweezer-typeepilator eliminates some risks to healthassociated with the use of the needle-type epilator. The needle-type epilator,an invasive device, removes unwantedhair by inserting a wire needle into thehair follicle to destroy the dermalpapilla of a hair. Serious adverse deviceevents associated with the use ofneedle-type epilators are also rare, butthey include reports of temporary pain,edema, erythema, scarring, infection,and posttreatment hyper- andhypopigmentation; a case of diphtheroidendocarditis; and spreading of flat warts(Refs. 6 and 9).

FDA now believes, based on publiclyavailable information, that the tweezer-type epilator can be regulated as a classI device (general controls) to reasonablyassure the device’s safety andeffectiveness. FDA further believes thatagency review of premarket notificationsubmissions for the device will notenhance public health.

VIII. References

The following references have beenplaced on display in the DocketsManagement Branch (address above)and may be seen by interested personsbetween 9 a.m. and 4 p.m., Mondaythrough Friday:

1. 515(i) Submission submitted by BurkeAssociates International, Inc., receivedAugust 8, 1996.

2. 515(i) Submission submitted by LucyPeters, International, Ltd., receivedSeptember 5, 1996.

3. 515(i) Submission submitted by TheHelene Edgar Corp., received September 10,1996.

4. 515(i) Submission submitted byRemovatron International Corp., receivedSeptember 24, 1996.

5. Chernosky, M. E., ‘‘Permanent Removalof Superfluous Hair,’’ Texas Medicine,67:72–78, 1971.

6. Hobbs, E. R., J. L. Ratz, and B. James,‘‘Electrosurgical Epilation,’’ DermatologicClinic, 5:437–444, 1987.

7. McKinstry, C. T., M. Inaba, and J. N.Anthony, ‘‘Epilation by Electrocoagulation:Facts that Result in Regrowth of Hair,’’Journal of Dermatologic Surgery andOncology, 5:407–411, 1979.

8. Verdich, J., ‘‘A Critical Evaluation of aMethod for Treatment of FacialHypertrichosis in Women,’’ Dermatologica,168:87–89, 1984.

9. Wagner, R. F., Jr., J. M. Tomich, and D.J. Grands, ‘‘Electrolysis and Thermolysis forPermanent Hair Removal,’’ Journal of theAmerican Academy of Dermatology, 12:441–449, 1985.

IX. Environmental Impact

The agency has determined under 21CFR 25.24(e)(2) that this action is of atype that does not individually orcumulatively have a significant effect onthe human environment. Therefore,neither an environmental assessmentnor an environmental impact statementis required.

X. Analysis of Impacts

FDA has examined the impacts of theproposed rule under Executive Order12866, and the Regulatory FlexibilityAct (5 U.S.C. 601–612) (as amended bysubtitle D of the Small BusinessRegulatory Fairness Act of 1996 (Pub. L.104–121)), and the Unfunded MandatesReform Act of 1995 (Pub. L. 104–4).Executive Order 12866 directs agenciesto assess all costs and benefits ofavailable regulatory alternatives and,when regulation is necessary, to selectregulatory approaches that maximizenet benefits (including potentialeconomic, environmental, public healthand safety, and other advantages;distributive impacts; and equity). Theagency believes that this proposed ruleis consistent with the regulatoryphilosophy and principles identified inthe Executive Order. In addition, theproposed rule is not a significantregulatory action as defined by theExecutive Order and so is not subject toreview under the Executive Order.

The Regulatory Flexibility Actrequires agencies to analyze regulatoryoptions that would minimize anysignificant impact of a rule on smallentities. Reclassification of this devicefrom class III to class I will relieve allmanufacturers of the device of the costof complying with the premarket


approval requirements in section 515 ofthe act. Because reclassification willreduce regulatory costs with respect tothis device, it will impose no significanteconomic impact on any small entities,and it may permit small potentialcompetitors to enter the marketplace bylowering their costs. The Commissionerof Food and Drugs therefore certifiesthat this proposed rule, if issued, willnot have a significant economic impacton a substantial number of smallentities. In addition, this proposed rulewill not impose costs of $100 million ormore on either the private sector orState, local, and tribal governments inthe aggregate, and therefore a summarystatement of analysis under section202(a) of the Unfunded MandatesReform Act of 1995 is not required.

XI. CommentsInterested persons may, on or before

September 9, 1997, submit to theDockets Management Branch (addressabove) written comments regarding thisproposal. Two copies of any commentsare to be submitted, except thatindividuals may submit one copy.Comments are to be identified with thedocket number found in brackets in theheading of this document. Receivedcomments may be seen in the officeabove between 9 a.m. and 4 p.m.,Monday through Friday.

List of Subjects in 21 CFR Part 878Medical devices.Therefore, under the Federal Food,

Drug, and Cosmetic Act and underauthority delegated to the Commissionerof Food and Drugs, it is proposed that21 CFR part 878 be amended as follows:

PART 878—GENERAL AND PLASTICSURGERY DEVICES

1. The authority citation for 21 CFRpart 878 continues to read as follows:

Authority: Secs. 501, 510, 513, 515, 520,522, 701 of the Federal Food, Drug, andCosmetic Act (21 U.S.C. 351, 360, 360c, 360e,360j, 360l, 371).


§ 878.5360 Tweezer-type epilator.(a) Identification. The tweezer-type

epilator is a device intended to removehair by destroying the dermal papilla ofa hair. The energy provided at the tip ofthe tweezer used to remove hair may beradio frequency, galvanic (directcurrent), or a combination of radiofrequency and galvanic energy.

(b) Classification. Class I (GeneralControls). The device is exempt frompremarket notification procedures insubpart E of part 807 of this chapter.

Dated: May 30, 1997.Joseph A. Levitt,Deputy Director for Regulations Policy, Centerfor Devices and Radiological Health.[FR Doc. 97–15312 Filed 6–10–97; 8:45 am]BILLING CODE 4160–01–F


40 CFR Part 52

[SIPTRAX No. PA4057b; FRL–5835–5]

Approval and Promulgation of AirQuality Implementation Plans;Pennsylvania; Approval of VOC andNOx RACT Determinations forIndividual Sources

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Proposed rule.

SUMMARY: EPA proposes to approve theState Implementation Plan (SIP)revision submitted by theCommonwealth of Pennsylvania for thepurpose of establishing volatile organiccompound (VOC) and nitrogen oxides(NOx) reasonably available controltechnology (RACT) for five majorsources located in Pennsylvania. In theFinal Rules section of this FederalRegister, EPA is approving theCommonwealth’s SIP revision as adirect final rule without prior proposalbecause the Agency views this as anoncontroversial SIP revision andanticipates no adverse comments. Adetailed rationale for the approval is setforth in the direct final rule and theaccompanying technical supportdocument. If no adverse comments arereceived in response to this proposedrule, no further activity is contemplatedin relation to this rule. If EPA receivesadverse comments, the direct final rulewill be withdrawn and all publiccomments received will be addressed ina subsequent final rule based on thisproposed rule. EPA will not institute asecond comment period on this action.Any parties interested in commentingon this action should do so at this time.If adverse comments are received thatdo not pertain to all documents subjectto this rulemaking action, thosedocuments not affected by the adversecomments will be finalized in themanner described here. Only thosedocuments that receive adversecomments will be withdrawn in themanner described here.DATES: Comments must be received inwriting by July 11, 1997.ADDRESSES: Written comments on thisaction should be addressed to David

Campbell, Air, Radiation, and ToxicsDivision, Mailcode 3AT22, U.S.Environmental Protection Agency,Region III, 841 Chestnut Building,Philadelphia, Pennsylvania 19107.Copies of the documents relevant to thisaction are available for publicinspection during normal businesshours at the Air, Radiation, and ToxicsDivision, U.S. Environmental ProtectionAgency, Region III, 841 ChestnutBuilding, Philadelphia, Pennsylvania19107; and the PennsylvaniaDepartment of EnvironmentalProtection, Bureau of Air QualityControl, P.O. Box 8468, 400 MarketStreet, Harrisburg, Pennsylvania 17105.FOR FURTHER INFORMATION CONTACT:Ruth E. Knapp, (215) 566–2191, at theEPA Region III office or via e-mail atknapp.ruth@epamail. epa.gov. Whileinformation may be requested via e-mail, comments must be submitted inwriting to the above Region III address.SUPPLEMENTARY INFORMATION: See theinformation pertaining to this action,VOC and NOX RACT determinations forindividual sources located inPennsylvania, provided in the DirectFinal action of the same title which islocated in the Rules and RegulationsSection of this Federal Register.

Authority: 42 U.S.C. 7401–7671q.Dated: May 21, 1997.

W.T. Wisniewski,Acting Regional Administrator, Region III.[FR Doc. 97–15096 Filed 6–10–97; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 52

[AZ 68–0011; FRL–5835–7]

Approval and Promulgation of StateImplementation Plans; Arizona—Maricopa County OzoneNonattainment Area


SUMMARY: EPA is proposing to approvea State Implementation Plan (SIP)revision submitted by the State ofArizona on April 29, 1997, establishinga summertime gasoline Reid VaporPressure (RVP) limit of 7.0 pounds persquare inch (psi) for gasoline distributedin the Maricopa (Phoenix) ozonenonattainment area. Arizona haslowered the summertime RVP limit forthis area to reduce emissions of volatileorganic compounds (VOC) inaccordance with the requirements of the


1 This section is currently codified in the ARS assection 41–2083(F).

Clean Air Act, as amended in 1990(CAA). Arizona’s fuel requirement is notpreempted by federal fuels requirementsbecause EPA is proposing to find thatthe control measure is necessary for theMaricopa area to attain the nationalambient air quality standards (NAAQS)for ozone and is proposing to approvethe measure into the Arizona SIP.

In the final rules section of thisFederal Register, the EPA is approvingthe State’s SIP revision as a direct finalrule without prior proposal because theAgency views this as a noncontroversialrevision and anticipates no adversecomments. A detailed rationale for thisapproval is set forth in the direct finalrule. If no adverse comments arereceived in response to this proposedrule, no further activity is contemplatedin relation to this rule. If EPA receivesadverse comments, the direct final rulewill be withdrawn and all publiccomments received will be addressed ina subsequent final rule based on thisproposed rule. The EPA will notinstitute a second comment period onthis document. Any parties interested incommenting on this action should do soat this time.DATES: Comments on this proposed rulemust be received in writing by July 11,1997.ADDRESSES: Written comments shouldbe sent to the Region IX contact listedbelow. Copies of the SIP revision areavailable in the docket (#AZ–RVP–97)for this rulemaking, which is open forpublic inspection at the addressesbelow. A copy of this notice is alsoavailable on EPA, Region IX’s website athttp://www.epa.gov/region09.Air Planning Office (AIR–2), Air

Division, Region IX, U.S.Environmental Protection Agency, 75Hawthorne Street, San Francisco, CA94105

Arizona Department of EnvironmentalQuality, Office of Outreach andInformation, First Floor, 3033 N.Central Avenue, Phoenix Arizona85012

FOR FURTHER INFORMATION CONTACT:Roxanne Johnson, Air Planning Office,(AIR–2), Air Division, U.S.Environmental Protection Agency,Region 9, 75 Hawthorne Street, SanFrancisco, CA 94105, Telephone: (415)744–1225.SUPPLEMENTARY INFORMATION: Therevision is being proposed for approvalinto the Arizona SIP in section 13 ofArizona House Bill 2001 that adds toArizona Revised Statutes (ARS) section41–2083(E) 1 (summertime fuel

requirement to limit RVP gasoline to 7.0psi). This revision was submitted by theADEQ to EPA on April 29, 1997.

On May 8, 1997, EPA found the April29, 1997, SIP revision conformed toEPA’s completeness criteria in 40 CFRPart 51, Appendix V and the FederalRegister on August 26, 1991 (56 FR42216). For further information, pleasesee the information provided in theDirect Final action that is located in theRules Section of this Federal Register.


Felicia Marcus,Regional Administrator.[FR Doc. 97–15094 Filed 6–10–97; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 52

[PA083–4062b; FRL–5835–1]

Approval and Promulgation of AirQuality Implementation Plans;Pennsylvania; Approval of Source-Specific VOC and NOX RACTDeterminations


SUMMARY: EPA proposes to approve theState Implementation Plan (SIP)revision submitted by theCommonwealth of Pennsylvania for thepurpose of establishing VOC and NOX

RACT for one facility. In the Final Rulessection of this Federal Register, EPA isapproving the State’s SIP revision as adirect final rule without prior proposalbecause the Agency views this as anoncontroversial SIP revision andanticipates no adverse comments. Adetailed rationale for the approval is setforth in the direct final rule and theaccompanying Technical SupportDocument. If no adverse comments arereceived in response to this proposedrule, no further activity is contemplatedin relation to this rule. If EPA receivesadverse comments, the direct final rulewill be withdrawn and all publiccomments received will be addressed ina subsequent final rule based on thisproposed rule. EPA will not institute asecond comment period on this action.Any parties interested in commentingon this action should do so at this time.DATES: Comments must be received inwriting by July 11, 1997.ADDRESSES: Written comments on thisaction should be addressed to David J.Campbell, Pennsylvania RACT Team

Leader, Mailcode 3AT22, U.S.Environmental Protection Agency,Region III, 841 Chestnut Building,Philadelphia, Pennsylvania 19107.Copies of the documents relevant to thisaction are available for publicinspection during normal businesshours at the Air, Radiation, and ToxicsDivision, U.S. Environmental ProtectionAgency, Region III, 841 ChestnutBuilding, Philadelphia, Pennsylvania19107; and the PennsylvaniaDepartment of EnvironmentalProtection, Bureau of Air Quality, P.O.Box 8468, 400 Market Street, Harrisburg,Pennsylvania 17105.FOR FURTHER INFORMATION CONTACT:Janice M. Lewis, (215) 566–2185, at EPARegion III or via e-mail at [email protected]. Whileinformation may be requested via e-mail, comments must be submitted inwriting to the above Region III address.SUPPLEMENTARY INFORMATION: See theinformation, pertaining to this action(VOC and NOX RACT approval)affecting one facility in Pennsylvania,provided in the Direct Final action ofthe same title which is located in theRules and Regulations Section of thisFederal Register.


James W. Newsome,Acting Regional Administrator, Region III.[FR Doc. 97–15103 Filed 6–10–97; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 63

[AD–FRL–5839–5]

National Emission Standards forHazardous Air Pollutants: SourceCategory List

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Extension of public commentperiod.

SUMMARY: The EPA is announcing theextension of the public comment periodon the Advanced Notice of ProposedRulemaking for listing research anddevelopment facilities on the sourcecategory list (62 FR 25877), which waspublished on May 12, 1997.DATES: Written comments must bereceived on or before July 11, 1997.ADDRESSES: Submit comments induplicate if possible to: Air andRadiation Docket and InformationCenter (6102), Attention: Docket No. A–97–11, U.S. Environmental Protection


Agency, 401 M Street, SW, Washington,DC 20460. The EPA requests thatseparate copies be sent to theappropriate contact person listed below.The docket may be inspected at theabove address between 8:00 a.m. and5:30 p.m. on weekdays. A reasonable feemay be charged for copying.FOR FURTHER INFORMATION CONTACT:For information concerning the ANPR,contact Mr. Mark Morris at (919) 541–5416, Organic Chemicals Group,Emission Standards Division (MD–13),U.S. Environmental Protection Agency,Research Triangle Park, North Carolina27711.SUPPLEMENTARY INFORMATION: Inresponse to a request from severalcompanies involved in a large volume ofresearch and development activities, theEPA is extending the public commentperiod from June 11, 1997, to July 11,1997, on the Advanced Notice ofProposed Rulemaking for listingresearch and development facilities onthe source category list. The EPA agreesthat an extension of the comment periodwill provide for more meaningful,constructive comments on the ANPR.Having extended the comment period,the EPA nonetheless encouragescommenters to submit as many of theircomments as possible before July 11,this would assist the EPA in itsconsiderations of the issues raised. Dueto the unique nature of R&D activitiesand the EPA’a request in the ANPR forspecific information andrecommendations on how to list R&Dfacilities, the extension to the commentperiod will provide the EPA with moredetailed comments that will result infuture time savings on the project.


Air pollution control, Hazardous airpollutants, Research and development,Environmental protection.

Dated: June 5, 1997.Mary D. Nichols,Assistant Administrator.[FR Doc. 97–15365 Filed 6–10–97; 8:45 am]BILLING CODE 6560–50–M

FEDERAL COMMUNICATIONSCOMMISSION

47 CFR Part 1

[DA 97–679]

Broadband PCS C and F BlockInstallment Payment Issues

AGENCY: Federal CommunicationsCommission.ACTION: Request for comments.

SUMMARY: On June 2, the WirelessTelecommunications Bureau (‘‘Bureau’’)of the Federal CommunicationsCommission released a Public Noticerequesting comment on broadband PCSC and F block installment paymentissues. The Public Notice seekscomment on specific restructuringproposals, which are attached to thePublic Notice as Appendices A throughG. The Bureau invites any additionalproposals for addressing broadband PCSC and F block financing terms. TheBureau also seeks comment on issuesrelated to refund requests from licenseeswho submitted timely payments prior tothe suspension of the installmentpayments. The Bureau plans to conducta forum on broadband PCS C and Fblock installment payment issues, onJune 30, 1997, in Washington, D.C.DATES: Comments are due on or beforeJune 23, 1997. Reply comments are dueon or before July 8, 1997.ADDRESSES: Secretary, FederalCommunications Commission, 1919 MStreet, N.W., Room 222, Washington,DC 20554. In addition, two copiesshould be hand delivered to: (1)Auctions and Industry AnalysisDivision, Wireless TelecommunicationsBureau, Room 5322, 2025 M Street,N.W., Washington, D.C. 20554,Attention: Sande Taxali.FOR FURTHER INFORMATION CONTACT:Rachel Kazan or Sande Taxali, WirelessTelecommunications Bureau, (202) 418–0660.SUPPLEMENTARY INFORMATION: This is asummary of the Public Notice releasedon June 2, 1997. The complete PublicNotice is available for inspection andcopying during normal business hoursin the FCC Reference Center (Room239), 1919 M Street, N.W., Washington,D.C., 20554, and also may be purchasedfrom the Commission’s copy contractor,International Transcription Services,(202) 857–3800, 2100 M Street, N.W.,Washington, D.C. 20037. The completePublic Notice is also available on theCommission’s Internet home page(http://www.fcc.gov).

Summary of the Public Notice

Wireless Telecommunications BureauSeeks Comment on Broadband PCS Cand F Block Installment Payment Issues

June 2, 1997.Comment Due Date: June 23, 1997Reply Comment Due Date: July 8, 1997

1. The Wireless TelecommunicationsBureau (‘‘Bureau’’) has received arequest from several broadband PersonalCommunications Services (‘‘PCS’’)licensees requesting that theCommission modify the payment

frequency for broadband PCS C and Fblock licensees from quarterly to annualinstallments. See Letter from ThomasGutierrez, Esq., et al. to Michele C.Farquhar, Esq., Chief, WirelessTelecommunications Bureau (March 13,1997) (‘‘Gutierrez Letter’’). Petitionersinclude Alpine PCS, Inc.; DCR PCS,Inc.; Eldorado Communications, L.L.C.;Indus, Inc.; KMTel L.L.C.; Mercury PCS,L.L.C.; Microcom Associates; NextWaveCommunications, Inc.; and R&S PCS,Inc. As a result of the pendency of thisrequest and other issues regardingcertain debt functions, the Bureaureleased an Order which suspended thedeadline for broadband PCS C blockinstallment payments. See Order, In theMatter of Installment Payments for PCSLicenses, DA 97–649 (released: March31, 1997). PCS F block installmentpayments were later suspended as well.See Public Notice, ‘‘FCC AnnouncesGrant of Broadband PersonalCommunications Services D, E, and FBlock Licenses,’’ DA 97–883 (released:April 28, 1997) at p. 2.

2. The Bureau subsequently receivedseveral letters that propose alternativefinancing arrangements for broadbandPCS C and F block licensees. See Letterfrom Leonard S. Sawicki, Director, FCCAffairs, MCI TelecommunicationsCorporation, to Mr. William F. Caton,Secretary, Federal CommunicationsCommission (May 1, 1997) (‘‘SawickiLetter’’). In this proposal, MCI requeststhat the Commission allow C blocklicensees to defer payment and accrueinterest for the first five years of thelicense term. MCI also suggests that theCommission modify the PCS ownershipand attribution rules to encourageadditional investment in C blocklicensees. Finally, MCI suggests thatsuch changes be available to allbroadband PCS C block licensees. Seealso Letter from James H. Barker andMichael S. Wroblewski, Counsel toFortunet Communications, L.P., to Mr.William F. Caton, Secretary, FederalCommunications Commission (May 9,1997) (‘‘Barker Letter’’). In its proposal,Fortunet requests that the Commission(1) suspend interest payments until yearfive of the license term; (2) extend thelicense term to 20 years; (3) modify theC block control group rules; (4) allowthe transfer of C block licenses beforethe expiration of the five year holdingperiod with modified unjust enrichmentpayments; and, (5) increase the level offoreign equity permitted. The Bureaualso recently received a petition forrulemaking regarding the issue ofbroadband PCS C and F block payments.See Cook Inlet Region, Inc., Petition forRulemaking, filed May 7, 1997 (RM–


9093). Cook Inlet requests that theCommission initiate a rulemaking toestablish the requirements andprocedures for the disposition of theinstallment payment obligations ofCommission licensees who obtainedtheir licenses by competitive bidding.Additionally, Cook Inlet requests thatthe Commission lift the stay of thedeadline for broadband PCS C and Fblock installment payments. (‘‘CookInlet Petition’’). In order to considerwhich options would be mostappropriate for a restructuring ofbroadband PCS C and F block debt, theBureau seeks comment on the proposalsreceived to date, as set forth in theGutierrez Letter, the Sawicki Letter, theBarker Letter, and the Cook InletPetition. In addition, we note that otherproposals have been informally raisedwith the Bureau. See, e.g., GeneralWireless Inc., Informal Proposal (May 6,1997). In its proposal, General Wirelessrecommends that the Commissionreduce the principal amount of its debtfrom an average C block price of $40/pop to $15/pop, consistent with A/Bblock prices. The Bureau seekscomment on whether PCS licenseeswould be able to prepay theirinstallment debt if any such discountwere to occur. Are there alternativeproposals for calculating the presentvalue of the broadband PCS C and Fblock debt to the government that wouldpermit licensees to prepay the debtbased on the net present value?

3. The Bureau invites any additionalproposals for addressing the C and Fblock broadband PCS financing terms.Comments received in response to thisPublic Notice will be incorporated intothe record for the WT Docket No. 97–82 proceeding. Amendment of Part 1 ofthe Commission’s Rules—Competitive

Bidding Proceeding, Order,Memorandum Opinion and Order, andNotice of Proposed Rule Making, (62 FR13540–02). In this Notice of ProposedRulemaking the Commission seekscomment on numerous installmentpayment issues, including variousoptions for installment paymentsstructures, and input on improvementsin the installment payment program.Copies of the cited proposals areattached to this Public Notice asAppendices A through H. Theseproposals can also be found in theWireless Telecommunications BureauReference Room, Room 5608, 2025 MStreet, N.W., Washington D.C. 20554.

4. In addition, the Bureau will hold apublic forum to discuss the issues of Cand F block restructuring and thecurrent capital markets for financingthese licenses. The Bureau plans toconduct the forum on June 30, 1997 inWashington, D.C. Further informationconcerning this event will be providedin a subsequent Public Notice.

5. Finally, the Bureau has receivednumerous refund requests fromlicensees that submitted timelypayments prior to the suspension of theinstallment payments. The Bureau seekscomment on whether these licenseesshould be offered any credit for the timevalue of their payments as a means tocompensate these licensees for the costof retaining their money during theperiod of payment suspension. See, e.g.,Letter from Michael S. Wroblewski,Latham & Watkins, Counsel forSoutheast Wireless Communications,L.P., to Regina Dorsey, Billings andCollections Branch, Office of ManagingDirector (April 7, 1997) (‘‘WroblewskiLetter’’); Letter from Sylvia Lesse,Kraskin & Lesse, LLP, for Comtel PCSMainstreet Limited Partnership, to A.Jerome Fowlkes, Auctions Division,

Wireless Telecommunications Bureau(April 4, 1997) (‘‘Lesse Letter’’); Letterfrom Julia F. Kogan, Hogan & HartsonL.L.P., for Americall International LLC,to Linda King Friedman, FinancialOperations Division, Office of ManagingDirector (April 2, 1997) (‘‘KoganLetter’’). The Bureau seeks comment onhow such compensation could beformulated.

6. Parties should file comments on orbefore June 23, 1997 and replies tocomments on or before July 8, 1997,with the Secretary, FederalCommunications Commission, 1919 MStreet, N.W., Room 222, Washington,DC 20554. In addition, two copiesshould be hand delivered to: (1)Auctions and Industry AnalysisDivision, Wireless TelecommunicationsBureau, Room 5322, 2025 M Street,N.W., Washington, D.C. 20554,Attention: Sande Taxali. Copies of thepetitions, comments, and replycomments may be obtained from theCommission’s duplicating contractor,International Transcription Service, Inc.(ITS), 2100 M Street, N.W. Suite 140,Washington, D.C., 20037, (202) 857–3800. Copies are also available forpublic inspection during regularbusiness hours in Room 5608, 2025 MStreet, N.W., Washington, D.C. 20554.When requesting copies, please refer toDA–679.

7. For further information contactRachel Kazan or Sande Taxali, Auctionsand Industry Analysis Division,Wireless Telecommunications Bureau at(202) 418–0660.Federal Communications Commission.William F. Caton,Acting Secretary.[FR Doc. 97–15315 Filed 6–10–97; 8:45 am]BILLING CODE 6712–01–U

This section of the FEDERAL REGISTERcontains documents other than rules orproposed rules that are applicable to thepublic. Notices of hearings and investigations,committee meetings, agency decisions andrulings, delegations of authority, filing ofpetitions and applications and agencystatements of organization and functions areexamples of documents appearing in thissection.

Notices Federal Register

31779

Vol. 62, No. 112



Submission for OMB Review;Comment Request

June 6, 1997.The Department of Agriculture has

submitted the following informationcollection requirement(s) to OMB forreview and clearance under thePaperwork Reduction Act of 1995,Public Law 104–13. Commentsregarding (a) Whether the collection ofinformation is necessary for the properperformance of the functions of theagency, including whether theinformation will have practical utility;(b) the accuracy of the agency’s estimateof burden including the validity of themethodology and assumptions used; (c)ways to enhance the quality, utility andclarity of the information to becollected; (d) ways to minimize theburden of the collection of informationon those who are to respond, includingthrough the use of appropriateautomated, electronic, mechanical, orother technological collectiontechniques or other forms of informationtechnology should be addressed to: DeskOfficer for Agriculture, Office ofInformation and Regulatory Affairs,Office of Management and Budget(OMB), Washington, DC 20503 and toDepartment Clearance Office, USDA,OCIO, Mail Stop 7602, Washington, DC20250–7602. Comments regarding theseinformation collections are best assuredof having their full effect if receivedwithin 30 days of this notification.Copies of the submission(s) May beobtained by calling (202) 720–6204 or(202) 720–6746.

An agency May not conduct orsponsor a collection of informationunless the collection of informationdisplays a currently valid OMB controlnumber and the agency informspotential persons who are to respond tothe collection of information that suchpersons are not required to respond tothe collection of information unless it

displays a currently valid OMB controlnumber.


Title: Winter Pears Grown in Oregon,Washington, and California, MarketingOrder No. 927.

OMB Control Number: 0581–0089.Summary of Collection: Information is

collected from growers and handlers forreferendums, marketing agreements, andvolume of fruit sold.

Need and Use of the Information: Theinformation is used to administerMarketing Order No. 927.

Description of Respondents: Businessor other for-profit; Farms.

Number of Respondents: 1,890.Frequency of Responses:

Recordkeeping; Reporting: On occasion;Biennially

Total Burden Hours: 3,571.

Animal and Plant Health InspectionService

Title: Imported Seed and Screening.OMB Control Number: 0579-New.Summary of Collection: All seeds

offered for entry into the United Statesmust be accompanied by a declarationfrom the importer and the containersmust be labeled. A certificate of analysisstating that the seeds were analyzed andfound to present no noxious weed threatto the United States must accompanythe shipment.

Need and Use of the Information: Theinformation is used to prevent thespread of insect pests and noxiousweeds in the United States.

Description of Respondents: Businessor other for-profit; State, Local or tribalGovernment.

Number of Respondents: 1,200.Frequency of Responses:

Recordkeeping; Reporting: On occasion.Total Burden Hours: 11,564.

Farm Service Agency

Title: Foreign Investment DisclosureAct Report, 7 CFR 781.

OMB Control Number: 0560–0097.Summary of Collection: The

Agricultural Foreign InvestmentDisclosure Act of 1978 requires foreigninvestors to timely report all held,acquired, or transferred U.S. agriculturalland.

Need and Use of the Information: Theinformation is used to track foreigninvestment in U.S. agricultural land andprepare an annual report to Congressand the President.

Description of Respondents:Individuals or households; Business orother for-profit; Farms.

Number of Respondents: 4,375.Frequency of Responses: Reporting:

On occasion.Total Burden Hours: 2,108.

Donal Hulcher,Departmental Clearance Officer.[FR Doc. 97–15263 Filed 6–10–97; 8:45 am]BILLING CODE 3410–01–M



[Docket No. PY–97–006]

Notice of Request for Approval of anInformation Collection

AGENCY: Agricultural Marketing Service,USDA.ACTION: Proposed Collection.

SUMMARY: Notice; in accordance withthe Paperwork Reduction Act of 1995(44 U.S.C. Chapter 35), this noticeannounces the intention of theAgricultural Marketing Service (AMS) torequest an approval of an informationcollection in support of the State OptionContracts (SOC) Program.DATES: Comments on this notice must bereceived by August 11, 1997.ADDITIONAL INFORMATION: Contact ConnieHelms, USDA/AMS/Poultry Division,Room 3943–S, 1400 IndependenceAvenue S.W., STOP 0260, Washington,DC 20250–0260, (202) 720–7693.SUPPLEMENTARY INFORMATION:

Title: Donation of Foods for use in theUnited States, its territories andpossessions and areas under itsjurisdiction.

OMB Number: 0581–XXX

Expiration Date of Approval:Type of Request: Approval of a new

information collection.Abstract: Department of Agriculture

(USDA) Food Distribution Programsassist American farmers and needypeople by purchasing commodities anddelivering them to State agencies that,in turn, distribute them to organizationsfor use in providing food assistance tothose in need. The commodities help tomeet the nutritional needs of childrenfrom preschool age through high schoolin USDA Child Nutrition Programs andneedy individuals participating in otherdomestic feeding programs.

31780 Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Notices

In accordance with the provisions ofsection 3A of the CommodityDistribution Reform Act (Act) and WICAmendments of 1987 (7 U.S.C. 612cnote) as added by section 1773 of theFood, Agriculture, Conservation, andTrade Act of 1990 (7 U.S.C. 1421 note)and 7 CFR part 250, USDA acts as theadministering agency for theimplementation and operation of theSOC Program. This legislation allowsthe Secretary broad authority toestablish regulatory provisionpromoting accountability in the use ofUSDA commodities by Federal, State,and private agencies.

This program was previouslyadministered by the Food andConsumer Service (FCS). Effectiveschool year 1997–98, the AgriculturalMarketing Service (AMS) will assumethe responsibility for administering theSOC Program.

The collection of information for theprogram is currently approved underOMB number 0584–0293. Theexpiration date of this approval isSeptember 30, 1997.

The information collection and recordkeeping requirements in this request areessential in the administration of theSOC Program.

The information collected is usedonly by authorized representatives ofthe USDA. The information is used toassure compliance with the Act and theprovisions of the SOC Federal-Stateagreement.

Estimate of Burden: Public reportingburden for this collection of informationis estimated to average 2.00 hours perresponse.

Respondents: State or localgovernments.

Estimated Number of Respondents:20.

Estimated Number of Responses perRespondent: 1.00

Estimated Total Annual Burden onRespondents: 40 hours.

Copies of this information collectioncan be obtained from Connie Helms,Commodity Procurement Branch, at(202) 720–7693.

Send Comments regarding, but notlimited to, the following: (a) Whetherthe collection of information isnecessary for the proper performance ofthe functions of the agency, includingwhether the information will havepractical utility; (b) the accuracy of theagency’s estimate of burden includingthe validity of the methodology andassumptions used; (c) ways to enhancethe quality, utility, and clarity of the

information to be collected; or (d) waysto minimize the burden of the collectionof information on those who are torespond, including through the use ofappropriate automated, electronic,mechanical, or other technologicalcollection techniques or other forms ofinformation technology, to: Catherine V.Smith, Acting Chief, USDA/AMS/Poultry Division, Room 3943–S, 1400Independence Avenue S.W., STOP0260, Washington, DC 20250–0260.

All responses to this notice will besummarized and included in the requestfor OMB approval. All comments willalso become a matter of public record.

Dated: June 5, 1997.Michael D. Holbrook,Director, Poultry Division, AgriculturalMarketing Service.[FR Doc. 97–15254 Filed 6–10–97; 8:45 am]BILLING CODE 3410–02–P



[Docket No. 97–044–1]

Availability of EnvironmentalAssessments and Findings of NoSignificant Impact

AGENCY: Animal and Plant HealthInspection Service, USDA.ACTION: Notice.

SUMMARY: We are advising the publicthat three environmental assessmentsand findings of no significant impacthave been prepared by the Animal andPlant Health Inspection Service relativeto the issuance of permits to allow thefield testing of genetically engineeredorganisms. The environmentalassessments provide a basis for ourconclusion that the field testing of thegenetically engineered organisms willnot present a risk of introducing ordisseminating a plant pest and will nothave a significant impact on the qualityof the human environment. Based on itsfindings of no significant impact, theAnimal and Plant Health InspectionService has determined thatenvironmental impact statements neednot be prepared.ADDRESSES: Copies of the environmentalassessments and findings of nosignificant impact are available forpublic inspection at USDA, room 1141,South Building, 14th Street andIndependence Avenue SW.,Washington, DC, between 8 a.m. and

4:30 p.m., Monday through Friday,except holidays. Persons wishing toinspect those documents are requestedto call ahead on (202) 690–2817 tofacilitate entry into the reading room.

FOR FURTHER INFORMATION CONTACT: Dr.Arnold Foudin, Deputy Director,Biotechnology Evaluation, BSS, PPQ,APHIS, Suite 5B05, 4700 River RoadUnit 147, Riverdale, MD 20737–1237;(301) 734–7612. For copies of theenvironmental assessments and findingsof no significant impact, contact Mr.Clayton Givens at (301) 734–7612; e-mail: [email protected]. Pleaserefer to the permit numbers listed belowwhen ordering the documents.

SUPPLEMENTARY INFORMATION: Theregulations in 7 CFR part 340 (referredto below as the regulations) regulate theintroduction (importation, interstatemovement, and release into theenvironment) of genetically engineeredorganisms and products that are plantpests or that there is reason to believeare plant pests (regulated articles). Apermit must be obtained or anotification acknowledged before aregulated article may be introduced intothe United States. The regulations setforth the permit applicationrequirements and the notificationprocedures for the importation,interstate movement, and release intothe environment of a regulated article.

In the course of reviewing each permitapplication, the Animal and PlantHealth Inspection Service (APHIS)assessed the impact on the environmentthat releasing the organisms under theconditions described in the permitapplication would have. APHIS hasissued permits for the field testing of theorganisms listed below after concludingthat the organisms will not present arisk of plant pest introduction ordissemination and will not have asignificant impact on the quality of thehuman environment. Theenvironmental assessments and findingsof no significant impact, which arebased on data submitted by theapplicant and on a review of otherrelevant literature, provide the publicwith documentation of APHIS’ reviewand analysis of the environmentalimpacts associated with conducting thefield tests.

Environmental assessments andfindings of no significant impact havebeen prepared by APHIS relative to theissuance of permits to allow the fieldtesting of the following geneticallyengineered organisms:

31781Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Notices

Permit No. Permittee DateIssued Organisms Field test

location

96–355–01 ..... Applied Phytologics, Incor-porated.

3–31–97 Rice plants genetically engineered to express proteins of phar-maceutical interest.

California.

97–023–01 ..... Auburn University ...................... 3–31–97 Pseudomonas syringae pv. tomato strain DC3000 geneticallyengineered for decreased virulence.

Alabama.

97–044–02 ..... Betaseed, Incorporated ............. 4–25–97 Sugar beet plants genetically engineered to express virus resist-ance and a marker gene.

Idaho.

The environmental assessments andfindings of no significant impact havebeen prepared in accordance with: (1)The National Environmental Policy Actof 1969, as amended (NEPA) (42 U.S.C.4321 et seq.), (2) regulations of theCouncil on Environmental Quality forimplementing the procedural provisionsof NEPA (40 CFR parts 1500–1508), (3)USDA regulations implementing NEPA(7 CFR part 1b), and (4) APHIS’ NEPAImplementing Procedures (7 CFR part372).

Done in Washington, DC, this 4th day ofJune 1997.Terry L. Medley,Administrator, Animal and Plant HealthInspection Service.[FR Doc. 97–15257 Filed 6–10–97; 8:45 am]BILLING CODE 3410–34–P



[Docket No. 97–027–1]

International Sanitary andPhytosanitary Standard-SettingActivities

AGENCY: Animal and Plant HealthInspection Service, USDA.ACTION: Notice and solicitation ofcomments.

SUMMARY: In accordance with legislationimplementing the Uruguay Round of theGeneral Agreements on Tariffs andTrade, we are informing the public ofinternational standard-setting activitiesof the Office International desEpizooties, the Secretariat of theInternational Plant ProtectionConvention, and the North AmericanPlant Protection Organization, and weare soliciting public comment on thestandards to be considered.ADDRESSES: Please send an original andthree copies of your comments toDocket No. 97–027–1, RegulatoryAnalysis and Development, PPD,APHIS, Suite 3C03, 4700 River RoadUnit 118, Riverdale, MD 20737–1238.Please state in your letter that yourcomments refer to Docket No. 97–027–1, and state the name of the committee

or working group to which yourcomments are addressed. Commentsreceived may be inspected at USDA,Room 1141, South Building, 14th Streetand Independence Avenue SW.,Washington, DC, between 8 a.m. and4:30 p.m., Monday through Friday,except holidays. Persons wishing toinspect comments are requested to callahead on (202) 690–2817 to facilitateentry into the comment reading room.FOR FURTHER INFORMATION CONTACT: Mr.John Greifer, Acting Director, TradeSupport Team, International Services,APHIS, room 1128, South Building,14th Street and Independence AvenueSW, Washington, DC, 20250, (202) 720–7677; or e-mail [email protected] INFORMATION:Legislation implementing the UruguayRound of the General Agreements onTariffs and Trade (the Uruguay RoundAgreements Act) was signed into law(Pub. L. 103–465) by the President onDecember 8, 1994. The Uruguay RoundAgreements Act amended title IV of theTrade Agreements Act of 1979 (19U.S.C. 2531 et seq.) by adding a newsubtitle F, ‘‘International Standard-Setting Activities.’’ Subtitle F requiresthe President to designate an agency tobe responsible for informing the publicof the sanitary and phytosanitarystandard-setting activities of eachinternational standard-settingorganization. The designated agencymust inform the public by publishing anotice in the Federal Register, whichprovides the following information: (1)The sanitary or phytosanitary standardsunder consideration or planned forconsideration by the internationalstandard-setting organization; and (2)for each sanitary or phytosanitarystandard specified: a description of theconsideration or planned considerationof the standard; whether the UnitedStates is participating or plans toparticipate in the consideration of thestandard; the agenda for United Statesparticipation, if any; and the agencyresponsible for representing the UnitedStates with respect to the standard.

Subtitle F defines ‘‘internationalstandard’’ as a standard, guideline, orrecommendation: (1) Adopted by theCodex Alimentarius Commissionregarding food safety; (2) developed

under the auspices of the OfficeInternational des Epizooties regardinganimal health and zoonoses; (3)developed under the auspices of theSecretariat of the International PlantProtection Convention in cooperationwith the North American PlantProtection Organization regarding planthealth; or (4) established by ordeveloped under any other internationalorganization agreed to by the membercountries of the North American FreeTrade Agreement or by membercountries of the World TradeOrganization.

The Codex Alimentarius Commission(Codex) was created in 1962 by twoUnited Nations organizations, the Foodand Agriculture Organization (FAO) andthe World Health Organization. It is themajor international organization forencouraging international trade in foodand protecting the health and economicinterests of consumers.

The Office International desEpizooties (OIE) was created in Paris,France, in 1924, with the signing of aninternational agreement by 28 countries.The OIE facilitates intergovernmentalcooperation to prevent the spread ofcontagious diseases in animals, assistsin the development of animalproduction through improved healthinformation, and shares scientificprogress among its members. The OIEprovides the major international forumfor discussion and agreement onrecommendations and proposals ontopics such as disease control, technicalcooperation, trade standards, and theexchange of research and diseaseinformation.

The International Plant ProtectionConvention (IPPC), in effect since 1952,is a multilateral treaty, administered byFAO, that promotes ‘‘* * * commonand effective action to prevent thespread and introduction of pests ofplants and plant products and topromote measures for their control(IPPC Preamble).’’ The IPPC Secretariat,established within the FAO in 1993,works with plant protectionorganizations at the national andregional levels to harmonize plantquarantine activities worldwide,facilitate the dissemination ofphytosanitary information, strengthen


international cooperation, and supporttechnical assistance to developingcountries.

The North American Plant ProtectionOrganization (NAPPO) was created in1976 to coordinate plant protectionactivities in Canada, the United States,and Mexico. NAPPO provides amechanism by which the threecountries can exchange informationrelated to plant pest control. NAPPOconducts its business throughpermanent and ad hoc committees andannual meetings of the three membercountries. NAPPO cooperates with otherregional plant protection organizationsand the FAO to achieve the objectivesof the IPPC.

The World Trade Organization (WTO)was established on January 1, 1995, asthe common international institution forthe conduct of trade relations among themembers in matters related to theUruguay Round Agreements. The WTOis the successor to the GeneralAgreements on Tariffs and Trade. U.S.membership in the WTO was approvedby Congress when it enacted theUruguay Round Agreements Act.

The President, pursuant toProclamation No. 6780 of March 23,1995 (60 FR 15845), designated theSecretary of Agriculture as the officialresponsible for informing the public ofthe sanitary and phytosanitary (SPS)standard-setting activities of Codex,OIE, IPPC, and NAPPO. Thisresponsibility was delegated to theUnited States Department ofAgriculture’s Food Safety andInspection Service (FSIS) for Codexactivities and Animal and Plant HealthInspection Service (APHIS) for OIE,IPPC, and NAPPO activities.

FSIS is responsible for publishing anannual notice in the Federal Register toinform the public of SPS standard-setting activities for Codex. APHIS isresponsible for publishing notice of OIE,IPPC, and NAPPO activities related tointernational standards.

The United States is a participant ineach of the following activities, andAPHIS is the agency responsible forrepresenting the United States withrespect to these standards. In somecases, working groups and committeeshave not yet set meeting dates andlocations or determined specificstandards to be discussed. Also, becauseworking groups and the issues theyaddress are not static, this list may notpresent a complete picture of OIE, IPPC,and NAPPO SPS standard-settingactivities for the coming year.

OIE Standard Setting Activities1. Committee/Working Group: General

Session.

Agency/U.S. Participant(s):Delegate—Dr. Joan Arnoldi, DeputyAdministrator, Veterinary Services,APHIS, Washington, D.C.; Alternatedelegate—Dr. Alex Thiermann, RegionalDirector (Europe, Africa, and Asia),International Services, APHIS, Brussels,Belgium.

General Purpose: Establish, review,and adopt international standardsdealing with animal health.

Date of Meeting: May (annually).Location of Meeting: Paris, France.Major Discussion/Agenda: Animal

health standards related to trade,including risk assessment standards,regionalization, and specific diseaseissues.

2. Committee/Working Group:Regional Commission for the Americas.

Agency Participant(s): Dr. JoanArnoldi.

General Purpose: The RegionalCommission for the Americas is one offour OIE Regional Commissions.Regional Commissions nominatecandidates for election to the expertCommissions and Working Groups,discuss regional animal health issues,and propose topics of regional concernas agenda items or for scientific reviewat upcoming meetings of the OIEGeneral Session.

Dates of Meetings: May and Decemberor January (twice annually).

Location of Meetings: Variable.Major Discussion/Agenda: Location of

regional office for the Americas, animalhealth diseases control issues ofregional concern.

3. Committee/Working Group:Standards Commission.

Agency/U.S. Participant(s): Dr. JamesPearson, Director, National VeterinaryServices Laboratory, APHIS, Ames, IA.

General Purpose: The StandardsCommission recommends changes ininternational standards for diagnostictests and vaccines. These changes, whenapproved by the General Session, arepublished in the OIE Manual ofStandards for Diagnostic Tests andVaccines.

Dates of Meetings: February andSeptember (twice annually).

Location of Meetings: Paris, France.Major Discussion/Agenda: Review

and recommend revisions tointernational diagnostic test standardspublished in the OIE Manual ofStandards for Diagnostic Tests andVaccines; review OIE referencelaboratories, OIE reference sera,laboratory quality assurance, and makerecommendations to the OIE AnimalHealth Code Commission; discusswhich diagnostic procedures would bemost appropriately prescribed forspecific animal and poultry diseases.

4. Committee/Working Group:International Animal Health CodeCommission.

Agency/U.S. Participant(s): Dr. AlexThiermann.

General Purpose: The CodeCommission develops disease-specificrecommendations for internationalstandards regarding the movement ofanimals and animal products. The CodeCommission also develops genericstandards for animal transport,regionalization and risk assessmentprocedures, surveillance and monitoringguidelines, and procedures forevaluating animal health infrastructures.When adopted by the General Session,these standards are published in the OIEInternational Animal Health Code, theWTO-recognized manual of standardsfor international movement of animalsand animal products.

Dates of Meetings: January andSeptember (twice annually).

Location of Meetings: Paris, France.Major Discussion/Agenda: The Code

Commission reviews and updates theCode after proposed changes arecirculated to member countries forcomments. Updates are submitted foradoption at the General Session.

5. Committee/Working Group: Footand Mouth Disease (FMD) and OtherEpizootics Commission.

Agency/U.S. Participant(s): There isno Agency or U.S. member on the FMDCommission.

General Purpose: The FMD and OtherEpizootics Commission monitors theworld status of FMD and other majoranimal diseases and preparesrecommendations for adoption by theGeneral Assembly.

Dates of Meetings: The Commissionmeets when called by the DirectorGeneral.

Location of Meetings: Paris, France.Major Discussion/Agenda: Current

issues facing the Commission:International standards for FMDserological testing, protocols forendorsement of FMD-free areas,standards for epidemiologicalsurveillance for contagious bovinepleuropneumonia, and surveillance andmonitoring standards for bovinespongiform encephalopathy (BSE).

6. Committee/Working Group: FishDiseases Commission.

Agency/U.S. Participant(s): There isno Agency or U.S. member on the FishDiseases Commission. However, Dr. J. R.Winton, Research Team Leader atNorthwest Biological Science Center inSeattle, WA, is a U.S.-citizen observer.

General Purpose: The Fish DiseasesCommission drafted an Aquatic AnimalHealth Code and a Diagnostic Manual


for Aquatic Animal Diseases thatcontain international standards for fishdiseases. These manuals have beenapproved by the General Session.

Date of Meeting: September(annually).

Location of Meeting: Paris, France.Major Discussion/Agenda: Current

activities of the Fish DiseasesCommission: Continual updating of theOIE Fish Disease Manuals, preparationof the annual OIE report on the world-wide status of fish diseases, andplanning and hosting internationalconferences on current topics in aquaticanimal health.

7. Committee/Working Group: Ad HocWorking Group on Biotechnology.

Agency/U.S. Participant(s): Dr. JohnR. Gorham, Animal Disease ResearchUnit, Agricultural Research Service,USDA, Pacific Western Area, isPresident of the Working Group.

General Purpose: The Ad HocWorking Group on Biotechnologyreviews the biotechnological aspects ofeach chapter of the OIE Manual forDiagnostic Tests and Vaccines andprepares an annual report andrecommendations dealing withbiotechnology for consideration by theGeneral Session. The Working Grouphas also developed an internationaldatabase on sources ofbiotechnologically engineered vaccinesand diagnostic reagents.

Date of Meeting: The Working Groupmeets when called by the DirectorGeneral.

Location of Meeting: Paris, France.Major Discussion/Agenda: Current

issues facing the Working Group:Ongoing reviews of diagnostic test kits,applications of genetic engineering toanimal health, veterinary productsdeveloped using biotechnology, andpossible uses of new biotechnologicaltechniques in veterinary medicine.

8. Committee/Working Group:Working Group on Veterinary DrugRegistration.

Agency/U.S. Participant(s): Dr.Sharon R. Thompson, Special Assistantto the Director, Center for VeterinaryMedicine, Food and DrugAdministration, USDA.

General Purpose: Preparesrecommendations for the GeneralSession.

Date of Meeting: Every 2 years.Location of Meeting: Paris, France.Major Discussion/Agenda: Current

issues facing the group: Planning for theupcoming session of the InternationalTechnical Consultations on VeterinaryDrug Registration, developing trainingprograms for veterinary drug registrationofficials of OIE member countries, and

assisting an OIE ad hoc group indeveloping draft internationalguidelines for veterinary drugregistration.

9. Committee/Working Group:Working Group on Informatics andEpidemiology.

Agency/U.S. Participant(s): There isno Agency or U.S. member on theWorking Group. However, Dr. SteveWeber, Acting Director, Centers forAnimal Health and Epidemiology,APHIS, Fort Collins, CO, serves as aconsultant to the working group.

General Purpose: The Working Groupon Informatics and Epidemiologydevelops programs to increase theefficiency of OIE communications andto assist animal health officials ofmember countries to more effectivelyutilize contemporary communicationstechnology. One project of the WorkingGroup is HandiStatus, an informationnetwork on animal diseases ofinternational importance.


Location of Meeting: Paris, France.Major Discussion/Agenda: The

Working Group is currently developinga Windows version of HandiStatus anddesigning and developing the OIE WebPage.

10. Committee/Working Group:Working Group on Wildlife Diseases.

Agency/U.S. Participant(s): Dr. VictorNettles, Director, SoutheasternCooperative Wildlife Disease Study,College of Veterinary Medicine,University of Georgia, and Dr. M.H.Woodford (Working Group Chairman).

General Purpose: The Working Groupaddresses issues involving therelationship between diseases ofwildlife and those of domestic animalsand poultry.

Date of Meeting: The Working Groupmeets when called by the DirectorGeneral, usually annually in thesummer or fall.

Location of Meeting: Paris, France.Major Discussion/Agenda: Some

issues currently facing the WorkingGroup are: development of reportingmethods for wildlife diseases(particularly those naturallytransmissible between domesticated andwild species); facilitating worldwidewildlife disease surveillance and theapplicability of routine diagnostic teststo wildlife species; and problems relatedto propagation of wildlife species incaptivity and the disease hazardsassociated with their release from zoosor game farms.

11. Committee/Working Group: AdHoc Working Group on Animal DiseaseCategorization.

Agency/U.S. Participant(s): Dr.William D. Hueston, Associate Dean,Virginia-Maryland Regional College ofVeterinary Medicine.

General Purpose: The Working Groupis considering changes in diseasecategorization used to determine theurgency of reporting and the placementof certain diseases on OIE Lists A, B, orC. The Working Group submitted areport to the Code Commissionsuggesting changes in categorizationcriteria. The proposed changes are beingreviewed by the Code Commission.After the Code Commission reviews thereport, it will be presented for review bythe General Session.


Location of Meeting: Paris, France.Major Discussion/Agenda: The issue

currently facing this working Group isto determine how frequently certaindiseases should be reported to the OIE.

12. Committee/Working Group: AdHoc Group on TransmissibleSpongiform Encephalopathies (TSEs):Coordination of Research andEpidemiological Studies.

Agency/U.S. Participant(s): Dr. LindaDetwiler, Veterinary Services, APHIS,Robbinsville, NJ.

General Purpose: The Group reportedits findings on TSEs and BSE to theFMD Commission and developed aseparate report on TSE research needs.

Date of Meeting: The group iscurrently inactive.

Location of Meeting: Paris, France.Major Discussion/Agenda: Currently

there are no issues facing this WorkingGroup.

For further reference, the OIEstandards are contained in two OIEpublications, the ‘‘International AnimalHealth Code’’ and the ‘‘OIE Manual ofStandards for Diagnostic Tests andVaccines.’’ Staff veterinarians withNational Center for Import and Export,Veterinary Services, APHIS, each havecopies of these publications. Thepublications may also be ordered fromthe OIE web page at http://www.oie.org.

IPPC Standard Setting ActivitiesThere is no rigid structure for

development of draft IPPC standards. Insome cases, the IPPC Secretariat mayform an international working group todraft a standard deemed a priority byFAO. In most cases, however, draft IPPCstandards originate from industry, Stateor provincial governments, or otherinterested parties; they are submitted tothe IPPC Secretariat through therepresentative organization of themember country (APHIS) or through theregional plant protection organization


(NAPPO). The IPPC Secretariat refersdraft standards to the Committee ofExperts on Phytosanitary Measures(CEPM). The CEPM considers the draftstandards and recommends action; thedraft standards are submitted either toFAO for approval or to membercountries for consultation and comment(country consultation). The FAOapproval process involves review byseveral bodies—the FAO Committee onAgriculture (COAG), FAO Council, andFAO Conference—before standards areadopted.

Technical experts from the UnitedStates have participated directly inworking groups and indirectly asreviewers of all current IPPC draftstandards. In addition, documents andpositions developed by APHIS andNAPPO have served as the basis formany of the standards adopted to date.A range of standards are currentlymoving through different stages ofdevelopment, review, and approval. Thestatus of all IPPC standards (existing,drafted, and proposed) is summarizedbelow:

I. Reference Standards (completed butsubject to revision).

a. Plant Quarantine Principles as Relatedto Trade, adopted in 1993.

b. Glossary of Phytosanitary Terms, revisedin September 1995.

c. Policy and Standards for Construction ofInternational Standards for PhytosanitaryMeasures (ISPMs), adopted in May 1994.

d. International Plant ProtectionConvention, revised in April 1997.

II. Completed Standards (approved by theFAO Committee on Agriculture and FAOCouncil and adopted by FAO Conference inNovember 1995).

a. Guidelines for Pest Risk Analysis (PRA).b. Code of Conduct for the Import and

Release of Exotic Biological Control Agents.c. Requirements for the Establishment of

Pest Free Areas.III. Draft Standards (currently being

finalized).a. Guidelines for Survey and Monitoring

Systems, revised and approved by the CEPMin May 1996, adopted by COAG in April1997.

b. Framework for an Export CertificationSystem, revised and approved by the CEPMin May 1996, adopted by COAG in April1997.

c. Inspection Methodology—redrafted forreview by the October 1997 CEPM andpossible country consultation.

IV. Draft Supplementary Standards (requireadditional expert review).

a. PRA, Pest Categorization.b. PRA, Economic Impact Assessment.c. PRA, Probability of Pest Introduction.d. PRA, Pest Management.e. Procedures for Determining Freedom of

an Area—Citrus Canker, drafted in October1995; supplement to the Guidelines forSurvey and Monitoring standard which iscurrently under review by citrus cankerexperts.

The four PRA supplementary standards (athrough d) were combined into oneintegrated PRA supplementary standard in1996. This integrated supplementarystandard was not approved by the CEPMpending further work; upon approval by theCEPM (possibly in October 1997) thedocument will go for country consultation.

V. New Standards (in initial draft stage).a. Post-entry Quarantine Facilities,

postponed since 1996, no draft to date.b. Pest Free Production Sites, drafted in

October 1995, may be finalized by CEPM inOctober 1997 for FAO adoption.

c. Eradication, drafted in November 1995,may be finalized by CEPM in October 1997for FAO adoption.

d. Guidelines for Import Regulations,drafted in April 1996, will be reviewed byCEPM in October 1997 for countryconsultation.

e. Phytosanitary Certification(supplementing annexes to the Convention),drafted August 1996, will be reviewed byCEPM in October 1997 for countryconsultation.

f. Pest Status Reports (previously referredto as Pest Data Sheets), drafted in March1997, will be reviewed by CEPM in October1997 for country consultation.

g. Pest Management (Quarantine Security),working group proposed for 1997.

h. Dispute Resolution, proposed by somemembers as a new priority.

i. Regulated Non-quarantine Pests,proposed by some members as a newpriority.

Further information on the IPPCstandards is available from the UnitedNation’s Food and AgricultureOrganization web page at: http://faowfs0a.fao.org/waicent/faoinfo/agricult/agp/agpp/PQ/Default.htm.

Revision of the IPPCThe IPPC was amended in 1979 in

response to changing plant pestconditions and quarantine concerns.The amendment came into force in 1991upon ratification by two-thirds of theIPPC signatory countries. However, thecurrent IPPC does not directly recognizeSPS principles and obligations. Nordoes it discuss the harmonization ofphytosanitary measures throughstandards. In October 1995, IPPCsignatory countries agreed to revise theIPPC again in response to changes inglobal agriculture, including therequirements of the SPS Agreementregarding the development andapplication of internationalphytosanitary standards.

The IPPC Secretariat gatheredrecommendations from signatorycountries regarding potential revisionsto the current scope, coverage, andprovisions of the IPPC. In March 1996,plant quarantine experts from varioussignatory countries met to discuss anddevelop draft text for the revised IPPC.In January 1997, IPPC signatorycountries met in Rome to further

negotiate changes to the revised text.Due to an inability to resolve several keyissues over the course of the TechnicalConsultation, the Consultation did notproduce a final revised text to submit toFAO for approval.

Following the January TechnicalConsultations, the COAG established anopen-ended working group to finalizethe revision. This working groupdeveloped a final revised text whichwas presented to the COAG in April1997. The COAG adopted the revisedtext and will submit it to FAO Counciland legal experts in June 1997 forconsideration. If Council approves therevised text, it will be submitted toConference for final approval inNovember 1997. If approved, the revisedIPPC will be distributed to signatorycountries in January 1998.

NAPPO Standard Setting Activities

Current information on NAPPOpolicies, standard setting activities, U.S.participants, and meeting agendas anddates is available on the NAPPO homepage at http://www.nappo.org.Interested individuals may also contactMarshall Kirby, current APHISrepresentative on the APHIS NAPPOStandards Panel, at (301) 734–8262.

NAPPO Standards Panel

The NAPPO Standards Panel handlesor supports development of NAPPOstandards and other cross-commodityissues, reviews proposed internationalstandards, and recommends NAPPOpositions on proposed internationalstandards. At the July 1997 meeting, thePanel will develop a work plan for theupcoming year. Issues to be consideredinclude:

a. Review of existing NAPPO andinternational standards for equivalency;and

b. Planning for NAPPO developmentof, or input into, new or revised regionaland international standards.

In addition, the Standards Panelsupports the work of other NAPPOpanels on standards development.Following is a summary of panelcharges as they relate to thedevelopment of standards (see theNAPPO home page for the most up-to-date information, including a list of U.S.participants on the panels):

Accreditation Panel

The Panel will finalize the draftstandard, The accreditation ofindividuals to issue phytosanitarycertificates, for approval by the NAPPOExecutive Committee (EC) at the 1997NAPPO Annual Meeting (October 21–24).


Biological Control Panel

The Panel will:a. Develop a framework, with

timelines, for the development ofscience-based guidelines to harmonizeregulations and protocols for theimportation, quarantine, and release ofexotic biological control agents; and

b. Revise and resubmit draft ofNAPPO guidelines for petition forrelease of exotic phytophagous insectsand mites for the biological control ofweeds in the NAPPO Standards format.

Biotechnology Panel

The Panel will:a. Develop a NAPPO biotechnology

standard, taking into considerationexisting national and internationalstandards; and

b. Explore development of a NAPPOrelease policy for wild types of maize(cotton and tomato) and considerwhether it can be included in thestandard.

Forestry Panel

The Panel will:a. Develop a NAPPO standard for the

movement of Christmas trees within andamong NAPPO member countries;

b. Harmonize gypsy moth regulationsamong NAPPO member countries;

c. Develop a NAPPO standard for themovement of wood (includingdunnage); and

d. Review the European PlantProtection Organization list of forestrywords/definitions for possible adoptionby NAPPO; propose alternatives forthose considered inappropriate.

Fruit Fly Panel

The Panel will:a. Complete the list of quarantine

significant fruit flies for the NAPPOregion and member countries; and

b. Prepare NAPPO standardspertaining to survey procedures andphytosanitary procedures for quarantinesignificant fruit flies.

Fruit Tree and Grapevine Nursery StockCertification Standard Panel

The Panel will:a. Complete the grapevine portion of

the Fruit Tree and Grapevine NurseryStock Certification Standard in time forEC approval at the 1997 annual meeting;and

b. Proceed with other components ofthe standard.

Grains Panel

The Panel will:a. Review the list of weed species

intercepted by Mexico in importedconsignments of wheat grain forprocessing from other NAPPO countries

and determine which species meet theNAPPO definition of quarantine pest;

b. Determine which phytosanitarymeasures will reduce the probability ofintroduction of weed species that aredetermined to be quarantine pests intoMexico’s territories;

c. Review the Tilletia controversa(dwarf bunt) PRA conducted by Mexicoin March 1996 and recommend the peststatus for this species in the NAPPOregion; and

d. Complete development of a NAPPOsampling protocol for the examinationof railway (box) cars for (1) the presenceof wheat grains and (2) the presence ofKarnal bunted wheat grains that meetsthe quarantine security requirements ofNAPPO member countries.

Hemispheric Training Center Panel

The Panel will continue with thedesign of a Hemispheric Training Centerto enable plant protection staffs inWestern Hemisphere countries to buildand strengthen plant healthinfrastructures and to harmonizeinternational plant protection andquarantine systems.

Irradiation Panel

The NAPPO Irradiation Standard,developed by the Irradiation Panel, wasapproved by the EC in April 1997. Thereare no current charges to this panel.

Pest Risk Analysis (PRA) Panel

The Panel will:a. Develop guidelines for the

harmonized implementation andapplication of the NAPPO PRAStandard and consider possibleamendment of the standard;

b. Compare and contrast howindividual NAPPO member countriesapply the NAPPO PRA Standard using,as a case study, the PRAs which eachcountry has prepared onChrysanthemum white rust; and

c. Analyze the Chrysanthemum whiterust PRAs prepared by NAPPO membercountries to determine the status of thecausal agent of this disease as aquarantine pest in the NAPPO region.

Potato Panel

The Panel will:a. Advance the NAPPO Potato

Standard towards becoming aninternational standard; and

b. Convene a subgroup to harmonizeand/or determine equivalencies amongdiagnostic tests for Potato Virus Y StrainN within the NAPPO region.

Comments on standards beingconsidered or to be considered by anyof the committees or working groupslisted above may be sent to APHIS asdirected under the heading ADDRESSES.

Done in Washington, DC, this 4th day ofJune 1997.Terry L. Medley,Administrator, Animal and Plant HealthInspection Service.[FR Doc. 97–15256 Filed 6–10–97; 8:45 am]BILLING CODE 3410–34–P


Forest Service

Proposed Perkins—Manistique 138 kVTransmission Line Project

AGENCY: Forest Service, USDA.ACTION: Notice; intent to prepare anenvironmental impact statement.

SUMMARY: The USDA Forest Service willprepare an Environmental ImpactStatement (EIS) to analyze and disclosethe effects of a proposal by WisconsinElectric Power Company WEPCO andEdison Sault Electric (ESE) to constructa 24 mile, 138 kV transmission line inDelta county, Michigan. The project areaincludes portions of the HiawathaNational Forest (HNF), Rapid River/Manistique Ranger Districts.DATES: Written comments concerningthe scope of the analysis (issues,preliminary alternatives, etc.) must bereceived in writing by July 11, 1997.ADDRESSES: Send written comments andsuggestions to Mr. William F. Spinner,Forest Supervisor, Hiawatha NationalForest, 2727 Lincoln Road, Escanaba,Michigan, 49829.FOR FURTHER INFORMATION CONTACT:Technical questions regarding theproposed action and EIS should bedirected to Ms. Patty Beyer, ProjectCoordinator, (906) 228–9681.SUPPLEMENTARY INFORMATION: WEPCO/ESE propose to construct, operate, andmaintain a 138 kV double circuittransmission line from the existingPerkins Substation one mile west ofPerkins, Michigan to the proposedIndian Lake Substation one milenorthwest of Manistique, Michigan. Theproposed 24 mile route lies adjacent tothe Lakehead Oil Company pipelineright-of-way. The Substation locationsare outside the boundaries of theHiawatha National Forest. The FederalLand and Policy Act allows the use ofnational forest lands for electrictransmission rights-of-way. TheHiawatha National Forest Land andResource Management Plan allows forutility right-of-ways within managementareas crossed by the proposed project.

WEPCO/ESE have identified a lack ofadequate electric transmission facilitiesserving Delta and Schoolcraft countiesin the Upper Peninsula of Michigan,


presently an ESE service territory. TheMichigan Public Service Commissionhas determined the existing service isinadequate in three areas, includingload growth, reliability, and electricaltransmission system reinforcement.WEPCO/ESE’s load growth has nearlyexceeded capacity and its need forreliable service and additional capacityto meet peak system demand is urgent.The purpose for constructing the projectis to increase reliability of service andprovide an additional source of powerto the customers served within WEPCO/ESE service area.

Permits or licenses required toimplement the proposed action include:right-of-way easement from theMichigan Department of NaturalResources, wetland permits and erosioncontrol standards from the MichiganDepartment of Environmental Quality,Section 404 determination and permitfrom the US Army Corps of Engineers,road crossing permits from Delta andSchoolcraft counties and the MichiganDepartment of Transportation, railroadcrossing permits from the WisconsinCentral Railroad, approval ofInterchange Agreement from the FederalEnergy Regulatory Commission,Certificate of Public Convenience andNecessity from the Public ServiceCommission, Act 69 approval from theMichigan Public Service Commission,Section 106 Review by the MichiganState Historic Preservation Office and aWild and Scenic River Determinationfrom the USDA Forest Service.

The USDA Forest Service is serving aslead federal agency for the preparationof an EIS that will evaluate the purpose,need, and routing alternatives on theHiawatha National Forest for theproposed project. The decision to bemade is whether to allow the use ofportions of the Hiawatha NationalForest for siting a transmission linefacility. The USDA Forest Service hasinvited other affected agencies toparticipate in the environmentalprocess. Preliminary issues associatedwith this proposal include constructionacross two designated wild and scenicrivers, aesthetic effects, health andsafety concerns from electromagnetic

fields, impacts to wetlands fromconstruction and effective wetlandrestoration, disturbances to threatened,endangered and sensitive plant andanimal habitat, noxious weed control,recreation access to roads, rivers, andtrails during construction and thecommitment of forest resources over thelong term.

The public is invited to attendmeetings to be held June 17, 18, and 19,1997, from 7:00 p.m. to 9:00 p.m. at thetownship hall in Nahma, the OmniCenter in Rapid River, and the townshiphall in Cooks, Michigan, respectively. Inadditional meeting will be held June 17at the Nahma township hall from 11:00a.m. to 1:00 p.m. The purpose of theworkshop-style meetings, is to shareproject information and identify publicissues and concerns. To assist the ForestService in identifying and consideringissues and concerns on the proposedaction, written comments on theproposal should be as specific aspossible. Please note that writtencomments made on the proposal will beregarded as public information.Anticipated publication date for theDraft EIS is November 1997 and theFinal EIS in early 1998.

Dated: June 5, 1997.William F. Spinner,Forest Supervisor.[FR Doc. 97–15234 Filed 6–10–97; 8:45 am]BILLING CODE 3410–11–M

DEPARTMENT OF COMMERCE

Bureau of Export Administration

Exceptions to IC/DV Procedures;Correction

ACTION: Proposed collection; correction.

SUMMARY: The Department ofCommerce, Bureau of ExportAdministration published a documentin the Federal Register of May 1, 1997(62 FR 23757) concerning a request forcomments on a collection ofinformation. The document containedan incorrect OMB control number.FOR FURTHER INFORMATION CONTACT:Stephen Baker, (202) 482–3673.

Correction

In the Federal Register issue of May1, 1997, on page 23757, in the thirdcolumn, correct the OMB Number toread: 0694–0001.


Linda Engelmeier,Departmental Forms Clearance Officer, Officeof Management and Organization.[FR Doc. 97–15169 Filed 6–10–97; 8:45 a.m.]



International Trade Administration

Antidumping or Countervailing DutyOrder, Finding, or SuspendedInvestigation; Opportunity to RequestAdministrative Review

AGENCY: Import Administration,International Trade Administration,Department of Commerce.

ACTION: Notice of opportunity to requestadministrative review of antidumping orcountervailing duty order, finding, orsuspension of investigation.

Background

Each year during the anniversarymonth of the publication of anantidumping or countervailing dutyorder, finding, or suspension ofinvestigation, an interested party, asdefined in section 771(9) of the TariffAct of 1930, as amended, may request,in accordance with section 353.22 or355.22 of the Department of Commerce(the Department) Regulations (19 CFR353.22/355.22 (1993)), that theDepartment conduct an administrativereview of that antidumping orcountervailing duty order, finding, orsuspended investigation.

OPPORTUNITY TO REQUEST A REVIEW: Notlater than the last day of June 1997,interested parties may requestadministrative review of the followingorders, findings, or suspendedinvestigations, with anniversary dates inJune for the following periods:

Period

Antidumping ProceedingsBELGIUM: Sugar, A–423–077 ....................................................................................................................................................... 6/1/96–5/31/97CANADA: Oil Country Tabular Goods, A–122–506 ...................................................................................................................... 6/1/96–5/31/97CANADA: Raspberries, A–122–401 .............................................................................................................................................. 6/1/96–5/31/97FRANCE: Calcium Aluminate Flux, A–427–812 ........................................................................................................................... 6/1/96–5/31/97FRANCE: Large Power Transformers, A–427–030 ...................................................................................................................... 6/1/96–5/31/97FRANCE: Sugar, A–427–078 ........................................................................................................................................................ 6/1/96–5/31/97GERMANY: Industrial Belts, except Synchronous & V-Belts, A–428–802 ................................................................................... 6/1/96–5/31/97GERMANY: Precipitated Barium Carbonate, A–428–061 ............................................................................................................. 6/1/96–5/31/97GERMANY: Rayon Yarns, A–428–810 ......................................................................................................................................... 6/1/96–5/31/97


Period

GERMANY: Sugar, A–428–082 ..................................................................................................................................................... 6/1/96–5/31/97HUNGARY: Tapered Roller Bearings, A–437–601 ....................................................................................................................... 6/1/96–5/31/97ITALY: Large Power Transformers, A–475–031 ........................................................................................................................... 6/1/96–5/31/97ITALY: Synchronous and V-Belts, A–475–802 ............................................................................................................................. 6/1/96–5/31/97JAPAN: Fishnetting, A–588–029 ................................................................................................................................................... 6/1/96–5/31/97JAPAN: Forklift Trucks, A–588–703 .............................................................................................................................................. 6/1/96–5/31/97JAPAN: Grain-Oriented Electrical Steel, A–588–831 .................................................................................................................... 6/1/96–5/31/97JAPAN: Industrial Belts, A–588–807 ............................................................................................................................................. 6/1/96–5/31/97JAPAN: Large Power Transformers, A–588–032 .......................................................................................................................... 6/1/96–5/31/97JAPAN: Nitrile Rubber, A–588–706 ............................................................................................................................................... 6/1/96–5/31/97JAPAN: PET Film, A–588–814 ...................................................................................................................................................... 6/1/96–5/31/97NEW ZEALAND: Kiwifruit, A–614–801 .......................................................................................................................................... 6/1/96–5/31/97ROMANIA: Tapered Roller Bearings, A–485–602 ........................................................................................................................ 6/1/96–5/31/97RUSSIA: Ferrosilicon A–821–804 ................................................................................................................................................. 6/1/96–5/31/97SINGAPORE: V-Belts, A–559–803 ............................................................................................................................................... 6/1/96–5/31/97SOUTH AFRICA: Furfuryl Alcohol, A–791–802 ............................................................................................................................ 6/1/96–5/31/97SWEDEN: Stainless Steel Plate, A–401–040 ............................................................................................................................... 6/1/96–5/31/97TAIWAN: Carbon Steel Plate, A–583–080 .................................................................................................................................... 6/1/96–5/31/97TAIWAN: Oil Country Tubular Goods, A–583–505 ....................................................................................................................... 6/1/96–5/31/97TAIWAN: Stainless Steel Butt-Weld Pipe Fittings, A–583–816 .................................................................................................... 6/1/96–5/31/97TAIWAN: Washers, A–583–820 .................................................................................................................................................... 6/1/96–5/31/97THE NETHERLANDS: Aramid Fiber, A–421–805 ........................................................................................................................ 6/1/96–5/31/97THE PEOPLE’S REPUBLIC OF CHINA: Furfuryl Alcohol, A–570–835 ....................................................................................... 6/1/96–5/31/97THE PEOPLE’S REPUBLIC OF CHINA: Silicon Metal, A–570–806 ............................................................................................ 6/1/96–5/31/97THE PEOPLE’S REPUBLIC OF CHINA: Sparklers, A–570–804 ................................................................................................. 6/1/96–5/31/97THE PEOPLE’S REPUBLIC OF CHINA: Tapered Roller Bearings, A–570–601 ......................................................................... 6/1/96–5/31/97VENEZUELA: Ferrosilicon, A–307–807 ........................................................................................................................................ 6/1/96–5/31/97

Countervailing ProceedingsITALY: Grain-Oriented Electrical Steel, C–475–812 ..................................................................................................................... 1/1/96–12/31/96

In accordance with sections 353.22(a)and 355.22(a) of the regulations, aninterested party as defined by section353.2(k) may request in writing that theSecretary conduct an administrativereview. The Department has changed itsrequirements for requesting reviews forcountervailing duty orders. Pursuant to19 C.F.R. 355.22(a) of the regulations, aninterest party must specify theindividual producers or exporterscovered by the order or suspensionagreement for which they are requestinga review (Interim Regulations, 60 FR25130, 25137 (May 11, 1995)).Therefore, for both antidumping andcountervailing duty reviews, theinterested party must specify for whichindividual producers or exporterscovered by an antidumping finding oran antidumping or countervailing dutyorder it is requesting a review, and therequesting party must state why itdesires the Secretary to review thoseparticular producers or exporters. If theinterested party intends for theSecretary to review sales of merchandiseby an exporter (or a producer if thatproducer also exports merchandise forother suppliers) which were producedin more than one country of origin, andeach country of origin is subject to aseparate order, then the interested partymust state specifically, on an order-by-order basis, which exporter(s) therequest is intended to cover.

Seven copies of the request should besubmitted to the Assistant Secretary forImport Administration, InternationalTrade Administration, Room B–099,U.S. Department of Commerce, 14thStreet & Constitution Avenue, N.W.,Washington, D.C. 20230. TheDepartment also asks parties to serve acopy of their requests to the Office ofAntidumping/CountervailingEnforcement, Attention: Sheila Forbes,in room 3065 of the main CommerceBuilding. Further, in accordance withsection 353.31(g) or 355.31(g) of theregulations, a copy of each request mustbe served on every party of theDepartment’s service list.

The Department will publish in theFederal Register a notice of ‘‘Initiationof Administrative Review ofAntidumping or Countervailing DutyOrder, Finding, or SuspendedInvestigation,’’ for requests received bythe last day of June 1997. If theDepartment does not receive, by the lastday of June 1997, a request for reviewof entries covered by an order, finding,or suspended investigation listed in thisnotice and for the period identifiedabove, the Department will instruct theCustoms Service to assess antidumpingor countervailing duties on those entriesat a rate equal to the cash deposit of (orbond for) estimated antidumping orcountervailing duties required on thoseentries at the time of entry, orwithdrawal from warehouse, for

consumption and to continue to collectthe cash deposit previously ordered.

This notice is not required by statute,but is published as a service to theinternational trading community.


Jeffrey P. Bialos,Principal Deputy Assistant Secretary forImport Administration.[FR Doc. 97–15288 Filed 6–10–97; 8:45 am]BILLING CODE 3510–DS–M



[A–412–810]

Certain Hot-Rolled Lead and BismuthCarbon Steel Products from the UnitedKingdom: Notice of Amendment ofFinal Results of AntidumpingAdministrative Review

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of amendment of finalresults of antidumping dutyadministrative review.

SUMMARY: We are amending our finalresults of administrative review of theantidumping duty order on certain hot-rolled lead and bismuth carbon steelproducts from the United Kingdom,published on April 17, 1997, to reflect


the correction of ministerial errors madein the margin calculation in those finalresults. We are publishing thisamendment to the final results inaccordance with 19 CFR 353.28(c).EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT: G.Leon McNeill or Maureen Flannery,Import Administration, InternationalTrade Administration, U.S. Departmentof Commerce, 14th Street andConstitution Avenue, N.W., WashingtonD.C. 20230; telephone (202) 482–4733.

Applicable StatuteUnless otherwise stated, all citations

to the statute are references to theprovisions effective January 1, 1995, theeffective date of the amendments madeto the Tariff Act of 1930 (the Act) by theUruguay Round Agreements Act(URAA). In addition, unless otherwiseindicated, all citations to theDepartment’s regulations are to thecurrent regulations, as amended by theinterim regulations published in theFederal Register on May 11, 1995 (60FR 25130).


BackgroundOn December 10, 1996, we published

the preliminary results of ouradministrative review of certain hot-rolled lead and bismuth carbon steelproducts from the United Kingdom (61FR 65022). We published the finalresults of review on April 17, 1997 (62FR 18744). On May 1, 1997, we receiveda timely allegation from respondent,British Steel Engineering Steels Limited(BSES), alleging that the Departmentmade ministerial errors in the finalresults.

Scope of ReviewThe products covered by this review

are hot-rolled bars and rods of nonalloyor other alloy steel, whether or notdescaled, containing by weight 0.03percent or more of lead or 0.05 percentor more of bismuth, in coils or cutlengths, and in numerous shapes andsizes. Excluded from the scope of thisreview are other alloy steels (as definedby the Harmonized Tariff Schedule ofthe United States (HTSUS) Chapter 72,note 1 (f)), except steels classified asother alloy steels by reason ofcontaining by weight 0.4 percent ormore of lead, or 0.1 percent or more ofbismuth, tellurium, or selenium. Alsoexcluded are semi-finished steels and

flat-rolled products. Most of theproducts covered in this review areprovided for under subheadings7213.20.00 and 7214.30.00.00 of theHTSUS. Small quantities of theseproducts may also enter the UnitedStates under the following HTSUSsubheadings: 7213.31.30.00, 60.00;7213.39.00.30, 00.60, 00.90;7214.40.00.10, 00.30, 00.50;7214.50.00.10, 00.30, 00.50;7214.60.00.10, 00.30, 00.50; and7228.30.80.00. HTSUS subheadings areprovided for convenience and Customspurposes. The written description of thescope of this order remains dispositive.

Amended Final ResultsOn May 1, 1997, BSES alleged that the

Department of Commerce (theDepartment) committed ministerialerrors in calculating the finalantidumping duty margin. BSES arguesthat, in calculating constructed value(CV) profit, the Department made aministerial error in failing to ensure thatthe profit ratio and the value by whichthe ratio was multiplied shared thesame basis. BSES argues that theDepartment overstated the CV profit byincluding direct selling expenses,indirect selling expenses, and packingin ‘‘CVPROFIT,’’ the value by which theprofit ratio (‘‘PRATE2CV’’) wasmultiplied, but excluding thoseexpenses from the total cost ofproduction used in the denominator ofthe profit ratio. In order to ensure thatdenominator ‘‘TOTHMCOP’’ of theprofit ratio and value ‘‘CVPROFIT’’shared the same basis, BSES suggeststhat the Department either delete suchexpenses from ‘‘CVPROFIT’’ or includethem in the denominator‘‘TOTHMCOP.’’

We agree with BSES that theDepartment made a ministerial error byinadvertently excluding direct sellingexpenses, indirect selling expenses andpacking expenses in the calculation ofCV profit. These items should have beenincluded. Furthermore, we note that weerred by deducting these expenses fromgross price before the comparison ofgross price with cost of production.Therefore, we have excluded theseexpenses from the net cost ofproduction, ‘‘NPRICOP,’’ and haveadded them to the total cost ofproduction, ‘‘TOTCOP,’’ for theseamended final results.

Second, BSES alleges that, in thecalculation of CV, the Department

understated imputed credit andinventory carrying costs. BSES pointsout that the Department calculatedcredit and inventory carrying costs forCV by first creating CV credit andinventory carrying costs ratios. TheDepartment then multiplied the ratiosby total CV to yield the unit values ofCV credit and inventory carrying costs.BSES argues that, since the denominatorof the ratios was on a different basisthan total CV (the value by which theratio was multiplied), the results of thecalculations were understated. BSESclaims that the Department normallycreates these variables by weight-averaging values from above-cost homemarket sales. As support for itsargument, BSES cites our Final ResultsAnalysis memorandum of April 9, 1997,where the Department states that ‘‘weweighted-averaged the variables,including credit and inventory carryingcosts.’’ BSES notes that the total CV(‘‘TOTCV’’) does not include movementexpenses, while the home market totalunit price (‘‘HMTOTUPR’’), whichserves as the denominator of theimputed credit and inventory carryingcosts ratios, does include movementexpenses. BSES argues that the resultingunit values for credit and inventorycarrying costs are therefore understated.BSES suggests that the Departmentcorrect this error by using theDepartment’s standard weighted-averagemethod; alternatively, BSES suggests, ifthe Department continues to use theratio, the Department may correct itserror by either deducting movementexpenses from the denominator‘‘HMTOTUPR’’ or by adding themovement expenses to ‘‘TOTCV.’’

We agree that the Department made aministerial error as it intended tocalculate a weighted-average of thelisted variables including credit andinventory carrying costs. See FinalAnalysis memorandum dated April 9,1997. Therefore, we have revised themargin calculation program by replacing‘‘SUM’’ with ‘‘MEAN’’ at line 441, anddeleting lines 454, 455, 456, 457, 1009,1010, 1014, and 1015.

Amended Final Results of Review

Upon review of the submittedallegation, the Department hasdetermined that the following marginexists for the period March 1, 1995through February 29, 1996.

Manufacturer/Exporter Period of Review Margin(percent)

British Steel Engineering Steels Limited (BSES) (formerly United Engineering Steels Limited) ........................ 3/1/95–2/29/96 4.52


The Department shall determine, andthe Customs Service shall assess,antidumping duties on all appropriateentries. Individual differences betweenexport price and normal value may varyfrom the percentage stated above.Because there is a concurrent review ofthe countervailing duty order on thesubject merchandise, final assessmentsfor BSES will reflect the final results ofthe countervailing duty administrativereview in accordance with section772(c)(1)(C) of the Act. The Departmentwill issue appraisement instructionsdirectly to the Customs Service.

Furthermore, the following depositrequirements will be effective uponpublication of this notice of amendedfinal results of review for all shipmentsof certain hot-rolled lead and bismuthcarbon steel products from the UnitedKingdom entered, or withdrawn fromwarehouse, for consumption on or afterthe publication date, as provided bysection 751(a)(1) of the Act: (1) The cashdeposit rate for the reviewed companywill be the rate listed above; (2) forpreviously reviewed or investigatedcompanies not listed above, the cashdeposit rate will continue to be thecompany-specific rate published for themost recent period; (3) if the exporter isnot a firm covered in this review, a priorreview, or the original less-than-fair-value (LTFV) investigation, but themanufacturer is, the cash deposit ratewill be the rate established for the mostrecent period for the manufacturer ofthe merchandise; and (4) for all otherproducers and/or exporters of thismerchandise, the cash deposit rate shallbe 25.82 percent, the ‘‘all others’’ rateestablished in the LTFV investigation(58 FR 6207, January 27, 1993). Thesedeposit requirements shall remain ineffect until publication of the finalresults of the next administrativereview.

This notice serves as a final reminderto importers of their responsibilityunder 19 CFR 353.26 to file a certificateregarding the reimbursement ofantidumping duties prior to liquidationof the relevant entries during thisreview period. Failure to comply withthis requirement could result in theSecretary’s presumption thatreimbursement of antidumping dutiesoccurred and subsequent assessment ofdouble antidumping duties.

Notification to Interested PartiesThis notice also serves as a reminder

to parties subject to administrativeprotective order (APO) of theirresponsibility concerning thedisposition of proprietary informationdisclosed under APO in accordancewith 19 CFR 353.34(d). Timely written

notification of return/destruction ofAPO materials or conversion to judicialprotective order is hereby requested.Failure to comply with the regulationsand the terms of an APO is asanctionable violation.

This administrative review and noticeare in accordance with section 751(a)(1)of the Act (19 U.S.C. 1675(a)(1)) and 19CFR 353.22.

Dated: May 30, 1997.Robert S. LaRussa,Acting Assistant Secretary for ImportAdministration.[FR Doc. 97–15289 Filed 6–10–97; 8:45 am]BILLING CODE 3510–DS–P



A–580–810

Certain Welded Stainless Steel Pipefrom Korea; Initiation of ChangedCircumstances Antidumping DutyAdministrative Review

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of Initiation of ChangedCircumstances Antidumping DutyAdministrative Review.

SUMMARY: In response to a request fromSEAH Steel Corporation (SEAH), theDepartment of Commerce (theDepartment) is initiating a changedcircumstances antidumping dutyadministrative review of theantidumping duty order on certainwelded stainless steel pipe from Korea.See Notice of Amended FinalDetermination and Antidumping DutyOrder; Certain Welded Stainless SteelPipe From Korea, 60 FR 10064 (February23, 1995). See also Antidumping DutyOrder and Clarification of FinalDetermination; Certain WeldedStainless Steel Pipe from Korea, 57 FR62301, (December 30, 1992).

SEAH requested that the Departmentdetermine that SEAH is the successorfirm to Pusan Steel Pipe (PSP). Duringthe less-than-fair-value (LTFV)investigation, PSP was assigned a cashdeposit rate of 2.67 percent. SeeAntidumping Duty Order andClarification of Final Determination;Certain Welded Stainless Steel Pipefrom Korea, 57 FR 62301 (December 30,1992). SEAH’s request is filed pursuantto section 751(b) of the Tariff Act of1930, as amended (the Tariff Act).

We are initiating an antidumping dutychanged circumstances administrativereview of the antidumping duty orderon certain welded stainless steel pipe

from Korea to determine whether or notSEAH is the successor firm to PSP, andto determine whether SEAH is entitledto PSP’s cash deposit rate.EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT: G.Leon McNeill or Maureen Flannery,Import Administration, InternationalTrade Administration, U.S. Departmentof Commerce, 14th Street andConstitution Avenue, N.W.,Washington, D.C. 20230; telephone(202) 482–4733.

Applicable Statute

Unless otherwise indicated, allcitations to the statute are references tothe provisions effective January 1, 1995,the effective date of the amendmentsmade to the Tariff Act by the UruguayRound Agreements Act. In addition,unless otherwise indicated, all citationsto the Department’s regulations are tothe current regulations, as amended bythe interim regulations published in theFederal Register on May 11, 1995 (60FR 25130).


Background

On March 27, 1997, SEAH requestedthat the Department conduct a changedcircumstances administrative reviewpursuant to section 751(b) of the TariffAct to determine whether SEAH shouldproperly be considered the successorfirm to PSP and if, as such, SEAHshould be entitled to PSP’s cash depositrate.

According to SEAH, PSP legallychanged its name to SEAH on December28, 1995, which change becameeffective on January 1, 1996. SEAHclaims that its name change from PSPwas a change in name only, and that thelegal structure of the company, itsmanagement, and ownership were notaffected by the name change. SEAH alsoclaims that it is a part of a larger groupof related companies, certain membersof which had SEAH in their names priorto January 1, 1996.

In its request for a changedcircumstances review, SEAH indicatedthat PSP had acquired certainproduction assets formerly owned bySammi Metal Products Co (Sammi).SEAH asserts that the acquisition,which occurred more than a year beforethe name change and was effectiveJanuary 3, 1995, is not related to thename change. SEAH claims that itsacquisition of the products and facilitiesof Sammi is functionally no differentfrom PSP expanding its existingfacilities or contracting a newmanufacturing facility.


The Department has examinedSEAH’s request for a changedcircumstances administrative reviewand has determined that the facts beforethe Department will require furtherinvestigation.

On May 13, 1997, SEAH alsorequested that the Department publishconcurrently its notice of initiation andpreliminary results of changedcircumstances review. On May 23, 1997,petitioners submitted a letter objectingto the concurrent issuance of a notice ofinitiation and preliminary results ofchanged circumstances review.Petitioners’ objection is based on thecomplexity of the facts, and the inabilityof counsel to obtain proprietarydocuments submitted by SEAH untilafter an initiation. For these reasons,and because we are considering whetherto seek additional information and wantpetitioners to have an opportunity tocomment, the Department hasdetermined that it would not beappropriate to issue our preliminaryresults of a changed circumstancesreview at this time.

Scope of the ReviewThe merchandise subject to this

antidumping duty order is weldedaustenitic stainless steel pipe (WSSP)that meets the standards andspecifications set forth by the AmericanSociety for Testing and Materials(ASTM) for the welded form ofchromium-nickel pipe designatedASTM A–312. The merchandise coveredby the scope of this order also includesWSSP made according to the standardsof other nations which are comparableto ASTM A–312.

WSSP is produced by formingstainless steel flat-rolled products into atubular configuration and welding alongthe seam. WSSP is a commodity productgenerally used as a conduit to transmitliquids or gases. Major applicationsinclude, but are not limited to, digesterlines, blow lines, pharmaceutical lines,petrochemical stock lines, breweryprocess and transport lines, general foodprocessing lines, automotive paint linesand paper process machines. Imports ofWSSP are currently classifiable underthe following Harmonized TariffSchedule of the United States (HTS)subheadings: 7306.40.5005,7306.40.5015, 7306.40.5040,7306.40.5065 and 7306.40.5085.Although these subheadings includeboth pipes and tubes, the scope of thisantidumping duty order is limited towelded austenitic stainless steel pipes.Although the HTS subheadings areprovided for convenience and Customspurposes, the written description of thescope of this order is dispositive.

This changed circumstancesadministrative review covers SEAH andany parties affiliated with SEAH.

Initiation of Changed CircumstancesAntidumping Duty OrderAdministrative Review

Pursuant to section 751(b) of theTariff Act, the Department will conducta changed circumstances administrativereview upon receipt of informationconcerning, or a request from aninterested party of an antidumping dutyorder which shows, changedcircumstances sufficient to warrant areview of the order. See section751(b)(1). In accordance with section751(b) and 19 CFR 353.22(f)(1)(i), we areinitiating a changed circumstancesadministrative review based upon theinformation contained in SEAH’s March27, 1997 request for this review.

The Department will publish in theFederal Register a notice of preliminaryresults of changed circumstancesantidumping duty administrativereview, in accordance with 19 CFR353.22(f)(1)(v), which will set forth thefactual and legal conclusions uponwhich our preliminary results are based.Not later than 270 days after publicationof this notice of initiation, theDepartment will issue its final results ofreview. All written comments must besubmitted in accordance with 19 CFR353.31(e) and must be served on allinterested parties on the Department’sservice list in accordance with 19 CFR353.31(g).

This notice is in accordance withsection 751(b)(1) of the Tariff Act andsection 353.22(f)(1)(i) of theDepartment’s regulations.

Dated: June 2, 1997.Robert S. LaRussa,Acting Assistant Secretary for ImportAdministration.[FR Doc. 97–15290 Filed 6–10–97; 8:45 am]BILLING CODE 3510–DS–P


National Oceanic and AtmosphericAdministration

[I.D. 060297C]

An Evaluation of Potential ShrimpVirus Impacts on Cultured Shrimp andon Wild Shrimp Populations in the Gulfof Mexico and Southeastern U.S.Atlantic Coastal Waters

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce, on behalf of the JointSubcommittee on Aquaculture.

ACTION: Advance notice of a proposedshrimp virus risk assessment and publicmeetings.

SUMMARY: The Joint Subcommittee onAquaculture (JSA); Office of Scienceand Technology Policy, is releasing areport describing the potential impactsof shrimp viruses on cultured shrimpand on wild shrimp populations in theGulf of Mexico and southeastern U.S.Atlantic coastal waters. Commentsreceived in writing, or at publicmeetings, will be used to help developplans for an ecological risk assessmenton shrimp viruses.DATES: Consideration will be given toonly to those comments received on orbefore August 11, 1997. In addition,comments may be provided at any ofthree public meetings to be held. SeeSUPPLEMENTARY INFORMATION section forfurther details regarding these meetings.ADDRESSES: Copies of a report preparedfor the JSA entitled, ‘‘An Evaluation ofShrimp Virus Impacts on CulturedShrimp and on Wild ShrimpPopulations in the Gulf of Mexico andSoutheastern U.S. Atlantic CoastalWaters’’ (the shrimp virus report) maybe obtained by contacting NMFSAssistant Administrator’s Office ofIndustry and Trade, at:301–713–2379 orby accessing the NMFS Home Page, at:http://kingfish.ssp.nmfs.gov/oit/oit.html. To help ensure that writtencomments are considered, send anoriginal and three copies to Mr. JeromeErbacher, Office of Industry & Trade,Room 3675, SSMC3, NMFS, 1315 East-West Highway, Silver Spring, MD20910, or facsimile to (301) 713–2384.To attend any of the public meetings,contact the Eastern Research Group, Inc.(ERG), Conference RegistrationLine,(617) 674–7374.FOR FURTHER INFORMATION CONTACT: Fortechnical information, contact Dr.Thomas McIlwain, Chairperson of theJSA Shrimp Virus Work Group, NMFS,3209 Frederick Street, Pascagoula, MS39567, (601) 762–4591 or Dr. Thomas C.Siewicki, 219 Ft. Johnson Road,Charleston SC 29412, (803)762-8534.SUPPLEMENTARY INFORMATION: Evidencesuggests that exotic shrimp viruses maybe inadvertently introduced into U.S.coastal regions. If established, theseintroduced viruses have the potential toinfect both wild shrimp stocks andshrimp in aquaculture through anumber of different pathways. Twopotentially significant pathways involvethe shrimp aquaculture and shrimpprocessing industries. Thoughconsidered less significant, examples ofother potential pathways include baitshrimp, ship ballast water, research and


display, translocated animals (non-shrimp), and natural spread (e.g.,migratory birds, large scale currents,flooding).

In 1995, Taura Syndrome Virus (TVS)was documented in shrimp cultureponds in Texas. After the Texasoutbreak, ponds were restocked withshrimp seed native to the Gulf ofMexico. However, some of the shrimp inthe second stocking were later foundinfected with other pathogenic viruses(e.g., White Spot Syndrome Virus(WSSV) and Yellow Head virus (YHV),only previously identified in shrimpimported from the far east. In 1996, arepeat outbreak of TSV wasdocumented. In 1997, YHV and WSSVwere identified (based on very limiteddata) in South Carolina. These outbreakshave raised concerns that viruses couldbe spread from aquaculture facilities tothe wild shrimp stocks in U.S. coastalwaters, with potentially seriousimplications.

To determine the likelihood and thepotential impacts of exotic shrimpviruses on wild shrimp populations inthe Gulf of Mexico and SoutheasternU.S. Atlantic Coastal Waters and oncultured shrimp in aquaculture in theseareas, the JSA has decided to conduct anecological risk assessment. (The JSAconsists of representatives from severalFederal organizations, including theNational Marine Fisheries Service, U.S.Department of Agriculture, U.S. Fishand Wildlife Service, and the U.S.Environmental Protection Agency). Insupport of information exchange andeducation, and to determine anynecessary course of action to avert theintroduction of pathogenic viruses, theJSA tasked a Federal interagency workgroup (Shrimp Virus Work Group;SVWG) with identifying research onshrimp viruses, the mode of virustransmission, and the potential for theintroduction of these viruses into theGulf of Mexico and Southeastern U.S.Atlantic Coastal Waters. The SVWGhelped to organize and participated in ashrimp virus workshop in New Orleans,LA, in June 1996. Recently, the SVWGprepared a shrimp virus report thatsummarizes readily-available risk-relevant information on shrimp viruses.This report has been approved by theJSA and is available to the public forcomment.

Comments on the shrimp virus reportreceived from the public (whether inwriting or at the public meetings) willbe used as input to a workshop that willhelp finalize plans for conducting ashrimp virus ecological risk assessment.

Meeting Locations and Times : July15, in Charleston, South Carolina; July21, in Mobile, Alabama; and July 23, in

Brownsville, Texas. There is no chargefor attending the public meetings listedabove; however, seats are limited, so itis advisable to register as soon aspossible. Participants wishing to makecomments or address issues can registerwith ERG prior to the workshop, or onsite. Each participant will be assigned atime slot on a first-come, first-servedbasis. Individual comments should belimited to 3 to 5 minutes; additional orlengthy comments may be submitted inwriting to the address provided above.

Dated: June 5, 1997.Rolland Schmitten,Assistant Administrator for Fisheries,National Marine Fisheries Service.[FR Doc. 97–15241 Filed 6–10–97; 8:45 am]BILLING CODE 3510–22–F



[I.D. 060497A]

Gulf of Mexico Fishery ManagementCouncil; Public Meeting

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.

ACTION: Notice of public meeting.

SUMMARY: The Gulf of Mexico FisheryManagement Council (Council) willconvene a public meeting of the StoneCrab Advisory Panel (AP).

DATES: This meeting will be held on July7, 1997, from 8:00 a.m. to 2:00 p.m.

ADDRESSES: This meeting will be held atthe Monroe County Regional ServiceCenter, 2798 Overseas Highway,Marathon, FL; telephone: 305–743–6727.

Council address: Gulf of MexicoFishery Management Council, 3018 U.S.Highway 301 North, Suite 1000, Tampa,FL 33619.

FOR FURTHER INFORMATION CONTACT:Wayne Swingle, Executive Director,Gulf of Mexico Fishery ManagementCouncil; telephone: 813–228–2815.

SUPPLEMENTARY INFORMATION: Thepurpose of the meeting will be to revieweffort and landing trends in the fisheryand continue development ofrecommendations for a limited accesssystem and the structure of such asystem.

The AP is comprised of fishermen andother user groups who advise theCouncil on fishery issues.

Special Accommodations

This meeting is physically accessibleto people with disabilities. Requests forsign language interpretation or otherauxiliary aids should be directed toAnne Alford at the Council (seeADDRESSES) by June 30, 1997.

Dated: June 5, 1997.Bruce C. Morehead,Acting Director, Office of SustainableFisheries, National Marine Fisheries Service.[FR Doc. 97–15243 Filed 6–10–97; 8:45 am]BILLING CODE 3510–22–F



[I.D. 060497B]

Mid-Atlantic Fishery ManagementCouncil; Public Meeting

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Notice of public meeting.

SUMMARY: The Mid-Atlantic FisheryManagement Council will hold a publicmeeting.DATES: The meeting will be held on June25, 1997, the Council will meet from10:00 a.m. until approximately 5:00p.m. On June 26, 1997, the Council willmeet from 8:00 a.m. until approximatelynoon.ADDRESSES: The meeting will be held atthe Holiday Inn, 3845 VeteransMemorial Highway, Ronkonkoma, NY11779; telephone: 516-585-9500.

Council address: Mid-Atlantic FisheryManagement Council, 300 S. NewStreet, Dover, DE 19904; telephone:302–674–2331.FOR FURTHER INFORMATION CONTACT:David R. Keifer, Executive Director,Mid-Atlantic Fishery ManagementCouncil; telephone: 302–674–2331.SUPPLEMENTARY INFORMATION: Thepurpose of this meeting is to reviewproposed Federal regulations toimplement the Magnuson-Stevens Act,discuss and possibly adopt forSecretarial approval the MonkfishFishery Management Plan, and otherfishery management matters.

The above agenda items may not betaken in the order in which they appearand are subject to change as necessary;other items may be added. This meetingmay also be closed at any time todiscuss employment or other internaladministrative matters.



The meeting is physically accessibleto people with disabilities. Requests forsign language interpretation or otherauxiliary aids should be directed toJoanna Davis at the Council (seeADDRESSES) at least 5 days prior to themeeting date.


Bruce C. Morehead,Acting Director, Office of SustainableFisheries, National Marine Fisheries Service.[FR Doc. 97–15242 Filed 6–10–97; 8:45 am]

BILLING CODE 3510–22–F



Modernization Transition Committee(MTC); Meeting


TIME AND DATE: June 25, 1997 from 8:00a.m. to 4:30 p.m.

PLACE: This meeting will take place atthe Silver Spring Holiday Inn, 8777Georgia Avenue, Silver Spring,Maryland.

STATUS: The meeting will be open to thepublic. The time between 10:30 a.m. to11:15 a.m. will be set aside for oralcomments or questions from the public.Approximately 50 seats will be availableon a first-come first-served basis for thepublic.

MATTERS TO BE CONSIDERED: Thismeeting will cover: Consultation on 10combined Consolidation andAutomation Certifications, 4 combinedConsolidation, Automation and ClosureCertifications, and 3 ConsolidationCertifications; update on the ServiceLevel D Automation criteria; and anupdate on the NWS and Astoriacommunity interactions.

CONTACT PERSON FOR MORE INFORMATION:Mr. Nicholas R. Scheller, NationalWeather Service, Modernization Staff,1325 East-West Highway, SSMC2, SilverSpring, Maryland 20910. Telephone:(301) 713–0454.


Nicholas R. Scheller,Manager, National Implementation Staff.[FR Doc. 97–15218 Filed 6–10–97; 8:45 am]

BILLING CODE 3510–12–M



[I.D. 060497D]

North Pacific Fishery ManagementCouncil; Meetings

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Notice of public meetings.

SUMMARY: Two meetings have beenscheduled in July to begin preparationof an essential fish habitat (EFH)assessment document for the fisheriesoff Alaska, as mandated by the recentamendments to the Magnuson-StevensFishery Conservation and ManagementAct.DATES: Technical teams for Bering Sea/Aleutian Islands (BSAI) and Gulf ofAlaska (GOA) groundfish will meet July8–9, 1997, in Seattle, WA, beginning at1:00 p.m. on July 8. On July 15–17,1997, the EFH Core Team will meet inJuneau, AK, beginning at 8:00 a.m. onJuly 15.ADDRESSES: The groundfish technicalteams will meet July 8–9 in Seattle, WA,at the Alaska Fisheries Science Center,7600 Sand Point Way NE., Building 4,Room 2079.

The EFH Core Team will meet July15–17 in Juneau, AK, at the NMFSAlaska Regional Office, 709 W. 9thStreet, Room 142A-B.

Council address: North PacificFishery Management Council, 605 W.4th Ave., Suite 306, Anchorage, AK99501–2252.FOR FURTHER INFORMATION CONTACT:Cindy Hartmann, telephone: 907–586–7585.SUPPLEMENTARY INFORMATION:

1. The Groundfish Technical Teamsfor BSAI and GOA groundfish willprepare a preliminary EFH assessmentdocument.

2. The EFH Core Team will review thepreliminary EFH assessment documentand discuss preparation of EFHamendments for the fisherymanagement plans (FMPs) for BSAI andGOA groundfish, BSAI crab, and for theFMPs for scallops and salmon.


These meetings are physicallyaccessible to people with disabilities.Requests for sign languageinterpretation or other auxiliary aidsshould be directed to Cindy Hartmann,907–586–7585, at least 5 working daysprior to the meeting date.




[I.D. 060497C]

Pacific Fishery Management Council;Public Meetings

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Notice of public meetings.

SUMMARY: The Pacific FisheryManagement Council (Council) and itsadvisory entities will hold publicmeetings.DATES: The Council meeting will beheld June 23–25, 1997. SeeSUPPLEMENTARY INFORMATION for specificdates and times.ADDRESSES: The meetings will be held atthe Red Lion Hotel-Seattle Airport,18740 Pacific Highway South, Seattle,WA 98188; telephone: (206) 246–8600.

Council address: Pacific FisheryManagement Council, 2130 SW FifthAvenue, Suite 224, Portland, OR 97201.FOR FURTHER INFORMATION CONTACT:Lawrence D. Six, Executive Director,Pacific Fishery Management Council,2130 SW Fifth Avenue, Suite 224,Portland, OR; telephone: (503) 326–6352.SUPPLEMENTARY INFORMATION: Variousadvisory groups will be meeting onMonday, June 23. The Council meetingwill begin on Monday, June 23, at1 p.m. with an open session. TheCouncil meeting reconvenes onTuesday, June 24, at 8 a.m. OnWednesday, June 25, the Council willconvene in a closed session (not open tothe public) to discuss litigation andpersonnel matters. The open sessionbegins at 8:30 a.m. and will adjournwhen Council business has beencompleted.

The following items are on theCouncil agenda:

A. Call to OrderB. Proposed Rules Implementing

Magnuson-Stevens FisheryConservation and Management Act

1. Agency Report2. Comments of Advisory Entities and

Public3. Council Comments


C. Salmon Management1. Statement of Chair Concerning

1997 Process2. Sequence of Events and Status of

Fisheries3. Plans for Workshop on Chinook

Models4. Procedure for Review and Revision

of Salmon Methodologies5. Plan AmendmentsD. Dungeness Crab Management1. Report of the Ad Hoc Scoping

Committee2. Scientific and Statistical Committee

(SSC) and Public Comments3. Determine Need for Federal

Management - ACTIONE. Coastal Pelagic Species

Management1. Need for Federal Management2. Anchovy Biomass Estimate and

Quotas for 1997–1998F. Habitat Issues1. Report of the Steering Group2. Public Comments3. Council - ACTIONG. Groundfish Management1. Fixed Gear Sablefish Management

in 19972. Fixed Gear Sablefish Management

in 1998 and Beyond3. Control Date for Potential Fixed

Gear Sablefish Individual QuotaProgram

4. Status of Federal Regulations5. Status of Fisheries and Inseason

Adjustments6. Scoping Process for Plan

Amendments7. Capacity Reduction ProgramH. Administrative and Other Matters1. Report of the Budget Committee2. Status of Legislation3. Report of the Council Chairs’

Meeting4. Approve September 1997 Agenda -

ACTION5. Appointments to Advisory Groups

- ACTION6. Council Comments on Draft NMFS

Report on California Sea Lions andHarbor Seals - ACTION

Other MeetingsSCHEDULE OF ADVISORY GROUP/

COMMITTEE MEETINGS

MONDAY, JUNE 23, 1997 TimeSecretarial Center 8 a.m., June 23–25Groundfish Management Team 8 a.m.Scientific and Statistical Committee 8

a.m.Habitat Steering Group 10 a.m.Groundfish Advisory Subpanel 1 p.m.Budget Committee After Council

SessionEnforcement Consultants 7 p.m.Buyback Committee 7 p.m.

TUESDAY, JUNE 24, 1997Groundfish Advisory Panel (GAP) 8

a.m.

SSC 8 a.m.

WEDNESDAY, JUNE 25, 1997

GAP 7 a.m. (If necessary)Detailed agendas for the above

advisory meetings will be available afterJune 13, 1997.


These meetings are physicallyaccessible to people with disabilities.Requests for sign languageinterpretation or other auxiliary aidsshould be directed to Eric W. Greene at(503) 326–6352 at least 5 days prior tothe meeting date.


CONSUMER PRODUCT SAFETYCOMMISSION

Sunshine Act Meeting

AGENCY: U.S. Consumer Product SafetyCommission, Washington, DC 20207.TIME AND DATE: Thursday, June 19, 1997,10:00 a.m.LOCATION: Room 410, East West Towers,4330 East West Highway, Bethesda,Maryland.STATUS: Closed to the Public.

MATTER TO BE CONSIDERED:

Compliance Status Report

The staff will brief the Commission onthe status of various compliancematters.

For a recorded message containing thelatest agenda information, call (301)504–0709.CONTACT PERSON FOR ADDITIONALINFORMATION: Sadye E. Dunn, Office ofthe Secretary, 4330 East West Highway,Bethesda, MD 20207 (301) 504–0800.

Dated: June 9, 1997.Sadye E. Dunn,Secretary.[FR Doc. 97–15446 Filed 6–9–97; 2:16 pm]BILLING CODE 6355–01–M

DEPARTMENT OF DEFENSE

Department of the Air Force

Privacy Act of 1974; System ofRecords

AGENCY: Department of the Air Force,DOD.ACTION: Notice to amend record systems.

SUMMARY: The Department of the AirForce is amending the systemidentifiers, the system names, and thePreamble to the Air Force’s compilationof Privacy Act Systems of RecordsNotices. The system identifiers reflectthe current numbering system used bythe Secretary of the Air Force.DATES: The amendments will beeffective on June 11, 1997.ADDRESSES: Send comments to the AirForce Access Programs Manager,Headquarters, Air ForceCommunications and InformationCenter/ITC, 1250 Air Force Pentagon,Washington, DC 20330–1250.FOR FURTHER INFORMATION CONTACT: Ms.Anne Rollins at (703) 697–8674 or DSN227–8674.SUPPLEMENTARY INFORMATION: TheDepartment of the Air Force notices forsystems of records subject to the PrivacyAct of 1974 (5 U.S.C. 552a), as amended,have been published in the FederalRegister and are available from theaddress above.

The proposed amendments are notwithin the purview of subsection (r) ofthe Privacy Act (5 U.S.C. 552a), asamended, which would require thesubmission of a new or altered systemreport for each system. The specificchanges to the record systems beingamended are set forth below.


L. M. BYNUM,Alternate OSD Federal Register LiaisonOfficer, Department of Defense.

UNITED STATES AIR FORCE

How Systems of Records are Arranged

In the Air Force, records are groupedby subject series. Each series has recordsabout a specific activity or function towhich a subject title and number isgiven. Systems of records are grouped inthe same way. For example, a system ofrecords on personnel security clearancesmay be found in ’Security - 31,’ and oneabout psychiatry in ’Medical Service -44.’ These numbers are part of thesystem identification which precede thenotices. They look like this: F031 AF SPA or F044 AFSG A. The letter ’F’ meansAir Force. The first three digits (031 and044) show that the records pertain toSecurity and the Medical Servicerespectively. The letters that followindicate to whom the system appliesand/or the Office of PrimaryResponsibility (OPR). For example, insystem F031 AF SP A, AF indicates thatthis is an Air Force-wide system, withSP denoting Security Police as the OPR.The last alpha designation is for internalmanagement control. In the recordssystem F044 AFSG A, (without a space


between the AF and SG) indicates thisis a Surgeon General System and appliesto the office of the Surgeon Generalonly.

Using the Index Guide

The systems of records maintained bythe Air Force are contained within thesubject series that are listed below.

This list identifies each series in theorder in which it appears in thisissuance. Use the list to identify subjectareas of interest. Having done so, usethe series number (for example 031 forSecurity) to locate the systems ofrecords grouping in which you areinterested.System Identification Series

Subject Series

Flying Operations011

Maintenance021

Supply023

Transportation024

Security031

Civil Engineering032

Communications033

Services034

Public Affairs035

Personnel036

Manpower and Organization038

Medical044

Law051

Chaplain052

Scientific/Research Development061

Finance Management065

Special Investigations071

Command Policy090

Safety091

DEPARTMENT OF THE AIR FORCE PRIVACY ACT SYSTEMS OF RECORDS NOTICES

System IdentifierSystem Name

From: To:

F010 AF A F033 AF CIC A Automated Orders Data SystemF010 AFIS B F036 497IG A Prisoner of War (PW) Debriefing FilesF010 ARPC A F033 ARPC A Background MaterialF010 AU A F036 AETC V Potential Faculty Rating SystemF010 CVAE A F033 CVAE A Secretary of the Air Force Historical RecordsF010 RE A F033 AFRE A Inquiries (Presidential/Congressional)F011 AF A F033 AF CIC D Locator, Registration and Postal Directory FilesF011 AF B F034 AF SVA E Check Cashing Privilege FilesF011 AF MP A F033 AF PC A Congressional and Other High Level InquiriesF011 AFA A F036 USAFA D Class Committee ProductsF011 AFA B F036 USAFA E Faculty Biographical SketchF011 AF SG A F033 AFSG A High Level Inquiry FileF011 ARPC A F033 ARPC B Locator or Personnel DataF011 LLI A F033 SAFLL A Congressional/Executive InquiriesF011 SG A F033 AFSG B Professional Inquiry Records SystemF012 AF A F033 AF CIC B Information Requests-Freedom of Information ActF012 AF B F033 AF CIC C Privacy Act Request FileF021 AFSPC A F021 AFSPC A Cable Affairs Personnel/Agency RecordsF030 AF A F036 AF CIC A Biographical Data and Automated Personnel Management SystemF030 AF JA A F051 AF JA B Confidential Financial Disclosure ReportF030 AF LE A F032 AF CE A Equal Opportunity in Off-Base HousingF030 AF LE B F032 AF CE B Off-Base Housing Referral ServiceF030 AF LE C F032 AF CE C Base Housing ManagementF030 AF LE D F032 AF CE D On/Off-Base Housing RecordsF030 AF MP A F036 AF PC Q Personnel Data System (PDS)F030 AF MP B F044 AF DP B Substance Abuse Reorientation and Treatment Case FilesF030 AF MP C F036 AF PC R Casualty FilesF030 AF MP D F036 AF PC S Contingency Operations System (COMPES)F030 AF MP E F044 AF DP A Drug Abuse Waiver RequestsF030 AF SG A F044 AFSG A Aerospace Physiology Personnel Career Information SystemF030 AF SP A F031 AF SP O Documentation for Identification and Entry AuthorityF030 AFISA A F036 497IG B For Cause Discharge ProgramF030 AFIS C F031 497IG D Intelligence Applicant FilesF030 ARPC A F036 ARPC H Applications for Identification (ID) CardsF030 ARPC B F036 ARPC I Point Credit Accounting Record System (PCARS)F030 MPC A F036 AFPC A Deceased Service Member’s Dependent FileF030 MPC B F036 AFPC C Indebtedness, Nonsupport PaternityF030 SG A F044 AFSG B Bioenvironmental Engineer Personnel Career Information SystemF030 SG B F044 AFSG C Aerospace Medicine Personnel Career Information SystemF033 AETC A F036 AETC A Lead Management System (LMS)F035 AF A F036 AFCA A Officer Quality Force Management RecordsF035 AF DP A F036 AF DP A Family Support Center (FSC) Accountability and Data Collection SystemF035 AF DP B F036 AF DP B Colonels Assignment FileF035 AF MP A F036 AF PC A Effectiveness/Performance Reporting SystemsF035 AF MP B F036 AF PC B Geographically Separated Unit Copy Officer Effectiveness/Airman Performance ReportF035 AF MP C F036 AF PC C Military Personnel Records SystemF035 AF MP D F036 AF PC D Officer Performance Report (OPR)/Enlisted Performance Report (EPR) Appeal Case FilesF035 AF MP E F036 AF PC E United States Air Force (USAF) Airman Retraining Program


DEPARTMENT OF THE AIR FORCE PRIVACY ACT SYSTEMS OF RECORDS NOTICES—Continued


From: To:

F035 AF MP F F036 AF PC F Request for Selective Reenlistment Bonus (SRB) and/or Advance Payment of SRBF035 AF MP G F036 AF PC G Selective Reenlistment ConsiderationF035 AF MP H F036 AF PC H Air Force Enlistment/Commissioning Records SystemF035 AF MP I F036 AF PC I Incoming Clearance RecordsF035 AF MP J F036 AF PC J Absentee and Deserter Information FilesF035 AF MP K F036 AF PC K Relocation Preparation Project FoldersF035 AF MP L F036 AF PC L Unfavorable Information Files (UIF)F035 AF MP M F036 AF PC M Officer Promotion and AppointmentF035 AF MP N F044 AF PC A Individual Weight Management FileF035 AF MP O F036 AF PC N Unit Assigned Personnel InformationF035 AF MP P F036 AF PC O General Officer Personnel Data SystemF035 AF MP R F036 AF PC P Application for Appointment and Extended Active Duty FilesF035 AF MP S F044 AF SG N Physical Fitness FileF035 AFA A F036 USAFA A Cadet Personnel Management SystemF035 AFA B F036 USAFA B Master Cadet Personnel Record (Active/Historical)F035 AFA C F036 USAFA C Prospective Instructor FilesF035 AFOSI B F036 AFOSI A Career Development FolderF035 AFOSI C F036 AFOSI B Informational Personnel RecordsF035 AFOSI D F036 AFOSI C Internal Personnel Data SystemF035 AFRES A F036 AFRES A Personnel Interview RecordF035 AFRES B F036 AFRES B Recruiters Automated Management System (RAMS)F035 AFMC A F036 AFMC A Personnel Management Information System for Air Force Materiel Command (AFMC) Com-

mandersF035 ARPC A F036 ARPC A Administrative Discharge for Cause on Reserve PersonnelF035 ARPC B F036 ARPC B Informational Personnel Management RecordsF035 ARPC C F036 ARPC C Correction of Military Records of Officers and AirmenF035 ARPC D F036 ARPC D Data Change/Suspense NotificationF035 ARPC E F036 ARPC E Flying Status ActionsF035 ARPC G F036 ARPC F Officer PromotionsF035 ARPC I F036 ARPC G Requests for Discharge from the Air Force ReserveF035 AETC B F036 AETC B Air Force Junior ROTC (AFJROTC) Applicant/Instructor SystemF035 AETC C F036 AETC C Air Force Reserve Officer Training Corps Qualifying Test Scoring SystemF035 AETC D F036 AETC D Basic Trainee Interview RecordF035 AETC G F036 AETC E Recruiting Activities Management Support System (RAMSS)F035 AETC H F036 AETC F Recruiting Research and Analysis SystemF035 AETC I F036 AETC G Status of Ineffective RecruiterF035 AETC J F044 AETC A Drug Abuse Control Case FilesF035 AETC K F036 AETC H Processing and Classification of Enlistees (PACE)F035 HC A F052 AFHC A Chaplain Information SheetF035 HC B F052 AFHC B Chaplain Personnel RecordF035 HC C F052 AFHC C Chaplain Personnel Action FolderF035 HC D F052 AFHC D Chaplain Applicant Processing FolderF035 HC E F052 AFHC E Assignment Action FileF035 MP A F036 AFDP A Files on General Officers and Colonels Assigned to General Officer PositionF035 MP B F036 AFRE A Statutory Tour ProgramF035 MPC B F036 AFPC B Civilian/Military Service Review BoardF035 MPC D F036 AFPC D Correction of Military Records SystemF035 MPC E F036 AFPC E Disability Retirement RecordsF035 MPC F F036 AFPC F Health Education RecordsF035 MPC G F036 AFPC G Medical Officer Personnel Utilization RecordsF035 MPC H F036 AFPC H Medical Opinions on Board for Correction of Military Records Cases (BCMR)F035 MPC J F036 AFPC I Airmen Utilization Records SystemF035 MPC K F036 AFPC J Promotion Documents/Records Tracking (PRODART) and Airman Promotion Historical

Records (APHR) SystemF035 MPC L F036 AFPC K Historical Airman Promotion Master Test File (MTF)F035 MPC P F036 AFPC L Recorder’s RosterF035 MPC Q F036 AFPC M Officer Utilization Records SystemF035 MPC R F036 AFPC N Air Force Personnel Test 851, Test Answer SheetsF035 MPC S F036 AFPC O Aviation Service Historical Data FileF035 MPC U F036 AFPC P Separation Case Files (Officer and Airman)F035 RE A F036 AFRE B Personnel Files on Statutory Tour OfficersF035 RE B F036 AFRE C Files on Reserve General Officers; Colonels Assigned to General Officer PositionsF035 SAFCB A F036 SAFCB A Military Records Processed by the Air Force Correction BoardF035 SAFPA A F035 SAFPA B Mobilization Augmentee Training FoldersF035 SAFPC A F036 SAFPC A Air Force Discharge Review Board Retain FilesF035 SAFPC B F036 SAFPC B Air Force Discharge Review Board Original Case FilesF035 SAFPC C F036 SAFPC C Air Force Discharge Review Board Voting CardsF035 SAFPC D F036 SAFPC D Air Force Discharge Review Board Case Control/Locator CardsF035 SG A F044 AFSG D Application for Aeronautical Rating (Senior and Chief Flight Surgeon)F035 SG B F044 AFSG E Medical Service Corps Personnel Files




From: To:

F035 SG C F044 AFSG F Veterinary Personnel FilesF036 AFMC D F036 AFMC D Education/Training Management System (ETMS)F040 AA A F036 SAFAA A Civilian Personnel FilesF040 AF DP A F044 AF SG I Civilian Employee Drug Testing RecordsF040 AF MP H F036 AF DP F Employee Assistance Program Case Record SystemsF040 AF MP J F036 AF PC T Civilian Appeal and Grievance SystemF040 AF NAFI A F034 AF SVA A Non-Appropriated Fund (NAF) Civilian Personnel RecordsF040 AF NAFI B F034 AF SVA B Non-appropriated Fund (NAF) Civilian Personnel Records-ManpowerF040 AFAA A F036 AFAA A Merit Promotion FileF040 AFMC A F036 AFMC C Air Force Logistics Command (AFC) Senior Civilian Information FileF040 AFRES A F036 AFRES C Air Reserve Technician (ART) Officer Selection FoldersF040 ASG A F036 AF DP E Civilian Pay-Personnel-Manpower (PAPERMAN)F045 AETC C F036 AETC I Cadet RecordsF045 AFRES A F036 AFRES D Reserve Medical Service Corps Officer AppointmentsF045 ARPC A F036 ARPC J Air Force Reserve ApplicationF045 ARPC B F036 ARPC K Inactive Duty Training, Extension Course Institute (ECI) TrainingF045 ATC E F036 AETC J Four-Year Reserve Officer Training Corps (AFROTC) Scholarship Program FilesF045 MPC A F036 AFPC Q Educational Delay Board FindingsF050 ACC B F036 ACC B Operations Training Development EvaluationF050 AETC A F036 AETC K Officer Training Group (OTG) Resource Management System - Officer TraineesF050 AETC B F036 AETC L Community College of the Air Force Student Record SystemF050 AETC I F036 AETC O Defense English Language Management Information System (DELMIS)F050 AF A F036 AETC R Student RecordsF050 AF MP A F036 AF PC U Education Services Program Records (Individual)F050 AF SG A F044 AF SG P Nursing Skill InventoryF050 AFA A F036 USAFA F Military Performance AverageF050 AFA B F036 USAFA G Instructor Academic RecordsF050 AFA C F036 USAFA H Academy Athletic RecordsF050 AFAA A F036 AFAA B Air Force Audit Agency Office Training FileF050 AFAA B F036 AFAA C Employee Training and Career Development FileF050 AFC4A A F036 AFCA B Individual Academic Training RecordsF050 AFFSA A F036 AFFSA A USAF Air Traffic Control (ATC) Certification and Withdrawal DocumentationF050 AFIC A F036 AFCA D Training ProgressF050 AFOSI A F036 AFOSI D Air Force Special Investigations Academy Individual Academic RecordsF050 AFRES A F036 AFRES E Undergraduate Pilot and Navigator TrainingF050 AFMC A F036 AFMC B Systems Acquisition Schools Student RecordsF050 AFSPACECOM A F036 AFSPC A Space Command Operations TrainingF050 AMC A F036 AMC A Training Instructors (Academic Instructor Improvement/Evaluation)F050 AMC B F036 AMC B Training Progress (Permanent Student Record)F050 AMC C F036 AMC C Training Systems Research and Development MaterialsF050 ARPC A F036 ARPC L Professional Military Education (PME)F050 AU F F036 AETC M Air University Academic RecordsF050 AU G F036 AETC N Student Record FolderF050 AU J F036 AETC P Student QuestionnaireF050 AU K F036 AETC Q Institutional Research Analysis SystemF050 SAFPA A F035 SAFPA C Graduates of Air Force Short Course in Communication (Oklahoma University)F050 SAFPA B F035 SAFPA D Information Officer Short Course Eligibility FileF050 USAFE A F036 USAFE A Student Identification/Locator CardF051 AF A F036 AETC S Flying Training RecordsF051 AF B F036 AETC T Flying Training Records - NonstudentF051 AF C F036 AETC U Flying Training Records - StudentF051 AF JA A F051 AF JA A Judge Advocate General’s Professional Conduct FilesF051 AMC A F036 AMC D Air Crew Instruction RecordsF053 AFA A F036 USAFA I Educational Research Data BaseF053 AFA B F036 USAFA J Preparatory School RecordsF053 AFA C F036 USAFA K Admissions RecordsF053 MP A F036 AFDP B Air Force Academy Appointment and Separation RecordsF055 ACC A F011 ACC A Air-to-Air Weapon System Evaluation ProgramF060 AF A F011 AF AMC A Air Force Operations Resource Management Systems (AFORMS)F060 AF B F011 AF AFMC A Contractor Flight OperationsF060 ANG A F011 ANG A Progress Report, Undergraduate Pilot TrainingF066 AF A F021 AF IL A Core Automated Maintenance System (CAMS)F067 AF A F023 AF IL A Government Furnishings Issue RecordsF067 AF B F023 AF IL B Base Service Store/Tool Issue Center AccessF067 AF LE A F023 AF IL C Personal Clothing and Equipment RecordF067 AFMC A F023 AFMC A Equipment Maintenance Management Program (EMMP)F070 AF AFO A F065 AF AFC A Accounts Payable RecordsF075 AF DP A F024 AF DP A Application for Early Return of DependentsF075 AF LE A F024 AF IL A Household Goods Nontemporary Storage System (NOTEMPS)F075 AF LE B F024 AF IL B Personal Property Movement Records




From: To:

F075 USAFE A F024 USAFE A Customs Control RecordsF076 AMC A F024 AF AMC A Passenger Reservation and Management SystemF077 AF LE A F024 AF IL C Motor Vehicle Operators’ RecordsF080 AFMC A F061 AFMC A Aeromedical Research DataF090 AF A F032 AF CE E Visiting Officer Quarters-Transient Airman Quarters ReservationF090 AF B F032 AF CE F Unaccompanied Personnel Quarters Assignment/TerminationF100 AFC4A A F033 AFCA A Military Affiliate Radio System (MARS) Member RecordsF110 AF JA A F051 AF JA C Legal Assistance AdministrationF110 AF JA B F051 AF JA D Litigation Records (Except Patents)F110 AFAFC H F065 AFAFC L Legal Administration Records of the Staff Judge AdvocateF110 AFRES A F051 AFRES A Reserve Judge Advocate Training ReportF110 JA A F051 AFJA A Freedom of Information Act AppealsF110 JA B F051 AFJA B Invention, Patent Application, Application Security, and Patent FilesF110 JA C F051 AFJA C Judge Advocate Personnel RecordsF110 JA D F051 AFJA D Patent Infringement and Litigation RecordsF110 JA E F051 AFJA E Air Force Reserve Judge Advocate Personal DataF110 USAFE A F051 USAFE A Civil Process Case FilesF111 AF JA A F051 AF JA E Automated Military Justice Analysis and Management System (AMJAMS)F111 AF JA B F051 AF JA F Courts-Martial and Article 15 RecordsF112 AF JA A F051 AF JA G Air Force Claims Information Management System (AFCIMS)F112 AF JA B F051 AF JA H Claims RecordsF120 AF IG A F090 AF IG A Inspector General Records - Freedom of Information ActF120 AF IG B F090 AF IG B Inspector General RecordsF123 AFISC A F091 AFIA A United States Air Force (USAF) Inspection Scheduling SystemF124 AF A F071 AF OSI A Counterintelligence Operations and Collection RecordsF124 AF B F071 AF OSI B Security and Related Investigative RecordsF124 AF C F071 AF OSI C Criminal RecordsF124 AF D F071 AF OSI D Investigative Support RecordsF124 AFOSI A F071 AF OSI E Badge and CredentialsF124 AFOSI B F071 AF OSI F Investigative Applicant Processing RecordsF125 AF A F031 AF SP A Correction and Rehabilitation RecordsF125 AF SP A F031 AF SP B Air Force Policy Statement - Firearms Safety and Use of ForceF125 AF SP B F031 AF SP C Complaint/Incident ReportsF125 AF SP D F031 AF SP D Field Interview CardF125 AF SP E F031 AF SP E Security Police Automated System (SPAS)F125 AF SP F F031 AF SP F Notification Letters to Persons Barred From Entry to Air Force InstallationsF125 AF SP G F031 AF SP G Pickup or Restriction OrderF125 AF SP H F031 AF SP H Provisional PassF125 AF SP I F031 AF SP I Registration Records (Excluding Private Vehicle Records)F125 AF SP J F031 AF SP J Serious Incident ReportsF125 AF SP K F031 AF SP K Vehicle Administration RecordsF125 AF SP L F031 AF SP L Traffic Accident and Violation ReportsF125 AFMC A F031 AFMC A AFMC Badge and Vehicle Control RecordsF160 AF SG A F044 AF SG A USAF Hearing Conservation Record SystemF160 AF SG B F044 AF SG K Medical Professional Staffing RecordsF160 AF SG C F044 AF SG L Medical Treatment Facility Tumor RegistryF160 AF SG D F044 AF SG B Drug Abuse Rehabilitation Report SystemF160 AFA A F044 USAFA A Cadet Hospital/Clinic RecordsF160 ARPC A F044 ARPC A Physical Examination Reports Suspense FileF160 DODMERB A F044 USAFA A Department of Defense Medical Examination Review Board Medical Examination FilesF160 MPC A F044 AFPC A Medical Assignment Limitation Record SystemF160 SG A F044 AFSG G Aircrew Standards Case FileF161 AF SG A F044 AF SG H Air Force Aerospace Physiology Training ProgramsF161 AF SG B F044 AF SG M Compression Chamber OperationsF161 AF SG C F044 AF SG O USAF Master Radiation Exposure RegistryF162 AF SG A F044 AF SG C Dental Health RecordsF162 SG A F044 AFSG H Dental Personnel ActionsF168 AF SG A F044 AF SG D Automated Medical/Dental Record SystemF168 AF SG B F044 AF SG Q Family Advocacy Program RecordF168 AF SG C F044 AF SG E Medical Record SystemF168 AF SG D F044 AF SG F Medical Service AccountsF168 AF SG E F044 AF SG G Nursing Service RecordsF168 AF SG F F044 AF SG J Air Force Blood ProgramF168 AF SG G F044 AF SG R Reporting of Medical Conditions of Public Health and Military SignificanceF175 AFAA A F065 AFAA A Air Force Audit Agency Management Information System - Report FileF176 AA A F065 SAFAA A Accounts ReceivableF176 AF HC A F065 AF HC A Chaplain Fund Service Contract FileF176 AF MP A F065 AF SVA A Non-appropriated Fund Instrumentalities (NAFIs) Financial SystemF176 AF MP B F065 AF SVA B Non-appropriated Fund (NAF) Insurance and Employee Benefit System FileF176 AF MP C F065 AF SVA C Morale, Welfare, and Recreation (MWR) Participation/Membership/Training Records




From: To:

F176 AF MP D F065 AF SVA D Non-appropriated Funds Standard Payroll SystemF177 AETC A F065 AETC A Air Force ROTC Cadet Pay SystemF177 AF AFC A F065 AF AFC B Accounts Receivable Records Maintained by Accounting and FinanceF177 AF AFC B F065 AF AFC C Travel RecordsF177 AF AFC C F065 AF AFC D Air Reserve Pay and Allowance System (ARPAS)F177 AF AFC D F065 AF AFC E Joint Uniform Military Pay System (JUMPS)F177 AF AFC E F065 AF AFC F Reports of SurveyF177 AF AFC F F065 AF AFC G Civilian Pay RecordsF177 AF SG A F065 AF SG A Control LogsF177 AFA A F065 AFA A Cadet Accounting and Finance SystemF177 AFAFC A F065 AFAFC A Accounting and Finance Officer Accounts and Substantiating DocumentsF177 AFAFC B F065 AFAFC B Accrued Military Pay System, DiscontinuedF177 AFAFC C F065 AFAFC C Uniformed Services Savings Deposit Program (USSDP)F177 AFAFC D F065 AFAFC D Claims Case File - Active Duty Casualty Case RecordsF177 AFAFC E F065 AFAFC E Claims Case File - Corrected Military RecordsF177 AFAFC F F065 AFAFC F Claims Case File - Missing in Action DataF177 AFAFC G F065 AFAFC G Indebtedness and ClaimsF177 AFAFC I F065 AFAFC H Loss of Funds Case FilesF177 AFAFC J F065 AFAFC I Military Pay RecordsF177 AFAFC K F065 AFAFC J Pay and Allotment RecordsF177 AFAFC L F065 AFAFC K USAF Retired Pay SystemF178 AFC4A A F038 SSG A Center Automated Manpower and Update System (CAMPUS)F178 AFMC B F038 AFMC A Manhour Accounting System (MAS)F190 AF PA A F035 AF SAFPA A Special Events Planning - ProtocolF190 AF PA B F035 AF SAFPA B Hometown News Release Background Data FileF190 SAFPA A F035 SAFPA A Biographies of Officers and Key Civilians Assigned to SAF/PAF190 SAFPA B F035 AF SAFPA C Official BiographiesF190 SAFPA C F035 SAFPA E Public Affairs ReferencesF200 AFIS A F031 497IG C Security File for Foreign Intelligence CollectionF205 AF A F031 AF SP M Personnel Security Access RecordsF205 AF SP A F031 AF SP N Special Security FilesF205 AFISA A F031 497IG A Sensitive Compartmented Information Personnel RecordsF205 AFMC A F031 AFMC B Space Human Assurance and Reliability Program (SHARP)F205 AFSCO A F031 497IG B Special Security Case FilesF205 AFSCO B F031 11 SPS A Presidential Support FilesF205 AFSCO C F031 11 SPS B Personnel Security Clearance and Investigation RecordsF205 AFSP A F031 SAFPA A Requests for Access to Classified Information by Historical ResearchersF211 AF MP A F036 AF DP C Family Services Volunteer RecordF213 AF MP A F036 AF DP D Individual Class Record FormF213 AFMWRC A F034 AF SVA D Air Force Educational Assistance LoansF215 AF DP A F034 AF SVA C Child Development/Youth Activities RecordsF215 AFMWRSA A F034 AF SVA F Automated Air Force Library Information SystemF265 AFA A F052 USAFA A Cadet Chaplain RecordsF265 HC A F052 AFHC F Non-Chaplain Ecclesiastical Endorsement FilesF265 HC B F052 AFHC G Chaplain Personnel RosterF265 HC D F052 AFHC H Records on Baptisms, Marriages and Funerals by Air Force ChaplainsF900 ACC A F036 ACC A Special Awards FileF900 AF MP A F036 AF PC V Awards and DecorationsF900 AF MP B F036 AF PC W Suggestions, Inventions, Scientific AchievementsF900 AFA A F036 USAFA L Cadet Awards FilesF900 AFA B F036 USAFA M Thomas D. White National Defense Award

[FR Doc. 97–15164 Filed 6–10– 97; 8:45 am]



Department of the Army

Record of Decision for theEnvironmental Impact Statement/Environmental Impact Report (EIS/EIR)for Proposed Combined-ForcesTraining Activities, New EquipmentUtilization, and Range ModernizationProgram at Camp Roberts ArmyNational Guard Training Site, California

AGENCY: Department of the Army, DoD.

ACTION: Notice of Availability.

SUMMARY: The Record of Decision (ROD)was signed on May 1, 1997.

The decision made in the ROD was toimplement the proposed action and aseries of mitigation measures tominimize the environmental impacts ofthis action. The proposed actionconsists of three components:combined-forces training with twobrigades of personnel and associatedequipment, new equipment utilization,and a range modernization program.


The combined-forces trainingcomponent would consist of increasingthe intensity of training from a typicalmaximum of approximately 5,300soldiers to approximately 10,600soldiers during an annual trainingperiod at Camp Roberts. Four new typesof equipment would be introduced atCamp Roberts as part of the proposedaction: the M1 Abrams series of tankswould replace the M60 series tanks,Bradley Fighting Vehicles wouldreplace the M113 series armoredpersonnel carriers, the Multiple-LaunchRocket System would replace all buttwo of the M110 8-inch howitzers, andthe AH–64 series Apache helicopterswould replace the Cobra helicopters.The range modernization programcomponent would be composed of bothupgrading existing ranges andconstructing new ranges.

Copies: Copies of the ROD will bemailed to individuals who participatedin the public scoping process. Copieswill also be sent to Federal, state,regional, and local agencies; interestedorganizations and agencies; and publiclibraries. Individuals not currently onthe mailing list may obtain a copy byrequest.FOR FURTHER INFORMATION CONTACT:Lieutenant Colonel William Parsonage,EIS/EIR Project Officer. Camp RobertsArmy National Guard Training Site,Camp Roberts, CA 93451–5000;telephone (805) 238–8207.

Dated: June 6, 1997.Raymond J. Fatz,Deputy Assistant Secretary of the Army,(Environment, Safety, and OccupationalHealth) OASA (I,L&E).[FR Doc. 97–15276 Filed 6–10–97; 8:45 am]BILLING CODE 3710–08–M


Department of the Army

Draft Programmatic EnvironmentalAssessment (PEA) for the JointVaccine Acquisition Program (JVAP)

AGENCY: Department of the Army, DOD.ACTION: Notice of availability.

SUMMARY: The U.S. Department of theArmy (Army) announces the availabilityfor public review and comment of adraft PEA for the JVAP. The primaryobjective of the JVAP is to develop,produce, store, test, and field sufficientquantities of U.S. Food and DrugAdministration (FDA) licensed vaccinesto implement U.S. government policyfor protecting its armed forces againstbiological warfare agents. Because of thecurrent threat of biological warfare and

its continuing proliferation, there is anurgent need to protect our fighting menand women who go in harms way. TheJVAP is implemented by the Departmentof Defense (DOD) through the JointProgram Office for Biological Defense(JPO BD) for which the Army is the leadagency. The JVAP PEA characterizesand assesses the possible and probableenvironmental consequences associatedwith the JVAP as proposed and thealternatives considered. The PEAconcludes that the proposed JVAPactivities and the alternatives analyzedare not likely to have significant adverseeffects upon the quality of theenvironment.

Alternatives: a. Implement andoperate the JVAP through which theArmy proposes to develop, produce,store, test, and field vaccines forbiological defense which are otherwiseunavailable (Preferred Alternative).

b. No action (cessation of all JVAPactivities now and in the future).

c. Conduct current and currentlyplanned JVAP activities in aconsolidated government facility.

d. Conduct current and currentlyplanned JVAP activities at aconsolidated contractor facility.

Comments: The JVAP Draft PEA isavailable for public review andcomment. Mr. Bruce G. Kay is the DAclearinghouse for requests for the JVAPdraft PEA and documentation fromprevious environmental analysesreferenced in the draft PEA. Writtencomments for consideration inpreparing the final ProgrammaticEnvironmental Assessment should besubmitted to the address providedbelow.

DATES: The agency must receivecomments on or before July 14, 1997.

ADDRESSES: Mail comments anddocument copy requests to: JointVaccine Acquisition ProjectManagement Office, JVAP–PMO (Attn:Mr. Bruce Kay), 568 Doughten Street,Fort Detrick, Maryland 21702–5040; orphone at (301) 619–2016; or fax at (301)619–7230; e-mail:[email protected].


Raymond J. Fatz,Deputy Assistant Secretary of the Army,(Environment, Safety and OccupationalHealth), OASA (I L&E).[FR Doc. 97–15235 Filed 6–10–97; 8:45 am]



Defense Logistics Agency

Privacy Act of 1974; New ComputerMatching Program Between theDepartment of Veterans Affairs and theDefense Manpower Data Center of theDepartment of Defense

AGENCY: Defense Manpower DataCenter, Defense Logistics Agency,Department of Defense.ACTION: Notice of a new computermatching program between theDepartment of Veterans Affairs (VA) andthe Department of Defense (DoD) forpublic comment.

SUMMARY: Subsection (e)(12) of thePrivacy Act of 1974, as amended, (5U.S.C. 552a) requires agencies topublish advance notice of any proposedor revised computer matching programby the matching agency for publiccomment. The DoD, as the matchingagency under the Privacy Act is herebygiving constructive notice in lieu ofdirect notice to the record subjects of acomputer matching program betweenVA and DoD that their records are beingmatched by computer. The recordsubjects are VA delinquent debtors whomay be current or former Federalemployees receiving Federal salary orbenefit payments and who aredelinquent in their repayment of debtsowed to the United States Governmentunder programs administered by VA soas to permit VA to pursue and collectthe debt by voluntary repayment or byadministrative or salary offsetprocedures under the provisions of theDebt Collection Act of 1982.DATES: This proposed action willbecome effective July 11, 1997, and thecomputer matching will proceedaccordingly without further notice,unless comments are received whichwould result in a contrarydetermination or if the Office ofManagement and Budget or Congressobjects thereto. Any public commentmust be received before the effectivedate.ADDRESSES: Any interested party maysubmit written comments to theDirector, Defense Privacy Office, CrystalMall 4, Room 920, 1941 Jefferson DavisHighway, Arlington, VA 22202–4502.FOR FURTHER INFORMATION CONTACT: Mr.Aurelio Nepa, Jr. at telephone (703)607–2943.SUPPLEMENTARY INFORMATION: Pursuantto subsection (o) of the Privacy Act of1974, as amended, (5 U.S.C. 552a), theDoD and VA have concluded anagreement to conduct a computermatching program between the agencies.


The purpose of the match is to exchangepersonal data between the agencies fordebt collection. The match will yieldthe identity and location of the debtorswithin the Federal government so thatVA can pursue recoupment of the debtby voluntary payment or byadministrative or salary offsetprocedures. Computer matchingappeared to be the most efficient andeffective manner to accomplish this taskwith the least amount of intrusion ofpersonal privacy of the individualsconcerned. It was therefore concludedand agreed upon that computermatching would be the best and leastobtrusive manner and choice foraccomplishing this requirement.

A copy of the computer matchingagreement between VA and DoD isavailable upon request to the public.Requests should be submitted to theaddress caption above or to theDepartment of Veterans Affairs, DebtManagement Center, U.S. Department ofVeterans Affairs, Bishop Henry WhippleFederal Building, 1 Federal Drive, Ft.Snelling, MN 55111.

Set forth below is the notice of theestablishment of a computer matchingprogram required by paragraph 6.c. ofthe Office of Management and BudgetGuidelines on computer matchingpublished in the Federal Register at 54FR 25818 on June 19, 1989.

The matching agreement, as requiredby 5 U.S.C. 552a(r) of the Privacy Act,and an advance copy of this notice wassubmitted on May 22, 1997, to theCommittee on Government Reform andOversight of the House ofRepresentatives, the Committee onGovernmental Affairs of the Senate, andthe Administrator of the Office ofInformation and Regulatory Affairs,Office of Management and Budgetpursuant to paragraph 4d of AppendixI to OMB Circular No. A–130, ‘FederalAgency Responsibilities for MaintainingRecords about Individuals,’ datedFebruary 8, 1996 (61 FR 6435, February20, 1996). The matching program issubject to review by OMB and Congressand shall not become effective until thatreview period has elapsed.

Dated: June 5, 1997.Patricia L. Toppings,Alternate OSD Federal Register LiaisonOfficer, Department of Defense.

NOTICE OF A COMPUTER MATCHINGPROGRAM BETWEEN THEDEPARTMENT OF VETERANSAFFAIRS AND THE DEPARTMENT OFDEFENSE FOR DEBT COLLECTION

A. Participating Agencies:Participants in this computer matching

program are the Department of VeteransAffairs (VA) and the Defense ManpowerData Center (DMDC) of the Departmentof Defense (DoD). The VA is the sourceagency, i.e., the activity disclosing therecords for the purpose of the match.The DMDC is the specific recipientactivity or matching agency, i.e., theagency that actually performs thecomputer matching.

B. Purpose of the Match: Upon theexecution of this agreement, VA willprovide and disclose debtor records toDMDC to identify and locate anyFederal personnel, employed or retired,who owe delinquent debts to theFederal Government under certainprograms administered by VA. VA willuse this information to initiateindependent collection of those debtsunder the provisions of the DebtCollection Act of 1982 when voluntarypayment is not forthcoming. Thesecollection efforts will include requestsby VA of the employing agency to applyadministrative and/or salary offsetprocedures until such time as theobligation is paid in full.

C. Authority for Conducting theMatch: The legal authority forconducting the matching program iscontained in the Debt Collection Act of1982 (Pub. L. 97–365), 31 U.S.C.Chapter 37, Subchapter I (General) andSubchapter II (Claims of the UnitedStates Government), 31 U.S.C. 3711Collection and Compromise, 31 U.S.C.3716 Administrative Offset, 5 U.S.C.5514, as amended, InstallmentDeduction for Indebtedness (SalaryOffset); 10 U.S.C. 136, as amended,Under Secretary of Defense forPersonnel and Readiness; 10 U.S.C. 138,as amended, Assistant Secretaries ofDefense; section 101(1) of ExecutiveOrder 12731; 4 CFR Chapter II, FederalClaims Collection Standards (GeneralAccounting Office - Department ofJustice); 5 CFR 550.1101 - 550.1108,Collection by Offset from IndebtedGovernment Employees (OPM); 38 CFR1.980 - 1.994 (VA).

D. Records to be Matched: Thesystems of records maintained by therespective agencies under the PrivacyAct of 1974, as amended, 5 U.S.C. 552a,from which records will be disclosed forthe purpose of this computer match areas follows:

Sections 5 and 10 of the DebtCollection Act of 1982 (public Law 97-365) authorize agencies to discloseinformation about debtors in order toeffect salary or administrative offsets.Agencies must publish routine usespursuant to subsection (b)(3) of thePrivacy Act for those systems of recordsfrom which they intend to disclose this

information. Sections 5 and 10 of theDebt Collection Act will comprise thenecessary authority to meet the PrivacyAct’s ‘compatibility’ condition. Thesystems of records described belowcontain an appropriate routine usedisclosure between the agencies of theinformation proposed in the match. Theroutine use provisions are compatiblewith the purpose for which theinformation was collected.

VA will use personal data from thefollowing Privacy Act record systems forthe match: Accounts Receivable-VA,88VA20A6, published in the FederalRegister at 61 FR 60148 (Nov. 26, 1996).

DoD will use the record systemidentified as S322.11 DMDC, entitled‘Federal Creditor Agency DebtCollection Data Base’ last published inthe Federal Register at 61 FR 32779 onJune 25, 1996.

E. Description of Computer MatchingProgram: VA, as the source agency, willprovide DMDC with a electronic filewhich contains the names of delinquentdebtors in programs VA administers.Upon receipt of the computer tape fileof debtor accounts, DMDC will performa computer match using all nine digitsof the SSN of the VA file against aDMDC computer database. The DMDCdatabase, established under aninteragency agreement between DoD,OPM, OMB and the Department of theTreasury, consists of employmentrecords of non-postal Federal employeesand military members, active andretired. Matching records (’hits’), basedon the SSN, will produce the member’sname, service or agency, category ofemployee, and current work or homeaddress. The hits or matches will befurnished to VA. VA is responsible forverifying and determining that the dataon the DMDC reply tape file areconsistent with VA’s source file and forresolving any discrepancies orinconsistencies on an individual basis.VA will also be responsible for makingfinal determinations as to positiveidentification, amount of indebtednessand recovery efforts as a result of thematch.

The electronic file provided by VAwill contain data elements of thedebtor’s name, SSN, internal accountnumbers and the total amount owed foreach debtor on approximately 300,000delinquent debtors.

The DMDC computer database filecontains approximately 8 millionrecords of active duty and retiredmilitary members, including the Reserveand Guard, and the OPM government-wide, non-postal Federal civilianrecords of current and retired Federalemployees and Non-appropriated Fundemployees.


DMDC will match the SSNs on the VAtape by computer against the DMDCdatabase. Matching records, hits basedon SSN’s, will produce data elements ofthe individual’s name, SSN, service oragency, and current work or homeaddress.

F. Inclusive Dates of the MatchingProgram: This computer matchingprogram is subject to review by theOffice of Management and Budget andCongress. If no objections are raised byeither, and the mandatory 30 day publicnotice period for comment has expiredfor this Federal Register notice with nosignificant adverse public comments inreceipt resulting in a contrarydetermination, then this computermatching program becomes effectiveand the respective agencies may beginthe exchange of data 30 days after thedate of this published notice at amutually agreeable time and will berepeated semiannually. Under nocircumstances shall the matchingprogram be implemented before the 30day public notice period for commenthas elapsed as this time period cannotbe waived. By agreement between VAand DoD, the matching program will bein effect and continue for 18 monthswith an option to renew for 12additional months unless one of theparties to the agreement advises theother by written request to terminate ormodify the agreement.

G. Address for Receipt of PublicComments or Inquiries: Director,Defense Privacy Office, Crystal Mall 4,Room 920, 1941 Jefferson DavisHighway, Arlington, VA 22202–4502.Telephone (703) 607–2943.[FR Doc. 97–15163 Filed 6–10–97; 8:45 am]BILLING CODE 5000–04–F

DEPARTMENT OF EDUCATION

Submission for OMB Review;Comment Request

AGENCY: Department of Education.ACTION: Submission for OMB review;comment request.

SUMMARY: The Acting Director,Information Resources ManagementGroup, invites comments on thesubmission for OMB review as requiredby the Paperwork Reduction Act of1995.DATES: Interested persons are invited tosubmit comments on July 11, 1997.ADDRESSES: Written comments shouldbe addressed to the Office ofInformation and Regulatory Affairs,Attention: Dan Chenok, Desk Officer,Department of Education, Office of

Management and Budget, 725 17thStreet, NW., Room 10235, NewExecutive Office Building, Washington,DC 20503. Requests for copies of theproposed information collectionrequests should be addressed to PatrickJ. Sherrill, Department of Education, 600Independence Avenue, SW., Room5624, Regional Office Building 3,Washington, DC 20202–4651.FOR FURTHER INFORMATION CONTACT:Patrick J. Sherrill (202) 708–8196.Individuals who use atelecommunications device for the deaf(TDD) may call the Federal InformationRelay Service (FIRS) at 1–800–877–8339between 8 a.m. and 8 p.m., Eastern time,Monday through Friday.SUPPLEMENTARY INFORMATION: Section3506 of the Paperwork Reduction Act of1995 (44 U. S. C. Chapter 35) requiresthat the Office of Management andBudget (OMB) provide interestedFederal agencies and the public an earlyopportunity to comment on informationcollection requests. OMB may amend orwaive the requirement for publicconsultation to the extent that publicparticipation in the approval processwould defeat the purpose of theinformation collection, violate State orFederal law, or substantially interferewith any agency’s ability to perform itsstatutory obligations. The ActingDirector of the Information ResourcesManagement Group publishes thisnotice containing proposed informationcollection requests prior to submissionof these requests to OMB. Eachproposed information collection,grouped by office, contains thefollowing: (1) Type of review requested,e.g., new, revision, extension, existingor reinstatement; (2) Title; (3) Summaryof the collection; (4) Description of theneed for, and proposed use of, theinformation; (5) Respondents andfrequency of collection; and (6)Reporting and/or Recordkeepingburden. OMB invites public comment atthe address specified above. Copies ofthe requests are available from Patrick J.Sherrill at the address specified above.

Dated: June 5, 1997.Linda C. Tague,Acting Director, Information ResourcesManagement Group.

Office of Postsecondary EducationTitle: The Comprehensive Program of

the Fund for the Improvement ofPostsecondary Education (New Grants).

Frequency: Annually.Affected Public: Not-for-profit

institutions; State, local or Tribal Gov’t,SEAs or LEAs.

Annual Reporting and RecordkeepingHour Burden:

Responses: 2,100Burden Hours: 28,100

Abstract: The Comprehensiveapplication is for competitive awardswith a two-stage application process(preliminary and final).


DEPARTMENT OF ENERGY

Federal Energy RegulatoryCommission

[Docket Nos. RP97–171–005 and RP97–311–001]

ANR Pipeline Company; Notice ofProposed Changes in FERC Gas Tariff

June 5, 1997.Take notice that, on May 29, 1997,

ANR Pipeline Company (ANR) tenderedfor filing as part of its FERC Gas Tariff,Second Revised Volume No. 1, thefollowing tariff sheets to be effectiveJune 1, 1997:Substitute Twenty-Second Revised Sheet

No. 8Substitute Fourth Revised Sheet No. 109Substitute Second Revised Sheet No. 132Substitute Second Revised Sheet No. 134

ANR states that the purpose of thisfiling is to comply with theCommission’s May 19, 1997 order. Thatorder addressed the incorporation ofcertain Gas Industry Standard Boardbusiness practices into ANR’s tariff andaccepted, subject to certainmodifications, ANR’s proposal to allowpool-to-pool transfers in ANR’s supplyareas.

ANR states that copies of the filinghave been mailed to all affectedcustomers and state regulatorycommissions.

Any person desiring to protest thisfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commissions RulesRegulations. All such protests must befiled as provided in Section 154.210 ofthe Commission’s Regulations. Protestswill be considered by the Commissionin determining the appropriate action tobe taken, but will not serve to makeprotestants parties to the proceeding.Copies of this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 97–15205 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




[Docket No. EG97–65–000]

CEA Philippines Holdings LLC; Noticeof Application of CEA PhilippinesHolding LLC for CommissionDetermination of Exempt WholesaleGenerator Status

June 5, 1997.

On May 23, 1997, CEA PhilippinesHoldings LLC (CPH), with its principaloffice at The Corporation TrustCompany, Corporate Trust Center, 1209Orange Street, Wilmington, Delawarefiled with the Federal Energy RegulatoryCommission an application fordetermination of exempt wholesalegenerator status pursuant to Part 365 ofthe Commission’s Regulations.

CPH is a company organized underthe laws of Delaware. CPH will beengaged, directly or indirectly throughan Affiliate as defined in Section2(a)(11)(B) of the Public Utility HoldingCompany Act of 1935, exclusively inowning, or both owning and operatinga 63 MW diesel-fired cogenerationfacility comprised of six 8 MW andthree 5 MW bunker-fired dieselgenerating units coupled with six heatrecovery steam generators located inCavite, Philippines and to engage inproject development activities withrespect thereto. CPH will in addition,through an Affiliate as defined inSection 2(a)(11)(B), hold the votingsecurities of a special purposesubsidiary which will used solely toown the land necessary for a futureEWG which it will own or operate andwhich is currently under development.

Any person desiring to be heardconcerning the application for exemptwholesale generator status should file amotion to intervene or comments withthe Federal Energy RegulatoryCommission, 888 First Street, NE.,Washington, DC 20426, in accordancewith sections 385.211 and 385.214 ofthe Commission’s Rules of Practice andProcedure. The Commission will limitits consideration of comments to thosethat concern the adequacy or accuracyof the application. All such motions andcomments should be filed on or beforeJune 17, 1997 and must be served on theApplicant. Any person wishing tobecome a party must file a motion tointervene. Copies of this filing are on

file with the Commission and areavailable for public inspection.Lois D. Cashell,Secretary.[FR Doc. 97–15189 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. CP97–549–000]

CNG Transmission Corporation; Noticeof Application

June 5, 1997.Take notice that on May 27, 1997,

CNG Transmission Corporation (CNGT),445 Main Street, Clarksburg, WestVirginia 26301, filed in Docket No.CP97–549–000 an application pursuantto Section 7(b) of the Natural Gas Act forpermission and approval to abandonand reclassify to gathering, 3compressor stations and 65 transmissionlines behind compressor stations, invarious counties in West Virginia andPennsylvania, all as more fully set forthin the application on file with theCommission and open to publicinspection.

CNGT states that on October 30, 1996,CNGT filed a letter with theCommission indicating that someclassification anomalies existed inCNGT’s production area whichpresented difficulties in administeringvarious rules and regulations of theCommission regarding transmission andgathering. CNGT notes that in severalinstances gathering lines weredownstream of lines classified astransmission. CNGT asserts that uponexamination of these lines it believesthat the transmission classification isinappropriate under the Commissions‘‘primary functions’’ test for gathering.CNGT indicates that after a lengthyreview of the gathering systems in theproduction areas of West Virginia andPennsylvania, CNGT proposes toabandon and reclassify as gathering alltransmission lines found behindcompressor stations which feedproduction into the station.

CNGT states that there are about 65lines that currently meet this criteriaand the lines range from 1 inch to 24inches in diameter. CNGT further statesthat there are eight lines over 15 milesin length and the longest is 36 miles inlength. CNGT claims that there are threecompressor stations that also should bereclassified from transmission togathering since they act to feedgathering gas to transmissioncompressor stations.

Any person desiring to be heard or tomake any protest with reference to saidapplication should on or before June 26,1997, file with the Federal EnergyRegulatory Commission, Washington,DC 20426, a motion to intervene or aprotest in accordance with therequirements of the Commission’s Rulesof Practice and Procedure (18 CFR385.214 or 385.211) and the Regulationsunder the Natural Gas Act (18 CFR157.10). All protests filed with theCommission will be considered by it indetermining the appropriate action to betaken but will not serve to make theprotestants parties to the proceeding.Any person wishing to become a partyto a proceeding or to participate as aparty in any hearing therein must file amotion to intervene in accordance withthe Commission ’s Rules.

Take further notice that, pursuant tothe authority contained in and subject tojurisdiction conferred upon the FederalEnergy Regulation Commission bySections 7 and 15 of the Natural Gas Actand the Commission’s Rules of Practiceand Procedure, a hearing will be heldwithout further notice before theCommission or its designee on thisapplication if no motion to intervene isfiled within the time required herein, ifthe Commission on its own review ofthe matter finds that a grant of thecertificate is required by the publicconvenience and necessity. If a motionfor leave to intervene is timely filed, orif the Commission on its own motionbelieves that a formal hearing isrequired, further notice of such hearingwill be duly given.

Under the procedure herein providedfor, unless otherwise advised, it will beunnecessary for CNGT to appear or berepresented at the hearing.Lois D. Cashell,Secretary.[FR Doc. 97–15185 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. TM97–5–32–000]

Colorado Interstate Gas Company;Notice of Tariff Filing

June 5, 1997.Take notice that, on May 30, 1997,

Colorado Interstate Gas Company (CIG)filed Fourth Revised Sheet No. 11A ofits FERC Gas Tariff, First RevisedVolume No. 1, reflecting an increase inits fuel reimbursement percentage forLost, Unaccounted-For and Other Fuel


Gas from 0.68% to 0.76% effective July1, 1997.

CIG states that the increase reflectedby the instant filing is primarilytraceable to conditions prevailingduring the first quarter of Calender Year1997. That period was marked by adramatic increase in prices for naturalgas on the spot market. By contrast,prices for natural gas liquids remainedrelatively constant during this period.

CIG states that copies of this filinghave been served on CIG’s jurisdictionalcustomers and public bodies.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Sections385.211 and 385.214 of theCommission’s Rules of Practice andProcedure. All such motions or protestsmust be filed in accordance withSection 154.210 of the Commission’sRegulations. Protests will be consideredby the Commission in the determiningappropriate action to be taken, but willnot serve to make protestants parties tothe proceedings. Any person wishing tobecome a party must file a motion tointervene. Copies of this filing are onfile with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 97–15214 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. RP94–158–007]

Columbia Gas TransmissionCorporation; Notice of Filing AccountNo. 191 Final Close-Out Report

June 5, 1997.On May 30, 1997, Columbia Gas

Transmission Corporation (Columbia)tendered for filing in Docket No. RP94–158, Columbia filed to reflect eachcustomer’s Account No. 191 monthlydirect bill amounts based on thecustomer elected amortization periodsand the then current FERC interest rate.Columbia stated in that filing that itwould true-up a customer’s direct billamount (billed and collected) based onthe actual FERC interest rates in effectfor the applicable amortization period.The true-up for each customer occurredin the last applicable billing month ofthe customer’s amortization period.Appendix A sets forth the amounts

actually billed and collected, includingthe appropriate interest, fromColumbia’s customers for the applicableamortization periods.

Any person desiring to protest thisfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’sRegulations. All such protests must befiled as provided in Section 154.210 ofthe Commission’s Regulations. Protestswill be considered by the Commissionin determining the appropriate action tobe taken, but will not serve to makeprotestants parties to the proceedings.Copies of this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 97–15195 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




Columbia Gas TransmissionCorporation; Notice of ProposedChanges in FERC Gas Tariff

June 5, 1997.

Take notice that on May 30, 1997,Columbia Gas Transmission Corporation(Columbia) tendered for filing as part ofits FERC Gas Tariff, Second RevisedVolume No. 1, the following revisedtariff:To Be Effective February 1, 1997

Fourth Revised Sheet No. 483Third Revised Sheet No. 484

To Be Effective June 1, 1997Third Revised Sheet No. 405Second Revised Sheet No. 406

Columbia is making the instantsubmission to effectuate revisions to itstariff approved by the Commission byorder issued April 17, 1997, as part ofa comprehensive settlement agreementin Docket Nos. RP95–408, et al.(Settlement). Sheet Nos. 405 and 406reflect revisions to Section 25 of theGeneral Terms and Conditions ofColumbia’s tariff, and bear an effectivedate of June 1, 1997, to coincide withColumbia’s implementation of theSettlement. Sheet Nos. 483 and 484reflect revisions to Section 46 of theGeneral Terms and Conditions ofColumbia’s tariff, and bear an effectivedate of February 1, 1997, pursuant to

Article III, Section I(6) of Stipulation IIof the Settlement.

Columbia states that copies of thefiling have been served upon itscustomers.

Any person desiring to protest thisfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’s Rules andRegulations. All such protests must befiled as provided in Section 154.210 ofthe Commission’s Regulations. Protestswill be considered by the Commissionin determining the appropriate action tobe taken, but will not serve to makeprotestants parties to the proceeding.Copies of this filling are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 97–15196 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. ER97–1343–001]

El Paso Electric Company; Notice ofFiling

June 5, 1997.

Take notice that on May 14, 1997, ElPaso Electric Company tendered forfiling its refund report in the above-referenced docket.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Rules 211 and 214of the Commission’s Rules of Practiceand Procedure (18 CFR 385.211 and 18CFR 385.214). All such motions orprotests should be filed on or beforeJune 18, 1997. Protests will beconsidered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15191 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




[Docket Nos. RP97–20–001, 002, and RP97–194–000 (not consolidated)]

El Paso Natural Gas Company; Noticeof Technical Conference

June 5, 1997.In the Commission’s order issued on

February 13, 1997, in the above-captioned proceedings concerningimplementation by El Paso Natural GasCompany (El Paso) of the Gas IndustryStandards Board (GISB) standards, theCommission held that the filings raisedissues for which a technical conferenceis to be convened. On March 13, 1997,the Commission granted El Paso’srequest to delay its implementation ofthe GISB standards from April 1, 1997,to June 1, 1997.

The conference to address the issueshas been scheduled for Wednesday July9, 1997, at 10:00 a.m. in a room to bedesignated at the offices of the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426.

All interested persons and Staff arepermitted to attend.Lois D. Cashell,Secretary.[FR Doc. 97–15197 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




Gas Transport, Inc.; Notice ofCompliance Filing

June 5, 1997.Take notice that on May 30, 1997, Gas

Transport, Inc. (GTI) tendered for filingas part of its FERC Gas Tariff, SecondRevised Volume No. 1, certain tariffsheets listed on Appendix A to thefiling, with a proposed effective date ofJune 1, 1997.

GTI states that these tariff sheetsreflect the requirements of the LetterOrder issued by the Federal EnergyRegulatory Commission(‘‘Commission’’) on May 15, 1997, inDocket Nos. RP97–157–000, et al.

Gas Transport states that copies ofthis compliance filing were served uponits jurisdictional customers and theRegulatory Commissions of the states ofOhio and West Virginia.

Any person desiring to protest saidfiling should file a protest with theFederal Energy Regulatory Commission,

888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’s Rules ofPractice and Procedure. All suchprotests must be filed in accordancewith Section 154.210 of theCommission’s Regulations. Protests willbe considered by the Commission indetermining the appropriate action to betaken but will not serve to makeprotestants parties to the proceeding.Copies of this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15202 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. TM97–2–4–000]

Granite State Gas Transmission, Inc.;Notice of Proposed Changes in FERCGas Tariff


Granite State Gas Transmission, Inc.(Granite State) tendered for filing in itsFERC Gas Tariff, Third Revised VolumeNo. 1, the revised tariff sheets listedbelow for effectiveness on July 1, 1997:Third Substitute Eighth Revised Sheet No. 21Third Substitute Ninth Revised Sheet No. 22

According to Granite State, the listedtariff sheets state the surcharge forelectric power costs applicable to itsfirm transportation services for the thirdquarter of 1997. Granite State furtherstates that the surcharge is derivedpursuant to the tracking procedureestablished in the Power CostAdjustment provision in its tariff, whichwas accepted in a Letter Order issuedApril 25, 1997 in Docket Nos. RP97–300–000, et al.

Granite State states that copies of itsfiling have been served on its firmtransportation customers and on theregulatory agencies of the states ofMaine, Massachusetts and NewHampshire.

Any person desiring to be heard or toprotest this filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Sections 385.214and 385.211 of the Commission’s rulesand regulations. All such motions orprotests must be filed as provided inSection 154.210 of the Commission’sRegulations. Protests will be considered

by the Commission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Any person wishing tobecome a party must file a motion tointervene. Copies of this filing are onfile with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 97–15208 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




Great Lakes Gas Transmission LimitedPartnership; Notice of ComplianceFiling

June 5, 1997.

Take notice that on May 30, 1997,Great Lakes Gas Transmission LimitedPartnership (Great Lakes) tendered forfiling as part of its FERC Gas Tariff,Second Revised Volume No. 1,Substitute Second Revised Sheet No. 42and Substitute Original Sheet No. 42A,to be effective June 1, 1997.

Great Lakes states the above-namedtariff sheets are being filed at thedirection of the Commission in its May19, 1997 Order on Great Lakes’ filing toimplement the GISB Standards adoptedin Order No. 587. The Commissiondirected Great Lakes to remove the term‘‘business’ from its short-term releaseprovisions to clarify that short-termreleases will be available seven days aweek.

Any person desiring to protest saidfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’s Rules andRegulations. All such protests must befiled as provided in Section 154.210 ofthe Commission’s Regulations. Protestswill be considered by the Commissionin determining the appropriate action tobe taken, but will not serve to makeprotestants parties to the proceeding.Copies of this filing are on file with theCommission and are available for publicinspection in the Commission’s PublicReference Room.Lois D. Cashell,Secretary.[FR Doc. 97–15200 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




[Docket Nos. RP97–161–005 and RP97–329–002]

Iroquois Gas Transmission System,L.P.; Notice of Proposed Changes inFERC Gas Tariff

June 5, 1997.

Take notice that on May 29, 1997,Iroquois Gas Transmission System, L.P.(Iroquois) tendered for filing as part ofits FERC Gas Tariff, First RevisedVolume No. 1, the tariff sheets listed onthe filing, to become effective June 1,1997.

Iroquois states that these sheets weresubmitted in compliance with theprovisions of the Commission’s May 19,1997 Order Accepting and RejectingTariff Sheets, Subject to Conditions, andDenying Rehearing, 70 FERC ¶ 61,196(May 19, 1997). In its Order, theCommission accepted tariff sheets thatIroquois had filed on April 2, 1997,subject to Iroquois filing revised sheetsto reflect certain changes. The tariffsheets included herewith reflect thechanges required by the Order.

Iroquois also states that copies of thisfiling were served upon all customersand interested state regulatory agencies.

Any person desiring to protest saidfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’s Rules andRegulations. All such protests must befiled in accordance with Section154.210 of the Commission’sRegulations. Protests will be consideredby the Commission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Copies of this filing areon file with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 97–15204 Filed 6–10–97; 8:45 am]





Kern River Gas Transmission Co.;Notice of Compliance Filing


Kern River Gas Transmission (KernRiver) tendered for filing as part of itsFERC Gas Tariff, First Revised VolumeNo. 1, the tariff sheets listed on thefiling, in conformity with Part 154 of theRegulations of the Federal EnergyRegulatory Commission to be effectiveon June 1, 1997.

Kern River states that the purpose ofthis filing is to comply with theCommission’s Order on ComplianceFiling issued on May 20, 1997 in DocketNo. RP97–178–002. These revisions willconform Kern River’s tariff to thestandardized business practices issuedby the Gas Industry Standards Board(GISB) and approved by theCommission.

Any person desiring to protest thisfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’s Rules andRegulations. All such protests must befiled as provided in Section 154.210 ofthe Commission’s Regulations. Protestswill be considered by the Commissionin determining the appropriate action tobe taken, but will not serve to makeprotestants parties to the proceeding.Copies of this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cahsell,Secretary.[FR Doc. 97–15206 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. TM97–2–53–000]

K N Interstate Gas Transmission Co.;Notice of Tariff Filing

June 5, 1997.Take notice that on May 30, 1997 K

N Interstate Gas Transmission Co. (KNI)tendered for filing as part of its FERCGas Tariff, the following revised tariffsheets, to be effective July 1, 1997:Third Revised Volume No. 1–A

First Revised Sheet No. 4–EFirst Revised Sheet No. 4–FFirst Revised Volume No. 1–CEighth Revised Sheet No. 4

KNI states that this filing adjustsKNI’s fuel and loss reimbursementpercentages through the reconciliationof KNI’s actual fuel and loss volumeswith the quantity retained in kind forcalendar year 1996. KNI proposes aneffective date of July 1, 1997 for therevised fuel and loss percentages.

KNI states that copies of the filingwere served upon KNI’s mainline andBuffalo Wallow customers, interestedpublic bodies, and all parties to theproceedings.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Sections 385.211and 385.214 of the Commission’s Rulesof Practice and Procedure. All suchmotions or protests must be filed asprovided in Section 154.210 of theCommission’s Regulations. All protestsfiled with the Commission will beconsidered by it in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceedings. Any person wishing tobecome a party must file a petition tointervene. Copies of this filing are onfile with the Commission and areavailable for public inspection.Lois D. Cashell,Secretary.[FR Doc. 97–15210 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




Koch Gateway Pipeline Company;Notice of Compliance Filing


Koch Gateway Pipeline Company(Koch) tendered for filing as part of itsFERC Gas Tariff, Fifth Revised VolumeNo. 1, the tariff sheets listed on thefiling, to become effective June 1, 1997.

Koch states that this filing is incompliance with the Commission’s May15, 1997 Order on Rehearing andCompliance Filing, 79 FERC ¶ 61,168.The filing contains revised tariff sheetsto comply with the GISB standards, asspecifically directed by the May 15,1997 Order, including the addition of aTrading Partner Agreement in Koch’stariff.


Koch also states that it has servedcopies of this filing upon each personon the official service list compiled bythe Secretary in this proceeding.

Any person desiring to protest thisfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 or the Commission’s Rules andRegulations. All such protests must befiled as provided by Section 154.210 ofthe Commission’s rules and regulations.Protests will be considered by theCommission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Copies of this filing areon file with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 97–15201 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. TM97–11–16–000]

National Fuel Gas Supply Corporation;Notice of Tariff Filing


National Fuel Gas Supply Corporation(National) tendered for filing as part ofits FERC Gas Tariff, Third RevisedVolume No. 1, Twenty-Third RevisedSheet No. 5A, with a proposed effectivedate of June 1, 1997.

National states that pursuant toArticle II, Section 2, of the approvedsettlement at Docket Nos. RP94–367–000, et al., National is required torecalculate the maximum InterruptibleGathering (IG) rate monthly and tocharge that rate on the first day of thefollowing month if the result is an IGrate more than 2 cents above or belowthe IG rate as calculated under Section1 of Article II. The recalculationproduced an IG rate of 10 cents per dth.

National further states that, asrequired by Article II, Section 4,National is filing a revised tariff sheetwithin 30 days of the effective date forthe revised IG rate.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Sections 385.211and 385.214 of the Commission’s Rulesof Practice and Procedure. All such

motions or protests must be filed inaccordance with Section 154.210 of theCommission’s Regulations. Protests willbe considered by the Commission indetermining the appropriate action to betaken but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15215 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. TM97–12–16–000]

National Fuel Gas Supply Corporation;Notice of Tariff Filing


National Fuel Gas Supply Corporation(National) tendered for filing as part ofits FERC Gas Tariff, Third RevisedVolume No. 1, Twenty-Second RevisedSheet No. 5, with a proposed effectivedate of July 1, 1997.

National states that this filing reflectsthe quarterly adjustment to thereservation component of the EFT ratepursuant to the Transportation andStorage Cost Adjustment (TSCA)provision set forth in Section 23 of theGeneral Terms and Conditions ofNational’s FERC Gas Tariff.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Sections 385.211and 385.214 of the Commission’s Rulesof Practice and Procedure. All suchmotions or protests must be filed inaccordance with Section 154.210 of theCommission’s Regulations. Protests willbe considered by the Commission indetermining the appropriate action to betaken but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15216 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




NorAm Gas Transmission Company;Notice of Request Under BlanketAuthorization


NorAm Gas Transmission Company(NGT), 525 Milam Street, P.O. Box21734, Shreveport, Louisiana 71151,filed in Docket No. CP97–553–000 arequest pursuant to Sections 157.205and 157.211 of the Commission’sRegulations under the Natural Gas Act(18 CFR 157.205, 157.211) forauthorization to construct and operate anew 1-inch delivery tap and first cutregulator, located in Crittenden County,Arkansas, under NGT’s blanketcertificate issued in Docket No. CP82–384–000 and CP82–384–001, pursuantto Section 7(c) of the Natural Gas Act,all as more fully set forth in the requestthat is on file with the Commission andopen to public inspection.

NGT proposes to construct andoperate a new 1-inch delivery tap andfirst cut regulator on NGT’s Line JM–23located in Section 26, Township 7North, Range 8 East, West Memphis,Crittenden County, Arkansas to provideservice to ARKLA, a distributiondivision of NorAm Energy Corporation.

NGT states the estimated volumes tobe delivered to this tap areapproximately 360 MMBtu annuallyand 1 MMBtu on a peak day. NGTdeclares it will transport gas to ARKLAand provide service under its tariff, thatthe volumes delivered are withinARKLA’s certificated entitlement, andNGT’s tariff does not prohibit theaddition of new delivery points. NGTasserts it has sufficient capacity toaccomplish the deliveries withoutdetriment or disadvantage ordisadvantage to its other customers.

NGT states the estimated total projectcosts will be approximately $2,394, andARKLA will reimburse NGT $1,750 ofthe costs.

Any person or the Commission’s staffmay, within 45 days after issuance ofthe instant notice by the Commission,file pursuant to Rule 214 of theCommission’s Procedural Rules (18 CFR385.214) a motion to intervene or noticeof intervention and pursuant to Section157.205 of the Regulations under theNatural Gas Act (18 CFR 157.205) aprotest to the request. If no protest isfiled within the time allowed therefor,the proposed activity shall be deemed tobe authorized effective the day after the


time allowed for filing a protest. If aprotest is filed and not withdrawnwithin 30 days after the time allowedfor filing a protest, the instant requestshall be treated as an application forauthorization pursuant to Section 7 ofthe Natural Gas Act.Lois D. Cashell,Secretary.[FR Doc. 97–15186 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




NorAm Gas Transmission Company;Notice of Request under BlanketAuthorization


NorAm Gas Transmission Company(NGT), 1600 Smith Street, Houston,Texas 77002, filed in Docket No. CP97–554–000 a request pursuant to Sections157.205, 157.211 and 157.216 of theCommission’s Regulations under theNatural Gas Act (18 CFR 157.205,157.211 and 157.216) for authorizationto replace and upgrade certain facilitiesin Arkansas, under NGT’s blanketcertificate issued in Docket No. CP82–384–000 and CP82–384–001 pursuant toSection 7 of the Natural Gas Act, all asmore fully set forth in the request thatis on file with the Commission and opento public inspection.

NGT proposes to upgrade a 1-inchmeter by replacing it with a 2-inch U-shape meter station at an existing tap onNGT’s Line TM–10 in Arkansas County,Arkansas. NGT installed this meter in1995 to deliver gas to domestic andcommercial customers served by Arkla.The existing meter station wascertificated in Docket No. CP95–704 todeliver 1,105 MMBtu annually and 10MMBtu on a peak day. NGT proposes toupgrade this rural extension byremoving the existing 1-inch meter andreplacing it with a 2-inch U-shapemeter. The 2-inch meter would allowestimated deliveries of 4,500 MMBtuannually and 1,800 MMBtu on peakday. The estimated cost of the newmeter is $16,073.

NGT states that the total volumesdelivered will not exceed total volumesauthorized prior to this request and thatNGT has sufficient capacity toaccomplish deliveries withoutdetriment or disadvantage to its othercustomers.

Any person or the Commission’s staffmay, within 45 days after issuance of

the instant notice by the Commission,file pursuant to Rule 214 of theCommission’s Procedural Rules (18 CFR358.214) a motion to intervene or noticeof intervention and pursuant to Section157.205 of the Regulations under theNatural Gas Act (18 CFR 157.205) aprotest to the request. If no protest isfiled within the time allowed therefor,the proposed activity shall be deemed tobe authorized effective the day after thetime allowed for filing a protest. If aprotest is filed and not withdrawnwithin 30 days after the time allowedfor filing a protest, the instant requestshall be treated as an application forauthorization pursuant to Section 7 ofthe Natural Gas Act.Lois D. Cashell,Secretary.[FR Doc. 97–15187 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




Ozark Gas Transmission System;Notice of Proposed Changes in FERCGas Tariff


Ozark Gas Transmission System (Ozark)tendered for filing as part of its FERCGas Tariff, First Revised Volume No. 1,the following tariff sheets to becomeeffective June 1, 1997:Substitute Second Revised Sheet No. 43BSubstitute Original Sheet No. 13BFifth Revised Sheet No. 20

Ozark states that the purpose of thisfiling is to correct two minortypographical errors, and to incorporatethe Commission’s May 21, 1997 Orderallowing Ozark to specify that openseasons for released capacity will end‘‘at’’ 2 p.m. rather than ‘‘no later than’’2 p.m.

Ozark states that copies of this filingare being served on all participants inthis proceeding.

Any person desiring to protest thisfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’s Rules andRegulations. All such protests must befiled in accordance with Section154.210 of the Commission’sRegulations. Protests will be consideredby the Commission in determining theappropriate action to be taken, but willnot serve to make protestants parties to

the proceeding. Copies of this filing areon file with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 97–15207 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. ER97–2470–000]

Pacific Gas and Electric Company;Notice of Filing


Pacific Gas and Electric Companytendered for filing an amendment in theabove-referenced docket.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Rules 211 and 214of the Commission’s Rules of Practiceand Procedure (18 CFR 385.211 and 18CFR 385.214). All such motions orprotests should be filed on or beforeJune 17, 1997. Protests will beconsidered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15192 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




Pacific Gas Transmission Company;Notice of Compliance Filing


Pacific Gas Transmission Company(PGT) tendered for filing as part of itsFERC Gas Tariff, First Revised VolumeNo. 1–A: Substitute Original Sheet No.81A.01, Second Substitute OriginalSheet No. 81A.05, Substitute FirstRevised Sheet No. 110, and Original


Sheet Nos. 186 through 200C, to beeffective June 1, 1997.

PGT asserts the purpose of this filingis to comply with the Commission’sOrder on Rehearing issued May 15, 1997in Docket Nos. RP97–134–000, et al. onPGT’s compliance filing establishingstandards for business practices ofinterstate natural gas pipelines. PGTstates the filing conforms its FERC GasTariff, First Revised Volume No. 1–A tothe requirements of Order No. 587 incompliance with the May 15, 1997Order.

PGT further states a copy of this filinghas been served upon its jurisdictionalcustomers and interested stateregulatory agencies, as well as theofficial service list compiled by theSecretary in the above-referencedproceeding.

Any person desiring to protest saidfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’s Rules ofPractice and Procedure. All suchprotests must be filed as provided inSection 154.210 of the Commission’sRegulations. Protests will be consideredby the Commission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Copies of this filing areon file with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 97–15198 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. TM97–3–86–000]

Pacific Gas Transmission Company;Notice of Compliance Filing


Pacific Gas Transmission Company(PGT) tendered for filing as part of itsFERC Gas Tariff, First Revised VolumeNo. 1–A: Seventeenth Revised Sheet No.5; and as part of its FERC Gas Tariff,Second Revised Volume No. 1:Thirteenth Revised Sheet No. 7. PGTrequested the above-referenced tariffsheets become effective July 1, 1997.

PGT asserts that the purpose of thisfiling is to comply with Paragraphs 37and 23 of the terms and conditions ofFirst Revised Volume No. 1–A andSecond Revised Volume No. 1,

respectively, of its FERC Gas Tariff,Adjustment for Fuel, Line Loss andOther Unaccounted For GasPercentages. These tariff changes reflecta decrease in PGT’s fuel and line losssurcharge percentage to becomeeffective July 1, 1997. Also included, asrequired by Paragraphs 37 and 23, areworkpapers showing the derivation ofthe current fuel and line loss percentagein effect for each month the fueltracking mechanism has been in effect.

PGT further states that a copy of thisfiling has been served on PGT’sjurisdictional customers and interestedstate regulatory agencies.

Any person desiring to be heard orprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Sections 385.214and 385.211 of the Commission’s Rulesof Practice and Procedure. All suchmotions or protests must be filed asprovided in Section 154.210 of theCommission’s regulations. Protests willbe considered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 97–15212 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M

DEPATMENT OF ENERGY


[Docket No. TM97–2–8–000]

South Georgia Natural Gas Company;Notice of Proposed Changes in FERCGas Tariff


South Georgia Natural Gas Company(South Georgia) tendered for filing itsFERC Gas Tariff Second RevisedVolume No. 1, the following revisedtariff sheets to be effective July 1, 1997:Ninth Revised Sheet No. 5Eighth Revised Sheet No. 6

South Georgia states that the instantfiling is submitted pursuant to Section19.2 of the General Terms andConditions of its Tariff to adjust its fuelretention percentage (FRP) for alltransportation services on its system

effective July 1, 1997. The derivation ofthe revised FRP is based on SouthGeorgia’s gas required for operations(GRO) for the twelve-month periodending April 30, 1997, adjusted for thebalance accumulated in the DeferredGRO Account at the end of said period,divided by the Transportation volumesreceived during the same twelve-monthperiod. Based on this calculation, therevised FRP is 1.70% which is areduction from the currently effectiveFRP of 2.25%.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Sections 385.211and 385.214 of the Commission’s Rulesof Practice and Procedure. All suchmotions or protests must be filed inaccordance with Section 154.210 of theCommission’s Regulations. Protests willbe considered by the Commission indetermining the parties to theproceeding. Any person wishing tobecome a party must file a motion tointervene. Copies of this filing are onfile with the Commission and areavailable for public inspection.Lois D. Cashell,Secretary.[FR Doc. 97–15209 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




Southern Natural Gas Company;Notice of Proposed Changes in FERCGas Tariff


Southern Natural Gas Company(Southern) tendered for filing as part ofits FERC Gas Tariff, Seventh RevisedVolume No. 1, the following revisedTariff sheets in compliance with theCommission’s May 16, 1997 Order inthis docket, to become effective June 1,1997:First Substitute Second Revised Sheet No.

129First Substitute Original Sheet No. 212hFirst Substitute Second Revised Sheet No.

276

On July 17, 1996, the Commissionissued Order No. 587 in Docket No.RM96–1–000 which revised theCommission’s regulations governinginterstate natural gas pipelines torequire such pipelines to follow certain


standardized business practices issuedby the Gas Industry Standards Board(GISB) and adopted by the Commissionin said Order. 18 CFR 284.10(b).

On April 7, 1997, Southern made itsTariff filing to comply with Order No.587 effective June 1, 1997. On May 16,1997, the Commission issued an orderin this docket accepting Southern’sfiling except for minor modifications.The filing submitted herein complieswith the Commission’s May 16, Order inthis docket.

Any person desiring to protest thisfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Section385.211 of the Commission’s Rules ofPractice and Procedure. All suchprotests must be filed in accordancewith Section 154.210 of theCommission’s Regulations. Pro6testswill be considered by the Commissionin determining the appropriate action tobe taken, but will not serve to makeprotestants parties to the proceeding.Copies of this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 97–15199 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. ER96–2922–000]

Tampa Electric Company; Notice ofFiling


Tampa Electric Company tendered forfiling an amendment in the above-referenced docket.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Rules 211 and 214of the Commission’s Rules of Practiceand Procedure (18 CFR 385.211. and 18CFR 385.214). All such motions orprotests should be filed on or beforeJune 17, 1997. Protests will beconsidered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to interevene. Copiesof this filing are on file with the

Commission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15190 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M



[Docket No. TM97–4–18–000]

Texas Gas Transmission, Corporation;Notice of Proposed Changes in FERCGas Tariff


Texas Gas Transmission Corporation(Texas Gas) tendered for filing tobecome part of its FERC Gas Tariff, FirstRevised Volume No. 1, the followingrevised tariff sheets to become effectiveJuly 1, 1997:First Revised Twenty-first Revised Sheet No.

10First Revised Fourth Revised Sheet No. 10AFirst Revised Eighteenth Revised Sheet No.

11First Revised Fifth Revised Sheet No. 11B

Texas Gas states that the filing reflectsthe expiration of the MiscellaneousRevenue Credit Adjustment (MCRA)(Docket No. TM96–5–18–000) originallyfiled by Texas Gas on May 31, 1996, andapproved by the Commission in itsletter order dated June 17, 1996. Thisfiling also reflects the MCRA, asrequired by Article IV of Texas Gas’sDocket No. RP94–423 settlementagreement approved by theCommission’s letter order issuedFebruary 20, 1996, and the respectiveSection 29 of the General Terms andConditions of Texas Gas’s FERC GasTariff, First Revised Volume No. 1. Theeffect of these two MCRA results in nonet change to the FT, NNS and SGTrates. Lastly, this filing reflects the ISSRevenue Credit Adjustment as requiredby Section 5.3 of Rate Schedule ISS ofTexas GAS’s FERC Gas Tariff, FirstRevised Volume No. 1 which results ina $.0001 decrease to the FT DailyDemand and Overrun Rates.

Texas Gas states that copies of therevised tariff sheets are being mailed toTexas Gas’s jurisdictional customersand interested state commissions.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protests with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Section 385.211 and385.214 of the Commission’s Rules and

Regulations. All such motions orprotests must be filed in accordancewith Section 154.210 of theCommission’s Regulations. Protests willbe considered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.

Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 97–15213 Filed 6–10 –97; 8:45 am]BILLING CODE 6717–01–M




Transcontinental Gas Pipe LineCorporation; Notice of ComplianceFiling

June 5, 1997.Take notice on May 30, 1997,

Transcontinental Gas Pipe LineCorporation (Transco) tendered forfiling certain tariff sheets to its FERCGas Tariff, Third Revised Volume No. 1,which tariff sheets are listed onAppendices A and B to the filing. Theproposed effective date for the tariffsheets is June 1, 1997.

Transco states that the purpose of theinstant filing is to comply with theCommission’s order dated May 15, 1997in Docket Nos. RP97–159–001 andRP97–159–002 (the May 15 Order). TheMay 15 Order addressed Transco’s April2, 1997 submission of tariff sheetsreflecting implementation of standardsproposed by the Gas Industry StandardsBoard (GISB) and adopted by theCommission in Order No. 587. Therevised tariff sheets reflect the changesto Transco’s tariff required by the May15 order.

Transco states that it is serving copiesof the instant filing to customers, StateCommission and other interestedparties.

Any person desiring to protest saidfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, Washington, D.C.20426, in accordance with Section385.211 of the Commission’s Rules andRegulations. All such protests should befiled as provided in Section 154.210 ofthe Commission’s Regulations. Protestswill be considered by the Commissionin determining the appropriate action to


be taken, but will not serve to makeprotestants parties to the proceeding.Copies of this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 97–15203 Filed 6–10–97; 8:45 am]




[Docket No. TQ97–3–35–000]

West Texas Gas, Inc.; Notice ofProposed Changes in FERC Gas Tariff

June 5, 1997.

Take notice that on May 30, 1997,West Texas Gas, Inc. (WTG), tenderedfor filing proposed changes in its FERCGas Tariff, First Revised Volume No. 1,WTG submitted Twenty-Third RevisedSheet No. 4 to be effective July 1, 1997.This tariff sheet and the accompanyingexplanatory schedules constitute WTG’squarterly PGA filing submitted inaccordance with the purchased gasadjustment provisions of Section 19 ofthe General Germs and Conditions ofWTG’s FERC Gas Tariff, First RevisedVolume No. 1.

WTG states that copies of the filingwere served upon WTG’s customers andinterested state commissions.

Any persons desiring to be heard orto protest said filing should file amotion to intervene or protest with theFederal Energy Regulatory Commission,888 First Street, N.E., Washington, D.C.20426, in accordance with Sections385.214 and 385.211 of theCommission’s Rules and Regulations.All such motions or protests must befiled as provided in Section 154.210 ofthe Commission’s Regulations. Protestswill be considered by the Commissionin determining the appropriate action tobe taken, but will not serve to make theprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 97–15217 Filed 6–10–97; 8:45 am]





Williams Natural Gas Company; Noticeof Request Under BlanketAuthorization

June 5, 1997.

Take notice that on May 30, 1997,Williams Natural Gas Company (WNG),P.O. Box 3288, Tulsa, Oklahoma 42301,filed in Docket No. CP97–536–000 arequest pursuant to Sections 157.205,157.212, and 157.216(b) of theCommission’s Regulations under theNatural Gas Act (18 CFR 157.205,157.212, and 157.216) for approval toabandon in place approximately 5,280feet of 3-inch lateral pipeline and installa tap and construct approximately 2,600feet of replacement four-inch lateralpipeline and a new high pressureregulator setting to serve Missouri GasEnergy in Johnson County, Missouri,under Texas Gas’ blanket certificateissued in Docket No. CP82–479–000,pursuant to Section 7(c) of the NaturalGas Act (NCA), all as more fully setforth in the request which is on file withthe Commission and open to publicinspection.

WNG states that the projected volumeof delivery will remain unchanged.WNG further states that the constructioncost is estimated to be $106,946 with areclaim cost estimated to be $1,500.WNG asserts that this change is notprohibited by its existing tariff and thatWNG has sufficient capacity toaccomplish the deliveries specifiedwithout detriment or disadvantage to itsother customers.

Any person or the Commission’s Staffmay, within 45 days of the issuance ofthe instant notice by the Commission,file pursuant to Rule 214 of theCommission’s Rules of Practice andProcedure (18 CFR 385.214), a motion tointervene and pursuant to Section157.205 of the regulations under theNatural Gas Act (18 CFR 157.205), aprotest to the request. If no protest isfiled within the time allowed therefor,the proposed activities shall be deemedto be authorized effective the day afterthe time allowed for filing a protest. Ifa protest is filed and not withdrawn 30days after the time allowed for filing aprotest, the instant request shall betreated as an application for

authorization pursuant to Section 7 ofthe Natural Gas Act.Lois D. Cashell,Secretary.[FR Doc. 97–15188 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M




Williston Basin Interstate PipelineCompany; Notice of Request UnderBlanket Authorization


Williston Basin Interstate PipelineCompany (Williston Basin), Suite 300,200 North Third Street, Bismarck, NorthDakota 58501, filed in Docket No. CP97–547–000 a request pursuant to Sections157.205 and 157.216 of theCommission’s Regulations under theNatural Gas Act (18 CFR 157.205,157.216) for authorization to abandon afarm tap at Station 154+90 on theCleveland-Grafton pipeline in StutsmanCounty, North Dakota, under WillistonBasin’s blanket certificate issued inDocket No. CP82–487–000 et al.pursuant to Section 7 of the Natural GasAct, all as more fully set forth in therequest that is on file with theCommission and open to publicinspection.

Williston Basin proposes to removethe tap and riser and the below-groundvalve will be accessed by backhoeexcavation of an area almost 10 feet indiameter. The valve will be shut in andthe excavated area on existing right-of-way will be backfilled and leveled. Theowner will cultivate the area andseeding is unnecessary. The farm tap islocated in NE1⁄4, Section 18, TWP140N,RGE67W, Stutsman County, NorthDakota. Williston Basin states thatMontana-Dakota, a local distributioncompany, has requested that this tap beabandoned since the only end-usecustomer no longer requests servicethere. The tap’s abandonment will notaffect Williston Basin’s peak day orannual transportation to Montana-Dakota and the total volumes deliveredwill not exceed total volumesauthorized prior to this request.

Any person or the Commission’s staffmay, within 45 days after issuance ofthe instant notice by the Commission,file pursuant to Rule 214 of theCommission’s Procedural Rules (18 CFR385.214) a motion to intervene or noticeof intervention and pursuant to Section157.205 of the Regulations under the


Natural Gas Act (18 CFR 157.205) aprotest to the request. If no protest isfiled within the time allowed therefor,the proposed activity shall be deemed tobe authorized effective the day after thetime allowed for filing a protest. If aprotest is filed and not withdrawnwithin 30 days after the time allowedfor filing a protest, the instant requestshall be treated as an application forauthorization pursuant to Section 7 ofthe Natural Gas Act.Lois D. Cashell,Secretary.[FR Doc. 97–15184 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M

DEPATMENT OF ENERGY


[Docket No. TM97–3–49–000]

Williston Basin Interstate PipelineCompany; Notice of Compliance Filing


Williston Basin Interstate PipelineCompany (Williston Basin), tendered forfiling its Annual Take-or-PayReconciliation Filing pursuant toSection 37 of the General Terms andConditions of its FERC Gas Tariff,Second Revised Volume No. 1. Morespecifically, Williston Basin filed thefollowing tariff sheets, to be effectiveJuly 1, 1997:Second Revised Volume No. 1Twenty-fifth Revised Sheet No. 15Twenty-eighth Revised Sheet No. 16Twenty-fourth Revised Sheet No. 18Twenty-first Revised Sheet No. 21Fourth Revised Sheet No. 321Original Volume No. 2Sixty-ninth Revised Sheet No. 11B

Williston Basin states that the revisedtariff sheets are being filed to reflectrecalculated fixed monthly surchargesand revised throughput surcharges to beeffective during the period July 1, 1997through June 30, 1998 pursuant to theprocedures contained in Section 37 ofthe General Terms and Conditions of itsWilliston Basin’s FERC Gas Tariff,Second Revised Volume No. 1.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE, Washington, D.C.20426, in accordance with Sections385.214 and 385.211 of theCommission’s regulations. All suchmotions or protests must be filed inaccordance with Section 154.210 of theCommission’s Regulations. Protests willbe considered by the Commission in

determining appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.

Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15211 Filed 6–10–97; 8:45 am]




[Docket No. ER97–2968–000]

Wisconsin Public Service Corporation;Notice of Filing

June 5, 1997.

Take notice that on May 15, 1997,Wisconsin Public Service Corporation(WPSC) tendered for filing an executedNon-Firm Open-Access TransmissionService Agreement between WPSC andthe Oconto Electric Cooperative underWPSC’s Open Access TransmissionTariff. WPSC states that also included inthis filing is an executed serviceagreement between WPSC and theCooperative under WPSC’s W–2APartial Requirements Wholesale Tariff.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, N.E., Washington, D.C.20426, in accordance with Rules 211and 214 of the Commission’s Rules ofPractice and Procedure (18 CFR 385.211and 18 CFR 385.214). All such motionsor protests should be filed on or beforeJune 17, 1997. Protests will beconsidered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15193 Filed 6–10–97; 8:45 am]




[Docket No. EG97–56–000, et al.]

American Ref-Fuel Company ofDelaware County, L.P., et al.; ElectricRate and Corporate Regulation Filings

June 4, 1997.Take notice that the following filings

have been made with the Commission:

1. American Ref-Fuel Company ofDelaware County, L.P.


On May 30, 1997, American Ref-FuelCompany of Delaware County, L.P.(ARC), a Delaware limited partnership,with its principal place of business atc/o American Ref-Fuel Company, 770North Eldridge, Houston, TX 77079,filed with the Federal Energy RegulatoryCommission an amendment to itsapplication for determination of exemptwholesale generator status pursuant toPart 365 of the Commission’sRegulations.

ARC is engaged directly andexclusively in the business of operatinga municipal solid waste-fired smallpower production facility with amaximum net power productioncapacity of 79.5 MW which is aneligible facility. All of the facility’selectric power net of the facility’soperating electric power is and will bepurchased at wholesale by Atlantic CityElectric Company and PECO EnergyCompany.

Comment date: June 30, 1997, inaccordance with Standard Paragraph Eat the end of this notice. Thecommission will limit its considerationof comments to those that concern theadequacy or accuracy of the application.

2. Sky River Partnership


On May 23, 1997, Sky RiverPartnership, 13000 Jameson Road,Tehachapi, California 93561 (Sky River),filed with the Federal Energy RegulatoryCommission an application fordetermination of exempt wholesalegenerator status pursuant to Part 365 ofthe Commission’s Regulations.

Sky River owns a wind-poweredeligible facility with a capacity ofapproximately 77 megawatts (along withcertain appurtenant interconnectedtransmission facilities), located inTehachapi, California.

Comment date: June 24, 1997, inaccordance with Standard Paragraph Eat the end of this notice. TheCommission will limit its consideration


of comments to those that concern theadequacy or accuracy of the application.

3. Zond Windsystems HoldingCompany

[Docket No. EG97–67–000]On May 23, 1997, Zond Windsystems

Holding Company, 13000 JamesonRoad, Tehachapi, California 93561(ZWHC), filed with the Federal EnergyRegulatory Commission an applicationfor determination of exempt wholesalegenerator status pursuant to Part 365 ofthe Commission’s Regulations.

ZWHC owns a wind-powered eligiblefacility with a capacity of approximately20 megawatts (along with certainappurtenant interconnectedtransmission facilities), located inTehachapi, California.

Comment date: June 24, 1997, inaccordance with Standard Paragraph Eat the end of this notice. TheCommission will limit its considerationof comments to those that concern theadequacy or accuracy of the application.

4. Victory Garden Phase IV Partnership

[Docket No. EG97–68–000]On May 23, 1997, Victory Garden

Phase IV Partnership, 13000 JamesonRoad, Tehachapi, California 93561(Victory Garden IV), filed with theFederal Energy Regulatory Commissionan application for determination ofexempt wholesale generator statuspursuant to Part 365 of theCommission’s Regulations.

Victory Garden IV owns a wind-powered eligible facility with a capacityof approximately 22.05 megawatts(along with certain appurtenantinterconnected transmission facilities),located in Tehachapi, California.

Comment date: June 24, 1997, inaccordance with Standard Paragraph Eat the end of this notice. TheCommission will limit its considerationof comments to those that concern theadequacy or accuracy of the application.

5. Sachsen Holding B.V.

[Docket No. EG97–69–000]On May 28, 1997, Sachsen Holding

B.V. (Applicant) applied for adetermination that it will be an ‘‘exemptwholesale generator’’ within themeaning of Section 32(a)(1) of PUHCA.Applicant will own 45 percent of theequity capital of PT Dayalistrik Pratama(PTDP). PTDP is a special purposecompany incorporated under the laws ofIndonesia to develop, construct andown a power plant to be built in WestJava, Indonesia (the ‘‘Facility’’).Indirectly through PTDP, Applicant willbe an owner of the Facility. The Facilitywill be a single unit, coal-fired steam

generating boiler and a single unit steamturbine generator with a 100 percentnominal load of 420 megawatts and anet output capacity of 400 megawatts.All of the output of the Facility will besold to PT Perusahaan Listrik Negara(Persero) (PLN), the state-owned electricutility of Indonesia, pursuant to a 30-year Power Purchase Agreement.

Comment date: June 24, 1997, inaccordance with Standard Paragraph Eat the end of this notice. Thecommission will limit its considerationof comments to those that concern theadequacy or accuracy of the application.

6. Pennsylvania Power Company

[Docket No. ER96–749–001]Take notice that on April 24, 1997,

Pennsylvania Power Company tenderedfor filing its refund report in the above-referenced docket.

Comment date: June 18, 1997, inaccordance with Standard Paragraph Eat the end of this notice.

7. Sunoco Power Marketing L.L.C.

[Docket No. ER97–870–000]Take notice that on May 22, 1997,

Sunoco Power Marketing L.L.C.(Sunoco), tendered for filing anamended application in the above-captioned docket seeking the additionalauthority to buy power from, and sellpower to, all willing buyers andsellers—including, but not limited to,Sunoco’s affiliates—at market basedrates under Sunoco’s FERC Electric RateSchedule No. 1. Sunoco requested thatit be granted this additional authoritywithout prejudice to the blanketauthorizations and waivers previouslygranted in this docket by order of theDirector of the Division of Applicationsof the Commission’s Electric PowerRegulation Office on April 11, 1997.Sunoco also submitted a revised FERCElectric Rate Schedule No. 1 which itrequested become effective within sixty(60) days from the date of its filing.


8. Nevada Power Company


Nevada Power Company (NevadaPower) tendered for filing anAmendment to its Electric ServiceCoordination Tariff (AmendedCoordination Tariff) having a proposedeffective date of March 1, 1997. Theamendment is being made to complywith FERC’s Order No. 888 unbundlingrequirements.


9. Valero Power Services Company

[Docket No. ER97–1847–000]

Take notice that on May 14, 1997,Valero Power Services Company (ValeroPower) filed an amendment to thenotification of a change in its statuswhich was previously filed on February26, 1997. The Amendment adopts theStandards of Conduct applicable to therelationship between Valero Power andPacific Gas and Electric Company, awholly-owned subsidiary of PG&ECorporation, pending and after approvalof the proposed merger between PG&ECorporation and Valero EnergyCorporation. The Standards of Conductsubmitted are the same as Pacific Gasand Electric Company has adopted togovern its conduct with other powermarketing affiliates and which theCommission has previously approved.


10. Energis Resources Incorporated

[Docket No. ER97–2176–001]

Take notice that on May 30, 1997,Energis Resources Incorporatedtendered for filing copies of itscompliance filing in the abovereferenced docket in response toOrdering Paragraph (A) of theCommission’s Order ConditionallyAccepting For Filing Proposed Market-Based Rates, Energis ResourcesIncorporated, 79 FERC ¶ 61,170 (1997).


11. Hartford Power Sales, L.L.C.

[Docket No. ER97–2227–000]

Take notice that on May 22, 1997,Hartford Power Sales, L.L.C. filed anotice of withdrawal of its filing in thisdocket.


12. Wisconsin Electric Power Company

[Docket No. ER97–2309–001]

Take notice that Wisconsin ElectricPower Company (Wisconsin Electric) onMay 27, 1997, tendered for filing itsrefund report in the above referencedproceeding. The submittal was made incompliance with the letter order issuedby the Director, Division of Applicationson May 13, 1997.

Copies of the filing have been servedon Madison Gas and Electric Company,Sonat Power Marketing, L.P., and thePublic Service Commission ofWisconsin.



13. Houston Lighting & Power Company

[Docket No. ER97–2524–000]

Take notice that on May 23, 1997,Houston Lighting & Power Company(HL&P) tendered for filing anamendment to its filing in thereferenced docket.

HL&P states that copies of theamendment have been served on theparties to Docket No. ER97–2524 and onthe Public Utility Commission of Texas.


14. Keystone Energy Services

[Docket No. ER97–3053–000]

Take notice that on May 23, 1997,Keystone Energy Services, Inc.(Keystone) petitioned the Commissionfor acceptance of Keystone RateSchedule FERC No. 1; the granting ofcertain blanket approvals, including theauthority to sell electricity at market-based rates; and the waiver of certainCommission Regulations.

Keystone intends to engage inwholesale electric power and energypurchases and sales as a marketer.Neither Keystone nor any affiliate ofKeystone is in the business of generatingor transmitting electric power.


15. Otter Tail Power Company

[Docket No. OA96–192–002]

Take notice that on May 12, 1997,Otter Tail Power Company tendered forfiling its refund report in the above-referenced docket.


Standard Paragraph

E. Any person desiring to be heard orto protest said filing should file amotion to intervene or protest with theFederal Energy Regulatory Commission,888 First Street, N.E., Washington, D.C.20426, in accordance with Rules 211and 214 of the Commission’s Rules ofPractice and Procedure (18 CFR 385.211and 18 CFR 385.214). All such motionsor protests should be filed on or beforethe comment date. Protests will beconsidered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copies

of this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15248 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–P



[Docket No. EC97–36–000, et al]

Northeast Empire Limited Partnership#2, et al.; Electric Rate and CorporateRegulation Filings

June 3, 1997.Take notice that the following filings

have been made with the Commission:

1. Northeast Empire LimitedPartnership #2

[Docket No. EC97–36–000]On May 27, 1997, Northeast Empire

Limited Partnership #2, c/o Thomas D.Emero, Twenty South Street, P.O. Box407, Bangor, Maine 04402–0407, filedwith the Federal Energy RegulatoryCommission an Application forApproval of Disposition ofJurisdictional Facilities pursuant to Part33 of the Commission’s Rules.


2. Independent Power Producers ofNew York, Inc.

[Docket No. EL97–40–000]Take notice that on May 23, 1997,

Independent Power Producers of NewYork, Inc. (IPPNY) filed a petition for adeclaratory order finding that New Yorkpublic utilities have no authority todirect qualifying facilities under thePublic Utilities Regulatory Policies Actof 1978 (PURPA) to comply with certainorders of the New York Public ServiceCommission (PSC) respecting a QFmonitoring program; seekingenforcement action under PURPA§ 210(h) and requesting expeditedconsideration.


3. MidAmerican Energy Company


MidAmerican Energy Company(MidAmerican) filed with theCommission a Network IntegrationTransmission Service Agreement and aNetwork Operating Agreement, both

dated April 7, 1997 and entered into byMidAmerican and the City of SergeantBluff, Iowa (Sergeant Bluff) inaccordance with MidAmerican’s OpenAccess Transmission Tariff.

MidAmerican requests an effectivedate of July 1, 1997 for the Agreementsand, accordingly, seeks a waiver of theCommission’s notice requirement.MidAmerican has served a copy of thefiling on Sergeant Bluff, the IowaUtilities Board, the Illinois CommerceCommission and the South DakotaPublic Utilities Commission.


4. Wisconsin Public ServiceCorporation


Wisconsin Public Service Corporation(WPSC), tendered for filing executedTransmission Service Agreementsbetween WPSC and Wisconsin Power &Light Company. The Agreementsprovide for transmission service underthe Open Access Transmission ServiceTariff, FERC Original Volume No. 11.


5. Orange and Rockland Utilities, Inc.


Orange and Rockland Utilities, Inc.(Orange and Rockland), filed ServiceAgreements between Orange andRockland and Cleveland ElectricIlluminating Co., CMS MarketingServices and Trading Co., The PowerCompany of America L.P., and ToledoEdison Company. These ServiceAgreements specify that the Customershave agreed to the rates, terms andconditions of Orange and RocklandOpen Access Transmission Tariff filedon July 9, 1996 in Docket No. OA96–210–000.

Orange and Rockland requests waiverof the Commission’s sixty-day noticerequirements and an effective date ofMay 15, 1997 for the ServiceAgreements. Orange and Rockland hasserved copies of the filing on The NewYork State Public Service Commissionand on the Customers.


6. Commonwealth Electric Company &Cambridge Electric Light Company


Commonwealth Electric Company


(Commonwealth) and CambridgeElectric Light Company (Cambridge),collectively referred to as theCompanies, tendered for filing with theFederal Energy Regulatory Commissionexecuted Service Agreements betweenthe Companies and the followingMarket-Based Power Sales Customers(collectively referred to herein as theCustomers):

Bangor Hydro-Electric CompanyCNG Power Services CorporationDuke/Louis Dreyfus L.L.C.Rainbow Energy Marketing CorporationTown of South Hadley, Electric Light

Department

These Service Agreements specifythat the Customers have signed on toand have agreed to the terms andconditions of the Companies’ Market-Based Power Sales Tariffs designated asCommonwealth’s Market-Based PowerSales Tariff (FERC Electric TariffOriginal Volume No. 7) and Cambridge’sMarket-Based Power Sales Tariff (FERCElectric Tariff Original Volume No. 9).These Tariffs, accepted by the FERC onFebruary 27, 1997, and which have aneffective date of February 28, 1997, willallow the Companies and the Customersto enter into separately scheduled short-term transactions under which theCompanies will sell to the Customerscapacity and/or energy as the partiesmay mutually agree.

The Companies and the Customershave also filed Notices of Cancellationfor service under the Companies’ PowerSales and Exchange Tariffs (FERCElectric Tariff Original Volume Nos. 5and 3) and the Customers’ respectiveFERC Rate Schedules.

The Companies request an effectivedate as specified on each ServiceAgreement and Notice of Cancellation.


7. The Montana Power Company

[Docket No. ER97–2988–000]

Take notice that on May 16, 1997, TheMontana Power Company (Montana),tendered for filing with the FederalEnergy Regulatory Commissionpursuant to 18 CFR 35.13, a Non-FirmPoint-to-Point Transmission ServiceAgreement with Powerex under FERCElectric Tariff, Original Volume No. 5(Open Access Transmission Tariff).

A copy of the filing was served uponPowerex.


8. New York State Electric & GasCorporation

[Docket No. ER97–2989–000]

Take notice that on May 16, 1997,New York State Electric & GasCorporation (NYSEG), tendered forfiling pursuant to Section 35.13 of theFederal Energy RegulatoryCommission’s Regulations, (18 CFR35.13), a Supplement to its September28, 1993 Marcy-South 345 kVTransmission Facilities-TransmissionReinforcement Agreement (Agreement)with the New York Power Authority(NYPA), designated NYSEG RateSchedule FERC No. 112. The proposedchanges would decrease revenues forthe twelve month period ending June30, 1998.

This rate filing is made pursuant toArticle No. 2 of the Agreement. Theannual charges associated with othertaxes, operating expenses, maintenanceexpenses, working capital, andassociated revenue taxes are revisedbased on data taken from NYSEG’sAnnual Report to the Federal EnergyRegulatory Commission (FERC Form 1)for the twelve months ended December31, 1996.

NYSEG requests an effective date ofJuly 1, 1997, and, therefore, requestswaiver of the Commission’s noticerequirements for good cause shown.

Copies of the filing were served uponthe New York Power Authority and onthe Public Service Commission of theState of New York.


9. Western Resources, Inc.

[Docket No. ER97–2990–000]

Take notice that on May 16, 1997,Western Resources, Inc., tendered forfiling a non-firm transmissionagreement between Western Resourcesand Vastar Power Marketing, Inc.Western Resources states that thepurpose of the agreement is to permitnon-discriminatory access to thetransmission facilities owned orcontrolled by Western Resources inaccordance with Western Resources’open access transmission tariff on filewith the Commission. The agreement isproposed to become effective April 22,1997.

Copies of the filing were served uponVastar Power Marketing, Inc. and theKansas Corporation Commission.


10. Public Service Electric and GasCompany


Public Service Electric and GasCompany (PSE&G) of Newark, NewJersey, tendered for filing an agreementfor the sale of capacity and energy toPlum Street Energy Marketing, Inc.(Plum Street) pursuant to the PSE&GBulk Power Service Tariff, presently onfile with the Commission.

PSE&G further requests waiver of theCommission’s Regulations such that theagreement can be made effective as ofMay 1, 1997.

Copies of the filing have been servedupon Plum Street and the New JerseyBoard of Public Utilities.


11. Public Service Electric and GasCompany


Public Service Electric and GasCompany (PSE&G) of Newark, NewJersey, tendered for filing an agreementfor the sale of capacity and energy toUSGen Power Services, L.P. (USGen)pursuant to the PSE&G WholesalePower Market Based Sales Tariff,presently on file with the Commission.

PSE&G further requests waiver of theCommission’s Regulations such that theagreement can be made effective as ofMay 1, 1997.

Copies of the filing have been servedupon USGen and the New Jersey Boardof Public Utilities.


12. MidAmerican Energy Company


MidAmerican Energy Company(MidAmerican), 666 Grand Avenue, DesMoines, Iowa 50303 submitted to theCommission for filing a change toMidAmerican’s Rate Schedule FERC No.19, as supplemented. The changeconsists of the Second Amendmentdated May 7, 1997, entered into byMidAmerican and Central Iowa PowerCooperative (CIPCO) to InterconnectionAgreement dated June 13, 1983, enteredinto by Iowa-Illinois Gas and ElectricCompany (a predecessor by merger toMidAmerican) and CIPCO.

MidAmerican states that the purposeof the rate schedule change is to makea technical correction to the descriptionof an interconnection, add references toseveral normally closed points of


interconnection and modifytransmission service arrangements toCIPCO at a substation.

MidAmerican requests an effectivedate in accordance with Section IV ofthe Second Amendment and furtherrequests the Commission to accept therate schedule change for filing within 60days of the date of its submission to theCommission. MidAmerican has served acopy of the filing on representatives ofCIPCO, the Iowa Utilities Board, theIllinois Commerce Commission and theSouth Dakota Public UtilitiesCommission.


13. Louisville Gas and ElectricCompany


Louisville Gas and Electric Company,tendered for filing copies of a serviceagreement between Louisville Gas andElectric Company and City of Hamilton,Ohio under Rate GSS.


14. Commonwealth Edison Company


Commonwealth Edison Company(ComEd) submitted for filing a short-term firm umbrella Service Agreementfor firm transactions with Illinois PowerCompany (IP), under the terms ofComEd’s OATT, Docket No. OA97–569–000 filed on March 26, 1997, and threenon-firm Service Agreements with OhioEdison Company (Ohio), Madison Gasand Electric Company (MG&E), andDelmarva Power & Light Company(DP&L), under the terms of ComEd’sOATT, under Docket No. OA96–166–000.

ComEd also submitted an executedservice agreement with Delhi EnergyServices, Inc. (Delhi). On April 18, 1997,ComEd filed an unexecuted agreementwith Delhi, to be effective March 20,1997. ComEd now asks that theCommission substitute the executedagreement for the previously filedunexecuted agreement, to be effectiveMarch 20, 1997, the original effectivedate.

ComEd requests various effectivedates, and accordingly seeks waiver ofthe Commission’s requirements. Copiesof this filing were served upon IP, Ohio,MG&E, DP&L, Delhi, and the IllinoisCommerce Commission.


15. Central Illinois Public ServiceCompany

[Docket No. ER97–2996–000]

Take notice that on May 16, 1997,Central Illinois Public Service Company(CIPS), submitted a service agreement,dated May 7, 1997, establishing DuPontPower Marketing, Inc. as a customerunder the terms of CIPS’ Open AccessTransmission Tariff.

CIPS requests an effective date of May7, 1997 for the service agreement.Accordingly, CIPS requests waiver ofthe Commission’s notice requirements.Copies of this filing were served uponDuPont Power Marketing, Inc. and theIllinois Commerce Commission.


16. Southern California Edison Co.

[Docket No. ER97–2997–000]

Take notice that on May 16, 1997,Southern California Edison Company(Edison), tendered for filing ServiceAgreements (Service Agreements) withthe City of Vernon, Enron PowerMarketing, Inc., Pacific Gas & Electric,and Valero Power Services Company forPoint-To-Point Transmission Serviceunder Edison’s Open AccessTransmission Tariff (Tariff) filed incompliance with FERC Order No. 888,and a Notice of Cancellation of ServiceAgreement Nos. 92, 93, 94, 95, 96, 97,98, 99, 100, 101, 102, 103, 104, 105, 106,107, 108, 109, 110, 111, 112, 113, 114,and 115 under FERC Electric Tariff,Original Volume No. 4.

Edison filed the executed ServiceAgreements with the Commission incompliance with applicableCommission regulations. Edison alsosubmitted a revised Sheet No. 152(Attachment E) to the Tariff, which is anupdated list of all current subscribers.Edison requests waiver of theCommission’s notice requirement topermit an effective date of May 17, 1997for Attachment E, and to allow theService Agreements to become effectiveand terminate according to their terms.

Copies of this filing were served uponthe Public Utilities Commission of theState of California and all interestedparties.


17. Northeast Utilities Service Company

[Docket No. ER97–2998–000]

Take notice that on May 16, 1997,Northeast Utilities Service Company(NUSCO), tendered for filing, a ServiceAgreement with the Village of Rockville

Centre under the NU SystemCompanies’ Sale for Resale, Tariff No. 7.

NUSCO states that a copy of this filinghas been mailed to the Village ofRockville Centre.

NUSCO requests that the ServiceAgreement become effective May 5,1997.


Standard ParagraphE. Any person desiring to be heard or

to protest said filing should file amotion to intervene or protest with theFederal Energy Regulatory Commission,888 First Street, N.E., Washington, D.C.20426, in accordance with Rules 211and 214 of the Commission’s Rules ofPractice and Procedure (18 CFR 385.211and 18 CFR 385.214). All such motionsor protests should be filed on or beforethe comment date. Protests will beconsidered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 97–15247 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–P



[Project Nos. 503, 1971, 1975–014, 2055,2061–004, 2726, 2777–007, 2778–005—Idaho]

Idaho Power Company; Notice of IntentTo Prepare an Environmental ImpactStatement (EIS) and Conduct PublicScoping Meetings and a Site Visit

June 5, 1997.The Federal Energy Regulatory

Commission (Commission) is reviewingapplications to relicense and continueoperating the following Idaho PowerCompany hydroelectric projects:Bliss Project—Project No. 1975Lower Salmon Falls Project—Project No.

2061Upper Salmon Falls Project—Project No.

2777Shoshone Falls Project—Project No. 2778

The projects are located on the SnakeRiver in Twin Falls, Elmore, Gooding,and Jerome Counties, Idaho.

Relicensing these projects couldconstitute a major federal action


significantly affecting the quality of thehuman environment. Therefore, theCommission intends to prepare anEnvironmental Impact Statement (EIS)on the projects in accordance with theNational Environmental Policy Act of1969, and the Commission’s regulations.The EIS will objectively consider bothsite-specific and cumulativeenvironmental impacts of the projectsand reasonable alternatives, and willinclude an economic and engineeringanalysis.

A draft EIS will be circulated forreview and comment by all interestedparties, and the Commission will holda public meeting on the draft EIS. FERCstaff will consider and respond tocomments received on the draft EIS inthe final EIS. the FERC staff’sconclusions and recommendations willthen be presented for the considerationof the Commission in reaching its finallicensing decision.

The Commission staff is alsopreparing a cumulative analysis of thefour projects already filed along withthe following four other Idaho PowerCompany projects, scheduled to be filedbetween 1998 and 2008:C.J. Strike Project—Project No. 2055Upper and Lower Malad Project—Project No.

2726Hells Canyon Project—Project No. 1971Swan Falls Project—Project No. 503

ScopingConcerned citizens, special interest

groups, local governments, state andfederal agencies, tribes, and any otherinterested parties are invited tocomment on the scope of theenvironmental issues that should beanalyzed in the EIS and the cumulativeanalysis. Scoping will help ensure thatall significant issues related to thisproposal are addressed in the EIS.

Bliss, Lower Salmon Falls, UpperSalmon Falls, and Shoshone FallsProjects

A scoping meeting oriented towardthe public will be held starting at 7:00p.m. on Tuesday, July 15, 1997, at theCollege of Southern Idaho, located at315 Falls Avenue West, Twin Falls,Idaho.

A scoping meeting oriented towardthe agencies will be held at 9:00 am onThursday, July 15, 1997, at the BoiseCenter on the Grove, 850 West FrontStreet, Boise, Idaho.

The public and the agencies mayattend either or both meetings.

Cumulative Analysis of the Snake RiverBasin

A scoping meeting for the cumulativeanalysis will be held starting at 9:00

a.m. on Friday, July 18, 1997, at theBoise Center on the Grove, 850 WestFront Street, Boise, Idaho.

ObjectivesAt the July 15 and 17 scoping

meetings, FERC staff will (1) identifypreliminary environmental issuesrelated to the proposed projects; (2)attempt to identify preliminary resourceissues that are not important and do notrequire detailed analysis; (3) identifyreasonable alternatives to be addressedin the EIS; (4) solicit from the meetingparticipants all available information,especially quantified data, on theresource issues; and (5) encouragestatements from experts and the publicon issues that should be analyzed in theEIS, including points of view inopposition to, or in support of, thestaff’s preliminary views.

At the July 18 scoping meeting inBoise, we will discuss approaches toevaluating cumulative impacts of theIdaho Power’s eight relicense projectsand cumulative impact issues associatedwith the eight projects.

ProceduresThe meetings will be recorded by a

court reporter and all statements (oraland written) will become a part of theofficial record of the Commissionproceedings for the three projects.Individuals presenting statements at themeetings will be asked to clearlyidentify themselves for the record.

To help focus discussions at thescoping meeting, the FERC will mail aScoping Document, outlining subjectareas to be addressed in the EIS, toagencies and interested individuals onthe project mailing list. Copies of thescoping document will also be availableat the scoping meetings.

Persons choosing not to speak at themeetings, but who have views on theissues or information relevant to theissues, may submit written statementsfor inclusion in the public record at themeetings. In addition, written scopingcomments may be filed with the Officeof the Secretary, Dockets Room 1A,Federal Energy Regulation Commission,888 First Street, NE, Washington, D.C.20426 until August 18, 1997. All writtencorrespondence should clearly identifythe appropriate projects on the firstpage: Project Nos. 503 (C.J. Strike),2061–004 (Lower Salmon Falls), 2726(Upper and Lower Malad), 2777–007(Upper Salmon Falls), 2778 (ShoshoneFalls).

Intervenors—those on theCommission’s service list for thisproceeding (parties)—are reminded ofthe Commission’s Rules of Practice andProcedure, requiring parties filing

documents with the Commission, toserve a copy of the document on eachperson whose name appears on theofficial service list. Further, if a party orinterceder files comments or documentswith the Commission relating to themerits of an issue that may affect theresponsibilities of a particular resourceagency, they must also service a copy ofthe document on that resource agency.

Site VisitThere will also be a tour of the Bliss,

Lower Salmon Falls, Upper SalmonFalls, and Shoshone Falls Projects onJuly 16, 1997. Attendees will meet at theShoshone Falls overlook parking lot at9:00 a.m. Please call Craig Jones, IdahoPower Company, at 208–388–2934, ifyou plan to attend no later than July 9,1997.

For Further Information Contact: AlanMitchnick, FERC–OHL (202) 219–2826.Lois D. Cashell,Secretary.[FR Doc. 97–15194 Filed 6–10–97; 8:45 am]BILLING CODE 6717–01–M


[OPP–340112; FRL 5721–2]

Notice of Receipt of Requests forAmendments to Delete Uses in CertainPesticide Registrations

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice.

SUMMARY: In accordance with section6(f)(1) of the Federal Insecticide,Fungicide and Rodenticide Act (FIFRA),as amended, EPA is issuing a notice ofreceipt of request for amendment byregistrants to delete uses in certainpesticide registrations.DATES: Unless a request is withdrawn,the Agency will approve these usedeletions and the deletions will becomeeffective on December 8, 1997.FOR FURTHER INFORMATION CONTACT: Bymail: James A. Hollins, Office ofPesticide Programs (7502C),Environmental Protection Agency, 401M St., SW., Washington, DC 20460.Office location for commercial courier,delivery, telephone number and e-mail:Room 216, Crystal Mall No. 2, 1921Jefferson Davis Highway, Arlington, VA,(703) 305–5761; e-mail:[email protected] INFORMATION:

I. Introduction

Section 6(f)(1) of FIFRA provides thata registrant of a pesticide product may


at any time request that any of itspesticide registrations be amended todelete one or more uses. The Act furtherprovides that, before acting on therequest, EPA must publish a notice ofreceipt of any such request in theFederal Register. Thereafter, theAdministrator may approve such arequest.

II. Intent to Delete UsesThis Notice announces receipt by the

Agency of applications from registrantsto delete uses in the 35 pesticideregistrations listed in the followingTable 1. These registrations are listed byregistration number, product names,active ingredients and the specific usesdeleted. Users of these products whodesire continued use on crops or sites

being deleted should contact theapplicable registrant before December 8,1997 to discuss withdrawal of theapplications for amendment. This 180–day period will also permit interestedmembers of the public to intercede withregistrants prior to the Agency approvalof the deletion. Note: Registrationnumbers preceded by ** indicate a 30–day comment period.

TABLE 1. — REGISTRATIONS WITH REQUESTS FOR AMENDMENTS TO DELETE USES IN CERTAIN PESTICIDE REGISTRATIONS

EPA Reg No. Product Name Active Ingredient Delete From Label

000264–00325 SEVIN Brand 97.5% Manu facturingConcentrate Carbaryl Insecticide

Carbaryl Avocados, grass for seed, maple treesforsap, oyster beds

000264–00328 SEVIN Brand Dust Base Carbaryl Insec-ticide

Carbaryl Almonds, apples, apricots, avocados, cher-ries, chestnuts, citrus fruits, filberts, mapletrees for sap, nectarines, olives, peaches,pecans, pistachios, plums pome fruits,prunes, trees, walnuts, oyster beds, grassfor seed

000432–00566 SBP-1382/Chlorpyrifos TransparentEmulsion Spray

Chlorpyrifos; Resmethrin Aircraft uses

000432–00567 SBP-1328/Chlorpyrifos TransparentEmulsion Dilutable Conc.

Chlorpyrifos; Resmethrin Aircraft uses

000432–00568 UltraTEC Insecticide w/SBP-1382 Chlorpyrifos; Resmethrin Aircraft uses

000432–00658 Chlorpyrifos/Esbiothrin TransparentEmulsion Spray

Chlorpyrifos; d-trans-Allethrin

Aircraft uses

000432–00659 Crossfire-D TEDC w/Chlorpyrifos/Esbiothrin

Chlorpyrifos; d-trans-Allethrin

Aircraft uses

000432–00660 UltraTEC Insecticide w/ChlorpyrifosTEDC

Chlorpyrifos Aircraft uses

000432–00681 UlltraTEC Insecticide w/Chlorpyrifos/PY/PB TEDC

Chlorpyrifos; Piperonylbutoxide; Pyrethrins

Aircraft uses

000769–00624 SMCP Malathion 50% Malathion Beef cattle, dogs, cats, potatoes, plums,prunes, indoor uses, poultry

000769–00844 Pratt Malathion 50 Spray Malathion Indoor uses

000769–00957 Pratt Malathion 25W Malathion Ornamentals, flies, apples pears, citrus,cherries, peaches, plum, prunes, beets,broccoli, brussel sprouts, cabbage, cauli-flower, kale, mustard greens, turnips, egg-plant, peppers, potatoes, tomatoes

002935–00084 Malathion 25 Spray Malathion Apples, apricots, avocadoes, cherries, fil-berts, nectarines, peaches, pears, pecans,plums, prunes, quinces, asparagus,beans, beets, carrots, dandelions, egg-plant, endive, garlic, leeks, parsley, pars-nips, peas, peppers, salsify, shallots, spin-ach, swiss chard, water cress, cabbage,broccoli, brussel sprouts, kale, mustardgreens, turnips, celery, citrus, grapes, let-tuce, mushrooms, peppermint, spearmint,potatoes, tomatoes, cranberries, strawberries

004816–00707 Kicker Piperonyl butoxide;Pyrethrins

Aircraft uses

010370–00059 Ford’s Control Plus Roach Spray Chlorpyrifos Aircraft uses

010370–00061 Ford’s Aquakill Plus Roach Spray Chlorpyrifos; Resmethrin Aircraft uses

010370–00147 Ford’s 50% Malathion EC Malathion Household indoors, animals, animal quar-ters, stored grain, livestock, mushroomhouses, greenhouses, plums, prunes

010370–00222 Ford’s Ultra S.S.C. 12–2.5 Chlorpyrifos; Resmethrin Aircraft uses


TABLE 1. — REGISTRATIONS WITH REQUESTS FOR AMENDMENTS TO DELETE USES IN CERTAIN PESTICIDEREGISTRATIONS—Continued

EPA Reg No. Product Name Active Ingredient Delete From Label

010370–00256 Malathion 57% EC Malathion Non-medicated cattle feed blocks, baggedcitrus pulp, residual warehouse spray,stored grains, field or garden seeds, ware-houses, livestock (hogs, sheep, goats,horses, beef & non- milking cattle) poultry,domestic pets (dogs & cats), plants proc-essing dry milk, food handling establish-ments (food & non-food areas), foresttrees, green houses, residential homes,christmas trees, fly & mosquito control, in& around culled fruit and vegetable dumps

011678–00045** Pyrinex Technical Chlorpyrifos Indoor broadcast flea control, indoor total re-lease fogger use, paint additive use (in-cluding manhole covers, direct applicationpet care product (shampoos, dips, sprays)

019713–00288 Drexel Malathion ULV Malathion Soybeans, sugarbeets, tomatoes, safflower

019713–00340 Green Devil Containing Malathion Dogs, pets, household pests

034704–00544 Cythion 5-F Insecticide Malathion Almonds, apples, grape vines, greenhousevegetables, filberts, pears, peanuts, plums,prunes, quince, safflower, soybeans, to-bacco, stored products, bagged citruspulp, livestock, forestry, greenhouses,homes, dumps, processing plants, foodestablishments

039609–00001 Schultz Houseplants & Garden InsectSpray

Piperonyl butoxide;Pyrethrins

Jade plants, grapes

062719–00015** Dursban F Insecticide Chemical Chlorpyrifos Indoor/outdoor pest control (domestic), pets& domestic animals (indoor), aquatic uses(aquatic food crop/aquatic non-food), paintadditives, sewer manhole applications

062719–00044** Dursban R Insecticide Chemical Chlorpyrifos Indoor/outdoor pest control (domestic), pets& domestic animals (indoor), aquatic uses(aquatic food crop/aquatic non-food), paintadditives, sewer manhole applications

062719–00045** Dursban 30 SEC Insecticide Con-centrate

Chlorpyrifos Indoor/outdoor pest control (domestic), pets& domestic animals (indoor), aquatic uses(aquatic food crop/aquatic non-food), paintadditives, sewer manhole applications

062719–00066** Dursban HF Insecticidal Concentrate Chlorpyrifos Indoor/outdoor pest control (domestic), pets& domestic animals (indoor), aquatic uses(aquatic food crop/aquatic non-food), paintadditives, sewer manhole applications

062719–00078** Dursban W Insecti Chlorpyrifos Indoor/outdoor pest cidal Chemical control(domestic), pets & domestic animals (in-door), aquatic uses (aquatic food crop/aquatic non-food), paint additives, sewermanhole applications

062719–00099 Trifluralin Technical Trifluralin Forage legumes

062719–00131 Treflan TR-10 Trifluralin Forage legumes

062719–00225** XRM-5222 Chlorpyrifos Indoor/outdoor pest control (domestic), pets& domestic animals (indoor), aquatic uses(aquatic food crop/aquatic non-food), paintadditives, sewer manhole applications

062719–00250 Treflan HFP Trifluralin Forage legumes

063310–00008 Rhizopon AA Water Indole-3-butyric acid Lawns, sod, golf Soluble Tablets greens,tees, fairways, greenhouses, field crops,field crop application timing, chemigationsystems connected to public water sys-tems, sprinkler chemigation

066222–00008 Farmrite Folpet 50–W Folpet Crabapples, leeks, shallots

Note: Registration numbers preceded by ** indicate a 30–day comment period.


The following Table 2 includes the names and addresses of record for all registrants of the products in Table1, in sequence by EPA company number.

TABLE 2. — REGISTRANTS REQUESTING AMENDMENTS TO DELETE USES IN CERTAIN PESTICIDE REGISTRATIONS

Com-pany No. Company Name and Address

000264 Rhone-Poulenc Ag Co., P.O. Box 12014, T.W. Alexander Dr., Research Triangle Park, NC 27709.

000432 AgrEvo Environmental Health, 95 Chestnut Ridge Road, Montvale, NJ 07645.

000769 SureCo, Inc., 10012 N. Dale Mabry, Ste. 221, Tampa, FL 33618.

002935 Wilbur-Ellis Company, 191 W. Shaw Ave., Suite 107, Fresno, CA 93704.



011678 Makhteshim-Agan of North America Inc., 551 Fifth Avenue., Suite 1100, New York, NY 10176.

019713 Drexel Chemical Co., P.O. Box 13327, 1700 Channel Ave., Memphis, TN 38113.

034704 Platte Chemical Co., P.O. Box 667, Greeley, CO 80632.

039609 Schultz Company, 14090 Riverport Dr., P.O. Box 173, Maryland Heights, MO 63043.

062719 DowElanco, 9330 Zionsville Rd., Indianapolis, IN 46268.

063310 Hortus USA Corp., P.O. Box 1956 Old Chelsea Sta., New York, NY 10113.

066222 Makhteshim-Agan of North America Inc., 551 Fifth Avenue, Suite 1100, New York, NY 10176.

III. Existing Stocks Provisions

The Agency has authorized registrantsto sell or distribute product under thepreviously approved labeling for aperiod of 18 months after approval ofthe revision, unless other restrictionshave been imposed, as in special reviewactions.

List of Subjects

Environmental protection, Pesticidesand pests, Product registrations.


Linda A. Travers,Director, Information Resources ServicesDivision, Office of Pesticide Programs.

[FR Doc. 97–14985 Filed 6-10-97; 8:45 am]BILLING CODE 6560–50–F

FARM CREDIT ADMINISTRATION

Farm Credit Administration Board;Regular Meeting; Sunshine ActMeeting

AGENCY: Farm Credit Administration.SUMMARY: Notice is hereby given,pursuant to the Government in theSunshine Act (5 U.S.C. 552b(e)(3)), ofthe forthcoming regular meeting of theFarm Credit Administration Board(Board).DATE AND TIME: The regular meeting ofthe Board will be held at the offices ofthe Farm Credit Administration inMcLean, Virginia, on June 12, 1997,from 9:00 a.m. until such time as theBoard concludes its business.

FOR FURTHER INFORMATION CONTACT:Floyd Fithian, Secretary to the FarmCredit Administration Board, (703) 883–4025, TDD (703) 883–4444.ADDRESSES: Farm CreditAdministration, 1501 Farm Credit Drive,McLean, Virginia 22102–5090.SUPPLEMENTARY INFORMATION: Thismeeting of the Board will be open to thepublic (limited space available). In orderto increase the accessibility to Boardmeetings, persons requiring assistanceshould make arrangements in advance.The matters to be considered at themeeting are:Open SessionA. Approval of MinutesB. Report

—FCSBA Quarterly ReportC. New Business Regulations

—Other Financing Institutions [12 CFRpart 614] (Proposed)

Dated: June 9, 1997.Floyd Fithian,Secretary, Farm Credit Administration Board.[FR Doc. 97–15421 Filed 6–9–97; 12:58 pm]BILLING CODE 6705–01–P


Farm Credit Administration Board;Special Meeting; Sunshine Act Meeting

AGENCY: Farm Credit Administration.SUMMARY: Notice is hereby given,pursuant to the Government in theSunshine Act (5 U.S.C. 552b(e)(3)), ofthe special meeting of the Farm CreditAdministration Board (Board).DATE AND TIME: The special meeting ofthe Board was held at the offices of the

Farm Credit Administration in McLean,Virginia, on June 5, 1997, from 1:45 p.m.until such time as the Board concludedits business.FOR FURTHER INFORMATION CONTACT:Floyd Fithian, Secretary to the FarmCredit Administration Board, (703) 883–4025, TDD (703) 883–4444.ADDRESSES: Farm CreditAdministration, 1501 Farm Credit Drive,McLean, Virginia 22102–5090.SUPPLEMENTARY INFORMATION: Thismeeting of the Board was open to thepublic (limited space available). In orderto increase the accessibility to Boardmeetings, persons requiring assistanceshould make arrangements in advance.The matter considered at the meetingwas:Open SessionA. New Business



Farm Credit Administration Board;Regular Meeting; Sunshine ActMeeting

AGENCY: Farm Credit Administration.SUMMARY: Notice is hereby given,pursuant to the Government in theSunshine Act (5 U.S.C. 552b(e)(3)), thatthe July 10, 1997 regular meeting of theFarm Credit Administration Board(Board) will not be held. The FCA Board


will hold a special meeting at 9:00 a.m.on Tuesday, July 22, 1997. An agendafor this meeting will be published at alater date.FOR FURTHER INFORMATION CONTACT:Floyd Fithian, Secretary to the FarmCredit Administration Board, (703) 883–4025, TDD (703) 883–4444.ADDRESSES: Farm CreditAdministration, 1501 Farm Credit Drive,McLean, Virginia 22102–5090.


FEDERAL ELECTION COMMISSION

SUNSHINE ACT MEETING

* * * * *Federal Register Number: 97–14897.Previously announced date & time:Tuesday, June 10, 1997 at 10:00 a.m.

Meeting closed to the public.Additional item to be discussed:

Report containing privileged orconfidential financial or commercialinformation. (11 C.F.R. § 2.4(b)(2)).

Thursday, June 12, 1997 at 10:00 a.m.Meeting open to the public.

The following item was added to theagenda: Petitions for Ruelmaking onSoft Money; Substitute Draft Notice ofAvailability.* * * * *DATE AND TIME: Tuesday, June 17, 1997at 10:00 a.m.PLACE: 999 E Street, N.W., Washington,D.C.STATUS: This meeting will be closed tothe public.

ITEMS TO BE DISCUSSED:Compliance matters pursuant to 2

U.S.C. § 437g.Audits conducted pursuant to 2

U.S.C. § 437g, § 438(b), and Title 26,U.S.C.

Matters concerning participation incivil actions or proceedings orarbitration.

Internal personnel rules andprocedures or matters affecting aparticular employee.DATE AND TIME: Wednesday, June 18,1997 at 9:30 a.m.PLACE: 999 E Street, N.W., Washington,D.C. (ninth floor)STATUS: This hearing will be open to thepublic.

Matter before the Commission: Noticeof Proposed Rulemaking regardingcoordinated and independentexpenditures by party committees.* * * * *

DATE AND TIME: Thursday, June 19, 1997at 10:00 a.m.PLACE: 999 E Street, N.W., Washington,D.C. (ninth floor)STATUS: This Meeting will be open thethe public.

ITEMS TO BE DISCUSSED:Correction and Approval of Minutes.Report of the Audit Division on

Alexander for President, Inc.Advisory Opinion 1997–06: Kay

Bailey Hutchison for Senate Committee,Kenneth W. Anderson, Jr., Treasurer.

Administrative Matters.Person to contact for information: Mr.

Ron Harris, Press Officer, Telephone:(202) 219–4155.Marjorie W. Emmons,Secretary of the Commission.[FR Doc. 97–15453 Filed 6–9–97; 2:59 pm]BILLING CODE 6715–01–M

FEDERAL RESERVE SYSTEM

Change in Bank Control Notices;Acquisitions of Shares of Banks orBank Holding Companies

The notificants listed below haveapplied under the Change in BankControl Act (12 U.S.C. 1817(j)) and §225.41 of the Board’s Regulation Y (12CFR 225.41) to acquire a bank or bankholding company. The factors that areconsidered in acting on the notices areset forth in paragraph 7 of the Act (12U.S.C. 1817(j)(7)).

The notices are available forimmediate inspection at the FederalReserve Bank indicated. Once thenotices have been accepted forprocessing, they will also be availablefor inspection at the offices of the Boardof Governors. Interested persons mayexpress their views in writing to theReserve Bank indicated for that noticeor to the offices of the Board ofGovernors. Comments must be receivednot later than June 26, 1997.

A. Federal Reserve Bank of Atlanta(Lois Berthaume, Vice President) 104Marietta Street, N.W., Atlanta, Georgia30303-2713:

1. Susma Patel, London, England;Suketu Madhusudan Patel (Suku),London, England; Parimal KantibhaiPatel (Perry), London, England; BharatMuljibhai Amin, London, England; andDennis John Lloyd King, Surrey,England; collectively, as the PatelGroup, each to acquire up to 50 percentof the voting shares of First Bankshares,Inc., Longwood, Florida, and therebyindirectly acquire First National Bank ofCentral Florida, Longwood, Florida.

B. Federal Reserve Bank ofMinneapolis (Karen L. Grandstrand,

Vice President) 250 Marquette Avenue,Minneapolis, Minnesota 55480-2171:

1. James A. Espeland, Henning,Minnesota; to acquire an additional .04percent, for a total of 31.32 percent, ofthe voting shares of HenningBancshares, Inc., Henning, Minnesota,and thereby indirectly acquire FirstNational Bank of Henning, Henning,Minnesota, and First National Bank ofBattle Lake, Battle Lake, Minnesota.

C. Federal Reserve Bank of KansasCity (D. Michael Manies, Assistant VicePresident) 925 Grand Avenue, KansasCity, Missouri 64198-0001:

1. George H. Moyer, Jr., Madison,Nebraska; to acquire an additional 13.30percent, for a total of 28.09 percent, andJon M. Moyer, Madison, Nebraksa, toacquire an additional 12.84 percent, fora total of 31.83 percent, of the votingshares of Madison Bancshares, Inc.,Madison, Nebraska, and therebyindirectly acquire The Bank of Madison,Madison, Nebraksa.

Board of Governors of the Federal ReserveSystem, June 6, 1997.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 97–15269 Filed 6–10–97; 8:45 am]BILLING CODE 6210–01–F

FEDERAL RESERVE SYSTEM

Formations of, Acquisitions by, andMergers of Bank Holding Companies

The companies listed in this noticehave applied to the Board for approval,pursuant to the Bank Holding CompanyAct of 1956 (12 U.S.C. 1841 et seq.)(BHC Act), Regulation Y (12 CFR Part225), and all other applicable statutesand regulations to become a bankholding company and/or to acquire theassets or the ownership of, control of, orthe power to vote shares of a bank orbank holding company and all of thebanks and nonbanking companiesowned by the bank holding company,including the companies listed below.

The applications listed below, as wellas other related filings required by theBoard, are available for immediateinspection at the Federal Reserve Bankindicated. Once the application hasbeen accepted for processing, it will alsobe available for inspection at the officesof the Board of Governors. Interestedpersons may express their views inwriting on the standards enumerated inthe BHC Act (12 U.S.C. 1842(c)). If theproposal also involves the acquisition ofa nonbanking company, the review alsoincludes whether the acquisition of thenonbanking company complies with thestandards in section 4 of the BHC Act.Unless otherwise noted, nonbanking


activities will be conducted throughoutthe United States.

Unless otherwise noted, commentsregarding each of these applicationsmust be received at the Reserve Bankindicated or the offices of the Board ofGovernors not later than July 7, 1997.

A. Federal Reserve Bank of St. Louis(Randall C. Sumner, Vice President) 411Locust Street, St. Louis, Missouri 63102-2034:

1. The Union Illinois 1995 InvestmentLimited Partnership, Swansea, Illinois;to acquire at least a total of 13.18percent, and up to a total of 18.22percent, of the voting shares of UnionIllinois Company, Swansea, Illinois, andthereby indirectly acquire Union Bankof Illinois, Swansea, Illinois, and StateBank of Jerseyville, Jerseyville, Illinois.

B. Federal Reserve Bank ofMinneapolis (Karen L. Grandstrand,Vice President) 250 Marquette Avenue,Minneapolis, Minnesota 55480-2171:

1. New Prague Bancshares, Inc., NewPrague, Minnesota; to become a bankholding company by acquiring 100percent of the voting shares ofCommunity Security Bank, New Prague,Minnesota, a de novo bank.

Board of Governors of the Federal ReserveSystem, June 5, 1997.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 97–15270 Filed 6–10–97; 8:45 am]BILLING CODE 6210–01–F

FEDERAL TRADE COMMISSION

[File No. 972–3187]

Sears, Roebuck and Co.; Analysis toAid Public Comment

AGENCY: Federal Trade Commission.ACTION: Proposed consent agreement.

SUMMARY: The consent agreement in thismatter settles alleged violations offederal law prohibiting unfair ordeceptive acts or practices or unfairmethods of competition. The attachedAnalysis to Aid Public Commentdescribes both the allegations in thedraft complaint that accompanies theconsent agreement and the terms of theconsent order—embodied in the consentagreement—that would settle theseallegations.DATES: Comments must be received onor before August 11, 1997.ADDRESSES: Comments should bedirected to: FTC/Office of the Secretary,Room 159, 6th St. and Pa. Ave., NW.,Washington, DC 20580.FOR FURTHER INFORMATION CONTACT:David Medine, Federal Trade

Commission, S–4429, 6th andPennsylvania Ave., NW., Washington,DC 20580. (202) 326–3224. Paul Block,Boston Regional Office, Federal TradeCommission, 101 Merrimac Street, Suite810, Boston, MA 02114–4719. (617)424–5960.SUPPLEMENTARY INFORMATION: Pursuantto Section 6(f) of the Federal TradeCommission Act, 38 Stat. 721, 15 U.S.C.46, and Section 2.34 of theCommission’s Rules of Practice (16 CFR2.34), notice is hereby given that theabove-captioned consent agreementcontaining a consent order to cease anddesist, having been filed with andaccepted, subject to final approval, bythe Commission, has been placed on thepublic record for a period of sixty (60)days. The following Analysis to AidPublic Comment describes the terms ofthe consent agreement, and theallegations in the accompanyingcomplaint. An electronic copy of thefull text of the consent agreementpackage can be obtained from theCommission Actions section of the FTCHome Page (for June 4, 1997), on theWorld Wide Web, at ‘‘http://www.ftc.gov/os/actions/htm.’’ A papercopy can be obtained from the FTCPublic Reference Room, Room H–130,Sixth Street and Pennsylvania Avenue,NW., Washington, DC 20580, either inperson or by calling (202) 326–3627.Public comment is invited. Suchcomments or views will be consideredby the Commission and will be availablefor inspection and copying at itsprincipal office in accordance withSection 4.9(b)(6)(ii) of the Commission’sRules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order toAid Public Comment

The Federal Trade Commission hasaccepted an agreement to a proposedconsent order from Sears, Roebuck andCo. The proposed respondent is a largenational retailer that sells a wide varietyof products and services.

The proposed consent order has beenplaced on the public record for sixty(60) days for reception of comments byinterested persons. Comments receivedduring this period will become part ofthe public record. After sixty (60) days,the Commission will again review theagreement and the comments receivedand will decide whether it shouldwithdraw from the agreement and takeother appropriate action or make finalthe agreement’s proposed order.

The Commission’s complaint allegesseveral unfair or deceptive acts orpractices related to the proposedrespondent’s policy of inducingconsumers who have filed forbankruptcy protection to sign

agreements reaffirming debts owed toproposed respondent prior to the filingof the bankruptcy petition. Thecomplaint charges that the proposedrespondent: falsely represented toconsumers that signed reaffirmationagreements would be filed with thebankruptcy courts, as required by theUnited States Bankruptcy Code; falselyrepresented to consumers that debtsassociated with unfiled reaffirmationagreements, or agreements that werefiled but not approved by thebankruptcy courts, were legally bindingon the consumers; and unfairlycollected debts that it was not permittedby law to collect. The proposed consentorder contains provisions designed toremedy the violations charged and toprevent the proposed respondent fromengaging in similar acts in the future.

The proposed consent order preservesthe Commission’s right to seekconsumer redress if the Commissiondetermines that redress to consumersprovided through related named andunnamed legal actions is not adequate.

Part I of the proposed order prohibitsthe proposed respondent frommisrepresenting to consumers who havefiled petitions for bankruptcy protectionunder the United States BankruptcyCode that (A) Reaffirmation agreementswill be filed in bankruptcy court; or (B)any reaffirmation agreement is legallybinding on the consumer. Part I.C of theproposed order prohibits the proposedrespondent from collecting any debt(including any interest, fee, charge, orexpense incidental to the principalobligation) that has been legallydischarged in bankruptcy proceedingsand that the proposed respondent is notpermitted by law to collect. Part II of theproposed order prohibits the proposedrespondent from making any materialmisrepresentation in the collection ofany debt subject to a pendingbankruptcy proceeding.

Part III of the proposed order containsrecord keeping requirements formaterials that demonstrate thecompliance of the proposed respondentwith the proposed order. Part IVrequires distribution of a copy of theconsent decree to certain current andfuture principals, officers, directors,managers, and representatives.

Part V provides for Commissionnotification upon any change in thecorporate respondent affectingcompliance obligations arising underthe order. Part VI requires the proposedrespondent to notify the Commission ofproposed settlement terms in relatedactions filed by various named andunnamed parties. Part VII requires thefiling of compliance report(s). Finally,Part VIII provides for the termination of


the order after twenty years undercertain circumstances.

The purpose of this analysis is tofacilitate public comment on theproposed order, and it is not intendedto constitute an official interpretation ofthe agreement and proposed order or tomodify in any way their terms.Donald S. Clark,Secretary.[FR Doc. 97–15282 Filed 6–10–97; 8:45 am]BILLING CODE 6712–01–M


Centers for Disease Control andPrevention

[Announcement 757]

National Institute for OccupationalSafety and Health; EpidemiologicStudies To Evaluate Health Effects ofUranium Milling; Notice of Availabilityof Funds for Fiscal Year for 1997

Introduction

The Centers for Disease Control andPrevention (CDC) announces theavailability of fiscal year (FY) 1997funds for a cooperative agreementprogram to design and conductepidemiologic studies evaluating thehealth effects of uranium milling.

CDC is committed to achieving thehealth promotion and diseaseprevention objectives of Healthy People2000, a national activity to reducemorbidity and mortality and improvethe quality of life. This announcementis related to the priority area ofOccupational Safety and Health. (Forordering a copy of Healthy People 2000,see the section Where To ObtainAdditional Information.)

Authority

This program is authorized underSection 501 of the Federal Mine Safetyand Health Act (30 U.S.C. 951).

Smoke-Free Workplace

CDC strongly encourages all grantrecipients to provide a smoke-freeworkplace and promote the nonuse ofall tobacco products, and Public Law103–227, the Pro-Children Act of 1994,prohibits smoking in certain facilitiesthat receive Federal funds in whicheducation, library, day care, health care,and early childhood developmentservices are provided to children.

Eligible Applicants

Applications may be submitted bypublic and private, non-profit and for-profit organizations and governments,

and their agencies. Thus, universities,colleges, research institutions, hospitals,other public and private organizations,State and local health departments ortheir bona fide agents, federallyrecognized Indian tribal governments,Indian tribes or Indian tribalorganizations, and small, minority-and/or women-owned businesses are eligibleto apply.

Note: Public Law 104–65, dated December19, 1995, prohibits an organization describedin section 501(c)(4) of the IRS Code of 1986,that engages in lobbying activities toinfluence the Federal Government, fromreceiving Federal funds.

Availability of FundsApproximately $300,000 is available

in FY 1997 to fund one award. It isexpected that the award will begin on orabout September 1, 1997, and will bemade for a 12-month budget period witha one year project period.

Preapplication TeleconferenceApplicants are invited by CDC/NIOSH

to attend a preapplication technicalassistance teleconference on Monday,June 16, 1997, at 2:00 p.m.(EDT) todiscuss the programmatic issues andtime constraints regarding this program,and to ask question regarding itscontent. This teleconference is expectedto last approximately one hour. Allconference calls are scheduled onEastern time. The conference name is‘‘Uranium Millers TechnicalAssistance’’. The telephone bridgenumber for Federal participants is 404/639–4100 and for Non-Federalparticipants it is 800/713–1971.Participants will need the conferencecode, 575934, to be connected.

Use of Funds

Restrictions on LobbyingApplicants should be aware of

restrictions on the use of HHS funds forlobbying of Federal or State legislativebodies. Under the provisions of 31U.S.C. Section 1352 (which has been ineffect since December 23, 1989),recipients (and their subtier contractors)are prohibited from using appropriatedFederal funds (other than profits from aFederal contract) for lobbying Congressor any Federal agency in connectionwith the award of a particular contract,grant, cooperative agreement, or loan.This includes grants/cooperativeagreements that, in whole or in part,involve conferences for which Federalfunds cannot be used directly orindirectly to encourage participants tolobby or to instruct participants on howto lobby.

In addition, the FY 1997 HHSAppropriations Act, which became

effective October 1, 1996, expresslyprohibits the use of 1997 appropriatedfunds for indirect or ‘‘grass roots’’lobbying efforts that are designed tosupport or defeat legislation pendingbefore State legislatures. This new law,Section 503 of Pub. L. No. 104–208,provides as follows:

Sec. 503(a) No part of anyappropriation contained in this Actshall be used, other than for normal andrecognized executive-legislativerelationships, for publicity orpropaganda purposes, for thepreparation, distribution, or use of anykit, pamphlet, booklet, publication,radio, television, or video presentationdesigned to support or defeat legislationpending before the Congress, * * *except in presentation to the Congressor any State legislative body itself.

(b) No part of any appropriationcontained in this Act shall be used topay the salary or expenses of any grantor contract recipient, or agent acting forsuch recipient, related to any activitydesigned to influence legislation orappropriations pending before theCongress or any State legislature.

Department of Labor, Health andHuman Services, and Education, andRelated Agencies Appropriations Act,1997, as enacted by the OmnibusConsolidated Appropriations Act, 1997,Division A, Title I, Section 101(e), Pub.L. No. 104–208 (September 30, 1996).

BackgroundThe National Institute for

Occupational Safety and Health(NIOSH) is developing and conductinga study of the health effects associatedwith uranium milling and will beawarding cooperative agreement fundsto support this effort.

NIOSH is conducting this researchpursuant to an agreement with theUnited States Army EnvironmentalHygiene Agency in follow-up to a 1994Congressional mandate to theDepartment of Defense. Public Law 103–139 provides that the Department ofDefense shall conduct ‘‘* * * a study ofthe health effects of uranium milling,including the effects of exposure toradon chemicals and uranium, on thehealth of those individuals employed inuranium mills in the southwesternUnited States during the periodbeginning on January 1, 1947, andending on December 31, 1971.’’

NIOSH has been evaluating availablepersonnel and exposure records foruranium mills which operated inColorado, New Mexico, Utah, andArizona between 1947 and 1971 todetermine which types of epidemiologicstudies of the health effects of uraniummilling would be feasible given the


nature and extent of records availableon uranium milling operations. To date,NIOSH has determined that a crosssectional study of renal and/orpulmonary disease among uraniummillers would be feasible. In addition,such a study is scientifically appropriatesince prior research has indicated thaturanium millers may be at increasedrisk of renal disease and non-malignantrespiratory disease.

PurposeThe purpose of this cooperative

agreement is to utilize the specialresources of the research community toconduct studies evaluating the renaland/or pulmonary health effects ofuranium milling, including the effects ofexposure to uranium dust, silica dust,inorganic acids, organic solvents, andionizing radiation. The project resultsshould be applicable to individualsemployed in uranium mills in thesouthwestern United States betweenJanuary 1, 1947 and December 31, 1971.This project could include: (a) Amorbidity study of renal disease, (b) amorbidity study of non-malignantrespiratory disease, and/or (c) amorbidity study of other healthoutcomes if substantial justification isgiven for evaluating other endpoints.Personnel and/or exposure records fromU.S. uranium mills may be utilized tothe extent available. The recipientshould develop an epidemiologic studydesign which specifies the methods thatwill be used to select former uraniummillers and a non-uranium millercomparison group for the study.

Program RequirementsIn conducting activities to achieve the

purpose of this program, the recipientwill be responsible for the activitiesunder A. (Recipient Activities), andCDC/NIOSH will be responsible foractivities under B. (CDC/NIOSHActivities).

A. Recipient Activities1. Develop a study to evaluate the

health effects of uranium milling amongindividuals employed in uranium millsin the southwestern United Statesduring the period between January 1,1947, and December 31, 1971.

2. Evaluate potential sources ofrecruitment of uranium millersincluding company records, the registrykept by the Office of Navajo UraniumWorkers, and other sources in order topropose a recruitment strategy.

3. Develop a final study protocol thatreviews the pertinent literature onpotential health effects of uraniummilling and historical exposure data,describes the study methodology

including the selection of an unexposed(non-uranium miller) comparison group,the data to be collected, and theproposed analysis of the data.

4. Present the protocol to a panel ofscientific peer reviewers and revise theprotocol as required for final approval.

5. Perform data collection andmanagement. Data collected mayinclude worker symptomatology, resultsof medical tests evaluating renal and/orpulmonary function, and availableexposure data.

6. Conduct statistical analyses of thedata collected.

7. Report study results to thescientific community via presentationsat professional conferences and articlesin peer-reviewed journals. All reportsshould undergo appropriate scientificpeer review prior to public release.

8. Maintain the confidentiality ofindividually identifiable data. Providewritten assurance to the CDC that thereare adequate technical andadministrative safeguards in place toprotect the confidentiality of suchrecords and that the confidentiality ofthe records will be maintained.

9. Notify study participants of theirindividual and overall study results.

B. CDC/NIOSH Activities

1. Provide technical assistance withprogram development, implementation,maintenance, priority setting, evaluationefforts, and information anddissemination activities.

2. Provide scientific, epidemiologic,and medical collaboration for thesuccessful completion of this project.

3. Provide, obtain, and/or assist inobtaining available personnel and/orexposure records from uranium millslocated in the southwestern UnitedStates that operated during the periodbetween January 1, 1947 and December31, 1971.

4. Assist in reporting study results tothe scientific community viapresentations at professionalconferences and articles in peer-reviewed journals. Assist, if needed, inreporting individual and overall studyresults to study participants.

Technical Reporting Requirements

An original and two copies of semi-annual progress reports are required.Timelines for the semi-annual reportswill be established at the time of award.Final financial status and performancereports are required no later than 90days after the end of the project period.All reports are submitted to the GrantsManagement Branch, Procurement andGrants Office, CDC.

Semi-annual progress report shouldinclude:

A. A brief program description.B. A listing of program goals and

objectives accompanied by acomparison of the actualaccomplishments related to the goalsand objectives established for theperiod.

C. If established goals and objectivesto be accomplished were delayed,describe both the reason for thedeviation and anticipated correctiveaction or deletion of the activity fromthe project.

D. Other pertinent information,including the status of completeness,timeliness and quality of data.

Final Report summarizing themethodology; results obtained,conclusions reached, andrecommendations regardingeffectiveness and costs of components ofthe Epidemiologic Studies to EvaluateHealth Effects of Uranium Millingprogram.

Application Content

The entire application, includingappendices, should not exceed 40 pagesand the Proposal Narrative sectioncontained therein should not exceed 25pages. Pages should be clearlynumbered and a complete index to theapplication and any appendicesincluded. The original and each copy ofthe application must be submittedunstapled and unbound. All materialsmust be typewritten, double-spaced,with unreduced type (font size 12 point)on 81⁄2′′ by 11′′ paper, with at least 1′′margins, headers, and footers, andprinted on one side only. Do not includeany spiral or bound materials orpamphlets.

The applicant should provide adetailed budget, with accompanyingjustification of all operating expenses,that is consistent with the statedobjectives and planned activities of theproject. CDC may not approve or fundall proposed activities. Applicantsshould be precise about the programpurpose of each budget item. Forcontracts described within theapplication budget, applicants shouldname the contractor, if known;described the services to be performedand provide an itemized breakdown andjustification for the estimated cost of thecontract; the kinds of organizations orparties to be selected; the period ofperformance; and the method ofselection. Place budget narrative pagesshowing, in detail, how funds in eachobject class will be spent, directlybehind form 424A. Do not put thesepages in the body of the application.

The applicant should provide adetailed description of all activities.


A. Title Page

The heading should include the titleof the program, project title,organization, name and address, projectdirector’s name and telephone number.

B. Abstract

A one page, singled-spaced, typedabstract must be submitted with theapplication. The heading shouldinclude the title of grant program,project title, organization, name andaddress, project director and telephonenumber. This abstract should include awork plan identifying activities to bedeveloped, activities to be completed,and a timeline for completion theseactivities.

C. Proposal Narrative

The narrative of each applicationmust:

1. Briefly state the applicant’sunderstanding of the need or problem tobe addressed and the purpose of thiscooperative agreement. This should bereflected in a draft protocol for thestudy.

2. Describe clearly the objectives, thesteps to be taken in planning andimplementing this project, and therespective responsibilities of theapplicant for carrying out those steps.Provide timelines for accomplishingeach objective and a method ofevaluating the activities.

3. Inclusion of women, ethnic, andracial groups: Describe how the CDCpolicy requirements will be metregarding the inclusion of women,ethnic, and racial groups in theproposed research. (See Women, Racialand Ethnic Minorities in the EvaluationCriteria and Other Requirementssections.)

4. Provide documentation of access topotential study sites with the samplecharacteristics specified in the ProgramRequirements Section, and providedocumentation of anticipatedinvolvement of management, labor, andcommunity representatives in the study.

5. Document the applicant’s expertisein the area of occupational health,industrial hygiene, health physics, andproject management.

6. Document the applicant’s ability toprovide staff, knowledge, and otherresources required to perform theresponsibilities in this project.

7. Provide the name, qualifications,and proposed time allocation of theProject Director who will be responsiblefor administering the project. Describestaff, experience, facilities, equipmentavailable for performance of this project,and other resources that define theapplicant’s capacity or potential to

accomplish the requirements statedabove. List the names (if known),qualifications, and time allocations ofthe existing professional staff to beassigned to (or recruited for) thisproject, the support staff available forperformance of this project, and theavailable facilities including space.

8. Human Subjects: State whether ornot Humans are subjects in thisproposal. (See Human Subjects in theEvaluation Criteria and OtherRequirements sections.)

9. Provide a detailed budget whichindicates: (a) Anticipated costs forpersonnel, travel, communications,postage, equipment, supplies, etc., and(b) all sources of funds to meet thoseneeds.

10. Provide a detailed security plan toensure that there are reasonableadministrative, technical, and physicalsafeguards to prevent unauthorized useor disclosure of records.

Evaluation Criteria

The application will be reviewed andevaluated according to the followingcriteria:

A. Understanding of the Problem (15%)

Responsiveness to the purpose of thisannouncement including:

1. Applicant’s understanding of thegeneral objectives, and

2. Evidence of the ability tounderstand the problem and to proposeeffective methodologies for evaluatingrenal and/or pulmonary effects.

B. Program Personnel (30%)

1. Applicant’s technical experience(e.g., in the areas of occupational health,industrial hygiene, health physics, andproject management),

2. The qualifications (e.g., in the areasof industrial hygiene, health physics,and occupational safety and health) andtime allocation of the professional staffto be assigned to this project, and

3. The applicant’s ability to describethe approach to be used in carrying outthe responsibilities of the applicant inthis project.

C. Study Design (30%)

1. Steps proposed in planning andimplementing this project and therespective responsibilities of theapplicant for carrying out those steps,

2. The adequacy of the applicant’sevidence of access to study populations,and

3. The degree to which the applicanthas met the CDC policy requirementsregarding the inclusion of women,ethnic, and racial groups in theproposed research.

D. Project Planning and Evaluation(15%)

The extent to which the proposedgoals and objectives are clearly stated,time-phased, and measurable. Theextent to which the methods aresufficiently detailed to allow assessmentof whether the objectives can beachieved for the budget period. Clearlystated evaluation method for evaluatingthe accomplishments and a detailedsecurity plan to safeguard and preventdisclosure of records. The extent towhich a qualified plan is proposed thatwill help achieve the goals stated in theproposal.

E. Facilities and Resources (10%)

The adequacy of the applicant’sfacilities, equipment, and otherresources available for performance ofthis project.

F. Human Subjects (Not Scored)

Whether or not exempt from theDepartment of Health and HumanServices (DHHS) regulations, areprocedures adequate for the protectionof human subjects? Recommendationson the adequacy of protections include:(1) Protections appear adequate, andthere are no comments to make orconcerns to raise, (2) protections appearadequate, but there are commentsregarding the protocol, (3) protectionsappear inadequate and the ObjectiveReview Group has concerns related tohuman subjects, or (4) disapproval ofthe application is recommendedbecause the research risks aresufficiently serious and protectionagainst the risks are inadequate as tomake the entire applicationunacceptable.

G. Budget Justification (Not Scored)

The budget will be evaluated to theextent that it is reasonable, clearlyjustified, and consistent with theintended use of funds.

Executive Order 12372 Review

This program is not subject toExecutive Order 12372 review.

Public Health System ReportingRequirements

This program is not subject to thePublic Health System ReportingRequirements.

Catalog of Federal Domestic AssistanceNumber

The Catalog of Federal DomesticAssistance number for this project is93.283.


Other Requirements

Paperwork Reduction Act

Projects that involve the collection ofinformation from ten or moreindividuals and funded by thiscooperative agreement will be subject toreview and approval by the Office ofManagement and Budget (OMB) underthe Paperwork Reduction Act.

Human Subjects

If the proposed project involvesresearch on human subjects, theapplicant must comply with the DHHSRegulations, 45 CFR part 46, regardingthe protection of human subjects.Assurance must be provided todemonstrate the project will be subjectto initial and continuing review by anappropriate institutional reviewcommittee. The applicant will beresponsible for providing assurance inaccordance with the appropriateguidelines and form provided in theapplication kit.

In addition to other applicablecommittees, Indian Health Service (IHS)institutional review committees alsomust review the project if anycomponent of IHS will be involved orwill support the research. If anyAmerican Indian community isinvolved, its tribal government mustalso approve that portion of the projectapplicable to it.

Women, Racial and Ethnic Minorities

It is the policy of the Centers forDisease Control and Prevention (CDC)and the Agency for Toxic Substancesand Disease Registry (ATSDR) to ensurethat individuals of both sexes and thevarious racial and ethnic groups will beincluded in CDC/ATSDR-supportedresearch projects involving humansubjects, whenever feasible andappropriate. Racial and ethnic groupsare those defined in OMB Directive No.15 and include American Indian,Alaskan Native, Asian, Pacific Islander,Black and Hispanic. Applicants shallensure that women, racial and ethnicminority populations are appropriatelyrepresented in applications for researchinvolving human subjects. Where clearand compelling rationale exist thatinclusion is inappropriate or notfeasible, this situation must beexplained as part of the application.This policy does not apply to researchstudies when the investigator cannotcontrol the race, ethnicity and/or sex ofsubjects. Further guidance to this policyis contained in the Federal Register,Vol. 60, No. 179, pages 47947–47951,and dated Friday, September 15, 1995.

Application Submission and Deadline

A. Preapplication Letter of IntentAlthough not a prerequisite of

application, a non-binding letter ofintent-to-apply is requested frompotential applicants. The letter shouldbe submitted to Victoria F. Sepe, GrantsManagement Specialist, GrantsManagement Branch, CDC at the addresslisted in this section. It should bepostmarked no later than July 11, 1997.The letter should identify the ProgramAnnouncement number 757 and thename of principal investigator. Theletter of intent does not influencereview or funding decisions, but it willenable CDC to plan the review moreefficiently and will ensure that eachapplicant receives timely and relevantinformation prior to applicationsubmission.

B. Application

The original and four copies of theapplication PHS Form 398 (Revised 5/95, OMB Number 0925–0001) must besubmitted to Victoria Sepe, GrantsManagement Specialist, GrantsManagement Branch, Procurement andGrants Office, Centers for DiseaseControl and Prevention (CDC), MailstopE–13, 255 East Paces Ferry Road, NE.,Room 321, Atlanta, GA 30305, on orbefore July 25, 1997.

1. Deadline: Applications will beconsidered as meeting the deadline ifthey are either:

(a) Received on or before the deadlinedate, or

(b) Sent on or before the deadline dateand received in time for submission tothe objective review group. (Theapplicants must request a legibly datedU.S. Postal Service postmark or obtaina legibly dated receipt from acommercial carrier or the U.S. PostalService. Private metered postmarks willnot be acceptable as proof of timelymailing.)

2. Late Applicants: Applications thatdo not meet the criteria in 1.(a) or 1.(b)above are considered late applications.Late applications will not be consideredin the current competition and will bereturned to the applicants.

Where To Obtain AdditionalInformation

To receive additional writteninformation call (404) 332–4561. Youwill be asked to leave your name,address, and telephone number and willneed to refer to NIOSH Announcement757. You will receive a completeprogram description, information onapplication procedures, and applicationforms. CDC will not send applicationkits by facsimile or express mail.

Please refer to AnnouncementNumber 757 when requestinginformation and submitting anapplication.

If you have questions after reviewingthe contents of all the documents,business management technicalassistance may be obtained fromVictoria Sepe, Grants ManagementSpecialist, Grants Management Branch,Procurement and Grants Office, Centersfor Disease Control and Prevention(CDC), Mailstop E–13, Room 321, 255East Paces Ferry Road, NE., Atlanta, GA30305, telephone (404) 842–6804,Internet: [email protected].

Programmatic technical assistancemay be obtained from Lynne E.Pinkerton, M.D., M.P.H., MedicalOfficer, Epidemiology 1 Section,Industrywide Studies Branch, Divisionof Surveillance, Hazard Evaluations,and Field Studies, National Institute forOccupational Safety and Health, Centersfor Disease Control and Prevention(CDC), Mailstop R–15, 4676 ColumbiaParkway, Cincinnati, OH 45226,telephone (513) 841–4344, Internet:[email protected].

Potential applicants may obtain acopy of Healthy People 2000 (FullReport, Stock No. 017–001–00474–0) orHealthy People 2000 (Summary Report,Stock No. 017–001–00473–1) referencedin the Introduction section through theSuperintendent of Documents,Government Printing Office,Washington, DC 20402–9325, telephone(202) 512–1800.

This and other CDC announcementsare available through the CDC homepageon the Internet. The address for the CDChomepage is: http://www.cdc.gov.

Dated: June 4, 1997.Diane D. Porter,Acting Director, National Institute forOccupational Safety and Health, Centers forDisease Control and Prevention (CDC).[FR Doc. 97–15179 Filed 6–10–97; 8:45 am]BILLING CODE 4163–19–P


Centers for Disease Control andPrevention

[Announcement 738]

National Institute for OccupationalSafety and Health; Assessment ofRespiratory Exposure Hazards inComposting

Introduction

The Centers for Disease Control andPrevention (CDC) announces theavailability of fiscal year (FY) 1997


funds for a cooperative agreement toconduct cross-sectional studies atcomposting facilities of respiratoryexposures and respiratory health effectsamong compost workers.

CDC is committed to achieving thehealth promotion and diseaseprevention objectives of Healthy People2000, a national activity to reducemorbidity and mortality and improvethe quality of life. This announcementis related to the priority area ofOccupational Safety and Health. (Forordering a copy of Healthy People 2000,see the section Where to ObtainAdditional Information.)

CDC, National Institute forOccupational Safety and Health(NIOSH) is committed to the programpriorities developed by the NationalOccupational Research Agenda (NORA).(For ordering a copy of the NORA, seethe section WHERE TO OBTAIN ADDITIONALINFORMATION.)

Authority

This program is authorized underSections 20(a) and 22(e)(7) of theOccupational Safety and Health Act of1970 (29 U.S.C. 669(a) and 671(e)(7)).

Smoke-Free Workplace

CDC strongly encourages all grantrecipients to provide a smoke-freeworkplace and to promote the nonuse ofall tobacco products, and Public Law103–227, the Pro-Children Act of 1994,prohibits smoking in certain facilitiesthat receive Federal funds in whicheducation, library, day care, health care,and early childhood developmentservices are provided to children.

Eligible Applicants

Applications may be submitted bypublic and private, non-profit and for-profit organizations and governments,and their agencies. Thus, universities,colleges, research institutions, hospitals,other public and private organizations,State and local health departments ortheir bona fide agents, federallyrecognized Indian tribal governments,Indian tribes or Indian tribalorganizations, and small, minority- and/or women-owned businesses are eligibleto apply.

Note: Public Law 104–65, dated December19, 1995, prohibits an organization describedin section 501(c)(4) of the IRS Code of 1986,that engages in lobbying activities toinfluence the Federal Government, fromreceiving Federal funds.

Availability of Funds

Approximately $200,000 will beavailable in FY 1997 to fund up to twoawards at approximately $100,000 each.It is expected that the awards will begin

on or about September 30, 1997, andwill be made for 12-month budgetperiods within the project period of upto 3 years. The funding estimate issubject to change.

Continuation awards within theproject period will be made on the basisof satisfactory progress and theavailability of funds.

Use of Funds

Restrictions on Lobbying

Applicants should be aware ofrestrictions on the use of HHS funds forlobbying of Federal or State legislativebodies. Under the provisions of 31U.S.C. Section 1352 (which has been ineffect since December 23, 1989),recipients (and their subtier contractors)are prohibited from using appropriatedFederal funds (other than profits from aFederal contract) for lobbying Congressor any Federal agency in connectionwith the award of a particular contract,grant, cooperative agreement, or loan.This includes grants/cooperativeagreements that, in whole or in part,involve conferences for which Federalfunds cannot be used directly orindirectly to encourage participants tolobby or to instruct participants on howto lobby.

In addition, the FY 1997 HHSAppropriations Act, which becameeffective October 1, 1996, expresslyprohibits the use of 1997 appropriatedfunds for indirect or ‘‘grass roots’’lobbying efforts that are designed tosupport or defeat legislation pendingbefore State legislatures. This new law,Section 503 of Pub. L. No. 104–208,provides as follows:

Sec. 503(a) No part of anyappropriation contained in this Actshall be used, other than for normal andrecognized executive-legislativerelationships, for publicity orpropaganda purposes, for thepreparation, distribution, or use of anykit, pamphlet, booklet, publication,radio, television, or video presentationdesigned to support or defeat legislationpending before the Congress, * * *except in presentation to the Congressor any State legislative body itself.

(b) No part of any appropriationcontained in this Act shall be used topay the salary or expenses of any grantor contract recipient, or agent acting forsuch recipient, related to any activitydesigned to influence legislation orappropriations pending before theCongress or any State legislature.

Department of Labor, Health andHuman Services, and Education, andRelated Agencies Appropriations Act,1997, as enacted by the OmnibusConsolidated Appropriations Act, 1997,

Division A, Title I, Section 101(e), Pub.L. No. 104–208 (September 30, 1996).

BackgroundComposting is the decomposition of

organic materials under aerobicconditions which produces a stable,humus-like material which can be usedas a soil amendment. Materialscomposted can include yard waste,food/household waste, food processingwaste, agricultural wastes, biosolids,and animal wastes. The recycling ofbiosolids and the organic fractions ofmunicipal solid waste is increasingbecause of the benefits that can ariseand because the disposal alternativessuch as land filling and incineration aremore costly, unpopular, or restricted bylaw. The consequence of this is adramatic increase in the number ofcomposting operations and the numberof workers exposed to organic dusts atthese facilities. The proceedings from anational composting council workshopindicate that there were approximately2500 composting facilities operating inthe United States during 1992 with alarge expected growth rate (over 45percent) in the number of compostingfacilities during subsequent years. Therapid growth in this industry, combinedwith the potential for worker exposureto organic dusts containing many toxicand immunogenic constituents,indicates the need for studies to addresspotential respiratory health problemsamong workers in this industry. Upperrespiratory tract irritation, organic dusttoxic syndrome (ODTS), asthma,bronchitis, and hypersensitivitypneumonitis are among the respiratoryhealth problems described to occur fromorganic dust exposures such as thoseassociated with composting.

Composting is an emergingtechnology area. Under the NIOSHNational Occupational Research Agenda(NORA), emerging technologiesrepresent a priority area for researchefforts to (1) Assess their potential tocause harm to workers, (2) evaluatespecific worksites, (3) develop effectivecontrol strategies where occupationalhazards exist, (4) identify superior newtechnologies that diminish risk, and (5)share information for the benefit of allpersons at risk and those responsible formanaging the risk.

This project addresses many of theseemerging technology criteria describedin NORA.

PurposeThe purpose of this project is to

conduct research to identify potentialexposure hazards and respiratory healthproblems among workers in thecomposting industry. This information


will be used to promote respiratoryhealth for this workforce and directprevention efforts as appropriate.

The specific objectives for thiscooperative agreement program includethe following: develop a researchprotocol(s) for a cross-sectional study ofrespiratory exposures and respiratoryhealth effects among workers employedat composting facilities; conduct in-depth environmental investigations ofrespiratory exposure hazards at selectedcomposting facilities; conduct in-depthclinical investigations on the respiratoryhealth status of workers at selectedcomposting facilities; and describe thecomposting processes used at eachsurvey site including the controlprocedures used to reduce workerexposures.

Note: Protocols should exclude samplingsites in Department of Health and HumanServices (DHHS) Region VII from the sample(DHHS Region VII includes the followingStates: Iowa, Kansas, Missouri, andNebraska). This exclusion is to avoidduplication with ongoing compostingresearch efforts completed through theNIOSH funded Centers for AgricultureResearch, Education and Disease Injury andPrevention in DHHS Region VII.

Program RequirementsIn conducting activities to achieve the

purpose of this agreement, the recipientwill be responsible for conductingactivities under A. (Recipient Activities)below, and CDC/NIOSH will beresponsible for conducting activitiesunder B. (CDC/NIOSH Activities) below:

A. Recipient Activities1. Develop a research protocol(s) for a

cross-sectional study of respiratoryexposures and respiratory effects amongworkers employed at compostingfacilities. Obtain scientific peer reviewof the protocol(s), revise, and finalizethe protocol(s).

2. Conduct a comprehensiveenvironmental investigation ofrespiratory exposure hazards at selectedcomposting facilities. Personal and areaenvironmental sampling data collectedfrom each of these facilities shouldinclude, at a minimum, particulate nototherwise regulated (formerly known as‘‘total dust’’), metals, endotoxins, viablemicroorganisms, and ammonia.

3. Conduct in-depth clinicalinvestigations on the respiratory healthstatus of workers at selected compostingfacilities. Study design should take intoaccount sources of bias in particular theproblems encountered when limitingthe study to current employees. Clinicalinvestigations should include, at aminimum:

a. The development andadministration of a questionnaire

designed to gather information on workand exposure history and respiratoryhealth effects. The questionnaire shouldbe administered to all members of thisstudy population.

b. The development andimplementation of a pulmonaryfunction testing program appropriate tothe investigation of respiratory healtheffects among compost workers atselected facilities.

4. Clarify the composting processesused at each survey site including thecontrol procedures used to reduceworker exposures.

5. Collaborate with CDC/NIOSHscientists on study research efforts.

6. Report and disseminate, if desired,research results and relevant health andsafety education and traininginformation to appropriate health careproviders, the scientific community,agricultural workers and their families,management and union or other workerrepresentatives, and Federal, State, andlocal agencies. Emphasis should beplaced on the rapid dissemination ofsignificant public health findings andthe translation of research findings intoprevention efforts.

B. CDC/NIOSH Activities1. Provide technical assistance in the

areas of program development andstudy research efforts, implementation,maintenance.

2. Provide technical assistance, ifneeded, related to the development andimplementation of the pulmonaryfunction testing program.

3. Provide technical assistance, ifneeded, related to the collection, reviewand/or analysis of data.

4. Collaborate in the reporting anddissemination of research results andrelevant health and safety education andtraining information.

Technical Reporting RequirementsAn original and two copies of semi-

annual progress reports are required.Timelines for the semi-annual reportswill be established at the time of award.Final financial status and performancereports are required no later than 90days after the end of the project period.All reports are submitted to the GrantsManagement Branch, Procurement andGrants Office, CDC.

Semi-annual progress report shouldinclude:

A. A brief program description.B. A listing of program goals and

objectives accompanied by acomparison of the actualaccomplishments related to the goalsand objectives established for theperiod.

C. If established goals and objectivesto be accomplished were delayed,

describe both the reason for thedeviation and anticipated correctiveaction or deletion of the activity fromthe project.

Application Content

The entire application, includingappendices, should not exceed 40 pagesand the Proposal Narrative sectioncontained therein should not exceed 25pages. Pages should be clearlynumbered and a complete index to theapplication and any appendicesincluded. The original and each copy ofthe application must be submittedunstapled and unbound. All materialsmust be typewritten, double-spaced,with unreduced type (font size 12 point)on 81⁄2’’ by 11’’ paper, with at least 1’’margins, headers, and footers, andprinted on one side only. Do not includeany spiral or bound materials orpamphlets.

The applicant should provide adetailed budget, with accompanyingjustification of all operating expenses,that is consistent with the statedobjectives and planned activities of theproject. CDC may not approve or fundall proposed activities. Applicantsshould be precise about the programpurpose of each budget item. Forcontracts described within theapplication budget, applicants shouldname the contractor, if known;described the services to be performedand provide an itemized breakdown andjustification for the estimated cost of thecontract; the kinds of organizations orparties to be selected; the period ofperformance; and the method ofselection. Place budget narrative pagesshowing, in detail, how funds in eachobject class will be spent, directlybehind form 424A. Do not put thesepages in the body of the application.

The applicant should provide adetailed description of first-yearactivities and briefly describe future-years objectives and activities.

A. Title Page

The heading should include the titleof grant program, project title,organization, name and address, projectdirector’s name address and telephonenumber.

B. Abstract

A one page, singled-spaced, typedabstract must be submitted with theapplication. The heading shouldinclude the title of grant program,project title, organization, name andaddress, project director and telephonenumber. This abstract should include awork plan identifying activities to bedeveloped, specific activities to be


completed, and a time-line forcompletion these activities.

C. Proposal Narrative

The narrative of each applicationmust:

1. Briefly state the applicant’sunderstanding of the need or problem tobe addressed and the purpose of thiscooperative agreement. This shouldinclude a draft protocol for the study.The protocol(s) should include:

(a) A sampling strategy to insure thata representative sample of compostingoperations and technologies areincluded in the study, and

(b) The sampling strategy shouldmaximize the number of study sites andinclude a representative sample basedon geographic considerations.

2. (a) Describe clearly the objectives ofthis project, the steps to be taken inplanning and implementing this project,and the respective responsibilities of theapplicant for carrying out those steps.

(b) Provide a proposed schedule foraccomplishing each of the activities tobe carried out in this project and amethod of evaluating theaccomplishments.

3. Provide documentation of access topotential study sites with the samplecharacteristics specified, and providedocumentation of management andlabor representatives to participate inthe intervention study.

4. Document the applicant’s expertisein the area of exposure and healthassessment as they pertain tooccupational safety and health.

5. Provide the name, qualifications,and proposed time allocation of theProject Director who will be responsiblefor administering the project. Describestaff, experience, facilities, equipmentavailable for performance of this project,and other resources that define theapplicant’s capacity or potential toaccomplish the requirements statedabove. List the names (if known),qualifications, and time allocations ofthe existing professional staff to beassigned to (or recruited for) thisproject, the support staff available forperformance of this project, and theavailable facilities including space.

6. Human Subjects: State whether ornot Humans are subjects in thisproposal. (See Human Subjects in theEvaluation Criteria and OtherRequirements sections.)

7. Inclusion of women, ethnic, andracial groups:

Describe how the CDC policyrequirements will be met regarding theinclusion of women, ethnic, and racialgroups in the proposed research. (SeeWomen, Racial and Ethnic Minorities in

the Evaluation Criteria and OtherRequirements sections.)

8. Provide a detailed budget whichindicates: (a) anticipated costs forpersonnel, travel, communications,postage, equipment, supplies, etc., and(b) all sources of funds to meet thoseneeds.

Evaluation Criteria

Applications will be reviewed andevaluated according to the followingcriteria:

A. Background and Need (20%)

Responsiveness to the purpose of thisproject, including the applicant’sunderstanding of the objectives of theproposed cooperative agreement and therelevance of the proposal to theobjectives.

B. Goals, Objectives and Methods (25%)

1. The extent to which the proposedgoals and objectives are clearly stated,time-phased, and measurable. Theextent to which the methods aresufficiently detailed to allow assessmentof whether the objectives can beachieved for the budget period. Theextent to which a qualified plan isproposed that will help achieve thegoals stated in the proposal.

2. The degree to which the applicanthas met the CDC policy requirementsregarding the inclusion of women,ethnic, and racial groups in theproposed project. This includes: (a) Theproposed plan for the inclusion of bothsexes and racial and ethnic minoritypopulations for appropriaterepresentation; (b) The proposedjustification when representation islimited or absent; (c) A statement as towhether the design of the study isadequate to measure differences whenwarranted; and (d) A statement as towhether the plan for recruitment andoutreach for study participants includethe process of establishing partnershipswith community(ies) and recognition ofmutual benefits.

C. Strength of Programs (20%)

Strength of the applicant’senvironmental and clinical researchprograms including a demonstratedability in the conduct of occupationalhealth studies involving organic dusts,gases, and respiratory healthassessment.

D. Project Management and StaffingPlan (20%)

Training and experience,qualifications, and time commitment ofthe project director, staff, andorganization. This includes a Projectdirector who is a distinguished scientist

and technical expert and staff with thenecessary training and experiencesufficient to accomplish proposedproject.

E. Experience/Expertise (10%)

Applicant’s knowledge/understandingand experience in the compostingindustry.

F. Facilities and Resources (5%)

Efficiency of resources and novelty ofprogram. This includes the efficient useof existing and proposed personnel withassurances of a major time commitmentof the Project Director to the programand the novelty of program approach.

G. Human Subjects (Not Scored)

Whether or not exempt from theDHHS regulations, are proceduresadequate for protection of humansubjects? Recommendations on theadequacy of protections include: (1)Protections appear adequate, and thereare no comments to make or concerns toraise, (2) protections appear adequate,but there are comments regarding theprotocol, (3) protections appearinadequate and the Objective ReviewGroup has concerns related to humansubjects, or (4) disapproval of theapplication is recommended becausethe research risks are sufficientlyserious and protection against the risksare inadequate as to make the entireapplication unacceptable.

H. Budget Justification (Not Scored)

The budget will be evaluated to theextent that it is reasonable, clearlyjustified, and consistent with theintended use of funds.

Executive Order 12372 Review

Applications are subject toIntergovernmental Review of FederalPrograms as governed by ExecutiveOrder (E.O.) 12372. E.O. 12372 sets upa system for State and local governmentreview of proposed Federal assistanceapplications. Applicants (other thanfederally recognized Indian tribalgovernments) should contact their StateSingle Point of Contact (SPOC) as earlyas possible to alert them to theprospective applications and receiveany necessary instructions on the Stateprocess. For proposed projects servingmore than one State, the applicant isadvised to contact the SPOC for eachaffected State. A current list of SPOCsis included in the application kit.

If SPOCs have any State processrecommendations on applicationssubmitted to CDC, they should be sentto Victoria Sepe, Grants ManagementSpecialist, Grants Management Branch,Procurement and Grants Office, Centers


for Disease Control and Prevention(CDC), 255 East Paces Ferry Road, NE.,Room 321, Atlanta, GA 30305, no laterthan September 1, 1997. The ProgramAnnouncement Number 738 andProgram Title should be referenced onthe document. The granting agency doesnot guarantee to ‘‘accommodate orexplain’’ State processrecommendations it receives after thatdate.

Indian tribes are strongly encouragedto request tribal government review ofthe proposed application. If tribalgovernments have any tribal processrecommendations on applicationssubmitted to CDC, they should forwardthem to: Victoria Sepe, GrantsManagement Specialist, GrantsManagement Branch, Centers forDisease Control and Prevention, 255East Paces Ferry Road, NE., Room 321,Mailstop E–13, Atlanta, GA 30305. Thisshould be done no later than September1, 1997. The granting agency does notguarantee to ‘‘accommodate or explain’’for tribal process recommendations itreceives after that date.

Public Health System ReportingRequirements

This program is not subject to thePublic Health System ReportingRequirements.

Catalog of Federal Domestic AssistanceNumber

The Catalog of Federal DomesticAssistance Number for this program is93.262.

Other Requirements

Paperwork Reduction ActProjects funded through the

cooperative agreement mechanism ofthis program involving the collection ofinformation from 10 or more individualswill be subject to review and approvalby the Office of Management andBudget (OMB) under the PaperworkReduction Act.

Human SubjectsIf the proposed project involves

research on human subjects, theapplicant must comply with the DHHSRegulations, 45 CFR Part 46, regardingthe protection of human subjects.Assurance must be provided todemonstrate the project will be subjectto initial and continuing review by anappropriate institutional reviewcommittee. The applicant will beresponsible for providing assurance inaccordance with the appropriateguidelines and form provided in theapplication kit.

In addition to other applicablecommittees, Indian Health Service (IHS)

institutional review committees alsomust review the project if anycomponent of IHS will be involved orwill support the research. If anyAmerican Indian community isinvolved, its tribal government mustalso approve that portion of the projectapplicable to it.

Women and Minority Inclusion Policy

It is the policy of the Centers ofDisease Control and Prevention (CDC) toensure that women and racial andethnic groups will be included in CDCsupported research projects involvinghuman subjects, whenever feasible andappropriate. Racial and ethnic groupsare those defined in OMB Directive No.15 and include American Indian,Alaskan Native, Asian, Pacific Islander,Black and Hispanic. Applicants shallensure that women, racial and ethnicminority population are appropriatelyrepresented for research involvinghuman subjects. Where clear andcompelling rationale exist that inclusionis inappropriate or not feasible, thissituation must be explained as part ofthe application. In conducting thereview of applications for scientificmerit, review groups will evaluateproposed plans for inclusion ofminorities and both sexes as part of thescientific assessment and assignedscore. This policy does not apply toresearch studies when the investigatorcannot control the race, ethnicity and/or sex of subjects. Further guidance onthis policy is contained in the FederalRegister, Vol. 60, No. 179, Friday,September 15, 1995, pages 47947–47951.

Application Submission and Deadline

A. Preapplication Letter of Intent

Although not a prerequisite ofapplication, a non-binding letter ofintent-to-apply is requested frompotential applicants. The letter shouldbe submitted to Victoria Sepe, GrantsManagement Specialist, GrantsManagement Branch, Procurement andGrants Office, CDC at the address listedin this section. It should be postmarkedno later than July 1, 1997. The lettershould identify Program Announcement738 and name of the principalinvestigator. The letter of intent doesnot influence review or fundingdecisions, but it will enable CDC to planthe review more efficiently and willensure that each applicant receivestimely and relevant information prior toapplication submission.

B. Application

The original and two copies of theapplication PHS Form 5161–1 (Revised

7/92, OMB Number 0937–0189) must besubmitted to Victoria Sepe, GrantsManagement Specialist, GrantsManagement Branch, Procurement andGrants Office, Centers for DiseaseControl and Prevention (CDC), 255 EastPaces Ferry Road, NE., Room 321,Atlanta, GA 30305, on or before July 18,1997.

1. Deadline: Applications will beconsidered as meeting the deadline ifthey are either:

(a) Received on or before the deadlinedate, or

(b) Sent on or before the deadline dateand received in time for submission tothe objective review group. (Theapplicants must request a legibly datedU.S. Postal Service postmark or obtaina receipt from a commercial carrier orthe U.S. Postal Service. Private meteredpostmarks will not be acceptable asproof of timely mailing.)

2. Late Applicants: Applications thatdo not meet the criteria in 1.(a) or 1.(b)above are considered late applications.Late applications will not be consideredand will be returned to the applicants.

Where to Obtain AdditionalInformation

To receive additional writteninformation call (404) 332–4561. Youwill be asked to leave your name,address, and telephone number and willneed to refer to NIOSH Announcement738. You will receive a completeprogram description, information onapplication procedures, and applicationforms. CDC will not send applicationkits by facsimile or express mail. Pleaserefer to NIOSH Announcement Number738 when requesting information andsubmitting an application.

If you have questions after reviewingthe contents of all the documents,business management technicalassistance may be obtained fromVictoria Sepe, Grants ManagementSpecialist, Grants Management Branch,Procurement and Grants Office, Centersfor Disease Control and Prevention(CDC), Mailstop E–13, Room 321, 255East Paces Ferry Road, NE., Atlanta, GA30305, telephone (404) 842–6804,Internet: [email protected].

Programmatic technical assistancemay be obtained from Patrick Hintz,M.S., Division of Respiratory DiseaseStudies, National Institute forOccupational Safety and Health, Centersfor Disease Control and Prevention(CDC), Mailstop P04/111, 1095Willowdale Road, Morgantown, WV26505–2888, telephone (304) 285–5744,Internet: [email protected].

This and other CDC announcementsare available through the CDC homepage


on the Internet. The address for the CDChomepage is: http://www.cdc.gov.

Potential applicants may obtain acopy of Healthy People 2000 (FullReport, Stock No. 017–001–00474–0) orHealthy People 2000 (Summary Report,Stock No. 017–001–00473–1) referencedin the Introduction section through theSuperintendent of Documents,Government Printing Office,Washington, DC 20402–9325, telephone(202) 512–1800.

The National Occupational ResearchAgenda: copies of this publication maybe obtained from the National Institutefor Occupational Safety and Health,Publications Office, 4676 ColumbiaParkway, Cincinnati, OH 45226–1998 ortelephone 1–800–356–4674, and isavailable through the NIOSH HomePage; http://www.cdc.gov/niosh/nora.html.

NORA Priority Research Areas

Disease and Injury

Allergic and Irritant DermatitisAsthma and Chronic Obstructive

Pulmonary DiseaseFertility and Pregnancy AbnormalitiesHearing LossInfectious DiseasesLow Back DisordersMusculoskeletal Disorders of the Upper

ExtremitiesTraumatic Injuries

Work Environment and Workforce

Emerging TechnologiesIndoor EnvironmentMixed ExposuresOrganization of WorkSpecial Populations at Risk

Research Tools and Approaches

Cancer Research MethodsControl Technology and Personal

Protective EquipmentExposure Assessment MethodsHealth Services ResearchIntervention Effectiveness ResearchRisk Assessment MethodsSocial and Economic Consequences of

Workplace Illness and InjurySurveillance Research Methods


Diane D. Porter,Acting Director, National Institute forOccupational Safety and Health, Centers forDisease Control and Prevention (CDC).[FR Doc. 97–15180 Filed 6–10–97; 8:45 am]





Agency Information CollectionActivities: Proposed Collection;Comment Request; Extension

AGENCY: Food and Drug Administration,HHS.ACTION: Notice.

SUMMARY: The Food and DrugAdministration (FDA) is announcing anopportunity for public comment on theproposed collection of certaininformation by the agency. Under thePaperwork Reduction Act of 1995 (thePRA), Federal agencies are required topublish notice in the Federal Registerconcerning each proposed collection ofinformation, including each proposedextension of an existing collection ofinformation, and to allow 60 days forpublic comment in response to thenotice. This notice solicits comments onthe electronic collection of data by FDAregarding FDA-regulated products offoreign origin that are being offered forimport into the United States.DATES: Submit written comments on thecollection of information by August 11,1997.ADDRESSES: Submit written commentson the collection of information to theDockets Management Branch (HFA–305), Food and Drug Administration,12420 Parklawn Dr., rm. 1–23,Rockville, MD 20857. All commentsshould be identified with the docketnumber found in brackets in theheading of this document.FOR FURTHER INFORMATION CONTACT:Margaret R. Wolff, Office of InformationResources Management (HFA–250),Food and Drug Administration, 5600Fishers Lane, rm. 16B–19, Rockville,MD 20857, 301–827–1223.SUPPLEMENTARY INFORMATION: Under thePRA (44 U.S.C. 3501–3520), Federalagencies must obtain approval from theOffice of Management and Budget(OMB) for each collection ofinformation they conduct or sponsor.‘‘Collection of information’’ is definedin 44 U.S.C. 3502(3) and 5 CFR1320.3(c) and includes agency requestsor requirements that members of thepublic submit reports, keep records, orprovide information to a third party.Section 3506(c)(2)(A) of the PRA (44U.S.C. 3506(c)(2)(A)) requires Federalagencies to provide a 60-day notice inthe Federal Register concerning eachproposed collection of information,including each proposed extension of an

existing collection of information,before submitting the collection to OMBfor approval. To comply with thisrequirement, FDA is publishing noticeof the proposed collection ofinformation listed below.

With respect to the followingcollection of information, FDA invitescomments on: (1) Whether the proposedcollection of information is necessaryfor the proper performance of FDA’sfunctions, including whether theinformation will have practical utility;(2) the accuracy of FDA’s estimate of theburden of the proposed collection ofinformation, including the validity ofthe methodology and assumptions used;(3) ways to enhance the quality, utility,and clarity of the information to becollected; and (4) ways to minimize theburden of the collection of informationon respondents, including through theuse of automated collection techniques,when appropriate, and other forms ofinformation technology.

Importer’s Entry Notice—(OMB ControlNumber 0910–0046)—Extension

Section 801 of the Federal Food, Drug,and Cosmetic Act (the act) (21 U.S.C.381) charges FDA with the followingresponsibilities: (1) Assuring thatforeign-origin FDA-regulated foods,drugs, cosmetics, medical devices, andradiological health products offered forimport into the United States meet thesame requirements of the act as dodomestic products; and (2) preventingshipments from entering the country ifthey are not in compliance.

The information collected by FDAconsists of the following: (1) Productcode, an alpha-numeric series ofcharacters that identifies each productFDA regulates; (2) FDA country oforigin, the country where the FDA-registered or FDA-responsible firm islocated; (3) FDA manufacturer, the partywho manufactured, grew, assembled, orotherwise processed the goods (if morethan one, the last party whosubstantially transformed the product);(4) shipper, the party responsible forpacking, consolidating, or arranging theshipment of the goods to their finaldestination; (5) quantity and value ofthe shipment; and (6) if appropriate,affirmation of compliance, a code thatconveys specific FDA information, suchas registration number, foreigngovernment certification, etc. Thisinformation is collected electronicallyby the entry filer via the U.S. CustomsService’s Automated CommercialSystem at the same time he/she files anentry for import with the U.S. CustomsService. FDA uses the information tomake admissibility decisions about


FDA-regulated products offered forimport into the United States.

FDA estimates the burden of thiscollection of information as follows:

ESTIMATED ANNUAL REPORTING BURDEN

No. of Respondents Annual Frequencyper Response

Total AnnualResponses Hours per Response Total Hours

2,505 1,212.54 3,037,426 0.07 h 229,693

There are no capital costs or operating and maintenance costs associated with this collection.

The source of the estimate for thenumber of respondents is the number ofimporters who submitted entry data forforeign-origin FDA-regulated productsin 1996. The estimated reporting burdenis based on information obtained bycontacting several past respondents.

Dated: June 3, 1997.William K. Hubbard,Associate Commissioner for PolicyCoordination.[FR Doc. 97–15168 Filed 6-10-97; 8:45 am]BILLING CODE 4160–01–F



[Docket No. 97G–0219]

Beatrice Foods, Inc.; Withdrawal ofGRAS Affirmation Petition


SUMMARY: The Food and DrugAdministration (FDA) is announcing thewithdrawal, without prejudice to afuture filing, of a petition (GRASP5G0047) proposing that the use ofmagnesium caseinate for use as aningredient for making cheese alternateproducts which can be blended withnatural cheese or used alone as a totalsubstitute for cheese be affirmed asgenerally recognized as safe (GRAS).FOR FURTHER INFORMATION CONTACT:Rudolph Harris, Center for Food Safetyand Applied Nutrition (HFS–206),Foodand Drug Administration, 200 C St. SW.,Washington, DC 20204, 202–418–3090.SUPPLEMENTARY INFORMATION: In a noticepublished in the Federal Register ofFebruary 4, 1975 (40 FR 5180), FDAannounced that a petition (GRASP5G0047) had been filed by BeatriceFoods Co., Inc., 1526 South State St.,Chicago, IL 60605. This petitionproposed that the use of magnesiumcaseinate for use as an ingredient formaking cheese alternate products whichcan be blended with natural cheese orused alone as a total substitute forcheese is GRAS.

Beatrice Foods Co., Inc., of Chicago,the submitter of the original GRASaffirmation petition no longer exists.Beatrice Cheese Inc., 770 NorthSpringdale Rd., Waukesha, WI, 53180,which was formerly part of BeatriceFoods Co., Inc., indicated that theproposed use had been abandoned andacknowledged that the agency shouldclose the petition file and withdraw thepetition. Therefore, the agency isannouncing that it considers thispetition to be withdrawn, withoutprejudice to a future filing, inaccordance with 21 CFR 171.7.

Dated: May 12, 1997.Alan M. Rulis,Director, Office of Premarket Approval,Center for Food Safety and Applied Nutrition.[FR Doc. 97–15313 Filed 6–10–97; 8:45 am]BILLING CODE 4160–01–F



[Docket No. 97M–0186]

Millenium Medical Supply, Inc.;Premarket Approval of Needle-EaseTM

2501


SUMMARY: The Food and DrugAdministration (FDA) is announcing itsapproval of the application submittedby Louise N. Howe of the law firmHALE and DORR, as the U.S.Representative on behalf of MilleniumMedical Supply, Inc., Ontario, Canada,for premarket approval, under theFederal Food, Drug, and Cosmetic Act(the act), of Needle-EaseTM 2501. FDA’sCenter for Devices and RadiologicalHealth (CDRH) notified the applicant,by letter of March 6, 1997, of theapproval of the application.DATES: Petitions for administrativereview by July 11, 1997.ADDRESSES: Written requests for copiesof the summary of safety andeffectiveness data and petitions foradministrative review to the Dockets

Management Branch (HFA–305), Foodand Drug Administration, 12420Parklawn Dr., rm. 1–23, Rockville, MD20857.FOR FURTHER INFORMATION CONTACT:Chiu S. Lin, Center for Devices andRadiological Health (HFZ–480), Foodand Drug Administration, 9200Corporate Blvd., Rockville, MD 20850,301–443–8913.SUPPLEMENTARY INFORMATION: OnDecember 6, 1996, Louise N. Howe ofthe law firm HALE and DORR, as theU.S. Representative on behalf ofMillenium Medical Supply, Inc.,Ontario, Canada, N3T 5M1, submitted toCDRH an application for premarketapproval of Needle-EaseTM 2501. Thisdevice is a sharps needle destructiondevice that is intended for home use bydiabetics to reduce the incidence ofneedlesticks by the incineration of 28–30 gauge needles, 29 and 30 gaugediabetic ‘‘pen tips,’’ and 23–26 gaugediabetic lancets.

In accordance with the provisions ofsection 515(c)(2) of the act (21 U.S.C.360e(c)(2)) as amended by the SafeMedical Devices Act of 1990, thispremarket approval application (PMA)was not referred to the General Hospitaland Personal Use Devices Panel of theMedical Devices Advisory Committee,an FDA advisory committee, for reviewand recommendation because theinformation in the PMA substantiallyduplicates information previouslyreviewed by this panel. On March 6,1997, CDRH approved the applicationby a letter to the applicant from theDirector of the Office of DeviceEvaluation, CDRH.

A summary of the safety andeffectiveness data on which CDRHbased its approval is on file in theDockets Management Branch (addressabove) and is available from that officeupon written request. Requests shouldbe identified with the name of thedevice and the docket number found inbrackets in the heading of thisdocument.

Opportunity For AdministrativeReview

Section 515(d)(3) of the act authorizesany interested person to petition, under


section 515(g) of the act, foradministrative review of CDRH’sdecision to approve this application. Apetitioner may request either a formalhearing under part 12 (21 CFR part 12)of FDA’s administrative practices andprocedures regulations or a review ofthe application and CDRH’s action by anindependent advisory committee ofexperts. A petition is to be in the formof a petition for reconsideration under(21 CFR 10.33(b)). A petitioner shallidentify the form of review requested(hearing or independent advisorycommittee) and shall submit with thepetition supporting data andinformation showing that there is agenuine and substantial issue ofmaterial fact for resolution throughadministrative review. After reviewingthe petition, FDA will decide whether togrant or deny the petition and willpublish a notice of its decision in theFederal Register. If FDA grants thepetition, the notice will state the issueto be reviewed, the form of the reviewto be used, the persons who mayparticipate in the review, the time andplace where the review will occur, andother details.

Petitioners may, at any time on orbefore July 11, 1997, file with theDockets Management Branch (addressabove) two copies of each petition andsupporting data and information,identified with the name of the deviceand the docket number found inbrackets in the heading of thisdocument. Received petitions may beseen in the office above between 9 a.m.and 4 p.m., Monday through Friday.

This notice is issued under theFederal Food, Drug, and Cosmetic Act(secs. 515(d), 520(h) (21 U.S.C. 360e(d),360j(h))) and under authority delegatedto the Commissioner of Food and Drugs(21 CFR 5.10) and redelegated to theDirector, Center for Devices andRadiological Health (21 CFR 5.53).

Dated: April 22, 1997.Joseph A. Levitt,Deputy Director for Regulations Policy, Centerfor Devices and Radiological Health.[FR Doc. 97–15167 Filed 6–10–97; 8:45 am]BILLING CODE 4160–01–F



Product, Establishment, and BiologicsLicense Applications, Refusal to File;Meeting of Oversight Committee

AGENCY: Food and Drug Administration,HHS.

ACTION: Notice.

SUMMARY: The Food and DrugAdministration (FDA) is announcing theremaining 1997 meetings of its standingoversight committee in the Center forBiologics Evaluation and Research(CBER) that conducts a periodic reviewof CBER’s use of its refusal to file (RTF)practices on product licenseapplications (PLA’s), establishmentlicense applications (ELA’s), andbiologics license applications (BLA’s).CBER’s RTF oversight committeeexamines all RTF decisions whichoccurred during the previous quarter toassess consistency across CBER officesand divisions in RTF decisions.DATES: The next meetings will be heldon July 8, 1997, and October 14, 1997.FOR FURTHER INFORMATION CONTACT: JoyA. Cavagnaro, Center for BiologicsEvaluation and Research (HFM–5), Foodand Drug Administration, 1401Rockville Pike, Rockville, MD 20852–1448, 301–827–0379.SUPPLEMENTARY INFORMATION: In theFederal Register of May 15, 1995 (60 FR25920), FDA announced theestablishment and first meeting ofCBER’s standing oversight committee.As explained in the notice, theimportance to the public health ofgetting new biological products on themarket as efficiently as possible hasmade improving the biological productevaluation process an FDA priority.CBER’s managed review process focuseson specific milestones or intermediategoals to ensure that a quality review isconducted within a specified timeperiod. CBER’s RTF oversightcommittee continues CBER’s effort topromote the timely, efficient, andconsistent review of PLA’s, ELA’s, andBLA’s.

FDA regulations on filing PLA’s,ELA’s, and BLA’s are found in 21 CFR601.2 and 601.3. A sponsor whoreceives an RTF notification mayrequest an informal conference withCBER, and thereafter may ask that theapplication be filed over protest, similarto the procedure for drugs describedunder 21 CFR 314.101(a)(3).

CBER’s standing RTF oversightcommittee consists of senior CBERofficials, a senior official from FDA’sCenter for Drug Evaluation andResearch, and FDA’s Chief Mediator andOmbudsman. Meetings will ordinarilybe held once a quarter to review all ofthe RTF decisions. The purpose of sucha review is to assess the consistencywithin CBER in rendering RTFdecisions. If there are no RTF decisionsto review, however, the meeting may becancelled. FDA intends to post any

meeting cancellation on the CBER homepage at http://www.fda.gov/cber/confmeet.htm. Publication of anymeeting cancellation will be made onlyas time permits.

Because the committee’s deliberationswill deal with confidential commercialinformation, all meetings will be closedto the public. The committee’sdeliberations will be reported in theminutes of the meeting. Although thoseminutes will not be publicly availablebecause they will contain confidentialcommercial information, summaries ofthe committee’s deliberations, with allsuch confidential commercialinformation omitted, may be requestedin writing from the Freedom ofInformation Office (HFI–35), Food andDrug Administration, 5600 FishersLane, rm. 12A–16, Rockville, MD 20857,approximately 15 working days after themeeting, at a cost of 10 cents per page.If, following the committee’s review, anRTF decision changes, the appropriatedivision within CBER will notify thesponsor.

Dated: June 4, 1997.William K. Hubbard,Associate Commissioner for PolicyCoordination.[FR Doc. 97–15165 Filed 6–10–97; 8:45 am]BILLING CODE 4160–01–F


Health Resources and ServicesAdministration

Agency Information CollectionActivities: Proposed Collection:Comment Request

In compliance with the requirementfor opportunity for public comment onproposed data collection projects(section 3506(c)(2)(A) of Title 35, UnitedStates Code, as amended by thePaperwork Reduction Act of 1995,Public Law 104–13), the HealthResources and Services Administration(HRSA) will publish periodicsummaries of proposed projects beingdeveloped for submission to OMB underthe Paperwork Reduction Act of 1995.To request more information on theproposed project or to obtain a copy ofthe data collection plans, call the HRSAReports Clearance Officer on (301) 443–1129.

Comments are invited on: (a) Whetherthe proposed collection of informationis necessary for the proper performanceof the functions of the agency, includingwhether the information shall havepractical utility; (b) the accuracy of theagency’s estimate of the burden of the


proposed collection of information; (c)ways to enhance the quality, utility, andclarity of the information to becollected; and (d) ways to minimize theburden of the collection of informationon respondents, including through theuse of automated collection techniquesor other forms of informationtechnology.

Proposed Project: The Health EducationAssistance Loan (HEAL) ProgramRegulations—42 CFR part 60—0915–0108—Extension, No Change

This clearance request is for extensionof approval for the notification,reporting and recordkeepingrequirements in the HEAL program toinsure that the lenders, holders andschools participating in the HEALprogram follow sound managementprocedures in the administration offederally-insured student loans. Whilethe regulatory requirements areapproved under this OMB number,much of the burden associated with theregulations is cleared under the OMBnumbers for the HEAL forms used toreport required information (listedbelow). The table listed at the end ofthis notice contains the estimate ofburden for the remaining regulations.

Annual Response Burden for thefollowing regulations is cleared by OMBwhen the reporting forms are cleared:

OMB Approval No. 0915–0034, Lender’sApplication, Borrower Status, Manifest,Loan Transfer, Contract for LoanInsurance:

Reporting42 CFR 60.7(c)(3), Employer

certification of nonstudent status42 CFR 60.31(a), Lender annual

application42 CFR 60.38(a), Loan reassignment

Notification42 CFR 60.12(c)(1), Borrower

deferment

OMB Approval No. 0915–0036, Lender’sApplication for Insurance Claim:

Reporting42 CFR 60.35(a)(2), Lender skip-

tracing activities42 CFR 60.40(a), Lender

documentation to litigate a default42 CFR 60.40(c)(1) (i), (ii), and (iii),

Lender default claim42 CFR 60.40(c)(2), Lender death

claim42 CFR 60.40(c)(3), Lender disability

claim42 CFR 60.40(c)(4), Lender report of

student bankruptcy

OMB Approval No. 0915–0038, StudentApplication

Reporting42 CFR 60.7(a)(1)(ii), Student

application

42 CFR 60.7(a)(3), School section ofthe application

42 CFR 60.51(a), School section of theapplication

Notification42 CFR 60.7(a)(2), Federal debt

collection policies—student42 CFR 60.33(c), Creditworthiness of

applicant

OMB Approval No. 0915–0043,Promissory Note, Repayment Schedule,Call Report

Notification42 CFR 60.7(c)(2) Federal debt

collection policies—nonstudent42 CFR 60.11(e), Establishment of

repayment terms—borrower42 CFR 60.11(f)(5), Borrower notice of

supplemental repayment agreement42 CFR 60.33(e), Executed note to

borrower42 CFR 60.34(b)(1), Establishment of

repayment terms—lender

OMB Approval No. 0915–0204,Physician’s Certification of Permanentand Total Disability

Reporting42 CFR 60.39(b)(2), Holder request to

Secretary to determine borrowerdisability

The estimate of burden for theregulatory requirements of thisclearance are as follows:

TABLE OF REGULATORY SECTIONS AND RESPONDENT BURDEN

Type of burden Transactionsper year

Estimated time pertransaction

Annual re-sponse burden

(hours)

REPORTINGSubpart D: Lender—32 Participating Lenders

60.32(b) Application for Loan ............................................................................... 10 0.00 .................................... 060.40(c)(1)(iv) Bankruptcy Report to the Secretary ............................................. 140 12 min. ............................... 2860.42(d) Audit ....................................................................................................... 32 240 min. (4 hrs.) ................. 12860.42(e) Evidence of Fraud .................................................................................. 3 120 min. (2 hrs.) ................. 660.43(b) Evidence of Cause for Administrative Hearing ...................................... 2 180 min. (3 hrs.) ................. 6

Subtotal ............................................................................................................ 177 ............................................ 168

Subpart E: School—190 Participating Schools

60.56(c) Biennial Audit .......................................................................................... 190 240 min. (4 hrs.) ................. 76060.60(b) Evidence of Cause for Administrative Hearing ...................................... 3 180 min. (3 hrs.) ................. 960.61(b) Evidence of Fraud .................................................................................. 0.00 0.00 .................................... 0.0060.61(d) Bankruptcy Documentation .................................................................... 140 10 min. ............................... 23

Subtotal ............................................................................................................ 333 ............................................ 792

Total Reporting ......................................................................................... ........................ ............................................ 960NOTIFICATION

Subpart B: Borrower—20,640 Borrowers

60.0(a)(5) Sale or Transfer of Loan ...................................................................... Burden included in 60.38a60.8(b)(3) Status change ...................................................................................... 20,500 10 min. ............................... 3,41760.61(d)* Bankruptcy ............................................................................................ 140 10 min. ............................... 23

Subtotal ............................................................................................................ 20,640 ............................................ 3,440


TABLE OF REGULATORY SECTIONS AND RESPONDENT BURDEN—Continued




(hours)

Subpart C: Loan/Lender—32 Participating Lenders

60.18 Loan Consolidation ..................................................................................... 5,000 40 min. ............................... 3,33360.21(b)(2) Refund Check Transfer ...................................................................... 1,000 30 min. ............................... 50060.21(b)(2) Refund Check Notification ................................................................. 1,000 15 min. ............................... 250

Subpart D: Lender—32 Participating Lenders

60.33(g) Denial of Loan ........................................................................................ 133 14 min. ............................... 3160.33(h) Borrower Indebtedness .......................................................................... 15,227 1 min. ................................. 25460.34(c) Biannual Debt Status .............................................................................. 250,000 10 min. ............................... 41,66760.35(a)(1) Delinquent Payment Notice to Borrower ........................................... 9,500 30 min. ............................... 4,75060.35(c)(2) Delinquent Notice to Credit Reporting Agency .................................. 1,300 15 min. ............................... 32560.35(e) Demand Letter ........................................................................................ 1,300 10 min. ............................... 21760.37(a) Right to Forbearance ............................................................................. 2,400 5 min. ................................. 20060.37(c)(3) Reminder of obligation to pay ............................................................ 1,200 10 min. ............................... 20060.38(a) Notification to Borrower of Loan Reassignment .................................... 7,500 5 min. ................................. 62560.40(c)(1)(iv) and (c)(4) Default Notification to Courts ....................................... 140 25 min. ............................... 58

Subtotal ............................................................................................................ 295,700 ............................................ 51,915


60.53 Change in Student Status .......................................................................... Burden included with 60.61(a)(7)60.54 Notice of Refund Payment ......................................................................... 190 25 min. ............................... 7960.57 Borrower Identifying Information ................................................................. 1,240 8 min. ................................. 16560.61(a)(1) Entrance Interview ............................................................................. 6,818 35 min. ............................... 3,97760.61(a)(2) Exit Interview ...................................................................................... 6,818 50 min. ............................... 5,68260.61(a)(2) Student Departure Notification to Lender .......................................... 190 35 min. ............................... 11160.61(a)(3) Unresolved Discrepancies to Lender ................................................. 204 12 min. ............................... 4160.61(a)(7) Change in Student Address to Lender .............................................. 10,227 10 min. ............................... 1,705

Subtotal ............................................................................................................ 25,687 ............................................ 11,760Total Notification ....................................................................................... ........................ ............................................ 67,115

RECORDKEEPINGSubpart B: Borrower

60.7(a)(2) Student Signed Stmt.-Gov. Debt Collection Procedures ..................... Burden included in 60.34(b)(2) and 60.61(a)(1)&(2)60.7(c)(2) Non-Student signed Stmt.-Gov. Debt Collection ................................. 0.00 ............................................ 0.00

Subpart D: Lender—32 Participating Lenders

60.31(c) Procedures for Servicing & Collecting Loans ........................................ 32 240 min. (4 hrs.) ................. 12860.33(e) Promissory Note ..................................................................................... Burden included in 60.42(a)(2)60.34(b)(2) Terms of Repayment Schedules ....................................................... 15,227 5 min. ................................. 1,26960.35(a)(1) Attempts to Collect Delinquent Payment ........................................... 10,000 5 min. ................................. 83360.35(a)(2) Documentation of Skip-tracing ........................................................... 2,500 10 min. ............................... 41760.37(a)(1) Documentation of Borrower’s Inability to Pay ................................... 2,500 15 min. ............................... 62560.37(c) Renewals of Forbearance ...................................................................... 1,200 10 min. ............................... 20060.37(c)(1) Basis for Belief of Borrower Itent to Default ...................................... 300 10 min. ............................... 5060.40(a) Documentation of Insurance Claims ...................................................... 978 70 min. ............................... 1,14160.42(a)(1) Loan Records ..................................................................................... Burden included in 60.42(a)(2)60.42(a)(2) Borrower’s Payment History .............................................................. 133,500 15 min. ............................... 33,375

Subtotal ............................................................................................................ 166,237 ............................................ 38,038


60.51(f)(1) Documentation of Needs Analysis Adjustment .................................. Burden included in 60.61(a)(5)60.51(f)(2) Documentation of Standard Student Budget Adjustments ................. Burden included in 60.61(a)(5)60.56(a) Required Retention of HEAL Borrower Records ................................... Burden included in 60.61(a)(5)60.56(b) Five year Retention of Student Records ................................................ Burden included in 60.61(a)(5)60.57 Retention of Reports to the Secretary ........................................................ 190 45 min. ............................... 14360.61(a)(1) Entrance Interview ............................................................................. 6,8185 min. 568.60.61(a)(2) Exit Interview ...................................................................................... 6,818 5 min. ................................. 56860.61(a)(4) HEAL Check Receipt ......................................................................... 190 300 min. (5 hrs.) ................. 95060.61((a)(5) Complete Records of HEAL Borrowers ............................................ 133,500 15 min. ............................... 33,37560.61(a)(6) Criteria for Student Budgets .............................................................. 10,227 2 min. ................................. 341

Subtotal ............................................................................................................ 154,743 ............................................ 35,945

Total Recordkeeping ................................................................................. ........................ ............................................ 73,983


TABLE OF REGULATORY SECTIONS AND RESPONDENT BURDEN—Continued




(hours)

Total Annual Burden ................................................................................. ........................ ............................................ 142,058

1 No new HEAL loans.2 Burden is from Subpart E—School.

Send comments to Patricia Royston,HRSA Reports Clearance Officer, Room14–36, Parklawn Building, 5600 FishersLane, Rockville, MD 20857. Writtencomments should be received within 60days of this notice.

Dated: June 3, 1997.James J. Corrigan,Acting Associate Administrator forManagement and Program Support.[FR Doc. 97–15278 Filed 6–10–97; 8:45 am]BILLING CODE 4160–15–P


National Institutes of Health

Government-Owned Inventions;Availability for Licensing

AGENCY: National Institutes of Health.ACTION: Notice.

SUMMARY: The inventions listed beloware owned by agencies of the U.S.Government and are available forlicensing in the U.S. in accordance with35 U.S.C. 207 to achieve expeditiouscommercialization of results of federallyfunded research and development.Foreign patent applications are filed onselected inventions to extend marketcoverage for U.S. companies and mayalso be available for licensing.ADDRESSES: Licensing information andcopies of the U.S. patent applicationslisted below may be obtained by writingto the indicated licensing contact at theOffice of Technology Transfer, NationalInstitutes of Health, 6011 ExecutiveBoulevard, Suite 325, Rockville,Maryland 20852–3804; telephone: 301/496–7057; fax: 301/402–0220. A signedConfidential Disclosure Agreement willbe required to receive copies of thepatent applications.

Methods for Detecting Cervical Cancer

T Ried et al. (NHGRI)U.S. Patent Serial No. 08/781,424 filed

10 Jan 97Licensing Contact: Mary Savagner, 301/

496–7735 ext. 205Last year, nearly 16,000 women in the

United States were diagnosed withinvasive cervical carcinoma and nearly

5,000 women died from the disease.While the widespread promotion anduse of the Pap smear has contributed tothe reduced mortality rate associatedwith the disease over the last 30 years,there is still a need for improvementand optimization of the screeningprocess. Despite tremendous efforts, theautomated analysis of cervical PAPsmears based on cytopathological stainshas not been achieved. Also,cytopathological analyses revealinsufficient information to predictdisease progression.

This invention provides a method ofdetecting the presence of invasivecervical carcinoma by detecting in acervical cell taken from a patient thepresence of a chromosomal aberrationindicating the presence of invasivecervical carcinoma. The invention alsoprovides a method of diagnosingadvanced-stage cervical carcinoma in apatient as well as a method ofclassifying the progression of dysplasticcervical cells from non-invasive toinvasive cervical carcinoma. Inaddition, the invention provides kitscomprising nucleic acids thatspecifically hybridize in chromosome3q and specifically hybridize to anotherchromosome, and to compositionscomprising nucleic acids. (portfolio:Cancer—Diagnostics, in vitro, other)

Chimeric Nucleic Acid SequencesEncoding attenuated Hepatitis AViruses and the Use of These Sequencesand Viruses as VaccinesSU Emerson, SA Harmon, E Ehrenfeld,

DF Summers (NIAID)Serial No. 08/547,482 filed 24 Oct 95Licensing Contact: Gloria Richmond,

301/496–7056 ext. 268This invention is directed to chimeric

hepatitis A viruses, containingmutations in the 2A gene, which will beused as the basis for an attenuatedvaccine for humans. The mutations inthe 2A gene are unusual because theyare not naturally occurring mutationsbut were engineered into an infectiouscDNA clone. These mutations in 2A areable to decrease pathology substantiallyand offer the opportunity ofconstructing a virus that will induceeffective immunity without causingdisease. Sales of the inactivated vaccine

in Europe have demonstrated thecommercial importance of a vaccine forhepatitis A. An attenuated vaccinewould be more economical and easier toadminister. (portfolio: InfectiousDiseases—Vaccines, viral, non-AIDS)

Vaccine for Dengue VirusC–J Lai, M Bray, AG Pletnev, R Men, Y–

M Zhang, KH Eckels (NIAID)Serial No. 08/250,802 filed 27 May 94Licensing Contact: Gloria H. Richmond,

301/496–7056 ext 268The claimed invention relates to

recombinant modified or viablechimeric dengue viruses for use asvaccines against dengue and otherflavivirus disease, including tick-borneencephalitis. Dengue is a mosquito-transmitted viral disease which occursin tropical and subtropical regionsthroughout the world. Inactivated wholedengue virus vaccines have been shownto be insufficiently immunogenic andlive dengue virus vaccines prepared byserial passage in cell culture have notbeen shown to be consistentlyattenuated. A dengue vaccine is still notavailable. The present inventionrepresents a technical breakthrough,which provides new approaches todengue vaccines by construction ofchimeric dengue viruses of all fourserotypes and strategic modification toproduce attentuated virus strains.Several fields of use remain available forlicensing. (portfolio: InfectiousDiseases—Vaccines, viral, non-AIDS)

Parvovirus B19 Receptor andParvovirus B19 DetectionN Young, K Brown (NHLBI)Serial No. 08/034,132 filed 22 Mar 93;

U.S. Patent 5,449,608 issued 12 Sep95

Licensing Contact: Gloria H. Richmond,301/496–7056 ext 268The claimed invention provides a

method of detecting the presence of aparvovirus in a sample. Parvovirusesinfect animals and man. In man, theonly known pathogenic member of thisfamily is parvovirus B19. The inventorshave identified the parvovirus B19receptor which provides for a method todiagnose, prevent, and treat parvovirusinfection utilizing the binding affinityfor the receptor. (portfolio: Infectious


Diseases—diagnostics, viral, non-AIDS;Infectious Diseases—Therapeutics, anti-viral, non-AIDS)

Dated: May 30, 1997.Barbara M. McGarey,Deputy Director, Office of TechnologyTransfer.[FR Doc. 97–15299 Filed 6–10–97; 8:45 am]BILLING CODE 4140–01–M



Division of Research Grants; Notice ofClosed Meetings

Pursuant to Section 10(d) of theFederal Advisory Committee Act, asamended (5 U.S.C. Appendix 2), noticeis hereby given of the following Divisionof Research Grants Special EmphasisPanel (SEP) meetings:

Purpose/Agenda: To review individualgrant applications.

Name of SEP: Chemistry and RelatedSciences.

Date: June 24, 1997.Time: 3:00 p.m.Place: NIH, Rockledge 2, Room 5150,

Telephone Conference.Contact Person: Dr. Zakir Bengali,

Scientific Review Administrator, 6701Rockledge Drive, Room 5150, Bethesda,Maryland 20892, (301) 435–1742.

Name of SEP: Behavioral andNeurosciences.

Date: July 2, 1997.Time: 8:30 a.m.Place: Capitol Holiday Inn, Washington,

DC.Contact Person: Dr. Jane Hu, Scientific

Review Administrator, 6701 Rockledge Drive,Room 5168, Bethesda, Maryland 20892, (301)435–1245.

Name of SEP: Biological and PhysiologicalSciences.

Date: July 7, 1997.Time: 11:30 a.m.Place: NIH, Rockledge 2, Room 4132,

Telephone Conference.Contact Person: Dr. Syed Quadri, Scientific



Date: July 7, 1997.Time: 3:00 p.m.Place: NIH, Rockledge 2, Room 4132,

Telephone Conference.Contact Person: Dr. Syed Quadri, Scientific



Date: July 11, 1997.Time: 8:30 a.m.Place: Doubletree Hotel, Rockville, MD.

Contact Person: Dr. Michael Micklin,Scientific Review Administrator, 6701Rockledge Drive, Room 5198, Bethesda,Maryland 20892, (301) 435–1258.


Date: July 16, 1997.Time: 8:30 a.m.Place: Ramada Inn, Rockville, MD.Contact Person: Dr. Luigi Giacometti,



Date: July 17, 1997.Time: 8:30 a.m.Place: Holiday Inn-Georgetown,

Washington, DC.Contact Person: Dr. John Bowers, Scientific



Date: July 17, 1997.Time: 2:45 p.m.Place: Doubletree Hotel, Rockville, MD.Contact Person: Dr. Martin Padarathsingh,



Date: July 17–18. 1997.Time: 8:20 a.m.Place: Doubletree Hotel, Rockville, MD.Contact Person: Dr. Bob Weller, Scientific



Date: July 25, 1997.Time: 1:00 p.m.Place: Doubletree Hotel, Rockville, MD.Contact Person: Dr. Michael Micklin,



Date: July 30–31, 1997.Time: 8:30 p.m.Place: Hyatt Regency, Bethesda, MD.Contact Person: Dr. Marjam Behar,



Date: August 6, 1997.Time: 8:30 a.m.Place: Hyatt Regency Hotel, Bethesda, MD.Contact Person: Dr. Carl Banner, Scientific


Purpose/Agenda: To review SmallBusiness Innovation Research.


Date: June 27, 1997.Time: 2:00 p.m.

Place: Latham Hotel, Washington, DC.Contact Person: Dr. Cheryl Corsaro,



Date: July 14–15, 1997.Time: 8:30 a.m.Place: Doubletree Hotel, Rockville, MD.Contact Person: Dr. Syed Quadri, Scientific



Date: July 16, 1997.Time: 8:30 a.m.Place: Holiday Inn, Silver Spring, MD.Contact Person: Dr. Bob Weller, Scientific



Date: July 25, 1997.Time: 8:30 a.m.Place: Doubletree Hotel, Rockville, MD.Contact Person: Dr. Michael Micklin,


The meetings will be closed in accordancewith the provisions set forth in sections552b(c)(4) and 552b(c)(6), Title 5, U.S.C.Applications and/or proposals and thediscussions could reveal confidential tradesecrets or commercial property such aspatentable material and personal informationconcerning individuals associated with theapplications and/or proposals, the disclosureof which would constitute a clearlyunwarranted invasion of personal privacy.(Catalog of Federal Domestic AssistanceProgram Nos. 93.306, 93.333, 93.337, 93.393–93.396, 93.837–93.844, 93.846–93.878,93.892, 93.893, National Institutes of Health,HHS)

Date: June 5, 1997.LaVerne Y. Stringfield,Committee Management Officer, NIH.[FR Doc. 97–15296 Filed 6–10–97; 8:45 am]BILLING CODE 4140–01–M



National Cancer Institute; Notice ofClosed Meeting

Pursuant to Section 10(d) of theFederal Advisory Committee Act, asamended (5 U.S.C. Appendix 2), noticeis hereby given of the followingNational Cancer Institute SpecialEmphasis Panel (SEP) meeting:

Name of SEP: Record Linkage StudiesUtilizing Resources in Population-BasedTumor Registries.

Date: June 10, 1997.


1 The NTP uses five categories of evidence ofcarcinogenic activity observed in each animalstudy: two categories for positive results (‘‘clearevidence’’ and ‘‘some evidence’’), one category foruncertain findings (‘‘equivocal evidence’’), onecategory for no observable effect (‘‘no evidence’’),and one category for studies that cannot beevaluated because of major flaws (‘‘inadequatestudy’’).

Time: 10:00 a.m.Place: Teleconference, Executive Plaza

North, Room 640, 6130 Executive Boulevard,Bethesda, MD 20892.

Contact Person: Courtney M. Kerwin,PH.D., M.P.H., Scientific ReviewAdministrator, National Cancer Institute,NIH, Executive Plaza North, Room 640, 6130Executive Boulevard, MSC 7410, Bethesda,MD 20892–7410, Telephone: 301/496–7421.

Purpose/Agenda: To evaluate and reviewgrant applications.

The meeting will be closed in accordancewith the provisions set forth in secs.552b(c)(4) and 552b(c)(6), Title 5 U.S.C.Applications and the discussions couldreveal confidential trade secrets orcommercial property such as patentablematerial and personal informationconcerning individuals associated with theapplications, the disclosure of which wouldconstitute a clearly unwarranted invasion ofpersonal privacy.

This notice is being published less than 15days prior to the meeting due to the urgentneed to meet timing limitations imposed bythe review and funding cycle.(Catalog of Federal Domestic AssistanceProgram Numbers: 93.393, Cancer Cause andPrevention Research; 93.394, CancerDetection and Diagnosis Research; 93.395,Cancer Treatment Research; 93.396, CancerBiology Research; 93.397, Cancer CentersSupport; 93.398, Cancer Research Manpower,93.399, Cancer Control.)

Dated: June 5, 1997.LaVerne Y. Stringfield,Committee Management Officer, NIH.[FR Doc. 97–15297 Filed 6–10–97; 8:45 am]BILLING CODE 4140–01–M


Public Health Service

National Toxicology Program;Availability of Technical Report onToxicology and CarcinogenesisStudies of Phenolphthalein

The HHS’ National ToxicologyProgram announces the availability ofthe NTP Technical Report on thetoxicology and carcinogenesis studies ofphenolphthalein which is used as alaboratory reagent and acid-baseindicator and in over-the-counterlaxative preparations. The results ofthese studies were previously releasedin draft form prior to a public peerreview in December, 1995.

Toxicology and carcinogenicitystudies were conducted byadministrating phenolphthalein togroups of 50 F344/N rats for 2 years andto B6C3F1 mice at exposures of 0, 3000,6000 or 12,000 ppm in the feed for 2years (equivalent to average daily dosesof approximately 300, 600 or 1200 mgphenolphthalein/kg body weight to

males and 400, 800 or 1000 mg/kg tofemales).

Under the conditions of these 2-yearfeed studies, there was clear evidence ofcarcinogenic activity 1 ofphenolphthalein in male F344/N ratsbased on markedly increased incidencesof benign pheochromocytomas of theadrenal medulla and of renal tubuleadenomas and adenomas or carcinomas(combined). There was some evidenceof carcinogenic activity ofphenolphthalein in female F344/N ratsbased on the increased incidences ofbenign pheochromocytomas of theadrenal medulla in the 12,000 ppmgroup and of benign or malignantpheochromocytomas (combined) in the12,000 and 25,000 ppm groups. Therewas clear evidence of carinogenicactivity of phenolphthalein in maleB6C3F1 mice based on increasedincidences of histiocytic sarcomas andof malignant lymphomas of thymicorigin. there was clear evidence ofcarcinogenic activity of phenolphthaleinin female B6C3F1 mice based onincreased incidences of histiocyticsarcomas, malignant lymphomas of alltypes, lymphomas of thymic origin, andbenign sex-cord stromal tumors of theovary.

Exposure of rats to phenophthalein infeed for 2 years resulted in increasedincidences of focal hyperplasia of theadrenal medulla in males and inincreased incidences and/or severity ofnephropathy of the kidney in males andfemales. Exposure of mice tophenolphthalein in feed for 2 yearsresulted in increased incidences ofatypical hyperplasia of the thymus inmales and females, degeneration of thegerminal epithelium of the testis inmales, and ovarian hyperplasia infemales.

Exposure of mice to phenolphthaleinin feed for 2 years resulted in decreasedincidences of hepatocellular neoplasmsand nonneoplastic lesions in males andfemales.

Questions or comments about theTechnical Report should be directed toCentral Data Management at P.O. Box12233, Research Triangle Park, NC27709–2233.

Copies of Toxicology andCarcinogenesis Studies ofPhenolphthalein (CAS No. 77–09–8)(TR–465) are available from Central Data

Management, NIEHS, MD E1–02, P.O.Box 12233, Research Triangle Park, NC27709–2233; telephone (919) 541–3419.

Dated: May 28, 1997.Kenneth Olden,Director, National Toxicology Program.[FR Doc. 97–15298 Filed 6–10–97; 8:45 am]BILLING CODE 4140–01–M

DEPARTMENT OF HOUSING ANDURBAN DEVELOPMENT

[Docket No. FR–4152–N–02]

Announcement of Funding Award FY1996; Cooperative Agreement Betweenthe Department of Housing and UrbanDevelopment (HUD) and the Milton S.Eisenhower Foundation (MEF)

AGENCY: Office of the AssistantSecretary for Public and IndianHousing.ACTION: Announcement of additionalfunding award.

SUMMARY: According to section102(a)(4)(C) of the Department ofHousing and Urban DevelopmentReform Act of 1989, this documentnotifies the public of an additionalfunding award for Fiscal Year (FY) 1996Technical Assistance to the Milton S.Eisenhower Foundation. The purpose ofthis document is to announce the nameand address of the existing grantee andthe amount of the additional award.FOR FURTHER INFORMATION CONTACT:Malcolm E. Main, Office of CrimePrevention and Security, OfficeCommunity Relations and Involvement,Public and Indian Housing, Departmentof Housing and Urban Development,Room 4112, 451 Seventh Street, S.W.,Washington, D.C. 20410, telephone(202) 708–1197, ext 4232. Atelecommunications device for hearingor speech impaired persons (TDD) isavailable at (202) 708–0850. (These arenot toll-free telephone numbers.)


I. AuthorityThis cooperative agreement is

authorized under Chapter 2, Subtitle C,Title V of the Anti-Drug Abuse Act of1988 (42 U.S.C. 11901 et. seq.), asamended by Section 581 of the NationalAffordable Housing Act of 1990(NAHA), approved November 28, 1990,Pub. L. 101–625, and Section 161 of theHousing and Community DevelopmentAct of 1992 (HCDA 1992) (Pub. L. 102–550, approved October 28, 1992).

II. FY 1996 Funding for Original AwardOn April 26, 1996, the President

signed the Omnibus Consolidated


Rescissions and Appropriations Act of1996 (Pub. L. 104–134) (FY 1996Appropriations Act). The amountavailable, to remain available untilexpended. The FY 1996 AppropriationsAct appropriated $290 million for theDrug Elimination Program. Of the total$290 million appropriated; $10 millionwill fund drug elimination technicalassistance, contracts and otherassistance training, programassessments, and execution for or onbehalf of public housing agencies andresident organizations (including thecost of necessary travel for participantsin such training).

III. Funding and Recipient InformationOriginal award (FY 1996

appropriation 86X0197-DSP):$1,400,000.

New award (FY 1996 appropriation86X0197–DSP): $87,322.

Total award amount: $1,487,322.Recipient: Milton S. Eisenhower

Foundation, Suite 200, 1660 L. Street,NW, Washington, DC 20036.

Recipient contact person: Lynn A.Curtis, President and CEO.

Recipients phone number: (202) 429–0440, fax (202) 452–0169.

HUD cooperative agreement number:DC00TTC0000096.

IV. General ObjectivesOn September 12, 1996, the United

States Department of Housing andUrban Development and the Milton S.Eisenhower Foundation entered into acooperative agreement to providetechnical assistance to housingauthorities to implement and evaluatelaw enforcement mini-stations andinner-city youth safe havens in thefollowing public housing authorities:District of Columbia, Columbia, SC,Little Rock, AR, Memphis, TN, SanJuan, Puerto Rico, and Baltimore, MD.In addition, the Foundation and HUDwill identify best practices among drug-prevention efforts which operatethrough community-based facilities, asmethods public housing authorities canuse in support of residents, who musttransition from welfare to work.

The KOBAN police and communitypartnership program is a uniqueinnovative program to improverelationships between local lawenforcement agencies and the inner-cityneighborhoods they patrol, to reducecrime and drug abuse in theneighborhoods and prevent inner-cityyouth from engaging in high-riskbehavior. The program builds onpolicing strategies that have operatedsuccessfully in Japan and provensuccessful in other variations inAmerican cities.

V. Specific Change to Agreement

The amendment to the agreementrequires the Eisenhower Foundation todesign, develop and deliver a bestpractices guidebook to HUD. Theguidebook will identify best practicesamong drug-prevention efforts whichoperate through community-basedfacilities, such as methods publichousing authorities can use in supportof residents, who must transition fromwelfare to work. This task will paralleland complement the existing scope ofwork.

The Catalog of Federal DomesticAssistance number for the Drug EliminationProgram is 14.854.

Dated: June 6, 1997.Kevin Emanuel Marchman,Acting Assistant Secretary for Public andIndian Housing.[FR Doc. 97–15287 Filed 6–10–97; 8:45 am]BILLING CODE 4210–33–P


[Docket No. FR–4208–C–03]

Public and Indian Housing DrugElimination Technical AssistanceProgram Notice of FundingAvailability—FY 1997; Correction

AGENCY: Office of the AssistantSecretary for Public and IndianHousing, HUD.ACTION: Notice of Funding Availability(NOFA); correction.

SUMMARY: On May 23, 1997 (62 FR28576), HUD published a noticeannouncing the availability of $2.8million under the Fiscal Year 1997Public and Indian Housing DrugElimination Technical AssistanceProgram.

The funds reimburse consultants whoprovide expert advice and work withhousing authorities or resident councilsto assist them in gaining skills andtraining to eliminate drug abuse andrelated problems from public housingcommunities. In the body of the May 23,1997 Notice of Funding Availability(NOFA) is information concerning thefollowing: (1) The purpose of the NOFA;(2) eligible applicants and activities; (3)available funding amounts; (4) selectioncriteria; (5) application processing; (6)consultant eligibility; and (7) consultantapplication processing.

The May 23, 1997 NOFA incorrectlyprovided for an application deadlinedate of June 30, 1997. The applicationdue date should have been July 15,1997. The purpose of this document is

to correct the application due date inthe May 23, 1997 NOFA.FOR FURTHER INFORMATION CONTACT: Forquestions regarding the Public HousingDrug Elimination program contactBertha M. Jones, Office of CrimePrevention and Security (OCPS), Officeof Community Relations andInvolvement (OCRI), Department ofHousing and Urban Development, Room4112, 451 Seventh Street, SW,Washington, DC 20410; telephone (202)708–1197.

For questions regarding the NativeAmerican program contact TracyOutlaw, National Office of NativeAmerican Programs (ONAP),Department of Housing and UrbanDevelopment, Suite 3990, 1999Broadway, Denver, CO 80202; telephone(303) 675–1600.

Hearing and speech-impaired personsmay access the telephone numbers viaTTY by calling the Federal InformationRelay Service at 1–800–877–8339. (Withthe exception of the ‘‘800’’ number,these are not toll-free numbers.)SUPPLEMENTARY INFORMATION:Accordingly, FR Doc. 97–13519, Publicand Indian Housing Drug EliminationTechnical Assistance Program Notice ofFunding Availability—FY 1997,published in the Federal Register onMay 23, 1997 (62 FR 28576) is correctedas follows:

1. On page 28576, in column 1, the‘‘DEADLINE DATES’’ section iscorrected to read as follows:DEADLINE DATES: This NOFA is effectiveupon publication. Technical assistanceapplications and consultant applicationkits may be immediately submitted tothe address specified in the applicationkit. Applications may be submittedanytime, up to close of business on July15, 1997. Technical assistanceapplications will be reviewed on acontinuing basis until July 15, 1997, oruntil funds available under this NOFAare expended. There is no applicationdeadline for consultants.

2. On page 28581, in columns 1 and2, paragraph (b) of Section II.Application Process, is corrected to readas follows:

II. Application Process

* * * * *(b) Application Submission. This

NOFA is effective upon publication.Short-term (90 days for completion)technical assistance applications andconsultant application kits may beimmediately submitted to the addressspecified in the application kit. Theapplication submission deadline for theshort-term technical assistance grantsavailable under this NOFA is July 15,


1997. Technical assistance applicationswill be reviewed on a continuing first-come, first-served basis, until fundsunder this NOFA are no longer availableor until July 15, 1997. Applicants areencouraged to submit their applicationsas early as possible in the fiscal year.* * * * *

Dated: June 6, 1997.Kevin Emanuel Marchman,Acting Assistant Secretary, Public and IndianHousing.[FR Doc. 97–15302 Filed 6–10–97; 8:45 am]BILLING CODE 4210–33–P


Office of the Secretary

Exxon Valdez Oil Spill Public AdvisoryGroup

AGENCY: Department of the Interior,Office of the Secretary.

ACTION: Notice of meeting.

SUMMARY: The Department of theInterior, Office of the Secretary isannouncing a public meeting of theExxon Valdez Oil Spill Public AdvisoryGroup.

DATES: July 16, 1997, at 9:00 a.m.

ADDRESSES: Fourth floor conferenceroom, 645 ‘‘G’’ Street, Anchorage,Alaska.

FOR FURTHER INFORMATION CONTACT:Douglas Mutter, Department of theInterior, Office of Environmental Policyand Compliance, 1689 ‘‘C’’ Street, Suite119, Anchorage, Alaska, (907) 271–5011.

SUPPLEMENTARY INFORMATION: ThePublic Advisory Group was created byParagraph V.A.4 of the Memorandum ofAgreement and Consent Decree enteredinto by the United States of Americaand the State of Alaska on August 27,1991, and approved by the United StatesDistrict Court for the District of Alaskain settlement of United States ofAmerica v. State of Alaska, Civil ActionNo. A91–081 CV. The agenda willinclude a review of current restorationactivities, recommendations on projectsfor the fiscal year 1998 restoration workplan, and discussion of the restorationreserve fund.

Dated: June 4, 1997.Willie R. Taylor,Director, Office of Environmental Policy andCompliance.[FR Doc. 97–15172 Filed 6–10–97; 8:45 am]BILLING CODE 4310–RG–P


Bureau of Land Management

[UT–020–07–1]

Salt Lake District, Box Elder ResourceManagement Plan; Utah

AGENCY: Bureau of Land Management,Interior.ACTION: Notice of availability.

SUMMARY: The Bureau of LandManagement, Salt Lake District, hascompleted an Environmental Analysis/Finding of No Significant Impact of theProposed Plan Amendment to the BoxElder Resource Management Plan(RMP). The Proposed Amendment,implementation of alternative #2,addresses management of 47,088 acresof land acquired since the RMP wascompleted in 1986, providesmanagement goals and objectives forfuture acquisitions, and changesmanagement on 16,621 acres of selectedlands which were previously analyzedin the RMP.DATES: The protest period for thisProposed Plan Amendment willcommence with the date of publicationof this notice and last for 30 days.Protests must be received on or beforeJuly 11, 1997.ADDRESSES: Protests must be addressedto the Director (WO–210), Bureau ofLand Management, Attn: BrendaWilliams, 1849 C Street NW.,Washington, DC 20240, within 30 daysafter the date of publication of thisNotice of Availability.FOR FURTHER INFORMATION CONTACT:Alice Stephenson, EnvironmentalSpecialist/Planner, Salt Lake DistrictOffice, 2370 South 2300 West, Salt LakeCity, Utah, 84119, (801) 977–4317.Copies of the EnvironmentalAssessment and Proposed PlanAmendment are available for review atthe Salt Lake District Office.SUPPLEMENTARY INFORMATION: Thisaction is announced pursuant to section202(a) of the Federal Land Policy andManagement Act of 1976 and 43 CFRpart 1610. The Proposed Amendment issubject to protest from any party whohas participated in the planningprocess. Protests must be specific andcontain the following information:—The name, mailing address, phone

number, and interest of the personfiling the protest.

—A statement of the issue(s) beingprotested.

—A statement of the part(s) of theproposed amendment being protestedand citing pages, paragraphs, maps

etc., of the Proposed PlanAmendment.

—A copy of all documents addressingthe issue(s) submitted by the protestorduring the planning process or areference to the date when theprotester discussed the issue(s) for therecord.

—A concise statement as to why theprotester believes the BLM StateDirector is incorrect.Dated: June 5, 1997.

G. William Lamb,State Director, Utah.[FR Doc. 97–15232 Filed 6–10–97; 8:45 am]BILLING CODE 4310–DQ–P


Bureau of Land Management

[AZ–020–97–2200]

Notice of Intent To Prepare AnEnvironmental Impact Statement For AProposed Land Exchange NearKingman, Arizona, and Notice ofScoping Meetings

AGENCY: Bureau of Land Management,Interior.ACTION: Notice of intent, notice ofscoping period, and notice of scopingmeetings.

SUMMARY: The Bureau of LandManagement is considering a proposalto exchange land pursuant to Section206 of the Federal Land Policy andManagement Act of 1976 (43 U.S.C.1716), as amended. An environmentalimpact statement will be prepared inaccordance with Section 102(2)(C) of theNational Environmental Policy Act of1969 to analyze the impacts associatedwith the proposed exchange. Theexchange proponent is Santa FeRailroad Company being represented byBen Brooks and Associates. It isproposed to exchange approximately70,000 acres of public land forapproximately 70,000 acres of privateland. The final acreage may change asthe exchange will be on an equal valuebasis. There are 70,000 acres of offeredlands (lands currently in privateownership) and 60,000 acres of selectedlands (lands currently in publicownership) 20 to 40 miles southwest ofKingman, Arizona. The remaining10,000 acres of selected lands arelocated approximately 15 milesnortheast of Kingman, Arizona. Theexchange includes portions of DutchFlat and the Hualapai and McCrackenmountains. The BLM would acquirelands mostly within the Hualapai andMcCracken mountains or foothills while


Santa Fe would acquire land in theDutch Flat and Hualapai Valley areas.

This notice is intended to invite thepublic to participate in identification ofissues and development of alternativesfor the proposal.DATES: Public scoping meetings toidentify public concerns will be held onthe following dates:Monday, June 30, in Wikieup, Arizona,

at the Owens School, 14109 EastChicken Springs Road, Wikieup,Arizona 85360.

Tuesday, July 1, in Kingman, Arizona, atthe BLM office located at 2475Beverly Avenue, Kingman, Arizona86401.

Wednesday, July 2, in Yucca, Arizona,at the Brooks Realty Office, 12470South Yucca Frontage Road, Yucca,Arizona 86348.Comments relating to the

identification of issues and alternativeswill be accepted for up to 45 daysfollowing the publication of this notice.ADDRESSES: Send comments to: Bureauof Land Management, Kingman FieldOffice, 2475 Beverly Avenue, Kingman,Arizona 86401.FOR FURTHER INFORMATION CONTACT:Don McClure, Project Manager, (520)757–3161.SUPPLEMENTARY INFORMATION: Theproposed exchange area is located innorthwestern Arizona. The landexchange will block federal ownershipto facilitate management of naturalresources in the Hualapai andMcCracken mountains and associatedfoothills. This exchange will helpalleviate problems associated withprivate land sales and development inthe checker boarded lands in Dutch Flatand the Hualapai and McCrackenmountains. Consolidation of lands intopublic ownership in the HualapaiMountains area was begun in the early1980s. To date, BLM has exchangedlands with the State of Arizona andprivate entities to consolidate publicownership throughout the HualapaiMountains. This proposed exchangewill consolidate the last large checkerboarded area within the HualapaiMountains into public ownership.

Anticipated Issues

Management concerns that will beaddressed include, but are not limitedto, wildlife management, impacts onvisual quality, unique vegetation, NativeAmerican religious concerns, and accessconcerns. Baseline studies will beconducted to gather information aboutcultural resources, hazardous materials,minerals, water rights, and the generalhabitat.

Other Relevant InformationThe EIS will be prepared by an

interdisciplinary team of resourcespecialists. The team will include aproject manager, a wildlife specialist, arealty specialist, a botanist, a soilscientist, a range management specialist,a visual resources specialist, a biologicalresources specialist, and a culturalresource specialist.

Complete records of all phases of theEIS process will be available for publicreview at the Kingman Field Office,2475 Beverly Avenue, Kingman,Arizona 86401.Denise P. Meridith,State Director, Arizona.[FR Doc. 97–15231 Filed 6–10–97; 8:45 am]BILLING CODE 4310–32–M


National Park Service

Notice of Inventory Completion forNative American Human Remains fromWashington State in the Possession ofthe Department of Anthropology,Central Washington University,Ellensburg, WA

AGENCY: National Park Service.ACTION: Notice.

Notice is hereby given in accordancewith provisions of the Native AmericanGraves Protection and Repatriation Act(NAGPRA), 25 U.S.C. 3003 (d), of thecompletion of an inventory of humanremains from Washington State in thepossession of the Department ofAnthropology, Central WashingtonUniversity, Ellensburg, WA.

A detailed assessment of the humanremains was made by Department ofAnthropology professional staff inconsultation with representatives of thePuyallup Indian Tribe of Indians andthe Muckleshoot Indian Tribe.

In 1896, human remains representingone individual were removed from‘‘under a fir tree’’ by M. Choir near LakeWashington, Seattle, King County, WA,and donated to the Burke Museum. Inthe 1970s, these human remains werebrought to the Department ofAnthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

In 1913 or 1914, human remainsrepresenting one individual wasrecovered by Mr. Williams during a re-grade of Jackson Street in Seattle, KingCounty, WA, and donated to the BurkeMuseum. In the 1970s, these humanremains were brought to the Departmentof Anthropology, Central Washington

University. No known individuals wereidentified. No associated funeraryobjects are present.

In 1921, human remains representinga minimum of two individuals wereremoved from Othello Street on LakeWashington in Seattle, King County,WA during city street construction.These human remains were donated tothe Burke Museum that same year bythe Seattle Coroner’s Office. In the1970s, these human remains werebrought to the Department ofAnthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

Around 1925, human remainsrepresenting one individual weredonated to the Burke Museum by Prof.Trevor Kincaid. Accession informationindicates these human remains wererecovered from an unknown location inthe vicinity of Seattle, WA. In the 1970s,these human remains were brought tothe Department of Anthropology,Central Washington University. Noknown individuals were identified. Noassociated funerary objects are present.

In 1943, human remains representingone individual were removed by Mr.Harold Hammer during a houseconstruction in Seattle, King County,WA, and donated to the Burke Museumby the Seattle Coroner’s Office. In the1970s, these human remains werebrought to the Department ofAnthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

At an unknown date, human remainsrepresenting one individual wereremoved from an unknown location inthe vicinity of Seattle and donated tothe Burke Museum by Rev. LesterPontius. In the 1970s, these humanremains were brought to the Departmentof Anthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

In 1959, human remains representinga minimum of two individuals wereremoved from the Dash Point site (45–PI–41), Pierce County, WA, by Mr. M.V.Petersen, Butler, and Garner anddonated to the Burke Museum. In the1970s, these human remains werebrought to the Department ofAnthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

In 1966, human remains representingone individual were recovered from theBeachcrest Addition, Thurston County,WA by the Thurston County Sheriff’sOffice and donated to the Burke


Museum. In the 1970s, these humanremains were brought to the Departmentof Anthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

Morphological evidence indicatesthese individuals are Native Americanbased on dental patterns and cranialformation. Anthropological evidence,including continuities of technologyand material culture, indicatescontinuous occupation by Salishanpeoples over the last 2,000 years in thePuget Sound region of Washington Statewhich includes the sites and vicinitieslisted above. Consultation evidence,including oral history, presented byrepresentatives of the Puyallup IndianTribe of Indians and the MuckleshootIndian Tribe further support thisevidence of occupation.

Based on the above mentionedinformation, officials of the Departmentof Anthropology, Central WashingtonUniversity have determined that,pursuant to 43 CFR 10.2 (d)(1), thehuman remains listed above representthe physical remains of a minimum often individuals of Native Americanancestry. Officials of the Department ofAnthropology, Central WashingtonUniversity have determined that,pursuant to 25 U.S.C. 3001 (2), there isa relationship of shared group identitywhich can be reasonably traced betweenthese Native American human remainsand Puyallup Indian Tribe of Indiansand the Muckleshoot Indian Tribe.

This notice has been sent to officialsof the Puyallup Indian Tribe of Indiansand the Muckleshoot Indian Tribe.Representatives of any other Indian tribethat believes itself to be culturallyaffiliated with these human remainsshould contact Steven Hackenberger,Chair, Department of Anthropology,Central Washington University, 400 E.8th Ave., Ellensburg, WA 98926–7544;telephone: (509) 963–3201, fax (509)963–3215, before July 11, 1997.Repatriation of the human remains tothe Puyallup Tribe of Indians may beginafter that date if no additional claimantscome forward.Dated: June 3, 1997.

Francis P. McManamon,Departmental Consulting Archeologist,Manager, Archeology and EthnographyProgram.[FR Doc. 97–15224 Filed; 6–10–97 8:45 am]




Notice of Inventory Completion forNative American Human Remains fromPrince William Sound, AK in thePossession of the Department ofAnthropology, Central WashingtonUniversity, Ellensburg, WA

AGENCY: National Park ServiceACTION: Notice

Notice is hereby given in accordancewith provisions of the Native AmericanGraves Protection and Repatriation Act(NAGPRA), 25 U.S.C. 3003 (d), of thecompletion of an inventory of humanremains from Prince William Sound,AK, in the possession of the Departmentof Anthropology, Central WashingtonUniversity, Ellensburg, WA.

A detailed assessment of the humanremains was made by Department ofAnthropology professional staff inconsultation with representatives of theChugach Alaska Corporation.

In 1902, human remains wererecovered from Billy’s Hole cave on anisland in Prince William Sound, AK, byEdmond S. Meany. During the 1970s,human remains representing aminimum of two individuals from thissite were transferred to the Departmentof Anthropology at Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

Archeological and ethnographicevidence from the islands of PrinceWilliam Sound, including manner ofinternment, continuity of technology,and cultural items indicate continuousoccupation by the same communitiesfrom the precontact period to thepresent. Oral tradition presented by therepresentatives of the Chugach AlaskaCorporation also supports Chugachoccupation of this area throughout thisperiod.

Based on the above mentionedinformation, officials of the Departmentof Anthropology, Central WashingtonUniversity have determined that,pursuant to 43 CFR 10.2 (d)(1), thehuman remains listed above representthe physical remains of a minimum oftwo individuals of Native Americanancestry. Officials of the Department ofAnthropology, Central WashingtonUniversity have also determined that,pursuant to 25 U.S.C. 3001 (2), there isa relationship of shared group identitywhich can be reasonably traced betweenthese Native American human remainsand the Chugach Alaska Corporation.

This notice has been sent to officialsof the Chugach Alaska Corporation.

Representatives of any other Indian tribethat believes itself to be culturallyaffiliated with these human remainsshould contact Steven Hackenberger,Chair, Department of Anthropology,Central Washington University, 400 E.8th Ave., Ellensburg, WA 98926–7544;telephone: (509) 963–3201, fax (509)963–3215 , before July 11, 1997.Repatriation of the human remains tothe Chugach Alaska Corporation maybegin after that date if no additionalclaimants come forward.Dated: June 3, 1997.

Francis P. McManamon,Departmental Consulting Archeologist,Manager, Archeology and EthnographyProgram.[FR Doc. 97–15228 Filed; 6–10–97 8:45 am]BILLING CODE 4310–70–F



Notice of Inventory Completion forNative American Human Remains,Associated Funerary Objects, and anUnassociated Funerary Object fromHartstine Island, Mason County, WA inthe Possession of the Burke Museum,University of Washington, Seattle, WA


Notice is hereby given in accordancewith provisions of the Native AmericanGraves Protection and Repatriation Act(NAGPRA), 25 U.S.C. 3003 (d), of thecompletion of an inventory of humanremains, associated funerary objects,and an unassociated funerary objectfrom Hartstine Island, Mason County,WA, in the possession of the BurkeMuseum, University of Washington,Seattle, WA.

A detailed assessment of the humanremains was made by Burke Museumprofessional staff in consultation withrepresentatives of the Squaxin IslandTribe.

In 1923, human remains representingtwo individuals were removed fromgraves on Hartstine Island, MasonCounty, WA by Mr. A.G. Colley anddonated to the Burke Museum. Noknown individuals were identified. Thesix associated funerary objects includefive wood fragments and one copper-stained stone.

Also in 1923, cultural itemsconsisting of a whalebone club and soilfrom a grave on Hartstine were removedby Mr. A.G. Colley and donated to theBurke Museum. No human remainsfrom this grave are present.


Hartstine Island has been identified ashaving been occupied by the SquaxinIsland Tribe from pre-contact times intothe historic period based on historicaldocuments, ethnographic andanthropological evidence, andcontinuity of material culture. Oralhistory presented by representatives ofthe Squaxin Island Tribe furthersupports this conclusion.

Based on the above mentionedinformation, officials of the BurkeMuseum have determined that,pursuant to 43 CFR 10.2 (d)(1), thehuman remains listed above representthe physical remains of two individualsof Native American ancestry. Officials ofthe Burke Museum have alsodetermined that, pursuant to 25 U.S.C.3001 (3)(A), the six objects listed aboveare reasonably believed to have beenplaced with or near individual humanremains at the time of death or later aspart of the death rite or ceremony.Officials of the Burke Museum havefurther determined that, pursuant to 25U.S.C. 3001 (3)(B), these two culturalitems are reasonably believed to havebeen placed with or near individualhuman remains at the time of death orlater as part of the death rite orceremony and are believed, by apreponderance of the evidence, to havebeen removed from a specific burial siteof an Native American individual.Lastly, officials of the Burke Museumhave determined that, pursuant to 25U.S.C. 3001 (2), there is a relationshipof shared group identity which can bereasonably traced between these NativeAmerican human remains, associatedfunerary objects, and unassociatedfunerary objects and the Squaxin IslandTribe.

This notice has been sent to officialsof the Squaxin Island Tribe.Representatives of any other Indian tribethat believes itself to be culturallyaffiliated with these human remains andassociated funerary objects shouldcontact Dr. James Nason, Chair of theRepatriation Committee, BurkeMuseum, Box 353010, University ofWashington, Seattle, WA 98195;telephone: (206) 543–9680, before July11, 1997. Repatriation of the humanremains, associated funerary objects,and unassociated funerary objects to theSquaxin Island Tribe may begin afterthat date if no additional claimantscome forward.

The National Park Service is notresponsible for the determinationswithin this notice.Dated: June 2, 1997.Francis P. McManamon,Departmental Consulting Archeologist,Manager, Archeology and EthnographyProgram.[FR Doc. 97–15225 Filed; 6–10–97 8:45 am]BILLING CODE 4310–70–F



Notice of Intent to Repatriate CulturalItems in the Possession of theMilwaukee Public Museum, Milwaukee,WI


Notice is hereby given under theNative American Graves Protection andRepatriation Act, 25 U.S.C. 3005 (a)(2),of the intent to repatriate cultural itemsin the possession of the MilwaukeePublic Museum, Milwaukee, WI, whichmeet the definition of ‘‘sacred objects’’under Section 2 of the Act.

The cultural items include a bear-cubskin medicine bag, two pinesnakeskins, and two birchbark cases for thesnake skins.

In 1910, Dr. Samuel A. Barrett,Curator of Anthropology at theMilwaukee Public Museum purchasedthese cultural items as a set fromSpekapuwikweu (also known asAshkapokok Annamitta Neconish),daughter of Animita (also known asFrank Annamitta) on the MenomineeReservation, Keshena, WI. Museumcatalogue information states these itemswere said to be associated with theMenominee Medicine Lodge/Mitawin,although other documentation by Dr.Barrett indicates they were exclusivelyused for ‘‘sorcery.’’

Authorized representatives of theMenominee Indian Tribe of Wisconsinacting on behalf of Mr. RichardAnnamitta, Sr. have identified these fivecultural items as specific ceremonialobjects needed by Mr. RichardAnnamitta, Sr. for the practice of on-going and traditional ceremonial andreligious traditions, specifically theMitawin or Grand Medicine Lodge.Information provided by Mr. RichardAnnamitta, Sr. and other authorizedMenominee tribal representativesindicates these items are rightfullyinherited only by male descendants ofthe owner, and further that such itemscould not have been rightfully alienatedby any other person. This claim is also

supported by the Menominee IndianTribe of Wisconsin and members of Mr.Annamitta’s extended family. Further,Mr. Richard Annamitta, Sr. haspresented proof of direct lineal descentfrom the last rightful owner, Animita/Frank Annamitta, as his grandson and isthe current rightful inheritor of thesecultural items.

Based on the above-mentionedinformation, officials of the MilwaukeePublic Museum have determined that,pursuant to 25 U.S.C. 3001 (3)(C), thesefive cultural items are specificceremonial objects needed by traditionalNative American religious leaders forthe practice of traditional NativeAmerican religions by their present-dayadherents. Officials of the MilwaukeePublic Museum have also determinedthat, pursuant to 25 U.S.C. 3005(a)(5)(A), Mr. Richard Annamitta, Sr. isthe direct lineal descendant of theindividual who owned these sacredobjects.

This notice has been sent to Mr.Richard Annamitta, Sr. and officials ofthe Menominee Indian Tribe ofWisconsin. Any other lineal descendentwho believes him or herself to beculturally affiliated with these objectsshould contact Ann McMullen, Ph.D.,Curator of North American Ethnology,Milwaukee Public Museum, 800 WestWells St., Milwaukee, WI 53233;telephone: (414) 278–2786, fax (414)278–6100 before July 11, 1997.Repatriation of these objects to Mr.Richard Annamitta, Sr. may begin afterthat date if no additional claimantscome forward.

Dated: June 3, 1997.Francis P. McManamon,Departmental Consulting Archeologist,Manager, Archeology and EthnographyProgram.[FR Doc.97–15227 Filed; 6–10–97 8:45 am]BILLING CODE 4310–70–F



Notice of Inventory Completion forNative American Human Remains fromWashington State in the Possession ofthe Department of Anthropology,Central Washington University,Ellensburg, WA


Notice is hereby given in accordancewith provisions of the Native AmericanGraves Protection and Repatriation Act(NAGPRA), 25 U.S.C. 3003 (d), of the


completion of an inventory of humanremains from Washington State in thepossession of the Department ofAnthropology, Central WashingtonUniversity, Ellensburg, WA.

A detailed assessment of the humanremains was made by Department ofAnthropology professional staff inconsultation with representatives of thePuyallup Indian Tribe of Indians andthe Muckleshoot Indian Tribe.

In 1896, human remains representingone individual were removed from‘‘under a fir tree’’ by M. Choir near LakeWashington, Seattle, King County, WA,and donated to the Burke Museum. Inthe 1970s, these human remains werebrought to the Department ofAnthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

In 1913 or 1914, human remainsrepresenting one individual wasrecovered by Mr. Williams during a re-grade of Jackson Street in Seattle, KingCounty, WA, and donated to the BurkeMuseum. In the 1970s, these humanremains were brought to the Departmentof Anthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

In 1921, human remains representinga minimum of two individuals wereremoved from Othello Street on LakeWashington in Seattle, King County,WA during city street construction.These human remains were donated tothe Burke Museum that same year bythe Seattle Coroner’s Office. In the1970s, these human remains werebrought to the Department ofAnthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

Around 1925, human remainsrepresenting one individual weredonated to the Burke Museum by Prof.Trevor Kincaid. Accession informationindicates these human remains wererecovered from an unknown location inthe vicinity of Seattle, WA. In the 1970s,these human remains were brought tothe Department of Anthropology,Central Washington University. Noknown individuals were identified. Noassociated funerary objects are present.

In 1943, human remains representingone individual were removed by Mr.Harold Hammer during a houseconstruction in Seattle, King County,WA, and donated to the Burke Museumby the Seattle Coroner’s Office. In the1970s, these human remains werebrought to the Department ofAnthropology, Central WashingtonUniversity. No known individuals were

identified. No associated funeraryobjects are present.

At an unknown date, human remainsrepresenting one individual wereremoved from an unknown location inthe vicinity of Seattle and donated tothe Burke Museum by Rev. LesterPontius. In the 1970s, these humanremains were brought to the Departmentof Anthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

In 1959, human remains representinga minimum of two individuals wereremoved from the Dash Point site (45–PI–41), Pierce County, WA, by Mr. M.V.Petersen, Butler, and Garner anddonated to the Burke Museum. In the1970s, these human remains werebrought to the Department ofAnthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

In 1966, human remains representingone individual were recovered from theBeachcrest Addition, Thurston County,WA by the Thurston County Sheriff’sOffice and donated to the BurkeMuseum. In the 1970s, these humanremains were brought to the Departmentof Anthropology, Central WashingtonUniversity. No known individuals wereidentified. No associated funeraryobjects are present.

Morphological evidence indicatesthese individuals are Native Americanbased on dental patterns and cranialformation. Anthropological evidence,including continuities of technologyand material culture, indicatescontinuous occupation by Salishanpeoples over the last 2,000 years in thePuget Sound region of Washington Statewhich includes the sites and vicinitieslisted above. Consultation evidence,including oral history, presented byrepresentatives of the Puyallup IndianTribe of Indians and the MuckleshootIndian Tribe further support thisevidence of occupation.

Based on the above mentionedinformation, officials of the Departmentof Anthropology, Central WashingtonUniversity have determined that,pursuant to 43 CFR 10.2 (d)(1), thehuman remains listed above representthe physical remains of a minimum often individuals of Native Americanancestry. Officials of the Department ofAnthropology, Central WashingtonUniversity have determined that,pursuant to 25 U.S.C. 3001 (2), there isa relationship of shared group identitywhich can be reasonably traced betweenthese Native American human remainsand Puyallup Indian Tribe of Indiansand the Muckleshoot Indian Tribe.

This notice has been sent to officialsof the Puyallup Indian Tribe of Indiansand the Muckleshoot Indian Tribe.Representatives of any other Indian tribethat believes itself to be culturallyaffiliated with these human remainsshould contact Steven Hackenberger,Chair, Department of Anthropology,Central Washington University, 400 E.8th Ave., Ellensburg, WA 98926–7544;telephone: (509) 963–3201, fax (509)963–3215, before July 11, 1997.Repatriation of the human remains tothe Puyallup Tribe of Indians may beginafter that date if no additional claimantscome forward.Dated: June 3, 1997.Francis P. McManamon,Departmental Consulting Archeologist,Manager, Archeology and EthnographyProgram.[FR Doc. 97–15226 Filed 6–10–97; 8:45 am]BILLING CODE 4310–70–F

DEPARTMENT OF JUSTICE

Notice of Lodging of Consent DecreePursuant to the ComprehensiveEnvironmental Response,Compensation, and Liability Act of1980

Notice is hereby given that on April11, 1997, a proposed Consent Decree inUnited States v. Gold Field MiningCorp., Civil Action No. 96–2146–JWL(D. Kan.) was lodged with the UnitedStates District Court for the District ofKansas. The proposed Consent Decreeresolves the United States’ claims in thisaction against Gold Fields MiningCorporation (‘‘Gold Fields’’) and ViacomInternational Incorporated (‘‘Viacom’’)regarding their liability under Section107(a) of CERCLA, 42 U.S.C. § 9607(a),for response costs incurred and to beincurred by the United States inconnection with the Cherokee CountySuperfund Site—Galena Subsite inCherokee County, Kansas (‘‘Subsite’’).

The proposed Consent Decreerequires, inter alia, that Gold Fields andViacom will pay to the EPA HazardousSubstance Superfund $2,100,000 and$492,000, respectively. The proposedConsent Decree grants to the defendantsa covenant not to sue and thecontribution protection afforded bySection 113(f)(2) of CERCLA, 42 U.S.C.§ 9613(f)(2), for matters addressed in theproposed Consent Decree. The proposedConsent Decree contains reopenerswhich allow the United States, incertain situations, to institute additionalproceedings to require the defendants toperform response actions or reimbursethe United States for additional costs ofresponse.


The Department of Justice will receivecomments relating to the proposedConsent Decree for a period of thirty(30) days from the date of thispublication. Comments should beaddressed to the Assistant AttorneyGeneral of the Environment and NaturalResources Division, Department ofJustice, Washington, D.C. 20530, andshould refer to United States v. GoldField Mining Corp., DOJ No. 90–11–2–1081.

The proposed Consent Decree may beexamined at the Office of the UnitedStates Attorney for the District ofKansas, 500 State Avenue, Suite 360,Kansas City, Kansas 66101; and at theConsent Decree library, 1120 G Street,N.W. 4th Floor, Washington, D.C.20005. A copy of the proposed ConsentDecree may be obtained in person or bymail from the Consent Decree Library.When requesting a copy, please enclosea check in the amount of $7.25 (25 centsper page reproduction cost) payable tothe Consent Decree Library.Joel Gross,Chief, Environmental Enforcement Section,Environment and Natural Resources Division.[FR Doc. 97–15230 Filed 6–10–97; 8:45 am]BILLING CODE 4410–15–M


National Institute of Corrections

Advisory Board Meeting

TIME AND DATA: 8:00 a.m., Tuesday, July1, 1997.

PLACE: Sheraton City Centre, 1143 NewHampshire Avenue, NW., Washington,DC 20037.

STATUS: Open.

MATTERS TO BE CONSIDERED: Update onthe Corrections Program Office ViolentOffender and Truth In Sentencing GrantProgram, update on the NIC ExecutiveExcellence Program, a history of NICWork Plan/Feasibility Study, victimsissues discussion points, a status reporton the Mental Health Survey in Jails, anupdate on NIC’s Strategic Planning, theNIC Program Plan for FY 1998, electionof officers and liaisons, and a quarterlyreport from the Office of JusticePrograms.

FOR FURTHER INFORMATION CONTACT:Larry Solomon, Deputy Director, (202)307–3106, ext. 155.Morris L. Thigpen,Director.[FR Doc. 97–15295 Filed 6–10–97; 8:45 am]BILLING CODE 4410–36–M

DEPARTMENT OF LABOR


Proposed Information CollectionRequest Submitted for PublicComment and Recommendations;Attestations by Employers Using AlienCrewmembers for Longshore Activitiesin U.S. Ports

AGENCY: Employment and TrainingAdministration, Labor.ACTION: Notice.

SUMMARY: The Department of Labor, aspart of its continuing effort to reducepaperwork and respondent burdenconducts a preclearance consultationprogram to provide the general publicand Federal agencies with anopportunity to comment on proposedand/or continuing collections ofinformation in accordance with thePaperwork Reduction Act of 1995(PRA95), 44 U.S.C. 3506(c)(2)(A). Thisprogram helps to ensure that requesteddata can be provided in the desiredformat, reporting burden (time andfinancial resources) is minimized,collection instruments are clearlyunderstood, and the impact of collectionrequirements on respondents can beproperly assessed. Currently, theEmployment and TrainingAdministration is soliciting commentsconcerning the proposed extension tothe collection of information on theAttestation by Employers Using AlienCrewmembers to Perform LongshoreWork at Locations in the State of Alaska.A copy of the proposed informationcollection request (ICR) can be obtainedby contacting the office listed below inthe addressee section of this notice.DATES: Written comments must besubmitted to the office listed in theaddressee section below on or beforeAugust 11, 1997.

The Department of Labor isparticularly interested in commentswhich:

• Evaluate whether the proposedinformation collection is necessary forthe proper performance of the functionsof the agency, including whether theinformation will have practical utility;

• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collection of informationincluding the validity of themethodology and assumptions used;

• Enhance the quality, utility, andclarity of the information to becollected; and

• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,

electronic, mechanical, or othertechnological collections techniques orother forms of information, e.g.,permitting electronic submissions ofresponses.ADDRESSEE: Comments and questionsregarding the collection of informationon Form ETA 9033–A, Attestation byEmployers Using Alien Crewmembersfor Longshore Activities in the State ofAlaska, should be directed to JamesNorris, Chief, Division of Foreign LaborCertifications, U.S. Department of Labor,200 Constitution Avenue, NW., RoomN–4456, Washington, D.C. 20210 ((202)219–5263 (this is not a toll-freenumber)).


I. Background

The information collection is requireddue to amendments to section 258 of theImmigration and Nationality Act (8U.S.C. 1101 et seq.) (NA). Theamendments created an Alaskaexception to the general prohibition onthe performance of longshore work byalien crewmembers in U.S. ports. Underthe Alaska exception, before anyemployer may use alien crewmembersto perform longshore work in the Stateof Alaska, it must submit an attestationto ETA containing the elementsprescribed by the INA.

The INA further requires that theDepartment make available for publicexamination in Washington, DC, a list ofemployers which have filed attestations,and for each such employer, a copy ofthe employer’s attestation andaccompanying documentation it hasreceived.

II. Current Actions

In order for the Department to meet itsstatutory responsibilities under the INAthere is a need for an extension of anexisting collection of informationpertaining to employers’ seeking to usealien crewmembers to performlongshore activities at locations in theState of Alaska.

Type of Review: Extension of acurrently approved collection withoutchange.

Agency: Employment and TrainingAdministration, Labor.

Title: Attestations by Employers UsingAlien Crewmembers for LongshoreActivities at Locations in the State ofAlaska.

OMB Number: 2005–AB03.Affected Public: Businesses or other

for-profit.Form: Form ETA 9033–A.Total Respondents: 350.Frequency of Response: Annually.Total Responses: 350.


Average Burden Hours per Response:3.

Estimate Total Annual Burden Hours:1,050.

Comments submitted in response tothis notice will be summarized and/orincluded in the request for Office ofManagement and Budget approval of theinformation collection request; they willalso become a matter of public record.

Signed at Washington D.C. this 5th day ofJune, 1997.John R. Beverly, III,Director, U.S. Employment Service.[FR Doc. 97–15260 Filed 6–10–97; 8:45 am]BILLING CODE 4510–30–M

DEPARTMENT OF LABOR

Employment and TrainingAdministration

Proposed Collection; CommentRequest

ACTION: Notice.

SUMMARY: The Department of Labor, aspart of its continuing effort to reducepaperwork and respondent burdenconducts a pre-clearance consultationprogram to provide the general publicand Federal agencies with anopportunity to comment on proposedand/or continuing collections ofinformation in accordance with thePaperwork Reduction Act of 1995(PRA95) [44 U.S.C. 3506(c)(2)(A)]. Thisprogram helps to ensure that requesteddata can be provided in the desiredformat, reporting burden (time andfinancial resources) is minimized,collection instruments are clearlyunderstood, and the impact of collectionrequirements on respondents can beproperly assessed. Currently, theEmployment and TrainingAdministration is soliciting commentsconcerning the proposed revisedcollection of the Summer YouthEmployment Program.

A copy of the proposed informationcollection request (ICR) can be obtainedby contacting the office listed below inthe addressee section of this notice.DATES: Written comments must besubmitted to the office listed in theaddressee section below on or beforeAugust 11, 1997.

The Department of Labor isparticularly interested in commentswhich:

• Evaluate whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the agency, includingwhether the information will havepractical utility;

• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collection of information,including the validity of themethodology and assumptions used;


• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,e.g., permitting electronic submissionsof responses.ADDRESSES: James Wiggins, U.S.Department of Labor, 200 ConstitutionAvenue, NW., Washington, DC 20210;Telephone (202) 219–7533 ext. 164 (thisis not a toll-free number); internetaddress—[email protected]; faxnumber (202) 219–7190.


I. Background

Under the Job Training PartnershipAct Program, title IIB, the Department ofLabor has established the SummerYouth Employment and TrainingProgram to: (1) Enhance the basiceducation skills of youth; (2) encourageschool completion or enrollment insupplementary or alternative schoolprograms; provide eligible youth withexposure to the world of work; and (3)enhance the citizenship skills of youth.The Department of Labor is responsiblefor overseeing these programs. In orderto carry out that responsibility, theDepartment will be revising thereporting instructions and monitoringinstruments.

II. Current Actions

The changes being proposed will beconsistent with the current emergencyrequest which has been forwarded to theOffice of Management and Budget. TheDepartment is requesting reporting atthree points during the summerprogram—plan, mid and final. Thisinformation will permit the Departmentto fulfill requests from the U.S.Congress, the Administration, the mediaand the public.

Type or Review: Extension.Agency: Employment and Training

Administration, U.S. Department ofLabor.

Title: Summer Youth Employmentand Training Program.

OMB Number: 1205–XXXX.Recordkeeping: Retention for three

years.Affected Public: States.

Cite/Reference/Form/etc: SummerReporting (Plan/Mid/Final) andRegional Monitoring.

Total Respondents: 56.Frequency: Plan, Mid-Summer and

End of Summer.Total Responses: 168.Average Time per Response: Two

hours per report each report.Estimated Total Burden Hours: 6717.Total Burden Cost (operating/

maintaining): $750.00.Comments submitted in response to

this comment request will besummarized and/or included in therequest for Office of Management andBudget approval of the informationcollection request; they will alsobecome a matter of public record.

Dated: June 5, 1997.Charles L. Atkinson,Deputy Administrator, Office of Job TrainingPrograms.[FR Doc. 97–15259 Filed 6–10–97; 8:45 am]BILLING CODE 4510–30–M

DEPARTMENT OF LABOR


Unemployment Insurance CustomerSatisfaction Survey

ACTION: Notice.

SUMMARY: The Department of Labor, aspart of its continuing effort to reducepaperwork and respondent burden,conducts a preclearance consultationprogram to provide the general publicand Federal agencies with anopportunity to comment on proposedand/or continuing collections ofinformation, in accordance with thePaperwork Reduction Act of 1995(PRA95). This program helps to ensurethat requested data can be provided inthe desired format, reporting burden isminimized, reporting forms are clearlyunderstood, and the impact of collectionrequirements on respondents can beproperly assessed. Currently, theUnemployment Insurance Service of theEmployment and TrainingAdministration is soliciting commentsconcerning the proposed customersatisfaction survey of UnemploymentInsurance claimants. A copy of theproposed satisfaction survey can beobtained by contacting the employeelisted below in the contract section ofthis notice.DATES: Written comments must besubmitted on or before August 11, 1997.If you anticipate submitting writtencomments, but find it difficult to do sowithin the length of time allowed by


this notice, you should request anextension from the contact person listedbelow as soon as possible. An effort willbe made to accommodate each request,unless otherwise justified.FOR FURTHER INFORMATION CONTACT:Robert Pavosevich, U.S. Dept. of Labor,Unemployment Insurance Service,Room C–4514, 200 Constitution Ave.N.W., Washington, D.C. 20210, (202)219–5312, (this is not a toll-freenumber), internet address:[email protected].


I. BackgroundCustomer satisfaction has become a

key area of focus in the FederalGovernment. The United StatesDepartment of Labor Employment andTraining Administration is seeking todetermine the degree to which theUnemployment Insurance (UI) systemprovides satisfactory service to itsclaimant customers. This project is forthe development and implementation ofa nationally representative customer

satisfaction survey for UI claimantsonly. The objectives of this survey areto support the Federal role in such tasksas oversight and national programdevelopment. The survey satisfies theintent of Executive Order 12862 byenabling the Department of Labor todevelop customer satisfactionbenchmarks to which individual Statesmay compare results from their ownsurveys.

II. Current Actions

The survey will be administered to3,000 claimants in sixteen differentStates. Each of the States will providethe data on claimants. It is estimatedthat the burden of collecting thisadministrative data is 80 hours per Statefor a total of 1,280 hours. The surveywill then be done over the telephone inan average of fifteen minutes perclaimant (750 total burden hours).Computer Assisted TelephoneInterviewing (CATI) will be used toconduct the survey in order to reducethe burden on respondents and provide

greater accuracy. All respondents willbe informed that the information theyprovide will be kept strictlyconfidential. All data will be collectedby a private contractor and onlyinformation that will preclude anyindividual’s identification will beprovided to the U.S. Department ofLabor. This data collection process fromindividuals and states will occur onlyonce. The total burden of collecting theadministrative data and conducting thesurvey is estimated to be 2,030 hours.

Public comments are being solicitedto address the accuracy of the burdenestimates and ways to minimize burden,including the use of automatedcollection techniques or the use of otherforms of information technology.

Type of Review: New.Agency: Employment and Training

Administration.Title: Unemployment Insurance

Claimant Customer Satisfaction Survey.OMB Number: 1205—New.Affected Public: Individuals or

Households and State Government.

Cite/reference Total re-spondents Frequency Total re-

sponsesAvg. time per

resp.Burdenhours

State ............................................................................................ 16 One-time ........... 16 80 hrs ............... 1,280Survey ......................................................................................... 3,000 One-time ........... 3,000 15 min .............. 750

Totals ................................................................................... ...................... ....................... 2,030

Total Burden Cost (capital/startup):$43,551.

Total Burden Cost (operating/maintaining): $94,296.

Comments submitted in response tothis notice will be summarized and/orincluded in the request for Office ofManagement and Budget approval of theinformation collection request; they willalso become a matter of public record.

Signed at Washington, D.C., this fourth dayof June, 1997.Grace A. Kilbane,Director, Unemployment Insurance Service.[FR Doc. 97–15261 Filed 6–10–97; 8:45 am]BILLING CODE 4510–30–M

DEPARTMENT OF LABOR

Employment Standards Administration

Wage and Hour Division; MinimumWages for Federal and FederallyAssisted Construction; General WageDetermination Decisions

General wage determination decisionsof the Secretary of Labor are issued inaccordance with applicable law and arebased on the information obtained bythe Department of Labor from its study

of local wage conditions and data madeavailable from other sources. Theyspecify the basic hourly wage rates andfringe benefits which are determined tobe prevailing for the described classes oflaborers and mechanics employed onconstruction projects of a similarcharacter and in the localities specifiedtherein.

The determinations in these decisionsof prevailing rates and fringe benefitshave been made in accordance with 29CFR Part 1, by authority of the Secretaryof Labor pursuant to the provisions ofthe Davis-Bacon Act of March 3, 1931,as amended (46 Stat. 1494, as amended,40 U.S.C. 276a) and of other Federalstatutes referred to in 29 CFR Part 1,Appendix, as well as such additionalstatutes as may from time to time beenacted containing provisions for thepayment of wages determined to beprevailing by the Secretary of Labor inaccordance with the Davis-Bacon Act.The prevailing rates and fringe benefitsdetermined in these decisions shall, inaccordance with the provisions of theforegoing statutes, constitute theminimum wages payable on Federal andfederally assisted construction projectsto laborers and mechanics of thespecified classes engaged on contract

work of the character and in thelocalities described therein.

Good cause is hereby found for notutilizing notice and public commentprocedure thereon prior to the issuanceof these determinations as prescribed in5 U.S.C. 553 and not providing for delayin the effective date as prescribed in thatsection, because the necessity to issuecurrent construction industry wagedeterminations frequently and in largevolume causes procedures to beimpractical and contrary to the publicinterest.

General wage determinationdecisions, and modifications andsupersedes decision thereto, contain noexpiration dates and are effective fromtheir date of notice in the FederalRegister, or on the date written noticeis received by the agency, whichever isearlier. These decisions are to be usedin accordance with the provisions of 29CFR Parts 1 and 5. Accordingly, theapplicable decision, together with anymodifications issued, must be made apart of every contract for performance ofthe described work within thegeographic area indicated as required byan applicable Federal prevailing wagelaw and 29 CFR Part 5. The wage ratesand fringe benefits, notice of which is


published herein, and which arecontained in the Government PrintingOffice (GPO) document entitled‘‘General Wage Determinations IssuedUnder The Davis-Bacon And RelatedActs,’’ shall be the minimum paid bycontractors and subcontractors tolaborers and mechanics.

Any person, organization, orgovernmental agency having an interestin the rates determined as prevailing isencouraged to submit wage rate andfringe benefit information forconsideration by the Department.Further information and self-explanatory forms for the purpose ofsubmitting this data may be obtained bywriting to the U.S. Department of Labor,Employment Standards Administration,Wage and Hour Division, Division ofWage Determinations, 200 ConstitutionAvenue, NW., Room S–3014,Washington, DC 20210.

Modifications to General WageDetermination Decisions

The number of decisions listed in theGovernment Printing Office documententitled ‘‘General Wage DeterminationsIssued Under the Davis-Bacon andRelated Acts’’ being modified are listedby Volume and State. Dates ofpublication in the Federal Register arein Parentheses following the decisionsbeing modified.

Volume I

MassachusettsMA970001 (Feb. 14, 1997)MA970002 (Feb. 14, 1997)MA970003 (Feb. 14, 1997)MA970006 (Feb. 14, 1997)MA970007 (Feb. 14, 1997)MA970008 (Feb. 14, 1997)MA970009 (Feb. 14, 1997)MA970010 (Feb. 14, 1997)MA970013 (Feb. 14, 1997)MA970017 (Feb. 14, 1997)MA970018 (Feb. 14, 1997)MA970019 (Feb. 14, 1997)MA970020 (Feb. 14, 1997)MA970021 (Feb. 14, 1997)

New JerseyNJ970002 (Feb. 14, 1997)

Rhode IslandRI970001 (Feb. 14, 1997)RI970002 (Feb. 14, 1997)

Volume II

District of ColumbiaDC970001 (Feb. 14, 1997)DC970002 (Feb. 14, 1997)DC970003 (Feb. 14, 1997)

MarylandMD970008 (Feb. 14, 1997)MD970017 (Feb. 14, 1997)MD970034 (Feb. 14, 1997)MD970035 (Feb. 14, 1997)MD970036 (Feb. 14, 1997)MD970047 (Feb. 14, 1997)MD970048 (Feb. 14, 1997)MD970056 (Feb. 14, 1997)

MD970057 (Feb. 14, 1997)Pennsylvania

PA970018 (Feb. 14, 1997)PA970042 (Feb. 14, 1997)PA970065 (Feb. 14, 1997)

VirginiaVA970022 (Feb. 14, 1997)VA970025 (Feb. 14, 1997)VA970034 (Feb. 14, 1997)VA970039 (Feb. 14, 1997)VA970048 (Feb. 14, 1997)VA970052 (Feb. 14, 1997)VA970058 (Feb. 14, 1997)VA970063 (Feb. 14, 1997)VA970078 (Feb. 14, 1997)VA970079 (Feb. 14, 1997)VA970103 (Feb. 14, 1997)VA970104 (Feb. 14, 1997)VA970105 (Feb. 14, 1997)

West VirginiaWV970002 (Feb. 14, 1997)WV970003 (Feb. 14, 1997)WV970006 (Feb. 14, 1997)

Volume III

KentuckyKY970001 (Feb. 14, 1997)KY970002 (Feb. 14, 1997)KY970003 (Feb. 14, 1997)KY970004 (Feb. 14, 1997)KY970006 (Feb. 14, 1997)KY970007 (Feb. 14, 1997)KY970025 (Feb. 14, 1997)KY970027 (Feb. 14, 1997)KY970028 (Feb. 14, 1997)KY970029 (Feb. 14, 1997)KY970035 (Feb. 14, 1997)KY970044 (Feb. 14, 1997)

Volume IV

IllinoisIL970008 (Feb. 14, 1997)IL970009 (Feb. 14, 1997)

MinnesotaMN970005 (Feb. 14, 1997)MN970007 (Feb. 14, 1997)MN970008 (Feb. 14, 1997)MN970012 (Feb. 14, 1997)MN970015 (Feb. 14, 1997)MN970017 (Feb. 14, 1997)MN970027 (Feb. 14, 1997)MN970031 (Feb. 14, 1997)MN970035 (Feb. 14, 1997)MN970039 (Feb. 14, 1997)MN970046 (Feb. 14, 1997)MN970047 (Feb. 14, 1997)MN970049 (Feb. 14, 1997)MN970058 (Feb. 14, 1997)MN970059 (Feb. 14, 1997)MN970061 (Feb. 14, 1997)

OhioOH970001 (Feb. 14, 1997)OH970002 (Feb. 14, 1997)OH970003 (Feb. 14, 1997)OH970012 (Feb. 14, 1997)OH970014 (Feb. 14, 1997)OH970024 (Feb. 14, 1997)OH970026 (Feb. 14, 1997)OH970027 (Feb. 14, 1997)OH970028 (Feb. 14, 1997)OH970029 (Feb. 14, 1997)OH970032 (Feb. 14, 1997)OH970034 (Feb. 14, 1997)OH970035 (Feb. 14, 1997)

WisconsinWI970001 (Feb. 14, 1997)

WI970002 (Feb. 14, 1997)WI970003 (Feb. 14, 1997)WI970004 (Feb. 14, 1997)WI970005 (Feb. 14, 1997)WI970006 (Feb. 14, 1997)WI970007 (Feb. 14, 1997)WI970008 (Feb. 14, 1997)WI970009 (Feb. 14, 1997)WI970010 (Feb. 14, 1997)WI970011 (Feb. 14, 1997)WI970012 (Feb. 14, 1997)WI970013 (Feb. 14, 1997)WI970014 (Feb. 14, 1997)WI970015 (Feb. 14, 1997)WI970016 (Feb. 14, 1997)WI970017 (Feb. 14, 1997)WI970018 (Feb. 14, 1997)WI970019 (Feb. 14, 1997)WI970020 (Feb. 14, 1997)WI970021 (Feb. 14, 1997)WI970022 (Feb. 14, 1997)WI970024 (Feb. 14, 1997)WI970025 (Feb. 14, 1997)WI970026 (Feb. 14, 1997)WI970027 (Feb. 14, 1997)WI970028 (Feb. 14, 1997)WI970029 (Feb. 14, 1997)WI970030 (Feb. 14, 1997)WI970031 (Feb. 14, 1997)WI970032 (Feb. 14, 1997)WI970033 (Feb. 14, 1997)WI970034 (Feb. 14, 1997)WI970035 (Feb. 14, 1997)WI970036 (Feb. 14, 1997)WI970037 (Feb. 14, 1997)WI970039 (Feb. 14, 1997)WI970041 (Feb. 14, 1997)WI970049 (Feb. 14, 1997)WI970066 (Feb. 14, 1997)WI970067 (Feb. 14, 1997)

Volume V

KansasKS970004 (Feb. 14, 1997)KS970006 (Feb. 14, 1997)KS970007 (Feb. 14, 1997)KS970008 (Feb. 14, 1997)KS970009 (Feb. 14, 1997)KS970012 (Feb. 14, 1997)KS970013 (Feb. 14, 1997)KS970016 (Feb. 14, 1997)KS970017 (Feb. 14, 1997)KS970021 (Feb. 14, 1997)KS970023 (Feb. 14, 1997)KS970025 (Feb. 14, 1997)KS970026 (Feb. 14, 1997)KS970029 (Feb. 14, 1997)KS970061 (Feb. 14, 1997)

LouisianaLA970005 (Feb. 14, 1997)LA970009 (Feb. 14, 1997)LA970018 (Feb. 14, 1997)

TexasTX970018 (Feb. 14, 1997)

Volume VI

ColoradoCO970001 (Feb. 14, 1997)

South DakotaSD970003 (Feb. 14, 1997)SD970005 (Feb. 14, 1997)SD970006 (Feb. 14, 1997)

Volume VII

None


General Wage DeterminationPublication

General wage determinations issuedunder the Davis-Bacon and related Acts,including those noted above, may befound in the Government Printing Office(GPO) document entitled ‘‘General WageDeterminations Issued Under The Davis-Bacon and Related Acts’’. Thispublication is available at each of the 50Regional Government DepositoryLibraries and many of the 1,400Government Depository Libraries acrossthe county.

The general wage determinationsissued under the Davis-Bacon andrelated Acts are available electronicallyby subscription to the FedWorldBulletin Board System of the NationalTechnical Information Service (NTIS) ofthe U.S. Department of Commerce at(703) 487–4630.

Hard-copy subscriptions may bepurchased from: Superintendent ofDocuments, U.S. Government PrintingOffice, Washington, D.C. 20402, (202)512–1800.

When ordering hard-copysubscription(s), be sure to specify theState(s) of interest, since subscriptionsmay be ordered for any or all of theseven separate volumes, arranged byState. Subscriptions include an annualedition (issued in January or February)which includes all current general wagedeterminations for the States covered byeach volume. Throughout the remainderof the year, regular weekly updates aredistributed to subscribers.

Signed at Washington, D.C. this 6th day ofJune 1997.Carl J. Poleskey,Chief, Branch of Construction WageDeterminations.[FR Doc. 97–15277 Filed 6–10–97; 8:45 am]BILLING CODE 4510–27–M

DEPARTMENT OF LABOR

Occupational Safety and HealthAdministration

OSHA Data Collection System

[Docket ICR 97–17]

AGENCY: Occupational Safety and HealthAdministration, Labor.ACTION: Notice; proposed collectionrequest; submitted for public commentand recommendations.

SUMMARY: The Department of Labor, aspart of its continuing effort to reducepaperwork and respondent burdenconducts a preclearance consultationprogram to provide the general publicand Federal agencies with an

opportunity to comment on proposedand/or continuing collections ofinformation in accordance with thePaperwork Reduction Act of 1995(PRA95) (44 U.S.C. 3506(c)(2)(A)). Thisprogram helps to ensure that requesteddata can be provided in the desiredformat, reporting burden (time andfinancial resources) is minimized,collection instruments are clearlyunderstood, and the impact of collectionrequirements on respondents can beproperly assessed. Currently, theOccupational Safety and HealthAdministration (OSHA) is solicitingcomments concerning the proposedextension of the information collectionrequest for the OSHA Data CollectionSystem. A copy of the proposedinformation collection request (ICR) canbe obtained by contacting the officelisted below in the addressee section ofthis notice.DATES: Written comments must besubmitted to the office listed in theaddressee section below on or beforeAugust 11, 1997. The Department ofLabor is particularly interested incomments which:

• Evaluate whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the agency, includingwhether the information will havepractical utility;

• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collection of information,including the validity of themethodology and assumptions used;


• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,e.g., permitting electronic submissionsof responses.ADDRESSES: Comments are to besubmitted to the Docket Office, DocketNo. ICR 97–17, U.S. Department ofLabor, Room N–2625, 200 ConstitutionAve., NW., Washington, DC 20210, (202)219–7894. Written comments limited to10 pages or less in length may also betransmitted by facsimile to (202) 219–5046.FOR FURTHER INFORMATION CONTACT:Dr. Joseph DuBois, Office of Statistics,Occupational Safety and HealthAdministration, U.S. Department ofLabor, Room N–3647, 200 ConstitutionAve., NW., Washington DC 20210, (202)219–6463. Copies of the reference

information collection request areavailable for inspection and copying inthe Docket Office and will be mailedimmediately to persons who requestcopies by telephoning Barbara Bielaskiat (202) 219–7177. For electronic copiesof the information collection request onthe OSHA Data Collection System,contact the Labor News Bulletin Board(202) 219–4784; or OSHA’s WebPage onInternet at http://www.osha.gov/ (clickon Standards).


Background

To meet many of OSHA’s programneeds, OSHA is proposing to continueits data system to collect occupationalinjury and illness data and informationon number of workers employed andnumber of hours worked fromestablishments in portions of the privatesector. OSHA will collect data from80,000 employers required in 1997 tocreate and maintain records pursuant toCFR Part 1904. These data will allowOSHA to calculate occupational injuryand illness rates and to focus its effortson individual workplaces with ongoingserious safety and health problems.Successful implementation of the datacollection system is critical to OSHA’sreinvention efforts. The data collectedwill allow the Agency to deal with alarger number of employers withoutmassive increases in resources, willreduce intrusive interventions inworkplaces that are relatively safe, andwill lead to improved workplace safetyand health for America’s workers. Thedata collection system is also critical tothe Agency’s Government Performanceand Results Act (GPRA) requirements.The data will enable OSHA to monitorthe results of agency activities, quantifyand evaluate the successes and failure ofits various programs based on programresults, identify the most efficient andeffective program mix, and promote thedevelopment of programs and policiesbased on outcome data.

Current Action

This notice requests OMB approval ofthe paperwork requirements for theOSHA Data Collection System.

Type of Review: Extension of existingapproval.

Agency: Occupational Safety andHealth Administration, U.S. Departmentof Labor.

Title OSHA Data Collection System.OMB Number: 1218–0209.Agency Number: ICR–97–17.Frequency: Annually.Affected Public: Business or other for-

profit and State, Local or TribalGovernment.


Form: OSHA Form 196A and OSHAForm 196B.

Number of Respondents: 80,000.Estimated Time Per Respondent: 30

minutes

Estimated Total Burden Hours: 35,000hours

Cite/reference Total re-spondents Frequency Total re-

sponses Average time per response Burden

OSHA Form 196A ................... 10,000 Annually .................................. 10,000 30 minutes .............................. (*)OSHA Form 196B ................... 70,000 Annually .................................. 70,000 30 minutes .............................. 35,000 hours.

Total Burden Cost (capital/startup/operating/maintenance): $0.

Comments submitted in response tothis comment request will besummarized and/or included in therequest for Office of Management andBudget approval of the informationcollection request; they will be alsobecome a matter of public record.

Signed this 3 day of June 1997.Stephen A. Newell,Director, Office of Statistics.[FR Doc. 97–15262 Filed 6–11–97; 8:45 am]BILLING CODE 4510–26–M

NATIONAL FOUNDATION ON THEARTS AND THE HUMANITIES

National Endowment for the Arts;Combined Arts Panel

Pursuant to Section 10(a)(2) of theFederal Advisory Committee Act (Pub.L. 92–463), as amended, notice is herebygiven that a meeting of the CombinedArts Advisory Panel, Folk andTraditional Arts Section (Creation andPresentation, Heritage and Preservation,Education and Access, and Planningand Stabilization categories) to theNational Council on the Arts will beheld on July 7–11, 1997. The panel willmeet from 9:00 a.m. to 7:00 p.m. on July7 and 10; from 9:00 a.m. to 5:30 p.m. onJuly 8 and 11; and from 10:00 a.m. to3:30 p.m. on July 9. The panel will meetin Room 716 at the Nancy Hanks Center,1100 Pennsylvania Avenue, NW,Washington, D.C. 20506. A portion ofthis meeting, from 10:30 a.m. to 12:00p.m. on July 11 will be open to thepublic for a policy and guidelinesdiscussion.

The remaining portions of thismeeting, from 9:00 a.m. to 7:00 p.m. onJuly 7 and 10; from 9:00 a.m. to 5:30p.m. on July 8; from 10:00 a.m. to 3:30p.m.; from 9:00 a.m. to 10:30 a.m. andfrom 1:00 p.m. to 5:30 p.m. on July 11,are for the purpose of Panel review,discussion, evaluation, andrecommendation on applications forfinancial assistance under the NationalFoundation on the Arts and theHumanities Act of 1965, as amended,including information given inconfidence to the agency by grant

applicants. In accordance with thedetermination of the Chairman of March31, 1997, these sessions will be closedto the public pursuant to subsection (c)(4), (6) and (9)(B) of section 552b of Title5, United States Code.

Any person may observe meetings, orportions thereof, of advisory panelswhich are open to the public, and maybe permitted to participate in thepanel’s discussions at the discretion ofthe panel chairman and with theapproval of the full-time Federalemployee in attendance.

If you need special accommodationsdue to a disability, please contact theOffice of AccessAbility, NationalEndowment for the Arts, 1100Pennsylvania Avenue, NW, Washington,D.C. 20506, 202/682–5532, TDY–TDD202/682–5496, at least seven (7) daysprior to the meeting.

Further information with reference tothis meeting can be obtained from Ms.Kathy Plowitz-Worden, CommitteeManagement Officer, NationalEndowment for the Arts, Washington,D.C. 20506, or call 202/682–5691.

Dated: June 5, 1997.Kathy Plowitz-Worden,Panel Coordinator, Panel Operations,National Endowment for the Arts.[FR Doc. 97–15173 Filed 6–10–97; 8:45 am]BILLING CODE 7537–01–M



Pursuant to Section 10(a)(2) of theFederal Advisory Committee Act (PublicLaw 92–463), as amended, notice ishereby given that a meeting of theCombined Arts Advisory Panel, DesignSection (Creation and Presentation,Heritage and Preservation, Educationand Access, and Planning andStabilization categories) to the NationalCouncil on the Arts will be held on July24, 1997. The panel will meet from 9:00a.m. to 4:30 p.m. in Room 714 at theNancy Hanks Center, 1100 PennsylvaniaAvenue, N.W., Washington, D.C. 20506.A portion of this meeting, from 1:30p.m. to 2:30 p.m., will be open to the

public for a policy and guidelinesdiscussion.

The remaining portions of thismeeting, from 9:00 a.m. to 12:30 p.m.and from 2:30 p.m. to 4:30 p.m., are forthe purpose of Panel review, discussion,evaluation, and recommendation onapplications for financial assistanceunder the National Foundation on theArts and the Humanities Act of 1965, asamended, including information givenin confidence to the agency by grantapplicants. In accordance with thedetermination of the Chairman of March31, 1997, these sessions will be closedto the public pursuant to subsection (c)(4), (6) and (9)(B) of section 552b of Title5, United States Code.


If you need special accommodationsdue to a disability, please contact theOffice of AccessAbility, NationalEndowment for the Arts, 1100Pennsylvania Avenue, NW.,Washington, D.C. 20506, 202/682–5532,TDY–TDD 202/682–5496, at least seven(7) days prior to the meeting.

Futher information with reference tothis meeting can be obtained from Ms.Kathy Plowitz-Worden, CommitteeManagement Officer, NationalEndowment for the Arts, Washington,D.C. 20506, or call 202/682–5691.

Dated: June 5, 1997.Kathy Plowitz-Worden,Panel Coordinator, Panel Operations,National Endowment for the Arts.[FR Doc. 97–15236 Filed 6–10–97; 8:45 am]BILLING CODE 7537–01–M



Pursuant to Section 10(a)(2) of theFederal Advisory Committee Act (PublicLaw 92–463), as amended, notice ishereby given that a meeting of the


Combined Arts Advisory Panel,Museum/Visual Arts Section (Heritageand Preservation category) to theNational Council on the Arts will beheld on July 15–16, 1997. The panelwill meet from 9:00 a.m. to 7:00 p.m. onJuly 15 and from 9:00 a.m. to 5:00 p.m.on July 16, in Room 716 at the NancyHanks Center, 1100 PennsylvaniaAvenue, NW., Washington, DC 20506. Aportion of this meeting, from 11:00 a.m.to 12:30 p.m. and from 1:00 p.m. to 2:00p.m. on July 16, will be open to thepublic for a policy and guidelinesdiscussion.

The remaining portions of thismeeting, from 9:00 a.m. to 7:00 p.m. onJuly 15 and from 9:00 a.m. to 11:00 a.m.and 2:00 p.m. to 5:00 p.m., on July 16are for the purpose of Panel review,discussion, evaluation, andrecommendation on applications forfinancial assistance under the NationalFoundation on the Arts and theHumanities Act of 1965, as amended,including information given inconfidence to the agency by grantapplicants. In accordance with thedetermination of the Chairman of March31, 1997, these sessions will be closedto the public pursuant to subsection (c)(4), (6) and (9)(B) of section 552b of Title5, United States Code.


If you need special accommodationsdue to a disability, please contact theOffice of AccessAbility, NationalEndowment for the Arts, 1100Pennsylvania Avenue, NW.,Washington, DC 20506, 202/682–5532,TDY–TDD 202/682–5496, at least seven(7) days prior to the meeting.

Further information with reference tothis meeting can be obtained from Ms.Kathy Plowitz-Worden, CommitteeManagement Officer, NationalEndowment for the Arts, Washington,DC 20506, or call 202/682–5691.


Kathy Plowitz-Worden,Panel Coordinator, Panel Operations,National Endowment for the Arts.[FR Doc. 97–15237 Filed 6–10–97; 8:45 am]


NATIONAL SCIENCE FOUNDATION

Special Emphasis Panel in HumanResource Development

Notice of Meeting

In accordance with the FederalAdvisory Committee Act (Pub. L. 92–463, as amended), the National ScienceFoundation announces the followingmeeting.

Name and Committee Code: SpecialEmphasis Panel In Human ResourceDevelopment (#1199).

Date and Time: June 23, 1997: 8:00 a.m. to5:00 p.m.; June 24, 1997: 8:00 a.m. to 5:00p.m.

Place: National Science Foundation, 4201Wilson Boulevard, Room 360, Arlington, VA22230.

Type of Meeting: Closed.Contact Person: Dr. Bobby Wilson, Program

Director, Human Resource DevelopmentDivision, Room 815, National ScienceFoundation, 4201 Wilson Boulevard,Arlington, VA 22230, Telephone: (703) 306–1634.

Purpose of Meeting: To provide advice andrecommendations concerning nominationssubmitted to NSF for financial support.

Agenda: To review and evaluatenominations for Presidential Awards forExcellence in Science, Mathematics andEngineering Mentoring (PAESMEM) as partof the selection process for awards.

Reason for Closing: The nominations beingreviewed include information of aproprietary or confidential nature, includingtechnical information; financial data, such assalaries; and personal informationconcerning individuals associated with thenominations. These matters are exemptunder 5 U.S.C. 552b(c), (4) and (6) of theGovernment in the Sunshine Act.

Dated: June 5, 1997.M. Rebecca Winkler,Committee Management Officer.[FR Doc. 97–15176 Filed 6–10–97; 8:45 am]BILLING CODE 7555–01–M


Special Emphasis Panel in MaterialsResearch; Notice of Meeting

In accordance with the FederalAdvisory Committee Act (Pub. L. 92–463 as amended), the National ScienceFoundation announces the followingmeetings.

Name and Committee Code: SpecialEmphasis Panel in Materials Research #1293.

Dates and Times: June 25, 1997; 6:00 pm–10:00 pm, June 26, 1997; 8:00 am–6:00 pm,June 27, 1997; 8:00 am–5:00 pm.

Place: Liquid Crystal Institute/MaterialsScience Building, Kent State University,Kent, OH

Type of Meeting: Closed.Contact Person: Dr. David L. Nelson,

Coordinating Program Director, Division of

Materials Research, Room 1065, NationalScience Foundation, 4201 Wilson Boulevard,Arlington, VA 22230, Telephone (703) 306–1817.

Purpose of Meeting: To provide advice andrecommendations concerning support for theCenter for Advanced Liquid CrystallineOptical Materials (ALCOM), Science andTechnology Center, Kent State University.

Agenda: To review and evaluate a proposaland provide advice and recommendations aspart of the review process for proposalsubmitted to the National ScienceFoundation.

Reason For Closing: The activity beingevaluated may include information of aproprietary or confidential nature, includingtechnical information; financial data, such assalaries and personal information concerningindividuals associated with the proposals.These matters are exempt under 5 U.S.C.552b.(c) (4) and (6) of the Government in theSunshine Act.

Dated. June 5, 1997.M. Rebecca Winkler,Committee Management Officer.[FR Doc. 97–15177 Filed 6–10–97; 8:45 am]BILLING CODE 7555–01–M

NATIONAL SCIENCES FOUNDATION

Special Emphasis Panel in the Divisionof Physics; Notice of Meeting

In accordance with the FederalAdvisory Committee Act (Pub. L. 92–463, as amended), the National ScienceFoundation announces the followingmeeting.

Name and Committee Code: SpecialEmphasis Panel in the Division of Physics(#1208).

Date and Time: Thursday, June 26, 19978:30 a.m.–5:00 p.m., Friday, June 27, 19978:30 a.m.–5:00 p.m.

Place: Thursday, June 26, 1997, Room370N; Friday June 27, 1997, Room 370N 4201Wilson Blvd., Arlington, VA 22230.

Type of Meeting: Closed.Contact Person: Dr. John W. Lightbody,

Executive Officer, Division of Physics, Room1015, National Science Foundation, 4201Wilson Blvd., Arlington, VA 22230.Telephone: (703) 306–1806.

Purpose of Meeting: To provide advice andrecommendations concerning the BorexinoReview submitted to NSF for financialsupport.

Agenda: To review and evaluate proposalsas part of the selection process for awards.

Reason for Closing: The proposals beingreviewed include information of aproprietary or confidential nature, includingtechnical information; financial data, such assalaries; and personal informationconcerning individuals associated with theproposals. These matters are exempt under 5U.S.C. 552b(c) (4) and (6) of the Governmentin the Sunshine Act.




Special Emphasis Panel in Research,Evaluation and Communication; Noticeof Meeting

In accordance with the FederalAdvisory Committee Act (Pub. L. 92–463, as amended), the National ScienceFoundation announces the followingmeeting:

Name: Special Emphasis Panel inResearch, Evaluation and Communication.

Date and Time: June 30, 1997; 8:30 a.m. to6:00 p.m., July 1, 1997; 8:30 a.m. to 4:00 p.m.

Place: Rooms 310, 320, 340, 360, 370, 380,390, National Science Foundation, 4201Wilson Boulevard, Arlington, VA 22230.

Type of Meeting: Closed.Contact Person: Dr. Nora Sabelli, Senior

Program Director, 4201 Wilson Boulevard,Room 855, Arlington, VA 22230. Telephone(703) 306–1651.

Purpose of Meeting: To provide advice andrecommendations concerning proposalssubmitted to NSF for financial support.

Agenda: To review and evaluate proposalsand provide advice and recommendations aspart of the selection process for proposalssubmitted to the Learning and IntelligentSystems Initiative (LIS) Program.

Reason for Closing: Because the proposalsreviewed include information of aproprietary or confidential nature, includingtechnical information; financial data, such assalaries; and personal informationconcerning individuals associated withproposals, the meetings are closed to thepublic. These matters are within exemptions(4) and (6) of 5 U.S.C. 552b(c), Governmentin the Sunshine Act.


NORTHEAST DAIRY COMPACTCOMMISSION

Meeting

AGENCY: Northeast Dairy CompactCommission.ACTION: Notice of Regular Meeting.

SUMMARY: The Compact Commissionwill hold its regularly scheduledmonthly meeting to consider certainmatters relating to administration andcertain issues relating toimplementation of the compact over-order price regulation.

DATES: The meeting is scheduled forJune 19, 1997 commencing at 10:00 a.m.to adjournment.ADDRESS: The meeting will be held inRoom 301–303 at the New HampshireLegislative Office Building located on33 North State Street in Concord, NH(exit 14 off Interstate 93).FOR FURTHER INFORMATION CONTACT:Daniel Smith, Executive Director,Northeast Dairy Compact Commission,43 State Street, PO Box 1058,Montpelier, VT 05601. Telephone (802)229–1941.SUPPLEMENTARY INFORMATION: Notice ishereby given that the Northeast DairyCompact Commission will hold itsregularly scheduled monthly meeting.The Compact Commission will considercertain administrative matters,including staffing and budget issues andthe establishment of an ad hoccommittee on regional cost ofproduction. The Commission will alsoconsider procedures to implementCompact Sections 16 and 17, relative tothe protection of the rights of anyobjectors to the compact over-orderprice regulation during administrativeand judicial review of their objections tothis regulation.(Authority: (a) Article V, Section 11 of theNortheast Interstate Dairy Compact, and allother applicable Articles and Sections, asapproved by Section 147, of the FederalAgriculture Improvement and Reform Act(FAIR ACT), Pub. L. 104–127, and as therebyset forth in S.J. Res. 28(1)(b) of the 104thCongress; Finding of Compelling PublicInterest by United States Department ofAgriculture Secretary Dan Glickman, August8, 1996 and March 20, 1997. (b) Bylaws ofthe Northeast Dairy Compact Commission,adopted November 21, 1996)Daniel Smith,Executive Director.[FR Doc. 97–15233 Filed 6–10–97; 8:45 am]BILLING CODE 1650–01–P

NUCLEAR REGULATORYCOMMISSION

Agency Information CollectionActivities: Submission for OMBReview; Comment Request

AGENCY: U. S. Nuclear RegulatoryCommission (NRC).ACTION: Notice of the OMB review ofinformation collection and solicitationof public comment.

SUMMARY: The NRC has recentlysubmitted to OMB for review thefollowing proposal for the collection ofinformation under the provisions of thePaperwork Reduction Act of 1995 (44U.S.C. Chapter 35). The NRC hereby

informs potential respondents that anagency may not conduct or sponsor, andthat a person is not required to respondto, a collection of information unless itdisplays a currently valid OMB controlnumber.

1. Type of submission, new, revision,or extension: Revision

2. The title of the informationcollection: 10 CFR Part 50, ‘‘DomesticLicensing of Production and UtilizationFacilities’’.

3. The form number if applicable: Notapplicable.

4. How often the collection isrequired: As necessary in order for NRCto meet its responsibilities to conduct adetailed review of applications forlicenses and amendments thereto toconstruct and operate nuclear powerplants, preliminary or final designapprovals, design certifications,research and test facilities, reprocessingplants and other utilization andproduction facilities, licensed pursuantto the Atomic Energy Act of 1954, asamended (the Act) and to monitor theiractivities.

5. Who will be required or asked toreport: Licensees and applicants fornuclear power plants and non-powerreactors (research and test facilities).

6. An estimate of the number ofresponses: 7,985.

7. The estimated number of annualrespondents: 178.

8. An estimate of the total number ofhours needed annually to complete therequirement or request: 5.6M(approximately 2.9M reporting hoursand 2.7M recordkeeping hours); anaverage of 31.3K per respondent.

9. An indication of whether Section3507(d), Pub. L. 104–13 applies: Notapplicable.

10. Abstract: 10 CFR part 50 of theNRC’s regulations, ‘‘Domestic Licensingof Production and UtilizationFacilities,’’ specifies technicalinformation and data to be provided tothe NRC or maintained by applicantsand licensees so that the NRC may makedeterminations necessary to promote thehealth and safety of the public, inaccordance with the Act. The reportingand recordkeeping requirementscontained in 10 CFR part 50 aremandatory for the affected licensees andapplicants.

A copy of the submittal may beviewed free of charge at the NRC PublicDocument Room, 2120 L Street, NW(Lower Level), Washington, DC.Members of the public who are in theWashington, DC, area can access thesubmittal via modem on the PublicDocument Room Bulletin Board (NRC’sAdvance Copy Document Library) NRCsubsystem at FedWorld, 703–321–3339.


Members of the public who are locatedoutside of the Washington, DC, area candial FedWorld, 1–800–303–9672, or usethe FedWorld Internet address:fedworld.gov (Telnet). The documentwill be available on the bulletin boardfor 30 days after the signature date ofthis notice. If assistance is needed inaccessing the document, please contactthe FedWorld help desk at 703–487–4608. Additional assistance in locatingthe document is available from the NRCPublic Document Room, nationally at 1–800–397–4209, or within theWashington, DC, area at 202–634–3273.

Comments and questions should bedirected to the OMB reviewer by July11, 1997: Edward Michlovich, Office ofInformation and Regulatory Affairs(3150–0011), NEOB–10202, Office ofManagement and Budget, Washington,DC 20503.

Comments can also be submitted bytelephone at (202) 395–3084.

The NRC Clearance Officer is BrendaJo. Shelton, (301) 415–7233.

Dated at Rockville, Maryland, this 5th dayof June 1997.

For the Nuclear Regulatory Commission.Arnold E. Levin,Acting Designated Senior Official forInformation Resources Management.[FR Doc. 97–15272 Filed 6–10–97; 8:45 am]BILLING CODE 7590–01–P


Agency Information CollectionActivities: Submission for OMBReview; Comment Request

AGENCY: U.S. Nuclear RegulatoryCommission (NRC).ACTION: Notice of the OMB review ofinformation collection and solicitationof public comment.

SUMMARY: The NRC has recentlysubmitted to OMB for review thefollowing proposal for the collection ofinformation under the provisions of thePaperwork Reduction Act of 1995 (44U.S.C. Chapter 35).

1. Type of submission, new, revision,or extension: Revision.

2. The title of the informationcollection: Proposed rule, 10 CFR Parts30 and 32—Exempt Distribution of aRadioactive Drug Containing OneMicrocurie of Carbon-14 Urea.

3. The form number if applicable:NRC Form 313.

4. How often the collection isrequired: On occasion.

5. Who will be required or asked toreport: Manufacturers and distributorsof the radioactive drug containingCarbon-14 urea.

6. An estimate of the number ofresponses: 3.

7. The estimated number of annualrespondents: 3.

8. An estimate of the total number ofhours needed annually to complete therequirement or request: 54 hoursinitially; thereafter 48 hours annually—16 hours for each of 3 respondents (48hours per year reporting burden and aone-time 6-hour recordkeeping burden,2 hours for each of 3 respondents)

9. An indication of whether Section3507(d). Pub. L. 104–13 applies:Applicable.

10. Abstract: In response to a petitionfor rulemaking submitted by Tri-MedSpecialties, Inc., the NRC is proposingto amend its regulations to allow NRClicensees to distribute a radioactive drugcontaining one microcurie of carbon-14urea to any person for ‘‘in vivo’’diagnostic use. The adoption of thisamendment would make the drug morewidely available, thus reducing costs topatients.

Submit, by July 11, 1997, commentsthat address the following questions:

1. Is the proposed collection ofinformation necessary for the NRC toproperly perform its functions? Does theinformation have practical utility?

2. Is the burden estimate accurate?3. Is there a way to enhance the

quality, utility, and clarity of theinformation to be collected?

4. How can the burden of theinformation collection be minimized,including the use of automatedcollection techniques or other forms ofinformation technology?

A copy of the submittal may beviewed free of charge at the NRC PublicDocument Room, 2120 L Street NW,(Lower Level), Washington, DC. Theproposed rule indicated in ‘‘The title ofthe information collection’’ is or hasbeen published in the Federal Registerwithin several days of the publicationdate of this Federal Register Notice.Instructions for accessing the electronicOMB clearance package for therulemaking have been appended to theelectronic rulemaking. Members of thepublic may access the electronic OMBclearance package by following thedirections for electronic access providedin the preamble to the titled rulemaking.

Comments and questions should bedirected to the OMB reviewer by July11, 1997: Edward Michlovich, Office ofInformation and Regulatory Affairs(3150–0001), NEOB–10202, Office ofManagement and Budget, WashingtonDC 20503.

Comments can also be submitted bytelephone at (202) 395–3084.

The NRC Clearance Officer is BrendaJo. Shelton, (301) 415–7233.

Dated at Rockville, Maryland, this 5th dayof June, 1997.

For the Nuclear Regulatory Commission.Arnold E. Levin,Acting Designated Senior Official forInformation Resources Management.[FR Doc. 97–15273 Filed 6–10–97; 8:45 am]BILLING CODE 7590–01–P


[Docket Nos. 50–282 and 50–306]

Northern States Power Company;Prairie Island Nuclear GeneratingPlant, Unit Nos. 1 and 2 EnvironmentalAssessment and Finding of noSignificant Impact

The U.S. Nuclear RegulatoryCommission (the Commission) isconsidering issuance of amendments toFacility Operating Licenses Nos. DPR–42 and DPR–60, issued to NorthernStates Power Company (NSP, thelicensee), for operation of Prairie IslandNuclear Generating Plant, Unit Nos. 1and 2, located in Goodhue County,Minnesota.

Environmental Assessment

Identification of the Proposed Action

The proposed amendments wouldrevise the technical specifications (TS)to take credit for soluble boron in thespent fuel pool in maintaining anacceptable margin of subcriticality.However, even if the spent fuel poolwere to be completely filled withunborated water, the licensee’s dilutionevent calculations show that the spentfuel pool would remain subcritical.

The Need for the Proposed Action

Currently, compliance with the TSrequirement to maintain criticality (keff)in the spent fuel pool to less than 0.95with unborated water is accomplishedthrough the use of Boraflex, a neutronabsorber. However, recent tests haveindicated that the Boraflex is showingdegradation induced by gammaradiation. Maintaining a boronconcentration of 1800 parts per millionin the spent fuel pool is more thansufficient to ensure that the keff ismaintained below 0.95.

Environmental Impacts of the ProposedAction

The Commission has completed itsevaluation of the proposed action andconcludes that the licensee’s proposal totake credit for soluble boron in the spentfuel pool water to maintain keff less thanor equal to 0.95 is acceptable.


The change will not increase theprobability or consequences ofaccidents, no changes are being made inthe types of any effluents that may bereleased offsite, and there is nosignificant increase in the allowableindividual or cumulative occupationalradiation exposure. Accordingly, theCommission concludes that there are nosignificant radiological environmentalimpacts associated with the proposedaction.

With regard to potentialnonradiological impacts, the proposedaction involves features located entirelywithin the restricted area as defined in10 CFR Part 20. It does not affectnonradiological plant effluents and hasno other environmental impact.Accordingly, the Commission concludesthat there are no significantnonradiological environmental impactsassociated with the proposed action.

Alternatives to the Proposed Action

Since the Commission has concludedthere is no measurable environmentalimpact associated with the proposedaction, any alternatives with equal orgreater environmental impact need notbe evaluated. As an alternative to theproposed action, the staff considereddenial of the proposed action. Denial ofthe application would result in nochange in current environmentalimpacts. The environmental impacts ofthe proposed action and the alternativeaction are similar.

Alternative Use of Resources

This action does not involve the useof any resources not previouslyconsidered in the Final EnvironmentalStatement for the Prairie Island NuclearGenerating Plant, Unit Nos. 1 and 2.

Agencies and Persons Consulted

In accordance with its stated policy,the NRC staff consulted with theMinnesota State official, Mr. MichaelMcCarthy of the Department of PublicServices, on May 5, 1997, regarding theproposed actions. Mr. McCarthy had nocomments.

Finding of No Significant ImpactBased upon the environmental

assessment, the Commission concludesthat the proposed action will not havea significant effect on the quality of thehuman environment. Accordingly, theCommission has determined not toprepare an environmental impactstatement for the proposed action.

For further details with respect to theproposed action, see the licensee’s letterdated July 28, 1995, as revised February21, 1997, which are available for publicinspection at the Commission’s Public

Document Room, The Gelman Building,2120 L Street, NW., Washington, DC,and at the local public document roomlocated at the Minneapolis PublicLibrary, Technology and ScienceDepartment, 300 Nicollet Mall,Minneapolis, Minnesota 55401.

Dated at Rockville, Maryland, this 4th dayof June 1997.

For the Nuclear Regulatory Commission.Beth A. Wetzel,Project Manager, Project Directorate III–1,Division of Reactor Projects—III/IV, Office ofNuclear Reactor Regulation.[FR Doc. 97–15274 Filed 6–10–97; 8:45 am]BILLING CODE 7590–01–P


[Project No. 697]

Notice of Issuance of Staff’s SafetyEvaluation on DOE’s Report onTritium-Producing Burnable AbsorberRod Lead Test Assemblies

The U.S. Department of Energy (DOE)is considering the use of commerciallight water reactors to produce tritiumin order to maintain the strategicstockpile. On December 4, 1996, asrevised on March 17, 1997, DOEsubmitted a report to the U.S. NuclearRegulatory Commission (NRC) entitled,‘‘Report on the Evaluation of theTritium Producing Burnable AbsorberRod Lead Test Assembly.’’ This reportcontained information to allow the NRCstaff to determine whether the use of acommercial light-water reactor toirradiate a limited number of tritium-producing burnable absorber rods(TPBARs) in lead test assemblies (LTAs)requires prior NRC review and approval.The NRC staff has reviewed the DOEreport and has prepared its safetyevaluation.

The staff’s safety evaluationconcludes that DOE’s proposal involvesat least one issue requiring priorCommission review and approval;therefore, an NRC licensee seeking toperform the LTA irradiation mustsubmit an amendment to its facilityoperating license prior to placing theTPBAR LTAs in the reactor core. Thestaff’s safety evaluation is beingpublished as NUREG–1607, ‘‘SafetyEvaluation Report Related to theDepartment of Energy’s Proposal for theIrradiation of Lead Test AssembliesContaining Tritium-Producing BurnableAbsorber Rods in Commercial Light-Water Reactors.’’

NUREG–1607 is available for publicinspection and copying for a fee at theCommission’s Public Document Room,

the Gelman Building, 2120 L Street(Lower Level), NW., Washington, DC.Printed copies of NUREG–1607 areavailable from the Superintendent ofDocuments, U.S. Government PrintingOffice, P. O. Box 37082, Washington, DC20402–9328.FOR FURTHER INFORMATION CONTACT: J. H.Wilson, Office of Nuclear ReactorRegulation, U.S. Nuclear RegulatoryCommission, Washington, DC 20555,telephone (301) 415–1108; [email protected].

Dated at Rockville, Maryland, this 2nd dayof June, 1997.

For the Nuclear Regulatory Commission.Marylee M. Slosson,Acting Director, Division of Reactor ProgramManagement, Office of Nuclear ReactorRegulation.[FR Doc. 97–15275 Filed 6–10–97; 8:45 am]BILLING CODE 7590–01–P

PEACE CORPS

Information Collection Requests UnderOMB Review

ACTION: Notice of public use formreview request to the Office ofManagement and Budget.

SUMMARY: Pursuant to the PaperworkReduction Act of 1981 (44 USC, Chapter35), the Peace Corps is requestingapproval from the Office of Managementand Budget for the continued use of theRPCV County Survey to be used by theWorld Wise Schools (WWS) program. Acopy of the information collection maybe obtained from Alyce P. Hill, Office ofWorld Wise Schools, Peace corps, 1990K St., NW, Washington DC 20525. Ms.Hill may be contacted at (202) 606–3294. The purpose of this notice is toallow an additional 30 days for publiccomments. This process is conducted inaccordance with 5 CFR Part 1320.10; theinitial notice was published in theFederal Register on April 16, 1997 (pp.18659), during which time no commentswere received by the agency. PeaceCorps invites comments on whether theproposed collection of information isnecessary for proper performance of thefunctions of the Peace Corps, includingwhether the information will havepractical use; the accuracy of theagency’s estimate of the burden of theproposed collection of information,including the validity of themethodology and assumptions used;ways to enhance the quality, utility andclarity of the information to becollected; and, ways to minimize theburden of the collection of informationon those who are to respond, includingthrough the use of automated collection


1 15 U.S.C. § 78s(b)(1)(1988).

techniques, when appropriate, and otherforms of information technology.Comments on this form should beaddressed to Victoria Becker Wassmer,Desk Officer, Office of Management andBudget, NEOB, Washington, DC 20503.

Information Collection Abstract

Title: RPCV Country Survey.Need for and use of the Information:

World Wise Schools needs thisinformation to accurately describe othercountries and its educational materials.The information collected assists WWSand the agency in fulfilling the thirdgoal of Peace Corps as required byCongressional legislation and toenhance the Office of World WiseSchools global education program.

Respondents: Returned Peace CorpsVolunteers (RPCVs).

Respondents obligation to reply:Voluntary.

Burden on the Public:a. Annual reporting burden: 75 hrsb. Annual record keeping burden: 0 hrsc. Estimated average burden per

response: 15 mind. Frequency of response: on occasionc. Estimated number of likely

respondents: 300f. Estimated cost to respondents: $3.03

This notice is issued in Washington, DC,on June 6, 1997.Stanley D. Suyat,Associate Director for Management.[FR Doc. 97–15219 Filed 6–10–97; 8:45 am]BILLING CODE 6051–01–M

PEACE CORPS

Information Collection Requests UnderOMB Review

ACTION: Notice of public use formreview request to the Office ofManagement and Budget.

SUMMARY: Pursuant to the PaperworkReduction Act of 1981 (44 USC, Chapter35), the Peace Corps is requestingapproval from the Office of Managementand Budget for the continued use of theTeacher Brochure/Enrollment Form tobe used by the World Wise Schoolsprogram. A copy of the informationcollection may be obtained from AlyceP. Hill, Office of World Wise Schools,Peach Corps, 1990 K St., NW,Washington DC 20525. Ms. Hill may becalled at (202) 606–3294. The purposeof this notice is to allow an additional30 days for public comments. Thisprocess is conducted in accordance with5 CFR Part 1320.10; the initial noticewas published in the Federal Registeron April 16, 1997 (pp. 18659), duringwhich time no comments were received

by the agency. Peace Corps invitescomments on whether the proposedcollection of information is necessaryfor proper performance of the functionsof the Peace Corps, including whetherthe information will have practical use;the accuracy of the agency’s estimate ofthe burden of the proposed collection ofinformation, including the validity ofthe methodology and assumptions used;ways to enhance the quality, utility andclarity of the information to becollected; and, ways to minimize theburden of the collection of informationon those who are to respond, includingthrough the use of automated collectiontechniques, when appropriate, and otherforms of information technology.Comments on this form should beaddressed to Victoria Becker Wassmer,Desk Officer, Office of Management andBudget, NEOB, Washington, DC 20503.

Information Collection Abstract

Title: Teacher Brochure/EnrollmentForm.

Need for and use of the Information:This form is completed voluntarily beeducators throughout the country. Thisinformation will be used by WWS toenroll classrooms in the program and todetermine what changes need to beaddressed to meet the needs ofparticipating teachers and the PeaceCorps Volunteers. Enrollment in thisprogram also fulfills the third goal ofPeace Corps as required byCongressional legislation and toenhance the Office of World WiseSchools global education program.

Respondents: Educators throughoutthe public and private school systems inthe United States.

Respondents obligation to reply:Voluntary.

Burden on the Public:

a. Annual reporting burden: 833 hrsb. Annual record keeping burden: 0 hrsc. Estimated average burden per

response: 10 mind. Frequency of response: on occasion &

annuallye. Estimated number of likely

respondents: 5,000f. Estimated cost of respondents: $2.02

This notice is issued in Washington, DC,on June 6, 1997.

Stanley D. Suyat,Associate Director for Management.[FR Doc. 97–15220 Filed 6–10–97; 8:45 am]


SECURITIES AND EXCHANGECOMMISSION

[Release No. 34–38715; File No. SR–NASD–97–37]

Self-Regulatory Organizations; Noticeof Filing of Proposed Rule Change byNational Association of SecuritiesDealers, Inc. in Providing anInterpretation to NASD Conduct Rule2110 Regarding Anti-Intimidation/Coordination Activities of MemberFirms and Persons Associated WithMember Firms

June 4, 1997.Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934(‘‘Act’’),1 notice is hereby given that onMay 7, 1997, the National Association ofSecurities Dealers, Inc. (‘‘NASD‘‘ or‘‘Association;;) filed with the Securitiesand Exchange Commission (‘‘SEC’’ or‘‘Commission’’) the proposed rulechange as described in Items I, II, andIII below, which Items have beenprepared by NASD Regulation, Inc. TheCommission is publishing this notice tosolicit comments on the proposed rulechange from interested persons.

I. Self-Regulatory Organization’sStatement of the Terms of Substance ofthe Proposed Rule Change

The NASD is proposing IM–2110–5 toprohibit certain anti-competitive andcoordination conduct of member broker/dealers and persons associated withmember broker/dealers. Below is thetext of the proposed rule change.Proposed new language is in italics.

IM–2110–5. Anti-Intimidation/Coordination

The Board of Governors is issuing thisinterpretation to codify a longstandingpolicy. It is conduct inconsistent withjust and equitable principles of trade forany member or person associated witha member to coordinate the prices(including quotations), trades, or tradereports of such member with any othermember or person associated with amember; to direct or request anothermember to alter a price (including aquotation); or to engage, directly orindirectly, in any conduct thatthreatens, harasses, coerces,intimidates, or otherwise attemptsimproperly to influence another memberor person associated with a member.This includes, but is not limited to, anyattempt to influence another member orperson associated with a member toadjust or maintain a price or quotation,whether displayed on any automatedsystem operated by The Nasdaq Stock


2 See Securities Exchange Act Release No. 37538(August 8, 1996), SEC’s Order Instituting PublicProceedings Pursuant to Section 19(h)(1) of theSecurities Exchange Act of 1934, Making Findingsand Imposing Remedial Sanctions.

Market, Inc. (Nasdaq), or otherwise, orrefusals to trade or other conduct thatretaliates against or discourages thecompetitive activities of another marketmaker or market participant. Nothing inthis interpretation respectingcoordination of quotes, trades, or tradereports shall be deemed to limit,constrain, or otherwise inhibit thefreedom of a member or personassociated with a member to:

(1) Set unilaterally its own bid andask in any Nasdaq security, the pricesat which it is willing to buy or sell anyNasdaq security, and the quantity ofshares of any Nasdaq security that it iswilling to buy or sell;

(2) Set unilaterally its own dealerspread, quote increment, or quantity ofshares for its quotations (or set anyrelationship between or among itsdealer spread, inside spread, or the sizeof any quote increment) in any Nasdaqsecurity;

(3) Communicate its own bid or ask,or the prices at or the quantity of sharesin which it is willing to buy or sell anyNasdaq security to any person, for thepurpose of exploring the possibility of apurchase or sale of that security, and tonegotiate for or agree to such purchaseor sale;

(4) Communicate its own bid or ask,or the price at or the quantity of sharesin which it is willing to buy or sell anyNasdaq security, to any person for thepurpose of retaining such person as anagent or subagent for the member or fora customer of the member (or for thepurpose of seeking to be retained as anagent or subagent), and to negotiate foror agree to such purchase or sale;

(5) Engage in any underwriting (or anysyndicate for the underwriting) ofsecurities to the extent permitted by thefederal securities laws;

(6) Take any unilateral action or makeany unilateral decision regarding themarket makers with which it will tradeand the terms on which it will tradeunless such action is prohibited by thesecond and third sentences of thisInterpretation; and

(7) Deliver an order to anothermember for handling, provided,however, that the conducted describedin (1) through (7) is otherwise incompliance with all applicable law.

II. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

In its filing with the Commission, theNASD included statements concerningthe purpose of and basis for theproposed rule change and discussed anycomments it received on the proposedrule change. The text of these statements

may be examined at the places specifiedin Item IV below. The NASD hasprepared summaries, set forth inSections A, B, and C below, of the mostsignificant aspects of such statements.

A. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

1. Purpose

On August 8, 1996, the SEC issued anOrder pursuant to Section 19(h)(1) ofthe Act (‘‘SEC Order’’), making certainfindings about the NASD and conducton the Nasdaq Market, and imposingremedial sanctions.2 Among otherfindings, the SEC determined thatcertain activities of Nasdaq marketmakers had directly and indirectlyimpeded price competition in theNasdaq market. In addition, the SECdetermined that a number of Nasdaqmarket makers had coordinatedquotations, trades and trade reports withother Nasdaq market makers for thepurpose of advancing or protecting themarket maker’s proprietary tradinginterests. Based on the SEC’s specificfindings of certain anti-competitivebehavior of Nasdaq market makers inthe Nasdaq Stock Market, the NASDagreed to certain undertakings. Inparticular, Undertaking 11 requires theNASD ‘‘[t]o propose a rule or ruleinterpretation for Commission approvalwhich expressly makes unlawful thecoordination by or among marketmakers of their quotes, trades and tradereports, and which prohibits retributionor retaliatory conduct for competitiveactions of another market maker or othermarket participant.’’ Undertaking 12requires the NASD ‘‘[t]o enforce ArticleIII, Section 1 of the NASD Rules of FairPractice (currently NASD Conduct Rule2110), with a view to enhancing marketmaker competitiveness by: (a) Acting toeliminate anti-competitive or unlawfulenforced or maintained industry pricingconventions, and to discipline marketmakers who harass other market makersfor narrowing the displayed quotationsin the Nasdaq market, trading not morethan the quantities of securities they arerequired to trade under the NASD’srules, or otherwise engaging incompetitive conduct; (b) acting toeliminate coordination between oramong market makers or quotes, tradesand trade reports; and (c) acting toeliminate concerted discrimination and

concerted refusals to deal by marketmakers.’’

To comply with NASD Undertaking11, the NASD has prepared thefollowing rule interpretation of NASDConduct Rule 2110 (formerly Article III,Section 1 of the NASD’s Rules of FairPractice). The NASD believes that theconduct described in Undertaking 11already is proscribed by existing NASDRule 2110, which requires members toobserve high standards of commercialhonor and just and equitable principlesof trade. The conduct described in theinterpretation is fundamentallyinconsistent with the obligations ofmember firms to their customers and isinimical to the public interest in fairand efficient securities markets.Although such conduct already isprohibited, this interpretation isdesigned to address specifically certainof the findings contained in the SECOrder and to emphasize the importanceplaced by the NASD on the enforcementof the prohibition.

This rule interpretation defines asconduct inconsistent with just andequitable principles of trade certainconduct by and among members firms,and sets forth specific exclusions(numbered 1 through 7) which identifybona fide commercial activities by andamong member firms. The interpretationidentifies three general areas of conductthat are prohibited. The first part of theinterpretation prohibits coordinatingactivities by member firms involvingquotations, prices, trades and tradereporting. Conduct covered by thisprohibition would include, but not belimited to agreements to report tradeslate or inaccurately, or to agree tomaintain certain minimum spreads orquote sizes above the legal minimums.

The second part of the interpretationprohibits ‘‘directing or requesting’’another member to alter prices orquotations. This would includesituations in which a market makerrequests another market maker to moveor adjust its displayed quotations toaccommodate the requesting marketmaker. This prohibition does not extendto activity, identified in exclusionnumber 7, that permits a member toroute customer orders to market makersfor handling or a correspondent firm ofthe member to ask a market maker torepresent an order in the market maker’squote.

The third part of the interpretationrelates to conduct that threatens,harasses, coerces, intimidates orotherwise attempts improperly toinfluence another member in a mannerthat interferes with or impedes theforces of competition among memberfirms in the Nasdaq Stock Market. This


3 15 U.S.C. § 78o–3.

4 The NASD has requested that the Commissionfind good cause pursuant to Section 19(b)(2) forapproving the proposed rule change prior to the30th day after its publication in the FederalRegister. The NASD believes that the conductdescribed in the proposed rule change is alreadyproscribed by existing NASD Rule 2110.

5 17 CFR 200.30–3(a)(12) (1996).

1 The approval of the pilot program wasannounced in Securities Exchange Act Release No.38156 (January 10, 1997), 62 FR 2415 (January 16,1997). The approval of the extension wasannounced in Securities Exchange Act Release No.38156 (April 15, 1997), 62 FR 19373 (April 21,1997).

2 A copy of the executive summary of the reportis available at Nasdaq’s World Wide Web site at‘‘http://www.nasdaq.com’’. Members of the publicmay also download a file containing the entirereport at this site.

part of the prohibition is intended toreach conduct that goes beyondlegitimate bargaining among memberfirms. This conduct may include, amongother things, refusals to trade, impropersystems messages, trading in odd lots,and other conduct intended to influencea member to engage in improper marketactivity or refrain from legitimatemarket activity. However, as identifiedin exclusion number 6, this languagewould not prohibit a member fromtaking unilateral action in selecting withwhom to trade and under what terms,based on legitimate market andcommercial criteria (e.g., creditexposure).

In addition, this interpretation doesnot prohibit a market maker fromcontracting another market maker in alocked or crossed market situation toattempt to unlock or uncross the market.Moreover, the overall prohibitionapplies to primary market as well assecondary trading activities.

2. Statutory Basis

The NASD believes that the proposedrule change is consistent with theprovisions of Section 15A(b)(6) of theAct 3 in that regulating the conduct ofmember broker/dealers and personsassociated with member broker/dealersby prohibiting anti-competitive conductis in furtherance of the requirementsthat the Association’s rules to promotejust and equitable principles of trade,prevent fraudulent and manipulativeacts and practices, and to protectinvestors and the public interest.

B. Self-Regulatory Organization’sStatement on Burden on Competition

The NASD does not believe that theproposed rule change will result in anyburden on competition that is notnecessary or appropriate in furtheranceof the purposes of the Act, as amended.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants, or Others

Written comments were neithersolicited nor received.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

Within 35 days of the date ofpublication of this notice in the FederalRegister or within such longer period (i)as the Commission may designate up to90 days of such date if it finds suchlonger period to be appropriate andpublishes its reasons for so finding or(ii) as to which the self-regulatory

organization consents,4 the Commissionwill:

A. By order approve such proposedrule change, or

B. Institute proceedings to determinewhether the proposed rule changeshould be disapproved.

IV. Solicitation of Comments

Interested persons are invited tosubmit written data, views, andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, N.W.,Washington, D.C. 20549. Copies of thesubmission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. 552, will beavailable for inspection and copying inthe Commission’s Public ReferenceRoom. Copies of such filing will also beavailable for inspection and copying atthe principal office of the NASD. Allsubmissions should refer to the filenumber in the caption above and shouldbe submitted by July 2, 1997.

For the Commission, by the Division ofMarket Regulation, pursuant to delegatedauthority.5

Margaret H. McFarland,Deputy Secretary.[FR Doc. 97–15170 Filed 6–10–97; 8:45 am]



[Release No. 34–38720; File No. SR–NASD–97–26]

Self-Regulatory Organizations; Noticeof Extension of the Comment Periodfor the Proposed Rule Change by theNational Association of SecuritiesDealers, Inc., Relating to an Expansionof the Pilot for the NASD’s RulePermitting Market Makers To DisplayTheir Actual Quotation Size

June 5, 1997.On April 11, 1997, the National

Association of Securities Dealers, Inc.(‘‘NASD’’ or ‘‘Association’’) filed withthe Securities and ExchangeCommission (‘‘Commission’’ or ‘‘SEC’’)a proposed change to NASD Rule4613(a)(1)(C). The proposal would allowmarket makers to quote their actual sizeby reducing the minimum quotationsize requirement for market makers incertain securities listed on The NasdaqStock Market (‘‘Nasdaq’’) to one normalunit of trading (‘‘Actual Size Rule’’). TheActual Size Rule presently applies to agroup of fifty Nasdaq securities on apilot basis.1 The NASD has proposed toextend this pilot program to December1997 and to add an additional 100stocks to the pilot program. TheCommission has already receivedcomments from many individualinvestors and other market participantson the ongoing pilot.

On June 3, 1997, the NASD filed withthe Commission a revised reportcontaining its economic analysis of theoperation of the Actual Size Rule for thegroup of 50 stocks in the pilot, asrequested by the Commission.2 Thestudy examines the effects of theremoval of the 1,000-Share Quote SizeRule on market quality.

The NASD’s study compares themarket quality of pilot stocks with themarket quality of peer stocks in the nexttranche of stocks that became subject tothe Order Handling Rules, but remainedsubject to the 1,000-Share Quote SizeRule. The study: (1) Summarizes therelevant academic literature; (2)empirically assesses market quality forboth groups pre- and post-rule changeby examining spread, volatility, depth,


3 17 CFR 200.30–3(a)(12) (1989).

1 Prior to the adoption of the pilot program, PCXRule 5.37(a) provided that the Exchange’s EquityAllocation Committee (‘‘EAC’’) evaluate allregistered specialists on a quarterly basis and thateach specialist receive an overall evaluation ratingbased on three criteria of specialist performance: (1)Specialist Evaluation Questionnaire Survey(‘‘Questionnaire’’); (2) SCOREX Limit OrderAcceptance Performance; and (3) National MarketSystem Quote Performance. The pilot programmodifies Rule 5.37(a) by adding three new criteriaof performance and eliminating one performancecriterion. The new criteria are: (1) Executions (itselfconsisting of four criteria; (a) Turnaround Time; (b)Holding Orders Without Action; (c) TradingBetween the Quote; and (d) Executions in SizeGreater Than BBO); (2) Book Display Time; and (3)Post-1 p.m. Parameters. The SCOREX Limit OrderAcceptance Performance criterion has beeneliminated. The pilot also adds more questions tothe Questionnaire and expands the National MarketSystem Quote Performance criterion (renamedQuote Performance under the pilot) to includewithin it a submeasure for bettering the quote. Fora more detailed description of the performancecriteria utilized in the PCX’s pilot program, seeSecurities Exchange Act Release No. 37770 (October1, 1996), 61 FR 52820 (October 8, 1996) (File No.SR–PSE–96–28). See generally PCX Rule 5.37(description of the standards and proceduresapplicable to the EAC’s evaluation of specialists).

2 See Securities Exchange Act Release No.37619A (September 6, 1996), 61 FR 48290(September 12, 1996) (File No. S7–30–95).

3 ‘‘Trading Between the Quote’’ is one of the fourcriteria which together constitute ‘‘Executions’’criterion. See supra note 1.

and liquidity; and (3) examines the useof automatic execution systems for thepilot stocks, Nasdaq’s Small OrderExecution System (‘‘SOES’’), and someprivate systems to assess whetherinvestors continue to have reasonableaccess to market maker capital.

The NASD asserts that the evidenceanalyzed in the study reveals that thepilot stocks and non-pilot stocks haveexperienced virtually the sameimprovements in market quality sinceimplementation of the SEC’s OrderHandling Rules. Specifically, the NASDsays that it found no statisticallysignificant basis to conclude that themarket quality of the pilot stocks hasbeen affected as a result of removal ofthe 1,000-Share Quote Size Rule. Inaddition, the NASD found that investorsin the pilot stocks continue to havesubstantial and reasonable access tomarket maker capital through bothSOES and market makers’ proprietaryautomatic execution systems.

In order to give the public additionaltime to comment on this analysis, thecomment period for the NASD’s currentproposal has been extended at theCommission’s request to July 3, 1997. Acopy of the report is available in theCommission’s Public Reference room inFile No. SR–NASD–97–26.

Interested persons are invited tosubmit written data, views, andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theJonathan G. Katz, Secretary, Securitiesand Exchange Commission, 450 FifthStreet, NW., Washington, DC 20549.Copies of the submission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. 552, will beavailable for inspection and copying inthe Commission’s Public ReferenceRoom. Copies of such filing will also beavailable for inspection and copying atthe principal office of the NASD. Allsubmissions should refer to file numberSR–NASD–97–26 and should besubmitted by July 3, 1997.

For the Commission, by the Division ofMarket Regulation, pursuant to delegatedauthority.3

Margaret H. McFarland,Deputy Secretary.[FR Doc. 97–15331 Filed 6–6–97; 4:08 pm]BILLING CODE 8010–01–U


[Release No. 34–38712; File No. SR–PCX–97–19]

June 3, 1997.

Self-Regulatory Organizations; Noticeof Filing of Proposed Rule Change bythe Pacific Exchange, Inc., Relating toIts Specialist Evaluation Program

Pursuant to Section 19(b)(1) of theSecurities Exchange Act of 1934(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice ishereby given that on May 29, 1997, thePacific Exchange, Inc. (‘‘PCX’’ or‘‘Exchange’’) filed with the Securitiesand Exchange Commission(‘‘Commission’’) the proposed rulechange as described in Items I, II, andIII below, which Items have beenprepared by the self-regulatoryorganization. The Commission ispublishing this notice to solicitcomments on the proposed rule changefrom interested persons.

I. Self-Regulatory Organization’sStatement of the Terms of Substance ofthe Propose Rule Change

The PCX is proposing to extend itspilot program regarding the evaluationof its equity specialists until January 1,1998. In addition, the Exchange isproposing to implement certain changesto the pilot program.

Self-Regulatory OrganizationsStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

In its filing with the Commission, theself-regulatory organization includedstatements concerning the purpose ofand basis for the proposed rule changeand discussed any comments it receivedon the proposed rule change. The textof these statements may be examined atthe places specified in Item IV below.The self-regulatory organization hasprepared summaries, set forth inSections A, B, and C below, of the mostsignificant aspects of such statements.

A. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

1. Purpose

On October 1, 1996, the Commissionapproved a nine-month pilot programfor the evaluation of PCX equity

specialists.1 The Exchange is nowproposing to extend the pilot programfor an additional six month period, untilJanuary 1, 1998. The reason for theextension is that the Exchange needsmore time to evaluate the impact of theSEC’s new order handling rules 2 on theperformance criteria. During theextension of the pilot, the Exchange willdetermine an organization overallpassing score and individual passingscores for each criterion used in thepilot program. In addition, the Exchangeproposes to implement for use in theevaluation program, beginning with thethird quarter review period of 1997 (i.e.,July 1, 1997 to September 30, 1997),certain programming changes requestedby the Commission in its October 1,1996 order approving the pilot program.Specifically, the Commission requestedthat the Exchange reprogram its systemsso that the following criteria arecalculated using the NBBO instead ofthe primary market quote: TradingBetween the Quote, Book Display Time,and Quote Performance (Equal or BetterQuote Performance and Better QuotePerformance). The description of theseperformance criteria will be modified asfollows:

a. Trading Between the Quote 3

‘‘Trading Between the Quote’’currently measures the number ofmarket and marketable limit orders thatare executed between the best primarymarket bid and offer. For this criterion


4 17 CFR 240.19b–4.5 15 U.S.C. 78f(b)(5).

to count toward the overall evaluationscore, ten orders or more must havebeen executed during the quarter inwhich the specialist is being evaluated.If less than ten orders are executed, thiscriterion will not be counted and therest of the evaluation criteria will begiven more weight.

When a market or marketable limitorder is executed, the execution price iscompared to the primary market bid andoffer. The specialist will be awardedpoints based on the percentage of ordersthe specialist receives that are executedbetween the primary market bid andoffer. If the execution price fallsbetween the primary market bid andoffer, the trade is counted as one thattraded between the quote at the time ofexecution. Each time a trade isexecuted, the primary market quote willbe noted. If the spread of that quote istwo or more trading fractions apart, thattrade will count as one eligible for thecomparison of the execution price to thequote.

The Exchange is now proposing tocontinue using this criterion, but toreplace references to the ‘‘primarymarket bid and offer’’ with references tothe ‘‘NBBO.’’

b. Book Display TimeThis criterion calculates the

percentage of book shares at the bestprice in the book that is displayed in thespecialist’s quote, by symbol, and theduration of time that each percentage isin effect. This criterion rates the P/COAST book displayed 100% of thetime. The sizes of all open buy limitorders at the best price for the symbolin the specialist’s book are totaled andcompared to the bid size quote. Thesizes of all open sell limit orders at thebest price for the symbol in the book aretotaled and compared to the offer sizequote. This will be done for eachsymbol traded by the specialist, but onlyfor those orders within the primarymarket quote. Limit orders in the bookthat were priced beyond the primarymarket quote will not be included; theywill not be executed until they reach theprice in the primary market quote, sothe specialist should not be required tocover them in his (her) quote sizes.

The Exchange is now proposing tocontinue using this criterion, but toreplace references to the ‘‘primarymarket bid and offer’’ to references tothe ‘‘NBBO.’’

c. Quote PerformanceThis criterion, on which 10% of each

specialist evaluation is based, consistsof two submeasures: (a) Equal or BetterQuote Performance; and (b) Better QuotePerformance.

Equal or Better Quote Performancecalculates for each issue traded, thepercentage of time in which aspecialist’s bid or offer is equal to orbetter than the primary market quotewith a 500 share market size or theprimary market size, whichever is less,with a 200 share minimum.

Better Quote Performance calculatesfor each issue traded, the percentage oftime in which a specialist’s bid or offeris better than the primary market quotewith a 500 share market size or theprimary market size, whichever is less,with a 200 share minimum.

The Exchange is proposing tocontinue using this criterion, but toreplace references to the ‘‘primarymarket bid and offer’’ with references tothe ‘‘NBBO.’’

Further, the Commission hasrequested that the Exchange file a reportregarding the Exchange’s experiencewith the pilot.

This report has been filed with theCommission under separate cover. Inaddition, the Exchange will submit aproposed rule change with theCommission pursuant to Rule 19b–4under the Act 4 by November 15, 1997,that will specify an overall passing scorefor the performance evaluation andindividual passing scores for eachcriterion, as well as a request to furtherextend the pilot beyond January 1, 1998.

2. Statutory Basis

The proposed rule change isconsistent with Section 6(b)(5) of theAct 5 in that it is designed to preventfraudulent and manipulative acts andpractices and to perfect the mechanismof a free and open market.

B. Self-Regulatory Organization’sStatement on Burden on Competition

The Exchange does not believe thatthe proposed rule change will imposeany burden on competition that is notnecessary or appropriate in furtheranceof the purposes of the Act.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants, or Others

Written comments on the proposedrule change were neither solicited norreceived.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

Within 35 days of the publication ofthis notice in the Federal Register orwithin such longer period (i) as the

Commission may designate up to 90days of such date if it finds such longerperiod to be appropriate and publishesits reasons for so finding or (ii) as towhich the self-regulatory organizationconsents, the Commission will:

(A) by order approve the proposedrule change, or

(B) institute proceedings to determinewhether the proposed rule changeshould be disapproved.

IV. Solicitation of Comments

Interested persons are invited tosubmit written data, views, andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, N.W.,Washington, D.C. 20549. Copies of thesubmission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. 552, will beavailable for inspection and copying atthe Commission’s Public ReferenceSection, 450 Fifth Street, N.W.,Washington, D.C. 20549. Copies of suchfiling will also be available forinspection and copying at the principaloffice of the Exchange. All submissionsshould refer to File No. SR–PCX–97–19and should be submitted by July 2,1997.

For the Commission, by the Division ofMarket Regulation, pursuant to delegatedauthority.Margaret H. McFarland,Deputy Secretary.[FR Doc. 97–15255 Filed 6–10–97; 8:45 am]BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

Reporting and RecordkeepingRequirements Under OMB Review

ACTION: Notice of reporting requirementssubmitted for review.

SUMMARY: Under the provisions of thePaperwork Reduction Act (44 U.S.C.Chapter 35), agencies are required tosubmit proposed reporting andrecordkeeping requirements to OMB forreview and approval, and to publish anotice in the Federal Register notifyingthe public that the agency has madesuch a submission.


DATES: Comments should be submittedon or before July 11, 1997. If you intendto comment but cannot preparecomments promptly, please advise theOMB Reviewer and the AgencyClearance Officer before the deadline.COPIES: Request for clearance (OMB 83–1), supporting statement, and otherdocuments submitted to OMB forreview may be obtained from theAgency Clearance Officer. Submitcomments to the Agency ClearanceOfficer and the OMB Reviewer.

FOR FURTHER INFORMATION CONTACT:

Agency Clearance Officer: JacquelineWhite, Small Business Administration,409 3rd Street, S.W., 5th Floor,Washington, D.C. 20416, Telephone:(202) 205–6629.

OMB Reviewer: Victoria Wassmer,Office of Information and RegulatoryAffairs, Office of Management andBudget, New Executive Office Building,Washington, D.C. 20503.

Title: Request for Management andTechnical Assistance.

Form No: SBA Form 641B.Frequency: On Occasion.Description of Respondents:

Individuals Interested in Using the BIC.Annual Responses: 60,000.Annual Burden: 12,000.Dated: June 5, 1997.

Jacqueline White,Chief, Administrative Information Branch.[FR Doc. 97–15268 Filed 6–10–97; 8:45 am]BILLING CODE 8025–01–P



Reports, Forms and RecordkeepingRequirements; Agency InformationCollection Activity Under OMB Review

AGENCY: Office of the Secretary, DOT.ACTION: Notice.

SUMMARY: In compliance with thePaperwork Reduction Act of 1995 (44U.S.C. 3501 et seq.), this noticeannounces that the InformationCollection Request (ICR) abstractedbelow has been forwarded to the Officeof Management and Budget (OMB) forreview and comment. The ICR describesthe nature of the information collectionand its expected burden. The FederalRegister Notice with a 60-day commentperiod soliciting comments on thefollowing collection of information waspublished in 62 FR 14718–14719, March27, 1997.DATES: Comments must be submitted onor before July 11, 1997.

FOR FURTHER INFORMATION CONTACT:Richard Weaver, MARAD ClearanceOfficer, (202) 366–2811, and refer to theOMB Control Number.


Maritime Administration

Title: Monthly Report of OceanShipments Moving Under Export-ImportBank Financing.

Type of Request: Extension of acurrently approved informationcollection.

OMB Control Number: 2133–0013.Affected Entities: Export-Import Bank

Financed Foreign Borrowers.Abstract: Title 46 App. U.S.C. 1241–

1, Public Resolution 17, 73rd Congress(PR 17), requires the MARAD to monitorand enforce the U.S.-flag shippingrequirements relative to the loans/guarantees extended by the Export-Import Bank (Eximbank) to foreignborrowers. PR 17 requires that allshipments financed by Eximbank andthat move by sea, must be transportedexclusively on U.S.-flag registeredvessels unless a waiver is obtained fromMARAD.

Need and Use of the Information: Theprescribed monthly report is necessaryfor MARAD to fulfill its responsibilitiesunder PR 17, to ensure compliance ofocean shipping requirements operatingunder Eximbank financing and toensure equitable distribution ofshipments between U.S. flag and foreignships. MARAD will use this informationto report annually to Congress, the totalshipping activities during the calendaryear.

Annual Responses: 336.Estimated Annual Burden: 168 hours.Comments: Send all comments

regarding whether this informationcollection is necessary for properperformance of the function of theagency and will have practical utility,accuracy of the burden estimates, waysto minimize this burden, and ways toenhance quality, utility, and clarity ofthe information to be collected to theOffice of Information and RegulatoryAffairs, Office of Management andBudget, 725–17th Street, NW.,Washington, DC 20503, Attention DOTDesk Officer.

Issued in Washington, DC, on June 6, 1997.

Vanester M. Williams,Clearance Officer, United States Departmentof Transportation.[FR Doc. 97–15304 Filed 6–10–97; 8:45 am]




Proposed Advisory Circulars forAirport Lighting

AGENCY: Federal AviationAdministration.ACTION: Notice of availability, proposedadvisory circulars.

SUMMARY: The Federal AviationAdministration (FAA) announces (1) theavailability of proposed AdvisoryCircular (AC) 150/5340–28, LowVisibility Taxiway Lighting Systems,which provides standards for thedesign, installation and maintenance oftaxiway centerline lights, stop bars,runway guard lights, and clearance bars,(2) the proposed cancellation of AC 150/5340–19, Taxiway Centerline LightingSystem, (3) the availability of AC 150/5345–3E, FAA Specification for L–821,for Control of Airport Lighting, thiscircular has been rewritten to includecontrol panels for stop bar lightingsystems and for land and hold shortlighting systems, (4) the proposedcancellation of AC 150/5345–3D,Specification for L–821 Panels forRemote Control of Airport Lighting, (5)the availability of AC 150/5345–46B,Specification for Runway and TaxiwayLight Fixtures, which includes newspecifications for stop bar and runwayguard light fixtures, updates theclassification of lighting fixtures,photometric requirements, chromaticityrequirements, and applicabledocuments and document sources. Inaddition, instruction manuals have beenmade mandatory and a new option foran automatic lampchanger has beenadded, and (6) the proposedcancellation of AC 150/5345–46A,Specification for Runway and TaxiwayLight Fixtures. Paper copies of thesedocuments may be obtained bycontacting the address shown below.Electronic copies of these documentsare available over the Internet atwww.faa.gov/arp/draftacs.htm.DATES: Comments must be received byJuly 25, 1997.ADDRESSES: Comments should be sent tothe Federal Aviation Administration,Engineering and Specifications Division(AAS–200), 800 Independence Ave.,S.W., Washington, DC 20591.FOR FURTHER INFORMATION CONTACT:John L. Rice, AAS–200, at (202) 267–8745.Raymond T. Uhl,Deputy Director, Office of Airport Safety andStandards, AAS–2.[FR Doc. 97–15305 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–M




Advisory Circular 20–128A, DesignConsiderations for Minimizing HazardsCaused by Uncontained TurbineEngine and Auxiliary Power Unit RotorFailure

AGENCY: Federal AviationAdministration, DOT.

ACTION: Notice of issuance of advisorycircular.

SUMMARY: This notice announces theissuance of Advisory Circular (AC) 20–128A, Design Considerations forMinimizing Hazards Caused byUncontained Turbine Engine andAuxiliary Power Unit Rotor Failure.This AC sets forth a method ofcompliance with the requirements of theFederal Aviation Regulations pertainingto design precautions taken to minimizethe hazards to an airplane in the eventof uncontained engine or auxiliarypower unit (APU) rotor failures. Theguidance provided within this AC isharmonized with that of the EuropeanJoint Aviation Authorities (JAA) and isintended to provide a method ofcompliance that has been foundacceptable.

DATES: Advisory Circular 20–128A wasissued by the Manager, AircraftEngineering Division, AIR–100, onMarch 25, 1997.

HOW TO OBTAIN COPIES: A copy may beobtained by writing to the U.S.Department of Transportation,Subsequent Distribution Office, DOTWarehouse, SVC–121.23, 3341Q 75thAvenue, Landover, MD 20785, or faxingyour request to that office at 301–5394.

Issued in Renton, Washington, on June 3,1997.Darrell M. Pederson,Acting Manager, Transport AirplaneDirectorate, Aircraft Certification Service,ANM–100.[FR Doc. 97–15310 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–M



Intent To Prepare an EnvironmentalImpact Statement and Hold ScopingMeetings for Los Angeles InternationalAirport, Los Angeles, California

AGENCY: Federal AviationAdministration.

ACTION: Notice to hold three (3) publicscoping meetings and one (1)

Governmental and Public Agencyscoping meeting.

SUMMARY: The Federal AviationAdministration (FAA) is issuing thisnotice to advise the public that anEnvironmental Impact Statement will beprepared for developmentrecommended by the Master Plan forLos Angeles International Airport, LosAngeles, California. To ensure that allsignificant issues related to theproposed action are identified, three (3)public scoping meetings and one (1)governmental and public agencyscoping meeting will be held.FOR FURTHER INFORMATION CONTACT:David B. Kessler, AICP, EnvironmentalProtection Specialist, AWP–611.2,Planning Section, Airports Division,Federal Aviation Administration,Western-Pacific Region, P.O. Box 92007,World Way Postal Center, Los Angeles,California 90009–2007, Telephone: 310/725–3615. Comments on the scope ofthe EIS should be submitted to theaddress above and must be received nolater than Thursday, July 31, 1997.SUPPLEMENTARY INFORMATION: TheFederal Aviation Administration (FAA)in cooperation with the city of LosAngeles, California, will prepare anEnvironmental Impact Statement forfuture development recommended bythe Master Plan for Los AngelesInternational Airport (LAX). The need toprepare an Environmental ImpactStatement (EIS) is based on theprocedures described in FAA Order5050.4A, Airport EnvironmentalHandbook. LAX is a commercial serviceairport located within a standardmetropolitan statistical area and theproposed development includesconstruction of new runway(s) capableof accommodating air carrier aircraftrequiring FAA approval of the AirportLayout Plan, the area around the airportcontains non-compatible land uses interms of aircraft noise; and the proposeddevelopment is likely to becontroversial.

The city of Los Angeles, pursuant tothe California Environmental QualityAct of 1970 (CEQA) will also prepare anEnvironmental Impact Report (EIR) forthe proposed development. In an effortto eliminate unnecessary duplicationand reduce delay, the document to beprepared, will be a joint EIR/EIS inaccordance with the President’s Councilon Environmental Quality Regulationsdescribed in 40 Code of FederalRegulations §§ 1500.5 and 1506.2.

The Joint Lead Agencies for thepreparation of the EIR/EIS will be theFederal Aviation Administration andthe city of Los Angeles, California.

The following master planningdevelopment concepts and the NoAction Alternative are proposed to beevaluated in the EIR/EIS as describedbelow:

Concept 1

• Construction of a new 6,000 footlong runway along the northern borderof the airport.

• Relocation to the south andextension of Runways 6L/24R and 6R/24L to lengths of 10,000 and 12,000 feetrespectively.

• Relocation to the south andextension of Runway 7R/25L to 12,000feet in length.

• Terminal Building Expansion andassociated terminal area improvementsincluding adding 100 narrow bodyequivalent aircraft gates.

• Reduction of the ancillary facilitiesarea to approximately 228 acres andrelocating the fuel farm to an on-airportsite located at Imperial Highway andSepulveda Boulevard.

• Expansion of air cargo space toapproximately 4.8 million square feet.

• Acquisition of approximately 220acres of land.

Concept 2

• Construction of a new 6,000 footlong runway along the northern borderof the airport.

• Relocation to the east and extensionof Runways 6L/24R and 6R/24L tolengths of 10,000 and 12,000 feet,respectively.


• Construction of a new 6,000 footlong runway along the southeasternborder of the airport.

• Terminal Building Expansion andassociated terminal area improvementsincluding adding approximately 131narrow body equivalent aircraft gates.

• Reduction of ancillary facilities areato approximately 228 acres andrelocating the fuel farm to an off-airportsite away from residential land uses.



Concept 3

• Construction of a new 6,000 footlong runway along the northwesternborder of the airport into the LAXdunes/preserve area.

• Relocation to the east and extensionof Runway 6L/24R to a length of 10,000feet.

• Relocation to the south andextension of Runway 6R/24L to a lengthof 12,000 feet.



• Construction of a new 6,000 footlong runway along the southeasternborder of the airport.


• Reduction of ancillary facilities areato approximately 228 acres andrelocating the fuel farm to an off-airportsite away from residential land uses.



Concept 4

• Realignment and extension of theexisting runway at Jack Northrop Field/Hawthorne Municipal Airport to 6,000feet in length to accommodatecommuter aircraft operations.

• Relocation to the south andextension of Runway 6L/24R to a lengthof 10,000 feet.

• Relocation to the south andextension of Runway 6R/24L to a lengthof 12,000 feet.


• Reduction of the ancillary facilitiesarea to approximately 228 acres andrelocating the fuel farm to an on-airportsite located at Imperial Highway andSepulveda Boulevard.



No Action Alternative

• This alternative does not includeany projects that would increase theairport’s passenger or airfield capacity,but does include the following minordevelopment items:

• Extension and minor improvementsto existing taxiways.

• Remodeling and minor expansionof the existing Tom BradleyInternational Terminal.

• Construction of additional remotegates/aircraft ramp area on the west sideof the airport.

• Minor expansion of public parkinglots.

• Minor expansion of air cargo space.Comments and suggestions are invited

from Federal, State and local agencies,and other interested parties to ensurethat the full range of issues related tothese proposed projects are addressedand all significant issues are identified.Written comments and suggestions

concerning the scope of the EIS/EIR maybe mailed to the FAA informationalcontact listed above and must bereceived no later than Thursday, July31, 1997.

Public Scoping MeetingsThe FAA will hold three (3) public

and one (1) governmental agencyscoping meetings to solicit input fromthe public and various Federal, Stateand local agencies which havejurisdiction by law or have specificexpertise with respect to anyenvironmental impacts associated withthe proposed projects. The first twopublic scoping meetings will be held onSaturday, July 12, 1997, at the ProudBird Restaurant, 11022 AviationBoulevard, Los Angeles, California90045. The first meeting will be heldfrom 8:00 am to 12:30 p.m. PacificDaylight Time (PDT). The secondmeeting will be held beginning at 2:00p.m. to 7:00 p.m. (PDT). The thirdpublic scoping meeting will be held onTuesday, July 15, 1997, from 5:00 p.m.to 9:00 p.m. (PDT) at the HawthorneMemorial Center, 3901 El SegundoBoulevard, Hawthorne, California90250. A scoping meeting will be heldspecifically for governmental and publicagencies on Wednesday, July 16, 1997,from 9:00 a.m. to 5:00 p.m. (PDT) in theBoard Room of the Los AngelesDepartment of Airports Building, LosAngeles International Airport, 1 WorldWay, Los Angeles, California 90009.

Issued in Hawthorne, California, onMonday, June 4, 1997.Herman C. Bliss,Manager, Airports Division, Western-PacificRegion, AWP–600.[FR Doc. 97–15306 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–M



[Summary Notice No. PE–97–31]

Petitions for Exemption; Summary ofPetitions Received; Dispositions ofPetitions Issued

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Notice of petitions forexemption received and of dispositionsof prior petitions.

SUMMARY: Pursuant to FAA’s rulemakingprovisions governing the application,processing, and disposition of petitionsfor exemption (14 CFR Part 11), thisnotice contains a summary of certainpetitions seeking relief from specifiedrequirements of the Federal Aviation

Regulations (14 CFR Chapter I),dispositions of certain petitionspreviously received, and corrections.The purpose of this notice is to improvethe public’s awareness of, andparticipation in, this aspect of FAA’sregulatory activities. Neither publicationof this notice nor the inclusion oromission of information in the summaryis intended to affect the legal status ofany petition or its final disposition.DATES: Comments on petition receivedmust identify the petition docketnumber involved and must be receivedon or before June 30, 1997.ADDRESSES: Send comments on anypetition in triplicate to: FederalAviation Administration, Office of theChief Counsel, Attn: Rule Docket (AGC–200), Petition Docket No. llll, 800Independence Avenue, SW.,Washington, D.C. 20591.

Comments may also be sentelectronically to the following internetaddress: 9–NPRM–[email protected].

The petition, any comment received,and a copy of any final disposition arefiled in the assigned regulatory docketand are available for examination in theRules Docket (AGC–200), Room 915G,FAA Headquarters Building (FOB 10A),800 Independence Avenue, SW.,Washington, D.C. 20591; telephone(202) 267–3132.FOR FURTHER INFORMATION CONTACT:Heather Thorson (202) 267–7470 orAngela Anderson (202) 267–9681 Officeof Rulemaking (ARM–1), FederalAviation Administration, 800Independence Avenue, SW.,Washington, DC 20591.

This notice is published pursuant toparagraphs (c), (e), and (g) of § 11.27 ofPart 11 of the Federal AviationRegulations (14 CFR part 11).

Issued in Washington, DC, on June 4, 1997.Michael E. Chase,Acting Assistant Chief Counsel forRegulations.

Dispositions of Petitions

Docket No.: 26919.Petitioner: Kalamazo Aviation History

Museum.Sections of the FAR Affected: 14 CFR

45.25 and 45.29.Description of Relief Sought/

Disposition: To permit the petitioner tooperate its Ford Tri-motor, Model No.5–AT–C, Serial No. 58, with 3 inch-highnationally and registration markslocated on each side of the fuselageunder the leading edge of the horizontalstabilizer. Grant, May 20, 1997,Exemption No. 5519B.

Docket No.: 28094.Petitioner: American Trans Air.


Sections of the FAR Affected: 14 CFR121.433 (c)(1)(iii), 121.441(a)(1) and(b)(1) and appendix F to part 121.

Description of Relief Sought/Disposition: To permit the petitioner tocombine recurrent flight and groundtraining and proficiency checks forATA’s flight crewmembers in a singleannual training and proficiencyevaluation program. Grant, May 28,1997, Exemption No. 6090A.

Docket No.: 26237.Petitioner: MCI Systemhouse

Corporation.Sections of the FAR Affected: 14 CFR

91.611.Description of Relief Sought/

Disposition: To allow petitioner toconduct ferry flights with one engineinoperative in MCI’s Falcon Trijetaircraft, Model Nos. 50 and 900, withoutobtaining a special flight permit for eachflight. Grant, May 27, 1997, ExemptionNo. 5332C.

[FR Doc. 97–15171 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–M



Notice of Intent To Rule on ApplicationTo Impose and Use the Revenue Froma Passenger Facility Charge (PFC) atT.F. Green State Airport

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Notice of intent to rule onapplication.

SUMMARY: The FAA proposes to rule andinvites public comment on theapplication to impose and use therevenue from a Passenger FacilityCharge at T.F. Green State Airport underthe provisions of the Aviation Safetyand Capacity Expansion Act of 1990(Title IX of the Omnibus BudgetReconciliation Act of 1990) (Pub. L.101–508) and Part 158 of the FederalRegulations (14 CFR Part 158).DATES: Comments must be received onor before July 11, 1997.ADDRESSES: Comments on thisapplication may be mailed or deliveredin triplicate to the FAA at the followingaddress: Federal AviationAdministration, Airports Division, 12New England Executive Park,Burlington, Massachusetts 01803.

In addition, one copy of anycomments submitted to the FAA mustbe mailed or delivered to Ms. ElaineRoberts, at the following address:Executive Director of Airports, RhodeIsland Aviation Corporation, T.F. Green

State Airport, 2000 Post Road, Warwick,Rhode Island, 02886.

Air carriers and foreign air carriersmay submit copies of written commentspreviously provided to the ConnecticutDepartment of Transportation undersection 158.23 of Part 158 of the FederalAviation Regulations.FOR FURTHER INFORMATION CONTACT:Priscilla A. Scott, PFC ProgramManager, Federal AviationAdministration, Airports Division, 12New England Executive Park,Burlington, Massachusetts 01803, (617)238–7614. The application may bereviewed in person at 16 New EnglandExecutive Park, Burlington,Massachusetts.SUPPLEMENTARY INFORMATION: The FAAproposes to rule and invites publiccomment on the application to imposeand use the revenue from a PassengerFacility Charge (PFC) at T.F. Green StateAirport under the provisions of theAviation Safety and Capacity ExpansionAct of 1990 (Title IX of the OmnibusBudget Reconciliation Act of 1990)(Pub. L. 105–508) and Part 158 of theFederal Aviation Regulations (14 CFRPart 158).

On May 2, 1997, the FAA determinedthat the application to impose and usethe revenue from a PFC submitted bythe Rhode Island Aviation Corporationwas substantially complete within therequirements of § 158.25 of Part 158 ofthe Federal Aviation Regulations. TheFAA will approve or disapprove theapplication, in whole or in part, no laterthan August 6, 1997.

The following is a brief overview ofthe impose and use application.

PFC Project #: 97–02–C–00–PVD.Level of the proposed PFC: $3.00.Proposed charge effective date:

September 1, 2013.Proposed estimated charge expiration

date: May 27, 2014.Estimated total net PFC revenue:

$3,892,980.Brief description of project: Terminal

Leasehold Acquisition.Class or classes of air carriers which

the public agency has requested not berequired to collect PFCs: On demandAir Taxi/Commercial Operators (ATCO),that (1) do not enplane or deplanepassengers at the main passengerterminal building; and (2) enplane lessthan 500 passengers per year at T.F.Green State Airport.

Any person may inspect theapplication in person at the FAA officelisted above under FOR FURTHERINFORMATION CONTACT.

In addition, any person may, uponrequest, inspect the application, noticeand other documents germane to the

application in person in the RhodeIsland Aviation Corporation, 2000 PostRoad, Warwick, Rhode Island.

Issued in Burlington, Massachusetts, onJune 4, 1997.Bradely A. Davis,Assistant Manager, Airports Division, NewEngland Region.[FR Doc. 97–15307 Filed 6–10–97; 8:45 am]BILLING CODE 4910–13–M



[Docket No. M–036]

Information Collection Available forPublic Comments andRecommendations

ACTION: Notice and request forcomments.

SUMMARY: In accordance with thePaperwork Reduction Act of 1995, thisnotice announces the MaritimeAdministration’s (MARAD’s) intentionsto request extension of approval forthree years of a currently approvedinformation collection.DATES: Comments should be submittedon or before August 11, 1997.FOR FURTHER INFORMATION CONTACT:Richard L. Walker, Director, Office ofIntermodal Development, MaritimeAdministration, MAR–810, Room 7209,400 Seventh Street, S.W., Washington,D.C. 20590. Telephone 202–366–8888 orFAX 202–366–6988. Copies of thiscollection can also be obtained from thatoffice.


Title of Collection: Inventory ofAmerican Intermodal Equipment.

Type of Request: Extension ofcurrently approved informationcollection.

OMB Control Number: 2133–0503.Expiration Date of Approval:

December 31, 1997.Summary of Collection of

Information: The collection consists ofan intermodal equipment inventory thatprovides data essential to both thegovernment and the transportationindustry in planning for the mostefficient use of intermodal equipment.

Need and Use of the Information: Theinformation contained in the inventoryprovides data about U.S.-basedcompanies that own or lease intermodalequipment and is essential to bothgovernment and industry in planningfor contingency operations.

Description of Respondents: Thereport requests information from U.S.


steamship and intermodal equipmentleasing companies.

Annual Responses: 22 companies.Annual Burden: 66 hours.Comments: Send all comments

regarding this information collection toJoel C. Richard, Department ofTransportation, MaritimeAdministration, MAR–120, Room 7210,400 Seventh Street, S.W., Washington,D.C. 20590. Send comments regardingwhether this information collection isnecessary for proper performance of thefunction of the agency and will havepractical utility, accuracy of the burdenestimates, ways to minimize thisburden, and ways to enhance quality,utility, and clarity of the information tobe collected.

By Order of the Maritime Administrator.


Joel C. Richard,Secretary.[FR Doc. 97–15280 Filed 6–10–97; 8:45 am]




Voluntary Intermodal SealiftAgreement

AGENCY: Maritime Administration, DOT.


The Maritime Administration andUnited States Transportation Command,with its sealift component MilitarySealift Command, announce a publicmeeting to discuss and providebackground information focusedprimarily to the U.S.-flag tug/bargeindustry on the advantages of becominga participant in the VoluntaryIntermodal Sealift Agreement (VISA)Program. The meeting will be held inRoom 3200–3204, Department ofTransportation, 400 Seventh Street, SW,Washington, D.C. 20590 on June 25,1997 from 1:00 p.m. to 4:00 p.m.

CONTACT PERSON FOR ADDITIONALINFORMATION: Raymond R. Barberesi,Director, Office of Sealift Support, (202)366–2323.

By Order of the Maritime Administrator.


Joel C. Richard,Secretary.[FR Doc. 97–15279 Filed 6–10–97; 8:45 am]



Surface Transportation Board

[STB Finance Docket No. 33405]

Paducah & Louisville Railway—Trackage Rights Exemption—CSXTransportation, Inc.

CSX Transportation, Inc. (CSXT) hasagreed to grant overhead trackage rightsto Paducah & Louisville Railway (P&L)between Madisonville, KY, at or nearmilepost OOH 275, and the Providence1 Mine (Mine) located on CSXT’sMorganfield Branch, at or near milepostMB 288.8, a distance of approximately13.5 miles.

The transaction is scheduled to beconsummated on June 7, 1997.

The purpose of the trackage rights isto allow P&L to handle movements ofcoal from the Mine to the generatingfacilities of Louisville Gas and ElectricCompany at Kosmosdale and Louisville,KY, and to handle empties via thereverse route.

As a condition to this exemption, anyemployees affected by the trackagerights will be protected by theconditions imposed in Norfolk andWestern Ry. Co.—Trackage Rights—BN,354 I.C.C. 605 (1978), as modified inMendocino Coast Ry., Inc.—Lease andOperate, 360 I.C.C. 653 (1980).

This notice is filed under 49 CFR1180.2(d)(7). If it contains false ormisleading information, the exemptionis void ab initio. Petitions to revoke theexemption under 49 U.S.C. 10502(d)may be filed at any time. The filing ofa petition to revoke will notautomatically stay the transaction.

An original and 10 copies of allpleadings, referring to STB FinanceDocket No. 33405, must be filed withthe Surface Transportation Board, Officeof the Secretary, Case Control Unit, 1925K Street, N.W., Washington, DC 20423–0001. In addition, a copy of eachpleading must be served on (1) J.Thomas Garrett, Esq., Paducah &Louisville Railway, 1500 KentuckyAvenue, Paducah, KY 42003, and (2)Fred R. Birkholz, Esq., CSXTransportation, Inc., 500 Water Street,J–150, Jacksonville, FL 32202.

Decided: June 4, 1997.

By the Board, David M. Konschnik,Director, Office of Proceedings.

Vernon A. Williams,Secretary.[FR Doc. 97–15264 Filed 6–10–97; 8:45 am]


DEPARTMENT OF THE TREASURY

Government Securities: Call for LargePosition Reports

AGENCY: Office of the Under Secretaryfor Domestic Finance, Treasury.ACTION: Notice.

SUMMARY: The Department of theTreasury (‘‘Department’’ or ‘‘Treasury’’)called for the submission of LargePosition Reports by those entities whosereportable positions in the 61⁄4%Treasury Notes of February 2007equaled or exceeded $21⁄2 billion as ofclose of business June 6, 1997.DATES: Large Position Reports must bereceived before noon Eastern time onJune 13, 1997.ADDRESSES: The reports must besubmitted to the Federal Reserve Bankof New York, Market Reports Division,4th Floor, 33 Liberty Street, New York,New York 10045; or facsimile 212–720–8028.FOR FURTHER INFORMATION CONTACT: KenPapaj, Director, or Kerry Lanham,Government Securities Specialist,Bureau of the Public Debt, Departmentof the Treasury, at 202–219–3632.SUPPLEMENTARY INFORMATION: Pursuantto the Department’s large position rulesunder the Government Securities Actregulations (17 CFR Part 420), theTreasury, in a press release issued onJune 9, 1997, and in this FederalRegister notice, called for Large PositionReports from those entities whosereportable position in the 61⁄4%Treasury Notes of February 2007, SeriesB–2007, equaled or exceeded $21⁄2billion as of the close of businessFriday, June 6, 1997. The call for LargePosition Reports is a test. Entities whosereportable positions in this 10-year noteequaled or exceeded the $21⁄2 billionthreshold must report these positions tothe Federal Reserve Bank of New York.Large Position Reports, which mustinclude the required position andadministrative information, must bereceived by the Market Reports Divisionof the Federal Reserve Bank of NewYork before noon Eastern time onFriday, June 13, 1997. The Reports maybe filed by facsimile at (212) 720–8028or delivered to the Bank at 33 LibertyStreet, 4th floor.

The 61⁄4% Treasury Notes of February2007 have a CUSIP number of 912827 2J0, a STRIPS principal component CUSIPnumber of 912820 BW 6, and a maturitydate of February 15, 2007.

The press release and a copy of thisFederal Register notice calling for theLarge Position Reports, and a copy of asample Large Position Report which


1 A copy of this list may be obtained bycontacting Ms. Jacqueline Caldwell, AssistantGeneral Counsel, at 202/619–6982, and the addressis Room 700, U.S. Information Agency, 301 4thStreet, S.W., Washington, D.C. 20547–0001.

appears in Appendix B of the rules at 17CFR Part 420, can be obtained by calling(202) 622–2040 and requestingdocument number 1737. Thesedocuments are also available at theBureau of the Public Debt’s Internet siteat the following address: http://www.publicdebt.treas.gov.

Questions about Treasury’s largeposition reporting rules should bedirected to Public Debt’s GovernmentSecurities Regulations Staff at (202)219–3632. Questions regarding themethod of submission of Large PositionReports may be directed to the MarketReports Division of the Federal ReserveBank of New York at (212) 720–8021.

The collection of large positioninformation has been approved by theOffice of Management and Budgetpursuant to the Paperwork ReductionAct under OMB Control Number 1535–0089.

Dated: June 6, 1997.John D. Hawke, Jr.,Under Secretary, Domestic Finance.[FR Doc. 97–15445 Filed 6–9–97; 3:33 pm]BILLING CODE 4810–39–P

UNITED STATES INFORMATIONAGENCY

Culturally Significant Objects Importedfor Exhibition; Determinations

Notice is hereby given of thefollowing determinations: Pursuant tothe authority vested in me by the Act ofOctober 19, 1965 (79 Stat. 985, 22 U.S.C.2459), Executive Order 12047 of March27, 1978 (43 F.R. 13359, March 29,1978), and Delegation Order No. 85–5 ofJune 27, 1985 (50 F.R. 27393, July 2,1985), I hereby determine that the sevenobjects (See list 1), to be exhibited in ALiving Memorial to the Holocaust—Museum of Jewish Heritage in NewYork, imported from abroad for thetemporary exhibition without profitwithin the United States, are of culturalsignificance. These objects are importedpursuant to a loan agreement with theforeign lenders. I also determine that the

exhibition or display of the listedexhibit objects at A Living Memorial tothe Holocaust—Museum of JewishHeritage in New York from on or aboutJuly 1, 1997, through July 1, 2002, is inthe national interest. The action of theUnited States in this matter and theimmunity based on the application ofthe provisions of the law involved doesnot imply any view of the United Statesconcerning the ownership of theexhibition objects. Further, it is notbased upon and does not represent anychange in the position of the UnitedStates regarding the status of Jerusalemor the territories occupied by Israelsince 1967. Public Notice of thesedeterminations is ordered to bepublished in the Federal Register.

Date: June 5, 1997.

Les Jin,General Counsel.[FR Doc. 97–15283 Filed 6–10–97; 8:45 am]


This section of the FEDERAL REGISTERcontains editorial corrections of previouslypublished Presidential, Rule, Proposed Rule,and Notice documents. These corrections areprepared by the Office of the FederalRegister. Agency prepared corrections areissued as signed documents and appear inthe appropriate document categorieselsewhere in the issue.

Corrections Federal Register

31865

Vol. 62, No. 112


OFFICE OF GOVERNMENT ETHICS

5 CFR Part 2641

RIN 3209-AA07

Post-Employment Conflict of InterestRestrictions; Exemption of Positionsand Revision of DepartmentalComponent Designations

Correction

In rule document 97–12898,beginning on page 26915, in the issue ofFriday, May 16, 1997, make thefollowing corrections:

Appendix A to Part 2641 [Corrected]

1. On page 26917, in the first column,in Appendix A to part 2641, the listingfor the Department of Justice shouldread as follows:

* * * * *Agency: Department of Justice.Positions: United States Trustee (21)(effectiveJune 2, 1994).

* * * * *

Appendix B to Part 2641 [Corrected]2. On page 26917, in the first column,

in the eighth line from the bottom,‘‘anuary’’ should read ‘‘January’’.

3. On page 26917, in the secondcolumn, in footnote 1, in the second line‘‘Secreary’’ should read ‘‘Secretary’’.

4. On page 26917, in the secondcolumn, in footnote 1, in the sixth line‘‘Secreary’’ should read ‘‘Secretary’’.

5. On page 26917, in the secondcolumn, in footnote 2, in the first line‘‘Untied’’ should read ‘‘United’’.

6. On page 26917, in the secondcolumn, in footnote 3, in the first line,‘‘Untied’’ should read ‘‘United’’.

7. On page 26917, in the secondcolumn, in footnote 3, in the second line‘‘Attorneys’’ should read ‘‘Trustees’’.

8. On page 26917, in the thirdcolumn, in footnote 5, in the first line‘‘Untied’’ should read ‘‘United’’.BILLING CODE 1505-01-D


5 CFR Part 3801

28 CFR Part 45

RIN 3209-AA15

Supplement Standards of EthicalConduct for Employees of theDepartment of Justice

CorrectionIn rule document 97–11476 beginning

on page 23941 in the issue of Friday,

May 2, 1997, make the followingcorrection:

§ 3801.106 [Corrected]

On page 23943, in the first column, inthe first line of § 3801.106 (b)(1)(ii),‘‘have as’’ should read ‘‘habeas’’.BILLING CODE 1505-01-D

DEPARTMENT OF LABOR


Job Training Partnership Act AnnualService Delivery Area Report (JASDA);Comment Request

Correction

In notice document 97–14056beginning on page 29154 in the issue ofThursday, May 29, 1997, make thefollowing correction:

On page 29154, in the third column,under the DATES section ‘‘June 28,1997’’ should read ‘‘July 28, 1997’’.BILLING CODE 1505-01-D

fede

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egiste

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31867

WednesdayJune 11, 1997

Part II

FederalCommunicationsCommission47 CFR Parts 61 and 69Access Charge Reform; Price CapPerformance Review for Local ExchangeCarriers; Transport Rate Structure andPricing; Usage of the Public SwitchedNetwork by Information Service andInternet Providers; Rules



47 CFR Parts 61 and 69

[CC Docket Nos. 96–262, 94–1, 91–213, 96–263; FCC 97–158]

Access Charge Reform; Price CapPerformance Review for LocalExchange Carriers; Transport RateStructure and Pricing; Usage of thePublic Switched Network byInformation Service and InternetAccess Providers

AGENCY: Federal CommunicationsCommission.ACTION: Final rule.

SUMMARY: On December 23, 1996, theCommission adopted a Notice ofProposed Rulemaking in this docket,seeking comment on how the interstateaccess charge regime should be revisedin light of the local competition and BellOperating Company entry provisions ofthe Telecommunications Act of 1996and state actions to open local marketsto competition, the effects of potentialand actual competition on incumbentLEC pricing for interstate access, andthe impact of the Act’s mandate topreserve and enhance universal service.In this Report and Order, theCommission adopts many of the rules itproposed. These rule revisions areintended to foster competition, moveaccess charges over time to moreeconomically efficient levels and ratestructures, preserve universal service,and lower rates.DATES: The following rules oramendments thereto, shall becomeeffective July 11, 1997 47 CFR 69.103,69.107, 69.122, 69.303, 69.304, 69.307,69.308, and 69.406. The following rulesor amendments thereto, which imposenew or modified information orcollection requirements, shall becomeeffective upon approval by the Office ofManagement and Budget (OMB), but nosooner than June 15, 1997: 47 CFR61.45, 61.47, 69.104, 69.126, 69.151,69.152, and 69.410. The following rules,or amendments thereto, in this Reportand Order shall be effective January 1,1998: 47 CFR 61.3, 61.46, 69.1, 69.2,69.105, 69.123, 69.124, 69.125, 69.154,69.155, 69.157, 69.305, 69.306, 69.309,69.401, 69.411, 69.501, 69.502, and69.611. The following rules, whichimpose new or modified information orcollection requirements, shall becomeeffective upon approval by the Office ofManagement and Budget (OMB), but nosooner than January 1, 1998: 47 CFR61.42, 61.48, 69.4, 69.106, 69.111,69.153, and 69.156. The Commissionwill publish a document in the Federal

Register at a later date announcing theeffective date for the sections containinginformation collection requirements.FOR FURTHER INFORMATION CONTACT:Richard Lerner, Attorney, CommonCarrier Bureau, Competitive PricingDivision, (202) 418–1530. For additionalinformation concerning the informationcollections contained in this Report andOrder contact Judy Boley at 202–418–0214, or via the Internet [email protected] INFORMATION: This is asummary of the Commission’s Reportand Order adopted May 7, 1997, andreleased May 16, 1997. The full text ofthis Report and Order is available forinspection and copying during normalbusiness hours in the FCC ReferenceCenter (Room 239), 1919 M St., N.W.,Washington, DC. The complete text alsomay be obtained through the WorldWide Web, http://www.fcc.gov/Bureaus/CommonlCarrier/Orders/1997/fcc97158.wp, or may be purchasedfrom the Commission’s copy contractor,International Transcription Service,Inc., (202) 857–3800, 2100 M St., N.W.,Suite 140, Washington, DC 20037. Toseek comment on the rules adopted inthis Report and Order, the Commissionreleased Access Charge Reform, CCDocket No. 96–262, Notice of ProposedRulemaking, 62 FR 4670 (January 31,1997); Price Cap Performance Reviewfor Local Exchange Carriers, CC DocketNo. 94–1, Second Further Notice ofProposed Rulemaking, 60 FR 49539(September 25, 1995); and Price CapPerformance Review for Local ExchangeCarriers, CC Docket 94–1, FourthFurther Notice of Proposed Rulemaking,60 FR 52362 (October 6, 1995). ThisReport and Order contains proposed ormodified information collections subjectto the Paperwork Reduction Act of 1995(PRA). It has been submitted to theOffice of Management and Budget(OMB) for review under the PRA. OMB,the general public, and other Federalagencies are invited to comment on theproposed or modified informationcollections contained in thisproceeding. Please note that theCommission has requested emergencyreview and approval of this collectionby June 10, 1997 under the provisionsof 5 CFR 1320.13.


This Report and Order contains eithera proposed or modified informationcollection. As part of its continuingeffort to reduce paperwork burdens, weinvite the general public and the Officeof Management and Budget (OMB) totake this opportunity to comment on theinformation collections contained in

this Report and Order, as required bythe Paperwork Reduction Act of 1995,Public Law 104–13. Please note that theCommission has requested emergencyreview and approval of this collectionby June 10, 1997 under the provisionsof 5 CFR 1320.13. OMB notification ofaction is due June 10, 1997. Commentsshould address: (a) Whether theproposed collection of information isnecessary for the proper performance ofthe functions of the Commission,including whether the information shallhave practical utility; (b) the accuracy ofthe Commission’s burden estimates; (c)ways to enhance the quality, utility, andclarity of the information collected; and(d) ways to minimize the burden of thecollection of information on therespondents, including the use ofautomated collection techniques orother forms of information technology.

OMB Approval Number: 3060–0760.Title: Access Charge Reform Report

and Order.Form No.: N/A.Type of Review: Revised Collection.Respondents: Business and other for

profit.Number of Respondents: 13.Estimated Time Per Response:

138,714 hours.Total Annual Burden: 1,803,282

hours.Estimated costs per respondent:

$2,400.Total Annual Estimated Costs:

$31,200.Needs and Uses: In the Access Charge

Reform First Report and Order, theCommission adopts, that, consistentwith principles of cost-causation andeconomic efficiency, non-trafficsensitive (NTS) costs associated withlocal switching should be recovered onan NTS basis, through flat-rated, permonth charges. The informationcollections resulting from this Reportand Order are as follows:

a. Cost Study of Local SwitchingCosts: The FCC does not establish afixed percentage of local switching coststhat incumbent LECs must reassign tothe Common Line basket or newlycreated Trunk Cards and Ports servicecategory as NTS costs. In light of thewidely varying estimates in the record,we conclude that the portion of coststhat is NTS costs likely varies amongLEC switches. Accordingly, we requireeach price cap LEC to conduct a coststudy to determine the geographically-averaged portion of local switchingcosts that is attributable to the line-sideports, as defined above, and todedicated trunk side cards and ports.These amounts, including cost support,should be reflected in the access charge


elements filed in the LEC’s access tariffeffective January 1, 1998.

b. Cost Study of Interstate AccessService That Remain Subject to PriceCap Regulation: The 1996 Act hascreated an unprecedented opportunityfor competition to develop in localtelephone markets. We recognize,however, that competition is unlikely todevelop at the same rate in differentlocations, and that some services will besubject to increasing competition morerapidly than others. We also recognize,however, that there will be areas andservices for which competition may notdevelop. We will adopt a prescriptive‘‘backstop’’ to our market-basedapproach that will serve to ensure thatall interstate access customers receivethe benefits of more efficient prices,even in those places and for thoseservices where competition does notdevelop quickly. To implement ourbackstop to market-based access chargereform, we require each incumbentprice cap LEC to file a cost study nolater than February 8, 2001,demonstrating the cost of providingthose interstate access services thatremain subject to price cap regulationbecause they do not face substantialcompetition.

c. Tariff Filings. The Commission alsosuggests several information collectionsrelating to tariff filings. Specifically, theCommission adopts its proposals torequire the filing of various tariffs, withmodifications. For example, the FCCdirects incumbent LECs to establishseparate rate elements for themultiplexing equipment on each side ofthe tandem switch. LECs must establisha flat-rated charge for the multiplexerson the SWC side of the tandem,imposed pro-rata on the purchasers ofthe dedicated trunks on the SWC side ofthe tandem. Multiplexing equipment onthe EO side of the tandem shall becharged to users of common EO-to-tandem transport on a per-minute of usebasis. These multiplexer rate elementsmust be included in the LEC accesstariff filings to be effective January 1,1998.

Synopsis of Report and Order

I. Introduction

1. In passing the TelecommunicationsAct of 1996, Public Law 104–104, 110Stat. 56 (codified at 47 U.S.C. secs. 151et seq.) (1996 Act), Congress sought toestablish ‘‘a pro-competitive,deregulatory national policyframework’’ for the United States’telecommunications industry. With thisOrder, we begin the third part in atrilogy of actions collectively intendedto foster and accelerate the introduction

of competition into alltelecommunications markets, pursuantto the mandate of the 1996 Act.

2. In the Local Competition Order, weset forth rules to implement section 251and section 252 of the CommunicationsAct of 1934, as amended.Implementation of the LocalCompetition Provisions of theTelecommunications Act of 1996, CCDocket No. 96–98, First Report andOrder, 61 FR 45476 (August 29, 1996)(Local Competition Order), Order onReconsideration, CC Docket No. 96–98,61 FR 52706 (October 8, 1996), petitionfor review pending and partial staygranted, sub nom. Iowa Utils. Bd. v.FCC, 109 F.3d 418 (8th Cir. 1996). Aswith all of Part II of Title II of theCommunications Act, those sections,and the rules implementing them, seekto remove the legal, regulatory,economic, and operational barriers totelecommunications competition.Among other things, sections 251 and252 provide entrants with theopportunity to compete for consumersin local markets by either constructingnew facilities, leasing unbundlednetwork elements, or resellingtelecommunication services.

3. In the Universal Service Order,which we adopt in a companion ordertoday, we take steps to ensure thatsupport mechanisms that are necessaryto maintain local rates at affordablelevels are protected and advanced aslocal telecommunication marketsbecome subject to the competitivepressures unleashed by the 1996 Act.Federal-State Board on UniversalService, CC Docket No. 96–45, FirstReport and Order, FCC 97–157, lllFR lll (released May 8, 1997)(Universal Service Order). When itenacted section 254 of theCommunications Act, Congress detailedthe principles that must guide thiseffort. It placed on the Commission andthe states the duty to implement theseprinciples in a manner consistent withthe pro-competition purposes of the Act,as embodied in, for instance, theinterconnection provisions of the Act. Itstated that ‘‘[t]here should be specific,predictable and sufficient Federal andState mechanisms to preserve andadvance universal service.’’

4. Congress also specified thatuniversal service support ‘‘should beexplicit,’’ and that, with respect tofederal universal service support,‘‘[e]very telecommunications carrier thatprovides interstate telecommunicationsservices shall contribute, on anequitable and non-discriminatory basis,to the specific, predictable, andsufficient mechanisms established bythe Commission to preserve and

advance universal service.’’ Asexplained further in the JointExplanatory Statement of the Committeeof the Conference, Congress intendedthat, ‘‘[t]o the extent possible, * * * anysupport mechanisms continued orcreated under new section 254 shouldbe explicit, rather than implicit as manysupport mechanisms are today.’’Congress directed the Commission, byMay 8, 1997, to complete a universalservice proceeding that ‘‘include[s] adefinition of the services that aresupported by Federal universal servicesupport mechanisms and a specifictimetable for implementation.’’

5. Through our accompanyingUniversal Service Order, we establishthe definition of services to besupported by federal universal servicesupport mechanisms and the specifictimetable for implementation. Further,through this First Report and Order inour access reform docket and ourUniversal Service Order, we set in placerules that will identify and convertexisting federal universal servicesupport in the interstate high cost fund,the dial equipment minutes (DEM)weighting program, Long Term Support,Lifeline, Link-up, and interstate accesscharges to explicit federal universalservice support mechanisms. Asdetailed below, we will identify theimplicit federal universal servicesupport currently contained in interstateaccess charges through three methods.

6. First, we will reduce usage-sensitive interstate access charges byphasing out local loop and other non-traffic-sensitive (NTS) costs from thosecharges and directing incumbent localexchange carriers (LECs) to recoverthose NTS costs through moreeconomically efficient, flat-ratedcharges. Because NTS costs, bydefinition, do not vary with usage, therecovery of NTS costs on a usage basispursuant to our current access chargerules amounts to an implicit subsidyfrom high-volume users of interstate tollservices to low-volume users ofinterstate long-distance services.

7. Second, we will rely in part onemerging competition in localtelecommunications markets, spurredby the adoption of the 1996 Act, to helpidentify the differences between therates for interstate access servicesestablished by incumbent LECs underprice cap regulation and those thatcompetition would set. The prices forinterstate access services offered bycompeting providers presumably willnot contain any implicit universalservice support such as that embeddedin the incumbent LECs’ access charges.Consequently, the introduction ofcompetition inevitably will help to


remove implicit support from theincumbent LECs’ access charges wherecompetition develops and also will helpto identify the extent of implicit supportin other areas.

8. Third, we will engage in furtherdeliberations on a forward-lookingeconomic cost-based mechanism thatwe will use to distribute federal supportto rural, insular, and high cost areas,beginning in 1999. Based on cost studiesthe states will conduct during thecoming year (or, at a state’s election,based upon Commission-developedproxy methods), an estimate of theforward-looking economic cost ofproviding service to a customer in aparticular rural, insular, or high costarea will be calculated. We willdistribute federal universal servicesupport based on the interstate portionof the difference between forward-looking economic cost and a nationwiderevenue benchmark. The amount of thesupport will be explicitly calculable andidentifiable by competing carriers, andthe support will be portable amongcompeting carriers, i.e., distributed tothe eligible telecommunications carrierchosen by the customer. It will befunded by equitable and non-discriminatory contributions from allcarriers that provide interstatetelecommunications services. Throughthis First Report and Order, we directthat federal universal service supportreceived by incumbent LECs be used toreduce or satisfy the interstate revenuerequirement otherwise collectedthrough interstate access charges.Accordingly, through both ourUniversal Service Order and this FirstReport and Order on access reform,interstate implicit support for universalservice will be identified and removedfrom interstate access charges, andsupport will be provided through theexplicit interstate universal servicesupport mechanisms.

9. Although these three steps will setin motion a process that will removeimplicit universal service support fromaccess charges, it will not remove allimplicit support from all access chargesimmediately. This result is fully inaccord with Congress’s directives.Although Congress said in the Act that‘‘support should be explicit’’, it did notprovide that ‘‘support shall be explicit.’’Congress’s decision to say ‘‘should’’instead of ‘‘shall’’ is especially pertinentin light of Congress’s repeated use of‘‘shall’’ in the 1996 Act. Moreover, inthe Act’s legislative history, Congressqualified its intention that ‘‘supportmechanisms should be explicit, ratherthan implicit,’’ with the phrase ‘‘[t]o theextent possible.’’ Thus, Congressrecognized that the conversion of the

existing web of implicit subsidies to asystem of explicit support would be adifficult task that probably could not beaccomplished immediately. Asexplained below, we conclude that aprocess that eliminates implicitsubsidies from access charges over timeis warranted primarily for three reasons.First, we simply do not have the toolsto identify the existing subsidiesprecisely at this time. Second, we preferto rely on the market rather thanregulation to identify implicit supportbecause we are more confident of themarket’s ability to do so accurately.Third, even if we were more confidentof our ability to identify all of theexisting implicit support mechanisms atthis time, eliminating them all at oncemight have an inequitable impact on theincumbent local exchange carriers.

10. Nor, by our orders today, do weattempt to identify or eliminate theimplicit universal service supportmechanisms established by statecommissions. We recognize that statesare initially responsible for identifyingimplicit intrastate subsidies. For thereasons stated above, we believe theCommission has discretion under thestatute to employ pro-competitive,deregulatory policies to aid in thereform of the existing, complex systemof universal service. Where pro-competition policies, such as those setforth in sections 251, 252 and 253, canforce prices for telecommunicationsservices to competitive levels, and, as aresult, eliminate or, at least,substantially eliminate implicit support,the Act grants us the authority to rely onsuch policies over a period of time. Wefind that the Act does not require, nordid Congress intend, that weimmediately institute a vast set of wide-ranging pricing rules applicable tointerstate and intrastate servicesprovided by incumbent LECs that wouldhave enormously disruptive effects onboth ratepayers as well as the affectedLECs. Indeed, the congressionalmandate that we implement pro-competitive, deregulatory policies is acontinuing reminder that, whereverfeasible, we should select competitioninstead of regulation as our means ofaccomplishing the stated statutory goals.Reliance on competition is the keystonethat unifies our universal service andaccess reform orders.

11. Nevertheless, implicit intrastateuniversal service support is substantial.States have maintained low residentialbasic service rates through, among otherthings, a combination of: geographic rateaveraging, high rates for businesscustomers, high intrastate access rates,high rates for intrastate toll service, andhigh rates for vertical features and

services such as call waiting and callforwarding. By not mandatingimmediate Commission action toeliminate these policies and instead byordering that the Commission and thestates together achieve universal servicegoals, Congress intended that states,acting pursuant to section 254(f) of theCommunications Act, must in the firstinstance be responsible for identifyingintrastate implicit universal servicesupport. Indeed, by our decisions in thisOrder and in our companion UniversalService Order, we strongly encouragestates to take such steps.

12. To achieve the vital, historic, andcongressionally-mandated purposes ofuniversal service in every state in an erain which competition replacesmonopoly, it is necessary that the statesand the Commission develop new andeffective mechanisms of complementingthe activities of each other. Therefore, asstates implement their universal serviceplans, we will be able to assess whetheradditional federal universal servicesupport is necessary to ensure thatquality services remain ‘‘available atjust, reasonable, and affordable rates.’’Our decisions in this Order are meant inpart to provide some elements of theplan and time sufficient to dischargeresponsibly an aspect of the federal rolein this federal-state universal servicepartnership.

13. In this First Report and Order, wealso take the actions necessary to permitthe market, in the first instance, toexpose any implicit universal servicesupport that we may fail to identify aswe implement our federal mechanismsfor supporting universal service ininsular, rural, and high cost areas and todrive access rates toward levels thatcompetition would be expected toproduce. Our decision also fulfills thecongressional intent that we eliminatethe rules that have helped to sustain defacto or de jure monopolies in accessmarkets and instead create theconditions for competitive entry on asustainable, long-term basis. Thatrequires, among other things, that wephase out opportunities for inefficiententry that are created primarily byanomalies in the current, monopoly-oriented regime. Consequently, thisOrder sets forth a plan for removingdistortions and inefficiencies in both thecurrent ‘‘rate structures’’ (the term usedto describe the manner in which aparticular charge is assessed, such asthrough a per-minute-of-use fee or a flat-rated fee) and ‘‘rate levels’’ (the termused to describe the aggregate size of aparticular access charge). Byrationalizing the access charge ratestructure, we ensure that charges moreaccurately reflect the manner in which


the costs are incurred, therebyfacilitating the movement to acompetitive market. We also establish,in this First Report and Order, aprescriptive mechanism to ensure that,through the operation of price caps andby other means, interstate accesscharges in areas where competition doesnot develop will also be driven towardthe levels that competition would beexpected to produce. The Price CapFourth Report and Order, which is alsothe Second Report and Order in thisdocket and which is also adopted today,modifies the X-Factor in accordancewith this plan. Price Cap PerformanceReview for Local Exchange Carriers,Fourth Report and Order in CC DocketNo. 94–1, and Access Charge Reform,Second Report and Order in CC DocketNo. 96–262, FCC 97–159, lll FRlll (adopted May 7, 1997) (Price CapFourth Report and Order).

14. In a subsequent order in thepresent docket, we will provide detailedrules for implementing the market-basedapproach that we adopt in today’sOrder. That process will give carriersprogressively greater flexibility insetting rates as competition develops,gradually replacing regulation withcompetition as the primary means ofsetting prices and facilitatinginvestment decisions. A separate orderin this docket will also address‘‘historical cost’’ recovery: whether andto what extent carriers should receivecompensation for the recovery of theallocated costs of past investments ifcompetitive market conditions preventthem from recovering such costs in theircharges for interstate access services.

15. By our orders today, we reject thearguments made by some parties thatsection 254 compels us immediately toremove all universal service costs frominterstate access charges. Making‘‘implicit’’ universal service subsidies‘‘explicit’’ ‘‘to the extent possible’’means that we have authority at ourdiscretion to craft a phased-in plan thatrelies in part on prescription and in parton competition to eliminate subsidies inthe prices for various products sold inthe market for telecommunicationsservices. Moreover, we have met section254’s clear command that we identifythe services to be supported by federaluniversal service support mechanismsand that we establish a specifictimetable for implementation. Underthat timetable, we will over the nextyear identify implicit interstateuniversal support and make thatsupport explicit, as further provided bysection 254(e). As with any implicitsupport mechanism, universal servicecosts are presently intermingled with allother costs, including the forward-

looking economic costs of interstateaccess and any historic costs associatedwith the provision of interstate accessservices. We cannot remove universalservice costs from interstate accesscharges until we can identify thosecosts, which we will not be able to doeven for non-rural LECs before January1, 1999.

16. Coupled with the modificationsimplemented in our Universal ServiceOrder, the changes we put in placetoday will provide far-reaching benefitsto the American people. This Order willrestructure access charges, resulting inlower long-distance rates for manyconsumers, while substantiallyincreasing the volume of long-distancecalling. It will promote the spread ofcompetition by replacing significantimplicit subsidies with an explicit andsecure universal service support system.It will foster competition and economicprosperity by creating an access chargesystem that is both efficient and fair. Webelieve that the changes implementedby this Order are necessary to meet thegoal set forth in the 1996 Act—‘‘openingall telecommunications markets tocompetition.’’

A. Background

1. The Existing Rate System

17. For much of this century, mosttelephone subscribers obtained bothlocal and long-distance services fromthe same company, the pre-divestitureBell System, owned and operated byAT&T. Its provision of local andintrastate long-distance services throughits wholly-owned operating companieswas regulated by state commissions.The Commission regulated AT&T’sprovision of interstate long-distanceservice. Much of the telephone plantthat is used to provide local telephoneservice (such as the local loop, the linethat connects a subscriber’s telephone tothe telephone company’s switch) is alsoneeded to originate and terminateinterstate long-distance calls.Consequently, a portion of the costs ofthis common plant historically wasassigned to the interstate jurisdictionand recovered through the rates thatAT&T charged for interstate long-distance calls. The balance of the costsof the common plant was assigned tothe intrastate jurisdiction and recoveredthrough the charges administered by thestate commissions for intrastateservices. The system of allocating costsbetween the interstate and intrastatejurisdictions is known as theseparations process. The difficultiesinherent in allocating the costs offacilities that are used for multiple

services between the two jurisdictionsare discussed below.

18. At first, there was no formalsystem of tariffed charges to determinehow the BOCs and the hundreds ofunaffiliated, independent LECs wouldrecover the costs allocated to theinterstate jurisdiction by the separationsrules. Instead, AT&T remitted to thesecompanies the amounts necessary torecover their allocated interstate costs,including a return on allocated capitalinvestment.

19. In the 1970s, MCI and otherinterexchange carriers (IXCs) began toprovide switched long-distance servicein competition with AT&T. However,AT&T still maintained monopolies inthe local markets served by its localsubsidiaries, the Bell OperatingCompanies (BOCs). The BOCs ownedand operated the telephone wires thatconnected the customers in their localmarkets. Other independent (non-Bell)LECs held similar monopoly franchisesin their local service areas. MCI and theother IXCs were dependent on the BOCsand the independent LECs to completethe long-distance calls to the end user.

20. For much of the 1970s, MCI andAT&T fought over the fees—the accesscharges—that MCI should pay the BOCsfor originating and terminatinginterstate calls placed by or to end userson the BOCs’ local networks. That battletook place before federal regulators, aswell as in the federal courts. InDecember 1978, under Commissionsupervision, AT&T, MCI, and the otherlong-distance competitors entered into acomprehensive interim agreement,known as Exchange Network Facilitiesfor Interstate Access (ENFIA), that setrates that AT&T would charge long-distance competitors for originating andterminating interstate traffic over thefacilities of its local exchange affiliates.Several years afterwards, AT&T’sdivestiture was completed, separatingthe local exchange operations of theBOCs from the rest of AT&T’soperations, including AT&T’s longdistance business. The BOCsmaintained monopoly franchises intheir local market, but by splitting themoff from AT&T’s long-distance business,the federal courts removed an incentivefor the BOCs to favor AT&T’s longdistance business over its competitors.Now AT&T competed directly with MCIand the other competitors to provideinterstate service, and all of thecompetitors paid the BOCs for theservice of providing the necessaryaccess to end users.

21. In 1978, the Commissioncommenced a wide-ranging review ofthe system by which LECs werecompensated for originating and


terminating interstate traffic. In 1983,following the decision to break-upAT&T, the Commission adopteduniform access charge rules in lieu ofearlier agreements. MTS and WATSMarket Structure, Third Report andOrder, CC Docket No. 78–72, Phase 1, 48FR 10319 (March 11, 1983) (MTS andWATS Market Structure Third Reportand Order), recon., 48 FR 42984(September 21, 1983), second recon., 49FR 7810 (March 2, 1984). These rulesgoverned the provision of interstateaccess services by all incumbent LECs,BOCs as well as independents. Theaccess charge rules provide for therecovery of the incumbent LECs’ costsassigned to the interstate jurisdiction bythe separations rules.

22. The Commission uses a multi-stepprocess to identify the cost of providingaccess service. First, the rules require anincumbent LEC to record all of itsexpenses, investments, and revenues inaccordance with accounting rules setforth in our regulations. Second, therules divide these costs between thoseassociated with regulatedtelecommunications services and thoseassociated with nonregulated activities.Third, the separations rules determinethe fraction of the incumbent LEC’sregulated expenses and investment thatshould be allocated to the interstatejurisdiction. After the total amount ofinterstate cost is identified, the accesscharge rules translate these interstatecosts into charges for the specificinterstate access services and rateelements. Part 69 specifies in detail therate structure for recovering those costs.That is, the rules tell the incumbentLECs the precise manner in which theymay assess charges on interexchangecarriers and end users.

23. Determining the costs that anincumbent LEC incurs to provideinterstate access services and that,consequently, should be recovered fromthose services, is relativelystraightforward in some cases andproblematic in others. Some facilities,such as private lines, can be usedexclusively for interstate services and,in such cases, the entire cost of thosefacilities is assigned to the interstatejurisdiction by the separations rules.Most facilities, however, are used forboth intrastate and interstate services.The costs of some of these facilities varydepending on the amount oftelecommunications traffic that theyhandle. The separations rules typicallyassign these traffic-sensitive (TS) costson the basis of the relative interstate andintrastate usage of the facilities, asmeasured, for example, by the relativeminutes of interstate and intrastatetraffic carried by such facilities. By

contrast, the costs of other facilitiesused for both interstate and intrastatetraffic do not vary with the amount oftraffic carried over the facilities, i.e., thecosts are non-traffic-sensitive. Thesecosts pose particularly difficultproblems for the separations process:The costs of such facilities cannot beallocated on the basis of cost-causationprinciples because all of the facilitieswould be required even if they wereused only to provide local service oronly to provide interstate accessservices. A significant illustration of thisproblem is allocating the cost of thelocal loop, which is needed both toprovide local telephone service as wellas to originate and terminate long-distance calls. The current separationsrules allocate 25 percent of the cost ofthe local loop to the interstatejurisdiction for recovery throughinterstate charges. The general processof separating these costs between theinterstate and intrastate jurisdictions isdiscussed by the Supreme Court inSmith v. Illinois Bell Tel. Co., 282 U.S.133 (1930).

24. The Commission has recognizedin prior rulemaking proceedings that, tothe extent possible, costs of interstateaccess should be recovered in the sameway that they are incurred, consistentwith principles of cost-causation. Thus,the cost of traffic-sensitive accessservices should be recovered throughcorresponding per-minute access rates.Similarly, NTS costs should berecovered through fixed, flat-rated fees.The Commission, however, has notalways adopted rules that are consistentwith this goal. In particular, theCommission limited the amount of theallocated interstate cost of a local loopthat is assessed to residential andbusiness customers as a flat monthlycharge, because of concerns thatallowing the flat charges to rise abovethe specified limits might causecustomers to disconnect their telephoneservice. The residual cost of the loop notrecovered from end users through theflat charge is recovered through a per-minute-of-use charge assessed to long-distance carriers.

25. Through the end of 1990, the vastmajority of access revenues weregoverned by ‘‘cost-of-service’’regulation. Under cost-of-serviceregulation, incumbent LECs calculatethe specific access charge rates usingprojected costs and projected demandfor access services. Thus, for example, ifan incumbent LEC projects that it willprovide 10,000 total minutes ofswitching for interstate calls andestimates that it must generate $1,000dollars in revenue in order to recoverthe costs of switching that are allocated

to the interstate jurisdiction by theseparations rules, the access charge forlocal switching would be set at $0.10per minute ($1,000/10,000 minutes). In1991, however, we implemented asystem of price cap regulation thataltered the manner in which the largestincumbent LECs established theirinterstate access charges. While mostrural and small LECs remained subjectto all of the Part 69 cost-of-service rules,generally the largest incumbent LECsare now subject to price cap regulationsset forth in Part 61 of our rules.

26. Price cap regulationfundamentally alters the process bywhich incumbent LECs determine therevenues they are permitted to obtainfrom interstate access charges for accessservices. Briefly stated, cost-of-serviceregulation is designed to limit theprofits an incumbent LEC may earnfrom interstate access service, whereasprice cap regulation focuses primarilyon the prices that an incumbent LECmay charge and the revenues it maygenerate from interstate access services.Under the Part 69 cost-of-service rules,revenue requirements are based onembedded or accounting costs allocatedto individual services. Incumbent LECsare limited to earning a prescribedreturn on investment and are potentiallyobligated to provide refunds if theirinterstate rate of return exceeds theauthorized level. By contrast, althoughthe access charges of price cap LECsoriginally were set at the cost-of-servicelevels that existed at the time theyentered price caps, their prices havebeen limited ever since by price indicesthat have been adjusted annuallypursuant to formulae set forth in ourPart 61 rules. Price cap carriers whoseinterstate access charges are set by thesepricing rules are permitted to earnreturns significantly higher than theprescribed rate of return that incumbentLECs are allowed to earn under cost-of-service rules. Price cap regulationencourages incumbent LECs to improvetheir efficiency by harnessing profit-making incentives to reduce costs,invest efficiently in new plant andfacilities, and develop and deployinnovative service offerings, whilesetting price ceilings at reasonablelevels. In this way, price caps act as atransitional regulatory scheme until theadvent of actual competition makesprice cap regulation unnecessary. PriceCap Performance Review for LocalExchange Carriers, Second FurtherNotice of Proposed Rulemaking in CCDocket No. 93–124, and Second FurtherNotice of Proposed Rulemaking in CCDocket No. 93–197, 60 FR 49539


(September 26, 1995) (Price Cap SecondFurther NPRM).

27. Although price cap regulationeliminates the direct link betweenchanges in allocated accounting costsand change in prices, it does not severthe connection between accountingcosts and prices entirely. The overallinterstate revenue levels still generallyreflect the accounting and costallocation rules used to develop accessrates to which the price cap formulaewere originally applied. Price capindices are adjusted upwards if a pricecap carrier earns returns below aspecified level in a given year.Moreover, a price cap LEC may petitionthe Commission to set its rates above thelevels permitted by the price cap indicesbased on a showing that the authorizedrate levels will produce earnings thatare so low as to be confiscatory. In thepast, all or some price cap LECs wererequired to ‘‘share,’’ or return toratepayers, earnings above specifiedlevels. The new rules adopted in thecompanion Price Cap Fourth Report andOrder remove this limit on themaximum returns that can be earned byprice cap incumbent LECs.

2. Implicit Subsidies in the ExistingSystem

28. Both our price cap and cost-of-service rules contain requirements thatinevitably result in charges to certainend users that exceed the cost of theservice they receive. To the extent theserates do not reflect the underlying costof providing access service, they couldbe said to embody an implicit subsidy.Some of these subsidies are due to therate structures prescribed by our rules,which in some cases prevent incumbentLECs from recovering their access costsin the same way they have beenincurred. For example, although the costof the local loop that connects an enduser to the telephone company’s switchdoes not vary with usage, the currentrate structure rules require incumbentLECs to recover a large portion of thesenon-traffic-sensitive costs throughtraffic-sensitive, per-minute charges.These mandatory recovery rules inflatetraffic-sensitive usage charges andreduce charges for connection to thenetwork, in essence creating an implicitsupport flow from end users that makemany interstate long-distance calls toend users that make few or no interstatelong-distance calls.

29. Several Federal-State Joint Boardshave observed that additional subsidiesand distortions may be due, not only tothe rate structure, but to the separationsrules that divide costs between theinterstate and intrastate jurisdictions.For example, the current separations

rules require larger incumbent LECs toallocate the costs of their switchingfacilities between the interstate andintrastate jurisdictions on the basis ofrelative use (i.e., if 30 percent of theminutes of use handled by the LEC’sswitching facilities are interstate long-distance calls, 30 percent of the LEC’sswitching costs are allocated to theinterstate jurisdiction and recoveredthrough interstate access charges). Ourrules, however, permit smallerincumbent LECs to allocate a greatershare of their switching costs tointerstate access services than wouldresult from the relative use allocator.These smaller incumbent LECs multiplythe interstate use ratio by a factor (ashigh as 3) specified in the separationsrules. In its Recommended Decision, theJoint Board on Universal Serviceobserved that these separations rules‘‘shift what would otherwise beintrastate costs to the interstatejurisdiction,’’ thereby allowing suchLECs to charge lower prices forintrastate services. Federal-State JointBoard on Universal Service, CC DocketNo. 96–45, Recommended Decision, 61FR 63778 (December 2, 1996) (JointBoard Recommended Decision). TheJoint Board found that this allocationstructure, known as DEM (dialequipment minute) weighting, is ‘‘animplicit support mechanism that isrecovered through the switched accessrates charged to interexchange carriersby those carriers serving less than50,000 lines.’’ Joint BoardRecommended Decision. Similarly, inthe Marketing Expense RecommendedDecision, another Federal-State JointBoard observed that the separationsrules allocate a share of the incumbentLECs’ retail marketing expenses to theinterstate jurisdiction that isunreasonably high, given that theinterstate access services consistprimarily of wholesale service offerings.Amendment of Part 67 (New Part 36) ofthe Commission’s Rules andEstablishment of a Federal-State JointBoard, CC Docket No. 86–297,Recommended Decision and Order, 52FR 15355 (April 28, 1987) (MarketingExpense Recommended Decision). Tothe extent these and other separationrules do not apportion costs between thejurisdictions in a manner that reflectsthe costs incurred to provide service ineach jurisdiction, they might be viewedas generating subsidies from theinterstate to the intrastate jurisdiction.These subsidies effectively requireincumbent LECs to charge higher ratesfor interstate services and lower rates forintrastate services than would otherwiseoccur if the subsidies were eliminated.

30. This ‘‘patchwork quilt of implicitand explicit subsidies’’ generatesinefficient and undesirable economicbehavior. For example, a rate structurethat requires the use of per-minuteaccess charges where flat-rated feeswould be more appropriate increasesthe per-minute rates paid by IXCs andlong-distance consumers, thusartificially suppressing demand forinterstate long-distance services.Similarly, the possible overallocation ofcosts to the interstate jurisdiction may,for some consumers, increase long-distance rates substantially, suppressingtheir demand for interstateinterexchange services. Implicitsubsidies also have a disruptive effecton competition, impeding the efficientdevelopment of competition in both thelocal and long-distance markets. Forexample, where rates are significantlyabove cost, consumers may choose tobypass the incumbent LEC’s switchedaccess network, even if the LEC is themost efficient provider. Conversely,where rates are subsidized (as in thecase of consumers in high-cost areas),rates will be set too low and anotherwise efficient provider would haveno incentive to enter the market. Ineither case, the total cost oftelecommunications services will not beas low as it would otherwise be in acompetitive market. Because of thegrowing importance of thetelecommunications industry to theeconomy as a whole, this inefficientsystem of access charges retards jobcreation and economic growth in thenation.

31. Despite the existence ofdistortions and inefficiencies, thecurrent system of cross-subsidies haspersisted for over a decade. Thestructure has been justified on policygrounds, principally as a means to serveuniversal service goals. By providingincumbent LECs with a stream ofsubsidized revenues from certaincustomers, the system allows regulatorsto demand below-cost rates for othercustomers, such as those in high-costareas.

3. The Telecommunications Act of 199632. The existing system of implicit

subsidies and support flows issustainable only in a monopolyenvironment in which incumbent LECsare guaranteed an opportunity to earnreturns from certain services andcustomers that are sufficient to supportthe high cost of providing other servicesto other customers. The newcompetitive environment envisioned bythe 1996 Act threatens to underminethis structure over the long run. The1996 Act removes barriers to entry in


the local market, generating competitivepressures that make it difficult forincumbent LECs to maintain accesscharges above economic cost. Forexample, by giving competitors the rightto lease an incumbent LEC’s unbundlednetwork elements at cost, Congressprovided IXCs an alternative avenue toconnect to and share the local network.Thus, where existing rules require anincumbent LEC to set access chargesabove cost for a high-volume user, acompeting provider of exchange accessservices entering into a market can leaseunbundled network elements at cost, orconstruct new facilities, to circumventthe access charge. In Section VI.A of thisOrder, we conclude that access chargesmay not be assessed on unbundlednetwork elements since they are not partof the ‘‘cost’’ of providing thoseelements, as defined in 47 U.S.C. sec.252(d)(1)(A)(i). In this way, a newentrant might target an incumbent LEC’shigh-volume access customers, forwhom access charges are now set atlevels significantly above economiccost. As competition develops,incumbent LECs may be forced to lowertheir access charges or lose marketshare, in either case jeopardizing thesource of revenue that, in the past, haspermitted the incumbent LEC to offerservice to other customers, particularlythose in high-cost areas, at below-costprices. Incumbent LECs have for sometime been claiming that this process hasalready made more than trivial inroadson their high-volume customer base.

33. Recognizing the vulnerability ofimplicit subsidies to competition,Congress directed the Commission andthe states to take the necessary steps tocreate permanent universal servicemechanisms that would be secure in acompetitive environment. To achievethis end, Congress directed theCommission to strive to replace thesystem of implicit subsidies with‘‘explicit and sufficient’’ supportmechanisms. In calling for explicitmechanisms, Congress did not intendsimply to require carriers to identify anddisclose the implicit subsidies thatcurrently exist in the industry. Rather,as we determine in the UniversalService Order adopted today, Congressintended to establish subsidies thatwere both ‘‘measurable’’ and‘‘portable’’—‘‘measurable’’ in a way thatallows competitors to assess theprofitability of serving subsidized endusers; and ‘‘portable’’ in a way thatensures that competitors who succeedin winning a customer also win thecorresponding subsidy. A system ofportable and measurable subsidies willpermit carriers to compete for the

subsidies associated with high-cost orlow-income consumers. In the long run,this approach may even allow us to setsubsidy levels through competitivebidding rather than through regulation.By contrast, under the current system ofimplicit subsidies, the only carriers thatwill serve high-cost consumers are thosethat are required to do so by regulationand that are able (because of theirprotected monopoly positions) to chargeabove-cost rates to other end users.

34. In the Universal Service Order, weestablish ‘‘explicit and sufficient’’support mechanisms to assist users inhigh-cost areas, low-income consumers,schools, and health care providers. Bycreating explicit support mechanisms,we establish a system to advance theuniversal service goals of the 1996 Actthat is compatible with the developmentof competition in the local exchangeand exchange access markets. Bycreating a portable and measurablesystem of subsidies, we utilize thepower of the market to serve universalservice goals more efficiently. Thatorder, in short, guarantees thatCongress’s universal service goals aremet in a way that conforms with thepro-competitive and deregulatory goalsof the 1996 Act.

B. Access Charge Reform35. In light of Congress’s command to

create secure and explicit mechanismsto achieve universal service goals, weconclude that implicit subsidiesembodied in the existing system ofinterstate access charges cannot beindefinitely maintained in their currentform. In this Order, therefore, we taketwo steps with respect to the rulesgoverning the interstate access chargesof price cap incumbent LECs. First, wereform the current rate structure to bringit into line with cost-causationprinciples, phasing out significantimplicit subsidies. Second, we set inplace a process to move the baseline ratelevel toward competitive levels.Together with the Universal ServiceOrder, these adjustments will promotethe public welfare by encouraginginvestment and efficient competition,while establishing a secure structure forachieving the universal service goalsestablished by law. Further, the processwe set in place to achieve these goalsavoids the destabilizing effects ofsudden radical change, facilitating thetransformation from a regulated to acompetitive marketplace. With thelimited exceptions identified in SectionV, the scope of this proceeding islimited to price cap incumbent LECs. Aswe explain in that section, the need foraccess reform is most immediate forthese carriers, since they are most

vulnerable to competition frominterconnection and the availability ofunbundled network elements. Thisproceeding will affect the vast majorityof all access lines and revenues, becauseprice cap regulation governs more than90 percent of all incumbent LEC accesslines. We will initiate a separateproceeding later this year to examinethe special circumstances of small andrural rate-of-return LECs.

1. Rationalizing the Rate Structure36. In this Order, we reshape the

existing rate structure in order toeliminate significant implicit subsidiesin the access charge system. To achievethat end, we make several modificationsto ensure that costs are recovered in thesame way that they are incurred. Ingeneral, NTS costs incurred to serve aparticular customer should be recoveredthrough flat fees, while traffic-sensitivecosts should be recovered throughusage-based rates. The present structureviolates this basic principle of costcausation by requiring incumbent LECsto recover many fixed costs throughvariable, per-minute access rates. Animportant goal of this Order is toincrease the amount of fixed costsrecovered through flat charges anddecrease the amount recovered throughvariable rates.

37. Common Line Costs. Because thecosts of using the incumbent LEC’scommon line (or ‘‘local loop’’) do notincrease with usage, these costs shouldbe recovered through flat, non-traffic-sensitive fees. The current ratestructure, however, generally allows anincumbent LEC to recover no more thana portion of its interstate common linerevenues through a flat-rated SubscriberLine Charge (SLC), which is capped at$3.50 per month for residential andsingle-line business users, and $6.00 permonth for multi-line users. Theremaining common line revenues mustbe recovered through a per-minuteCommon Carrier Line (CCL) chargeassessed on IXCs (which, in turn, mayrecover these charges through theirprices to long-distance customers). Inorder to align the rate structure moreclosely with the manner in which costsare incurred, we adjust access rates overtime until the common line revenues ofall price cap LECs are recovered throughflat-rated charges.

38. For primary residential and single-line business lines, however, we declineto implement this goal by increasing theSLC ceiling above its existing $3.50level as urged by many companies,including price cap LECs and IXCs. Wedo not wish to see increases in the priceof basic dial tone charged by localexchange carriers to their end users for


fear that such increases might causesome consumers to discontinue service,a result that would be contrary to ourmandate to ensure universal service. Weagree with the Joint Board’s finding thatincreasing the SLC ceiling may maketelecommunications serviceunaffordable for some consumers.Consequently, to the extent thatcommon line revenues are not recoveredthrough the customer’s SLC, weconclude that LECs should recover theserevenues through a flat, per-line chargeassessed on the IXC to whom the accessline is presubscribed—thepresubscribed interexchange carriercharge, or PICC. Where an end user doesnot select a presubscribed interexchangecarrier, we allow an incumbent LEC tocollect this charge directly from the enduser. Further, in order to provide IXCswith the opportunity to incorporatethese changes into their business plans,we set the PICC for primary residentialand single-line business lines at notmore than the existing flat-rated linecharges for the first year, and wegradually increase the ceiling thereafteruntil it reaches a level that permits fullrecovery of the common line revenuesfrom flat charges assessed to both endusers and IXCs. To the extent that thePICC ceiling prevents full recovery ofaverage per-line common line revenuesfor primary residential and single-linebusiness lines, the residual amount willbe recovered through the PICC imposedupon non-primary residential andmulti-line business lines. As describedin Section III.A below, as the PICCassociated with primary residential andsingle-line business lines increases, theamount of common line revenuesassociated with those lines that isrecovered through the PICC imposedupon non-primary residential andmulti-line business lines will fall tozero.

39. For non-primary residential andmulti-line business lines, we concludethat affordability concerns do notrequire us to retain the current ceilingon the monthly SLC. Consequently, weraise the SLC ceiling for these lines tothe level that permits incumbent LECsfull recovery for their common linerevenues, but never more than $3.00above the current SLC ceiling for multi-line business lines today, adjusted forinflation. The $3.00 increase in the SLCcap for these lines is measured on a per-month basis. Almost all subscribers willpay SLCs below, and often substantiallybelow, the ceiling. The increase in theSLC ceiling for multi-line businesseswill be implemented in the first year. Toameliorate the impact that a dramaticincrease in the SLC ceiling might have

on residential customers, however, theincrease for non-primary residentiallines will be phased in over time. Thedata indicate that raising the SLC ceilingto this level will permit incumbent pricecap LECs to recover their averagecommon line revenues from 99 percentof their non-primary residential andmulti-line business lines. For theremaining lines, many of which arelocated in rural areas, the SLC ceilingfor non-primary residential and multi-line business lines will ensure that end-user charges are not prohibitive orsignificantly above the national average,thereby advancing universal servicegoals of affordability and access. Wehave also taken account of concernsraised by rural carriers and consumersgroups that the increase in the SLC fornon-primary residential lines and multi-lines could lead to substantial priceincreases in rural areas. Consequently,we are adopting these changes only forprice cap incumbent LECs and willreview rate structure modificationsaffecting small, rural carriers in aseparate proceeding.

40. In summary, the plan we adopthere phases out significant implicitsubsidies in the access charge ratestructure, while taking into accountuniversal service concerns ofaffordability and access. The resultingrate structure is more closely alignedwith cost principles. Under this plan,most price cap incumbent LECs willrecover their interstate common linerevenues through flat-rated SLCs andPICCs.

41. Switching and Transport Charges.Following the same pricing principlethat flat charges should recover fixedcosts and variable charges shouldrecover variable costs, we make severalmodifications to the rate structure forswitching and transport services.Among other things, we move the costof line-side ports to the common lineand require their recovery through flat-rated charges. To the extent permittedby the record, we also direct incumbentLECs to reassign costs in the TransportInterconnection Charge (TIC) in order tocomply with principles of costcausation and the D.C. Circuit’s recentdecision in CompTel v. FCC, 87 F.3d522 (D.C. Cir. 1996).

2. Baseline Rate Level Reductions42. The rate structure changes that we

implement in this Order eliminate someof the distortions that havecharacterized the access charge systemfor over a decade. These changes,however, are not alone sufficient tocreate a system that accurately reflectsthe true cost of service in all respects.To fulfill Congress’s pro-competitive

mandate, access charges shouldultimately reflect rates that would existin a competitive market. We recognizethat competitive markets are far betterthan regulatory agencies at allocatingresources and services efficiently for themaximum benefit of consumers. Weconclude, consequently, thatcompetition or, in the event thatcompetition fails to develop, rates thatapproximate the prices that acompetitive market would produce, bestserve the public interest.

43. The rate restructuring weimplement in this Order results insubstantial reductions in the charges forusage-rated interstate access services.These reductions move these accesscharges a long way towards theirforward-looking cost levels.Furthermore, in addition to these ratestructure adjustments, we also takeseveral steps in this Order to addressspecific cost misallocations that causeaccess charges to be set above economiccosts. For example, we requireincumbent LECs to make an exogenouscost adjustment to reflect the fullamortization of certain equal accesscosts. We also issue a Further Notice ofProposed Rulemaking to consider ourtentative conclusion that certain GeneralSupport Facility (GSF) costs should bereallocated to detariffed services.

44. We recognize that the prescriptivemeasures that we implement todayrepresent the first step toward our goalof removing implicit universal servicesubsidies from interstate access chargesand moving such charges towardeconomically efficient levels. In theNPRM, we identified two separate waysto continue this process in the future—a prescriptive approach in which weactively set rates at economic costlevels, and a market-based approachthat relies on competition itself to driveaccess charges down to forward-lookingcosts. We conclude in this Order, basedon our experience in exchange accessand other telecommunications marketsand the record in this proceeding, thata market-based approach to reducinginterstate access charges will, in mostcases, better serve the public interest.Although the Commission hasconsiderable expertise in regulatingtelecommunications providers andservices efficiently for the maximumbenefit of consumers, we believe thatemerging competition will provide amore accurate means of identifyingimplicit subsidies and moving accessprices to economically sustainablelevels. Further, as discussed above, webelieve that this approach is mostconsistent with the pro-competitive,deregulatory policy contemplated by the1996 Act. Accordingly, where


competition is developing, it should berelied upon in the first instance toprotect consumers and the publicinterest.

45. We acknowledge that a market-based approach under this scenario maytake several years to drive costs tocompetitive levels. We also recognizethat several commenters have urged usto move immediately to forward-lookingrates by prescriptive measures utilizingforward-looking cost models. Wedecline to follow that suggestion forseveral reasons. First, as a practicalmatter, accurate forward-looking costmodels are not available at the presenttime to determine the economic cost ofproviding access service. Because of theexistence of significant joint andcommon costs, the development ofreliable cost models may take a year ormore to complete. This situation mightbe contrasted with that addressed in ourLocal Competition Order, where weendorsed the use of cost models toestimate the cost of providingunbundled network elements. There, weobserved that unbundled elements havefew joint and common costs, so thatdevising accurate cost models forunbundled network elements is morestraightforward.

46. In addition, even assuming thataccurate forward-looking cost modelswere available, we are concerned thatany attempt to move immediately tocompetitive prices for the remainingservices would require dramatic cuts inaccess charges for some carriers. Suchan action could result in a substantialdecrease in revenue for incumbentLECs, which could prove highlydisruptive to business operations, evenwhen new explicit universal supportmechanisms are taken into account.Moreover, lacking the tools for makingaccurate prescriptions, precipitousaction could lead to significant errors inthe level of access charge reductionsnecessary to reach competitive levels.That would further impede thedevelopment of competition in the localmarkets and disrupt existing services.Consequently, we strongly prefer to relyon the competitive pressures unleashedby the 1996 Act to make the necessaryreductions.

47. To the extent that somecommenters contend that the immediateelimination of all implicit subsidies ismandated by the 1996 Act, we disagree.Neither in the 1996 Act nor itslegislative history did Congress statethat all forms of implicit universalservice support shall be made explicitby May 8, 1997. To the contrary,Congress stated that the conversion ofimplicit subsidies to explicit support isa goal that ‘‘should be’’ pursued ‘‘[t]o

the extent possible.’’ Congress mostcertainly did not state that we mustreach that goal by May 8, 1997. Rather,it directed that, by that date, we issuerules that ‘‘shall include a definition ofthe services that are supported byFederal universal service supportmechanisms and a specific timetable forimplementation.’’ Our companion ordersatisfies that timetable, and this Orderestablishes a process that will eliminatesome implicit subsidies quickly andmore gradually eliminate others.

48. We are confident that the pro-competitive regime created by the Actand implemented in the LocalCompetition Order and numerous statedecisions will generate workablecompetition over the next several yearsin many cases, and we would thenexpect that access price levels to bedriven to competitive levels. We alsorecognize, however, that competitionmay develop at different rates indifferent places and that some servicesmay prove resistant to competition.Where competition has not emerged, wereserve the right to adjust rates in thefuture to bring them into line withforward-looking costs. To assist us inthat effort, we will require price capLECs to submit forward-looking coststudies of their services no later thanFebruary 8, 2001, and sooner if wedetermine that competition is notdeveloping sufficiently for the market-based approach to work. We anticipatethat the tools needed to complete thesecost studies will be available soon, wellbefore this deadline. Indeed, ourUniversal Service Order requirescomparable cost models to be ready by1998. We will then review competitiveconditions and the submitted coststudies.

49. As we acknowledged in theNPRM, a market-based approach willpermit and, indeed, require usprogressively to deregulate the accesscharge regime as competition develops.In a subsequent order, we will examinespecific issues concerning the timingand degrees of pricing flexibility. Thatorder will identify the competitivetriggers that must be met to justifyrelaxation of specific regulatoryconstraints. We also recognize the needto examine whether incumbent LECsshould be compensated for anyhistorical costs that they have noreasonable opportunity to recover as aresult of the transformation from aregulated to competitive marketplace.We recognize that this issue may raisedifficult questions of both law andequity, and we intend to respond fullyto concerns about historical costrecovery in a subsequent order to beissued this year.

50. Finally, we adopt in this Orderour earlier tentative conclusion thatincumbent LECs may not assessinterstate access charges on informationservice providers (ISPs). We find thatour existing policy promotes thedevelopment of the information servicesindustry, advances the goals of the 1996Act, and creates significant benefits forthe economy and the American people.With respect to second and additionalresidential lines, which are often usedby consumers to access ISPs, our goal isto move towards price levels andstructures that reflect underlying costs,and thereby to create a neutral marketenvironment in which these linesneither give nor receive subsidies. Wewill address fundamental questionsconcerning ISP usage of the publicswitched network as part of a broaderset of issues under review in a relatedNotice of Inquiry. See Usage of thePublic Switched Network byInformation Service and Internet AccessProviders, CC Docket No. 96–263,Notice of Inquiry, 62 FR 4670 (January31, 1997).

51. Section II of this Order providesan overview of the rate structureadjustments adopted today. Section IIIoffers detailed explanations of thesechanges, which include adjustments tothe rate structure for the common line,local switching, transport, SS7, andswitching, and modifications to the TIC.In Section IV, we adopt a market-basedapproach to reducing access charges andaddress several specific rate leveladjustments. In Section V, we determinewhich of the changes adopted in thisOrder should apply to rate-of-returnLECs.

52. Section VI touches upon severaladditional issues, including theapplicability of access charges tounbundled network elements, ourtreatment of terminating access, andISPs. We also discuss modifications thatmay be needed to reconcile our accesscharge rules with the Universal ServiceOrder released today. In Section VII, weissue an FNPRM to seek comment onproposals to alter the current allocationof GSF costs and to allow incumbentLECs to impose a PICC on special accesslines.

II. Summary of Rate Structure Changesand Transitions

53. In rationalizing the switchedaccess rate structure in this Order, ourprimary goal is to ensure that traffic-sensitive costs are recovered throughtraffic-sensitive charges and NTS costsare recovered through flat-rated charges,wherever appropriate. Because manyNTS costs are currently recoveredthrough per-minute charges, the


principal effect of our Order is to reducethe amount recovered through per-minute interstate access charges andincrease the amounts recovered throughflat-rated charges. We phase in thesechanges over time to ameliorate anydisruptions these adjustments mightcause end users.

A. Common Line Rate StructureChanges

54. Because the cost of using theincumbent LEC’s common line does notincrease with usage, the costs should berecovered through flat non-traffic-sensitive fees. In this Order we increasethe amount of common line revenuesrecovered through flat-rated chargesover time until incumbent LECs canrecover all of their interstate commonlines revenues through NTS fees.

55. Primary Residential and Single-Line Business Lines. We agree with theFederal-State Joint Board on UniversalService that the SLC ceiling for primaryresidential and single-line businesslines should not be increased, becausea higher SLC could maketelecommunications serviceunaffordable for some consumers. Tothe extent common line revenues cannotbe recovered through the customer’sexisting SLC, we conclude that LECsshould recover these revenues through aflat, per-line charge (the ‘‘primaryinterexchange carrier charge’’ or‘‘PICC’’) assessed, not on the end user,but on the end user’s presubscribedinterexchange carrier. Where an enduser does not select a presubscribedinterexchange carrier, we allow a pricecap LEC to collect this charge directlyfrom the end user. We set a ceiling onthe PICC at the level of existing per-linecharges for the first year.

56. In order to give IXCs anopportunity to adjust to the new charge,we gradually increase the PICC ceilingover the next several years until itreaches a level that permits full recoveryof common line revenues—plus aportion of ‘‘residual TIC’’ revenues. Tothe extent that the ceiling on theprimary residential and single-linebusiness PICC does not allow for fullrecovery of these common line revenuesimmediately, the remaining revenueswill be recovered through a PICCimposed upon non-primary residentialand multi-line business lines, andthrough per-minute charges.

57. As the PICC ceiling for primaryresidential and single-line businesslines increases, the amount of commonline revenues transferred to non-primaryresidential and multi-line business lineswill fall to zero. At that point, allcommon line costs for primaryresidential and single-line business

lines will be recovered through flat-charges on those lines.

58. Non-Primary Residential andMulti-Line Business Lines. Becauseaffordability concerns are not assignificant for these lines, we permit amodest increase in the SLC to permitrecovery of the price cap LEC’s averageper-line common line revenues, butnever to more than $3.00 above the SLCceiling for multi-line business linestoday, adjusted for inflation. Toameliorate the impact that an increasein the SLC might have on residentialcustomers, the increase in the SLCceiling will be phased in for non-primary residential lines over severalyears.

59. We also establish a flat-rated PICCon non-primary residential and multi-line business lines. This PICC will covercommon line revenues that exceed theceilings on SLCs and primaryresidential PICCs. It may also recoversome residual TIC revenues and certainmarketing expenses, as discussed below.We set a ceiling on this PICC in the firstyear of $1.50 for non-primary residentiallines and $2.75 for multi-line businesslines, and permit those ceilings toincrease gradually thereafter. Weanticipate that the actual PICC imposedupon multi-line business lines will, onaverage, decrease from 1998 to 1999,and for every year thereafter, and willfall to less than $1.00 by 2001.

60. To the extent that the ceilings onSLCs and PICCs do not allow recoverythrough flat charges of all common linerevenues, LECs shall be permitted toimpose a per-minute CCL chargeassessed on originating minutes. To theextent that the sum of a LEC’soriginating local switching charge andany residual per-minute CCL, TIC, andmarketing expense charges exceeds thesum of its originating local switching,CCL, and TIC charges on December 31,1997, the excess shall be collectedthrough a per-minute charge onterminating access. We expect that thiswill only apply to a few LECs, and tonone beyond 1998. As the PICC cap fornon-primary residential and multi-linebusiness lines increases—and asrevenues transferred from primaryresidential and single-line businessesfall to zero—the per-minute CCL chargewill fall to zero, too. Eventually, weanticipate that most, if not all, price capLECs will be able to recover the full per-line revenues associated with non-primary residential and multi-linebusiness lines through the SLC, aftertaking into account the assistanceprovided through the explicit high-costuniversal service support mechanisms.In addition, residual TIC revenues willalso be recovered through the PICC on

non-primary residential and multi-linebusiness lines. As described more fullybelow, to the extent that the PICCceilings prevent full recovery of theresidual TIC, the remaining amount willbe recovered through a per-minuteresidual TIC.

B. Other Rate Structure Changes61. Switching. The traffic-sensitive

costs of local switching will continue tobe recovered through per-minute localswitching charges.

62. For price cap LECs, the NTS costsassociated with line ports will no longerbe included in the local switchingcharge, and instead will be recoveredthrough the flat-rated common linecharges discussed above. Price cap LECswill also assess a monthly flat-ratedcharge directly on end users that aresubscribing to integrated services digitalnetwork services, digital subscriber line,or other services that have higher lineport costs than basic, analog service.This charge recovers the amount bywhich the cost of the line port exceedsthe cost of a line port for basic, analogservice. Costs of local switchingattributable to trunk ports are moved toa separate service category within thetraffic-sensitive basket. These costs willbe recovered through flat-rated monthlycharges collected from users ofdedicated trunk ports and per-minute,traffic-sensitive charges assessed onusers of shared trunk ports. The newrate structure also includes an optionalcall set-up charge.

63. Transport. Effective July 1, 1998,the unitary rate structure option fortandem-switched transmission iseliminated and the costs of tandem-switched transmission must berecovered through the existing three-part rate structure. For price cap LECs,a new flat-rated monthly chargerecovers the NTS costs of tandemswitching attributable to dedicatedports. A new per-minute rate elementrecovers the costs of multiplexers usedbetween tandem switch DS–1 portinterfaces and the DS–3 circuits used totransport traffic from tandem to endoffices. For all incumbent LECs, theformula used to compute the tandem-switched transport rate is based onactual usage of the circuit, rather thanan assumed 9000 minutes of use permonth.

64. For all incumbent LECs, certaincosts currently recovered through theTIC are reassigned to specified facilitiescharges, including tandem-switchingrates. For price cap LECs, those costs ofthe TIC that remain (the ‘‘residual TIC’’)are recovered through the PICC. To theextent that the PICC ceiling preventsrecovery of the entire residual TIC


through the flat-rated PICC, theremaining portion will be collectedthrough a per-minute residual TIC. Asthe ceilings on the PICCs increase, alarger percentage of the residual TICwill be recovered through the PICC.Beginning in July 1997, price capreductions will be targeted to the per-minute residual TIC until it iseliminated. We expect that the per-minute TIC charge will be eliminated intwo to three years. Residual per-minuteTICs shall be assessed only onincumbent LEC transport customers,and therefore shall no longer beassessed on competitive accessproviders (CAPs) that interconnect withthe LEC switched network at the endoffice.

65. SS7 Signalling. Price cap LECsmay, but are not required to, adopt arate structure for SS7 signalling thatunbundles SS7 signalling functions, aswas permitted in the Ameritech SS7Waiver Order. Ameritech OperatingCompanies Petition for Waiver of Part69 of the Commission’s Rules toEstablish Unbundled Rate Elements forSS7 Signalling, Order, DA 96–446(1996) (Ameritech SS7 Waiver Order).

66. Retail Marketing Expense. Pricecap LECs may no longer recover certainmarketing expenses through per-minuteaccess charges assessed on IXCs. Theseexpenses are recovered from end usersthrough per-line charges on second andadditional residential lines and multi-line business lines, subject to ceilingson SLCs. Any residual shall berecovered through the PICCs on theselines and then through per-minutecharges on originating access, subject tothe exception described in Section III.A,below.

III. Rate Structure Modifications

A. Common Line

1. Overview67. In the 1983 MTS and WATS

Market Structure Third Report andOrder, the Commission established acomprehensive mechanism forincumbent LECs to recover the costsassociated with their provision of accessservice required to complete interstateand foreign telecommunications. Theaccess plan distinguished betweentraffic sensitive costs and NTS costsincurred by an incumbent LEC toprovide interstate access service Anincumbent LEC’s NTS costs of providinginterstate access, or costs that do notvary with the amount of usage, includethe common line, or ‘‘local loop,’’ whichconnects an end user’s home or businessto a LEC central office.

68. In the MTS and WATS MarketStructure Third Report and Order, the

Commission emphasized that its longrange goal was to have incumbent LECsrecover a large share of the NTScommon line costs from end usersinstead of carriers, and to recover thesecosts on a flat-rated, rather than on ausage-sensitive, basis. The Commissionrecognized, however, that a suddenincrease in the flat rates imposed byLECs on end users could have adetrimental effect on universal service.For this reason, the rules adopted in1983 apportioned charges for commonline costs between a monthly flat-ratedend-user SLC and a per-minute CCLcharge assessed to the IXCs. The SLC isbased on average interstate-allocatedcommon line costs, which theincumbent LEC may average over anentire region or over a study area,depending on how it files its interstatetariff. These charges currently are thelesser of the per-line average commonline costs allocated to the interstatejurisdiction or $3.50 per month forresidential and single-line businessusers, and $6.00 per month for multi-line business users. Any remainingcommon line revenues permitted underour price cap rules are recovered byincumbent price cap LECs through per-minute CCL charges assessed on theIXCs, and are ultimately recovered byIXCs from end-users through longdistance toll charges.

69. Because common line and otherNTS costs do not increase with eachadditional minute of use transmittedover the loop, the current per-minuteCCL charge that recovers loop costsrepresents an economically inefficientcost-recovery mechanism and implicitsubsidy. A rate structure that recoversNTS costs through per-minute chargescreates an incentive for customers tounderutilize the loop by requiring themto pay usage rates that significantlyexceed the incremental cost of using theloop. Additionally, a rate structure thatforces high-volume customers to paysignificantly more than the cost of thefacilities used to service them is notsustainable in a competitiveenvironment because high-volumecustomers can migrate to a competitiveLEC able to offer an efficientcombination of flat and per-minutecharges, even if the competitive LEC hasthe same or higher costs than theincumbent LEC.

70. The Federal-State UniversalService Joint Board stated, in itsRecommended Decision, that primaryresidential and single-line businesslines are essential to the provision ofuniversal service, and that current ratesfor local services are generallyaffordable based on subscribershiplevels. The Joint Board also concluded

that the SLC, as a charge assesseddirectly on local telephone subscribers,has an impact on universal serviceconcerns such as affordability, andrecommended that the Commissionleave the current SLC ceilings in placefor primary residential and single-linebusiness lines. In our companionUniversal Service Order, consistent withthat recommendation, we conclude thatwe should not raise the current $3.50SLC ceiling on primary residential andsingle-line business lines.

71. We adjust the SLC ceilings formulti-line business lines and residentiallines beyond the primary connection.Adjusting the SLC ceilings for multi-linebusiness lines and non-primaryresidential lines will permit incumbentLECs to recover directly from end usersmore of the common line revenuespermitted under our price cap rules forthose lines and will reduce the amountof NTS costs related to these lines thatare currently recovered through CCLcharges. Where the SLC ceilings do notallow the incumbent LEC to recover itsprice cap common line revenuesthrough end-user charges, theremaining, or ‘‘residual’’ amount will berecovered through flat, per-line chargesassessed to each customer’spresubscribed interexchange carrier.This presubscribed interexchangecarrier charge, or ‘‘PICC’’, will increasegradually until the incumbent price capLECs’’ full interstate-allocated commonline revenues permitted under our pricecap rules are recovered through acombination of flat-rated SLCs andPICCs. To the extent that the flat-ratedcharges do not recover, during theinitial phase, the full interstate-allocatedcommon line revenues permitted underour price cap rules, incumbent LECsmay continue to assess the IXCs a per-minute CCL charge based on the costsnot recovered through flat-rated charges.This per-minute charge, however, willbe generally much lower than today’sCCL charge and will be eliminated onceall common line revenues are recoveredthrough a combination of SLCs andPICCs.

2. Subscriber Line Charge

a. Background

72. In the NPRM we proposed toincrease the ceiling on the SLC forsecond and additional lines forresidential customers, and for all linesfor multi-line business customers, to theper-line loop costs assigned to theinterstate jurisdiction. Access ChargeReform Notice of Proposed Rulemakingin CC Docket No. 96–262, Price CapPerformance Review for Local ExchangeCarriers and Transport Rate Structure


and Pricing, Third Report and Order, inCC Docket Nos. 94–1 and 91–213 (PriceCap Third Report and Order), and Usageof the Public Switched Network byInformation Service and Internet AccessProviders, Notice of Inquiry in CCDocket No. 96–263, 62 FR 4670(December 24, 1996) (NPRM)Alternatively, we proposed to eliminatethe ceiling for multi-line businesscustomers and for residentialconnections beyond the primaryconnection, especially where theincumbent LEC has entered intointerconnection agreements and takenother steps to lower barriers to actual orpotential local competition. We soughtcomment on these proposals. We alsoinvited parties to comment on whetherany changes that we adopt to the ceilingon SLCs for incumbent price cap LECsshould be extended to incumbent rate-of-return LECs, and on the relationshipof any such changes to the Joint BoardRecommended Decision. We soughtcomment on whether to establish atransition mechanism for this increase ifthe ceilings on SLCs for multi-linebusiness lines and residential linesbeyond the primary connection areincreased and whether such a transitioncould be implemented consistent withsection 254, the Act’s universal serviceprovision. We sought comment onwhether geographic averaging of SLCs isan implicit subsidy that is inconsistentwith the requirements of section 254(e),and thus on whether we are required todeaverage SLCs.

b. Discussion73. The Commission has had the

longstanding goal of ensuring that allconsumers have affordable access totelecommunications services. In itsRecommended Decision, the Joint Boardstated that current rates for localtelephone services are generallyaffordable and that the SLC, as a chargeassessed directly on local telephonesubscribers, has an impact on universalservice concerns such as affordability.The Joint Board further recommendedthat the Commission maintain thecurrent SLC ceilings for primaryresidential and single-line businesslines, and we adopt thatrecommendation in our companionUniversal Service Order. Numerousparties in this proceeding argue that weshould raise or eliminate the SLCceiling on all lines to permit LECs torecover the full interstate allocated costsof the local loop from end-users. Thiswould increase the average SLC for allresidential and single-line businesslines from $3.50 per month to $6.10 permonth. We conclude that it would beinappropriate to make significant

changes to the SLC cap for primaryresidential and single-line businesslines. Primary residential and single-line business lines are central to theprovision of universal service. Becauseof concerns about affordability, and inlight of the significant changes that arestill underway in this proceeding, in thefederal universal service supportproceeding, and possible future changesto the separations process, we concludethat the current SLC for these linesshould not be raised. Consistent withthe Joint Board’s recommendation andour conclusion in the Universal ServiceOrder, therefore, the ceiling on the SLCfor primary residential and single-linebusiness lines will remain at $3.50 orthe permitted price cap common linerevenues per line, whichever is less.

74. With regard to multi-line users,the Joint Board suggested in itsRecommended Decision that universalservice support should not be extendedto non-primary residential lines andmulti-line business lines because itfound that cost of service is unlikely tobe a factor that would cause multi-lineusers not to subscribe to telephoneservice. Subsequently, the statemembers of the Joint Board filed areport with the Commission in whichthey proposed that we retain high costsupport for all lines served in high coststudy areas during a transition to aforward-looking cost methodology.Consistent with that proposal, we adopt,in our Universal Service Order, amodified version of the existing high-cost support system and continuesupport for all residential and businessconnections in areas currently receivinghigh cost support until at least January1, 1999. We therefore continue toprovide high cost support for non-primary residential and multi-linebusiness lines at this time, by allocatinga lower portion of these costs to theintrastate jurisdiction than wouldotherwise be the case. In that order, wealso express our concern, however, thatproviding universal service support fornon-primary residential and multi-linebusiness lines in high-cost areas may beinconsistent with our long-termuniversal service goals, and that overlyexpansive universal service supportmechanisms potentially could harm allconsumers by increasing the expense oftelecommunications services for all. Westate that we will continue to evaluatethe Joint Board’s recommendation tolimit universal service support toprimary residential connections andbusinesses with single connections.

75. We conclude here that it isnecessary to adjust the ceilings on theinterstate SLCs on both non-primaryresidential and multi-line business lines

in order to create a rate structure thatsupports our long-term universal servicegoals, is pro-competitive, and issustainable in a competitive localexchange market. Section 254 of the Actrequires that all consumers have accessto basic telephone service at just,reasonable, and affordable rates that arecomparable among different regions ofthe nation. This section of the Act alsorequires that universal service supportbe achieved through supportmechanisms that are ‘‘specific,predictable, and sufficient.’’ Becauseuniversal service concerns aboutensuring affordable access to basictelephone services are not as great fornon-primary residential and multi-linebusiness lines as they are for primaryresidential and single-line businesslines, we must take action to remove theimplicit subsidies contained in ourcurrent interstate access charges. Thus,we are adopting a rate structure that willpermit LECs to recover greater amountsof their costs on a flat-rated basis fromend users and to reduce the amount ofrevenues they must recover through per-minute access charges. Our initialimplementation improves upon thecurrent rate structure because it reducessubsidies by recovering more costs fromthe cost causer. It also creates a ratestructure that is more pro-competitivethan the existing one by providing forgreater flat-rated recovery of NTS costs.Without these modifications, newentrants, which are not subject to thenon-cost-causative rate structurerequirements, would be in a position totarget the incumbent LECs’ mostprofitable, high-volume customers basedon regulatory requirements. A loss ofprofitable customers would increase theincumbent LECs’ costs of providingservice to the rest of their customers,especially to those in high-cost areas.Consistent with our universal servicegoal of ensuring that all consumersreceive affordable rates that arecomparable in different parts of thenation, however, the SLC adjustmentswill be subject to ceilings to preventend-user customers in high-cost areasfrom paying SLCs that are significantlyhigher than in other parts of thecountry.

76. In virtually all cases, current SLCceilings do not permit incumbent LECsto recover their average per-lineinterstate-allocated common line costs.As a result of the existing SLC ceilings,which have been in place for the pastdecade, incumbent LECs must recoverthe shortfall through usage-sensitiveCCL charges assessed on IXCs. The IXCsin turn recover most or all of these costsfrom toll users in the form of per-minute


charges, keeping toll rates artificiallyhigh and discouraging demand forinterstate long distance services. Thehigh per-minute toll charges also createsupport flows between different classesof customers. For example, because end-user customers vary widely in their useof interstate long distance services, low-volume toll users do not pay the fullcost of their loops while high-volumetoll users contribute far more than thetotal cost of their loops. In additionhigh-volume toll users, who includesignificant numbers of low-incomecustomers, effectively support non-primary residential and multi-linebusiness customers.

77. In order to create a rate structurethat supports our long-term universalservice goals, is pro-competitive, and issustainable in a competitive market, wemodify our rate structure requirementsto permit incumbent LECs to recovercosts in a manner that more accuratelyreflects the way those costs are incurred.Because common line costs do not varywith usage, these costs should berecovered on a flat-rated instead of ona per-minute basis. In addition, thesecosts should be assigned, wherepossible, to those customers who benefitfrom the services provided by the localloop. Accordingly, the SLC ceilings fornon-primary residential and multi-linebusiness lines will be adjusted generallyto a level that permits incumbent LECsto recover, directly from the end user,their average per-line interstate commonline revenues.

78. For multi-line business lines, theSLC will be adjusted to recover theaverage per-line interstate-allocatedcommon line costs beginning July 1,1997. To the extent incumbent price capLECs, mostly in rural areas, havecommon line costs that significantlyexceed the national average, weestablish a ceiling on SLCs for multi-line business lines of $9.00, adjustedannually for inflation. To ameliorate anypossible adverse impact of adjustmentsin SLC ceilings for non-primaryresidential lines, we adopt an approachthat will gradually phase in adjustmentsin the SLC ceilings for these lines. TheSLC for non-primary residential lineswill be adjusted initially beginningJanuary 1, 1998. For the first year,beginning January 1, 1998, the SLCceiling for non-primary residential lineswill be adjusted to the incumbent LEC’saverage per-line interstate-allocatedcosts, but may not exceed $1.50 morethan the current SLC ceiling. BeginningJanuary 1, 1999, the monthly SLCceiling for these lines will be adjustedfor inflation and will increase annuallyby $1.00 per-line, until the SLC ceilingfor non-primary residential lines is

equal to the ceiling permitted for multi-line business lines.

79. The data indicate that the longterm ceilings we are establishing willpermit incumbent price cap LECs torecover their average per-line commonline revenues from 99 percent of theirnon-primary residential and multi-linebusiness lines. For the few incumbentprice cap LECs that have common linecosts in certain study areas that exceedthe ceiling, the ceiling will serve as aneconomic safeguard for those customerswho would otherwise pay significantlyhigher SLCs. We conclude thatmaintaining a ceiling for non-primaryresidential and multi-line businesscustomers in high-cost areas is areasonable response to a legitimateuniversal service concern because,consistent with section 254(b)(3), itensures that these customers haveaccess to telecommunication services atrates that are comparable to ratescharged for similar services in urbanareas.

80. We believe that the approach weadopt should prevent widespreaddiscontinuance of lines by multi-linecustomers. The record indicates thatnationwide, the average interstateallocation of common line costs is only$6.10 per line, and that for more thanhalf of multi-line business lines, theinterstate common line costs are belowthe existing $6.00 ceiling. Therefore,when the SLC ceiling is adjusted July 1,1997, more than half of multi-linebusiness lines will see no immediateincrease in their SLC. The $5.00 SLCceiling for non-primary residential linesfor the first year is a net increase of$1.50 per month, and the gradualincrease, if any, in subsequent years, isdesigned to allow these customers timeto adjust to the new rate structure.Moreover, we expect the rate structuremodifications we adopt in this order tobenefit the majority of multi-linecustomers through reductions in per-minute long distance rates. Thus, formany customers, the accessrestructuring will lead to an overallreduction in their telephone bill. Wealso note that, because we are adjustingthe SLC on non-primary residentiallines only to a level that recovers theaverage interstate allocated costsattributable to the line, to the extent thata customer chooses not to purchase anadditional line because of the SLCincrease, it is because the benefits of thesecond line to that customer are lessthan the average cost of the line.

81. Many parties contend thatadjusting the SLC ceiling for non-primary residential lines and multi-linebusiness lines will affect economicdevelopment in rural areas. To respond

to this concern, with the limitedexception of cost allocation to newelements, discussed in Section V,below, we are limiting application of therate structure modifications we adopt inthis Order to incumbent price cap LECsonly. Most consumers in rural areas areserved by small rate-of-return LECs thatare not affected by the SLC adjustmentwe are adopting. We will review ratestructure modifications affecting small,rural carriers in a separate proceedingwhen we address access charge reformfor those carriers. To the extent there areincumbent price cap LECs that servehigh-cost areas of the country and havecommon line costs that exceed thenational average, we are maintaining aceiling on the SLCs for these lines toensure that subscribers do not pay ratesthat greatly exceed the national average.

82. We are not persuaded byarguments that an upward adjustment toa SLC ceiling that was set over a decadeago, and that has never been adjustedfor inflation, would violate section254(b)’s requirement that consumers inall regions of the nation have affordableaccess to telecommunications andinformation services at rates that arereasonably comparable to those servicesprovided in urban areas. The dataindicate that if the SLC ceilings forbusiness and residential lines had beenadjusted annually for inflation sincethey became effective in 1984 and 1989,respectively, the $6.00 business SLCceiling would have increased by 1996 to$9.00 per line, and the $3.50 residentialand single-line business SLC ceilingwould have increased to $4.39 per line.Thus, for multi-line business customers,the SLC ceiling we adopt today is notsignificantly different from what itwould have been, if it had been adjustedfor inflation annually. Moreover, toadopt a ceiling lower than $9.00 wouldeffectively create an additionalimpermissible subsidy for a class ofcustomers not enumerated by Congressin section 254 of the 1996 Act asbeneficiaries of fundamental universalservice goals. We find that the $9.00ceiling we adopt today strikes areasonable balance between our desireto establish a more efficient interstateaccess charge rate structure consistentwith our long-term universal servicegoals in a competitive local exchangeenvironment, and the need to avoidprecipitous rate increases to consumersin high cost areas. Although SLCs insome areas may ultimately be lowerthan SLCs in high-cost areas, weconclude that $9.00 SLCs remain‘‘reasonably comparable’’ to those inurban areas.

83. We are also not persuaded that weshould maintain the current SLC ceiling


for non-primary residential linesbecause of claims that incumbent LECswill be unable to identify second linesfor purposes of billing different SLCs tothese lines. Additional telephone linesare a well-establishedtelecommunications product marketedby LECs. This product is supported bya marketing and billing infrastructurethat will enable LECs to distinguishnon-primary residential lines forpurposes of billing different SLCs. Wenote that we are not defining ‘‘primary’’or ‘‘non-primary’’ lines in this Order. Ina further notice of proposed rulemakingin the Universal Service proceeding, wewill address this issue, and release anorder defining ‘‘primary’’and ‘‘non-primary’’ residential lines by the end ofthe year.

84. We are unpersuaded by argumentsthat we should forgo these changes onthe grounds that increasing the SLCceilings for non-primary residentiallines will create undue incentives forsubscribers to order their primary linesfrom the incumbent LEC and theiradditional lines from competitors. Thechanges we adopt in this Order areintended to permit incumbent LECs tomove their prices for non-primaryresidential and multi-line business linestoward more economically efficientlevels by substantially reducing implicitsubsidies flowing between differentclasses of customers. Once thesesubsidies are eliminated and the newuniversal service regime is fullyimplemented, incumbent LECs will beable to recover their common line costsfrom customers through a rate structurethat accurately reflects the manner inwhich these costs are incurred, andthrough a targeted, portable universalservice contribution where necessary.At that point, both incumbent LECs andnew entrants should be able to competeefficiently in the local exchange market.Subscribers, therefore, should not havean incentive to use other carriers fortheir additional lines unless acompetitor is operating more efficientlyand can offer local exchange service ata lower rate than the incumbent LEC isable to offer. Indeed, the ability of acompetitive local exchange carrier tooffer local exchange service at a lowerrate is precisely the type of competitionenvisioned by the 1996 Act: it willencourage the incumbent LEC to reduceits costs of providing service in order tomeet or beat the prices of itscompetition.

85. To address the concerns of somecommenters that charging a higher SLCfor second and additional residentiallines will encourage subscribers to ordertheir additional line from competitors,we will permit LECs to charge

competitors the higher SLC when thecompetitor provides a customer with asecond line through resale of anincumbent LEC offering. If prior to thedevelopment of full competition, wefind that disparity between SLC chargeson primary and additional residentiallines becomes a significant problem, wewill reexamine this issue in conjunctionwith further reforms we adopt in anupcoming order.

86. Certain incumbent LECs haverequested that any rule that increasesthe SLC ceiling for non-primaryresidential lines should be optional forLECs. We adopt this proposal in partand will not require LECs to charge ahigher SLC for non-primary residentiallines. Thus, if an incumbent LEC findsthat charging higher SLCs leads to alarge number of disconnections, it isfree to charge less. To the extent pricecap LECs choose to charge a SLC that isless than the maximum allowed,however, they may not recover theseforegone revenues through the PICC orCCL charges. This restriction isconsistent with our current price caprules, which prevent LECs fromtransferring SLC costs to the CCLcharge.

87. Several incumbent price cap LECsargue in favor of deaveraging SLCs,stating that an averaged SLC createscross-subsidies between high-cost andlow-cost areas, in violation of section254 of the Act. We will resolve thisissue, along with issues concerning thetiming and degrees of geographicdeaveraging, pricing flexibility, andultimate deregulation in an upcomingorder.

3. Carrier Common Line Charge

a. Background

88. Because we are retaining the $3.50ceiling on SLCs for primary residentialand single-line business customers,virtually all price cap LECs will beunable to recover, through the SLC, allof their common line revenuespermitted under our price cap rules. Inthe NPRM, we sought comment onpossible revisions to the current CCLcharge structure that would allowincumbent price cap LECs to recoverthese NTS common line costs in a waythat reflects the way costs are incurred.We proposed a recovery mechanismsuggested by the Joint Board in itsRecommended Decision that wouldpermit incumbent LECs to recovercommon line costs not recovered fromSLCs through a flat, per-line chargeassessed against each end-user’spresubscribed interexchange carrier.The Joint Board suggested that theCommission allow incumbent LECs to

collect the flat-rated charge directlyfrom end users who have not selected aprimary interexchange carrier (‘‘PIC’’).We sought comments on this approachand also invited parties to discuss anypotential problems created when end-user customers have selected PICs, butuse other IXCs for Internet, fax,interexchange, or other interstateservices by ‘‘dialing-around’’ the PIC.

89. We also sought comment onseveral alternative approaches to theper-minute recovery of interstate NTSloop costs proposed by the CompetitionPolicy Institute (CPI), including a ‘‘bulkbilling’’ method that would assess acharge against the IXC based upon itspercentage share of interstate minutes ofuse or revenues, a ‘‘capacity charge,’’ a‘‘trunk port charge,’’ and a ‘‘trunk portand line port’’ charge. We invitedparties to comment on whether anychanges that we adopt to the recovery ofinterstate NTS local loop costs for pricecap LECs should be extended to rate-of-return LECs, and on the relationship ofinterstate NTS loop cost recovery to theuniversal service mechanisms proposedin the Joint Board RecommendedDecision. We asked parties to addresshow such an extension to rate-of-returnLECs would affect small businessentities, especially small incumbentLECs.

90. Additionally, we asked parties toaddress whether an alternativemechanism for recovering common linecosts currently recovered through theCCL charge would be necessary if wewere to eliminate the SLC ceiling forcertain lines. We asked interestedparties to address the extent to whichany proposed alternative recoverymechanism for recovering common linecosts currently recovered through theCCL charge would affect small businessentities, including small incumbentprice cap LECs and new entrants. Wealso sought comment on whethersection 254(g) precludes an IXC fromcharging its customers the flat, per-linemonthly rate assessed on that line if theamount of that charge varied amongcustomers in different areas within astate or among customers in differentstates, and if so, whether conditionsexist sufficient to require us to forbearfrom the application of section 254(g) toIXC recovery of flat-rate CCL charges.

b. Discussion91. The $3.50 SLC ceiling for primary

residential and single-line businesscustomers prevents most incumbentprice cap LECs from recovering, throughend-user charges, all of the common linerevenues permitted under our price caprules. To the extent that common linerevenues are not recovered through


SLCs, incumbent LECs will be allowedto recover these revenues through aPICC, a flat, per-line charge assessed onthe end-user’s presubscribedinterexchange carrier.

92. We adopt the Joint Board’srecommendation that incumbent LECsmay collect directly, from any customerwho does not select a presubscribedcarrier, the PICC that could otherwise beassessed against the presubscribedinterexchange carrier. Assessing thePICC directly against end users that donot presubscribe to a long distancecarrier should eliminate the incentivefor customers to access long-distanceservices solely through ‘‘dial-around’’carriers in order to avoid paying long-distance rates that reflect the PICC.Several parties argue that this type ofbilling arrangement will createadministrative difficulties because itwill require LECs to prorate charges forboth the end user and the IXC when acustomer leaves an IXC in the middle ofthe billing cycle. To avoid any potentialadministrative difficulties resultingfrom customers leaving theirpresubscribed interexchange carriers inthe middle of a billing cycle, we willpermit LECs to assess the full PICC atthe beginning of each billing cycle.

93. We recognize that this flat, per-line PICC will not prevent customersfrom ‘‘dialing around’’ theirpresubscribed long distance carrier toobtain interstate service. Collecting aPICC from a customer, however, in andof itself, creates no incentive for acustomer to presubscribe to one carrierand use ‘‘dial-around’’ service ofanother. If the presubscribed carrier isan efficient competitor, it should be ableto offer usage-based rates comparable tothe prices of a competitor, thuseliminating any artificial benefits of‘‘dial-around’’ capability. Acombination of lower per-minute longdistance rates and attractive long-distance pricing packages that rewardcustomers for increasing their usage ofthe presubscribed interexchangecarrier’s services should also help detercustomers from using separate long-distance carriers for various servicessolely because of regulation. There iscustomer contact value in being acustomer’s presubscribed interexchangecarrier. Regulators have long concludedthat the convenience of making a long-distance call by simply dialing ‘‘1+’’conveys certain advantages. And theadvantages of ‘‘1+’’ dialing will onlyincrease if, as many predict, we move toa world in which ‘‘one-stop shopping’’for a multiplicity of services becomesthe primary paradigm for provision oftelecommunication services. Weconclude that the record does not

support a finding that assessing a chargeon the presubscribed carrier willartificially encourage ‘‘dial-around’’traffic to such a degree that we shouldnot adopt access charge modificationsthat will move substantially towardefficient pricing for common lineelements and lower usage charges forlong-distance service. If evidenceappears to us that our rules dosubstantially contribute to undue use of‘‘dial-around’’ capabilities tocircumvent presubscribed interexchangeservices, we stand ready to revisit thisissue at a later time.

94. The rate structure we are adoptingcalls for the single-line PICC ultimatelyto recover the difference betweenrevenues collected through the SLC andthe per-line common line revenues forprimary residential lines and single-linebusiness lines permitted under our pricecap rules. In order to provide incumbentLECs and IXCs with adequate time toadjust to this rate structure change, wecap the PICC for primary residential andsingle-line business lines at $0.53 permonth for the first year, beginningJanuary 1, 1998, and establish ceilingson increases thereafter. We note that themonthly $0.53 PICC is approximatelyequal to the current presubscribed per-line charges that are assessed to IXCs forthe Universal Service Fund and LifelineAssistance plan, which are beingeliminated in our Universal ServiceOrder. Beginning January 1, 1999, theceiling on the monthly PICC on primaryresidential and single-line businesslines will be adjusted for inflation andwill increase by $0.50 per year until thesum of the SLC plus the flat-rated PICCis equal to the price cap LEC’s permittedcommon line revenues per line. In noevent shall the sum of the single-lineSLC and PICC exceed the sum of themaximum allowable multi-line SLC andmulti-line PICC.

95. Sprint asserts that if LECs recoverNTS common line costs throughdeaveraged rates assessed on IXCs, wemust forbear from applying section254(g) to the extent it requires an IXC toaverage geographically any flat chargesan IXC passes on to its customers.WorldCom asserts that IXCs should bepermitted to recover their costs in anymanner the market will allow, and thatunless the Commission forbears withrespect to the application of section254(g) to these costs, IXCs that operatenationally will be forced to averagetogether numerous subscribers’ loopcosts, and thus use long-distance ratesas a vehicle for cross-subsidies that runcounter to the overall policies of section254 (b) and (c). We conclude that theinformation in the record before us doesnot demonstrate that we are required, by

section 10(a) of the Act, to forbear fromenforcing section 254(g) as it relates tothe manner in which IXCs recover theircosts.

96. Section 10(a) of the 1934 Actrequires the Commission to forbear fromapplying any regulation or provision ofthe Communications Act of 1934 if: (1)enforcement of that provision isunnecessary to ensure that the relevantcharges and practices are just andreasonable and not unjustly orunreasonably discriminatory; (2)enforcement of that provision isunnecessary to protect consumers; and(3) forbearance from applying suchprovision or regulation is consistentwith the public interest. We concludethat, on the basis of the current record,IXCs have not demonstrated thatforbearance of section 254(g) iswarranted at this time.

97. We find that establishing a broadexception to section 254(g) to permitIXCs to pass through flat-rated chargeson a deaveraged basis may create asubstantial risk that many subscribers inrural and high-cost areas may becharged significantly more thansubscribers in other areas. Accordingly,we cannot conclude that enforcing ourrate averaging requirement isunnecessary to ensure that charges arejust and reasonable. In addition, becauseassessing subscribers flat-rated chargeson a deaveraged basis could lead tosignificantly higher rates for subscribersin high-cost areas, we find no basis inthis record to conclude that it isunnecessary to enforce section 254(g) toensure protection of consumers or toprotect the public interest. In contrast,IXCs cite no countervailing publicinterest considerations but merely makebroad, unsupported assertions of theneed to deaverage rates in light of thevarying PICC amounts expected to beassessed by incumbent LECs. We alsonote that IXCs now pay access chargesthat often vary from location to locationand from incumbent LEC to incumbentLEC, and still maintain geographicallyaveraged rates. We therefore concludethat, based on the record before us, theIXCs have not met the test set forth insection 10(a) of the Act, and forbearanceof section 254(g) is not warranted.

98. We note that we will continue toexamine the issue of whether conditionsexist that require us to forbear fromapplication of section 254(g) as it relatesto recovery of the PICC costs fromsubscribers. We will resolve this andother specific issues concerning thetiming and degrees of pricing flexibilityand ultimate deregulation in anupcoming order.

99. To the extent that the SLC ceilingson all lines and the PICC ceilings on


primary residential and single-linebusiness lines prevent recovery of thefull common line revenues permitted byour price cap rules, incumbent price capLECs may recover the shortfall througha flat-rated, per-line PICC on non-primary residential and multi-linebusiness lines. The incumbent LECswill calculate this additional charge bydividing residual permitted commonline revenues by the number of non-primary residential and multi-linebusiness lines served by the LEC. Forthe first year, the ceiling on the PICCwill be $1.50 per month for non-primaryresidential lines and $2.75 per monthfor multi-line business lines. To theextent that these PICCs do not recoveran incumbent LEC’s remainingpermitted CCL revenues, incumbentLECs will be allowed to recover anysuch residual common line revenuesthrough per-minute CCL chargesassessed on originating access minutes.The per-minute charges shall becalculated based on forecasts oforiginating access minutes as currentlyprovided in our rules.

100. We generally will not permitincumbent LECs to recover residualcommon line revenues through per-minute CCL charges assessed onterminating access minutes, becauseterminating minutes are not likely to besubject to as much competitive pressureas originating access minutes. Asdiscussed in Section III.D, below, we aresimilarly adopting a rule that requiresthat incumbent LECs be allowed torecover certain residual transportinterconnection charge costs throughaccess charges assessed on originatingminutes. In placing these variousresidual costs on originating minutesonly, however, we do not want todestroy the salutary effects of our accesscharge reforms by creating higher pricesfor originating minutes than exist underour current access charge rules. To theextent, therefore, that the sum of localswitching charges, the per-minute CCLcharge, the per-minute residual TIC, andany per-minute charges related tomarketing expenses exceed the currentsum of local switching charges and theper-minute CCL charge and TICassessed on originating minutes, theexcess may be recovered throughcharges assessed on terminatingminutes. We emphasize that any suchamounts recovered through chargesassessed on terminating minutes wouldbe temporary and would be phased outas the non-primary residential SLCceilings and the PICC ceilings areadjusted, and in any event, no later thanJuly 1, 2000.

101. Beginning January 1, 1999, thePICC will be adjusted for inflation and

will increase by a maximum of $1.00per year for non-primary residentiallines and $1.50 per year for multi-linebusiness lines, until incumbent LECsrecover all their permitted common linerevenues through a combination of flat-rated SLC and PICCs. These increaseswill cease as the PICCs on primaryresidential and single-line businesslines recover more of the common linerevenues permitted under price caprules. In addition, as the incumbentprice cap LECs increase their PICCs forprimary residential and single-linebusiness lines, they shall reduce theamount recovered from the residual per-minute CCL charges and reduce theirPICCs on non-primary residential andmulti-line business lines by acorresponding amount in accordancewith the procedures described below.While the plan we adopt today does noteliminate, even on a flat-rated basis,transitional higher rates for businessusers, it redistributes collection from avery few high-volume users to businessusers generally. This will permit thecharges to be sustainable while wefinish refining access charges andimplement a forward-looking cost-baseduniversal service mechanism for rural,insular, and high cost areas. We alsoacknowledge that our plan will requirecustomers with multiple telephone linesto contribute, for a limited period, to therecovery of common line costs thatincumbent LECs incur to serve single-line customers. We conclude that thisaspect of the plan is a reasonablemeasure to avoid an adverse impact onresidential customers.

102. As the PICC ceilings on primaryresidential and single-line businesslines increase, the residual per-minuteCCL charge will decrease until it iseliminated. After the residual per-minute CCL is eliminated, incumbentLECs shall make further reductions dueto the increase in the PICC ceilings forprimary residential and single-linebusiness lines, first to the PICCs onmulti-line business lines until the flat-rated PICCs for those lines are equal tothe flat-rated PICCs for non-primaryresidential lines. Thereafter, incumbentLECs shall apply the annual reductionsto both classes of customers equallyuntil the combined SLC and PICCs forprimary residential and single-linebusiness lines recover the full averageper-line common line revenuespermitted under our price cap rules, andthe additional flat-rated PICCs on non-primary residential and multi-linebusiness lines no longer recovercommon line revenues. As discussed inSections III.D and IV.D, below, the PICCwill recover TIC revenues and certain

marketing expenses in addition tocommon line revenues. Therefore,multi-line PICCs may continue torecover non-common line revenues,even though SLCs and PICCs forprimary residential and single-linebusiness lines recover the average per-line common line revenues permittedunder our price cap rules. If theincumbent LEC’s per-line common linerevenues permitted by our price caprules exceed the SLC ceiling for non-primary residential lines and multi-linebusinesses, the flat-rated charges willcontinue to apply to those lines so thatthe sum of the SLCs and flat-ratedcharges is equal to the permittedcommon line revenues. Once the multi-line PICC no longer recovers anycommon line revenues, the calculationof the SLC will be changed from theaverage per-line interstate allocation ofrevenue requirement to the average per-line common line revenues permitted byour current price cap rules. With thischange, the LEC will not be able torecover more than the average per-linecommon line revenues permitted underour price cap rules from any access line.We note that at least one party contendsthat under our current rules, certainprice cap carriers could be required tocharge negative carrier common linecharges, if the revenues recoveredthrough the SLC, which continues to bedeveloped on a cost-of-service basis,exceed the PCI for the common linebasket. This adjustment to thecalculation of the SLC will solve anysuch problem.

103. We are concerned that assessingPICCs on multi-line business lines maycreate an artificial and undue incentivefor some multi-line customers to convertfrom switched access to special accessto avoid the multi-line PICC charges. Amigration of multi-line customers tospecial access could significantly reducethe amount of revenue that could berecovered through per-minute charges,and would result in higher PICCs for thenon-primary residential and multi-linebusiness lines remaining on theswitched network. We tentativelyconclude that we should therefore applyPICCs to purchasers of special accesslines as well. The NPRM, however, maynot have provided sufficient notice tointerested parties that we might applycertain rate structure modifications tospecial access lines. We therefore seekcomment on this issue in Section VII.A,below.

104. We reject claims that a flat-rated,per-line recovery mechanism assessedon IXCs would be inconsistent withsection 254(b) which requires ‘‘equitableand nondiscriminatory contribution touniversal service’’ by all


telecommunications providers. ThePICC is not a universal servicemechanism, but rather a flat-ratedcharge that recovers local loop costs ina cost-causative manner. Numerouscommenters responding to the NPRMsupport a flat-rated cost recoverymechanism, and we conclude that thePICC is preferable to the other proposalsmade in the NPRM. We agree with MCIand the Minnesota IndependentCoalition that proposals based on thenumber of trunks or ports that an IXCpurchases from the incumbent LEC mayencourage IXCs to use fewer trunks orports than are needed and thereby havean adverse effect on service quality. Wedecline to adopt the bulk billingapproach set out in the NPRM, as wellas Ameritech’s proposed Loop/PortRecovery charge and the approachproposed by the Competition PolicyInstitute, because these mechanisms aresubstantially affected by usage and donot reflect the NTS manner in whichcommon line costs are incurred. TheAlliance for Public Technology’sproposed ‘‘facilities charge,’’ which is ahybrid system that accounts both forlevel of use and intensity of use by alltelecommunication carriers that use thelocal network, is flawed because it isbased partly on usage and is complexand administratively burdensome. Acost-recovery mechanism that recoverscommon line costs through flat-ratedcharges imposed on end-user customersand IXCs is an administratively simplemechanism. Further, under our plan,interstate common line access chargeswill become more closely aligned withallocated interstate costs than theywould be under any of the alternativeproposals.

105. The plan we describe aboveshould move us from the pricingscheme that has been in place for morethan a decade to a flat-rated pricingscheme that seeks to promotecompetition, while balancing universalservice considerations. We recognizethat the modifications we adopt in thisOrder do not eliminate all the existingsupport flows. The modifications,however, do move to eliminatesubsidies built into the current ratestructure, to an extent that is compatiblewith preserving the universal servicegoals of providing support to primaryresidential and single-line business andto customers in high-cost areas pursuantto the mandate of section 254. As we setfinal support levels for universalservice, address any legal issues relatedto the transition from embedded toforward-looking economic costs, andfactor in the development ofcompetition, we will identify and deal

with any remaining legal issues relatingto the recovery of these revenues. Inaddition, the plan we are adoptingallows incumbent price cap LECs torecover costs in the manner that reflectsthe way in which they are incurred. Webelieve that this realignment of rateswith costs will reduce the per-minuteaccess charges assessed on IXCs andbenefit consumers through lower long-distance rates, as well as create a pro-competitive local exchange market inwhich LECs will be able to competemore efficiently.

4. Common Line PCI Formula

a. Background

106. When we adopted price capregulation in 1990, we established aseparate common line basket in order tobalance the price cap goal ofeconomically efficient prices withimportant goals, such as universalservice, that were reflected in commonline rates prior to the adoption of pricecaps. Because common line costs arenon-traffic sensitive, growth in demandleads to a reduction in average per-minute common line charges. Therefore,in the LEC Price Cap Order, weestablished a price cap index (‘‘PCI’’)formula for the price cap basket thatdiffered from the PCI formula weestablished for the other three baskets,to ensure that carrier common linecharges declined as common linedemand increased. Policy and RulesConcerning Rates for Dominant Carriers,CC Docket No. 87–313, Second Reportand Order, 55 FR 42375 (October 19,1990) (LEC Price Cap Order).Specifically, we added a term, ‘‘g/2,’’ tothe common line PCI formula, torepresent half the growth in demand perline in the prior year. This adjustmentwas made because we originallyconcluded that both LECs and IXCshave the ability to influence commonline growth, and that both LECs andIXCs should benefit from increases indemand.

107. In the LEC Price CapPerformance Review, we found thatincumbent LECs in fact have littleinfluence over per-minute common linedemand, and tentatively concluded thatwe should remove the ‘‘g’’ term from thecommon line formula, becauseincluding an industry-wide movingaverage X-Factor in the common lineformula might tend to double-countdemand growth. Price Cap PerformanceReview for Local Exchange Carriers, CCDocket No. 94–1, First Report andOrder, 60 FR 19526 (April 19, 1995)(LEC Price Cap Performance Review).We sought comment, in the Price CapFourth Further NPRM, whether to apply

the same PCI formula to the commonline basket that we use for the otherbaskets if we were to adopt a TFP-basedX-Factor. Price Cap Performance Reviewfor Local Exchange Carriers, CC DocketNo. 94–1, Further Notice of ProposedRulemaking, 60 FR 52362 (October 6,1995) (Price Cap Fourth Further NPRM).We also invited comment on whetherwe could eliminate g/2 from thecommon line formula if we retain aseparate common line formula. In thisOrder, we adopt a plan that shouldquickly convert the CCL charge from aper-minute charge to a flat-rated per-linecharge assessed on interexchangecarriers. We also revise the common lineformula to reflect the phase out of theCCL charge.

b. Discussion108. We conclude that the separate

common line PCI formula should beeliminated, and that the PCI formula forthe traffic-sensitive and trunking basketsshould be used for the common linebasket, once traffic-sensitive CCLcharges have been eliminated. In thisOrder, we have reduced substantiallytraffic-sensitive CCL charges, andreplaced them with the per-line PICC.The remaining traffic-sensitive CCLcharges imposed by incumbent pricecap LECs will be reduced and theneliminated over the next two or threeyears. Once common line costs arerecovered solely through per-linecharges, increased minutes will notaffect common line recovery. Therefore,when the traffic-sensitive CCL chargeshave been eliminated, it will no longerbe necessary to ensure that CCL ratesdecline as per-minute demandincreases. Incumbent price cap LECsthat no longer assess per-minute CCLcharges will use the same PCI formulafor the common line basket as they usefor the traffic-sensitive and trunkingbaskets.

109. In the LEC Price Cap Order, weestablished ‘‘g/2’’ as the common linePCI formula because we believed thatbecause both LECs and IXCs contributedto encouraging common line demandgrowth, both LECs and IXCs shouldshare in the benefits of common linedemand growth. In the LEC Price CapPerformance Review, we tentativelyconcluded that IXCs contributed moreto common line demand growth, butdeclined to revise the common lineformula at that time because we werecontemplating eliminating the commonline PCI formula completely, andbecause we did not wish to createunnecessary rate churn. To avoidunnecessary rate churn here, we decideto retain ‘‘g/2’’ while carriers continueto charge per-minute CCL charges.


110. We revise sections 61.45(c) and61.46(d), which govern the common linePCI and API, respectively, to reflect ourrevisions to the common line ratestructure in the common line PCIformula. First, we redesignate section61.45(c) as 61.45(c)(1) and adopt a newsection 61.45(c)(2) that requires pricecap LECs to use the separate commonline formula only while they continue tocharge per-minute CCL charges. Section61.45(c)(2) also states that the commonline PCI will be governed by the samePCI formula LECs use for the traffic-sensitive and trunking baskets. Second,we redesignate section 61.46(d) as61.46(d)(1), and amend section61.46(d)(1) to recognize that LECs nowimpose PICC charges as well as CCLcharges on IXCs. We also adopt a newsection 61.46(d)(2) to govern PICCcharges once per-minute CCL chargeshave been phased out. These revisionsare set forth in Appendix C of thisOrder.

5. Assessment of SLCs and PICCs onDerived Channels

a. Background111. Integrated services digital

network (ISDN) services permit digitaltransmission over ordinary local loopsthrough the use of advanced hardwareand software. ISDN offers datatransmission at higher speeds and withgreater reliability than standard analogservice. Most incumbent LECs currentlyoffer two types of ISDN service, BasicRate Interface (BRI) service and PrimaryRate Interface (PRI) service. BRI serviceallows a subscriber to obtain two voice-

grade-equivalent channels and asignalling/data channel over an ordinarylocal loop, which generally is providedover a single twisted pair of copperwires. PRI service allows subscribers toobtain 23 voice-grade-equivalentchannels and one data signallingchannel over two pairs of twistedcopper wires. BRI service generally isused by individuals and smallbusinesses, and PRI service generally isused by larger businesses. LEC servicesother than ISDN use derived channeltechnology to provide multiple channelsover a single facility. The LECs also usederived channel technologies withintheir networks, for example, to providecustomers with individual local loops.In such situations, the end user has notgenerally requested derived channelservice and thus most likely is notaware that the LEC is using thistechnology.

112. On May 30, 1995, we released aNotice of Proposed Rulemaking seekingcomment on the application of SLCs toISDN and other derived channelservices. End User common LineCharges, CC Docket No. 95–72, Notice ofProposed Rulemaking, 60 FR 31274(June 14, 1995) (ISDN SLC NPRM). Inthe ISDN SLC NPRM, we noted that ourcurrent rules, which assess one SLC perderived channel, may discourageefficient use of ISDN services, and wesought comment on several options,ranging from continuation of the currentrules applying one SLC to each derivedchannel to requiring LECs to assess oneSLC per each pair of copper wires oreach physical facility. Other options

presented in the ISDN SLC NPRMincluded: (1) basing the application ofSLCs on a ratio of the average LEC costof providing a derived channel service,including the trunk or line card costs, tothe average cost of providing anordinary local loop or T–1 facility; (2)applying one SLC for every two derivedchannels; (3) reducing the number ofSLCs applied to derived channelservices while increasing slightly theSLC rates; or (4) giving LECs flexibilityconcerning the number of SLCs theyassess for derived channel services, atthe same time adjusting the price caprules to prevent an increase in CCLcharges.

113. In addition to the comments filedin response to the ISDN SLC NPRM,several BOCs provided data on therelative NTS costs of single and derivedchannel services. The cost data includedinformation about all NTS costcomponents, including componentslocated in the central office, such as linecards. As shown in Table 1 below, thecost data indicates that the ratio of NTSloop costs of BRI ISDN to standardanalog service is approximately 1 to 1.The ratio of NTS loop costs of PRI ISDNto standard analog service, excludingNYNEX’s data, is approximately 5 to 1.As shown in Table 2, NYNEX’s dataappear to be outliers because the ratiosof its outside plant and NTS costs forPRI ISDN to standard analog service arealmost twice those of other incumbentLECs. NYNEX’s data, therefore, areexcluded from the calculation of theaverage ratio for PRI ISDN to standardanalog service.

TABLE 1.—RATIO OF COSTS OF STANDARD ANALOG SERVICE TO BRI ISDN SERVICE

Outside plant(loop only)

costsAll NTS costs

Ameritech ................................................................................................................................................................. 1:1.07 1:1.45Bell Atlantic .............................................................................................................................................................. 1:1.01 1:1.36NYNEX ..................................................................................................................................................................... 1:0.85 1:1.23Pacific Bell ................................................................................................................................................................ 1:1.05 1:1.13US West ................................................................................................................................................................... 1:0.80 1:1.07Average ratio of costs .............................................................................................................................................. * 1:0.96 * 1:1.24

* Averages may differ due to rounding.

TABLE 2.—RATIO OF COSTS OF STANDARD ANALOG SERVICE TO PRI ISDN SERVICE

Outside plant (loop only)costs

Outside plant (looponly) costs (excluding

NYNEX data)All NTS costs

All NTScosts (ex-

cludingNYNEX

data)

Ameritech ................................................................ 1:5.68 1:5.68 ........................ 1:8.9 1:8.9.Bell Atlantic ............................................................. 1:4.13 1:4.13 ........................ 1:15.80 1:15.80.NYNEX ................................................................... 1:10.94 Excluded .................... 1:27.74 Excluded.Pacific Bell .............................................................. 1:4.67 1:4.67 ........................ 1:8.70 1:8.70.US West ................................................................. 1:5.33 1:5.33 ........................ 1:10.60 1:10.60.


TABLE 2.—RATIO OF COSTS OF STANDARD ANALOG SERVICE TO PRI ISDN SERVICE—Continued

Outside plant (loop only)costs

Outside plant (looponly) costs (excluding

NYNEX data)All NTS costs

All NTScosts (ex-

cludingNYNEX

data)

Average ratio of costs ............................................ * 1:6.5 1:4.95 * ...................... * 1:15.13 1:10.5 *.

* Averages may differ due to rounding.

114. We incorporated by reference, inthe current proceeding, all pleadingsfiled in response to the 1995 ISDN SLCNPRM, as listed in Appendix A of thatorder. In the NPRM for the currentproceeding, we invited comments onthe effect of the 1996 Act ondetermining how many SLCs should beapplied to ISDN services. We alsosought comment on whether mandatoryrate structures or rate caps should beprescribed for ISDN service or otherderived channel services.

b. Discussion

115. Consistent with the goal of thisOrder of realigning cost recovery in amanner that more closely reflects themanner in which those costs areincurred, we conclude that we shouldestablish separate SLC rates for ISDNservice based on the NTS loop costs ofBRI and PRI ISDN service. We agreewith the majority of commenters that aSLC for ISDN service equal to a SLC forsingle-channel analog service multipliedby the number of derived channelsexceeds the NTS costs of ISDN serviceand therefore artificially discouragesefficient use of ISDN. We find thatbasing ISDN SLCs on relative costs ismost likely to assign costs of ISDNservice to customers who subscribe to,and benefit from, that service. Further,we find that the current SLC-per-derived channel rule requires LECs toassess charges that are not related to theNTS costs of the service provided.

116. As set out above, the recordindicates that the NTS loop costs of PRIISDN service, excluding switching costs,reflect a cost ratio of approximately 5:1compared to the NTS loop costs ofsingle-channel analog service. Wetherefore conclude that we shouldamend our rules to establish, effectiveJuly 1, 1997, a SLC rate for PRI ISDNservice equal to five times theincumbent LEC’s average per-lineinterstate-allocated common line costs,subject to a ceiling of five times $9.00,adjusted annually for inflation.Similarly, the record shows that theNTS loop costs of BRI ISDN service,excluding NTS switching costs, whenrounded to the nearest half SLC, reflecta 1:1 cost ratio relative to the NTS loop

costs of single-channel analog service.Therefore, we here amend our rules toprovide for a SLC rate for BRI ISDNservice equal to the incumbent LEC’saverage per-line interstate-allocatedcommon line costs, subject to the sameceilings otherwise applicable to non-primary residential lines. Thus,beginning January 1, 1998, the SLCceiling for BRI ISDN service will be setat the lesser of the incumbent LEC’saverage per-line interstate-allocatedcosts, or $5.00. Each subsequent year,beginning January 1, 1999, the SLCceiling will be adjusted for inflation andincreased by $1.00 per line, until theceiling equals that permitted for multi-line business lines.

117. The cost data submitted by theBOCs in response to our request forinformation includes information aboutall NTS cost components, includingcomponents located in the centraloffice, such as line cards and trunkcards. The data confirm that line cardsand trunk cards for PRI ISDN service inparticular constitute a significantportion of the total NTS costs that arededicated to the provision of service tothe subscriber, and that ISDN line cardsand trunk cards are many times moreexpensive than the cards used forstandard analog service. As discussed inSection III.B, below, LECs will berequired to recover the differencebetween the cost of an ISDN line cardand the cost of a line card used forbasic, analog service through a separatecharge assessed directly on ISDN endusers. For purposes of determining therate levels for ISDN SLCs, therefore, weconsidered only the NTS loop costsassociated with providing ISDN service.

118. As with other non-primaryresidential and multi-line businesslines, incumbent price cap LECs mayassess flat-rated PICCs on ISDN serviceto the extent necessary to recover theshortfall of common line revenuescaused by SLC ceilings. Incumbent pricecap LECs are permitted to assess onePICC for BRI ISDN service and fivePICCs for PRI ISDN service. It isnecessary for incumbent LECs to be ableto assess up to five PICCs on PRI ISDNservice because, as discussed above, therecord indicates that the NTS loop costs

of providing PRI ISDN service,excluding switching costs, reflect a costratio of approximately 5:1 compared toNTS loop costs of single-channel analogservice. Because the PICC recovers NTScommon line costs not recoveredthrough the SLC, prohibiting incumbentLECs from charging as many as fivePICCs for PRI ISDN service couldprevent them from recovering thecommon line costs associated withproviding PRI ISDN service in caseswhere the common line costs exceed theSLC ceiling.

119. Incumbent LECs shall assessPICCs on BRI and PRI ISDN services inconjunction with those on the non-primary residential and multi-linebusiness lines. For the first year, the BRIISDN PICC will be capped at $1.50 permonth, and the PRI ISDN PICC will becapped at $2.75 per month. Eachsubsequent year these two PICCs shallincrease by no more than an inflationadjustment, plus $1.00 and $1.50,respectively.

120. The record does not containsufficient information to enable us todetermine the relative NTS costs ofderived channel services other thanISDN. We therefore limit our decision toBRI and PRI ISDN service. We agreewith NYNEX that we should not applythe rules we adopt here regarding SLCswhen the LEC uses derived channeltechnology but the end user has notrequested derived channel service.Unless a subscriber orders ISDN oranother service that requires derivedchannel technology, we see no reason tovary from our general rule that theincumbent LEC should charge one SLCfor each channel regardless of how it isprovisioned.

121. We are not persuaded byPacTel’s argument that ISDN service isnot an interstate service and should not,therefore, be regulated by theCommission. ISDN lines are not directlyassigned to the intrastate jurisdiction,but are treated as common lines. TheCommission’s jurisdiction thus includesthe interstate-allocated portion of thecosts of the ISDN lines. The rules weadopt in this order govern only themanner in which LECs recover the


interstate-allocated common line costsassociated with providing ISDN service.

122. Before the Commission initiatedCC Docket No. 95–72, Bell Atlantic,Pacific Bell, GTE, Cincinnati Bell, U SWest, and Bellsouth sought waivers ofSection 69.104 of the Commission’srules as it applies to ISDN service. Intheir petitions, these LECs urged theCommission to amend its rulesregarding the application of SLCs toISDN service. We have amended ourrules regarding the application of SLCsto ISDN service. We therefore dismissthe waiver petitions of Bell Atlantic,Pacific Bell, GTE, Cincinnati Bell, U SWest, and Bellsouth on the grounds thatthey are moot.

B. Local Switching

1. Non-Traffic Sensitive Charges

a. Background123. The local switch connects

subscriber lines both with other localsubscriber lines and with interofficededicated and common trunks. A localswitch consists of (1) an analog ordigital switching system; and (2) lineand trunk cards, which connectsubscriber lines and interoffice trunks,respectively, to the switch. Because allof this equipment is deployed withinthe central office, all of its costs areassigned to the central office switchingaccounts of the Commission’s UniformSystem of Accounts and to the localswitching category of central officeexpenses for jurisdictional separationspurposes. 47 CFR §§ 32.2001(j), 36.125.The interstate portion of these costs iscurrently recovered through per-minutelocal switching charges levied on IXCs.47 CFR § 69.106.

124. In the NPRM, we observed thata significant portion of local switchingcosts may not vary with usage. Forexample, the cost of line cards or line-side ports appears to vary with thenumber of loops connected to theswitch, not with the level of traffic overthe loops. We tentatively concluded thatLECs should not recover these coststhrough per-minute charges. Instead, wetentatively concluded that it is morereasonable and economically efficient torecover costs of equipment dedicated toindividual customers, such as line-sideports and trunk ports associated withdedicated transport, through flat-ratedcharges. Trunk-side ports not associatedwith dedicated transport and the centralprocessing portion of the switch, on theother hand, are shared among multiplecarriers. We asked if these costs aredriven by usage or by the number oflines and trunks served by the switch.We sought comment on whether ratestructures for shared local switching

facilities should consist of usage-sensitive, flat-rated, or a combination ofboth flat-rated and usage-sensitive rateelements. We asked commenters torecommend methods of identifying non-traffic-sensitive (NTS) local switchingcosts.

b. Discussion125. We conclude that, consistent

with principles of cost-causation andeconomic efficiency, NTS costsassociated with local switching shouldbe recovered on a flat-rated, rather thanusage sensitive, basis. The record beforeus indicates clearly that the costs of theline side port (including the line card,protector, and main distribution frame)are NTS. We conclude, therefore, thatthese costs should be recovered throughflat-rated charges. Accordingly, forprice-cap LECs, we reassign all line-sideport costs from the Local Switching rateelement to the Common Line rateelements. For price cap companies,these costs will be recovered throughthe common line rate elements,including the SLC and flat-rated PICC,described above.

126. LECs incur differing costs for lineports used in the provision of differentservices. The SLC and PICC costrecovery mechanisms will recover onlythe cost of a line port used to providebasic, analog service, whether the enduser has basic, analog service, oranother form of service. As discussedabove, data submitted in response to theISDN SLC NPRM show that ISDN linecards cost significantly more than linecards associated with a basic, analog,subscriber line. To the extent that thecosts of ISDN line ports, and line portsassociated with other services, exceedthe costs of a port used for basic, analogservice, price cap LECs will recover thisexcess amount through a separate end-user charge.

127. We conclude that the costs of adedicated trunk port (including thetrunk card and DS1/voice-grademultiplexers, if needed) should berecovered on a flat-rated basis becausethese costs are also NTS in nature.These costs should be recovered fromthe carrier purchasing the dedicatedtrunk terminated by that port. Similarly,we conclude that the costs of sharedtrunk ports should be recovered on aper-minute of use basis from the usersof common transport trunks. Wetherefore establish two separate rateelements for recovery of these costs.Price cap LECs may recover the costs ofeach dedicated trunk port on a flat-ratedbasis from the purchaser of thededicated trunk terminating at the port.In order to ensure that these purchasersof dedicated trunks do not pay the costs

of shared trunk ports that they do notuse, price cap LECs must also establisha usage-sensitive rate element forrecovery of the costs of shared trunkports. The costs of these shared trunkports will be recovered on a per minute-of-use basis from users of commontransport trunks terminating at theseports. We therefore add a separatecategory for all trunk port costs withinthe traffic sensitive basket, 47 CFR§ 61.42(e)(1). As with the othercategories within this basket, the ‘‘trunkports’’ category will have an upperservice band index of +5 percent and nolower service band index.

128. We do not establish a fixedpercentage of local switching costs thatincumbent LECs must reassign to theCommon Line basket or newly createdTrunk Cards and Ports service categoryas NTS costs. In light of the widelyvarying estimates in the record, weconclude that the NTS portion of localswitching costs likely varies among LECswitches. Accordingly, we require eachprice cap LEC to conduct a cost studyto determine the geographically-averaged portion of local switchingcosts that is attributable to the line-sideports, as defined above, and todedicated trunk side ports. Theseamounts, including cost support, shouldbe reflected in the access chargeelements filed in the LEC’s access tariffeffective January 1, 1998. Onceestablished, this service category, likeall others in the traffic sensitive basket,shall be subject to price cap adjustmentsfor inflation and productivity. Althoughsome LECs have obtained authority togeographically deaverage transport ratesunder a zone density pricing plan,because the costs of trunk ports willremain within the Traffic Sensitivebasket, we conclude that trunk portcosts should remain geographicallyaveraged for now. We will considerdeaveraging of these costs in connectionwith our assessment of other forms ofpricing flexibility in a subsequent Orderin this proceeding.

129. We direct all price cap LECs toinclude in their tariff filingsimplementing this Order an exogenousdownward adjustment to the TrafficSensitive basket, 47 CFR § 61.42(d)(2),and corresponding exogenous upwardadjustment to the Common LineInterstate Access Elements basket, 47CFR § 61.42(d)(1) to reflect the recoveryof the interstate NTS costs of line-sideports from the Common Line rateelements.

130. USTA, SNET, and BA/NYNEXargue that we should not codify anyspecific local switching rate elements.We disagree. In the NPRM, we proposedto eliminate local switching rate


elements only when an actualcompetitive presence is established foran exchange access service in a relevantgeographic area, as measured by (1)demonstrated presence of competition;(2) full implementation of competitivelyneutral universal service supportmechanisms; and (3) credible andtimely enforcement of pro-competitiverules. We tentatively concluded in theNPRM that, in the absence of actualcompetition, the mere availability ofunbundled network elements underefficient rate structures would notprovide incumbent LECs with sufficientincentive to adopt efficient, cost-causative access rate elements orstructures. The record before usindicates that flat-rated pricing for lineports and dedicated trunk ports isefficient, and reflective of costcausation. We will first amend thebaseline switched access rate structureto reflect this determination. Then, in asubsequent Report and Order in thisdocket, we will determine when andunder what circumstances we will allowincumbent LECs greater flexibility indesigning interstate access ratestructures.

131. In addition, despite argumentsfrom BA/NYNEX to the contrary, wefind that the benefits to be gained froma more efficient, cost-causative ratestructure outweigh the burden ofestablishing these flat-rate elements.Independent estimates from Cable &Wireless and USTA, both using NYNEXdata, indicate that as much as, or evenmore than, half of local switching costsmay be NTS. Since the current, per-minute rate structure for the localswitch was established, digital switcheshave become increasingly predominantin the network. Given USTA’s estimatethat six percent of the costs of an analogswitch and 51 percent of the costs of adigital switch are NTS, we find thatlocal switching costs have becomeincreasingly NTS and now warrant thecreation of a NTS recovery mechanism.Including NTS local switching costs inper-minute access charges contributessignificantly toward unnecessarily highper-minute long distance rates for allcustomers. Restructuring rates to reflectmore accurately cost-causation willpromote competition, reduce per-minute charges, stimulate long-distanceusage, and improve the overallefficiency of the rate structure.

132. We also reject proposals torecover the entire NTS portion of localswitching costs from the new universalservice support mechanisms. In theUniversal Service Order, we agreed withthe Joint Board that we should establisha ‘‘nationwide benchmark based onaverage revenues per line for local,

discretionary, interstate and intrastateaccess services, and othertelecommunications revenues that willbe used with either a cost model or acost study to determine the level ofsupport carriers will receive for lines ina particular geographic area.’’ We findthat it would be inconsistent with theJoint Board’s recommendation if wewere to mandate recovery of NTS localswitching costs directly from universalservice support mechanisms,independent of the revenue benchmark,and the percentage of high cost supportrecoverable from the federal universalservice mechanisms at this time.

133. In allocating costs between theintrastate and interstate jurisdictions,the Commission consults with the statesthrough the operation of the Joint Boardon Separations. See 47 U.S.C. sec.410(c); Amendment of Part 67 of theCommission’s Rules and Establishmentof a Joint Board, CC Docket No. 80–286,Notice of Proposed Rulemaking andOrder Establishing a Joint Board, 45 FR41459 (June 19, 1980). It is notnecessary to await action by the JointBoard on Separations before revising therecovery mechanisms applicable to theinterstate portion of the costs attributedto line ports and dedicated trunk ports.Our revision of the mechanisms used torecover the interstate portion of thecosts in Part 32 local switching accountsthat the jurisdictional separationsprocess allocates to the interstatejurisdiction will have no direct effect onthat allocation because these costs willcontinue to be separated in Part 36based on relative dial-equipment-minutes of use. The fact that localswitching costs are apportionedbetween jurisdictions based on arelative interstate and state usage isirrelevant to the choice of pricingstructure for recovering those costs,however. Economic efficiency does notrequire the jurisdictional separation ofNTS costs be based on an NTS (flat)factor. The jurisdictional separationsprocess only determines whether thebilled charges (flat or variable) arecharacterized as intrastate or interstate.Economic efficiency does require thatNTS costs, regardless of how they areseparated, be recovered in eachjurisdiction through flat charges. Thus,there was no loss of economic efficiencywhen the Commission, agreeing withthe recommendation of the Joint Board,simplified the separation of localswitching by eliminating the formerdistinction between NTS and traffic-sensitive costs and creating a singleswitching category that is assigned tothe jurisdictions based on dialequipment minutes. MTS and WATS

Market Structure, CC Docket No. 78–72,Report and Order, 52 FR 17228 (May 6,1987).

134. On the other hand, economicefficiency will be increased if localswitching costs (regardless of thejurisdiction to which they are assigned)are recovered through a combination offlat charges for NTS costs and trafficsensitive charges for the remainder.Because, at the time that theCommission established the currentjurisdictional separations process, it didnot consider the distinction between theswitch and the port that we addresstoday, the current jurisdictionalseparations process does not distinguishport costs from the costs of the localswitch itself. 47 CFR 36.125(b). We havethe authority and obligation,independent from the Joint Board, toestablish appropriate rate structures forrecovering the costs the jurisdictionalseparations process allocates to theinterstate jurisdiction. E.g., 47 U.S.C.secs. 151, 152, 154(i–j). We take stepstoday to address the fact that the costsof line ports and dedicated trunk portsare more properly recovered for Part 69purposes from the Common Line andDirect-Trunked Transport rate elementsas NTS charges, instead of from thetraffic sensitive Local Switchingelement. We will, however, examineany jurisdictional separations issuespresented by NTS switching costs in ourupcoming separations Notice ofProposed Rulemaking.

135. Costs may vary for shared localswitching facilities according to thenumber of lines connected, or the trafficover those lines. In the former case, thecosts of the shared facility may berecovered in the most cost-causativemanner by imposing a proportionateshare of the costs on each line while, inthe latter case, usage-sensitive chargesmay better reflect cost causation. Withrespect to such shared local switchingfacilities, including the switchingmatrix and shared trunk ports, we gavestates flexibility in our interconnectionproceeding to establish either per-minute usage charges, or flat-ratedcharges, as appropriate. LocalCompetition Order. In the accesscontext, however, we will continue torequire price cap incumbent LECs torecover the costs of shared localswitching facilities, including thecentral processor, switching matrix, andshared trunk ports, on a per-minutebasis. On the basis of the information inthe record before us, it would bedifficult to identify the NTS and traffic-sensitive portions of the costs of sharedswitching facilities and to verify theaccuracy of LEC studies attempting todo so. Therefore, until we gain more


experience with rate structures forunbundled network elements that areimplemented pursuant to Sections 251and 252 and that segregate these costsinto traffic-sensitive and NTScomponents, we will continue to adhereto the current, per-minute rate structurefor shared switching facilities.

2. Traffic Sensitive Charges136. In the NPRM, we sought

comment on several alternative ratestructures for recovery of usage-sensitive local switching costs.Specifically, we sought comment onwhether the Commission should requireor permit LECs to establish a separatecharge for call setup, and if so, whetherthe charge should be levied on all callattempts, or only completed calls. Wealso sought comment on whether theCommission should require or permitincumbent LECs to establish peak andoff-peak pricing structures for sharedlocal switching facilities, and whetherthe existing per-minute rate structureadequately reflects the manner in whichtraffic-sensitive local switching costs areincurred.

a. Call Setup Charges137. Among price cap carriers today,

most call setup is performed with out-of-band signalling, generally using theSS7 signalling network. In light of thewidely varying estimates of the costs ofcall setup in the record, we concludethat these costs may be more than a deminimis portion of the costs of localswitching. The record indicates thatthese call setup charges are incurredprimarily on a per-call rather than a per-minute basis. By requiring recovery thecosts of call setup on a per-minute basis,our current rate structure mandates animplicit subsidy running fromcustomers that make lengthy calls tothose that make many short-durationcalls. Therefore, we find that we shouldnot continue to require the price capLECs to recover costs of call setup fromper-minute local switching charges.

138. Accordingly, we will reviseSection 69.106 of our rules, 47 CFR§ 69.106, to permit, but not to require,price cap LECs to establish a separateper-call setup charge assessed on IXCsfor all calls handed off to the IXC’s pointof presence (POP). As noted earlier,because an incumbent LEC originatingan interstate call incurs call setup costseven if the call is not completed at thecalled location, we permit these LECs torecover call setup charges on alloriginating interstate calls that arehanded off to the IXC’s POP, and on allterminating calls that are received froman IXC’s POP. With respect tooriginating call attempts, we agree with

the California Commission that, whenthe call is handed off to the IXC’s POP,the incumbent LEC’s switches andsignalling network have performed theirfunctions and the incumbent LEC hasincurred the full cost of call setup. Wealso permit incumbent LECs to imposea setup charge for terminating callsreceived from an IXC’s POP, whether ornot that call is completed at the calledlocation, because the incumbent LECsignalling network in either case mustperform its setup function.

139. We conclude that the call setupcharge should not be mandatory becausesome incumbent LECs may determinethat call setup costs either are in fact deminimis or are otherwise outweighed bythe costs of the network and operationssupport systems (OSS) upgradesnecessary to install measurement andbilling systems. In such cases, it wouldbe economically inefficient to mandatea separate call-setup charge because thecosts of collecting the charge mightexceed the revenue collected from thecharge itself. We are aware that, bymaking the call-setup charge permissiveonly, we may allow certain incumbentLECs’ rate structures to continue tosubsidize short-duration calls. Wenevertheless conclude that we shouldnot mandate separate collection of acall-setup charge in cases where the LECdetermines that the costs of eliminatingthis subsidy exceed the benefits to begained. In contrast, we find that thoseincumbent LECs that either have orobtain the ability to implement a call-setup charge should have the flexibilityto adopt this cost-causative ratestructure.

140. No party disputes the fact thatincumbent LECs incur costs of callsetup for call attempts, in addition tocompleted calls. Some parties, however,argue that call setup charges should beassessed only on completed calls inorder to reduce customer confusion. Weanticipate that consumer confusion willbe minimal, however, because the callsetup charge we permit will be imposedon IXCs, not end users. We find itunlikely that IXCs would choose to passthis charge along to their customers inthe form of a separate charge per callattempt. For instance, IXCs todaygenerally charge their customers forcompleted long distance calls eventhough they incur access charges formany uncompleted calls as well.

141. Other commenters state thatsetup charges imposed on call attemptswill result in charges being imposed ona caller that has not received service.LCI asserts that ‘‘customers do notexpect to pay for uncompleted callattempts, and the carriers are notentitled to recover their costs of

uncompleted call attempts,’’ citing theCommission’s decision in VIA USA, Ltd,10 FCC Rcd 9540, 9545 (1995). The textcited from that order, however,addresses only customer expectationsthat have arisen because our currentrules make no explicit provision for therecovery of costs of an uncompletedcall. We now find that a call setupcharge, assessed to an IXC, should notbe prohibited because a rate structurethat recovers some switching coststhrough a per-call setup charge on allcall attempts is more cost-causative thanone limited to the recovery of costs onlyfrom completed calls.

142. Still other commenters arguethat, if we permit call setup charges tobe imposed for call attempts, we will, atbest, open the door to unauditablebilling errors or, at worst, facilitateincumbent LEC fraud and duplicity.These commenters argue that theincumbent LEC will be able to generateadditional revenue, or degrade theservice of IXC competitors, by blockingcalls at its own switch. Based on thisrecord, we conclude that these concernsare not well-founded. By permitting asetup charge only for originating callattempts that are handed off to the IXC’sPOP, we minimize the originatingincumbent LEC’s incentive to engage inthis type of activity because theincumbent LEC will receive nocompensation for calls blocked at itsown switch. In addition, incumbentLECs have compelling incentives todeliver interstate calls to an IXC’s POP.As competition develops for localservice, it appears doubtful that anincumbent LEC would find itadvantageous to block deliberatelyinterstate calls placed by their end usercustomers. Such practices wouldencourage entry by new competitors andincrease the interest of affected endusers in finding a more reliable serviceprovider. We also find it unlikely thateither originating or terminatingincumbent LECs would intentionallyrisk the collection of often significantper-minute access charge revenues on acompleted long-distance call in order tocollect additional, much smaller per-callsetup charges. Finally, we know of nosignificant allegations of degradedservice quality attributable to the verysimilar current regime, under whichincumbent LECs collect at least a fullminute of originating access revenueson uncompleted calls delivered to theIXC’s POP. We are prepared, however,to investigate claims that an incumbentLEC is blocking calls in an intentionalor discriminatory manner.

143. Several large business customersthat make substantial numbers of short-duration calls, such as those associated


with credit card authorization,automatic teller machine operation, orother transaction-oriented data transfers,argue that imposing a call setup chargewill be disruptive to their businessesand may force them to use alternativesto the public switched network. Thesecommenters are the primarybeneficiaries of the subsidy that isimplicit in the current recovery of callsetup costs on a per-minute basis,running from customers that makelengthy calls to those that make manyshort-duration calls. The existing ratestructure may well have encouragedusers who make many short durationcalls to use the public-switched networkin inefficient ways. Rate structures thatare aligned with cost causation, on theother hand, should encourageeconomically-efficient use of thetelecommunications network.Transaction-oriented users of thenetwork may be motivated to developmore economically efficient processingmethods, with resulting economicbenefits. Because this group of IXCcustomers may need time to adjust tothe new rate structure, however,incumbent LECs choosing to impose aper-call setup charge on IXCs may do so,at the earliest, in their access tarifffilings effective July 1, 1998. This givesa customer over one year to make anynecessary adjustments. This time shouldbe sufficient to mitigate any potentialdisruptive effects of this rate structurechange.

144. MCI asserts that there may becosts of call setup in addition to thoseassociated with signalling, such as aportion of the switch central processorcosts. We limit the costs that anincumbent LEC may recover throughcall setup charges, however, to thoseassociated with signalling because weagree with MCI that it would beextremely difficult to separate the costsof the switch CPU and other traffic-sensitive costs into per-message andper-minute portions and to verify thatthe allocation has been done properly.

145. Several commenters caution that,if we permit a call setup charge, weshould also ensure that the charge doesnot overlap with any SS7-relatedcharges now permitted or developed inthis proceeding. Because call setup isone function of the SS7 network, someof these costs may already be recoveredthrough the current Part 69 SS7 rateelements. 47 CFR § 125. Currently,Section 69.125 of our rules permitsLECs to recover from IXCs only (1) aflat-rated signalling link charge for theDedicated Network Access Line(DNAL); and (2) a flat rated SignalTransfer Point (STP) port terminationcharge. 47 CFR § 69.125. While these

elements recover the costs of somededicated SS7 facilities, they do notinclude the usage-based signalling costsof call setup, including the costsincurred to switch messages at the localSTP, to transmit messages between anSTP and the incumbent LEC’s end officeor tandem switch, and to process orformulate signal information at an endoffice or tandem switch.

146. Currently, the setup costs ofcertain calls may be recovered throughdatabase query charges, either for theline information database (LIDB), 47CFR § 69.120, or the 800 database, 47CFR § 69.118. In addition, incumbentLECs recover some costs associated withthe provision of certain signallinginformation necessary for third partiesto offer tandem switching through the‘‘signalling for tandem switching’’ rateelement, 47 CFR § 129.

147. Imposing a call setup charge forinterexchange calls should not overlapwith any of these existing rate elements.Nevertheless, we clarify that anincumbent LEC choosing to impose acall setup charge may not include inthat charge any costs that it continues torecover either through other localswitching charges, through charges fordedicated SS7 facilities, or throughother signalling charges. In this Order,we also permit incumbent LECs to adopta more detailed SS7 rate structure,modeled on that currently used byAmeritech under waiver. Ameritech SS7Waiver Order. This SS7 rate structuremay permit LECs to recover a significantportion of their call setup costs withoutan additional call setup charge. Givenestimates in the record that SS7 is usedto provide signalling for more than 95percent of the large LECs’ customers, weconclude that, in the ordinary case, aprice cap LEC will not need to use boththe optional SS7 rate structure and aseparate call setup charge to recover thecosts of call setup. We recognize,however, that some call setup is stillperformed using in-band,multifrequency (MF) signalling, ratherthan out-of-band signalling systems.Because SS7 charges will not recovercosts of call setup using MF signalling,we do not prohibit the use of both SS7and call setup charges. We caution LECsadopting both the optional SS7 ratestructure and an additional call setupcharge, however, that cost support filedwith access tariffs must clearly indicatethe allocation of individual costs of callsetup between these two recoverymechanisms; the same costs cannot bedouble-recovered using bothmechanisms.

b. Peak and Off-Peak Pricing

148. We conclude that we should notnow mandate a peak-rate pricingstructure for local switching. The recordreflects significant practical difficultiesthat may make it difficult or impossibleto establish and enforce a rational,efficient, and fair peak-rate structure asa matter of regulation. For example, therecord outlines a variety of difficultiesthat incumbent LECs will confront indetermining peak and off-peak hourswith any degree of certainty, based ongeographic, user-type, service, and othervariations. Moreover, peak usageperiods may shift over time as usagepatterns change, and as competitorsenter the market. Based on thesedifficulties, some incumbent LECs mayfind it too costly or too difficult todevelop, implement, and maintain apeak-rate structure that will allow themto capture all or most of the benefits thisstructure could offer.

149. We do recognize the possibleefficiency of a peak-rate structure. LocalCompetition Order. Accordingly, wewill consider whether LECs should havethe flexibility to develop such peak andoff-peak rate structures for localswitching on a permissive basis whenwe consider other issues of ratestructure flexibility in a subsequentReport and Order that we will adopt inthis proceeding.

C. Transport

150. Transport service is thecomponent of interstate switched accessconsisting of transmission between theIXC’s point of presence (POP) and LECend offices. Transport Rate Structureand Pricing, CC Docket No. 91–213,Third Memorandum Opinion and Orderon Reconsideration and SupplementalNotice of Proposed Rulemaking, 60 FR2068, (January 6, 1995) (Third TransportReconsideration Order). Currently,incumbent LECs offer two basic types ofinteroffice transport services. The first,direct-trunked transport, uses dedicatedcircuits for transport between a LEC endoffice and the LEC serving wire center,or between any other two points thedirect-trunked transport customerrequests. The second, tandem switchedtransport, uses common transportfacilities to connect the end office to atandem switch. Common transportcircuits may be used to transmit theindividual calls of many IXCs and eventhe incumbent LEC itself. Transportcircuits dedicated to a particular accesscustomer connect the tandem switch tothe serving wire center. Dedicatedentrance circuits carry traffic betweenthe IXC POP and the serving wirecenter, whether the IXC uses direct-


trunked transport or tandem-switchedtransport.

151. In the NPRM, we expressedconcern that some of our current Part 69rules, see, e.g., 47 CFR §§ 69.110,69,111, 69.112, 69.124, may requireLECs to recover transport costs throughrate structures that do not reflectaccurately the way these costs areincurred. We sought comment onpossible revisions to many of these rateelements.

1. Entrance Facilities and Direct-Trunked Transport

a. Background

152. Entrance facilities are dedicatedcircuits that connect an accesscustomer’s POP with the LEC’s servingwire center. Direct-trunked transportfacilities are dedicated trunks that carryan access customer’s traffic from theLEC end office to the serving wire centerwithout switching at the tandem switch.In the First Transport Order, wemandated an interim rate structureunder which entrance facilities anddirect trunked transport are priced on aflat-rated basis, which may be distancesensitive. Transport Rate Structure andPricing, CC Docket No. 91–213, Reportand Order and Further Notice ofProposed Rulemaking, 57 FR 54717(November 20, 1992) (First TransportOrder); see also 47 CFR § 69.110. Initialrate levels for direct-trunked transportand entrance facilities were presumedreasonable if they were set equal to therates for corresponding special accessservice components (special accessservice and special access channeltermination, respectively). TransportRate Structure and Pricing, CC DocketNo. 91–213, First MemorandumOpinion and Order on Reconsideration,58 FR 41184, (August 3, 1993) (FirstTransport Reconsideration Order). Inthe NPRM, we tentatively concludedthat, because direct-trunked transportand entrance facilities appear to bededicated to individual customers, aflat-rated pricing structure accuratelyreflected the way LECs incur the costsof these facilities. We sought commenton this tentative conclusion and onwhether incumbent LECs should bepermitted to offer transport servicesdifferentiated by whether the LEC or theIXC is responsible for channel facilityassignments (CFAs). A channel facilityassignment is the actual designation ofthe routing that a circuit takes withinthe incumbent LEC network. Thisassignment may be made either by anIXC purchasing a dedicated circuit, orthe incumbent LEC itself. We alsosought comment on whether any rulesin addition to the interim rules are

necessary to govern rate levels for theseservices.

b. Discussion

153. We conclude that both entrancefacilities and direct-trunked transportservices should continue to be priced ona flat-rated basis and that charges forthese services may be distance-sensitive.In the First Transport Order, we foundthat such a flat charge would facilitatecompetition in the direct-trunkedtransport market and encourageincumbent LECs to make efficientnetwork decisions. For the samereasons, and because this pricingstructure is reflective of the manner inwhich incumbent LECs incur the costsof provisioning these facilities, weconfirm that the interim rate structurethe Commission adopted for thesefacilities should be made final.

154. US West and Sprint make apersuasive showing that, as carriersexpand their use of fiber-optic ringarchitecture and other modern networkdesigns, transport costs should becomeless distance sensitive because LECsmay transport a call along any one ofmany paths to its destination based ontransient network traffic levels. Weconclude, however, that we need notamend our Part 69 rules now to reflectthe decreasing sensitivity of transportcosts to distance. Our rules permit, butdo not mandate, the use of distancesensitive transport charges. Therefore, ifan incumbent LEC determines that itstransport costs have become lessdistance sensitive, it may reduce oreliminate the distance-sensitivity of itsdirect-trunked transport rates. For tworeasons, we expect that incumbent LECswill adjust their rates to reflect anychange in the distance sensitivity oftransport costs. First, as US West states,ring architecture will be most prevalent,and therefore, will reduce the distancesensitivity of rates most dramatically, indensely populated areas. When anincumbent LEC obtains authority todeaverage access rates geographically,therefore, it may choose to offer a lessdistance-sensitive pricing structure inmore densely populated areas than itdoes in less densely populated areas.Such a structure would properly reflectthe reduced distance sensitivity of theincumbent LEC’s costs in more denselypopulated areas. Second, as competitiondevelops, incumbent LECs will comeunder increasing market pressures tomaintain rates that reflect the nature ofthe costs underlying the service. If theychoose not to do so, we expect that newmarket entrants will developcompetitive service offerings at pricesmore reflective of underlying costs.

155. We decline Ameritech’s requestin its comments for immediateflexibility to offer new technologies toswitched access customers withoutobtaining a Part 69 waiver or passing apublic interest test. In our Price CapPerformance Review for Local ExchangeCarriers, CC Docket No. 94–1, ThirdReport and Order, 62 FR 4657 (January1, 1997) (Price Cap Performance ReviewThird Report and Order), adopted alongwith the NPRM in this proceeding, weeliminated the need for a Part 69 waiverfor new services, and instead requiredincumbent LECs to file a petitiondemonstrating that introduction of thenew service would be consistent withthe public interest. Such petitions willgive LECs that desire to do so theopportunity to make their cases andreceive the requested flexibility. See 47CFR § 69.4(g). This proceduresignificantly streamlined the priorwaiver process, and we conclude thatthe public interest will not suffer if wedo not grant incumbent LECs additionalimmediate flexibility in this area as partof our basic rate structure modifications.We will give further consideration toAmeritech’s request for additionalflexibility to offer new technologies toswitched access customers as part of ourassessment of other aspects of pricingflexibility in a subsequent Report andOrder in this proceeding.

156. We also will consider whetherLECs should be permitted to offerdirect-trunked transport services thatare differentiated by whether theincumbent LEC or the transportcustomer is responsible for performingchannel facility assignments inconnection with our evaluation of otherforms of pricing flexibility in asubsequent Report and Order in thisproceeding. As MCI argues in itscomments, it is unclear whether ratesfor direct-trunked transport where theLEC controls the CFA should be higheror lower than the rates that apply wherethe IXC controls the CFA. Although theLEC may be able to make more efficientuse of its network facilities when itcontrols the CFAs itself, this efficiencybenefit may be offset by the additionalcosts the LEC incurs in performing theCFA function. We agree with MCI thatan incumbent LEC may be able toincrease its network efficiency byretaining or assuming control of CFAs,particularly if an IXC orders a relativelylarge amount of transport capacity. Inthose cases, however, ratedifferentiation based on CFA controlappears to be the functional equivalentof a volume discount. As a result, wewill consider this issue, along withother pricing flexibility issues, in a


subsequent Report and Order plannedin this docket.

157. In its comments, USTA requeststhat we forbear under Section 10 of theCommunications Act, 47 U.S.C. sec.160, from regulating services in theinterexchange basket, special access,collocated direct-trunked transport, anddirectory assistance. We will addressUSTA’s request along with other pricingflexibility issues, in a subsequent Reportand Order planned in this docket.

2. Tandem-Switched Transport

a. Background

158. Tandem-switched transport usestrunks that are shared among many IXCsand the LEC itself to carry trafficbetween the end office and a tandemswitch. The tandem switch routes IXCtraffic onto an appropriate dedicatedtrunk that runs between the tandemswitch and the serving wire center. AnIXC may use tandem-switched transporteither as its primary form of transport inlieu of direct-trunked transport, or tocarry traffic that overflows from itsdirect-trunked transport facilities atpeak periods. In 1982, the Modificationof Final Judgment (MFJ) established aninterim rule that required, untilSeptember 1, 1991, BOC charges to IXCsto be ‘‘equal, per unit of traffic’’ of agiven type transported between endoffices and facilities of the IXCs withinan exchange area or within reasonablesubzones of an exchange area. UnitedStates v. American Tel. and Tel. Co.,552 F. Supp. 131, 233–34 (AT&TConsent Decree, Appendix B, SectionB(3)), aff’d sub nom. Maryland v. UnitedStates, 460 U.S. 1001 (1983).

159. The Commission replaced the‘‘equal charge’’ rule in 1993 with aninterim rate structure for tandem-switched transport. This interimstructure allows IXCs to choose betweentwo rate structures for the purchase oftandem-switched transport. Bothoptions provide for a per-minutetandem switching charge. Under thefirst option, an IXC may elect to pay‘‘unitary’’ per-minute charge fortransmission of traffic from the endoffice, through the tandem switchingoffice, to the serving wire center. Thischarge may be distance sensitive, withdistance measured in airline miles fromthe end office to the serving wire center.Under the second option, the ‘‘three-part rate structure,’’ in addition to thecharge for the tandem switch, an IXCmay elect to purchase transmission ona bifurcated basis, with the end office-to-tandem portion charged on a per-minute basis, and the tandem-to-servingwire center portion charged as direct-trunked transport facilities, i.e., on a

flat-rated basis. Under the three-part ratestructure, both portions of thetransmission charge may be distancesensitive based on the airline mileage tothe tandem office.

160. In adopting the interim ratestructure, the Commission stated thatinitial direct-trunked and tandem-switched transport rates would bepresumed reasonable if set based onspecial access rates in effect onSeptember 1, 1992, using a DS3 to DS1rate ratio of at least 9.6 to 1. FirstTransport Order. Special accesscustomers use a dedicated trunkrunning between the customer’spremises and the IXC’s POP, therebybypassing the LEC’s switched networkfacilities altogether. This service isprimarily used by large volume users indensely populated areas. Per-minutetandem-switched transport rates werepresumed reasonable if set using aweighted average of DS1 and DS3 ratesreflecting the relative numbers ofcircuits of each type in use in thetandem-to-end office link, and assumingcircuit loading of 9000 minutes of useper month per voice-grade circuit. Id.

161. Under the interim rate structure,whether a tandem-switched transportcustomer elects to purchase tandem-switched transport under the unitary orthe three-part rate structure, the LECimposes a separate, per-minute chargeon the tandem-switched transportcustomer for use of the tandem switch.The Commission set this charge initiallyto recover only twenty percent of thetandem revenue requirement, in orderto: (1) protect small IXCs that usetandem-switched transport as theirprimary transport mechanism fromsubstantial increases in tandem-switched transport rates, seeCompetitive Telecommunications Ass’nv. FCC, 87 F.3d 522, 526–27 (D.C. Cir.1996) (CompTel); (2) ensure that theinterim rate structure did not ‘‘endangerthe availability of pluralistic supply inthe interexchange market’’ that haddeveloped under the equal charge rule,First Transport Order; and (3) allowIXCs a transitional period to reconfiguretheir networks to eliminateinefficiencies that had developed underthe equal charge rule and to prepare fora fully cost-based rate structure, id.Unlike the direct-trunked and tandem-switched transport rates, which are setusing overhead loadings based onspecial access, the tandem switchingrates used higher overhead loadingsapplicable to switched access.

162. As part of the interim ratestructure, the Commission also createdthe TIC to recover on a per-minute basisfrom all switched access customers thedifference between the Part 69 transport

revenue requirement and the revenuesprojected to be recovered under theinterim rate structure. Id. The TIC wasexplicitly intended to make thetransition to the interim rate structurerevenue neutral. Id. Among otherpossible costs, the TIC recovers theremaining 80 percent of the tandem-switching revenue requirement.

163. Portions of the interim transportrate structure were recently remanded tothe Commission by the United StatesCourt of Appeals for the District ofColumbia Circuit, CompTel, 87 F.3d522. With respect to tandem-switchingrates and the TIC, the Court ordered useither to implement a cost-based ratestructure or offer a ‘‘rational and non-conclusory analysis in support of [our]determination that an alternativestructure is preferable.’’ Id. at 736. Withrespect to overhead loadings, the Courtordered us either to substantiate that ourcurrent method of allocating overhead iscost-based, choose a method that is, orprovide a reasoned explanation of ourdecision to pursue a non-cost-basedsystem. Id.

164. In the NPRM, we soughtcomment on several alternative ratestructures for tandem-switchedtransport service facilities, including: (a)maintaining the interim rate structure,which permits the IXCs to choosebetween the two pricing alternativesabove; (b) eliminating the unitary rateoption and requiring the IXCs topurchase tandem-switched transportunder the three-part rate structure; or (c)developing another, different ratestructure. We also sought comment onwhether, in conjunction with any ofthese pricing options, we should applyto tandem switching any of the optionsfor local switching discussed above,including whether we should establishseparate flat-rated charges for thededicated ports on the serving wirecenter side of the tandem or other NTScomponents of the tandem switch, andwhether usage-based or flat rates moreaccurately reflect shared tandem-switching costs. We also soughtcomment on whether, in conjunctionwith any of these options, we shouldpermit or require peak load pricing forusage-based charges for tandem-switched transport service, and onwhether any portion of tandem-switched transport costs should berecovered from direct-trunked transportcustomers.

b. Overview of Rate Structure and RateLevel Changes

165. In this section, we summarize thechanges we make to the tandem-switched transport rate structure andrate levels below. We conclude that we


should require incumbent LECs toimplement a cost-based rate structurefor tandem-switched transport in fourstages over a two year transition period.Unlike our previous transition plans,however, we set forth today, for the firsttime, the details of a final, cost-basedtransport rate structure. We have longrecognized that non-cost based ratestructures can, among other dangers, (1)threaten the long-term viability of thenations’s telephone systems; (2) distortthe decision whether to use alternativetelecommunications technologies; and(3) encourage ‘‘uneconomic bypass’’ ofthe public switchedtelecommunications network, raisingrates for all. MTS and WATS MarketStructure Third Report and Order.

166. Until today, however, we havelimited ourselves to interim transportrate structure plans, such as the equalcharge rule and the interim ratestructure described above. While theinterim rate structure increased the cost-based nature of our transport ratestructure, it also included significantnon-cost-based elements. We have not,until today, laid out a clear transitionplan that describes all the stepsnecessary to achieve cost-basedtransport rates. As a result, although allcarriers have no doubt been aware ofour intention to move to a cost-basedrate structure, they have been able onlyto react to our transitional steps,announced piecemeal. Because we havenot announced a definite and detailedend state—a final, cost-based ratestructure—we have afforded carrierslittle opportunity to plan, adjust, anddevelop their networks in preparationfor such a rate structure, despite ourlengthy period of ‘‘transition.’’Accordingly, because of the potentialmagnitude of the rate impact of thesechanges, we conclude that a four-stepimplementation over a two-year periodwill minimize the risk of rate shock andallow transport customers to adjustwhile we move as expeditiously aspossible to cost-based transport rates asrequired by the CompTel decision.

167. The first step will occur inincumbent LEC access tariffs to becomeeffective on January 1, 1998. In thosetariffs, incumbent price cap LECs mustestablish new rate elements for recoveryof the costs of DS3/DS1 and DS1/voice-grade multiplexers used in conjunctionwith the tandem switch. The rateelement for the dedicated multiplexerson the serving wire center side of thetandem will recover these costs on aflat-rated basis, while the rate elementfor the multiplexers on the end officeside of the tandem will be assessed perminute of use. In addition, incumbentprice cap LECs must establish in those

tariffs a flat-rated charge to recover thecosts of dedicated trunk ports on theserving wire center side of the tandem.None of our existing rate elementscurrently recovers the costs of eitherthese multiplexers or these dedicatedtrunk ports. Accordingly, we concludethat those costs are currently recoveredthrough the TIC, and that incumbentprice cap LECs must reduce the TIC toreflect the recovery of these coststhrough the new rate elements. Also onJanuary 1, 1998, all incumbent LECsmust take the first of three annual stepsto reallocate to the tandem-switchingrate element tandem switching revenuescurrently being recovered through theTIC. In tariffs filed to be effective on thatdate, we require incumbent LECs toreallocate one third of the portion of thetandem switching revenue requirementthat they currently recover through theTIC, excluding signalling and dedicatedport costs that we reallocate elsewhere,to the tandem switching rate element.

168. The second step will occur inincumbent LEC tariffs to becomeeffective July 1, 1998. At that time, allincumbent LECs must eliminate theunitary pricing option for tandemswitched transport. Instead, incumbentLECs will be required to providetandem-switched transport under athree-part rate structure as follows: (1) aper-minute charge for transport of trafficover common transport facilitiesbetween the LEC end office and thetandem office; (2) a per-minute tandemswitching charge; and (3) a flat-ratedcharge for transport of traffic overdedicated transport facilities betweenthe serving wire center and the tandemswitching office. Incumbent LECs willcontinue to impose separatemultiplexing and port chargesestablished on January 1, 1998, ascomplementary to the three-part ratestructure.

169. The third and fourth steps willconsist of the reallocation of theremaining portion of the tandem-switching revenue requirementcurrently recovered through the TIC tothe tandem-switching rate element. Allincumbent LECs are to reallocate onehalf of the remaining portion of tandem-switching revenue requirementrecovered through the TIC to thetandem-switching rate element in accesstariffs to become effective January 1,1999, and the final portion of thetandem-switching revenue requirementto the tandem-switching rate element inaccess tariffs to become effective onJanuary 1, 2000. Before performing thisreallocation, price cap incumbent LECsmust account for X-factor reductions tothe tandem-switching revenuespermitted under price caps that have

occurred since the TIC was created, asdescribed in Section III.C.2.d, below.

c. Rate Structure170. Multiplexing Costs. As discussed

above, we direct incumbent LECs toestablish separate rate elements for themultiplexing equipment on each side ofthe tandem switch. LECs must establisha flat-rated charge for DS1/DS3multiplexers on the serving wire centerside of the tandem, imposed pro-rata onthe purchasers of dedicated DS3 trunkson the serving wire center side of thetandem, in proportion to the amount ofDS3 trunking capacity purchased byeach customer. Unlike DS3 rates, ratesfor DS1 dedicated trunks alreadyinclude a portion of the DS1/DS3multiplexer needed for transport. FirstTransport Order. Multiplexingequipment on the end office side of thetandem shall be charged to users ofcommon end office-to-tandem transporton a per-minute of use basis. Thesemultiplexer rate elements must beincluded in the LEC access tariff filingsto be effective January 1, 1998.

171. We sought comment in theNPRM on the claim that:

The TIC * * * includes the two additionalmultiplexers needed in order to multiplex aDS3 circuit down to a DS1 level beforeswitching at the tandem, and then back upto DS3 afterward for transmission to an endoffice. To the extent that analog tandemswitches exist, two additional DS1/[voice-grade] multiplexers are needed to achieve thevoice-grade interface with the tandem switch.

None of our existing rate elementsexplicitly recovers the costs of thesemultiplexers, and we conclude thatthese costs are currently recovered aspart of the TIC. Accordingly, weestablish two rate elements formultiplexers used on the serving wirecenter side of the tandem switch. Thefirst will recover the costs of DS3/DS1multiplexers used by purchasers ofdedicated DS3 transport trunks from theserving wire center to the tandemswitch, and may be levied only onpurchasers of such DS3 transport. Thesecond will recover the costs of DS1/voice-grade multiplexers used on theserving wire center side of analogtandem switches, and should be leviedon purchasers of DS1 or greater capacitydedicated transport from the tandemswitch to the serving wire center inproportion to the transport capacitypurchased on that route. Like servingwire center-side trunks and trunk ports,both DS3/DS1 and DS1/voice-grademultiplexers on the serving wire centerside of the tandem switch are dedicatedto individual customers. Accordingly,flat-rated NTS charges for thesemultiplexers are appropriate.


172. On the end office side of thetandem switch, we establish twoadditional rate elements. The first willrecover the costs of DS3/DS1multiplexers used on the end office sideof the tandem switch. This rate elementwill be a per-minute charge imposed oneach IXC purchasing common transporton the end office-to-tandem link. Thischarge will be calculated based onactual minutes of use of the commontransport circuits and will be assessedon IXCs in a 1:1 ratio with minutes ofuse of common transport. As withcommon transport trunks, because thesemultiplexers are shared among all usersof common transport, traffic-sensitive,per-minute charges are appropriate. Thesecond rate element should be assessedonly at analog tandems, to recover in asimilar manner the costs of DS1/voice-grade multiplexers needed at theseanalog tandems.

173. Price cap LECs must reallocaterevenues currently being recoveredthrough the TIC to these rate elementsand begin recovery of multiplexing costsusing these rate elements in their accesstariffs to become effective January 1,1998.

174. Dedicated Tandem Switch TrunkPort Costs. Price cap incumbent LECsmust establish a separate rate elementfor dedicated trunk ports used toterminate dedicated trunks on theserving wire center side of the tandemswitch. LECs incur the costs of theseports on an NTS basis, but currentlymust recover their costs through per-minute charges for the tandem switch.Because we have allocated 80 percent oftandem-switching costs to the TIC, theseport costs may currently be recoveredthrough either per-minute tandem-switching charges, or the per-minuteTIC. We now take this opportunity toestablish a separate rate element forthese costs. Price cap LECs mustestablish a flat-rated element fordedicated trunk ports on the servingwire center side of the tandem, assessedon the purchaser of the dedicated trunkterminated at that port. This rateelement shall be a flat-rated chargeassessed on the carrier purchasing thededicated trunk terminated at that port,and must also be included in tarifffilings to become effective January 1,1998.

175. Three-Part Rate Structure. Wealso direct all incumbent LECs todiscontinue the unitary rate structureoption for the transmission componentof tandem-switched transport, effectiveJuly 1, 1998. In their access tariffs thattake effect on July 1, 1998, incumbentLECs will be required to providetandem-switched transport under athree-part rate structure as follows: (1) a

per-minute charge for transport of trafficover common transport facilitiesbetween the LEC end office and thetandem office; (2) a per-minute tandemswitching charge; and (3) a flat-ratedcharge for transport of traffic overdedicated transport facilities betweenthe serving wire center and the tandemswitching office. This three part ratestructure reflects the manner in whichthe incumbent LEC incurs the costs ofproviding each component of tandem-switched transport. By establishing aper-minute, traffic-sensitive rate for theshared common transport trunks andthe tandem switch, incumbent LECswill recover these costs from each IXCin proportion to its use. The incumbentLEC, in contrast, incurs the costs of thededicated serving wire center-to-tandemtrunk on an NTS basis because, likeother dedicated trunks, the LEC mustprovision the trunk for the exclusive useof one IXC. Once this capacity isdedicated, the cost of the trunk does notvary with the amount of traffictransmitted by the IXC.

176. The three-part rate structure maycause some tandem-switched transportcustomers to increase their use of direct-trunked transport relative to tandem-switched transport. As discussed above,making this rate structure changeeffective on July 1, 1998, will providetandem-switched transport customersthat currently take service under theunitary rate structure with notice of thischange sufficient to enable them toadjust their networks to provide servicein the most efficient way possible, andto mitigate any sudden effect on ratessuch a change could have ifimplemented on shorter notice. In orderto encourage transport customers toincrease the efficiency of their transportnetworks quickly, we will requireincumbent LECs to waive certainnonrecurring charges until six monthsafter the three-part rate structurebecomes mandatory. Therefore, from theeffective date of this Order until sixmonths after the effective date of tariffseliminating the unitary pricing optionfor tandem-switched transport, theincumbent LECs shall not assess anynonrecurring charges for serviceconnection when a transport customerconverts trunks from tandem-switchedto direct-trunked transport or orders thedisconnection of overprovisionedtrunks.

177. When we replaced the equalcharge rule in 1991, we stated threeprinciples that would guide our effortsto develop the transport rate structure:(1) to encourage efficient use oftransport facilities by allowing pricingthat reflects the way costs are incurred;(2) to avoid interference with the

development of interstate accesscompetition; and (3) to facilitate full andfair interexchange competition. FirstTransport Order. In 1991, we stated thatthe interim rate structure was areasonable first step toward achievingthese goals, because it was more cost-based than the equal charge rule. FirstTransport Order. Even from itsinception, however, we have recognizedthat the interim rate structure representssignificant compromises that cause it tofall substantially short of these goals inmany ways. See First Transport Order;Third Transport Reconsideration Order.

178. First, the unitary rate option doesnot accurately reflect the manner inwhich LECs incur costs in providingtandem-switched transport and,therefore, does not provide maximumincentive for IXCs to use transportfacilities efficiently. IXCs may order,and LECs must provide, dedicatedtransport links with NTS costs on theserving wire center-to-tandem routewith no assurance that the traffic-sensitive, per-minute revenues collectedwill cover the NTS costs of the link. Aswe stated at the time, the unitary ratestructure was intended as an interimmeasure to allow IXCs time to preparefor a fully cost-based transport ratestructure. Third TransportReconsideration Order. IXCs have nowhad well over a decade since divestitureto so prepare. We agree with theCompTel decision that it is time to bringthis period of preparation to a close asexpeditiously as possible withoutcausing severe disruption to carriers.CompTel, 87 F.3d at 530.

179. Second, by bundling thededicated and common portions of thetransmission component of tandem-switched transport into a single, end-to-end per-minute charge, the unitary ratestructure inhibits the development ofcompetitive alternatives to incumbentLEC tandem-switched transport. Whilewe have required incumbent LECs toprovide the collocation, signalling, andunbundled network elements necessaryfor new entrants to compete withincumbent LECs without having toreplicate the incumbent LEC’sinteroffice transport network, see LocalCompetition Order; ExpandedInterconnection with Local TelephoneCompany Facilities, CC Docket No. 91–141, Memorandum Opinion and Order,59 FR 38922 (August 1, 1994);Expanded Interconnection with LocalTelephone Company Facilities, CCDocket No. 91–141, Transport Phase II,Third Report and Order, 59 FR 32925(June 27, 1994), we have not correctedthe non-cost based aspects of ourtandem-switched transport ratestructure that reduce incumbent LEC


rates for tandem-switched transportservices. Several commenters havenoted that the tandem-switchedtransport market, despite our efforts, issubject only to limited competition.Moreover, several competitive entrantshave stated that they have the capabilityand desire to offer some or all of thecomponents of tandem-switchedtransport on a competitive basis, butthat the present, unitary rate structureinhibits the development of competitionin this area. In addition, eachcomponent of tandem-switchedtransport is not equally susceptible tocompetitive entry; it is relatively easierfor a new entrant to compete to providethe dedicated serving wire center-to-tandem link than it would be tocompete to provide either the tandemswitch itself or the myriad commontransport end office-to-tandem links.Thus, in order to permit the fullestdevelopment of competitive alternativesto incumbent LEC networks, we need tounbundle reasonably segregablecomponents of incumbent LEC transportservices and price them in the mannerin which costs are incurred.

180. Third, the interim rate structuredoes not best promote ‘‘full and fair’’interexchange competition. The unitaryrate structure has facilitated the growthof small IXCs to compete with largercarriers. It has achieved this, however,by requiring incumbent LECs to pricefacilities with NTS costs on a per-minute, traffic sensitive basis, in orderto allow small IXCs to offerinterexchange services at ratescomparable to those offered by largercarriers without regard to whether thecharges paid by the small IXCs cover thecosts of the facilities that they use.While this structure has protected‘‘pluralistic supply in the interexchangemarket,’’ see First Transport Order, ourrules should promote competition, notprotect certain competitors. We haverecently concluded that no carrier isdominant with respect to domestic,interexchange services, Motion of AT&Tto be Reclassified as a Non-DominantCarrier, Order, 11 FCC Rcd 3271 (1995).Therefore, to the extent that wedesigned the interim rate structure tofacilitate the growth of small IXCs incompetition with AT&T, we find thatsuch protective rules are no longernecessary. In a competitive market, webelieve that we should strive to makeour rate structure rules consistent withcost-causation principles, so long asthose principles do not conflict withother statutory obligations, such asuniversal service. As the CompTeldecision stated, ‘‘attempt[ing] to recovercosts from IXCs that did not cause those

costs to be incurred would impart thewrong incentives to both actual andpotential providers of local transport,thereby inducing them to offer aninefficient mix of dedicated, [direct-trunked transport], and tandem-switched service.’’ CompTel, 87 F.3d at530–531. Because rules that do notreflect cost-causation may cause IXCs toorder an inefficient mix of transportservices, such rules artificially raise thecosts of providing interexchangeservices. Rules properly reflecting cost-causation, in contrast, will benefit LECs,IXCs, and consumers alike byencouraging competitors to provideservice using facilities efficiently. Inadopting the interim rate structure, wecited AT&T’s estimate that theefficiency benefit to consumers of cost-based pricing and competition couldreach $1 billion annually. FirstTransport Order. Our adoption of thethree-part rate structure is intended topermit consumers the benefits of evengreater service efficiency.

181. We therefore adopt the three-partstructure as the final tandem-switchedtransport rate structure because thisstructure most closely reflects themanner in which LECs incur the costsof each component of the overalltandem-switched transport service.When combined with our actions withrespect to the TIC, our adoption ofactual minutes of use as the appropriatefactor for determining per-minute ratesfor common transport circuits, and ourallocation of the full cost of the tandem-switch to the tandem-switching rateelements, we expect that this structurewill benefit LECs, IXCs, competitiveproviders of access services, andconsumers. Tandem-switched transportfacilities are sized to accommodate peaktraffic loads, including overflow trafficfrom IXCs using direct-trunkedtransport facilities. Several commentershave stated that, until now, theseoverflow customers have not borne thefull costs of these facilities becauseoverflow customers pay only the sameper-minute transmission chargesapplicable to other IXCs. The three-partrate structure will require the IXCpurchasing tandem-switchedtransmission facilities to pay the fullNTS costs of the dedicated serving wirecenter-to-tandem link, without regardfor the amount of traffic transported.This benefit, in turn, will substantiallyincrease IXC incentives to use tandem-switched transport efficiently foroverflow traffic.

182. Some commenters argue that weshould retain the unitary rate structurebecause tandem-switched transport, as aservice, has traditionally been offeredon an end-to-end basis. We agree that

the transmission component of tandem-switched transport has in fact beenoffered on an end-to-end basis, but onlypursuant to the requirements of the MFJand our interim rate structure rules aspart of a transition to cost-based rates.We find, however, that the transmissioncomponent of tandem-switchedtransport is not, in fact, provisioned bythe incumbent LEC on an end-to-endbasis. Purchasers of direct-trunkedtransport purchase an end-to-endservice; they purchase from theincumbent LEC transport capacitybetween two end points. Tandem-switched transport customers, incontrast, purchase use of the tandemswitch to route traffic to their POP. Byvirtue of their decision to choosetandem-switched transport, thesecustomers specifically obligate the LECto transport their traffic between theserving wire center and the tandemserving a particular end office or groupof end offices and to perform thetandem switching function. Becausethey cause the incumbent LEC to incurthe costs of transmitting their trafficbetween the serving wire center and thetandem, tandem-switched transportcustomers should, as a matter of cost-causation, pay the costs of reaching thetandem. In providing tandem-switchedservice, incumbent LECs must provisiontwo separate circuits with distinctlydifferent cost characteristics—onededicated, and one shared. Tandem-switched service, therefore, is notprovisioned on an end-to-end basisbetween the end office and serving wirecenter, but in three parts: (1)transmission from one ‘‘end,’’ the endoffice, to the tandem; (2) the tandemswitching function itself; and (3)transmission from the tandem to theother ‘‘end,’’ the serving wire center.Just as the tandem-switched transportcustomer pays a separate charge for thetandem switch, the tandem-switchedtransport customer should payseparately for the two distincttransmission components.

183. Other commenters argue that thethree-part rate structure will create LECincentives to engage in inefficientnetwork reconfiguration, placingtandems far from end offices andserving wire centers simply to increasetandem-switched transport revenues.These commenters further argue that, ifwe adopt the three-part rate structure,we need to control this incentive byestablishing a process for review of theincumbent LECs’ tandem deploymentdecisions. Based on this record, weconclude that these commenters’ fearsare not well founded. An incumbentLEC would likely incur substantial costs


to reconfigure placement of its tandemswitches specifically to disadvantageIXC users of tandem switched transport.Because we expect the three part ratestructure to catalyze the development ofcompetition, we conclude that theincumbent LEC would not be likely toincur such costs. Although theincumbent LEC might be able toincrease its tandem-switchedtransmission revenues in the short termto reflect inefficient routing, as moreefficiently configured competitors enterthe market, the LEC would not be ableto sustain such artificially inflated ratesand would then need to incur additionalcosts to reconfigure its networkefficiently. Because, under our newcompetitive paradigm, a multitude ofinvestment opportunities, includingwireless services, video, and interLATAtoll, may emerge for incumbent LECs,we agree with Ameritech that ‘‘[s]uchmisspent capital outlays and inefficientnetwork configuration simply would notmake good business sense.’’

184. Moreover, the redeployment oftandem switches affects networkefficiency with respect to both theincumbent LEC’s own local and tolltraffic, as well as intrastate andinterstate access. Therefore, inefficientnetwork reconfiguration would causeharm both to tandem-switched transportcustomers and to the incumbent LECitself. Any additional transport revenuesthat the incumbent LEC generatedthrough inefficient networkreconfiguration would be at leastpartially offset by the additional costs oftransporting the LEC’s own traffic insimilarly inefficient ways. As discussedabove, as competition develops in thelocal market, we expect that an LECwould be reluctant to take steps todecrease its own efficiency.

185. Some commenters argue that weshould retain the unitary rate structurebecause direct-trunked transport andtandem-switched transport circuitsoften travel along the same routes usingthe same physical facilities. Thesecommenters argue, therefore, that itwould be unfair or discriminatory torequire tandem-switched transport usersto purchase transmission based onairline mileage from the end office tothe tandem to the serving wire center,while users of direct-trunked transportare permitted to purchase the sameroute on the basis of airline mileagefrom end office to the serving wirecenter directly. Other commenters arguethat we should require the LECs to offerboth types of transport based on actualroute miles, revealing actual LECnetwork efficiencies and inefficiencies.

186. We disagree with both of theseproposed modifications. An IXC

purchasing direct-trunked transportrequires the incumbent LEC to providetransport service between the end officeand the serving wire center. Because theLEC must route direct-trunked transporttraffic between only these two points,our rate structure requires the IXC topay only for the airline mileage betweenthose two points, reflecting the directmileage route between the locations inthe incumbent LEC network designatedby the access customer. In contrast, anIXC purchasing tandem-switchedtransport purchases use of the accesstandem switch and therefore requiresthe incumbent LEC to provide servicebetween the serving wire center and thetandem, and between the tandem andthe end office. Under the three part ratestructure, the tandem-switchedtransport customer, like the direct-trunked transport customer, pays for thedirect mileage between the locations inthe incumbent LEC network designatedby the customer—for tandem-switchedtransport, the serving wire center totandem, and the tandem to the endoffice. Because the IXC has chosen tomake use of the LEC tandem switchingfacilities, it should pay explicitly for thetransport necessary to reach the tandem.The direct-trunked transport customer,in contrast, does not make use of thetandem switching facilities; even if theLEC routes direct-trunked transporttraffic through the tandem office, thistraffic is not switched at the tandem.While the incumbent LEC may chooseto route direct-trunked traffic throughthe tandem office based on its ownassessment of whether it iseconomically efficient to do so, thedirect-trunked transport customer paysonly for direct mileage between thelocations it designated in the network.

187. We are not persuaded byarguments that we should retain theunitary pricing structure because theincumbent LEC, and not the tandem-switched transport customer, hasselected the tandem location and,consequently, the tandem-switchedtransport customer should not pay forthe direct mileage to and from thetandem location. The incumbent LECequally chooses the locations of theserving wire center and end office, andyet access customers routinely paymileage charges to and from thoselocations, rather than between the endpoints of the access service—the POPand the end user location. Similarly, wefind that the three-part rate structuredoes not discriminate against IXCs usingtandem-switched transport. Asdiscussed above, the tandem-switchedtransport customer, unlike the direct-trunked transport customer, requires the

incumbent LEC to route its traffic to thetandem, and so should pay the costs ofreaching the tandem. In addition, anIXC operating efficiently often maychoose to locate its POP at or close tothe tandem, if the tandem-switchingoffice also can function as the servingwire center, thus eliminating virtuallyall of the dedicated transport costs ofthe tandem-to-serving wire center link.While such an arrangement may be themost efficient transport architecture fortandem-switched transport, our currentunitary pricing structure does not reflectthe underlying costs of tandem-switched transport transmissionfacilities and so does not encourageefficient transport architectures.

188. The introduction of more modernnetwork architectures, such asSynchronous Optical Network (SONET)rings, does not alter our conclusion thatthe three-part rate structure most closelyapproximates the nature of costsassociated with each component oftandem-switched transport. WorldCom,for instance, asserts that the ‘‘pyramid’’diagram included in the NPRM asFigure 1 is outdated and submits adiagram illustrating interoffice tandem-switched transport in a ring-basednetwork. WorldCom states that themultiple routing options and thereduced distance sensitivity of transportcosts in a SONET environment compelretention of the unitary rate structure.We conclude, however, that thedifferences WorldCom identifies do notsupport retention of the unitary ratestructure because, even in a ring-basednetwork, the three-part rate structuretreats direct-trunked and tandem-switched transport consistently. In afiber-optic or ring-based network,dedicated, direct-trunked transportcircuits are given a constant, andexclusive, time slot assignment on alarge, time-division multiplexed fiber-optic cable. The incumbent LEC routestraffic for the IXC purchasing the directtrunk into the dedicated circuit or timeslot, where it is received elsewhere onthe ring or in the network at the servingwire center. The direction or preciserouting of the signal around the ring isirrelevant for purposes of the ratestructure because the transport is pricedon an airline-mileage basis between thetwo end points. Capacity dedicated to aparticular IXC, however, is not availableto the LEC for other purposes.

189. SONET ring architecture offersthe LEC the capability to transport largetraffic volumes with redundant routingoptions, but it does not alter thefundamental nature of tandem-switchedtransport. Tandem-switched transport isfunctionally very different from direct-trunked transport because, by


definition, the incumbent LEC mustroute an IXC’s tandem-switched trafficthrough the tandem switch serving aparticular end office. Whether using aSONET ring or not, the LEC must routeits tandem-switched traffic into one ofmany shared common transport circuitsor time slots allocated for transportbetween the end office and the tandemswitch, and onto a second dedicatedcircuit or time slot for transport betweenthe serving wire center and the tandem.Despite parties’ arguments to thecontrary, the precise routing of thetraffic to the tandem, including thedirection it may take around a SONETring, is irrelevant to the rate structurebecause IXCs purchase transport underthe three-part rate structure based onairline mileage to the tandem.

190. As discussed in connection withdirect-trunked transport, above, ringnetwork architectures may causeincumbent LECs transport costs tobecome less distance sensitive. Becauseour rate structure permits, but does notrequire, transport rates to be distancesensitive, LECs remain free to establishless distance sensitive transport rates toreflect the changing nature of thesecosts.

191. We also decline Teleport’ssuggestion to establish a flat-ratedcharge for the tandem switch, tied to theamount of dedicated capacity each IXC’sserving wire center-side trunk portsprovide. While the costs of thesededicated trunk ports are NTS, therecord before us does not reflect that allof tandem-switching costs are similarlyNTS. Rather, we conclude at this timethat the costs of tandem switching likelyvary, as do those of local switching, ona traffic-sensitive basis. In light of thisconclusion, we find that it would beunreasonable to permit the incumbentLEC to recover all of its tandem-switching costs through flat-ratedcharges. As with the local switch, untilwe gain more experience with ratestructures for unbundled networkelements that are implemented pursuantto Sections 251 and 252 and thatsegregate switching costs into traffic-sensitive and NTS components, we willcontinue to adhere to the current, per-minute rate structure for sharedswitching facilities.

192. We also decline to adopt in fullsuggestions that we (1) retain theunitary pricing structure for tandem-switched transport, while (2) exemptingIXCs and competing LECs that do notuse the transport facilities supplied bythe incumbent LEC from paying the TICand (3) preventing the incumbent LECfrom deaveraging the TIC within a stateduring a five year transition period. Weare modifying our rules to prohibit

incumbent LECs from assessing any per-minute residual TIC charge on anyswitched minutes of CAPs thatinterconnect with the incumbent LECswitched access network at the endoffice. In doing so, we adopt a positionsubstantially similar to the secondenumerated point, above, whichTeleport and CompTel characterize asthe ‘‘most important’’ feature of thisproposal. In addition, we are also takingother measures that will reducesubstantially or eliminate the TIC in anexpeditious manner. We decline,however, to adopt the other twosuggestions. As explained in more detailabove, the unitary rate structure is notcost-based in that it requires incumbentLECs to recover costs incurred on anNTS basis through per-minute chargesand inhibits the development ofcompetition by bundling reasonablysegregable components of tandem-switched transport together and pricingthem in a manner that does not reflectcost causation. We conclude that ournew paradigm of promoting efficientcompetition requires that incumbentLECs adopt a cost-based transport ratestructure and that entrants providingtransport facilities in competition withthe incumbent LEC not pay the TIC.

193. Although in their comments inthis proceeding the incumbent LECsvirtually unanimously favor the three-part rate structure as most consistentwith principles of cost-causation, werecognize that incumbent LECs may facecompetition from competitors that arenot limited to the three-part ratestructure we adopt for incumbent LECstoday. As such competition develops,the incumbent LEC may wish torespond by offering tandem-switchedtransport on a unitary pricing basis. Wewill address issues relating to whenincumbent LECs should have theflexibility to offer a unitary tandem-switched transport rate structure inconnection with our discussion of otherpricing flexibility issues in a subsequentReport and Order that we will adopt inthis proceeding.

194. Peak and Off-Peak Pricing. Aswith the local switch, we conclude thatwe should not mandate a peak-ratepricing structure for the tandem switchor common transport at this time. Manyof the same practical difficulties withestablishing, verifying, and enforcing arational, efficient, and fair peak-ratestructure exist in the context of thetandem switch. We will considerwhether incumbent LECs should havethe flexibility to develop such peak andoff-peak rate structures for localswitching on a permissive basis whenwe consider other issues of ratestructure flexibility in a subsequent

Report and Order that we will adopt inthis proceeding.

d. Rate Levels

195. Allocation of 80 Percent of theTandem Switching RevenueRequirement to the TIC. In establishingthe interim transport rate structure, werequired incumbent LECs to base theirinitial tandem switching charge on 20percent of the interstate tandem-switching revenue requirement. Inremanding this portion of the interimrate structure to us, the D.C. Circuitdirected us either to implement a cost-based tandem switching rate or offer arational and non-conclusory analysis insupport of our determination that analternative structure is preferable.

196. Based on the record in thisproceeding, we reallocate much of theremaining 80 percent of the tandemswitch revenue requirement back to thetandem switching rate elements in threesteps. We conclude that this action ismost consistent with cost-causation, andwith the general approach we are takingin this Order regarding pricing issues.We do not require all of the 80 percentto be reallocated to tandem switchingrates because the tandem-switchingrevenue requirement includes, not onlythe costs of the tandem switch, but othercosts, such as SS7 signalling costs andtandem port costs, which we arerequiring to be reallocated elsewhere.

197. Furthermore, if we required theprice cap LECs to reallocate, dollar-for-dollar, the entire portion of the tandemswitching revenue requirement that wereallocated to the original TIC in theFirst Transport Order, we would denytandem-switched transport customersthe continuing benefits of past X-factorreductions in the revenues permittedunder price caps. Therefore, in order topreclude recovery of tandem switchingcosts in excess of the current revenuespermitted under price caps, we directprice cap incumbent LECs first toaccount in the following manner for theeffects of ‘‘GDP–PI minus X-factor’’reductions to the original portion of thetandem switching revenue requirementallocated to the TIC in the FirstTransport Order. Each price cap LECfirst should calculate the percentage ofits total original TIC that represented the80 percent reallocation of its tandemswitching costs when the TIC wascreated. It should then calculate thispercentage of its current TIC, whichrepresents the extant portion of thereallocated tandem switching costs. It isthis extant portion that the price capLECs should reallocate to tandemswitching as described in the nextparagraph.


198. In access tariff filings to becomeeffective on January 1, 1998, incumbentLECs must identify the portion of thetandem-switching revenue requirementcurrently in the TIC that they reallocateto each rate element, including, asapplicable, SS7 signalling, tandem portcosts, or other rate elements. They mustthen reallocate one third of the tandemswitching revenue requirementremaining in the TIC to the tandemswitching rate element. EffectiveJanuary 1, 1999, incumbent LECs shallreallocate approximately one half of theremaining amount of the tandemswitching revenue requirement in theTIC to the tandem switching rateelements. Effective January 1, 2000,incumbent LECs shall reallocate anyportion of the tandem switchingrevenue requirement remaining in theTIC to the tandem switching rateelement. This three-stepimplementation of this change permitsIXCs time to adjust their use of variousincumbent LEC transport services, butsets a definite end date in the nearfuture, thus responding to the CompTeldecision’s concerns regarding the lengthof the transition to a cost-basedtransport rate structure.

199. Some commenters argue that,rather than reallocating revenues fromthe TIC to other rate elements, weshould reinitialize tandem-switchedtransport rates to levels reflecting longrun incremental costs, makingreallocation of TIC revenues to othertransport rate elements unnecessary. Wehave decided in this Order, however,not to reinitialize access rates based onforward-looking cost principles. Wehave instead determined that the firststep in access reform is to make thecurrent system as economically efficientas is possible within the limits ofcurrent ratemaking practices. Thus, thefocus of this portion of this proceedingis on the development of cost-causativerate structure rules. While we are takingseveral prescriptive steps using existingratemaking methods to reduce initialbaseline rates, we are generally adoptinga market-based approach, with aprescriptive backdrop, to move ratesover time to levels reflecting forward-looking economic costs. We disagreewith those commenters that argue thatthe Local Competition Order requires usimmediately to prescribe rate levels foraccess elements based on long-runincremental costs. The LocalCompetition Order addressed, inter alia,the pricing of unbundled networkelements. While unbundled networkelements may be used to provideinterstate access services, theiravailability at TELRIC-based prices does

not compel adoption of similar rates foraccess services. We intend instead torely on the availability of unbundlednetwork elements to place market-baseddownward pressures on access rates,subject to a prescriptive backstop. Wewill further address questions related toreinitialization to TELRIC rate levels inconnection with our discussion of theprescriptive approach to access reform.

200. Use of Switched AccessOverhead Loadings for Initial TandemSwitching Rates. In setting rates, theinterim transport rate structure derivedboth direct-trunked transport rates andtandem-switched transmission ratesusing relatively low overhead loadingsapplicable to special access. Tandemswitching rates, in contrast, were setusing relatively higher switched accessoverhead loadings. As a result, thetandem switching revenue requirementbecame relatively high, in comparisonto other transport rate elements.

201. Several commenters in thisproceeding contend that our use ofspecial access overheads in settingdirect trunked transport rates wasinappropriate because, while specialaccess is used almost exclusively inhigh density, generally urban areas,direct-trunked transport and, to an evengreater extent, tandem-switchedtransport are used in less dense areas. Inthese less dense areas, overhead costsassociated with transport may be higherthan those associated with specialaccess in urban areas. Some commentershave argued that we should either (1)equalize the overhead loading factors forall transport options by directing thatthe difference in transport rates is equalto the difference in the long runincremental cost of each transportoption (DS3, DS1, and tandem-switchedtransport); or (2) otherwise ensure thattransport customers pay an equal dollaramount of overhead per unit of traffictransported.

202. We conclude that we need tomake no change to the overheadsattributed to tandem switching. Asdiscussed above, we have decided not tobase access prices directly at this timeon incremental cost studies, but insteadto make significant changes in existingratemaking practices as the first step inaccess reform. Our current methodsallocate overhead in a reasonable, cost-based manner. In consultation with theJoint Board on JurisdictionalSeparations, the Commissionestablished procedures for allocatingoverhead expenses between the stateand interstate jurisdictions. See, e.g., 47CFR § 36.192, separating CorporateOperations Expenses, USOA Accounts6710 and 6720, on the basis of theseparation of the Big Three Expenses:

Plant Specific Expenses, Plant Non-Specific Expenses, and CustomerOperations Expenses. Our Part 69 costallocation rules in turn allocatedinterstate direct investment to broadcategories, including Central OfficeEquipment (with respect to both localswitching and tandem switching) andCarrier Cable and Wire Facilities (withrespect to special access, direct-trunkedtransport, and tandem-switchedtransport transmission facilities). 47CFR §§ 69.305–69.306. Otherinvestment, including overhead, wasallocated among these categories inproportion to the dollar amounts of netdirect investment allocated to thesecategories. 47 CFR § 69.309. Similarly,direct expenses, where possible, wereallocated to the category to which theexpenses are related. E.g., 47 CFR§ 69.401. Other expenses, includingoverheads, are allocated on the samebasis as other investment, according torelative dollar amounts allocated to thevarious categories. 47 CFR § 69.411. TheCommission has stated that initialallocation of overheads based onrelative costs closely approximates aneconomically efficient method assumingthat the elasticity of demands for thevarious outputs is not too dissimilar.See, e.g., First Transport Order.

203. Our Part 69 cost allocation rules,therefore, established category revenuerequirements that included overheadsallocated generally based on relativecosts. Once these initial revenuerequirements were established, our Part69 rules permitted incumbent LECs torecover all costs assigned to eachcategory through the rate elementsestablished for that category. Theincumbent LECs were permitted toassign overhead costs among thecategory rate elements in any way thatis just and reasonable and notunreasonably discriminatory. 47 U.S.C.secs. 201–202. We find that it isreasonable to have set overheadloadings for tandem switchingconsistently with the overhead loadingsfor local switching, and disagree withthose parties that argue that there is nocost justification for the currentallocation of overheads to the tandemswitch. The direct costs of both kinds ofswitching are fundamentally the samein that both types of switches arecomprised of ports and a switchingmatrix. By contrast, the direct costs oftransmission consist of outside plantand circuit equipment and certaincentral office equipment. So long asconsistent overhead loadingmethodologies were used acrossswitching functions, and acrosstransmission functions, we find that a


reasonable cross-over is established foraccess customers between direct-trunked transport and tandem-switchedtransport. As competition develops, wecan also rely on market forces topressure incumbent LECs to allocateoverheads among rate elements ineconomically efficient ways. We addressissues concerning the use of specialaccess prices to initialize direct-trunkedtransport rates in the interim raterestructure below in our discussion ofthe TIC.

204. We also decline to adopt arequirement for equalized overheadloadings. Overhead loadings are used toassign costs that do not qualify as thedirect costs of a particular service.Reasonable definitions of direct costsoften leave in the overhead categorycosts that might reasonably be deemedattributable to a given service. Thus, ifall of a carrier’s costs are classified aseither ‘‘direct costs’’ or ‘‘overheads,’’ theoverhead category will likely includecosts that should not necessarily applyuniformly to all services. As a result, wethink it desirable not to adopt a policythat is too specific and too rigid, andthat might not permit recognition oflegitimate differences in costingdefinitions. Furthermore, in acompetitive market, it would be merehappenstance if different products orservices of a single company recovereduniform amounts of overhead. If wewere to require equalized overheadloadings, we would be interfering withthe market discipline on which we areprimarily relying. We might, forexample, prevent an entrant fromrealizing a reasonable profit opportunitybased on a rigid overhead loadingrequirement.

205. In determining that our existingcost allocation rules reasonablyallocated overhead to the initial tandemswitching rate element and that we thusneed not change the overheads currentlyattributed to tandem switching, werecognize that the D.C. Circuit inCompTel remanded the overhead issueto the Commission for furtherexplanation and stated that the ‘‘costallocation to the tandem switch’’ underthe existing allocation rules ‘‘is, by theCommission’s own estimation, grosslyexcessive.’’ CompTel, 87 F.3d at 533.The court did not provide a cite for itscharacterization of the Commission’s‘‘estimation,’’ but the court may havebeen referring to the agency’s finding inthe First Transport Order that ‘‘most,but not all, of the interstate tandemrevenue requirement is attributable totandem-switched transport’’ (emphasisadded). The Commission in that orderalso identified only one category ofcosts—having to do with SS7

technology—that appeared to bemisallocated to tandem switching. Id.Elsewhere in this Order, we have takensteps to address that misallocation ofSS7 costs. That correction having beenmade, we find that our existing rulesreasonably allocate overhead to tandemswitching for the reasons discussedabove.

206. Use of actual minutes of userather than an assumed 9000 minutes ofuse. For tandem-switched transportrates to be presumed reasonable, theinterim rate structure requiresincumbent LECs to set per-minutetandem-switched transport rates using aweighted average of DS1 and DS3 ratesreflecting the relative numbers ofcircuits of each type in use in thetandem-to-end office link, and assumingcircuit loading of 9000 minutes of useper month per voice-grade circuit. FirstTransport Order. Based on the recordbefore us, we find that continued use ofthis 9000 minutes of use assumption isno longer reasonable. Many commentersstate that their actual traffic levels aresubstantially lower than 9000 minutesof use per month. Some incumbentLECs, particularly smaller LECs in ruralareas, indicate that their actual trafficlevels may be as low as 4000 minutes ofuse per month per voice-grade circuit.Accordingly, we conclude that rates forthe common transport portion oftandem-switched transport must be setusing a weighted average of DS1 andDS3 rates reflecting the relative numbersof DS1 and DS3 circuits in use in thetandem-to-end office link, and using theactual voice-grade switched accesscommon transport circuit loadings,measured as total actual minutes of use,geographically averaged on a study-area-wide basis, that the incumbent LECexperiences based on the prior year’sannual use. Incumbent LECs thatdeaverage their transport rates underour existing zone-based deaveragingrules, see 47 CFR § 69.123, maysimilarly deaverage the actual minutesof use figures that they use to calculateper-minute common transport rates.

207. Our assumption that voice-gradecommon transport circuits experienceuniform loadings of 9000 minutes of usewas initially based on 1983 datasubmitted in the original MTS andWATS Market Structure proceeding.MTS and WATS Market Structure, CCDocket No. 78–72, Phase I,Memorandum Opinion and Order, 48FR 42984 (September 21, 1983). In usingthis assumption as part of the interimrate structure, we stated that, ‘‘[t]he9000 minutes per circuit per monthstandard serves as a convenient startingpoint in the context of a short-term,interim rate structure.’’ First Transport

Reconsideration Order. We rejected atthat time requests to develop a loadingfactor for small LECs that would reflecttheir actual, substantially lower circuitloading levels, stating that, ‘‘the benefitsto be obtained from use of moreindividualized loading factors areoutweighed by the benefits of theadministrative convenience of a uniformloading factor and of avoidingverification difficulties.’’ Id. Given thenew competitive paradigm embodied inthe 1996 Act, we conclude that thisassumption must give way to chargesbased on actual usage levels. The sameconversion factor is not appropriate foreach incumbent LEC. Because the 9000minute assumption appears to havesubstantially overstated the actual trafficlevels on many circuits, we nowconclude that the current rate structureis unlikely to recover the full costs ofcommon transport. Costs that properlyshould be recovered from commontransport rate elements may currently berecovered through TIC revenues.Because the 9000 minutes of use loadingfactor has contributed, possiblysignificantly, to the level of the non-cost-based TIC, we find that continueduse of this factor is no longerreasonable.

208. We therefore direct incumbentLECs to develop common transport ratesbased on the relative numbers of DS1and DS3 circuits in use in the tandem-to-end office link, and using actualvoice-grade circuit loadings,geographically averaged on a study-area-wide basis, that the incumbent LECexperiences based on the prior year’sannual use. As discussed above,incumbent LECs that deaverage theirtransport rates under our existing zone-based deaveraging rules may similarlydeaverage the actual minutes of usefigures that they use to calculate per-minute common transport rates. As theydevelop transport rates based on actualminutes of use, we require incumbentLECs to use any increase in commontransport revenues to decrease the TIC.These rates must be included in the LECaccess tariff filings effective January 1,1998.

209. We disagree with commentersarguing that the actual number ofminutes a circuit is in use is irrelevantin a rate-setting context. Thesecommenters argue that rates should beset based on forward-looking coststudies using Commission-determined‘‘efficient’’ traffic levels, which theyargue may be far higher than either theactual traffic levels, or the 9000 minutesof use assumption. As explainedelsewhere, we are not taking the generalapproach of prescribing rates at forwardlooking economic costs, and we decline


to make an exception in this instance.We are instead reforming access chargesso that they more closely reflect thecosts imposed by individual accesscustomers. We also do not find itnecessary to employ different principleshere to ensure that incumbent LECs facesufficient incentives to design theirnetworks to achieve efficient usagelevels. LECs subject to price capregulation already have only limitedability to raise rates to cover the costsof inefficient network designs, and areable to benefit from increased profits astheir efficiency improves. In addition, ascompetition develops for local service,all incumbent LECs will face increasingpressure to provide service as efficientlyas possible.

C. Transport Interconnection Charge(TIC)

1. Background210. Under our Part 36 separations

rules, certain costs of the incumbentLEC network are assigned to theinterstate jurisdiction. The Part 69 costallocation rules allocate these costsamong the various access andinterexchange services, includingtransport. In the First Transport Order,we restructured interstate transport ratesfor incumbent LECs. The restructurecreated facility-based rates for dedicatedtransport services based on comparablespecial access rates as of September 1,1991, derived per-minute tandem-switched transport transmission ratesfrom those dedicated rates, establisheda tandem switching rate, andestablished a TIC that initially recoveredthe difference between the revenuesfrom the new facility-based rates andthe revenues that would have beenrealized under the preexisting ‘‘equalcharge rule.’’ Under the equal chargerule, which arose from the AT&Tdivestiture of the BOCs, the BOCs wererequired to charge a per-minute,distance-sensitive rate for their transportofferings, regardless of how theunderlying costs were incurred. The TICwas intended as a transitional measurethat initially made the transport raterestructure revenue neutral forincumbent LECs and reduced anyharmful interim effects on small IXCscaused by the restructuring of transportrates. Approximately 70 percent ofincumbent LEC transport revenues aregenerated through TIC charges, orapproximately $3.1 billion, according toUSTA.

211. The TIC is a per-minute chargeassessed on all switched access minutes,including those of competitors thatinterconnect with the LEC switchedaccess network through expanded

interconnection. In the NPRM, wesought comment on how to reduce andeliminate the TIC in a manner thatfosters competition and responds to theD.C. Circuit’s CompTel remand. Wesought comment on different methods ofrecovering the costs currently recoveredby the TIC, including: (1) Giving theincumbent LECs significant pricingflexibility and allowing market forces todiscipline the recovery of the TIC, eitheralone or in conjunction with a phase-outof the TIC; (2) quantifying andcorrecting all identifiable costmisallocations and other practices thatresult in costs being recovered throughthe TIC; (3) combining the aboveapproaches, for example, by addressingdirectly the most significant andreadily-corrected misallocations, andthen relying on a market-basedapproach to reduce what remains of theTIC; (4) providing for the termination ofthe TIC over a specified time, such asthree years. We specifically soughtcomment on the possible reassignmentof costs based on several explanationsfor the amounts in the TIC. The NPRMalso sought comment on how theresolution of the issues surrounding theTIC would be affected by decisions onuniversal service, by the level of anyresidual costs, and by the adoption ofeither the market-based or prescriptiveapproach to access reform.

2. Discussion212. As a per-minute charge assessed

on all switched access minutes,including those of competing providersof transport service that interconnectwith the LEC switched access networkthrough expanded interconnection, theTIC adversely affects the developmentof competition in the interstate accessmarket. First, as discussed more fullybelow, some of the revenues recoveredthrough the TIC should be recoveredthrough other switched access elements,including transport rates other than theTIC. The TIC, as currently structured,provides the incumbent LECs with acompetitive advantage for some of theirinterstate switched access servicesbecause the charges for those servicesdo not recover their full costs. At thesame time, the incumbent LECs’competitors using expandedinterconnection must pay a share ofincumbent LEC transport costs throughthe TIC. Under our expandedinterconnection rules and policies,competitors may interconnect with theincumbent LEC’s facilities at the endoffice and supply their own transport.For a more detailed discussion ofexpanded interconnection, seeExpanded Interconnection with LocalTelephone Company Facilities, CC

Docket No. 91–141, MemorandumOpinion and Order, 59 FR 38922(August 1, 1994). Second, all otherthings being equal, the usage-rated TICincreases the per-minute access chargespaid by IXCs and long-distanceconsumers, thus artificially suppressingusage of such services and encouragingcustomers to explore ways to bypass theLEC switched access network,particularly through the use of switchedfacilities of providers other than theincumbent LEC that may be lesseconomically efficient than incumbentLECs.

213. As we noted in the NPRM, ourgoal is to establish a mechanism toreduce and eliminate the TIC in amanner that fosters competition andresponds to the D.C. Circuit’s remand.To that end, we below identify severalcosts included in the TIC that should bereallocated to other access elements. Weconclude, however, that on the presentrecord, we cannot immediatelyeliminate the TIC entirely through thesereassignments. We establish amechanism that should substantiallyreduce the remaining TIC over a short,but reasonable period. In addition, wewill in the near future refer a broadrange of separations issues to a JointBoard for purposes of determiningwhether certain costs currentlyallocated to the interstate jurisdictionand recovered through the TIC moreproperly should be allocated to theintrastate jurisdiction. Finally, weestablish the means by which theremaining TIC amounts are to berecovered.

a. Reallocation of Costs in the TIC

214. The record in response to theNPRM clearly establishes that somecosts in the TIC should be reallocated toother access elements. USTA, inconjunction with the incumbent LECs,submitted extensive comments settingforth an incumbent LEC consensusexplanation of the causes for the sumsin the TIC and estimates of the amountsassociated with each explanation. Whilethe current rulemaking record will notpermit us to prescribe specific amountsthat individual incumbent LECs mustshift from the TIC to specific access rateelements, it does permit us to directincumbent LECs to make certain costreallocations and to require them tocalculate the appropriate level of thereallocation in the supporting materialsfiled with the tariffs implementing thechanges. Below, we discuss each of theidentified causes of costs being includedin the TIC and the extent to which costsshould be reallocated to other accesselements or categories.


215. In this Order, we do not addresscertain rate structure issues relating toincumbent LECs subject to rate-of-returnregulation. These LECs account forrelatively few access lines. In someinstances we direct price cap LECs toallocate costs to new rate elements thatdo not currently exist for rate-of-returnLECs. We anticipate that we willpropose similar rate elements in theforthcoming notice of proposedrulemaking addressing rate structureissues for incumbent LECs subject torate-of-return regulation. Recognizingthe expense and difficulties ofmodifying billing systems, we concludethat, until the rate structure issues areresolved for rate-of-return companies,the costs allocated to new elements andany residual TIC revenues may continueto be recovered by the incumbent LECsthat are not subject to price capregulation through per-minute TIC ratesassessed on both originating andterminating access.

216. As their primary challenge to theincumbent LEC proposals to reallocatecosts from the TIC, several parties arguethat we should use forward-looking costprinciples, or TELRIC, in determininghow much to shift from the TIC to otheraccess categories. Some partiesadvocating the use of such forward-looking cost standards assert that anycosts not meeting these forward-lookingcost standards should be eliminatedfrom the TIC, and the incumbent LECsshould not be permitted to recover thoseamounts. One group of consumeradvocates proposes that we need notcomplete TELRIC studies beforesubstantially reducing the TIC becauseBA/NYNEX has already proposed, aspart of their access charge reformcompromise plan, to eliminate up to 80percent of the TIC pending adetermination of ‘‘service related’’ costsby the Commission. We conclude,however, that immediate, widespread,prescriptive action is not necessary topressure access rates toward market-based levels. Instead, we havedetermined that the most appropriatefirst step towards access reform is tomake the current rate structure aseconomically efficient as possiblewithin the limits of past ratemakingpractices. These practices includesetting rates based on interstate-allocated costs, subject to price capconstraints for most large carriers. Aswe discuss more fully in Section IV,below, we intend in the future to relyprimarily on market forces, with aprescriptive backdrop, to move ratestoward forward-looking economic cost.Therefore, because we currently are notprescribing a forward-looking cost

method for access reform, we willrequire reassignment of certain TICrevenues based on an analysis of theseparated, booked costs alreadyrecovered through the TIC.

217. SS7 costs. Based on the recordbefore us, we conclude that SS7 coststhat are recovered by the TIC should beremoved from the TIC and allocated tothe traffic-sensitive basket. The recorddemonstrates that these costs are relatedto the signalling function and should berecovered through local switching orsignalling rate elements. The costs to beremoved are the costs of signal transferpoints (STPs) that were included in thetandem-switching category forjurisdictional separations purposes andthe cost of the link between the endoffice and the STP that is used only forSS7 signalling. The incumbent LECsshall distribute the STP costsreallocated from the TIC to localswitching or, if the incumbent LEC hasestablished an unbundled signalling ratestructure, to appropriate SS7 elements,in tariffs filed to be effective January 1,1998. The incumbent LEC shalldistribute the costs of the link betweenthe local switch and the STP that areincluded in the TIC to local switchingor, if provided, to the call-setup charge.This change means that the incumbentLECs’ SS7 prices will reflect the fullcost of providing SS7 signalling andprovide the proper price signals todevelopers of new services utilizingSS7. We decline to adopt the suggestionof US West that we reallocate SS7 coststo services in the trunking basket. As weconclude below in conjunction with ourconsideration of the SS7 rate structure,the costs being reallocated areappropriately included in the traffic-sensitive basket.

218. Tandem switching costs. Severalparties argue that the tandem switchingrate must be set to reflect the cost ofproviding the service. In the precedingsection, we modified the existingtandem-switched transport ratestructure and revised certain of thepricing rules applicable to elements oftandem-switched transport to establish acost-based structure and to respond tothe court remand in CompTel v. FCC.The revised pricing rules applicable totandem switching include two separateelements—a flat-rated port charge to beassessed when a port is dedicated to asingle customer and a per minute chargeto be assessed for the traffic-sensitiveportion of the tandem switch. In threeapproximately equal annual steps,beginning January 1, 1998, we requirereallocation of all tandem-switchingrevenues currently allocated to the TICto the tandem-switching rate element.As a result of this modification, the total

revenues recovered through the tandemswitching rates will, subject to price caplimits, increase to the level of costsassigned to the interstate jurisdiction bythe separations process at the end of ourplan. Equivalent changes to the amountsrecovered through the TIC must bemade to ensure that over-recovery doesnot occur. After this adjustment, inaccordance with the CompTel remand,and to facilitate the development ofeconomically-efficient competition fortandem-switching services, the TIC willnot recover any costs that areattributable to tandem switching.

219. DS1/voice-grade multiplexercosts. We conclude that the costs ofDS1/voice-grade multiplexingassociated with analog local switchesshould be reassigned to the newlycreated trunk ports category within thetraffic sensitive basket. Analog switchesrequire a voice-grade interface on thetrunk-side of the end office switch. Ourseparations rules assign the costs ofDS1/voice-grade multiplexers to thecable and wire category. The costs ofthese multiplexers associated withswitched access were originallyincluded in the Part 69 transportrevenue requirement. The revisedtransport rules adopted in 1992established transport rates based on DS1switch interfaces, and thus the rates didnot include the costs of DS1/voice-grademultiplexers. The costs of the DS1/voice-grade multiplexers are, therefore,included in the TIC. Therefore, the costsassociated with DS1/voice-grademultiplexing associated with analoglocal switches should be reassigned tothe trunk ports category within thetraffic sensitive basket, to be consideredin conjunction with the development ofappropriate rates for trunk ports, intariffs filed to become effective January1, 1998. This will make recovery of thecosts necessary to use an analog switchport equivalent to the recovery of digitalswitch port costs, in which themultiplexing function is included in theport itself.

220. Host/remote trunking costs. Weagree with the parties that allege that thecosts of host/remote links not recoveredby the current tandem-switchedtransport rates should be included inthe tandem-switched transport category.The record reflects that the rates forcarrying traffic between the host and aremote switch, for which the tandem-switched transport rates, both fixed andper mile, are assessed, do not recoverthe full costs of this transmissionservice. These charges for host/remoteservice are in addition to charges that anIXC is assessed for either direct-trunkedtransport, or tandem-switched transport,between the serving wire center and the


host end office. This reassignment willensure that these transmission costs willbe recovered from those using thetransmission facilities, and must beincluded in tariff filings to becomeeffective January 1, 1998. We rejectNECA’s suggestion that we includethese costs in local switching on thetheory that remote facilities are installedwhen it is more cost effective to do thatthan it is to install a new switch at theremote location. That would require allusers of local switching to pay for thesehost/remote transmission facilities.Imposing the host/remote transmissioncost on the users of host/remotefacilities is more cost causative and willfacilitate the development of accesscompetition.

221. Additional multiplexersassociated with tandem switching.Based on the record before us, weconclude that an IXC’s decision toutilize tandem-switched transportimposes the need for additionalmultiplexing on each side of the tandemswitch. The revised tandem-switchedtransport rate structure provides forthese multiplexers. For price cap LECs,recovery of the costs associated with themultiplexers should, therefore, beshifted from the TIC to the tandem-switched transport category as ofJanuary 1, 1998, as explained in SectionIII.C. This realignment of costs helpsensure that tandem-switched transportrates are cost based, as required by theCompTel decision, and facilitatescompetitive entry for those services.

222. Use of actual minutes of userather than an assumed 9000 minutes ofuse. The data in the record provided byUSTA and other incumbent LECssupport a finding that for manyincumbent LECs, especially thoseserving less densely populated areas,the assumed 9000 minutes of use percircuit is far higher than actual minutesof use. A tandem-switched transportrate derived by dividing the cost of acircuit by an assumed usage level doesnot recover the costs of the circuit whenthe actual usage is below that level. Thecosts not recovered through tandem-switched transport rates based on ourcurrent 9000 minutes of use assumptionare being recovered through the TIC. Inthe preceding section, we conclude thatthe pricing of tandem-switchedtransport transmission should be basedon the actual average minutes of use onthe shared circuits and that such pricingwould produce a cost-based rate.Accordingly, costs should be removedfrom the TIC equal to the additionalrevenues realized from the new tandem-switched transport rates when it isimplemented in accordance with the

rate structure established in SectionIII.C.

223. Central Office Equipment (COE)Maintenance Expenses. The record inthis proceeding demonstrates thatallocating COE maintenance expenseson the basis of combined COEinvestment produces misallocations ofthese expenses among access services.USTA correctly traces this problem tothe Part 36 separations rules; theproblem is then tracked in our Part 69cost allocation rules. Under our currentrules, COE maintenance expenses areallocated among separations categories,and then access services, based on thecombined investment in the threecategories of the COE plant beingmaintained—Central Office Switching,Operator Systems, and Central Office-Transmission—rather than on theindividual investment in each of thosecategories. As a result, a portion of theexpense of maintaining local switchesand operator systems is recovered inrates for common line, transport, andspecial access even though those do notutilize any local switching or operatorsystems. Correcting this misallocationthrough changes to Part 36 wouldrequire referral to a Federal-State JointBoard and therefore could not be donein this proceeding. The misallocationcan, however, be corrected by modifyingsection 69.401 of our rules, 47 CFR§ 69.401, to provide that the COEexpenses assigned to the interstatejurisdiction should be allocated on thebasis of the allocation of the specifictype of COE investment beingmaintained, and we make the correctionhere. This will shift some costs to localswitching from common line andtransport, and result in more cost-basedrates. This shift must be reflected intariff filings to be effective January 1,1998. We also plan to refer theunderlying separations issue to a JointBoard for its recommendation.

224. Separations-related causes.Several incumbent LECs argue that asubstantial portion of the TIC can betraced to decisions separating costsbetween the interstate and intrastatejurisdictions. As explained by USTAand incumbent LECs, the largest portionof the amounts recovered by the TICresults from the differences in thejurisdictional separations allocationprocedures for message (i.e., switched)services and special access services, andfrom the consequent effects of theCommission’s decision to use specialaccess rates to establish transporttransmission rates when theCommission restructured transportrates. The current jurisdictionalseparations process separates the costsof message services based on average

cost factors; costs of DS1 and DS3special access services, in contrast, areseparated using unit costing methods.Because of the differences in theseseparations methodologies, specialaccess-derived rates reflect the costs oftransport in areas in which specialaccess services are most often offered(urban, higher density areas), and do notreflect the costs of transport in rural,less dense areas. Another allegedseparations-related cause of the amountsin the TIC is the use of circuittermination counts in the separationsprocess to allocate costs between specialaccess and switched services before theyare allocated between federal and statejurisdictions. This practice appears toallocate costs disproportionately toswitched services. The incumbent LECsassert that the use of direct costingmethods would assign many of thesecosts to local and intrastate services andto interstate services other thantransport. If the Joint Board onJurisdictional Separations takes actionto address this issue, we will thenconsider what correspondingreallocations should be made.

225. We find that some of theremaining costs recovered by the TICresult from at least two different causes:(1) the separations process assignedcosts differently to private line andmessage (i.e., switched) services,resulting in costs allocated to specialaccess being lower than those allocatedto the message category, even thoughthe two services use comparablefacilities—rates for direct-trunkedtransport and the transmissioncomponent of tandem-switchedtransport, which are switched services,therefore, do not recover the full amountof separated costs; and (2) the cost ofproviding transport services in lessdensely populated areas is higher thanthat reflected by transport rates derivedfrom those special access rates. Theexisting record is inadequate to permitus to identify more costs that couldclearly be reallocated to interstateservices. Furthermore, the recordindicates that some residual TIC costsmay be appropriately allocated tointrastate services. Because we will soonbe considering a NPRM of ProposedRulemaking to refer to a Joint Boardquestions regarding separations, we willleave the determination of the ultimateallocation of the remaining costsrecovered by the TIC until theconclusion of that proceeding.

226. Incumbent LEC parties generallycontend that special access ratesprovided an acceptable initializingpricing level for transport transmissionservices in geographic areas wheresignificant amounts of special access


services are provided, but do not reflectthe cost of providing transport service inlow-density areas in which specialaccess services are not as widespread.We recognize that rates for direct-trunked transport and for thetransmission component of tandem-switched transport, because they wereestablished based on special accessrates, do not reflect the full cost ofproviding transport services in higher-cost, rural areas. Because none of ourother facilities-based rate elementsrecover costs reflecting this differential,we conclude that the additional costs ofrural transport currently are recoveredthrough the TIC. On the basis of thecurrent record, however, we are unableto quantify these cost differentials.Moreover, based on differences innetwork architectures, populationdensity variations, topography, andother factors that vary among LECs, wefind that transport cost differentials arealso likely to vary greatly amongincumbent LECs and among study areasserved by the same incumbent LEC. Wedo not believe, however, that we needto quantify these differences in thisOrder to ameliorate this distortioncaused by the current rate structure,because the requirements set forth in thenext paragraph will address this issue.

227. If an incumbent LEC deaveragesits transport rates, either byimplementing zone-density pricingunder our rules, 47 CFR § 69.123, or bywaiver, the underlying predicate is thatthe costs in low-density areas are higherthan those in higher-density areas. Therates it sets for the different areas shouldreveal a cost differential of at least thatmagnitude between low-density andhigh-density areas served by that LEC.When an incumbent LEC deaveragestransport rates, therefore, we require itto reallocate additional TIC amounts tofacilities-based transport rates, reflectingthe higher costs of serving lower-densityareas. The reallocation we require herewill permit incumbent LECs, indeaveraging their transport rates, toachieve cost-based transport rates whileensuring that a significant portion ofcosts reflecting the geographic costdifference are removed from the TIC.Each incumbent LEC must reallocatecosts from the TIC each time it increasesthe deaveraging differential. We findthat any incumbent LEC that has alreadydeaveraged its rates must move anequivalent amount from the TIC to itstransport services. Under any of thesescenarios, the costs shall be reassignedto direct-trunked transport and tandem-switched transport categories orsubcategories in a manner that reflectsthe way deaveraging is being

implemented by the incumbent LEC. Wedo not require incumbent LECs thataverage their transport rates to make asimilar reallocation at this time, becauseof the difficulty in determining theamount to be reallocated.

228. Price Cap Implementation issues.For purposes of phasing out the TIC, weare keeping the TIC in its own servicecategory in the trunking basket. Thereallocation of costs from the TIC toother access elements will require pricecap LECs to adjust their price capindices (PCIs) and service band indices(SBIs) to reflect the new revenuestreams. To accomplish thesereallocations, price cap LECs shall makeexogenous adjustments to their PCIs andSBIs that are targeted to the indices inquestion, rather than applying theexogenous adjustment proportionatelyacross all categories in the affected pricecap basket. Thus, when a reallocationoccurs within a price cap basket, onlythe affected SBIs will be adjusted. Whenthe reallocation affects servicecategories in more than one basket,however, the affected PCIs and SBIsmust be adjusted. The upward ordownward adjustment to the PCIs andupper SBIs shall be calculated as thepercentage of the revenues being addedor subtracted from a basket or category,divided by the total revenues recoveredthrough the basket or category at thetime of the adjustment. For example, iften percent of the revenues are beingreallocated from a service category, thecategory upper SBI will be reduced byten percent. If that revenue amount isonly three percent of the PCI for thebasket, the PCI is reduced by threepercent.

b. Treatment of Remaining CostsRecovered by the TIC

229. Residual TIC reduction plan.After the costs identified above havebeen reallocated to other accessservices, some costs will continue to berecovered by the TIC. While it isdesirable to eliminate the TIC as soon aspossible by shifting the costs recoveredby the TIC to facilities-based rates,referring separations questions to a JointBoard is the best means of reaching thatultimate objective, as we noted earlier.Even as we make this referral, we willrequire incumbent LECs to target to theTIC price cap reductions arising in anyprice cap basket as a result of theapplication of the ‘‘GDP–PI minus X-factor’’ formula until the per-minute TICis eliminated, as many parties havesuggested. These parties submit that thistargeting will permit incumbent LECs tomanage the reduction in revenuesrecovered by the TIC, while reducingthe amount at issue in the TIC. Sprint

states that, using a targeting approach,we would not need to address the costallocation issues raised by Part 36 andPart 69. Targeting these price capreductions to the TIC reduces the TICover a reasonable period, therebyultimately substantially reducing whatis widely recognized to be an inefficientaspect of the access rate structure. Werequire price-cap LECs to begin thesetargeted X-factor reductions to the TICin tariff filings to become effective July1, 1997.

230. Targeting PCI reductions to theper-minute TIC will not change theoverall revenue levels that our price capmechanisms permit incumbent LECs toreceive. We have reallocated those coststhat the record shows are clearly relatedto other facilities-based elements. Theupcoming separations proceeding mayprovide additional data that will permitus to reallocate more costs to facilities-based rate elements, or to the intrastatejurisdiction. The approach we take is areasonable response to the D.C. Circuit’sremand directive, and establishes a planthat should substantially reduce the TICwithin a reasonable period, pendingreview of the jurisdictional separationsprocess.

231. We reject ALTS’ allegation thattargeting the productivity factor to theTIC undercuts the rationale for the ‘‘justand reasonable’’ status of all price-caprates, which ALTS contends isdependant on the widespreadapplication of the X-factor. The targetingapproach that we adopt will eliminateanticompetitive aspects of the TIC,which promotes inefficient entry intothe transport market by imposing sometransport costs on IXCs that do notcause the costs to be incurred. Inaddition, by spreading current TICrevenues across all price cap PCIs andSBIs, our targeting method does notoffer TIC revenues special insulationagainst the pressures of the competitivemarketplace, as would some proposalsto bulk-bill the TIC to IXCs. We alsodecline to adopt the approach ofspreading the remaining costs recoveredby the TIC proportionately among alltransport services, as proposed by StateConsumer Advocates. That approachmight, because of the unknown natureof the costs that will remain in the TIC,result in an excessive reallocation totransport.

232. The D.C. Circuit instructed us torevise our transport rate structure rulesto be more consistent with cost-causation principles. There isconflicting evidence in the recordconcerning the nature of the costscontained within the residual TIC; thesecosts may be traffic sensitive or NTSand may be associated with common


line, transport or switching services.BA/NYNEX states, without explanation,that the costs in the TIC are NTS innature. To the extent that some portionof the residual TIC has its origin in themethods used to separate cable and wirefacilities between the regulatoryjurisdictions, it seems likely that BA/NYNEX is partially correct in thisassertion. The evidence, however, doesnot clearly resolve this issue.

233. If the costs remaining in theresidual TIC are NTS, as BA/NYNEXsuggests, then traffic-sensitive recoverycould artificially raise per-minute ratesfor interstate access. These higher per-minute access rates could distort themarket for interstate toll services byartificially suppressing demand forinterstate toll services and byencouraging users that efficiently couldmake use of the network to instead seekother alternatives. Conversely, if costsremaining in the residual TIC are usage-sensitive, flat-rating may also create adistortion by encouraging inefficientoveruse of interstate toll services.Because the limited evidence in therecord suggests that at least someamount of the residual TIC representsNTS costs, and because we wish to seethat consumers enjoy the benefits ofusage of the network to the greatestextent possible, we find that we shoulderr, if at all, on the side of NTS recoveryof these costs. For elements notdemonstrably reflecting usage-sensitivecosts, therefore, we find, on balance,compelling policy arguments in favor offlat-rated pricing because usage-sensitive recovery of any NTS costsartificially suppresses demand forinterexchange calling by inflating per-minute rates. In the absence ofdefinitive evidence as to the nature ofthe residual TIC amounts, we concludethat the public interest would be betterserved by imposing these costs on IXCson a flat per-line basis, rather than ona per-minute basis.

234. Accordingly, we seek to migratethe current usage-based charges intoflat-rated charges as quickly as possibleconsistent with avoiding short-termmarket distortions. We do that by: (1)On July 1, 1997, drawing down the per-minute-of-use residual TIC charge bytargeting the price cap productivity (X-factor) adjustment to the trunking PCIand, specifically, the TIC SBI, thuseffectively spreading those residual TICrevenues, which otherwise would berecovered exclusively on a minute ofuse basis, among the universe of (bothtraffic-sensitive and NTS) accessservices and moving TIC recovery closerto flat-rated recovery; (2) starting inJanuary 1998, recovering remainingresidual TIC revenues through PICC

charges each year, subject to the PICCcap; and (3) drawing down anyremaining residual per-minute TICrevenues each July by targeting theannual X-Factor adjustments to thoserevenues.

235. The targeting of price capproductivity reductions to the TIC willbe accomplished in the followingmanner. Because the price cap LECswill not have reallocated facilities-basedcosts contained in the TIC before theyfile tariffs to be effective July 1, 1997,we first direct the price cap LECs tocompute their anticipated ‘‘residual’’TIC amount by excluding revenues thatare expected to be reassigned on a cost-causative basis to facilities-basedcharges in the future, pursuant to thetransition plan described in this Order.To determine TIC amounts so excluded,NYNEX, BellSouth, U S West, and BellAtlantic shall use the residual TICpercentage estimates contained inUSTA’s ex parte letter filed May 2,1997, to compute their respectiveanticipated residual TICs. Thesepercentages are as follows: NYNEX,77.63 percent; BellSouth, 56.93 percent;U S West, 59.14 percent; and BellAtlantic, 63.96 percent. SBCCommunications shall use the cost datafor SWBT, Pacific Bell, and Nevada Bellcontained in its ex parte letter filedApril 24, 1997 to estimate its residualTICs. These percentages, calculatedfrom TIC data supplied, are: SWBT,69.11 percent; Pacific Bell and NevadaBell combined, 53.52 percent. Eachremaining price cap LEC shall estimatea ‘‘residual’’ TIC in an amount equal to55 percent of its current TIC revenues.For these remaining price cap LECs, wefind that this 55 percent level representsa reasonable, but conservative estimate.The 55 percent level correspondsapproximately to the lowest residualTIC percentage identified in the record,and three of the price cap LECs thatsubmitted data on the record are withina few percentage points of this level. Wetherefore find that residual TICestimates at the 55 percent level forcompanies that have not developedactual percentage estimates on therecord will be reasonable, but will alsominimize the risk that we will eliminatefacilities-based TIC costs with targetedX-factor price cap reductions.

236. The ‘‘GDP–PI minus X’’adjustments LECs ordinarily wouldapply to each of their price cap indices(i.e., revenues) for the July 1, 1997,annual filing shall be applied by LECsto reduce their calculated anticipated‘‘residual’’ TIC revenues. For tariffs tobecome effective July 1, 1997, the pricecap LECs shall calculate the annualprice cap reduction resulting from the

application of the productivityadjustment to each basket other than theinterexchange basket, and shall sum thedollar effects of the adjustment. If theeffect is to reduce PCIs, the dollaramount shall be targeted completely tothe trunking basket PCI and the TIC SBI,without changing the PCIs or SBIs forany other basket or service category. Thepercentage reduction in the PCI and SBIshall equal the ratio of the total dollareffect of the price cap annualadjustment to the dollar value of the PCIand SBI, respectively. If the effect of theproductivity adjustment would increasethe PCIs, the PCIs shall be adjusted intheir usual fashion, and no targeting tothe TIC shall occur. This avoidsexacerbating an already inefficientaspect of the access rate structure.

237. Price cap LECs will beginreallocation of facilities-based TICcomponents on January 1, 1998. At thattime, the price cap LECs should all haveactual cost data reflecting the facilities-based components of the TIC. If, at thattime, any price cap incumbent LECdetermines that its use of the applicableresidual TIC estimate, above, resulted inmore PCI reductions being targeted tothe interconnection charge in its tarifffiling to become effective on July 1,1997, than were required to eliminatethe per-minute interconnection charge,then that price cap LEC shall makenecessary exogenous adjustments to itsPCIs and SBIs to reverse the effects ofthe excess targeting.

238. For tariff filings to becomeeffective July 1, 1998, and annually inJuly thereafter, all price cap LECs willhave actual cost data reflecting thefacilities-based components of the TICand will be able to target reductions toactual anticipated residual per-minuteTIC amounts without resort to thepercentage estimates prescribed above.For these filings, ‘‘GDP–PI minus X’’adjustments similar to those describedabove shall be targeted to the trunkingbasket PCI and the TIC SBI to reduceresidual per-minute TIC amountsrecovered through per-minuteoriginating and terminating accesscharges.

239. To avoid the adverse effects ofper-minute pricing of costs that may beNTS, we require price cap LECs torecover residual TIC amounts nototherwise eliminated by targeted X-factor reductions, described above,through the flat-rated PICC to the extentthe PICC is below its ceiling. In order toensure that primary residential andsingle line business subscribers do notpay more than their fair share of theresidual TIC, however, we prohibit pricecap LECs from charging a PICC onprimary residential or single-line


business lines that recovers TICrevenues that exceed residual TICrevenues permitted under our price caprules divided by the total number ofaccess lines. As the PICC caps increaseeach year, more of the residual TICcharge can be included in the flat-ratedPICC. Any residual TIC amounts thatcannot be recovered through the PICCshall be recovered on a per-minute basisfrom originating traffic, subject to a capon per-minute originating accesscharges, as explained in Section III.A,above. If this cap is exceeded, theresidual TIC shall be recovered throughper-minute terminating switched accessrates. Although a portion of the residualTIC will be recovered through PICCcharges, the TIC will remain in thetrunking basket. Therefore, to ensurethat excess headroom is not created inthe trunking basket, price cap LECsshall include the TIC revenues receivedfrom the flat-rated PICC in calculatingthe API for the trunking basket and theSBI for the TIC.

240. The policies adopted when theTIC was created require incumbentLECs to assess the TIC on all minutesthat interconnect with the incumbentLEC switched access network, includingminutes that transit a CAP’s transportnetwork without using any incumbentLEC transport facilities. As we noted inthe NPRM, and as some commentersassert, if the incumbent LEC’s transportrates are kept artificially low and thedifference is recovered through the TIC,competitors of the incumbent LEC paysome of the incumbent LEC’s transportcosts. In a recent arbitration betweenTeleport and US West, the ColoradoCommission has precluded US Westfrom imposing the TIC on competitorsfor the portion of transport that US Westdoes not provide. See TCG ColoradoPetition for Arbitration Pursuant to sec.252(b) of the Telecommunications Actof 1996 to Establish an InterconnectionAgreement with US West, Docket No.96A–329T, Decision Regarding Petitionfor Arbitration, Decision No. C96–1186(adopted November 5, 1996); TCGColorado Petition for ArbitrationPursuant to sec. 252(b) of theTelecommunications Act of 1996 toEstablish an Interconnection Agreementwith US West, Docket No. 96A–329T,Order Denying Applications forRehearing, Reargument, orReconsideration, Decision No. C96–1344 (adopted December 18, 1996), at¶ I.B.1.4. We find that our currentpolicy, which requires competitiveentrants to pay the TIC even in caseswhere it provides its own transport, isinconsistent with the procompetitivegoals of the 1996 Act. We therefore

modify our rules to permit incumbentLECs to assess any per-minute residualTIC charge only on minutes that utilizeincumbent LEC transport facilities, andnot on any switched minutes of CAPsthat interconnect with the incumbentLEC switched access network at the endoffice.

241. Other Approaches. We rejectalternative methods for recovering theTIC that were proposed in the record.The majority of the incumbent LECparties supported recovering anyremaining costs in the TIC by bulkbilling such amounts to IXCs based oneach IXC’s share of revenues, orpresubscribed lines. Other incumbentLECs proposed establishing ‘‘publicpolicy’’ elements to recover the residualTIC. These approaches would insulateTIC costs from the pressures of thecompetitive market and guaranteeincumbent LECs the recovery of theseamounts, even where such costs haveresulted from inefficiencies that thecompetitive market—but notregulators—detected and otherwisewould eliminate. This would beinconsistent with the development of anefficient competitive market. Ourresolution of the TIC will allow LECs areasonable opportunity to recover theircosts, without providing a guarantee.We also reject the idea of spreading theremaining costs recovered by the TICproportionately over all transportservices, as suggested by AARP, et al. Aswe noted earlier, some of the remainingcosts in the TIC may implicate certainCommission decisions separating costsbetween the federal and statejurisdictions and thus may be related toservices other than transport. We,therefore, believe that awaiting furtherconsideration by a Joint Board is a morepractical means of ultimately resolvingthe TIC issue.

242. Some parties have requested thata portion of the costs recovered by theTIC should be considered to beuniversal service costs. We do not findthis argument persuasive. Elsewhere inthis Order, we have reallocated theTIC’s identifiable cost components. Onthe basis of the record before us, wecannot clearly associate the remainingTIC revenues with any particularfacilities or services. The parties arguingthat these costs are related to universalservice have not made any clearshowing as to the source of these costsor demonstrated why they believe thatthese TIC revenues are either costs ofuniversal service that should berecovered from the universal servicefund or constituent costs of supportedservices.

243. We have analyzed the effect ofthe reallocation of TIC costs and the

new recovery procedures on smallbusiness entities, including small LECsand new entrants, and find that thechanges will facilitate the developmentof a competitive marketplace by movingincumbent LEC rates toward cost-basedlevels and by eliminating the ability ofincumbent LECs to assess the TIC onswitched access minutes that do not useincumbent LEC transport facilities.These pricing revisions may create newopportunities for small entities wishingto enter the telecommunications market.

E. SS7 Signalling

1. Background

244. SS7 is a network protocol usedto transmit signalling information overcommon channel signalling networks.As described in greater detail in theNPRM, signalling networks like SS7establish and close transmission pathsover which telephone calls are carried.Signalling networks are also used toretrieve information from remote databases to enable credit card and collectcalling. SS7 systems are also used totransmit information needed to providecustom local area signalling serviceslike automatic call back.

245. An SS7 network consists ofseveral primary components—signallingpoints, signal transport links, anddedicated lines used for access to anincumbent LEC’s signalling network(signal links). Signalling points arenodes in an SS7 network that originate,transmit, or route signalling messages.There are three principal types ofsignalling points: service switchingpoints (SSPs), service control points(SCPs), and signalling transfer points(STPs). An SSP is a switch that canoriginate, transmit, and receivemessages for call setup and databasetransactions. An SCP serves as adatabase that stores and providesinformation used in the routing of calls,such as the line information database(LIDB) used to validate calling cards orthe database that identifies thedesignated long-distance carrier for toll-free service. An STP is a specializedpacket switch that performs screeningand security functions and switches SS7messages within the signalling network.

246. Signal transport links arefacilities dedicated to the transport ofSS7 messages within the incumbentLEC’s signalling network. Finally,dedicated network access lines (DNALs)consist of dedicated circuits thattransmit queries between the incumbentLEC’s signalling network and thesignalling networks of other individualcarriers, such as IXCs. A carrier’s DNALis connected to an incumbent LEC’s


signalling network through a port on anincumbent LEC’s STP.

247. Under the interim transport ratestructure, incumbent LECs charge IXCsand other access customers a flat-ratedcharge (dedicated signalling transport)under Part 69 for the use of dedicatedfacilities used to connect to theincumbent LEC’s signalling network.This rate element has twosubelements—a flat-rated signalling linkcharge for the dedicated network accessline (dedicated signalling line) and aflat-rated STP port termination charge.Most other signalling costs, such ascosts for switching messages at the STPand transmitting messages within thesignalling network, are not recoveredthrough facility-based charges and thusmost, if not all, of these costs areembedded in the TIC or in the localswitching charge and recovered throughper-minute-of-use charges. Retrieval ofinformation from databases for toll-freecalls and LIDB databases, however, ischarged on a per-query basis.

248. In the NPRM, we solicitedcomment on whether the Commissionshould revise its rate structure for SS7services to reflect the SS7 rate structureimplemented by Ameritech. In March,1996, the Commission granted a waiverto Ameritech, allowing it to restructureits recovery of SS7 costs through fourunbundled charges. These chargescorrespond to various functionsperformed by signalling networks:signal link, STP port termination, signaltransport, and signal switching.

249. The Ameritech waiver wasgranted to allow Ameritech to realign itscharges for SS7 services more closelywith the manner in which such costs areincurred. Unbundling of SS7 servicesfrom transport and local switchingensures that transport and localswitching customers do not pay for SS7services they do not use. Unbundlingalso enables Ameritech to offer SS7services to competing providers of localexchange and exchange access serviceswithout requiring the purchase of otherelements that the competitors do notneed. In support of its waiver petition,Ameritech noted that it had receivednumerous customer requests for suchunbundling. It also explained that it haddeployed equipment necessary formeasuring third-party usage of its SS7networks, enabling the company to billits SS7 services separately from itsswitched access services.

250. The NPRM also requestedcomment on whether incumbent LECsshould be allowed to impose separatecharges for ISDN User Part (ISUP)messages and Transaction CapabilitiesApplication Part (TCAP) messages. ISUPmessages are used to set up and take

down calls. For example, ISUP messagesinclude the initial address message usedto establish and close the transmissionpath used to carry a telephone call.TCAP messages, on the other hand, areused to carry information between SSPsthat support particular services, such astoll free services, LIDB services andcertain custom local area signallingservices (CLASS) like automatic callback. We noted that differentiationbetween charges for ISUP and TCAPmessages may be economically justifiedbecause TCAP messages tend to beshorter in average length and placelower demands on the signallingnetwork that ISUP messages.

251. The NPRM also requestedcomment regarding the appropriateplacement of SS7 signalling elements inprice cap baskets. Currently, STP porttermination rates and charges for thesignalling link, or DNAL, are placed inthe trunking basket. Because bothservices are dedicated to particular SS7customers, rates for these elements areflat-rated. We requested comment onwhether the STP port terminationcharge should be placed in its ownservice category in the traffic-sensitivebasket. We noted that interconnectorscan provide their own signalling link,exposing that service element to somemeasure of competition. The STP porttermination, on the other hand, isrelatively insulated from competitivepressures because it is part of theincumbent LEC’s STP and must bepurchased from the incumbent LECunder existing network architecture.

2. Discussion252. As we noted in the Ameritech

SS7 Waiver Order, the removal of SS7costs from the local switching andtransport interconnection charge rateelements would benefit accesscustomers that pay for these services butdo not actually use an incumbent LEC’ssignalling services. It would also benefitalternative local service providers byenabling them to purchase separate SS7services from incumbent LECs tosupport their provision of competinglocal exchange or exchange accessservices. Unbundling the individual SS7components into separate chargeswould further promote efficiency byensuring that signalling charges moreaccurately reflect the costs of providingsuch services. Competitive serviceproviders could limit their signallingcosts by purchasing only the signallingelements they need. Despite thesebenefits, however, we are reluctant toimpose on incumbent LECs the costburden of installing metering or otherequipment needed to measure thirdparty usage of signalling facilities. In

granting Ameritech a waiver toimplement its unbundled SS7 ratestructure, we noted that Ameritech hadpreviously installed the equipment andother facilities needed to meterindependent signalling usage. Althoughwe encourage actions that wouldpromote disaggregation and unbundlingof SS7 services, we will not requireincumbent LECs to implement such anapproach and incur the associatedequipment costs of doing so. The recordindicates that, as a general matter, thecosts of mandating the installation ofmetering equipment may well exceedthe benefits of doing so.

253. Instead, we will permitincumbent LECs to adopt unbundledsignalling rate structures at theirdiscretion and acquire the appropriatemeasuring equipment as needed toimplement such a plan. Specifically,incumbent LECs may implement thesame unbundled rate structure for SS7services that we approved in theAmeritech SS7 Waiver Order. Werecognize, however, that other signallingrate structures may achieve the samebenefits that are available under theAmeritech rate structure. Hence, anincumbent LEC may implement anunbundled signalling rate structure thatvaries from the approach implementedin the Ameritech SS7 Waiver Order byfiling a petition demonstrating that theestablishment of new rate elementsimplementing such a service isconsistent with the public interest. Wenote, however, that variations insignalling rate structures amongincumbent LECs could impose burdenson IXCs if IXCs must adapt to a diverserange of unbundled signalling ratestructures. We anticipate that, ifincumbent LECs choose to adoptunbundled rate structures for their SS7network services, they will evaluatehow the implementation of these planswill affect their prospective customers.

254. With respect to ratedifferentiation between ISUP and TCAPmessages, the NPRM expressed theconcern that imposing ratedifferentiation may be inconsistent withrate structure simplicity. Severalcommenters indicate that the costs ofimplementing rate differentiation wouldexceed the benefits of such an approach.We further note that commenters offeredlittle, if any, general support for theadoption of rate differentiation.Accordingly, to avoid unnecessarycomplexity and to avoid the impositionof unnecessary regulatory costs, we willnot impose a rate differential betweenISUP and TCAP messages.

255. With respect to the placement ofSS7 rate elements in price cap baskets,we have previously recognized that the


signalling link and the STP porttermination are not subject to the samelevel of competition. As noted in theAmeritech SS7 Waiver Order, STP porttermination is provided only byincumbents while the signalling linkcan be provided by SS7 customersthemselves or by other alternativeproviders. Comments filed in thisproceeding also acknowledge thiscompetitive disparity. AlthoughAmeritech discounts the risk that STPport termination charges would be usedto offset price reductions for the signallink, it nevertheless acknowledges theexistence of the competitive differentialwe suggested in the NPRM. Othercommenters argue that the competitivedisparity is sufficient to justify concernsthat price cap LECs would adjust theirrates to account for the competitivedifferential. Accordingly, we willestablish a new STP port terminationrate element in the traffic-sensitivebasket. Placing these SS7 services indifferent price cap baskets will ensureconsistency with the Commission’sgeneral approach of maintainingelements with similar competitivecharacteristics in the same servicebaskets.

F. Impact of New Technologies256. The NPRM requested comment

regarding the rate structure treatment ofnew technologies that enable newtelecommunications services and, byenhancing the productivity oftelecommunications facilities, lowerprices for services in the future. Thesetechnologies, which we describe ingreater detail in the NPRM, includesynchronous optical networks (SONET),Asynchronous Transfer Mode (ATM)switching, and advanced intelligentnetworks (AIN). We invited commentersto recommend specific rate structurerules that would reflect the manner inwhich incumbent LECs incur costswhen providing services utilizing suchnew technologies.

257. As a general matter, theCommission is reluctant to adoptdetailed rules governing rate structuresfor recovering the cost of deployingadvanced technologies. We note that, inthe Price Cap Third Report and Order,we adopted rules that permit price capLECs to petition the Commission for theestablishment of one or more switchedaccess rate elements to accommodatenew services. Under these rules,petitioners must demonstrate either ofthe following: (1) that the new rateelements would be in the publicinterest; or (2) that another LEC haspreviously obtained approval toestablish identical rate elements andthat the original petition did not rely

upon a competitive showing as part ofits public interest justification. Becausetechnological advancements emergerapidly, the adoption of uniform ratestructures corresponding to particulartechnologies may slow investment inthe development of newer technologiesor improvements in currenttechnologies. Indeed, as a generalmatter, incumbent LECs oppose theadoption of uniform rate structures fornew technologies, suggesting that strictuniform rules in this regard couldinhibit development of suchtechnologies. Accordingly, we willrefrain from adopting in this Orderspecific rate structures with respect toSONET, AIN, or other new technologies.As noted above, however, our rulesalready accommodate rate elementadjustments that may be needed on anad hoc basis when technologicaladvancements justify suchmodifications. As particular newtechnologies become used on awidespread basis, we can alwaysconsider whether there is a need for auniform rate structure at that point.

IV. Baseline Rate Levels

A. Primary Reliance on a Market-BasedApproach With a Prescriptive Backdropand the Adoption of Several InitialPrescriptive Measures

1. Background258. In the NPRM, we established a

goal of encouraging efficientcompetitors to enter local exchangeaccess markets so that incumbent LECswould face substantial competition forthe entire array of interstate accessservices. As a particular servicebecomes subject to substantialcompetition from new providers, weproposed to remove that service fromprice cap and tariff regulation. Wesought comment on two generalapproaches for a transition to relianceon substantial competition to ensurethat interstate access charges are closelyrelated to forward-looking economiccosts: a ‘‘market-based’’ approach and a‘‘prescriptive’’ approach. Under amarket-based approach, we wouldpermit market forces to operate ascompetition emerges, allowing anincumbent to change its prices inresponse to competitive entry. To thatend, we proposed a two-phase approachin which incumbent LECs would bepermitted certain pricing flexibilityupon a showing that meaningfulcompetitive entry is possible within aparticular local exchange and exchangeaccess market, followed by a furtherrelaxation of price cap regulation whenmeaningful actual competitiondeveloped within the market. We did

not propose, however, to abandon thepossibility of using the prescriptivetools at our disposal in the event thatcompetition does not develop in someplaces.

259. As an alternative to the proposedmarket-based approach, we also soughtcomment on a prescriptive approach,under which incumbent LECs would berequired to change their prices for someor all exchange access services usingspecific measures adopted by theCommission to more accurately ensurethat access charges are closely related tothe economic costs of providinginterstate access services. We alsoinvited comment on whether the twoapproaches could be merged in somefashion. We emphasized that ourultimate goal under any approach,whether market-based, prescriptive orcombined, is to remove from price capregulation LEC services that are subjectto substantial competition. Instead ofprice cap regulation, we expecteventually to rely on the operation ofcompetitive local markets to preventincumbent LECs from exercising marketpower, and thereby to protectconsumers.

260. In this section, we endorse theuse of a market-based approachgenerally. Our market-based approachwill retain the protection afforded byprice cap regulation, while relaxingparticular restrictions on incumbentLEC pricing as competition emerges,thereby permitting the development andoperation of competitive markets, whichwill maximize the efficient allocation oftelecommunications services andpromote consumer welfare. This sectionalso explains how, if competition failsto emerge over time for certain accessservices in particular geographic areas,we will ensure that the rates for thoseservices reflect the forward-lookingeconomic costs of providing theservices. In the NPRM, we soughtcomment on a number of specific issuesconcerning the timing and degrees ofpricing flexibility and ultimatederegulation. We recognize that wemust attend carefully to this task ofgranting incumbent LECs increasedpricing flexibility commensurate withcompetitive developments, and we willresolve these issues of timing anddegree in detail in a subsequent reportand order in this docket, where we canmore fully discuss these matters.

261. Elsewhere in this Order, weadopt or propose several measures thatwork within our current price capstructure to lower baseline access chargerate levels consistent with evidence thatthe revised rate levels better reflect theunderlying costs of providing interstateaccess services. In Section IV.C below,


we order an exogenous cost reduction toreflect the completion of theamortization of equal access costs. InSection IV.D, we order reallocation ofcertain marketing and retail expensesand discuss the reallocation of GSFcosts. We issue a further notice on GSFcosts in Section VII. In the companionPrice Cap Performance Review for LocalExchange Carriers and Transport RateStructure and Pricing, Fourth Reportand Order, CC Docket Nos. 94–1 and91–213, FCC 97–159, lll FR lll(released May 8, 1997) (Price CapFourth Report and Order), which wealso adopt today, we modify our currentprice cap plan by adopting a singleproductivity offset (X-Factor) of 6.5percent and eliminating sharing whilemaintaining the low-end adjustment.

2. Discussion262. The Commission’s objective is

the one set forth in the 1996 Act—‘‘opening all telecommunicationsmarkets to competition.’’ Therefore, wemust ensure that our own regulations donot unduly interfere with thedevelopment and operation of thesemarkets as competition develops. If wesuccessfully reform our access chargerules to promote the operation ofcompetitive markets, interstate accesscharges will ultimately reflect theforward-looking economic costs ofproviding interstate access services.This is so, in part, because Congressestablished in the 1996 Act a cost-basedpricing requirement for incumbentLECs’ rates for interconnection andunbundled network elements, which aresold by carriers to other carriers. As wehave recognized, interstate accessservices can be replaced with someinterconnection services or withfunctionality offered by unbundledelements. Because these policies willgreatly facilitate competitive entry intothe provision of all telecommunicationsservices, we expect that interstate accessservices will ultimately be priced atcompetitive levels even without directregulation of those service prices.

263. We decide that adopting aprimarily market-based approach toreforming access charges will betterserve the public interest than attemptingimmediately to prescribe new rates forall interstate access services based onthe long-run incremental cost orforward-looking economic cost ofinterstate access services. Competitivemarkets are superior mechanisms forprotecting consumers by ensuring thatgoods and services are provided toconsumers in the most efficient mannerpossible and at prices that reflect thecost of production. Accordingly, wherecompetition develops, it should be

relied upon as much as possible toprotect consumers and the publicinterest. In addition, using a market-based approach should minimize thepotential that regulation will create andmaintain distortions in the investmentdecisions of competitors as they enterlocal telecommunications markets.Finally, under section 254 of the 1996Act, implicit universal servicesubsidies, wherever possible, are to bemade explicit and supported by allcarriers on an equitable and non-discriminatory basis. To the extent thatany implicit subsidies remain ininterstate access charges because it wasnot feasible to identify them or makethem explicit, our market-basedapproach will have the effect of makingthose implicit subsidies subject to beingcompeted away as competitors offercomparable services at prices that donot include the subsidies. In addition,we note that the rate structure changeswe adopt today go a long way towardsachieving such ends because theinefficiency produced by distortions inmarkets ‘‘rises as a quadratic function ofthe relative price distortion [Scherer &Ross, supra., at 662].’’ Therefore, thefirst steps made toward removingdistortions caused by our regulationswill produce the greatest benefits.

264. The market-based approach toaccess charge reform that we adopt willnot, as some parties assert, exposecustomers of interstate access services tothe unfettered exercise of market power.We will continue to maintain thecurrent mechanisms upon which werely to ensure that rates for theseservices are ‘‘just and reasonable [asrequired by section 201 of theCommunications Act],’’ and notunjustly or unreasonably discriminatory[as required by section 202 of theCommunications Act]. Instead ofexposing customers to harm, we expectthat permitting incumbent LECs certainkinds of pricing flexibility in responseto the development of competition willallow prices for interstate accessservices to adjust in ways that reflect theunderlying economic costs of providingthose services without moving outsidethe range of rates that are just andreasonable. This process of relaxingregulation as competition develops, andultimately deregulating services subjectto effective competition, is wellestablished. For example, many of thetypes of pricing flexibility discussed inthe NPRM are similar to forms of pricingflexibility we have in the past accordedincumbent LECs and IXCs facingincreased competition in markets forparticular services.

265. Economic teaching also leads tothe conclusion that rates for interstate

access services will generally movetoward the forward-looking economiccost of providing such services inresponse to increased competition inlocal exchange and exchange accessmarkets. In addition, competition willdo a better job of determining the trueeconomic cost of providing suchservices. As competitive entry becomesincreasingly possible, IXCs that nowpurchase interstate switched accessservices from incumbent LECs will beable to bypass those services where theprices (interstate access charges) do notreflect the economic costs of providingthe underlying services. Those IXCs cando this by entering the local marketsthemselves as local exchange serviceproviders, thereby self-providinginterstate access services for their newlocal exchange service customers. Theycan also seek out competitive providersof comparable services. As customerschoose providers other than incumbentLECs as their local providers, interstateaccess services will come to be pricedcompetitively. Incumbent LECs willhave to respond to competitors’offerings with lower-priced accessservices of their own in order to retaincustomers that would otherwise switchto competitors’ networks, furtherincreasing the effect of competition onoverall access charge payments.

266. The 1996 Act has created anunprecedented opportunity forcompetition to develop in localtelephone markets. It also has providedthis Commission with tools for openingmarkets to competition, and forimplementing our market-basedrelaxation of regulation so that interstateaccess charges reflect forward-lookingeconomic costs. We recognize, however,that competition is unlikely to developat the same rate in different locations,and that some services will be subject toincreasing competition more rapidlythan others. The observation thatcompetitive entry will occur in someplaces, and for some services, morerapidly than others is a corollary to therule that firms in competitive marketsseek to maximize their profits. Tomaximize profits, firms naturally seekout those customers and services onwhich they can generate the mostprofits. Therefore, some customers arenaturally more desirable than others atany given point in time. As competitorsattempt to gain the patronage of thecustomers offering the greatest profitopportunities, they offer lower-priced ormore desirable services. These actionshave the effect of reducing over time theprofitability of serving those particularcustomers and, as this occurs, therelative profitability of serving other


customers or offering other servicesincreases. Therefore, competitors beginseeking to serve these other customers,and entry occurs in new places, or fornew services. Accordingly, weanticipate that competition will driverates for some interstate access servicestoward more economically efficientlevels more rapidly in some areas thanrates for other services or in other areas.Where competition develops, we willprovide incumbent LECs withadditional flexibility, culminating in theremoval of incumbent LECs’ interstateaccess services from price regulationwhere they are subject to sufficientcompetition to ensure that the rates forthose services are just and reasonable,and are not unjustly or unreasonablydiscriminatory.

267. We also recognize, however, thatthere will be areas and services forwhich competition may not develop.Therefore, we shall retain many of theexisting safeguards afforded by our pricecap regulation, including theproductivity offset (X-Factor), whichrequires incumbent LECs to adjust theiraccess charges to reflect changes in theeconomic cost of providing service. Inaddition, we also adopt a prescriptive‘‘backstop’’ to our market-basedapproach that will serve to ensure thatall interstate access customers receivethe benefits of more efficient prices,even in those places and for thoseservices where competition does notdevelop quickly. To implement ourbackstop to market-based access chargereform, we require each incumbentprice cap LEC to file a cost study nolater than February 8, 2001,demonstrating the cost of providingthose interstate access services thatremain subject to price cap regulationbecause they do not face substantialcompetition. The Commission willrequire submission of such studiesbefore that date if competition is notdeveloping sufficiently for our market-based approach to work. Studies shouldidentify and quantify forward-lookingcosts, short-run and long-run, that areincremental to providing each suchservice, and also costs that are commonas between various services. Thesestudies are required only for non-competitive services; as stated above,we do not intend to regulate prices ofservices that are subject to substantialcompetition.

268. We have chosen this date inorder to give competition sufficient timeto develop substantially in the variousmarkets for interstate exchange accessservices. We have also chosen this dateto permit us and all interested parties totake into account the effects ofimplementing the substantial changes

that we adopt in this Order and that wewill be adopting elsewhere to satisfy theuniversal service goals in section 254.By this date, we also expect to haveadditional regulatory tools by which toassess the reasonableness of accesscharges. We may, for example, be ableto establish benchmarks based on pricesfor the interstate access services forwhich competition has emerged, anduse the prices actually charged incompetitive markets to set rates for non-competitive services and markets.Carriers could be required either to settheir rates in accordance with thebenchmarks or to justify their ratesusing their cost studies.

269. We anticipate that the pro-competitive regime created by the 1996Act, and implemented in the LocalCompetition Order and numerous statecommission decisions, will generatecompetition over the next few years.Further, it would be imprudent toprejudge the effectiveness of thosemeasures at creating competitive localmarkets. Rather than ignore or interferewith the effects of this developingcompetition on prices for interstateaccess services, we find that the publicinterest is best served by permittingemerging competition to affect accesscharge rate levels. In addition, theexperience we gain from observing theeffects of emerging competition oninterstate access services will permit usmore effectively and efficiently toimplement any prescriptive measuresthat may be needed in the future toensure that interstate access servicesremaining subject to regulation arepriced in accordance with the forward-looking economic cost of providingthose services.

270. Economic logic holds that givingincumbent LECs increased pricingflexibility will permit them to respondto competitive entry, which will allowprices to move in a way that they wouldnot have moved were the pricingrestrictions maintained. This can lead tobetter operating markets and producemore efficient outcomes. Deregulationbefore competition has establisheditself, however, can expose consumersto the unfettered exercise of monopolypower and, in some cases, even stiflethe development of competition, leavinga monopolistic environment thatadversely affects the interests ofconsumers. Therefore, it is importantthat we design our market-basedapproach carefully. We must, amongother things, decide which, if any, of therules setting forth specific competitivetriggers and corresponding flexibility asproposed in the NPRM we shouldadopt. We will resolve these issues in

the subsequent report and order in thisdocket.

271. As set forth in the summary ofcomments appended to this order,AT&T cites to Farmers Union CentralExchange, Inc. v. FERC, 734 F.2d 1486,1508 (D.C. Cir.) (Farmers Union), cert.denied, Williams Pipe Line Co. v.Farmers Union Central Exchange, Inc.,469 U.S. 1034 (1984), for theproposition that ‘‘[r]eliance oncompetitive forces to constrainexchange access rates, particularly inthe presence of strong indications thatmarket forces will not produce theintended results, would be arbitrary andcapricious and contravene theCommission’s statutory duty to ensurejust, reasonable, and nondiscriminatoryrates.’’ We disagree with AT&T’sassertion. In Farmers Union, FERC hadstated in its relevant order thatratemaking for oil pipelines should beused solely to prevent price gouging,and had interpreted the Congressionalmandate of ‘‘just and reasonable’’ ratesas requiring that rates be kept within thezone of commercial reasonableness, notpublic utility reasonableness. Under thisinterpretation, FERC had concluded thatit would rely primarily on market forcesto keep rates reasonable.

272. The court in Farmers Unionrecognized that ‘‘[m]oving from heavy tolighthanded regulation * * * can bejustified by a showing that * * * thegoals and purposes of the statute will beaccomplished through substantially lessregulatory oversight,’’ but objected toFERC’s failure to establish that its newapproach would satisfy the ‘‘just andreasonable’’ standard. The court rejectedFERC’s position that oil pipelineratemaking should protect only against‘‘egregious exploitation and grossabuse’’ as being inconsistent with themandate that Congress had establishedfor FERC. The court concluded thatFERC had not shown that market forceswere sufficient to rely upon in settingreasonable rates.

273. We reject AT&T’s argument thatour market-based approach to accesscharge reform is analogous to FERC’sconduct at issue in Farmer’s Union. Ouraccess charge and price cap rules aredesigned to ensure that access chargesremain within the ‘‘zone ofreasonableness’’ defining rates that are‘‘just and reasonable,’’ and our market-based approach will also be designed toimplement this statutory requirement. Itwill not remove incumbent LECs fromregulation immediately, but willimplement deregulation in steps, ascompetitive conditions warrant.Throughout the transition toderegulation in the face of substantialcompetition, we will maintain many


safeguards against unjust orunreasonable rates, such as the pricecap indices. We will deregulateincumbent LEC services only when it isreasonable to conclude that competitionhas developed to such an extent that themarket will ensure just and reasonablerates.

274. Second, our market-basedapproach is an eminently reasonablemethod for pursuing our goal ofpromoting competition and ensuring theeconomically efficient pricing ofinterstate access services. Ascompetition emerges, the market-basedapproach will permit access charges tomove towards the levels that willprevail in competitive markets. Duringthe transition to competitive markets,access services not subject tocompetition will remain subject to pricecap regulation, and we will eventuallyprescribe rates for those services atforward-looking economic cost levels, toensure that all consumers reap thebenefits of economically-efficient prices.Unlike the FERC regulation at issue inFarmers Union, our market-basedapproach to promoting the developmentof competitive markets andeconomically-efficient pricing will notbe based on ‘‘largely undocumentedreliance on market forces * * *.’’Instead, we will design our approach sothat deregulation occurs only when thereliability of market forces can be fullydetermined with respect to a particularservice. Finally, we observe that FERC’smandate in Farmers Union was one ofrate regulation due to market failure andconcern over monopoly power. In lightof the 1996 Act, our mandate is nolonger strictly or solely one of rateregulation. Congress has stated its desireto establish ‘‘a pro-competitive,deregulatory national policyframework.’’ Our market-basedapproach will be designed to coincidewith and promote this objective.

275. Price Squeeze Concerns AreAdequately Addressed. Several partieshave argued that current access chargerate levels create the conditions for ananticompetitive price squeeze when aLEC affiliate offers interexchangeservices in competition with IXCs. Aprice squeeze, as the term is used bythese parties, refers to a particular, well-defined strategy of predation that wouldinvolve the incumbent LEC setting‘‘high’’ prices for interstate exchangeaccess services, over which the LEC hasmonopoly power (albeit constrained byregulation), while its affiliate is offering‘‘low’’ prices for long-distance servicesin competition with the other long-distance carriers. Because interstateexchange access services are a necessaryinput for long-distance services, these

parties argue that an incumbent LEC cancreate a situation where the relationshipbetween the LEC’s ‘‘high’’ exchangeaccess prices and its affiliate’s ‘‘low’’prices for long-distance services forcescompeting long-distance carriers eitherto lose money or to lose customers evenif they are more efficient than the LEC’saffiliate at providing long-distanceservices. It is this nonremunerativerelationship between the input pricesand the affiliate’s prices, and not theabsolute levels of those prices, thatdefines a price squeeze. In the mostextreme case, a price squeeze involvesa monopolist setting input prices thatare actually higher than its prices in theoutput market.

276. Price cap regulation of accessprices limits the ability of LECs to raisethe prices of the input services.Commenters raising price squeezeconcerns argue, however, that a LEC’sinterexchange affiliate will still be in aposition to implement a price squeezeby setting long-distance rates close tothe rates for access services, therebyforcing IXCs to charge below-cost ratesto retain customers. They argue thatLECs’ interexchange affiliates havelower costs of providing interexchangeservices because of their affiliation withmonopoly providers of interstate accessservices, and not as a result of beingmore efficient. According to thesecommenters, the relevant economiccosts of providing interstateinterexchange services will be lower forthe LEC affiliate offering interexchangeservices than for competing IXCsbecause it only has to recover the trueeconomic cost of providing theinterstate access services (since theowners of the LEC and its interexchangeaffiliate will want the two entities tomaximize their joint profits), whereasthe IXCs will be forced to pay interstateaccess charges that are above the trueeconomic cost of providing theunderlying services.

277. Absent appropriate regulation, anincumbent LEC and its interexchangeaffiliate could potentially implement aprice squeeze once the incumbent LECbegan offering in-region, interexchangetoll services. Although no BOC affiliatemay offer such services at this time,GTE, SNET, Sprint and other incumbentLECs do have affiliates offering suchservices. The incumbent LEC could dothis by raising the price of interstateaccess services to all interexchangecarriers, which would cause competingin-region carriers to either raise theirretail rates to maintain their profitmargins or to attempt to maintain theirmarket share by not raising their pricesto reflect the increase in access charges,thereby reducing their profit margins. If

the competing in-region, interexchangeproviders raised their prices to recoverthe increased access charges, theincumbent LEC’s interexchange affiliatecould seek to expand its market share bynot matching the price increase. Theincumbent LEC affiliate could also setits in-region, interexchange prices at orbelow its access prices. Its competitorswould then be faced with the choice oflowering their retail rates forinterexchange services, therebyreducing their profit margins, ormaintaining their retail rates at thehigher price and risk losing marketshare.

278. We conclude that, although anincumbent LEC’s control of exchangeand exchange access facilities may giveit the incentive and ability to engage ina price squeeze, we have in placeadequate safeguards against suchconduct. The Policy and RulesConcerning Rates for CompetitiveCommon Carrier Services and FacilitiesAuthorizations Therefor, CC Docket No.79–252, Fifth Report & Order, 49 FR34824 (September 4, 1984) (FifthCompetitive Carrier Report and Order),requirements aid in the prevention anddetection of such anticompetitiveconduct. In our recent RegulatoryTreatment of LEC Provision ofInterexchange Services Originating inthe LEC’s Local Exchange Area andPolicy and Rules Concerning theInterstate, Interexchange Marketplace,Second Report and Order in CC DocketNo. 96–149 and Third Report and Orderin CC Docket No. 96–61, 62 FR lll(released April 18, 1997) (Dom/NondomR&O), we decided to retain the FifthCompetitive Carrier Report and Orderseparation requirements for incumbentLEC provision of in-region interLATAservices. These requirements apply bothto BOCs and to other incumbent LECs.In addition, as discussed in that order,BOC interexchange affiliates are subjectto the safeguards set forth in section 272of the Act.

279. The Fifth Competitive CarrierReport and Order separationrequirements have been in place forover ten years, and independent (non-BOC) incumbent LECs have beenproviding in-region, interexchangeservices on a separated basis with nosubstantiated complaints of a pricesqueeze. Under these separationrequirements, incumbent LECs arerequired to maintain separate books ofaccount, permitting us to trace anddocument improper allocation of costsand/or assets between a LEC and itslong-distance affiliate, as well as todetect discriminatory conduct. Inaddition, we prohibit joint ownership offacilities, which further reduces the risk


of improper allocations of the costs ofcommon facilities between theincumbent LEC and its interexchangeaffiliate, as discussed at length in theDom/Nondom R&O and theImplementation of the Non-AccountingSafeguards of Sections 271 and 272 ofthe Communications Act of 1934, asamended, First Report and Order andFurther NPRM, FCC 96–489 ¶¶ 159–62(December 24, 1996) (Non-AccountingSafeguards Order), on recon., FCC 97–52 (February 19, 1997), recon. pending,CC Docket No. 96–149, petition forsummary review in part denied andmotion for voluntary remand grantedsub nom., Bell Atlantic v. FCC, No. 97–1067 (D.C. Cir. filed March 31, 1997),petition for review pending sub nom.,SBC Communications v. FCC, No. 97–1118 (D.C. Cir. filed March 6, 1997)(held in abeyance pursuant to courtorder filed May 7, 1997), 62 FR 2991(January 21, 1997) (addressing the Act’sprohibition of BOC joint ownershipwith its interexchange affiliate pursuantto section 272). As we also discussed atlength in those orders, the prohibitionon jointly-owned facilities also helps todeter any discrimination in access to theLEC’s transmission and switchingfacilities by requiring the affiliates tofollow the same procedures ascompeting interexchange carriers toobtain access to those facilities. Finally,our requirement that incumbent LECsoffer services at tariffed rates, or on thesame basis as requesting carriers thathave negotiated interconnectionagreements pursuant to section 251reduces the risk of a price squeeze to theextent that an affiliate’s long-distanceprices would have to exceed their costsfor tariffed services.

280. Current conditions in markets forinterexchange services give us comfortthat an anticompetitive price squeeze isunlikely to occur as a result of ourdecision not to prescribe immediatelyaccess charge rates at forward-lookingeconomic cost levels. If an incumbentLEC does attempt to engage in ananticompetitive price squeeze againstrival long-distance providers, theprovisions of the Act should permit newentrants or other competitors to seek outor provide competitive alternatives totariffed incumbent LEC access services.For example, under the provisions ofsection 251, a competitor will be able topurchase unbundled network elementsto compete with the incumbent LEC’soffering of local exchange access.Therefore, so long as an incumbent LECis required to provide unbundlednetwork elements quickly, at economiccost, and in adequate quantities, anattempted price squeeze seems likely to

induce substantial additional entry inlocal markets. Accordingly, there shouldbe a reduced likelihood that anincumbent LEC could successfullyemploy such a strategy to obtain thepower to raise long-distance prices tothe detriment of consumers.

281. Furthermore, even if a LEC wereable to allocate improperly the costs ofits affiliate’s interexchange services, weconclude that it is unlikely that theLEC’s interexchange affiliate couldengage successfully in predation. Atleast four interexchange carriers—AT&T, MCI, Sprint, and LDDSWorldCom—have nationwide, or near-nationwide, network facilities that coverevery LEC’s region. These are large,well-established companies withmillions of customers throughout thenation. It is unlikely, therefore, that oneor more of these national companies canbe driven from the market with a pricesqueeze, even if effectuated by severalLECs simultaneously, whether actingtogether or independently. Even if itcould be done, it is doubtful that theLECs’ interexchange affiliates wouldlater be able to raise, and profitablysustain, prices above competitive levels.As Professor Spulber has observed,‘‘[e]ven in the unlikely event that[LECs’’ interexchange affiliates] coulddrive one of the three largeinterexchange carriers into bankruptcy,the fiber-optic transmission capacity ofthat carrier would remain intact, readyfor another firm to buy the capacity atdistress sale and immediately undercutthe [affiliates’] noncompetitive prices.’’Daniel F. Spulber, DeregulatingTelecommunications, 12 Yale J. Reg. 25,60 (1995).

282. Finally, in addition to ourregulations and the provisions of section251 of the Act, the antitrust laws alsooffer a measure of protection against apossible price squeeze. Beginning withJudge Learned Hand’s opinion in UnitedStates v. Aluminum Co. of America(Alcoa), 148 F.2d 416, 437–38 (2d Cir.1945), a specific body of precedent hasdeveloped under federal antitrust lawdefining situations where a pricesqueeze can be actionable as a form ofmonopolization or attemptedmonopolization under Section 2 of theSherman Act. 15 U.S.C. sec. 2. Underthis precedent, a price squeeze canviolate the antitrust laws where (1) afirm has monopoly power with respectto an ‘‘upstream’’ product; (2) it sellsthat product at ‘‘higher than a ‘fairprice,’ ’’; (3) the product is a necessaryinput for the product being sold byother firms in competition with themonopoly or its affiliate in a‘‘downstream’’ market; and (4) themonopolist offers the ‘‘downstream’’

product at a price so low that (equally-efficient) competitors cannot match theprice and still earn a ‘‘living profit.’’Alcoa, 148 F.2d at 437–38. Over time,courts have developed several tests fordetermining when the relationshipbetween the two prices is sufficientlyadverse to competitors that it constitutesan anticompetitive price squeeze.Although we believe it would not servethe public interest for us knowingly topermit a price squeeze to occur, and torely entirely on the adequacy ofantitrust law remedies to protect thepublic, we take comfort in the fact thatsuch remedies exist should ananticompetitive price squeeze occur inspite of the safeguards we have adopted.In particular, although a price squeezeengaged in by several LECs, particularlyif it involved more than one of the BOCsor GTE, could have a significant impacton interexchange competitors, webelieve that the antitrust laws will act asa strong backstop to our ownenforcement process so that the risk ofsuch concerted activity is sufficientlylimited. Because the rates charged byLEC interexchange affiliates will not beregulated, we do not believe that a courtwould reject a price squeeze claimunder the antitrust laws on the groundsthat ‘‘ ‘normally’ a price squeeze will notconstitute an exclusionary practice inthe context of a fully regulatedmonopoly.’’ Town of Concord v. BostonEdison Co., 915 F.2d 17 (1st Cir. 1990)(J. Breyer), cert. denied, lll U.S.lll, 111 S. Ct. 1337 (1991). Indeed,the court in that case explicitly declinedto address the ‘‘special problem’’ posedby a price squeeze allegation against afirm regulated in the input market andundercutting rivals’ prices in theunregulated market where inputs areused.

283. Other Concerns Raised byCommenters. Several commenters raisedconcerns that our market-basedapproach to access charge reform mightpermit incumbent LECs to engage incross subsidization, either betweencompetitive and non-competitiveservices, or between interstate accessservices and other services such asvideo distribution. No evidence hasbeen presented, however, indicating anylikelihood that current price capregulation, which is designed, in part, toprevent cross subsidization, mightbecome less effective under a market-based approach to access charge reform.Those price cap regulations will remainin place until there is sufficientcompetition to prevent an incumbentLEC from charging rates that are not justand reasonable. Therefore, we find thatthe record does not contain substantial


evidence that a market-based approachto access charge reform is any less likelythan current regulation to permitincumbent LECs to engage inunreasonable cross subsidization withtheir interstate access charges.

284. Finally, several commentersbased their support for a market-basedapproach, in part, on arguments that itwould reduce, or minimize,administrative burdens. Othercommenters, on the other hand,opposed a market-based approach onthe grounds that it would increaseadministrative burdens. Based on therecord before us, however, we cannotreach a conclusion as to the relativeadministrative burdens of the twoapproaches. Some parts of our proposedmarket-based approach, such as grantsof increased pricing flexibility ascompetitive conditions warranted, weremodeled on waivers that we havegranted within the context of ourcurrent price cap plan and would likelybe necessary even if we had adopted aprimarily prescriptive approach toaccess charge rate level reform.Similarly, some parts of a prescriptiveapproach, such as annual changes inprice cap calculations, will necessarilybe a part of our market-based approach.Accordingly, we can see no basis in thisrecord for concluding that a market-based approach to access charge reformwill be any more or less burdensomethan any other alternative.

B. Prescriptive Approaches

1. Prescription of a New X-Factor

a. Background285. In the NPRM, we observed that

the Commission had initiated arulemaking proceeding in the Price CapFourth Further NPRM to examine anumber of proposals for revising theproductivity offset component of the X-Factor, and to consider related issuessuch as eliminating sharing obligationsand the low-end adjustmentmechanism. We invited parties todiscuss in this proceeding whether therecord developed pursuant to the PriceCap Fourth Further NPRM justifiedincreasing the productivity offset, andspecifically invited comment on theeffects of a forward-looking cost ofcapital and economic depreciation ontotal factor productivity (TFP)measurement.

b. Discussion286. The commenters generally repeat

arguments made in the Price Cap FourthFurther NPRM proceeding. For reasonsexplained in detail in our companionPrice Cap Fourth Report and Order, weconclude that we should prescribe an X-

Factor on the basis of total factorproductivity studies, the differencebetween LEC input price changes andinput price changes in the economy asa whole, and the 0.5 percent consumerproductivity dividend (CPD). In thecompanion order we find that thisresults in an X-Factor prescription of 6.5percent.

2. Other Prescriptive Approaches

a. Background

287. In the NPRM, we soughtcomment on four options for aprescriptive approach: reinitializingprice cap indices (PCIs) to economiccost-based levels; reinitializing PCIs tolevels targeted to yield no more than an11.25 percent rate of return, or someother rate of return; adding a policy-based mechanism similar to the CPD tothe X-Factor; or prescribing economiccost-based rates. We have decided aboveto rely primarily on a market-basedapproach, and impose prescriptiverequirements only when market forcesare inadequate to ensure just andreasonable rates for particular servicesor areas. We will determine the detailsof our market-based approach in afuture Order. In that Order, we will alsodiscuss in more detail what prescriptiverequirements we will use as a backstopto our market-based access chargereform. In this section, we explain whywe have decided not to adopt anyspecific prescriptive mechanism in thisOrder.

b. Rate Prescription

288. Background. We soughtcomment on prescribing new interstateaccess rates because simplyreinitializing PCIs would not necessarilycompel incumbent LECs to establishreasonable rate structures. We alsonoted, however, that prescribing accessrates on a TSLRIC basis could raisecommon cost allocation issues to amuch greater extent than did TELRICpricing for unbundled networkelements.

289. Discussion. In Section IV.A,above, we explain why we can andshould rely primarily on market forcesto cause interstate access rates to movetoward economic cost levels over thenext several years. Prescribing TSLRIC-based access rates would be the mostdirect, uniform way of moving thoserates to cost. But, precisely because ofits directness and uniformity, rateregulation can only be, at best, animperfect substitute for market forces.Regulation cannot replicate the complexand dynamic ways in whichcompetition will affect the prices,service offerings, and investment

decisions of both incumbent LECs andtheir competitors. A market-basedapproach to rate regulation shouldproduce, for consumers oftelecommunications services, a bettercombination of prices, choices, andinnovation than can be achievedthrough rate prescription. A market-based approach, with continued pricecap regulation of services not subject tosubstantial competition and with theprescriptive backstop described inSection IV.A, is thus consistent bothwith the pro-competitive, deregulatorygoals of the 1996 Act and with ourresponsibility under Title II, Part I of theCommunications Act to ensure just andreasonable rates.

290. Furthermore, immediateprescription of TSLRIC-based rateswould not necessarily move rates tothose levels faster than the market-basedapproach and prescriptive backstopdeveloped in Section IV.A. Some partiesthat favor a prescriptive approach haveasserted that setting access ratesimmediately at TSLRIC levels wouldreduce incumbent LEC revenues by $10billion or more. Were we to make sucha rate prescription, we would considerphasing in rate reductions of thatmagnitude over a period of years, inorder to avoid the rate shock that wouldaccompany such a great rate reductionat one time. Finally, because we haveadopted a more efficient rate structurefor interstate switched access services, itis not necessary to prescribe new ratesin order to achieve efficient ratestructures, as TRA and TCI recommend.Accordingly, we will not prescribeTSLRIC-based access rates at this time.

c. Reinitialization of PCIs on a Rate-of-Return Basis

291. Discussion. We rejectreinitialization on the basis of any rateof return at this time. As a generalmatter, the parties advocating a rate-of-return based reinitialization do notprovide any persuasive reason foradopting that particular approach. Theyfavor reinitialization largely becausethey believe interstate access chargesshould be lower than they are now. Asexplained above, however, we areadopting a primarily market-basedapproach to rate level adjustments. Theprescriptive backstop to that approachwill be based on TSLRIC cost studiesand, most likely, applied togeographically deaveraged rates. Thatapproach is more likely to result in ratesthat are aligned with economic coststhan would reinitialization to aparticular rate of return on an embeddedcost rate base.

292. Moreover, because the basictheory of our existing price cap regime


is that the prospect of retaining higherearnings gives carriers an incentive tobecome more efficient, we believe thatrate of return-based reinitializationwould have substantial perniciouseffects on the efficiency objectives ofour current policies. In this regard, wehave often expressed concern in pastprice cap orders that maintaining linksbetween rate levels and a carrier’sachieved rate of return would undercutthe efficiency incentives price capregulation was designed to encourage.In the LEC Price Cap Order, we rejecteda so-called ‘‘automatic stabilizer’’adjustment to the price cap index that—like reinitialization—would havepermanently adjusted index levelsdownward in the event that carriersachieved earnings above a certain rate ofreturn. Similarly, in our 1995 LEC PriceCap Performance Review Order, wecited as a disadvantage of AT&T’s‘‘Direct Model’’ method of determiningthe PCI formula’s ‘‘X-Factor’’ the factthat ‘‘a target rate of return is a criticalfactor in measuring productivity.’’ Andalthough we sought comment in theAccess Reform NPRM on the question ofrate of return-based reinitialization ofthe price cap indices, we once againexpressed concern that such action‘‘could have a negative effect on theproductivity incentives of the LEC pricecap plan.’’ We, of course, have authorityto change our methods and theories ofregulating LEC rates when we believethe purposes of the CommunicationsAct would be better served by doing so.However, we find that, given ourconsistently critical past statementsabout rate of return-based adjustmentsto price caps, a decision now toreinitialize PCIs to any specified rate ofreturn would further undermine futureefficiency incentives by making carriersless confident in the constancy of ourregulatory policies.

293. In declining to reinitialize PCIson the basis of carriers’ rates of return,we reject GSA/DOD’s suggestion thataccess rates have been excessive merelybecause the earnings of most price capcarriers have exceeded 11.25 percent,and, in some cases, by substantialamounts. When the Commissionadopted price cap regulation, itspecifically permitted price cap carriersto earn in excess of 11.25 percent inorder to encourage them to becomemore productive. The Commission alsoconcluded that complaints allegingexcessive earnings relative to costs willnot lie as long as the carrier is incompliance with the sharingmechanism. In addition, we found inthe LEC Price Cap Performance ReviewOrder that access rates declined

substantially under price cap regulationfrom 1991 to 1994, in spite of theincreases in earnings to which GSA/DOD alluded. Furthermore, the vastlydifferent results among companies showthat the incentive plan we have for costreduction (price caps) largely is workingas predicted, whereas a rate-of-return-based scheme would have cost much interms of inefficiency.

d. Reinitialization of PCIs on a TSLRICBasis

i. Background

294. In the NPRM, we soughtcomment on reducing price cap PCIs byan amount equal to the differencebetween the incumbent LECs’ PCIs andthe revenues that would be produced byrates set at TSLRIC levels. We noted thata TSLRIC-based PCI reinitializationmight be preferable to a TSLRIC-basedrate prescription because it would notrequire us to prescribe common costallocations. We also sought comment onwhether or to what extent we could relyon TELRIC studies developed forpricing unbundled network elements,and whether we should initiate jointboard proceedings to rely on statecommissions to evaluate the incumbentLECs’ TELRIC studies.

ii. Discussion

295. We have decided not to requireincumbent LECs to reinitialize PCIs ona TSLRIC basis at this time. As wediscuss in Section IV.A above, weexpect market forces to develop as aresult of the 1996 Act and to driveaccess rate levels to forward-lookingeconomic costs. Furthermore, the recordin this proceeding is unclear on whetherthere is an accurate and convenientmethod for determining TSLRIC forpurposes of reinitializing PCIs at thistime. Specifically, it is unclear whetherthe TELRIC studies used to developunbundled network element prices canbe used for access services.

e. Policy-Based X-Factor Increase

296. Background. In the NPRM, weobserved that we adopted a consumerproductivity dividend (CPD) to assurethat some portion of the benefits of theincumbent LECs’ increased productivitygrowth under price cap regulationwould flow to ratepayers in the form ofreduced rates. We sought comment onestablishing a policy-based mechanismsimilar to the CPD to force access ratesto cost-based levels.

297. Discussion. We do not require apolicy-based X-Factor increase at thistime for the same reason we do notrequire a TSLRIC-based PCIreinitialization; we expect market forces

to control access charges effectively ina less intrusive manner.

298. BellSouth and GTE opposeincreasing the CPD as an arbitrary andconfiscatory measure. SNET claims thatincreasing the X-Factor merely becausethe price cap LECs have earned toomuch, or simply to drive rates down, isessentially an abandonment of price capregulation, because it would punishincumbent LECs for their efficiencygains made under the price cap regime.BA/NYNEX and GTE contend that theX-Factor should be chosen to reflectreasonably expected incumbent LECproductivity growth rather than toachieve a specific rate reduction. Weemphasize that we have done nothing inthis Order to increase the X-Factor. Inour companion Price Cap Fourth Reportand Order, we prescribe a new X-Factorof 6.5 percent, but this prescription isbased on detailed studies of LECproductivity growth and input pricechanges. We decline to increase theCPD, and we reject a proposal to set theX-Factor to target an industry averagerate of return of 11.25 percent. Thus,none of our actions in either this Orderor our companion Order can properly becharacterized as an abandonment ofprice cap regulation, or as motivatedmerely by a desire to drive rates down.

C. Equal Access Costs

1. Background

299. In the NPRM, we solicitedcomment on whether to requireincumbent price cap LECs to make anexogenous cost decrease to one or moreof their PCIs to account for thecompletion of the amortization of equalaccess costs on December 31, 1993. Wenote that through the years, this issuehas been referred to as ‘‘equal accessnetwork reconfiguration’’ or EANRcosts. This is a misnomer, which wecorrect today. ‘‘Equal access’’ is theprovision of exchange access to allinterexchange carriers on an unbundled,tariffed basis that is equal in type,quality, and price to that provided toAT&T and its affiliates. Equal Accessand Network Reconfiguration Costs,Memorandum Opinion and Order, 50FR 50910 ( December 9, 1985) at ¶ 18(Equal Access Cost Order). ‘‘NetworkReconfiguration’’ costs are thoseinvestments and expenses incurred inconnection with structurally conformingthe pre-divestiture AT&T network withthe LATA boundaries mandated by theMFJ. Issues underlying networkreconfiguration costs were resolved inthe Equal Access Cost Order and havenot been raised since.

300. Under court order, the BOCs andGTE were required to provide equal


access. See United States v. AT&T, 552F. Supp. 131, 233 (D.D.C. 1982); UnitedStates v. GTE Corp., 603 F. Supp. 730,745 (D.D.C. 1984). This conversion,estimated at more than $2.6 billion, waslargely completed by 1990, andinvolved both capital and non-capitalexpenditures. Under the Equal AccessCost Order, incumbent LECs wererequired to identify separately theincremental capital investments and theincremental non-capital-relatedexpenses associated with theimplementation of equal access. TheEqual Access Cost Order directed thatthe capital investments, which itestimated to comprise approximately 55percent of the $2.6 billion, be treatedpursuant to ordinary accounting andratemaking principles. The Commissiondetermined that the remaining 45percent of the expenditures—whichwere non-capitalized equal accessexpenses—required special treatment:

[W]e are concerned that these expenditureswill cause irregular and substantialfluctuations in revenue requirementsassociated with equal access. Because theyare extraordinary, are for the greatest partexpected to be incurred over the next fewyears, and, therefore, are likely to bedistortive of financial results and raterequirements, we find that these equal accessexpenses should be deferred and amortized.

Equal Access Cost Order, 50 FR at50914–15, ¶ 33. The Commissionordered that these equal access expensesbe separately identified and recorded,and that they be written off over aperiod of eight years, ending December31, 1993. See Equal Access and NetworkReconfiguration Costs, Reconsideration,FCC No. 86–470 (released November 5,1986) at ¶ 25 (Equal Access CostReconsideration Order). In thereconsideration of the Equal Access CostOrder, the Commission found that thespecific termination date of the eightyear amortization of these expenseswould ‘‘shorten the period duringwhich the unamortized balances areentitled to earn a rate of return.’’ Id. Itis clear that the LECs’ rate-of-return(ROR) rates included revenue recoveryfor both capitalized expenditures(recovered through the ordinarydepreciation process) and non-capitalized expenses (recovered throughthe special amortization process). It isalso clear that at the time theamortization was imposed, theCommission envisioned an end to therecovery for the amortized expenses anda subsequent decrease in ROR rates.

301. In converting to price capregulation, the Commission found thatequal access conversion was, in largepart, completed and that the associatedcosts, which included both the

capitalized expenditures and theamortized expenses, were embedded inthe existing rates. As such, theCommission refused to grant LECs anexogenous increase for equal accesscosts, finding that these costs werealready accounted for in the existingrates. The Commission also based itsdecision to deny an exogenous increaseon its concern that exogenous treatmentof equal access expenditures wouldcreate inappropriate incentives for theLECs to inflate the amounts spent onequal access. The Commission noted thedifficulty of reviewing equal accesscosts, as well as the risk that incumbentLECs might willfully or inadvertentlyshift switched access costs into theproposed equal access category in orderto benefit from the requested exogenousincrease.

2. Discussion302. We find that an exogenous cost

decrease to account for completion ofthe amortization of equal access non-capitalized expenses is necessary andappropriate. Although we haveaddressed this issue in the past anddeclined to act, we now find that anexogenous decrease is merited. Werecognize our decision departs from ourpast decisions that have declined toimpose an exogenous decrease for thecompleted recovery of these costs. Asdiscussed below, our decision todayreverses those decisions and is based onan extensive record from this, and priorproceedings. Our decision today alignsour treatment of the completion of theamortization of equal access costs withtwo other similar amortizations thatwere ordered under ROR regulation andcarried over into price cap regulation,namely, the exogenous decreaseimposed for the completion of theamortization of depreciation reservedeficiencies, and the exogenousdecrease imposed for the completion ofthe amortization of inside wire costs.We are convinced that this treatment isthe proper method to ensure thatratepayers are not paying for costs thathave already been completelyrecovered.

303. The need for an exogenousadjustment to account for the expirationof the equal access expense amortizationstems from the different ways in whichrates are established under RORregulation, on the one hand, and pricecap regulation, on the other hand, andfrom the Commission’s decision toestablish initial price cap levels at theoutset of price cap regulation on thebasis of existing ROR-derived rates.When converting from ROR regulationto price cap on regulation January 1,1991, the Commission needed to select

a set of ‘‘baseline’’ rate levels to whichthe price cap index of incremental costchanges would be tied. For thatpurpose, we chose the ROR-developedrates that were in effect on July 1, 1990.The Commission found that, in general,those rates served as an appropriatestarting point for measuring subsequentincremental cost changes under pricecap regulation, because they ‘‘reflect[ed]the reasonable operation of RORregulation.’’

304. In two respects, however, theCommission recognized that existingrates did not reflect equilibrium ROR-derived rates, but rather reflectedspecial corrective adjustments that wehad ordered previously. In particular,the Commission noted that existingrates had embedded within them costsassociated with Commission-ordered‘‘one-time’’ amortizations ofdepreciation reserve deficiencies andinside wiring costs. Had ROR regulationcontinued, the rates subject to theseamortizations would have been reducedwhen the amortizations werecompleted. To ensure that ratepayersunder price caps would not be requiredpermanently to bear these temporaryCommission-ordered, ROR-derived rateadjustments, we directed LECs to makedownward exogenous cost adjustmentsto their price cap indices upon theexpiration of those amortizations.

305. Similarly, the Commissionordered amortization of equal accessexpenses, which also were reflected inbaseline rates at the outset of price capregulation. Under normal RORratemaking principles, those expenses—which, for the most part, already hadbeen incurred before price capregulation was initiated—would havebeen recovered in the BOCs’ rates thesame year they were incurred andwould no longer have been reflected inrates at the time price caps wereinstituted. However, as explained supra,the Commission required the carriers toamortize these extraordinary expensesover eight years because of the potentialfluctuations in revenue requirementsassociated with equal access. Thus theseexpenses remained embedded withinBOC rates at the outset of price capseven though, for the most part, theextraordinary expenses themselves wereno longer being incurred.

306. The specific question of whetherthe completely amortized equal accessexpenses should be treated exogenouslyhas been presented to the Commissionon a number of occasions. In the past,procedural impediments arising fromour rules, as well as the lack of anadequate record, convinced us todecline to impose such treatment at thattime. For example, when AT&T raised


the issue of downward adjustment forcompleted amortization of equal accessexpenses in an annual access chargetariff proceeding, the Common CarrierBureau found that the issue was beyondthe scope of the proceeding because itwould require a substantive change tothe price cap rules. Similarly, inresponse to AT&T’s and MCI’s revisitingthe question in both the First 1994Annual Access Charge Order and theSecond 1994 Annual Access ChargeOrder, the Commission found thatexogenous treatment would require arule change to section 61.45(d) of theCommission’s rules. Because no LEChad filed for a waiver of section61.45(d), the Common Carrier Bureaufound that the issue was not properlypresented for investigation.

307. In denying the requests forprocedural reasons, the Commissionsupported its decisions with variousrationales. In some instances, theserationales appear now not to have beenconsidered to a sufficient degree. Inaddressing equal access costs in theorders adopting price cap regulation, theCommission focused primarily on thequestion of whether future equal accessinvestments and expenses should betreated exogenously because equalaccess had been compelled byregulatory (or judicial) order. Weconcluded, subject to consideration ofwaiver requests, that we should notaccord exogenous cost treatment to suchfuture equal access conversion costs,because of concerns that exogenous costtreatment would create disincentives toimplement equal access in an efficientmanner. We did not focus in detail onthe logically distinct question ofwhether equal access expenses thatwere already embedded within baselineBOC rates pursuant to the temporary‘‘one-time’’ amortizations (and thusraised no question with respect to futureincentives) should be removed throughexogenous adjustments when theamortizations expired. Instead, werelegated that issue to a footnote, whichdenied exogenous cost treatment on thebasis of a skeletal analysis that makes noreference to our treatment of thedepreciation reserve deficiency andinside wiring amortizations. In thefootnote, it is clear that the Commissionwas not distinguishing betweencapitalized costs, which were properlytreated as depreciated expenses, andnon-capitalized expenses, which wereactually amortized per theCommission’s own requirement. TheCommission framed the issue of adownward adjustment in terms ofwhether the completion of depreciationrequired a downward adjustment,

querying ‘‘whether the BOCs willexperience any cost change in 1994 [atthe completion of the amortization] thatstems from factors beyond theircontrol.’’ In support of its implicitlynegative answer, the Commissionanalogized to the absence of a price capindex change when a piece ofequipment is fully depreciated, or whena carrier increased or decreased thespeed with which it recoveredinvestments. The Commission foundthat, ‘‘[b]ased on a meager factual recordpresented on the issue of equal accessexpense, we are reluctant to depart fromour practice of not adjusting PCI levelsto reflect levels of cost recovery.’’

308. The Commission’s analysis atthat time was incomplete. The EqualAccess Cost Order and the Equal AccessCost Reconsideration Order explicitlyrecognized two components of equalaccess costs—capitalized, which were tobe depreciated, and non-capitalized,which were extraordinary and were tobe amortized over a set period. TheCommission established differenttreatment for these two sets of costsbased on policy reasons, and ordered anamortization schedule for the non-capitalized costs. The Commission’sestablishment of this schedule wasbeyond the incumbent LECs’ control.The Commission’s analogy to the lack ofexogenous treatment for equipmentdepreciation and changes in the tempoof recovery should have only applied tothe capitalized portion of the equalaccess costs.

309. The Commission explicitly statedin the LEC Price Cap Order thatcompleted amortizations of depreciationreserve deficiencies require anexogenous downward adjustment. TheCommission found that such anadjustment was necessary to ensure thatratepayers were not paying for a costthat no longer existed. Analytically, theamortized portion of equal accessexpenses should have been treated inthe same fashion as the amortizeddepreciation reserve deficiency costs.The Commission’s imposition of adownward exogenous adjustment forthe completion of inside wireamortizations further supports ourfinding today that an exogenousdecrease is appropriate and necessaryfor the completion of the amortization ofequal access non-capitalized expenses.

310. We reject our prior analysis ofamortized equal access costs and accordthe expiration of equal access costamortizations the same exogenous costtreatment given to the amortizations ofthe depreciation reserve deficienciesand inside wiring costs. Both of thoseamortizations were given exogenouscost treatment when they expired

because they reflected temporary, one-time treatment of costs under RORregulation that, due to the mid-streamswitch to price cap regulation, wouldhave become permanent (even thoughthe costs already had been recovered)absent an exogenous cost adjustment.The same is true for equal access costamortizations.

311. Because this is a rulemaking, wedo not face the same proceduralimpediments as in some of our priordecisions, as explained supra. Wedetermine that the record from thisproceeding allows us to make areasoned decision on this issue. We findthat an exogenous decrease is necessaryin order to adjust the price caps for thecompleted recovery of the specifiedequal access non-capitalized expensesthat we required be amortized over aneight-year period. Because the currentprice cap index includes an expensethat has now been completelyrecovered, the price cap should beadjusted downward to account itsrecovery. Simply stated, we find thatratepayers should not be forced to payfor a cost that, were it not for the wayprice cap regulation occurred in thisinstance, they would no longer bepaying. By imposing a downwardexogenous adjustment to adjust the PCIfor the complete recovery of specificequal access expenses throughamortization, we will avoid unfairlyimposing a subsidy burden onratepayers. Our decision in this matterwill align charges more closely to costs.

312. Several commenters have arguedthat they continue to incur costs as apart of the provision of equal access.These ongoing costs are not at issue inthe present proceeding. As explainedabove, the costs at issue were a set ofcosts that the Commission determinedshould be amortized for policy reasons.These costs were extraordinary and, ifallowed to be imposed in the normalfashion, would have resulted in hugerate fluctuations. We consider theongoing costs of providing equal accessas part of the normal costs of providingtelephone service. Exogenous treatmentof these costs is unnecessary. Inresponse to BellSouth’s contention thatthe record is inadequate for us to makea decision about an exogenous decrease,we find that the current record providesa sufficient basis for our decision.Furthermore, we note that in the past,the record may have been sufficient,but, as explained above, theCommission’s analysis was incorrect.

313. TCA and GCI are concernedabout how the Commission will treatcost recovery for LECs that convert toequal access in the future. As we statedin the very first LEC Price Cap report


and order, LECs that have not receiveda bona fide request for equal access atthe time they become subject to pricecap regulation may request a waiver forspecial treatment of those specialconversion costs when the time arises.See Policies and Rules Concerning Ratesfor Dominant Carriers, CC Docket No.87–313, First Report and Order, 54 FR19836 (May 8, 1989).

314. We hereby direct price cap LECsto make a downward exogenousadjustment to the traffic sensitive basketin the Annual Access Tariff filing thattakes effect on July 1, 1997 to accountfor the completed amortization of equalaccess expenses.

D. Correction of Improper CostAllocations

1. Marketing Expenses

a. Background315. Prior to 1987, incumbent LEC

marketing expenses were allocatedbetween the interstate and intrastatejurisdictions on the basis of local andtoll revenues. In 1987, a Federal-StateJoint Board recommended that interstateaccess revenues be excluded from theallocation factor used to apportionmarketing expenses between theinterstate and intrastate jurisdictionsbecause marketing expenses are notincurred in the provision of interstateaccess services. Amendment of Part 67(New Part 36) of the Commission’sRules and Establishment of a Federal-State Joint Board, CC Docket No. 86–297, Recommended Decision and Order,52 FR 15355 (April 28, 1987) (MarketingExpense Recommended Decision). TheCommission agreed with the JointBoard’s recommendation and adoptednew procedures that allocatedmarketing expenses in Account 6610 onthe basis of revenues excluding accessrevenues. MTS and WATS MarketStructure, Amendment of Part 67 (NewPart 36) of the Commission’s Rules andEstablishment of a Federal-State JointBoard, CC Docket Nos. 78–72, 80–286,and 86–297, Report and Order, 52 FR17228 (May 6, 1987). In petitions forreconsideration of the Commission’sorder, several incumbent LECs arguedthat the revised separations treatment ofmarketing expenses would result in asignificant, nationwide shift of $475million in revenue requirements to theintrastate jurisdiction. MTS and WATSMarket Structure, Amendment of Part67 (New Part 36) of the Commission’sRules and Establishment of a JointBoard, CC Docket No. 78–72, 80–286,and 86–297, Memorandum Opinion andOrder on Reconsideration andSupplemental Notice of ProposedRulemaking, 52 FR 32922 (September 1,

1987) (Marketing ExpenseReconsideration Order). Onreconsideration, the Commissionadopted for marketing expenses aninterim allocation factor that includesaccess revenues, pending the outcomeof a further inquiry by the Joint Board.

316. In the NPRM, we stated thatsome of the difference between the pricecap LECs’ interstate allocated costs andforward-looking costs may be traced topast regulatory practices that weredesigned to shift some costs from theintrastate jurisdiction to the interstatejurisdiction in order to further universalservice goals. We observed that theCommission’s decision in the MarketingExpense Reconsideration Order toallocate intrastate marketing costs to theinterstate jurisdiction was an example ofsuch past regulatory practices. We askedparties to comment on the extent towhich the difference between price capLECs’ interstate allocated costs andforward-looking costs is a result of suchdecisions.

b. Discussion317. Under current separations

procedures, approximately 25 percent ofprice cap LECs’ total marketingexpenses are allocated to the interstatejurisdiction. We agree with parties thatcontend that, because marketingexpenses generally are incurred inconnection with promoting the sale ofretail services, those expenses for themost part should be recovered fromincumbent LEC retail services, whichare found predominantly in theintrastate jurisdiction. Pursuant tosection 410(c) of the Act, however, theCommission must refer any rulemakingproceeding regarding the jurisdictionalseparation of common carrier propertyand expenses between interstate andintrastate operations to a Federal-StateJoint Board. We intend to initiate aproceeding to review comprehensivelyour Part 36 jurisdictional separationsprocedures in the near future. We willrefer this issue to the Federal-State JointBoard in CC Docket No. 80–286 forresolution as part of that comprehensivereview. We therefore do not reallocatethese costs between the interstate andintrastate jurisdictions at this time.

318. In the Marketing ExpenseRecommended Decision, the Joint Boardstated that the inclusion of accessrevenues in the allocation factor formarketing expenses is unreasonablebecause incumbent LECs do not activelymarket or advertise access services.Although parties contested the accuracyof this statement on reconsideration, theCommission did not assess incumbentLEC claims that the decision to excludeaccess revenues in the allocator for

marketing expenses was based on aninaccurate perception of the extent towhich LECs actively market or advertiseexchange access services. TheCommission instead referred marketingexpense issues back to the Joint Board,with specific instruction to the partiesto identify any Account 6610 marketingactivities that are related to accessservices and any such activities that arerelated to a specific jurisdiction. Wecontinue to recognize that someexpenses recorded in Account 6610 mayindeed be incurred in the provision ofinterstate access service, and that this isan issue that must be addressed by theJoint Board when it examines theappropriate allocation factor formarketing expenses. We note, however,that the Commission did not find in theMarketing Expense ReconsiderationOrder that the Joint Board’s initialconclusion in the Marketing ExpenseRecommended Decision that incumbentLECs do not market or advertise accessservices to be inaccurate.

319. We conclude that price cap LECs’marketing costs that are not related tothe sale or advertising of interstateswitched access services are notappropriately recovered from IXCsthrough per-minute interstate switchedaccess charges. Pending arecommendation by the Joint Board ona new method of apportioningmarketing costs between the intrastateand interstate jurisdictions, we directprice cap LECs to recover marketingexpenses allocated to the interstatejurisdiction from end users on a per-linebasis, for the reasons we discuss below.

320. Recovering these expenses fromend users instead of from IXCs isconsistent with principles of cost-causation to the extent that price capLEC sales and advertising activities areaimed at selling retail services to endusers, and not at selling switched accessservices to IXCs. Recovery on a per-linebasis, while perhaps not preciselyreflective of the manner in whichmarketing costs are incurred, ispreferable to the current rule requiringprice cap LECs to recover theirmarketing expenses through per-minuteaccess charges. A price cap LEC’s retailmarketing costs are not caused by usageof switched access services, and itsefforts to sell additional lines, verticalfeatures, and other retail services wouldonly indirectly cause an increase inswitched access usage. Per-minuterecovery of retail marketing costs thusdistorts prices in the long distance andlocal markets in the same way as doesper-minute recovery of other NTS costs.

321. In the past, price cap LEC retailmarketing may have focused on the saleof optional vertical features such as call


waiting and caller ID, and on featuresand services designed for businesscustomers. As local competitiondevelops, we would expect that salesexpenses would be driven by the pricecap LEC’s need to respond tocompetition. In any case, it is beyondour jurisdiction to reassign retailmarketing costs to retail services on atruly cost-causative basis. There isprobably a relationship, however,between the number of lines purchasedby an end user, particularly a businessuser, and the amount of effort a pricecap LEC expends to sell services andfeatures to that end user. Furthermore,as parties have observed in the record inthis proceeding, price cap LECs activelymarket second lines to residentialcustomers. We conclude, therefore, thatthe most efficient and cost-causativemethod legally available to thisCommission at this time for recovery ofprice cap LEC retail marketing costsallocated to the interstate jurisdiction isto charge those end users to whom theprice cap LECs’ marketing is directed—multi-line business and non-primaryresidential line end users. We furthernote that by not permitting price capLECs to recover these costs fromprimary residential and single-linebusiness customers, we avoid potentialuniversal service concerns that weighagainst increasing charges on these endusers.

322. Moreover, continued recovery ofinterstate-allocated marketing expensesin per-minute switched access chargeswould raise competitive concerns.Increasingly, IXCs will be competingwith incumbent, price cap LECs in theprovision of local exchange andexchange access services. By permittingincumbent, price cap LECs to recoverfrom IXCs through interstate switchedaccess charges their costs of marketingretail services, these potentialcompetitors are forced to bear theincumbent, price cap LECs’ costs ofcompeting with the IXCs. Assigningrecovery of marketing costs to end users,on the other hand, subjects these coststo the competitive pressures of themarket.

323. Marketing expenses are currentlyrecovered through all interstate accessrate elements and the interexchangecategory in proportion to the investmentoriginally assigned to these elementsand categories by the Part 69 costallocation rules. Special access andinterexchange services are purchasedby, and marketed to, retail customers. Itis therefore appropriate to allow ratesfor those services to continue to includerecovery of marketing expenses.Marketing expenses must be removedfrom all other rate elements by means of

downward exogenous adjustments tothe PCIs for the common line, trafficsensitive, and trunking baskets. Withrespect to the trunking basket, theexogenous adjustment shall not reflectthe amount of any Account 6610marketing expenses allocated to specialaccess services. The service bandindices (SBIs) within the trunkingbasket shall be decreased based on theamount of Account 6610 marketingexpenses allocated to switched servicesincluded in each service category toreflect the exogenous adjustment to thePCI for the trunking basket.

324. After performing the appropriatedownward exogenous adjustmentsdescribed above to the PCIs in thecommon line, traffic sensitive, andtrunking baskets, price cap LECs mayrecover the revenues related to theAccount 6610 marketing expensesremoved from these baskets byincreasing the SLCs for multi-linebusiness and non-primary residentiallines. To prevent end-user charges fromexceeding levels we have establishedearlier in this Order, the amount ofmarketing expenses to be recoveredfrom multi-line business and non-primary residential lines in their SLCsshall be limited by the ceilings weestablish for these SLCs in this Order.To the extent these ceilings prevent fullrecovery of these amounts, price capLECs may recover these costs byincreasing equally both the non-primaryresidential line PICC and the multi-linebusiness PICC, not to exceed theceilings on the PICC for non-primaryresidential and multi-line businesslines. In the event the PICC ceilingsprevent full recovery of these expenses,any residual may be recovered throughper-minute charges on originatingaccess service, subject to its ceiling.Finally, to the extent price cap LECscannot recover their remainingmarketing expenses through per-minutecharges on originating access, anyresidual may be recovered through per-minute charges on terminating accessservice. Although these marketingexpenses will be recovered through theSLC, they shall not be included in thebase factor or considered common linerevenues. To prevent price cap LECsfrom recovering these expenses fromaccess services, we are establishing aseparate basket for these marketingexpenses.

325. We reject, however, AT&T’sassertion that recovery of interstate-allocated marketing expenses throughinterstate access charges violates thewholesale pricing provisions containedin section 252(d)(3) of the Act. AT&Tidentifies and quantifies inappropriateretail expenses embedded in current

interstate switched access rates based onthe requirements of section 252(d)(3)and the criteria for wholesale rate coststudies outlined in the LocalCompetition Order. Section 252(d)(3)establishes a pricing standard for thewholesale provision of retail offerings toother carriers that resell the LEC retailservices. Section 252(d)(3) does notapply to the pricing of interstate access,which is not a retail service.

2. General Support Facilities

a. Background

326. In the NPRM, we soughtcomment on other possible costmisallocations that may contribute tothe difference between embedded costsand forward-looking costs allocated tothe interstate jurisdiction. AT&Tsuggests that the allocation of embeddedgeneral support facilities (GSF) costs,including general purpose computerexpenses, among access categories isone such misallocation. This allocation,AT&T contends, results in theinappropriate support of LECs’ billingand collection service, which is anonregulated, interstate service, throughregulated access charges. AT&Testimates that $124 million of expensesrecovered in interstate access supportthe nonregulated billing and collectioncategory. Of the $124 million, $60.1million is included in interstateswitched carrier access, and $20.5million is in interstate special access,with the remainder recovered by theSLC.

327. The GSF investment category inPart 36 includes assets that supportother operations, such as land,buildings, vehicles, as well as generalpurpose computer investmentaccounted for in USOA Account 2124.Some incumbent LECs use generalpurpose computers to providenonregulated billing and collectionservices to IXCs. Part 69 allocates GSFinvestment among the billing andcollection category, interexchangecategory, and the access elements basedon the amount of Central OfficeEquipment (COE), Cable and WireFacilities (CWF), and InformationOrigination/Termination Equipment(IO/T) investment allocated to each Part69 category. Because no COE, CWF, orIO/T investment is allocated to thebilling and collection category, noinvestment in general support facilities,and thus no portion of general purposecomputer investment, is allocated to thebilling and collection category.Likewise, because expenses related toGSF investment are allocated in thesame manner as GSF investment, noGSF expenses, including expenses


related to general purpose computers,are allocated to the billing andcollection category. To the extent thatcosts are underallocated to the billingand collection category, incumbentLECs’ regulated services recover throughinterstate access charges costsassociated with nonregulated provisionof billing and collection services.

b. Discussion

328. We agree with AT&T andWorldCom that the current allocation ofGSF costs enables incumbent LECs torecover through regulated interstateaccess charges costs caused by the LECs’nonregulated billing and collectionfunctions. By shifting some costs frominterstate access services to thenonregulated billing and collectioncategory, we would move interstateaccess rates closer to cost. The NPRM,however, may not have providedsufficient notice to interested partiesthat we would change in the allocationof LEC interstate costs betweenregulated interstate services andnonregulated billing and collectionactivities. We therefore seek commenton this issue in Section VII.B below.

V. Access Reform for Incumbent Rate-of-Return Local Exchange Carriers

A. Background

329. In the NPRM we concluded that,with limited exceptions, the scope ofthis proceeding should be limited toincumbent price cap LECs because thesecarriers face the potential of significantcompetition in the interstate exchangeaccess market due to the new duties andobligations imposed upon them by the1996 Act. We proposed limitedexceptions that would subject allincumbent LECs to the rules addressingallocation of universal service supportto the interstate revenue requirement,discussed in Section VI.D, below, and tothe reforms to the transport ratestructure, including the TIC, discussedin sections III.D., above. We invitedcomment on these tentative conclusionson the scope of this proceeding. We alsosought comment on whether we shouldapply our proposed changes to thecommon line rate structure to rate-of-return incumbent LECs and whether weshould update Part 69 access rules inlight of various developments. Wefurther invited comment on the effect ofthese proposals and tentativeconclusions on small business entities,including small incumbent LECs andnew entrants. We also noted that wewould address access reform for rate-of-return carriers in a separate proceedingin 1997.

B. Discussion

330. We conclude that, with thelimited exceptions discussed inSections III.D and VI.D, the scope of thisproceeding should be limited to pricecap incumbent LECs. Price capregulation governs almost 91 percent ofinterstate access charge revenues andmore than 92 percent of total incumbentLEC access lines. Currently, all ten ofthe incumbent LECs with more than twomillion access lines and 13 of the 17non-NECA incumbent LECS with morethan 50,000 access lines are subject toprice cap regulation. Therefore, eventhough this proceeding applies only toprice cap incumbent LECs, it willnonetheless affect the vast majority ofall access lines and interstate accessrevenues.

331. Small and rural LECs will mostlikely not experience competition as fastas incumbent price cap LECs. We do notexpect small and rural LECs generally toface significant competition in theimmediate future because, for the mostpart, the high cost/low-margin areasserved by these LECs are unlikely to bethe immediate targets of new entrants orcompetitors. Moreover, as we noted inthe NPRM, all non-price cap incumbentLECs may be exempt from, or eligiblefor a modification or suspension of, theinterconnection and unbundlingrequirements of the 1996 Act. Bycontrast, all incumbent LECs that areineligible for section 251(f) exemption,suspensions, or modifications areincumbent price cap LECs. Because thelatter incumbent LECs must fulfill thesection 251 (b) and (c) duties to provideinterconnection and unbundledelements to new entrants, they are likelyto face significant competition in theinterstate exchange access market beforethe small and mid-sized rate-of-returnincumbent LECs face such competition.

332. We recognize that small andrural rate-of-return LECs face uniquecircumstances and that a few of thesecarriers may now have, or may soonreceive, bona fide requests forinterconnection. Although all rate-of-return carriers may not be completelyinsulated from competitive pressures,we are not persuaded by arguments thatdelaying the initiation of an accessreform proceeding for these carriersuntil later this year will have adetrimental impact on their viability. Aseparate proceeding for small and ruralrate-of-return LECs will provide us withthe opportunity to conduct acomprehensive review of thecircumstances and issues unique tothese carriers.

333. We do not agree that CitizensUtilities should be exempt from some of

the rules we adopt in this order for pricecap companies. The decisions we reachhere accommodate many of theconcerns that Citizens Utilities, as wellas a number of other price cap LECs thatserve rural areas, voices in its pleadings.Although Citizens Utilities arguablymay face different circumstances thanother price cap LECs that serve largerurban and suburban populations,Citizens has indicated, by electing pricecap regulation, that it believes it canachieve a higher rate of productivitythan smaller rate-of-return LECs andthat price cap regulation is morebeneficial to it than rate-of-returnregulation. Citizens Utilities has notdemonstrated that the modifications weare adopting in this proceeding wouldnecessarily affect it differently thanother price cap LECs. If CitizensUtilities believes that it cannot remainfinancially viable as a price cap carrierunder the revised access charge regime,it may petition for a waiver of the rulethat makes its decision to elect price capregulation irreversible.

334. We reject Centennial’s suggestionthat we adopt access reformmodifications for all incumbent LECsbut then grant waivers for small, ruralLECs whose special circumstanceswarrant different accommodations. Forthe most part, rate-of-return LECs face acommon set of complex issues, differentthan those faced by price cap LECs, thatare better addressed in a separateproceeding. In that proceeding, we willaddress any differences that may existbetween large and small rate-of-returncarriers.

335. We therefore limit application ofthe rules we adopt in this proceeding tothe incumbent price cap LECs, withlimited exceptions. Because rate-of-return LECs will collect revenues fromthe new universal service supportmechanisms, we address allocation ofuniversal service support to theinterstate revenue requirement for allincumbent LECs in Section VI.D. Inaddition, because rate-of-returnincumbent LECs’ transport rates weresubject to the rules that were remandedby the court in CompTel v. FCC, thechanges to the TIC that we adopt inSection III.D. pursuant to the court’sremand, except for changes that requirereallocation of costs to newly-createdrate elements, will also apply to rate-of-return incumbent LECs. Finally, inorder to prevent double recovery of thecosts associated with providing accessservices to new entrants through thesale of unbundled network elements, weconclude in Section VI.A, below, thatour exclusion of unbundled networkelements from Part 69 access chargesapplies to all incumbent LECs.


VI. Other Issues

A. Applicability of Part 69 toUnbundled Elements

1. Background

336. In the NPRM, we requestedcomment regarding the potentialapplication of Part 69 access charges tounbundled network elements purchasedby carriers to provide local exchangeservices or exchange access services. Wetentatively concluded that unbundlednetwork elements should be excludedfrom such access charges. We noted thatthe 1996 Act allowstelecommunications carriers to purchaseaccess to unbundled network elementsand to use those elements to provide alltelecommunications services, includingoriginating and terminating access ofinterstate calls. We further noted thatthe 1996 Act requires purchasingcarriers to pay cost-based rates toincumbent LECs to compensate them foruse of the unbundled network elements.Accordingly, we tentatively concludedthat the requesting carrier paying cost-based rates to the incumbent LEC wouldhave already compensated theincumbent LEC for the ability to deployunbundled network elements to provideoriginating and terminating access.

2. Discussion

337. We will adhere to our tentativeconclusion to exclude unbundlednetwork elements from Part 69 accesscharges. This conclusion applies to allincumbent LECs. As we noted in theLocal Competition Order, payment ofcost-based rates represents fullcompensation to the incumbent LEC foruse of the network elements that carrierspurchase. We further noted that sections251(c)(3) and 252(d)(1), the statutoryprovisions establishing the unbundlingobligation and the determination ofnetwork element charges, do not compeltelecommunications carriers usingunbundled network elements to payaccess charges. Moreover, theseprovisions do not restrict the ability ofcarriers to use network elements toprovide originating and terminatingaccess. Allowing incumbent LECs torecover access charges in addition to thereasonable cost of such facilities wouldconstitute double recovery because theability to provide access services isalready included in the cost of theaccess facilities themselves. Excludingaccess charges from unbundledelements ensures that unbundledelements can be used to provideservices at competitive levels,promoting the underlying purpose ofthe 1996 Act. If incumbent LECs addedaccess charges to the sale of unbundled

elements, the added cost to competitiveLECs would impair, if not foreclose,their ability to offer competitive accessservices. The availability of accessservices at competitive levels is vital tothe general approach we adopt in thisOrder, which relies on the growth ofcompetition, including fromcompetitors using unbundled networkelements, to move overall access ratelevels toward forward-looking economiccost. In addition, we note that excludingunbundled network elements fromaccess charges benefits small entitiesseeking to enter the local service marketby ensuring that they can acquireunbundled elements at competitiveprices.

338. We disagree with suggestionsoffered by some commenters that accesscharges should be imposed onunbundled elements because cost-basedrates for such elements would notrecover universal service supportsubsidies built into the access chargeregime. Although our plan to implementcomprehensive universal service reformis not fully implemented, we believeexcluding access charges from the saleof unbundled elements will notdramatically affect the ability of pricecap LECs to fulfill their universalservice obligations. First, competitorsusing unbundled network elements toprovide interstate services willcontribute to universal servicerequirements pursuant to section 254.Carriers receive no exemption from theirobligation to contribute to universalservice by using unbundled networkelements. Second, rate structuremodifications adopted in this Order—including reallocation of TIC costs,adoption of a mechanism to phase outthe TIC, and raising multi-line SLCs—should reduce the impact on price capLECs of excluding the recovery of TICcosts in the sale of unbundled networkelements. Third, if unbundled networkelement prices are geographicallydeaveraged, LECs will receive higherprices when they sell unbundlednetwork elements that embody highercosts. Fourth, because the differencebetween the level of access charges andthe forward-looking economic costs ofnetwork elements may include morethan universal service support,imposing access charges on the sale ofunbundled network elements couldrecover from market entrantssubstantially more than amounts used tosupport universal service. Accordingly,we are not persuaded by suggestionsthat the universal service obligations ofprice cap LECs compel the imposition ofaccess charges on the purchase of

unbundled network elements byrequesting carriers.

339. Although, in the LocalCompetition Order, we allowedapplication of certain non-cost-basedaccess charges (the CCLC and a portionof the TIC) to unbundled elements, welimited the duration of such applicationto a transition period ending June 30,1997 even if access and universalservice reform were not completed bythe end of the transition period. Thetransition period was limited in order tominimize the burden on competitivelocal service providers seeking to useunbundled network elements to offerthe competitive services that the 1996Act sought to promote. The interimapplication of certain access chargeswas also limited to non-cost-basedcharges because such charges, unlikefacilities-based charges, were morelikely to include subsidies for universalservice. All facilities-based charges werecompletely excluded from unbundlednetwork elements to prevent doublerecovery by incumbent LECs of the costsof these facilities when they arepurchased by competitive carriers.

340. We are also unpersuaded bysuggestions that access charges shouldbe imposed on unbundled elementsbecause provision of competitive serviceby rebundling the same networkelements used by the incumbent LEC toprovide access is equivalent to resale ofa retail service. First, in the LocalCompetition Order, we recognized majordifferences between competitionthrough the use of unbundled networkelements and competition throughresale of an existing retail serviceoffered by an incumbent LEC. Weexplained, for example, that an entrantrelying on unbundled elements ratherthan resale has the flexibility to offer alltelecommunications services madepossible by using network elements butalso assumes the risk that end users willnot generate sufficient demand to justifythe investment. The entrant using aresale strategy, however, is limited tooffering the retail service itself withoutthe attendant investment risk. Thus, wereject the notion that the rebundling ofnetwork elements is equivalent toresale. Second, although we concludedin the Local Competition Order thatIXCs must continue to pay accesscharges to incumbent LECs for accessservices when the end user is served bya competitive carrier reselling theincumbent LEC’s retail services, ourconclusion was based on the resaleprovisions of the 1996 Act which limitresale to retail services offered tosubscribers or other customers who arenot telecommunications carriers. Theresale provision does not apply to non-


retail services, including accessservices, that may be offered using thesame facilities. Unlike the provision oflocal exchange services, access servicesare not services that LECs providedirectly to end users on a retail basis. Toimpose access charges on the sale ofunbundled elements would contravenethe terms of the resale provision byeffectively treating exchange access as aservice provided on a retail basis.

B. Treatment of Interstate InformationServices

1. Background

341. In the 1983 Access ChargeReconsideration Order, the Commissiondecided that, although informationservice providers (ISPs) may useincumbent LEC facilities to originateand terminate interstate calls, ISPsshould not be required to pay interstateaccess charges. (For purposes of thisOrder, providers of enhanced servicesand providers of information servicesare referred to as ISPs.) MTS and WATSMarket Structure, CC Docket No. 78–72,Memorandum Opinion and Order, 48FR 42984 (September 21, 1983) (AccessCharge Reconsideration Order). Inrecent years, usage of interstateinformation services, and in particularthe Internet and other interactivecomputer networks, has increasedsignificantly. Although the UnitedStates has the greatest amount ofInternet users and Internet traffic, morethan 175 countries are now connected tothe Internet. Network Wizards InternetDomain Survey, January 1997, availableon the World Wide Web at <http://www.nw.com/zoneWWW/top.html>.As usage continues to grow, informationservices may have an increasinglysignificant effect on the public switchednetwork.

342. As a result of the decisions theCommission made in the Access ChargeReconsideration Order, ISPs maypurchase services from incumbent LECsunder the same intrastate tariffsavailable to end users. ISPs may paybusiness line rates and the appropriatesubscriber line charge, rather thaninterstate access rates, even for calls thatappear to traverse state boundaries. Thebusiness line rates are significantlylower than the equivalent interstateaccess charges, given the ISPs’ highvolumes of usage. ISPs typically payincumbent LECs a flat monthly rate fortheir connections regardless of theamount of usage they generate, becausebusiness line rates typically includeusage charges only for outgoing traffic.

343. In the NPRM, we tentativelyconcluded that ISPs should not berequired to pay interstate access charges

as currently constituted. We explainedthat the existing access charge systemincludes non-cost-based rates andinefficient rate structures. We stated thatthere is no reason to extend such asystem to an additional class ofcustomers, especially considering thepotentially detrimental effects on thegrowth of the still-evolving informationservices industry. We explained thatISPs should not be subjected to aninterstate regulatory system designed forcircuit-switched interexchange voicetelephony solely because ISPs useincumbent LEC networks to receivecalls from their customers. We solicitedcomment on the narrow issue ofwhether to permit incumbent LECs toassess interstate access charges on ISPs.In the companion Notice of Inquiry(NOI), we sought comment on broaderissues concerning the development ofinformation services and Internetaccess. See In the Matter of Usage of thePublic Switched Network byInformation Service and Internet AccessProviders, CC Docket No. 96–263,Notice of Inquiry, 62 FR 4657 (January31, 1997) (NOI).

2. Discussion344. We conclude that the existing

pricing structure for ISPs should remainin place, and incumbent LECs will notbe permitted to assess interstate per-minute access charges on ISPs. We thinkit possible that had access rates appliedto ISPs over the last 14 years, the paceof development of the Internet and otherservices may not have been so rapid.Maintaining the existing pricingstructure for these services avoidsdisrupting the still-evolving informationservices industry and advances the goalsof the 1996 Act to ‘‘preserve the vibrantand competitive free market thatpresently exists for the Internet andother interactive computer services,unfettered by Federal or Stateregulation.’’ 47 U.S.C. sec. 230(b)(2).

345. We decide here that ISPs shouldnot be subject to interstate accesscharges. The access charge systemcontains non-cost-based rates andinefficient rate structures, and thisOrder goes only part of the way toremove rate inefficiencies. Moreover,given the evolution in ISP technologiesand markets since we first establishedaccess charges in the early 1980s, it isnot clear that ISPs use the publicswitched network in a manneranalogous to IXCs. Commercial Internetaccess, for example, did not even existwhen access charges were established.As commenters point out, many of thecharacteristics of ISP traffic (such aslarge numbers of incoming calls toInternet service providers) may be

shared by other classes of businesscustomers.

346. We also are not convinced thatthe nonassessment of access chargesresults in ISPs imposing uncompensatedcosts on incumbent LECs. ISPs do payfor their connections to incumbent LECnetworks by purchasing services understate tariffs. Incumbent LECs alsoreceive incremental revenue fromInternet usage through higher demandfor second lines by consumers, usage ofdedicated data lines by ISPs, andsubscriptions to incumbent LEC Internetaccess services. To the extent that someintrastate rate structures fail tocompensate incumbent LECs adequatelyfor providing service to customers withhigh volumes of incoming calls,incumbent LECs may address theirconcerns to state regulators.

347. Finally, we do not believe thatincumbent LEC allegations aboutnetwork congestion warrant impositionof interstate access charges on ISPs. TheNetwork Reliability and InteroperabilityCouncil has not identified any serviceoutages above its reporting thresholdattributable to Internet usage, and evenincumbent LEC commentersacknowledge that they can respond toinstances of congestion to maintainservice quality standards. Internetaccess does generate different usagepatterns and longer call holding timesthan average voice usage. However, theextent to which this usage createscongestion depends on the ways inwhich incumbent LECs provision theirnetworks, and ISPs use those networks.Incumbent LECs and ISPs agree thattechnologies exist to reduce or eliminatewhatever congestion exists; theydisagree on what pricing structurewould provide incentives fordeployment of the most efficienttechnologies. The public interest wouldbest be served by policies that fostersuch technological evolution of thenetwork. The access charge system wasdesigned for basic voice telephonyprovided over a circuit-switchednetwork, and even when stripped of itscurrent inefficiencies it may not be themost appropriate pricing structure forInternet access and other informationservices.

348. Thus, in our review of the recordfiled in response to the NOI, we willconsider solutions to networkcongestion arguments other than theincumbent LECs’ recommendation thatwe apply access charges to ISPs’ use ofcircuit-switched network technology.We intend rather to focus on newapproaches to encourage the efficientoffering of services based on newnetwork configurations andtechnologies, resulting in more


innovative and dynamic services thanexist today. In the NOI, we will addressa range of fundamental issues about theInternet and other information services,including ISP usage of the publicswitched network. The NOI will give usan opportunity to consider theimplications of information servicesmore broadly, and to craft proposals fora subsequent NPRM that are sensitive tothe complex economic, technical, andlegal questions raised in this area. Wetherefore conclude that ISPs shouldremain classified as end users forpurposes of the access charge system.

C. Terminating Access

349. In the NPRM, we requestedcomment regarding the regulation ofterminating access. We noted that,unlike originating access, the choice ofan access provider for terminatingaccess is made by the recipient of thecall. The call recipient generally doesnot pay for the call and, therefore, is notlikely to be concerned about the ratescharged for terminating access. Wesuggested that neither the originatingcaller nor its long-distance serviceprovider can exert substantial influenceover the called party’s choice ofterminating access provider. Thus, evenif competitive pressures develop at theoriginating end as new entrants offeralternatives, the terminating end of along-distance call may remain abottleneck, controlled by the LECproviding access for a particularcustomer. We also recognized, however,that excessive terminating accesscharges could furnish an incentive forIXCs to enter the access market in orderto avoid paying excessive terminatingaccess charges.

1. Price Cap Incumbent LECs

a. Background

350. We requested comment onvarious alternative special methods forregulating the terminating access ratesof price cap LECs. For instance, wesought comment on whether to establisha ceiling on the terminating access ratesof price cap LECs equal to the forward-looking economic cost of providing theservice. We suggested alternativemethods for measuring forward-lookingeconomic cost, including reference toprices in reciprocal compensationarrangements for the transport andtermination charges oftelecommunications under sections251(b)(5) and 252(d)(2) or a requirementthat terminating rates be based on aTSLRIC study or other acceptableforward-looking cost-based model.

b. Discussion

351. We believe that new entrants, bypurchasing unbundled networkelements or providing facilities-basedcompetition, will eventually exertdownward pressure on originatingaccess rates assessed by incumbentLECs. We agree that excessiveterminating access rates couldencourage long-distance companies toavoid the payment of such charges byseeking to become the local exchangeand exchange access provider for enduser customers. These marketdevelopments, however, would not fullyaddress the concerns expressed in theNPRM and reflected in comments withrespect to the ability of incumbent LECsto charge unreasonable rates forterminating access.

352. We are also not convinced thata significant competitive impact wouldresult from changes in calling patternsbetween pairs of callers. Commentershave not described any realistic waythat users, by changing their callingpatterns, could experience savingsattributable to differing levels ofterminating access charges paid by IXCs.Although one commenter points to hightermination charges in foreign countriesas affecting the market for overseas callsoriginating in the United States, suchresults are less likely to occur fordomestic calls, which are much lessexpensive than international calls andare subject to geographic rate averagingand rate integration requirements. Thus,we are reluctant to base our approach onthe expectation that a significantproportion of callers will implementsuch a strategy.

353. Accordingly, we are establishingregulatory requirements that willaddress the potential that incumbentLECs could charge unreasonable ratesfor terminating access. Specifically, weare adopting rules in this Order that, forprice cap LECs, will limit recovery ofTIC and common line costs fromterminating access rates for a limitedperiod, and then eliminate any recoveryof common line and TIC costs fromterminating access. Under thisapproach, beginning January 1, 1998,price cap LECs will recover commonline and residual TIC revenues througha new flat charge, subject to a ceiling.Remaining common line and residualTIC revenues will then be firstrecovered through originating accessrates, subject to a ceiling. Anyremaining common line and residualTIC revenues may then be recoveredthrough terminating rates. As the capson SLCs applicable to non-primaryresidential lines and the PICC are raised,none of these residual revenues will be

recovered through terminating accesscharges. When the increased SLCs andPICCs are fully implemented, recoveryof these costs will be more susceptibleto competitive forces because IXCscould seek to influence the end user’schoice of its provider of local service,and the end user’s choice of serviceprovider will determine whether theincumbent LEC is able to recover thesecosts from the end user.

354. In addition, pending fullrecovery of all common line andresidual TIC costs in flat rate SLCs andPICCs, this approach will putdownward pressure on terminatingaccess rates by lowering the overallservice revenues derived fromterminating access charges. Becausecompetitive pressure is more likely todevelop on the originating end of a long-distance call, we can rely to a greaterextent on competitive forces to ensurejust and reasonable rates under thisapproach by moving recovery of certainrevenues from terminating access tooriginating access. By strippingterminating access rates of CCL andresidual TIC charges and, pending fullimplementation of the new flat charges,placing more of the burden of TICrecovery on originating access rates, wereduce potential excesses in terminatingaccess charges while exposing the CCLand residual TIC recovery tocompetitive pressures in the originatingaccess market.

355. The NPRM described proposalslinking terminating rates to originatingrate levels or shifting costs fromterminating to originating accesscharges. Some commenters supportlimiting price cap LEC terminatingaccess rates to the level of the LECoriginating access rates. If originatingaccess charges are lowered because ofcompetition, the ceiling on terminatingaccess rates would be lowered as well,placing downward pressure onterminating rates. This approach,however, would not substantially affectterminating access rates whereoriginating access rates have notresponded to competitive inroads.Moreover, linking an incumbent LEC’sterminating access rate to its ownoriginating rate could reduce theincumbent LEC’s incentive to lower itsoriginating access rates. Thus, wedecline to adopt this method ofregulating terminating access rates.

356. The NPRM requested commenton the possibility of eliminating allcharges for terminating access byshifting the burden of recovering allcosts currently recovered in terminatingaccess rates to originating accesscharges. We decline to adopt thisapproach because a complete shift of


terminating access costs to originatingaccess conflicts with one of the basicobjectives of this proceeding—to ensurethat charges for access services reflectthe manner in which the costs ofproviding those services are incurred.Switching costs, for example, shouldcontinue to be recovered in part fromterminating access charges becausethose costs are traffic sensitive and arerelated to the volumes of bothoriginating and terminating traffic.Moreover, we emphasize that, asdiscussed in Section III.A, the ratestructure we are adopting, which willreplace per-minute recovery of the CCLcharge and the TIC with flat ratecharges, helps to achieve our goal ofensuring that charges for access servicesreflect the manner in which costs areincurred. Our requirement thatincumbent LECs recover a greaterportion of common line and TIC costsin originating access rates pending fullimplementation of flat-rated chargeswill address concerns about thereasonableness of terminating accesscharges while providing price cap LECssufficient latitude to recover thereasonable costs of deploying theirfacilities to provide terminating accessservices.

357. The NPRM also discussed thealternative of requiring price cap LECsto establish end user charges forterminating access. This approachwould place direct responsibility for thecost of terminating access on therecipient of terminating access servicesand would expose terminating access tocompetitive pressures. We noted thatwireless companies already chargecalled parties for receiving calls andrequested comment on how we mightimplement a system of end user chargesin the context of access reform andwhether its implementation wouldincrease the number of uncompletedcalls due to a reluctance by calledparties to accept the charges. We agreewith commenters that such a changecould prove disruptive to consumers ofwireline services. After review of therecord, which produced few, if any,advocates of such an approach, weconclude that we should not mandate atthis time this change in current pricingpractices for wireline service.

2. Non-Incumbent LECs

a. Background

358. In the NPRM, we requestedcomment about whether to imposeceilings on the terminating access ratesof non-incumbent LECs. We stated inthe NPRM that our policy since theCompetitive Carrier Proceeding hasconsistently been that a carrier is non-

dominant unless the Commission makesor has made a finding that it isdominant. We noted that, since theCompetitive Carrier Proceeding, newentrants into the exchange accessmarket have been presumptivelyclassified as non-dominant because theyhave not been shown to exercisesignificant market power in their serviceareas. Policy and Rules ConcerningRates for Competitive Common CarrierServices and Facilities AuthorizationsTherefor, CC Docket No. 79–252, FirstReport and Order, 45 FR 76148(November 18, 1980), Further Notice ofProposed Rulemaking, 46 FR 10924(February 5, 1981), Second FurtherNotice of Proposed Rulemaking, 47 FR17308 (April 22, 1982), Second Reportand Order, 47 FR 37889 (August 27,1982). At the same time, we stated thatcompetitive LECs may possess marketpower over IXCs needing to terminatecalls because the LEC controlling theterminating local loop is the only accessprovider available to the IXC seeking toterminate a long-distance call on thatparticular loop. We solicited commenton several alternatives, includingwhether we should use incumbent LECterminating access rates as a benchmarkto determine the reasonableness ofcompetitive LEC terminating rates. Weinvited commenters to offer otherapproaches including, for example,whether we should establish apresumption of reasonableness if thecompetitive LEC’s terminating accessrate is no higher than the incumbentLEC’s rate in the same geographicmarket.

b. Discussion359. We recently noted that the test in

deciding whether to apply dominantcarrier regulation to a class of carriers iswhether those carriers have marketpower. Regulatory Treatment of LECProvision of Interexchange ServicesOriginating in the LEC’s Local ExchangeArea and Policy and Rules Concerningthe Interstate, InterexchangeMarketplace, CC Docket Nos. 96–149and 96–61, Second Report and Order inCC Docket No. 96–149 and Third Reportand Order in CC Docket No. 96–61, FCC97–142 (April 18, 1997) (Dominant-Non-Dominant Order). As we discussedin the Dominant/Nondominant Order,in determining whether a firm possessesmarket power, the Commission haspreviously focused on certain well-established market features, includingmarket share, supply and demandsubstitutability, the cost structure, sizeor resources of the firm, and control ofbottleneck facilities. Competitive LECscurrently have a relatively small marketshare in the provision of local exchange

and exchange access service.Nonetheless, at first blush, there is aconcern that a competitive LEC mayhave market power over an IXC thatneeds to terminate a long-distance callto a customer of that particularcompetitive LEC. Therefore, we soughtcomment on whether and to what extentwe should regulate the terminatingaccess charges of competitive LECs.

360. We conclude, based on therecord before us, that non-incumbentLECs should be treated as nondominantin the provision of terminating access.Although an IXC must use thecompetitive LEC serving an end user toterminate a call, the record does notindicate that competitive LECs havepreviously charged excessiveterminating access rates. Nor havecommenters provided evidencedemonstrating that competitive LECsare, in fact, charging excessiveterminating rates. Indeed, the recordsuggests that the terminating rates ofcompetitive LECs are equal to or belowthe tariffed rates of incumbent LECs. Inaddition, the record does not show thatcompetitive LECs distinguish betweenoriginating and terminating access intheir offers of service. Therefore, it doesnot appear that competitive LECs havestructured their service offerings inways designed to exercise any marketpower over terminating access.Accordingly, the concerns expressed inthe NPRM about the ability ofcompetitive LECs to exercise marketpower in the provision of terminatingaccess are not substantiated in therecord.

361. Further, as competitive LECs,which have a small share of theinterstate access market, attempt toexpand their market presence, the ratesof incumbent LECs or other potentialcompetitors will constrain theterminating access rates of competitiveLECs. Specifically, competitive LECscompete with incumbent LECs whoserates are regulated. The record indicatesthat long-distance carriers haveestablished relationships withincumbent LECs for the provision ofaccess services, and new marketentrants are not likely to risk damagingtheir developing relationships with IXCsby charging unreasonable terminatingaccess rates. This is especially true withrespect to competitive access providersseeking to maintain or expand theiraccess transport, special access, or otherservices apart from switched access.

362. In addition, we believe thatovercharges for terminating access couldencourage access customers to takecompetitive steps to avoid payingunreasonable terminating accesscharges. If, for example, a competitive


LEC consistently overcharged an IXC forterminating access, the IXC would havean incentive to enter a marketingalliance with another competitive LECin the same market or in othergeographic markets where theovercharging competitive LEC seeks toexpand. Although high terminatingaccess charges may not create adisincentive for the call recipient toretain its local carrier (because the callrecipient does not pay the long distancecharge), the call recipient maynevertheless respond to incentivesoffered by an IXC with an economicinterest in encouraging the end user toswitch to another local carrier. Such anapproach could have particular impactwhen the IXC has significant brandrecognition among consumers.Moreover, as noted in the NPRM,excessive terminating access chargescould encourage IXCs to enter the accessmarket in an effort to win the localcustomer. We believe that thepossibility of competitive responses byIXCs will have a constraining effect onnon-incumbent LEC pricing.

363. Thus, we will not adopt at thistime any regulations governing theprovision of terminating accessprovided by competitive LECs. Becausecompetitive LECs have not chargedunreasonable terminating access rates,and because they are not likely to do soin the future, competitive LECs do notappear to possess market power. Thus,the imposition of regulatoryrequirements with respect tocompetitive LEC terminating access isunnecessary. We similarly find noreason to adopt a presumption ofreasonableness where a competitiveLEC’s terminating access rates are lessthan its rates for originating access orless than the incumbent LEC’sterminating access rates. Instead, if weneed to examine the reasonableness ofcompetitive LEC terminating accessrates in an individual instance, we cando so taking into account all relevantfactors including relationships to otherrates. Thus, if an access provider’sservice offerings violate section 201 orsection 202 of the Act, we can addressany issue of unlawful rates through theexercise of our authority to investigateand adjudicate complaints undersection 208. On the basis of the currentrecord, we conclude that reliance on thecomplaint process will be sufficient toassure that non-incumbent LEC rates arereasonable. We emphasize that we willnot hesitate to use our authority undersection 208 to take corrective actionwhere appropriate.

364. We will be sensitive toindications that the terminating accessrates of competitive LECs are

unreasonable. The charging ofterminating access rates aboveoriginating rates in the same market, forexample, may suggest the need to revisitour regulatory approach. Similarly,terminating rates that exceed thosecharged by the incumbent LEC servingthe same market may suggest that acompetitive LEC’s terminating accessrates are excessive. If there is sufficientindication that competitive LECs areimposing unreasonable terminatingaccess charges, we will revisit the issueof whether to adopt regulationsgoverning competitive LEC rates forterminating access.

3. ‘‘Open End’’ Services365. In some cases, an IXC is unable

to influence the end user’s choice ofaccess provider for originating accessservices because the end user on theterminating end is paying for the call.For example, charges for the ‘‘open end’’originating access minutes for 800 or888 services are paid by the recipient ofthe call. Consequently, the Commissionhas treated incumbent LEC originating‘‘open end’’ minutes as terminatingminutes for access charge purposes. TheNPRM solicited comment on whethersuch regulatory treatment should beretained for ‘‘open end’’ services underwhich terminating access rates serve asoriginating access rates, and whetherthis approach should be extended tocompetitive LECs.

366. We continue to believe that‘‘open end’’ originating minutes shouldbe treated as terminating minutes foraccess charge purposes. Although fewcomments were filed regarding thisissue, commenters addressing thismatter advocate retention of the currentregulatory approach. By continuing totreat ‘‘open end’’ originating minutes asterminating minutes for access chargepurposes, we recognize that accesscustomers have limited ability toinfluence the calling party’s choice ofaccess provider. Accordingly, accesscharges for these ‘‘open end’’ minuteswill be governed by the requirementswe adopt in this Order applicable toterminating access provided byincumbent LECs. Thus, residualcommon line charges and the per-minute TIC will not be recoveredthrough ‘‘open end’’ originating minutesexcept to the extent such recovery ispermitted under the rules described inSection III.A of this Order.

D. Universal Service-Related Part 69Changes

367. In the NPRM, we recognized that,because of the role that access chargeshave played in funding and maintaininguniversal service, it is critical to

implement changes in the access chargesystem together with complementarychanges in the universal service system.In this section, we address the mannerin which incumbent LECs must adjusttheir interstate access charges to reflectthe universal service supportmechanisms adopted in the UniversalService Order.

1. Background

368. In November 1996, pursuant tosection 254 of the Act, the Federal-StateUniversal Service Joint Board issued itsrecommendations to the Commission forreforming our system of universalservice so that universal service ispreserved and advanced, but in amanner that permits the local exchangeand exchange access markets to movefrom monopoly to competition. In ourUniversal Service Order, we areadopting most of the Joint Board’srecommendations relating to thesupport of rural and high cost areas.

369. Section 254 of the Act requiresthat any federal universal servicesupport provided to eligible carriers be‘‘explicit’’ and recovered on an‘‘equitable and nondiscriminatorybasis’’ from all telecommunicationscarriers providing interstatetelecommunications service. In ourcompanion Universal Service Order, weagree with the Joint Board that theseprograms must be replaced withuniversal service support mechanismsthat satisfy section 254.

370. Currently, there are threemechanisms designed expressly toprovide support for high cost and smalltelephone companies: the UniversalService Fund (high cost assistancefund), the Dial Equipment Minutes(DEM) weighting program, and LongTerm Support (LTS). An incumbent LECis eligible for high cost assistance fromthe current Universal Service Fund if itsembedded loop costs exceed 115percent of the national average loopcost. This program is funded entirely byIXCs. DEM weighting assistance is animplicit support mechanism thatpermits LECs with fewer than 50,000access lines to apportion a greaterproportion of these local switching coststo the interstate jurisdiction than largerLECs may allocate. Finally, the existingLTS program supports carriers withhigher-than average subscriber line costsby providing carriers that are membersof the NECA pool with enough supportto enable them to charge IXCs only anationwide average CCL interstateaccess rate. LTS payments reduce theaccess charges of smaller, ruralincumbent LECs participating in theloop-cost pool by raising the access


charges of non-participating incumbentLECs.

371. In the NPRM, we soughtcomment on whether incumbent LECs’access charges must be adjusted toreflect elimination of LTS contributionrequirements and receipt of explicituniversal service funds in order toprevent incumbent LECs from beingcompensated twice for providinguniversal service. We proposed adownward exogenous cost adjustmentfor price cap incumbent LECs to reflectelimination of LTS contributionrequirements and any revenues receivedfrom any new universal service supportmechanisms, and sought comment onhow interstate costs must also bereduced to account for explicit universalservice support.

2. Discussion372. In our companion Universal

Service Order, we conclude that acarrier will continue to receiveuniversal service support based uponthe existing LTS, high cost, DEMweighting mechanisms, until the carrierbegins to receive support based uponforward-looking economic cost. In thefollowing sections, we will discuss themanner in which incumbent LECs mustreduce their interstate access charges toreflect the elimination of the obligationto contribute to LTS, increase theirinterstate access charges to permitrecovery of the new universal serviceobligation, and, to the extent necessary,adjust their interstate access charges toaccount for any additional universalservice funds received under themodified universal service mechanisms.

a. Removal of LTS Obligation FromInterstate Access Rates

373. In our companion UniversalService Order, we agree with the JointBoard that LTS payments constitute auniversal service support mechanismthat is inconsistent with the Act’srequirement that support be collectedfrom all providers of interstatetelecommunications services on anequitable and non-discriminatory basisand be available to all eligibletelecommunications carriers. In thatorder, we conclude that LTS should beremoved from the interstate accesscharge system. We provide, instead, forrecovery of comparable payments fromthe new federal universal servicesupport mechanisms.

374. Currently, only incumbent LECsthat do not participate in the NECA CCLtariff (non-pooling incumbent LECs)make LTS payments and onlyincumbent LECs participating in theNECA CCL tariff receive LTS support.Non-pooling incumbent LECs’

contributions to the common line poolare set annually based on the totalprojected amount of LTS, converted toa monthly payment amount. Non-pooling incumbent LECs recover therevenue necessary for their LTScontributions through their CCLcharges. We agree with commenters thatargue that, to the extent we do notreduce interstate access revenues by theamount of LTS contribution currentlyrecovered in the rates, incumbent LECswill double recover. We thereforeconclude that incumbent LEC interstateaccess charges must be reduced toreflect elimination of the obligation tocontribute to LTS.

375. Because payments from theexisting LTS mechanism will cease onJanuary 1, 1998, incumbent LECs shouldno longer contribute to the existing LTSfund after that date. For price cap LECs,which were requested to stopparticipating in the NECA CommonLine tariff before coming under pricecap regulation, LTS contributions wereincluded in the common line revenuerequirement when the PCI for thecommon line basket was established.We conclude that price cap LECs mustmake a one-time downward exogenousadjustment to the PCI for the commonline basket to account fully for theelimination of their LTS obligations.This exogenous adjustment shall bemade in a manner consistent withsection 61.45 and other relevantprovisions of the Commission’s rules.

376. Non-pooling, rate-of-return LECsrecover their LTS contributions in thecommon line revenue requirement.Because current LTS contributors willno longer be making such contributionsafter January 1, 1998, their CCL chargesshould be adjusted to account for thischange. Rate-of-return LECs thatformerly made LTS contributionsshould recompute their common linerevenue requirements based on theelimination of their LTS obligations,and adjust their CCL chargesaccordingly.

377. We note that the replacement ofLTS with comparable support from thenew universal service supportmechanisms requires us to amend theNECA Common Line tariff rules, whichestablish the CCL for pooling membersat the average of price cap LECs’ CCLcharges. Under the current LTS supportsystem, NECA annually projects thecommon line revenue requirement,including an 11.25 percent return oninvestment, for incumbent LECs thatparticipate in the common line pool.NECA then computes the total amountof LTS support needed by subtractingthe amount pooling carriers will receivein CCL revenues and SLCs from the

pool’s projected revenue requirement,after removing pay telephone costs andrevenues. Our rules currently providethat the NECA CCL tariff be set torecover the average of price cap LECs’CCL charges. If we were to retain thisrule, our decision eliminating LTSobligations for price cap LECs andrequiring them to reduce their CCLcharges accordingly wouldautomatically reduce the CCL revenuesof NECA pool members. Further,reductions would occur as price capLECs implemented our decisions inSection III of this Order, whichrestructures the common line ratestructure for price cap LECs to recovercommon line costs through flat-ratedcharges instead of the per-minute CCLcharge. Because we have deferredconsideration of access reform for non-price cap LECs and did not seekcomment on this issue in the NPRM, wemust address this issue in a futureproceeding that undertakes accessreform for small, non-price cap LECs.

b. Recovery of New Universal ServiceObligations

378. In the Universal Service Order,we conclude that assessment ofcontributions for the interstate portionof the high cost and low-income supportmechanisms shall be based solely onend-user interstate revenues, and thatassessment of universal support foreligible schools, libraries, and ruralhealth care providers shall be based oninterstate and intrastate total end-userrevenues. As to the manner in whichcarriers may recover their contributionsto the universal service fund, in ourUniversal Service Order we concludethat carriers may recover universalservice contributions via interstatemechanisms. In this Section, we addressthe manner in which incumbent pricecap LECs may recover their universalservice contributions. We address non-price cap LECs’ recovery of universalservice contributions in Section XIII.F ofthe Universal Service Order.

379. Price cap LECs may treat theircontributions to the new universalservice mechanisms, including high costand low-income support and support foreligible schools, libraries, and healthcare, as exogenous changes to their pricecap indices (PCIs). Because the onlyinterstate revenues that will serve as thebasis for assessing universal servicecontributions in 1998 will be end-userrevenues, we find that price cap LECsrecovering their universal serviceobligation through interstate accesscharges must recover thosecontributions in the baskets for servicesthat generate end-user interstaterevenues. Because price cap LECs do


not recover revenues from end users ofservices in all baskets, the exogenousadjustment should not be across-the-board. The baskets containing end-userinterstate services are the common line,interexchange, and trunking baskets.The end-user charges assessed onservices in the common line basket arerecovered through the SLC; in theinterexchange basket, end-user chargesare recovered through per-minute tollcharges; and in the trunking basket, enduser charges are recovered throughspecial access service provided directlyto end users. Price cap LECs electing torecover their universal serviceobligation through interstate accesscharges must therefore apply the fullamount of the exogenous adjustmentamong these three baskets on the basisof relative size of end-user revenues. Wenote, however, that the tandem-switched transport, interconnectioncharge, and tandem switch signallingservice categories in the trunking basketdo not recover end-user interstaterevenues. In order to prevent recoveryfrom customers of these services, theservice band indices (SBI) for theseservice categories should not beincreased to reflect the exogenousadjustment to the PCI for the trunkingbasket. To reflect the exogenousadjustment to the trunking basket PCI,price cap LECs should, instead, increasethe SBIs for the remaining servicecategories in the trunking basket basedon the relative end-user interstaterevenues generated in each servicecategory. The four remaining servicecategories in the trunking basket are asfollows: (1) voice grade entrancefacilities, voice grade direct-trunkedtransport, voice grade dedicatedsignalling transport, voice grade specialaccess, WATS special access, metallicspecial access, and telegraph specialaccess services; (2) audio and videoservice; (3) high capacity flat-ratedtransport, high capacity special access,and DDS services; and (4) widebanddata and wideband analog services.

380. In 1999, the percentage of pricecap LECs’ revenues that will be assessedfor universal service support mayincrease as a result of the anticipatedincreases in high cost, low-incomesupport and support for schools,libraries, and health care in 1999. Pricecap LECs shall therefore perform anupward exogenous adjustment to thePCIs for the common line,interexchange, and trunking baskets inthe same manner as the exogenousadjustment performed in 1998, to reflectany change in the assessment rate in1999.

c. Adjustments to Interstate AccessCharges to Reflect Additional SupportFrom the Modified Universal ServiceMechanisms

381. In our Universal Service Order,we conclude that the federal universalservice mechanism should support 25percent of the difference between theforward-looking economic cost ofserving the customer and theappropriate revenue benchmark. Wefurther conclude in that order that 25percent approximates the portion of thecost of providing the supported networkfacilities that would be assigned to theinterstate jurisdiction, and that, byfunding these interstate costs, we willensure that federal implicit universalservice support is made explicit.Consistent with our decision in theUniversal Service Order to fund onlyinterstate costs through the federaluniversal service fund, we directincumbent LECs to use any universalservice support received from the newuniversal service mechanisms to reduceor satisfy the interstate revenuerequirement otherwise collectedthrough interstate access charges.

382. Non-Rural Carriers. In ourUniversal Service Order, we concludethat, until a forward-looking economiccost methodology takes effect onJanuary 1, 1999, non-rural carriers willcontinue to receive high cost assistanceand LTS amounts based on the existinguniversal service mechanisms. As therewill be no change until January 1, 1999to the support non-rural incumbentLECs currently receive as high cost andLTS support, we conclude that it is notnecessary at this time to determine themanner in which non-rural carriersshould adjust their interstate accesscharges to reflect a difference inuniversal service support. We willaddress this issue prior to the January 1,1999, effective date of the forward-looking cost mechanisms for non-ruralcarriers.

383. Rural Carriers. In our UniversalService Order, we conclude that ruralcarriers, as defined in section 153(37) ofthe Act, shall continue to receivesupport based on embedded costs for atleast three years. Beginning on January1, 1998, rural carriers shall receive highcost loop support, DEM weightingassistance, and LTS benefits on the basisof the modified support mechanisms.

384. In our Universal Service Order,we adopt modified per-line supportmechanisms for providing supportcomparable to the LTS support receivedunder the existing mechanisms.Beginning on January 1, 1998, we willallow a rural carrier’s annual LTSsupport to increase from its support for

the preceding calendar year based onthe percentage of increase of thenationwide average loop cost. Rural,non-price cap LECs should continue toapply any revenues received from themodified universal service supportmechanisms that replace current LTSamounts to the accounts to which theyare currently applying LTS support.

385. We also decide in the UniversalService Order that, from January 1, 1998through December 31, 1999, ruralcarriers shall calculate their high costsupport using the current high costformulas. We conclude that noadjustment to rural incumbent LECs’interstate access charges is necessary atthis time because incumbent LECs willcontinue to use the existing high costformulas to determine high costsupport. As we determine in that order,however, beginning January 1, 2000,rural carriers shall receive high costloop support for their average loop coststhat exceed 115 percent of an inflation-adjusted nationwide average loop cost.The inflation adjusted nationwideaverage cost per loop shall be calculatedby multiplying the 1997 nationwideaverage cost per loop by the percentagein change in Gross Domestic ProductChained Price Index (GDP–CPI) from1997–1998. We conclude that rural,non-price cap LECs should continue toapply any revenues received from themodified universal service supportmechanism that replace amountsreceived under the current high costsupport system to the accounts to whichthey are currently applying high costsupport.

386. Finally, in our Universal ServiceOrder, we adopt the Joint Board’srecommendation that a subsidycorresponding in amount to thatgenerated formerly by DEM weightingbe recovered from the new universalservice support mechanisms. Beginningon January 1, 1998 and continuing untilpermanent mechanisms for thembecome effective, rural carriers willreceive DEM weighting assistancecalculated as follows: assistance willequal the difference between the 1996weighted DEM factor and theunweighted DEM factor multiplied bythe annual unseparated local switchingrevenue requirement. As withcomparable LTS and high cost support,rural, non-price cap LECs shouldcontinue to apply any support receivedfrom the modified universal servicesupport mechanisms that replacesexisting DEM weighting amounts to theaccounts to which they are currentlyapplying DEM weighting assistance.

387. Currently, the high cost and DEMweighting support mechanisms shift aportion of the intrastate revenue


requirement to the interstate jurisdictionin order to permit LECs to recover agreater percentage of their costs from theinterstate jurisdiction. Some non-pricecap LECs are concerned that, to theextent that support from the modifieduniversal service mechanisms is notapplied to the intrastate jurisdiction, anintrastate revenue shortfall will occur.In the Universal Service Order, weconclude that, until universal servicesupport is based on forward-lookingeconomic cost, carriers should continueto receive amounts from the newuniversal service mechanismscomparable to existing high cost andDEM weighting support. In that order,we do not alter the existing revenue-shifting mechanisms in place for thecurrent high cost support and DEMweighting at this time. Thus, nointrastate revenue shortfall will occur,because no revenue requirement isbeing shifted back to the intrastatejurisdiction.

E. Part 69 Allocation Rules

1. Background388. In the NPRM, we solicited

comment on whether it would beappropriate for incumbent price capLECs to be relieved of complying withsubparts D and E of part 69 of our rules,which address the allocation ofinvestments and expenses to the accessrate elements.

2. Discussion389. We conclude that at this time we

should maintain our part 69 costallocation rules. In this Report andOrder, we have instituted a phasing outof the CCL charge. Until the per-minuteCCL charge is phased out completelyand multi-line PICCs do not recover anycommon line revenues, price cap LECswill need to use these rules to calculatethe SLC. Therefore, we decline toeliminate the cost allocation rules at thistime. We note that we may revisit thisissue when these rules are no longerneeded to calculate the SLC.

F. Other Proposed Part 69 Changes

1. Background390. In the NPRM, we sought

comment on revisions necessary toupdate part 69 and conform it to the1996 Act. In the NPRM, we madeseveral proposals that we thoughtnecessary to bring Part 69 current,including: eliminating the rules thatprovide for a ‘‘contribution charge’’ thatmay be assessed on special access andexpanded interconnection; removing therule and sections referencing the rulethat establishes the equal access rateelement; and removing the rule and

sections referencing the rule thatestablishes a rate element for costsassociated with lines terminating at‘‘limited pay telephones’’; and changingthe definition of ‘‘Telephone Company’’to mean incumbent LEC. We also soughtcomment on whether rate elements andsubelements established pursuant towaiver should be incorporated intoPart 69.

2. Discussion

391. The passage of the 1996 Act andthe subsequent enactment ofimplementing regulations requires thatwe update and revise various sections ofPart 69. Sections 69.4(f) and 69.122 ofour rules provide for a ‘‘contributioncharge’’ that may be assessed on specialaccess and expanded interconnection.These sections are inconsistent withsection 254 as amended by the 1996Act, which requires, inter alia, that suchcarrier contributions be equitable andnondiscriminatory. Furthermore, ourrules governing the contribution chargemerely allow a LEC to try to justify thischarge in the expanded interconnectioncontext. No party has even attempted tojustify such a charge in more than fouryears. Given this and the relevantamendments in the 1996 Act, we findthat there is no need for this rateelement. We conclude that §§ 69.4(f)and 69.122 of our rules, which providefor a ‘‘contribution charge’’ that may beassessed on special access andexpanded interconnection, should bedeleted.

392. Under § 69.4(d), we requiredcarriers to eliminate any separate equalaccess charge by January 1, 1994. Weconclude, therefore, that § 69.4(d),which established the equal access rateelement for a limited duration, shouldbe deleted because of the expiration ofthe designated time period. Similarly,we conclude that § 69.107, whichgoverns the computation of the equalaccess rate element charges, and§§ 69.308 and 69.410, which concernallocation of costs to that rate element,should be deleted because thedesignated time period for separateequal access rate elements has expired.We conclude that references to thesedeleted sections should also be removedfrom part 69. Section 69.309 refers to§ 69.308 and § 69.411 refers to § 69.410.To ensure consistency, a new section,designated as § 69.3(3)(12), should beadded and should read as follows:‘‘Such a tariff shall not contain anyseparate carrier’s carrier tariff chargesfor an Equal Access element.’’ Similarly,we conclude that § 69.205, whichconcerns transitional premium chargesfor IXCs and others should be deleted

because the designated transition periodfor these charges has expired.

393. Section 69.103 requiresincumbent LECs to establish a separaterate element for costs associated withlines terminating at ‘‘limited paytelephones.’’ We note that few, if any,payphone service providers offer thistype of service today. Sections69.303(a), 69.304(c), 69.307(c), and69.406(a)(9) concern the allocation ofcosts to this rate element. Section 276 ofthe Act and the implementingregulations require a new per callcompensation plan, which requires,inter alia, that incumbent LECs removeall payphone costs from access charges.Implementation of the Pay TelephoneReclassification and CompensationProvisions of the TelecommunicationsAct of 1996, Report and Order, CCDocket No. 96–128, FCC 96–388, 61 FR39397 (July 29, 1996) (Payphone Order),recon., FCC 96–439, 61 FR 65341(December 12, 1996) (PayphoneReconsideration Order), appealdocketed sub nom., Illinois PublicTelecommunications Ass’n v. FCC andUnited States, Case No. 96–1394 (D.C.Cir., filed October 17, 1996). This newcompensation plan, as well as thepayphone dialing parity requirements,have eliminated the need for §§ 69.103,69.303(a), 69.304(c), 69.307(c), and69.406(a)(9). We conclude that thesesections should be deleted.

394. We conclude that codifyingpreviously-granted Part 69 waivers isnot necessary at this time. Under thePrice Cap Performance Review ThirdReport and Order, a party seeking tointroduce a new service may do so byfiling a petition showing that the newservice is in the public interest. Oncethat petition for a new service has beengranted, carriers seeking to introducethe same service with the same ratestructure may do so under expeditedprocedures. This streamlined alternativefor introducing new services shouldresolve past difficulties encounteredwith the Part 69 waiver process. Theproposed codification of previously-granted waivers is thus unnecessary. Wetherefore decline to codify previously-granted Part 69 waivers into our rules.

395. NECA and TCA have requestedthat the Commission extend to all rate-of-return companies, the right to offernew services based on an expeditedprocess, which requires, inter alia, ashowing that the new service is in thepublic interest. In the Third Report andOrder, we granted to incumbent pricecap LECs the right to introduce newservices under a streamlined procedure.We will address the request of NECAand TCA when we take up access


reform for rate-of-return companies inthe near future.

396. In the NPRM, we solicitedcomment on whether we should adoptregulatory requirements to govern ratesfor terminating access offered bycompetitive LECs. In Section VI.C.,supra, we conclude that we will notadopt such regulatory requirement atthis time. For the same reasons, we findit unnecessary to apply any of our Part69 regulations to competitive LECs. Wetherefore conclude that § 69.2(hh),which currently defines ‘‘TelephoneCompany’’ by reference to Section 3(r)of the 1934 Act, should be changed toread as follows: ‘‘ ‘Telephone Company’or ‘local exchange carrier’ as used inthis Part means an incumbent localexchange carrier as defined in section251(h)(1) of the 1934 Act as amended bythe 1996 Act.’’ There is no indication inthe record that competitive LECs haveexercised any degree of market power inprovision of terminating access or otheraccess services. By definition, non-dominant carriers do not exercisemarket power. Further, non-dominantcarriers possess a negligible share of thecurrent access market and they will becompeting with incumbent LECs whoserates are subject to regulation. As apractical matter, the rates of theincumbent LECs will serve as aconstraint to some degree on the pricingand practices of non-dominant LECs.We therefore find on this record that itis sufficient to rely on the Section 208complaint process to assure compliancewith the Act by competitive LECs, andthat we should not apply Part 69 tothem. To the extent that our definitionsor our application of Part 69 needs inthe future to be expanded to encompassLECs other than incumbent LECs, wecan revisit this issue.

VIII. Final Regulatory FlexibilityAnalysis

397. As required by the RegulatoryFlexibility Act (RFA), an InitialRegulatory Flexibility Analysis (IRFA)was incorporated in the NPRM in thisproceeding. The Commission soughtwritten public comments on theproposals in the NPRM, including theIRFA. The Commission’s FinalRegulatory Flexibility Analysis (FRFA)in this Order (the First Report and Orderin this Access Charge Reformproceeding) conforms to the RFA, asamended. We provide this summaryanalysis to provide context for ouranalysis in this FRFA. To the extent thatany statement contained in this FRFA isperceived as creating ambiguity withrespect to our rules or statements madein preceding sections of this Order, the

rules and statements set forth in thosepreceding sections shall be controlling.

A. Need for and Objectives of This FirstReport and Order

398. The Telecommunications Act of1996 requires incumbent LECs to offerinterconnection and unbundledelements on an unbundled basis, andimposes a duty to establish reciprocalcompensation arrangements for thetransport and termination of calls. TheCommission’s access charge rules wereadopted at a time when interstate accessand local exchange services wereoffered on a monopoly basis, and inmany cases are inconsistent with thecompetitive market envisioned by the1996 Act. This proceeding is beingconducted to revise the Commission’saccess charge rules to make themconsistent with theTelecommunications Act of 1996.

B. Summary of Significant Issues Raisedby the Public Comments in Response tothe IRFA

399. Only one party, Rural Tel.Coalition, commented on the IRFAcontained in the NPRM. Rural Tel.Coalition disagrees with our conclusionthat rules applying only to price capLECs will not affect non-price cap LECsin a way that requires analysis under theRFA. According to Rural Tel. Coalition,the decisions made in this Order will‘‘prejudge and prejudice’’ a laterrulemaking addressing access chargereform for non-price cap LECs. Inaddition, Rural Tel. Coalition arguesthat non-price cap LECs, which includesmall incumbent LECs, will be injuredif the access reform issues addressed inthis Order are not implemented for themas well as price-cap LECs. Finally, RuralTel. Coalition argues that theCommission impermissibly determinedthat small incumbent LECs are not smallbusinesses within the meaning of theRFA.

400. Rather than attempt to enact‘‘one size fits all’’ access charge reformthat would risk not fully accounting forthe special circumstances of rate-of-return and other non-price cap LECs, wehave chosen to address those LECsseparately in a proceeding in which wemay better focus on their needs. We donot agree with Rural Tel. Coalition thatour decisions in this Order will‘‘prejudge and prejudice’’ ourconsideration of the issues in asubsequent rulemaking. Although wemay often find that the public interestconcerns are similar for large and smallcarriers, our analysis will begin anew,and will address all relevant factors.Moreover, where the specialcircumstances faced by small incumbent

LECs justify different treatment than isaccorded price cap LECs in this Order,we will be better able to explain andaddress those concerns in a separateproceeding. For the reasons set forth inSection V above, we also disagree withRural Tel. Coalition that smallincumbent LECs may be injured by thedelay involved in conducting separaterulemakings. Finally, although we arenot persuaded on the basis of this recordthat our prior practice of findingincumbent LECs not subject toregulatory flexibility analysis (becausethey are not small businesses) has beenincorrect, we have fully performed anRFA analysis for small incumbent LECsin this Order, including consideration ofany adverse impact of the rules weadopt and consideration of alternativesthat may reduce adverse impacts onsuch entities.

C. Description and Estimate of theNumber of Small Entities to Which theRules Will Apply

401. The RFA generally defines‘‘small entity’’ as having the samemeaning as the terms ‘‘small business,’’‘‘small organization,’’ and ‘‘smallgovernmental jurisdiction.’’ In addition,the term ‘‘small business’’ has the samemeaning as the term ‘‘small businessconcern’’ under the Small Business Actunless the Commission has developedone or more definitions that areappropriate for its activities. A smallbusiness concern is one which: (1) Isindependently owned and operated; (2)is not dominant in its field of operation;and (3) satisfies any additional criteriaestablished by the Small BusinessAdministration (SBA).

402. Pursuant to 5 U.S.C. sec. 601(3),the statutory definition of a smallbusiness applies ‘‘unless an agency afterconsultation with the Office ofAdvocacy of the Small BusinessAdministration and after opportunityfor public comment, establishes one ormore definitions of such term which areappropriate to the activities of theagency and publishes such definition(s)in the Federal Register.’’ SBA hasdeveloped a definition of small businessfor Standard Industrial Classification(SIC) category 4813 (TelephoneCommunications, ExceptRadiotelephone). We first discuss thenumber of small businesses fallingwithin this category, and then weattempt to refine further our estimate tocorrespond with the categories oftelephone companies that are commonlyused under our rules.

403. Consistent with our priorpractice, our use of the terms ‘‘smallentities’’ and ‘‘small businesses’’ doesnot encompass ‘‘small incumbent


LECs.’’ We use the term ‘‘smallincumbent LECs’’ to refer to anyincumbent LECs that arguably might bedefined by SBA as ‘‘small businessconcerns.’’ Because the small incumbentLECs subject to these rules are eitherdominant in their field of operations orare not independently owned andoperated, they are, consistent with ourprior practice, excluded from thedefinition of ‘‘small entity’’ and ‘‘smallbusiness concerns.’’ Out of anabundance of caution, however, forregulatory flexibility analysis purposes,we will consider small incumbent LECswithin this analysis and use the term‘‘small incumbent LECs’’ to refer to anyincumbent LECs that arguably might bedefined by the SBA as ‘‘small businessconcerns.’’

1. Telephone Companies, ExceptRadiotelephone Companies (SIC 4813)

404. Total Number of TelephoneCompanies Affected. The United StatesBureau of the Census (‘‘the CensusBureau’’) reports that, at the end of1992, there were 3,497 firms engaged inproviding telephone services, as definedtherein, for at least one year. Thisnumber contains a variety of differentcategories of carriers, including localexchange carriers, interexchangecarriers, competitive access providers,cellular carriers, mobile service carriers,operator service providers, paytelephone operators, personalcommunications services providers,covered specialized mobile radioproviders, and resellers. It seems certainthat some of those 3,497 telephoneservice firms may not qualify as smallentities or small incumbent LECsbecause they are not ‘‘independentlyowned and operated.’’ For example, aPCS provider that is affiliated with aninterexchange carrier having more than1,500 employees would not meet thedefinition of a small business. It seemsreasonable to conclude that fewer than3,497 telephone service firms are smallentity telephone service firms or smallincumbent local exchange carriers.

405. According to theTelecommunications Industry Revenue:Telecommunications Relay ServiceFund Worksheet Data (TRS Worksheet),there are 2,847 interstate carriers. Thesecarriers include, inter alia, localexchange carriers, wireline carriers andservice providers, interexchangecarriers, competitive access providers,operator service providers, paytelephone operators, providers oftelephone toll service, providers oftelephone exchange service, andresellers.

406. Wireline Carriers and ServiceProviders. The SBA has developed a

definition of small entities for telephonecommunications companies other thanradiotelephone (wireless) companies.According to the SBA’s definition, asmall business telephone companyother than a radiotelephone company isone employing no more than 1,500persons. The Census Bureau reportsthat, there were 2,321 such telephonecompanies in operation for at least oneyear at the end of 1992. All but 26 ofthe 2,321 non-radiotelephonecompanies listed by the Census Bureauwere reported to have fewer than 1,000employees. Thus, even if all 26 of thosecompanies had more than 1,500employees, there would still be 2,295nonradiotelephone companies thatmight qualify as small entities or smallincumbent LECs. We do not haveinformation on the number of carriersthat are not independently owned andoperated, and thus are unable at thistime to estimate with greater precisionthe number of wireline carriers andservice providers that would qualify assmall business concerns under theSBA’s definition. Consequently, weestimate that there are fewer than 2,295small telephone communicationscompanies other than radiotelephonecompanies.

407. Incumbent Local ExchangeCarriers. Neither the Commission northe SBA has developed a definition forsmall incumbent providers of localexchange services (LECs). The closestapplicable definition under the SBArules is for telephone communicationscompanies other than radiotelephone(wireless) companies. The most reliablesource of information regarding thenumber of LECs nationwide is the datathat we collect annually in connectionwith the TRS Worksheet. According toour most recent data, 1,347 companiesreported that they were engaged in theprovision of local exchange services. Wedo not have information on the numberof carriers that are not independentlyowned and operated, nor what carriershave more than 1,500 employees, andthus are unable at this time to estimatewith greater precision the number ofincumbent LECs that would qualify assmall business concerns under SBA’sdefinition. Consequently, we estimatethat there are fewer than 1,347 smallincumbent LECs.

2. Information Service Providers andCompetitive LECs Are Not Affected

408. In Section VIII.B of the NPRM,we sought comment on whether tocontinue to exempt enhanced serviceproviders (which we now refer to asinformation service providers, or ISPs)from any requirement to pay accesscharges. Because we decide to retain the

ISP exemption, and do not permit LECsto impose access charges on ISPs at thistime, we conclude that the RFA doesnot require us to consider the effects ofany proposed rules on ISPs that fallwithin the definition of a small entity.Instead, as set forth in Section VI.Babove, we find that the proceedingcommenced with the Notice of Inquiryissued contemporaneously with theNPRM is the appropriate forum toaddress the fundamental questionsabout ISP usage of the public switchednetwork. In the Notice of Inquiry, wesought comment on broader issuesconcerning the development ofinformation services and Internetaccess. The information provided willgive us the data we need to make furtherreasonable and informed decisionsregarding Internet access and otherinformation services, and, if necessary,to craft proposals for a subsequentNotice of Proposed Rulemaking that aresensitive to the complex economic,technical, and legal questions raised inthis area. Similarly, we sought commentin Section VIII.A of the NPRM onwhether the public interest would beserved by regulating interstateterminating access services offered bycompetitive (non-incumbent) LECs.Because we conclude that the publicinterest would not be served byimposing any regulations oncompetitive LECs’ interstate terminatingaccess offerings at this time, weconclude that the RFA does not requireus to consider the effects of anyproposed rules on competitive LECs thatfall within the definition of a smallentity.

D. Summary Analysis of the ProjectedReporting, Recordkeeping, and OtherCompliance Requirements

409. In Section V.A above, we adoptchanges to transport interconnectioncharge (TIC) rate structures andtransport rate structures to comply withthe court order in CompTel v. FCC.These changes will affect all incumbentLECs, including small incumbent LECs,and will require small incumbent LECsto make one or more tariff filingsreflecting the new rate structures, whichwill involve the use of legal skills, andpossibly accounting, economic, andfinancial skills.

410. As set forth in Section VI.Dabove, incumbent LECs, including smallincumbent LECs, must reduce theirinterstate access charges to reflect theelimination of those former universalservice obligations that are beingreplaced with new universal serviceobligations, increase their interstateaccess charges to reflect their newuniversal service obligations, and, to the


extent necessary, adjust their interstateaccess charges to account for anyadditional universal service fundsreceived under the modified universalservice mechanisms. This will requiresmall incumbent LECs to make one ormore tariff filings, which will involvethe use of legal skills.

E. Burdens on Small Entities, andSignificant Alternatives Considered andRejected

411. Sections III.C–D: Transport/TICRate Structure Changes. As set forth inSections III.C–D above, we adopt a newtandem-switched transport ratestructure and rate levels that replace theinterim rate structure in place prior totoday. In addition, we adjust the TIC toreflect the changes made by the newtandem-switched transport ratestructure and rate levels. Unlike before,we adopt for the first time a final, cost-based rate structure, which shouldreduce and minimize uncertainty forthose small businesses and smallincumbent LECs whose businessesinvolve these services. Moreover, thenew rate structure and rate levels aremore closely related to the costs ofproviding the underlying services,which should minimize the economicimpact of these rules on smallbusinesses and small incumbent LECsby minimizing the adverse impacts thatcan accompany non-cost basedregulation.

412. We also adopt a transition planthat will have the effect of giving smallbusinesses and small incumbent LECsthe opportunity to plan, adjust, anddevelop their networks with a minimumof disruption for them and theircustomers. Finally, as set forth inSection III.C–D above, we find that thereallocation of TIC costs and the newrecovery procedures will facilitate thedevelopment of competitive markets.This is because incumbent LEC rateswill move toward cost-based levels andincumbent LECs will no longer have theability to assess TICs on switched accessminutes that do not use their transportfacilities. These pricing revisions maycreate new opportunities for smallentities, including small business andsmall incumbent LECs wishing to enterlocal telecommunications markets.

413. Section V: Access Reform forIncumbent Rate-of-Return LocalExchange Carriers. Our decision to limitaccess charge reform, with certainspecified exceptions, to price cap LECs,which do not include small businessesor small incumbent LECs, shouldmitigate the potential that access chargereform could have a significanteconomic impact on any smallincumbent LECs. This is because the

Commission will address in a separateproceeding the common set of complexissues faced by non-price cap LECs,which are different than those faced byprice cap LECs. Moreover, as discussedabove in Section V, we find that smallincumbent LECs are unlikely to faceimminent harm as a result of thecontinued application of our currentaccess charge rules because all non-price cap incumbent LECs may beexempt from, or eligible for amodification or suspension of, theinterconnection and unbundlingrequirements of the 1996 Act.

414. Section VI.A: Applicability ofPart 69 to Unbundled Elements. As aresult of the exclusion of unbundledelements from Part 69 access charges,described in Section VI.A above,incumbent LECs, including smallincumbent LECs, may receive reducedoverall levels of interstate accesscharges as competitors enter localmarkets using unbundled networkelements. They will, however, receivepayment for those unbundled networkelements pursuant to interconnectionagreements under Section 251 of theAct. Moreover, to the extent that smallincumbent LECs receive universalservice support through interstate accesscharges, such funding will continue tobe received without regard to any lossof revenue from interstate accesscharges. This is because all universalservice support received by smallincumbent LECs will be received fromthe new Universal Service Fund,established in a separate order releasedtoday. Finally, we note that section 251of the Act contains provisions expresslydesigned to take into account the specialcircumstances of small incumbent LECs,including those that qualify as ruralLECs, with respect to interconnectionobligations.

415. Our decisions in Section VI.Aabove to exclude unbundled elementsfrom the application of Part 69 accesscharges is likely to facilitate thedevelopment of competitive markets.This is because prices for unbundledelements will reflect the costs of thoseelements, and will not impose oncompetitors additional chargesunrelated to the costs of elements beingpurchased. Accordingly, as set forth inSection VI.A above, competitors usingunbundled elements will contribute touniversal service on an equitable andnon discriminatory basis instead ofpaying implicit subsidies to incumbentLECs (whether in addition to, or inplace of, explicit universal servicemechanisms). These decisions maycreate new opportunities for smallentities, including small businesses and

small incumbent LECs, wishing to enterlocal telecommunications markets.

416. Section VI.C: Terminating AccessServices Offered by Non-IncumbentLECs. As set forth in Section VI.C above,we find that treating new entrants asdominant carriers subject to regulationof their terminating access services untilwe find otherwise would imposeunnecessary regulation, includingpotentially increased regulatory burdenson small businesses. Instead ofimposing such burdens, we find that theimposition of regulatory requirementswith respect to competitive LECterminating access is unnecessary in theabsence of some stronger recordevidence that competitive LECs have inthe past charged unreasonableterminating access rates, or are likely todo so in the future. If there is sufficientindication that competitive LECs areimposing unreasonable terminatingaccess charges, we will revisit this issue.

417. Section VI.D: Universal ServiceRelated Part 69 Changes. As set forth inSection VI.D.2.a above, we require thatLECs that contribute to the Long TermSupport (LTS) program and LECs thatreceive LTS payments revise their tariffsto reflect the fact that the LTS programis being replaced with explicit supportfrom the new Universal Service Fundimplemented pursuant to the UniversalService Order adopted today. This willrequire small incumbent LECs to makeone or more tariff filings. The newUniversal Service Fund will facilitatethe transition to competitive marketswhile maintaining specific, predictableand sufficient support for universalservice as required under section 254 ofthe Act. Accordingly, the requiredchanges in LECs’ tariff filings, includingthose in tariffs filed by small incumbentLECs, are part of an overall mechanismdesigned to minimize the economicimpact of the 1996 Act on smallbusinesses and small incumbent LECs.The other universal service relatedchanges that we adopt in this Orderaffect only price-cap LECs, which do notinclude any small businesses or smallincumbent LECs.

F. Report to Congress418. The Commission shall include a

copy of this FRFA, along with thisOrder, in a report to be sent to Congresspursuant to SBREFA.

X. Ordering Clauses419. Accordingly, it is ordered,

pursuant to Sections 1–4, 10, 201–205,251, 254, 303(r), and 410(a) of theCommunications Act of 1934, asamended, and Section 601 of theTelecommunications Act of 1996, 47U.S.C. secs. 151–154, 160, 201–205, 251,


254, 303(r), 410(a), and 601, that theorder is adopted.

420. It is further ordered that theprovisions in this Order will be effectiveJune 15, 1997. We anticipate this datewill be at least thirty days afterpublication of the rules in the FederalRegister. If publication of this Order isdelayed, however, we find good causeunder 5 U.S.C. sec. 553(d)(3) to makethis Order effective less than thirty daysafter publication, because the localexchange carriers subject to price capregulation must file tariffs by June 16, inorder for them to be effective on July 1,1997, as required by Section 69.3 of theCommission’s rules, 47 CFR § 69.3. Inaddition, to ensure that the localexchange carriers subject to price capregulation have actual notice of thisOrder immediately following its release,we are serving those entities by certifiedfirst class mail. The collections ofinformation contained within arecontingent upon approval by the Officeof Management and Budget.

421. It is further ordered that thefollowing rules or amendments thereto,which impose new or modifiedinformation or collection requirements,shall become effective upon approval bythe Office of Management and Budget(OMB), but no sooner than June 15,1997: 47 CFR §§ 61.45, 61.47, 69.104,69.126, 69.151, and 69.152. Thefollowing rules, or amendments thereto,in this Report and Order shall beeffective January 1, 1998: 47 CFR§§ 61.3, 61.46, 69.1, 69.2, 69.105,69.123, 69.124, 69.125, 69.154, 69.155,69.157, 69.305, 69.306, 69.309, 69.401,69.411, and 69.502. The following rules,which impose new or modifiedinformation or collection requirements,shall become effective upon approval bythe Office of Management and Budget(OMB), but no sooner than January 1,1998: 47 CFR §§ 61.42, 61.48, 69.4,69.106, 69.111, 69.153, 69.156. Unlessotherwise stated herein, all remainingprovisions of this Order are effectiveJune 15, 1997.

422. It is further ordered that thewaiver petitions of Bell Atlantic, PacificBell, GTE, Cincinnati Bell, U S West,and BellSouth discussed in SectionIII.A.5., regarding Section 69.104 asapplied to ISDN service are dismissed.

423. It is further ordered that therulemaking proceeding in CC DocketNo. 95–72 is terminated.

424. It is further ordered, pursuant toSections 1–4, 10, 201–205, 251, 254,303(r), and 701 of the CommunicationsAct of 1934, as amended, 47 U.S.C. secs.151–154, 160, 201–205, 251, 254, 303(r),and 601, that notice is hereby given ofthe rulemaking described above and thatcomment is sought on these issues.

List of Subjects

47 CFR Part 61

Communications common carriers,Tariffs.

47 CFR Part 69

Access charges, Communicationscommon carriers.Federal Communications Commission.William F. Caton,Acting Secretary.

Rule ChangesParts 61 and 69 of title 47 of the Code

of Federal Regulations are amended asfollows:

PART 61—TARIFFS


Authority: Secs. 1, 4(i), 4(j), 201–205, and403 of the Communications Act of 1934, asamended; 47 U.S.C. 151, 154(i), 154(j), 201–205, and 403, unless otherwise noted.

2. Section 61.3 is amended by revisingthe introductory text of paragraph (f) toread as follows:

§ 61.3 Definitions

* * * * *(f) Basket. Any class or category of

tariffed service or charge:* * * * *

3. Section 61.42 is amended byrevising paragraphs (d)(1), (d)(2), and(d)(3), adding paragraph (d)(6), andrevising paragraphs (e)(1) and (e)(2)(vi)to read as follows:

§ 61.42 Price cap baskets and servicecategories.

* * * * *(d) * * *(1) A basket for the common line

interstate access elements as describedin §§ 69.115, 69.152, 69.154, and 69.157of this chapter, and that portion of theinterstate access element described in§ 69.153 of this chapter that recoverscommon line interstate access revenues;

(2) A basket for traffic sensitiveswitched interstate access elements;

(3) A basket for trunking services asdescribed in §§ 69.110, 69.111, 69.112,69.114, 69.125(b), and 69.155 of thischapter, and that portion of theinterstate access element described in§ 69.153 of this chapter that recoversresidual interconnection chargerevenues;* * * * *

(6) A basket for the marketingexpenses described in § 69.156 of thischapter, including those recoveredthrough End User Common Line chargesand Presubscribed Interexchange Carriercharges.

(e)(1) The traffic sensitive switchedinterstate access basket shall containsuch services as the Commission shallpermit or require, including thefollowing service categories:

(i) Local switching as described in§ 69.106(f) of this chapter;

(ii) Information, as described in§ 69.109 of this chapter;

(iii) Data base access services;(iv) Billing name and address, as

described in § 69.128 of this chapter;(v) Local switching trunk ports, as

described in § 69.106(f)(1) of thischapter; and

(vi) Signalling transfer point porttermination, as described in § 69.125(c)of this chapter.

(2) * * *(vi) Interconnection charge, as

recovered in §§ 69.153 and 69.155 ofthis chapter.* * * * *

4. Section 61.45 is amended byrevising the introductory text ofparagraph (b) and (b)(1), redesignatingthe introductory text of paragraph (c) asthe introductory text of paragraph (c)(1)and revising it, and adding newparagraphs (c)(2), (d)(1)(ix), (i), (j), (k),and (l) to read as follows:

§ 61.45 Adjustments to the PCI for localexchange carriers.

* * * * *(b) Adjustments to local exchange

carrier PCIs for the baskets designated in§ 61.42(d) (2), (3), (4), (5), and (6) shallbe made pursuant to the formula setforth in § 61.44(b), and as furtherexplained in §§ 61.44 (e), (f), (g), and (h).

(1) Notwithstanding the value of Xdefined in § 61.44(b), the X valueapplicable to the baskets specified in§ 61.42(d) (2), (3), and (6) shall be 4.0%,or 4.7%, or 5.3%, as the carrier elects.* * * * *

(c)(1) Subject to paragraphs (c)(2) and(e) of this section, adjustments to localexchange carrier PCIs for the basketdesignated in § 61.42(d)(1) shall bemade pursuant to the following formula:* * * * *

(2) The formula set forth in paragraph(c)(1) of this section shall be used by alocal exchange carrier subject to pricecap regulation only if that carrier isimposing a carrier common line chargepursuant to § 69.154 of this chapter.Otherwise, adjustments to localexchange carrier PCIs for the basketdesignated in § 61.42(d)(1) shall bemade pursuant to the formula set forthin § 61.44(b), and paragraphs (i) and (j)of this section, and as further explainedin § 61.44 (e), (f), (g), and (h). For thepurposes of this paragraph, andnotwithstanding the value of X defined


in § 61.44(b), the X value applicable tothe basket specified in § 61.42(d)(1)shall be 4.0%, or 4.7%, or 5.3%, as thecarrier elects.

(d) * * *(1) * * *(ix) The completion of amortization of

equal access expenses.* * * * *

(i)(1) Notwithstanding the provisionsof paragraphs (b) and (c) of this section,and subject to the limitations ofparagraph (j) of this section, price caplocal exchange carriers that arerecovering interconnection chargerevenues through per-minute ratespursuant to § 69.124 or § 69.155 of thischapter shall target, to the extentnecessary to eliminate the recovery ofany residual interconnection chargerevenues through per-minute rates, anyPCI reductions associated with thebaskets designated in § 61.42(d) (1) and(2) that result from the application ofthe formula in § 61.44(b), as furtherexplained in § 61.44 (e), (f), (g), and (h),to the PCI for the basket designated in§ 61.42(d)(3), with no adjustment beingmade to the PCIs for the basketsdesignated in § 61.42(d) (1) and (2) as aresult of the application of the formulain § 61.44(b). These reductions are to bemade after the adjustment is made to thePCI for the basket designated in§ 61.42(d)(3) resulting from theapplication of the formula in § 61.44(b),as further explained in § 61.44 (e), (f),(g), and (h).

(2) Notwithstanding the provisions ofparagraphs (b) and (c) of this section,and subject to the limitations ofparagraph (j) of this section, price caplocal exchange carriers that arerecovering interconnection chargerevenues through per-minute ratespursuant to § 69.155 of this chaptershall target, to the extent necessary toeliminate the recovery of any residualinterconnection charge revenuesthrough per-minute rates, any PCIreductions associated with the basketdesignated in § 61.42(d)(6) that resultfrom the application of the formula in§ 61.44(b), as further explained in§ 61.44 (e), (f), (g), and (h), to the PCI forthe basket designated in § 61.42(d)(3),with no adjustment being made to thePCIs for the basket designated in§ 61.42(d)(6) as a result of theapplication of the formula in § 61.44(b).This reduction is to be made after anyadjustment made pursuant to paragraph(i)(1) of this section.

(3) Through December 31, 1997, thereduction in the PCI for the basketdesignated in § 61.42(d)(3) that resultsfrom paragraph (i)(1) of this sectionshall be determined by dividing the sum

of the dollar effects of the PCIreductions that would have applied tothe baskets designated in § 61.42(d)(1)and (d)(2) except for the provisions ofparagraph (i)(1) of this section by thedollar amount associated with the PCIfor the basket designated in§ 61.42(d)(3), and multiplying the PCIfor the basket designated in § 61.42(d)(3)by one minus the resulting ratio.

(4) Effective January 1, 1998, thereduction in the PCI for the basketdesignated in § 61.42(d)(3) that resultsfrom paragraphs (i)(1) and (i)(2) of thissection shall be determined by dividingthe sum of the dollar effects of the PCIreductions that would have applied tothe baskets designated in § 61.42(d)(1),(d)(2), and (d)(6), except for theprovisions of paragraphs (i)(1) and (i)(2)of this section, by the dollar amountassociated with the PCI for the basketdesignated in § 61.42(d)(3), andmultiplying the PCI for the basketdesignated in § 61.42(d)(3) by one minusthe resulting ratio.

(j) In determining the extent of thetargeting that shall occur pursuant toparagraphs (i)(1) and (i)(2) of thissection, local exchange carriers shallcompute their anticipated residualinterconnection charge amount byexcluding revenues that are expected tobe reallocated to cost-causativefacilities-based charges in the future. Todetermine interconnection chargeamounts so excluded in connectionwith the July 1, 1997 tariff filings, thefollowing local exchange carriers shalluse as an estimate of the residualinterconnection charge revenues thespecified residual interconnectioncharge percentage: NYNEX, 77.63percent; BellSouth, 56.93 percent; U SWest, 59.14 percent; Bell Atlantic, 63.96percent; Southwestern Bell Telephone,69.11 percent; and Pacific Bell andNevada Bell, 53.52 percent. Eachremaining price cap local exchangecarrier shall estimate a residualinterconnection charge in an amountequal to 55 percent of its currentinterconnection charge revenues. Forsubsequent tariff filings in which thePCI reductions are to be targeted to theinterconnection charge, these initialestimates shall be adjusted to reflect theactual amounts that have or will bereallocated. If the use of these estimatesresults in more PCI reductions beingtargeted to the interconnection chargethan required to eliminate the per-minute interconnection charge, the localexchange carrier shall make thenecessary exogenous adjustments toreverse the effects of the excesstargeting.

(k) The calculation of the PCI for thebasket designated in § 61.42(d)(3) shall

include any residual interconnectioncharge revenues recovered pursuant to§§ 69.153 and 69.155 of this chapter.

(l) The calculation of the PCI for thebasket designated in § 61.42(d)(6) shallinclude any marketing expenserevenues recovered pursuant to§§ 69.153 and 69.156 of this chapter.

5. Section 61.46 is amended byrevising paragraphs (d) and (e) andadding new paragraphs (g) and (h) toread as follows:

§ 61.46 Adjustments to the API.

* * * * *(d)(1) Subject to paragraph (d)(2) of

this section, and in connection with anyprice cap tariff proposing changes torates for services in the basketdesignated in § 61.42(d)(1), themaximum allowable carrier commonline (CCL) charges shall be computedpursuant to the following methodology:CCLMOU=CLMOU * (1+% change in CL

PCI)¥(EUCLMOU+PICCMOU)*1/(1+(g/2))

Where:CCLMOU=the sum of each of the

proposed Carrier Common Linerates multiplied by itscorresponding base period CarrierCommon Line minutes of use,divided by the sum of all types ofbase period Carrier Common Lineminutes of use,

CLMOU=the sum of each of the existingmaximum allowable CarrierCommon Line rates multiplied byits corresponding base periodCarrier Common Line minutes ofuse, plus each existing maximumallowable End User Common Line(EUCL) rate multiplied by itscorresponding base period lines,plus the common line portion ofeach existing maximum allowablePresubscribed Interexchange CarrierCharge (PICC) multiplied by itscorresponding base period lines,divided by the sum of all types ofbase period Carrier Common Lineminutes of use,

EUCLMOU=maximum allowable EndUser Common Line rates multipliedby base period lines, and divided bythe sum of all types of base periodCarrier Common Line minutes ofuse,

PICCMOU=the common line portion ofmaximum allowable PresubscribedInterexchange Carrier charge ratesmultiplied by base period lines, anddivided by the sum of all types ofbase period Carrier Common Lineminutes of use, and

g=the ratio of minutes of use per accessline during the base period tominutes of use per access line


during the previous base period,minus 1.

(2) The formula set forth in paragraph(d)(1) of this section shall be used by alocal exchange carrier subject to pricecap regulation only if that carrier isimposing a per-minute carrier commonline charge pursuant to § 69.154 of thischapter. Otherwise, adjustments to localexchange carrier APIs for the basketdesignated in § 61.42(d)(1) shall bemade pursuant to the formula set forthin paragraph (a) of this section.

(e)(1) In addition, for the purposes ofparagraph (d) of this section, ‘‘ExistingCarrier Common Line Rates’’ shallinclude existing originating premium,originating non-premium, terminatingpremium and terminating non-premiumrates; and ‘‘End User Common LineRates’’ used to calculate the CLMOU andthe EUCLMOU factors shall include, butnot be limited to, Residential and SingleLine Business rates, Centrex rates, andthe Special Access surcharge.

(2) For purposes of paragraph (d) ofthis section, ‘‘each existingPresubscribed Interexchange CarrierCharge’’ shall include all the chargesspecified in § 69.153 of this chapter.* * * * *

(g) The calculation of the API for thebasket designated in § 61.42(d)(3) shallinclude any residual interconnectioncharge revenues recovered pursuant to§§ 69.153 and 69.155 of this chapter.

(h) The calculation of the API for thebasket designated in § 61.42(d)(6) shallinclude any marketing expenserevenues recovered pursuant to§§ 69.153 and 69.156 of this chapter.

6. Section 61.47 is amended byadding paragraphs (g)(7), (i) and (j) toread as follows:

§ 61.47 Adjustments to the SBI; pricingbands.

* * * * *(g)(1) * * *(7) The initial level of the local switch

trunk ports service category designatedin § 61.42(e)(1)(v) shall be established toinclude those costs identified pursuantto § 69.106(f)(1) of this chapter. Thislevel shall be assigned a value of 100,and thereafter must be adjusted asprovided in paragraph (a) of thissection, subject to the bandingrestrictions of paragraph (e) of thissection.* * * * *

(i)(1) Through December 31, 1997,notwithstanding the requirements ofparagraph (a) of this section, if a localexchange carrier is recoveringinterconnection charge revenuesthrough per-minute rates pursuant to§ 69.124 or § 69.155 of this chapter, any

reductions to the PCI for the basketdesignated in § 61.42(d)(3) resultingfrom the application of the provisions of§ 61.45 (b) and (i)(1) shall be directed tothe SBI of the service categorydesignated in § 61.42(e)(2)(vi).

(2) Effective January 1, 1998,notwithstanding the requirements ofparagraph (a) of this section, if a localexchange carrier is recoveringinterconnection charge revenuesthrough per-minute rates pursuant to§ 69.155 of this chapter, any reductionsto the PCI for the basket designated in§ 61.42(d)(3) resulting from theapplication of the provisions of§ 61.45(b), (i)(1), and (i)(2) shall bedirected to the SBI of the servicecategory designated in § 61.42(e)(2)(vi).

(3) Through December 31, 1997, theSBI reduction required by paragraph(i)(1) of this section shall be determinedby dividing the sum of the dollaramount of any PCI reduction requiredby § 61.45(i)(1) and from the applicationof § 61.45(b) to the basket described in§ 61.42(d)(3) by the dollar amountassociated with the SBI for the servicecategory designated in § 61.42(e)(2)(vi),and multiplying the SBI for the servicecategory designated in § 61.42(e)(2)(vi)by one minus the resulting ratio.

(4) Effective January 1, 1998, the SBIreduction required by paragraph (i)(2) ofthis section shall be determined bydividing the sum of the dollar amountof any PCI reduction required by § 61.45(i)(1) and (i)(2), and from the applicationof § 61.45(b) to the basket described in§ 61.42(d)(3) by the dollar amountassociated with the SBI for the servicecategory designated in § 61.42(e)(2)(vi),and multiplying the SBI for the servicecategory designated in § 61.42(e)(2)(vi)by one minus the resulting ratio.

(j) The calculation of the SBI for theservice category designated in§ 61.42(e)(2)(vi) shall include anyresidual interconnection chargerevenues recovered pursuant to§§ 69.153 and 69.155 of this chapter.

7. Section 61.48 is amended byadding paragraph (k) to read as follows:

§ 61.48 Transition rules for price capformula calculations.

* * * * *(k) Marketing expenses. In the January

1, 1998 price cap tariff filing, localexchange carriers shall establish themarketing expense basket designated in§ 61.42(d)(6) with an initial PCI and APIlevel of 100. The initial value of 100 forthe PCI and API for marketing expensesshall correspond to the marketingexpenses described in § 69.156(a) of thischapter.

PART 69—ACCESS CHARGES


Authority: 47 U.S.C. 154 (i) and (j), 201,202, 203, 205, 218, 254, and 403.

9. Section 69.1(c) is revised to read asfollows:

§ 69.1 Application of access charges.

* * * * *(c) The following provisions of this

part shall apply to telephone companiessubject to price cap regulation only tothe extent that application of suchprovisions is necessary to develop thenationwide average carrier common linecharge, for purposes of reportingpursuant to §§ 43.21 and 43.22 of thischapter, and for computing initialcharges for new rate elements: §§ 69.3(f),69.106(b), 69.106(f), 69.106(g),69.109(b), 69.110(d), 69.111(c),69.111(g)(1), 69.111(l), 69.112(d),69.114(b), 69.114(d), 69.125(b)(2),69.301 through 69.310, and 69.401through 69.412. The computation ofrates pursuant to these provisions bytelephone companies subject to pricecap regulation shall be governed by theprice cap rules set forth in part 61 of thischapter and other applicableCommission Rules and orders.

10. Section 69.2 is amended byrevising paragraph (hh) to read asfollows:

§ 69.2 Definitions.

* * * * *(hh) ‘‘Telephone company’’ or ‘‘local

exchange carrier’’ as used in this partmeans an incumbent local exchangecarrier as defined in section 251(h)(1) ofthe 1934 Act as amended by the 1996Act.* * * * *

11. Section 69.4 is amended byremoving and reserving paragraphs(b)(1), (d) and (f), revising theintroductory text of paragraph (b), andadding paragraph (h) to read as follows:

§ 69.4 Charges to be filed.

* * * * *(b) Except as provided in paragraphs

(c), (e), and (h) of this section, and in§ 69.118, the carrier’s carrier charges foraccess service filed with thisCommission shall include charges foreach of the following elements:* * * * *

(h) In addition to the chargesspecified in paragraph (b) of thissection, the carrier’s carrier charges foraccess service filed with thisCommission by price cap local exchangecarriers shall include charges for each ofthe following elements:


(1) Presubscribed interexchangecarrier;

(2) Per-minute residualinterconnection;

(3) Dedicated local switching trunkport;

(4) Shared local switching trunk port;(5) Dedicated tandem switching trunk

port;(6) Line port costs in excess of basic,

analog service; and(7) Multiplexers associated with

tandem switching.

§ 69.103 [Removed]12. Section 69.103 is removed.13. Section 69.104 is amended by

revising the section heading andparagraphs (a) and (e) to read as follows:

§ 69.104 End user common line for non-price cap incumbent local exchangecarriers.

(a) This section is applicable only toincumbent local exchange carriers thatare not subject to price cap regulation asthat term is defined in § 61.3(x) of thischapter. A charge that is expressed indollars and cents per line per monthshall be assessed upon end users thatsubscribe to local exchange telephoneservice or Centrex service to the extentthey do not pay carrier common linecharges. A charge that is expressed indollars and cents per line per monthshall be assessed upon providers ofpublic telephones. Such charge shall beassessed for each line between thepremises of an end user, or publictelephone location, and a Class 5 officethat is or may be used for local exchangeservice transmissions.* * * * *

(e) The monthly charge for eachresidential and single line business localexchange service subscriber shall be thecharge computed in accordance withparagraph (c) of this section, or $3.50,whichever is lower.* * * * *

14. Section 69.105 is amended byrevising the section heading andparagraph (a), and removing paragraphs(b)(7) and (b)(8), to read as follows:

§ 69.105 Carrier common line for non-pricecap local exchange carriers.

(a) This section is applicable only tolocal exchange carriers that are notsubject to price cap regulation as thatterm is defined in § 61.3(x) of thischapter. A charge that is expressed indollars and cents per line per accessminute of use shall be assessed upon allinterexchange carriers that use localexchange common line facilities for theprovision of interstate or foreigntelecommunications services, exceptthat the charge shall not be assessedupon interexchange carriers to theextent they resell MTS or MTS-type

services of other common carriers(OCCs).* * * * *

15. Section 69.106 is amended byrevising paragraphs (a) and (b), and byadding paragraphs (f) and (g) to read asfollows:

§ 69.106 Local switching.(a) Except as provided in § 69.118,

charges that are expressed in dollars andcents per access minute of use shall beassessed by local exchange carriers thatare not subject to price cap regulationupon all interexchange carriers that uselocal exchange switching facilities forthe provision of interstate or foreignservices.

(b) The per minute charge describedin paragraph (a) of this section shall becomputed by dividing the projectedannual revenue requirement for theLocal Switching element by theprojected annual access minutes of usefor all interstate or foreign services thatuse local exchange switching facilities.* * * * *

(f) Except as provided in § 69.118,price cap local exchange carriers shallestablish rate elements for localswitching as follows:

(1) Price cap local exchange carriersshall separate from the projected annualrevenues for the Local Switchingelement those costs projected to beincurred for ports (including cards andDS1/voice-grade multiplexers requiredto access end offices equipped withanalog switches) on the trunk side of thelocal switch. Price cap local exchangecarriers shall further identify costsincurred for dedicated trunk portsseparately from costs incurred forshared trunk ports.

(i) Price cap local exchange carriersshall recover dedicated trunk port costsidentified pursuant to paragraph (f)(1) ofthis section through flat-rated chargesexpressed in dollars and cents per trunkport and assessed upon the purchaser ofthe dedicated trunk terminating at theport.

(ii) Price cap local exchange carriersshall recover shared trunk port costsidentified pursuant to paragraph (f)(1) ofthis section through charges assessedupon purchasers of shared transport.This charge shall be expressed in dollarsand cents per access minute of use. Thecharge shall be computed by dividingthe projected costs of the shared portsby the historical annual access minutesof use calculated for purposes ofrecovery of common transport costs in§ 69.111(c).

(2) Price cap local exchange carriersshall recover the projected annualrevenues for the Local Switchingelement that are not recovered inparagraph (f)(1) of this section through

charges that are expressed in dollars andcents per access minute of use andassessed upon all interexchange carriersthat use local exchange switchingfacilities for the provision of interstateor foreign services. The maximumcharge shall be computed by dividingthe projected remainder of the annualrevenues for the Local Switchingelement by the historical annual accessminutes of use for all interstate orforeign services that use local exchangeswitching facilities.

(g) On or after July 1, 1998, a price caplocal exchange carrier may recoversignalling costs associated with callsetup through a call setup chargeimposed upon all interstateinterexchange carriers that use that localexchange carrier’s facilities to originateor terminate interstate interexchange orforeign services. This charge must beexpressed as dollars and cents per callattempt and may be assessed onoriginating calls handed off to theinterexchange carrier’s point of presenceand on terminating calls received froman interexchange carrier’s point ofpresence, whether or not that call iscompleted at the called location. Pricecap local exchange carriers may notrecover through this charge any costsrecovered through other rate elements.

§ 69.107 [Removed]

16. Section 69.107 is removed.17. Section 69.111 is amended by

removing and reserving paragraphs (b)and (f), revising paragraphs (a), (c), (d),(e), and (g), and adding paragraph (l) toread as follows:

§ 69.111 Tandem-switched transport andtandem charge.

(a)(1) Through June 30, 1998, exceptas provided in paragraph (l) of thissection, tandem-switched transportshall consist of two rate elements, atransmission charge and a tandemswitching charge.

(2) Beginning July 1, 1998, except asprovided in paragraph (l) of this section,tandem-switched transport shall consistof three rate elements as follows:

(i) A per-minute charge for transportof traffic over common transportfacilities between the incumbent localexchange carrier’s end office and thetandem switching office. This chargeshall be expressed in dollars and centsper access minute of use and shall beassessed upon all purchasers ofcommon transport facilities between thelocal exchange carrier’s end office andthe tandem switching office.

(ii) A per-minute tandem switchingcharge. This tandem switching chargeshall be set in accordance with


paragraph (g) of this section, excludingmultiplexer and dedicated port costsrecovered in accordance with paragraph(l) of this section, and shall be assessedupon all interexchange carriers andother persons that use incumbent localexchange carrier tandem switchingfacilities.

(iii) A flat-rated charge for transport oftraffic over dedicated transport facilitiesbetween the serving wire center and thetandem switching office. This chargeshall be assessed as a charge fordedicated transport facilitiesprovisioned between the serving wirecenter and the tandem switching officein accordance with § 69.112.

(b) [Reserved](c)(1) Through June 30, 1998, tandem-

switched transport transmission chargesgenerally shall be presumed reasonableif the telephone company bases thecharges on a weighted per-minuteequivalent of direct-trunked transportDS1 and DS3 rates that reflects therelative number of DS1 and DS3 circuitsused in the tandem to end office links(or a surrogate based on the proportionof copper and fiber facilities in theinteroffice network), calculated usingthe total actual voice-grade minutes ofuse, geographically averaged on a study-area-wide basis, that the incumbentlocal exchange carrier experiences basedon the prior year’s annual use. Tandem-switched transport transmission chargesthat are not presumed reasonablegenerally shall be suspended andinvestigated absent a substantial causeshowing by the telephone company.

(2) Beginning July 1, 1998:(i) Except in study areas where the

incumbent local exchange carrier hasimplemented density pricing zones asdescribed in section 69.124, per-minutecommon transport charges described inparagraph (a)(2)(i) of this section shallbe presumed reasonable if theincumbent local exchange carrier basesthe charges on a weighted per-minuteequivalent of direct-trunked transportDS1 and DS3 rates that reflects therelative number of DS1 and DS3 circuitsused in the tandem to end office links(or a surrogate based on the proportionof copper and fiber facilities in theinteroffice network), calculated usingthe total actual voice-grade minutes ofuse, geographically averaged on a study-area-wide basis, that the incumbentlocal exchange carrier experiences basedon the prior year’s annual use. Tandem-switched transport transmission chargesthat are not presumed reasonable shallbe suspended and investigated absent asubstantial cause showing by theincumbent local exchange carrier.

(ii) In study areas where theincumbent local exchange carrier has

implemented density pricing zones asdescribed in § 69.124, per-minutecommon transport charges described inparagraph (a)(2)(i) of this section shallbe presumed reasonable if theincumbent local exchange carrier basesthe charges on a weighted per-minuteequivalent of direct-trunked transportDS1 and DS3 rates that reflects therelative number of DS1 and DS3 circuitsused in the tandem to end office links(or a surrogate based on the proportionof copper and fiber facilities in theinteroffice network), calculated usingthe total actual voice-grade minutes ofuse, averaged on a zone-wide basis, thatthe incumbent local exchange carrierexperiences based on the prior year’sannual use. Tandem-switched transporttransmission charges that are notpresumed reasonable shall besuspended and investigated absent asubstantial cause showing by theincumbent local exchange carrier.

(d)(1) Through June 30, 1998, thetandem-switched transport transmissioncharges may be distance-sensitive.Distance shall be measured as airlinedistance between the serving wirecenter and the end office, unless thecustomer has ordered tandem-switchedtransport between the tandem office andthe end office, in which case distanceshall be measured as airline distancebetween the tandem office and the endoffice.

(2) Beginning July 1, 1998, the per-minute charge for transport of trafficover common transport facilitiesdescribed in paragraph (a)(2)(i) of thissection may be distance-sensitive.Distance shall be measured as airlinedistance between the tandem switchingoffice and the end office.

(e)(1) Through June 30, 1998, if thetelephone company employs distance-sensitive rates:

(i) A distance-sensitive componentshall be assessed for use of thetransmission facilities, includingintermediate transmission circuitequipment between the end points ofthe interoffice circuit; and

(ii) A non-distance-sensitivecomponent shall be assessed for use ofthe circuit equipment at the ends of theinteroffice transmission links.

(2) Beginning July 1, 1998, if thetelephone company employs distance-sensitive rates for transport of trafficover common transport facilities, asdescribed in paragraph (a)(2)(i) of thissection:

(i) A distance-sensitive componentshall be assessed for use of the commontransport facilities, includingintermediate transmission circuitequipment between the end office andtandem switching office; and

(ii) A non-distance-sensitivecomponent shall be assessed for use ofthe circuit equipment at the ends of theinteroffice transmission links.

(f) [Reserved](g)(1) The tandem switching charge

imposed pursuant to paragraphs (a)(1)or (a)(2)(ii) of this section, as applicable,shall be set to recover twenty percent ofthe annual part 69 interstate tandemrevenue requirement plus one third ofthe portion of the tandem switchingrevenue requirement being recoveredthrough the interconnection chargerecovered by §§ 69.124, 69.153, and69.155, excluding multiplexer anddedicated port costs recovered inaccordance with paragraph (l) of thissection.

(2) Beginning January 1, 1999, thetandem switching charge imposedpursuant to paragraph (a)(2)(ii) of thissection shall be set to recover theamount prescribed in paragraph (g)(1) ofthis section plus one half of theremaining portion of the tandemswitching revenue requirement thenbeing recovered through theinterconnection charge recovered by§§ 69.124, 69.153, and 69.155, excludingmultiplexer and dedicated port costsrecovered in accordance with paragraph(l) of this section.

(3) Beginning January 1, 2000, thetandem switching charge imposedpursuant to paragraph (a)(2)(ii) of thissection shall be set to recover the entireinterstate tandem switching revenuerequirement, including that portionformerly recovered through theinterconnection charge recovered in§§ 69.124, 69.153, and 69.155, andexcluding multiplexer and dedicatedport costs recovered in accordance withparagraph (l) of this section.

(4) A local exchange carrier that issubject to price cap regulation as thatterm is defined in § 61.3(x) of thischapter shall calculate its tandemswitching revenue requirement as usedin this paragraph by dividing thetandem switching revenue requirementthat was included in the originalinterconnection charge by the originalinterconnection charge, and thenmultiplying this result by the annualrevenues recovered through theinterconnection charge, described in§ 69.124, as of June 30, 1997.* * * * *

(l) In addition to the chargesdescribed in this section, price cap localexchange carriers shall establishseparate charges for multiplexers anddedicated trunk ports used inconjunction with the tandem switch asfollows:

(1) Local exchange carriers mustestablish a traffic-sensitive charge for


DS3/DS1 multiplexers used on the endoffice side of the tandem switch,assessed on purchasers of commontransport to the tandem switch. Thischarge must be expressed in dollars andcents per access minute of use. Themaximum charge shall be calculated bydividing the total costs of themultiplexers on the end office-side ofthe tandem switch by the serving wirecenter side of the tandem switch by theprojected annual access minutes of usecalculated for purposes of recovery ofcommon transport costs in paragraph (c)of this section. A similar charge shall beassessed for DS1/voice-grademultiplexing provided on the end-officeside of analog tandem switches.

(2)(i) Local exchange carriers mustestablish a flat-rated charge fordedicated DS3/DS1 multiplexing on theserving wire center side of the tandemswitch provided in conjunction withdedicated DS3 transport service fromthe serving wire center to the tandemswitch. This charge shall be assessed oninterexchange carriers purchasingtandem-switched transport inproportion to the number of DS3 trunksprovisioned for that interexchangecarrier between the serving wire centerand the tandem-switch.

(ii) Local exchange carriers mustestablish a flat-rated charge fordedicated DS1/voice-grade multiplexingprovided on the serving wire center sideof analog tandem switches. This chargemay be assessed on interexchangecarriers purchasing tandem-switchedtransport in proportion to theinterexchange carrier’s transportcapacity on the serving wire center sideof the tandem.

(3) Price cap local exchange carriersmay recover the costs of dedicated trunkports on the serving wire center side ofthe tandem switch only through flat-rated charges expressed in dollars andcents per trunk port and assessed uponthe purchaser of the dedicated trunkterminating at the port.

§ 69.122 [Removed]18. Section 69.122 is removed.19. Section 69.123 is amended by

adding paragraph (f) to read as follows:

§ 69.123 Density pricing zones for specialaccess and switched transport.

* * * * *(f)(1) An incumbent local exchange

carrier that establishes density pricingzones under this section must reallocateadditional amounts recovered under theinterconnection charge prescribed in§ 69.124 to facilities-based transportrates, reflecting the higher costs ofserving lower-density areas. Eachincumbent local exchange carrier must

reallocate costs from theinterconnection charge each time itincreases the differential between pricesin density zones two and one orbetween three and one.

(2) Any incumbent local exchangecarrier that has already deaveraged itsrates on January 1, 1998 must reallocatean amount equivalent to that describedin paragraph (f)(1) of this section fromthe interconnection charge prescribed in§ 69.124 to its transport services.

(3) Price cap local exchange carriersshall reassign to direct-trunkedtransport and tandem-switchedtransport categories or subcategoriesinterconnection charge amountsreallocated under paragraph (f)(1) or(f)(2) of this section in a manner thatreflects the way density pricing zonesare being implemented by theincumbent local exchange carrier.


§ 69.124 Interconnection charge.

(a) For telephone companies notsubject to price cap regulation, aninterconnection charge expressed indollars and cents per access minuteshall be assessed upon all interexchangecarriers and upon all other personsusing the telephone company localtransport network.

(b) For telephone companies notsubject to price cap regulation, theinterconnection charge shall becomputed by subtracting entrancefacilities, tandem-switched transport,direct-trunked transport, and dedicatedsignalling transport revenues from thepart 69 transport revenue requirement,and dividing by the total interstate localtransport minutes.

21. Section 69.125 is amended byrevising paragraph (a) to read as follows:

§ 69.125 Dedicated signalling transport.

(a) Dedicated signalling transportshall consist of two elements, asignalling link charge and a signallingtransfer point (STP) port terminationcharge.* * * * *


§ 69.126 Nonrecurring charges.

Incumbent local exchange carriersshall not assess any nonrecurringcharges for service connection when aninterexchange carrier converts trunksfrom tandem-switched transport todirect-trunked transport or when aninterexchange carrier orders thedisconnection of overprovisionedtrunks, until six months after theeffective date of the tariffs eliminating

the unitary pricing option for tandem-switched transport.

23. Subpart C is revised to read asfollows:

Subpart C—Computation of Charges forPrice Cap Local Exchange Carriers

Sec.69.151 Applicability.69.152 End user common line for price cap

local exchange carriers.69.153 Presubscribed interexchange carrier

charge (PICC).69.154 Per-minute carrier common line

charge.69.155 Per-minute residual interconnection

charge.69.156 Marketing expenses.69.157 Line port costs in excess of basic,

analog service.

Subpart C—Computation of Chargesfor Price Cap Local Exchange Carriers

§ 69.151 Applicability.This subpart shall apply only to

telephone companies subject to theprice cap regulations set forth in part 61of this chapter.

§ 69.152 End user common line for pricecap local exchange carriers.

(a) A charge that is expressed indollars and cents per line per monthshall be assessed upon end users thatsubscribe to local exchange telephoneservice or Centrex service to the extentthey do not pay carrier common linecharges. A charge that is expressed indollars and cents per line per monthshall be assessed upon providers ofpublic telephones. Such charge shall beassessed for each line between thepremises of an end user, or publictelephone location, and a Class 5 officethat is or may be used for local exchangeservice transmissions.

(b) Except as provided in paragraphs(d) through (i) of this section, themaximum single line rate or chargeshall be computed:

(1) By dividing one-twelfth of theprojected annual revenue requirementfor the End User Common Line elementby the projected average number of localexchange service subscriber lines in useduring such annual period, only so longas a per-minute carrier common linecharge is assessed or the multi-line PICCdefined in § 69.153 recovers commonline revenues.

(2) By dividing one-twelfth of theprojected annual revenues permitted forthe common line basket under theCommission’s price cap rules, as setforth in part 61 of this chapter, by theprojected average number of localexchange service subscriber lines in useduring such annual period, if no per-minute carrier common line charge isassessed and the multi-line PICC


defined in § 69.153 does not recover anycommon line revenues.

(3) Provided, however, that the chargefor each local exchange servicesubscriber line shall not exceed $9.00 asadjusted by the inflation factorcomputed under paragraph (k) of thissection.

(c) The charge for each subscriber lineassociated with a public telephone shallbe equal to the monthly chargecomputed in accordance with paragraph(b) of this section.

(d)(1) Through December 31, 1997,the monthly charge for each primaryresidential or single line business localexchange service subscriber line shall bethe charge computed in accordance withparagraph (b) of this section, or $3.50,whichever is lower.

(2) Beginning January 1, 1998, themaximum monthly charge for eachprimary residential or single linebusiness local exchange servicesubscriber line shall be the chargecomputed in accordance with paragraph(b) of this section, or $3.50, whicheveris lower.

(e)(1) Through December 31, 1997, themonthly charge for each non-primaryresidential local exchange servicesubscriber line shall be the chargecomputed in accordance with paragraph(b) of this section, or $3.50, whicheveris lower.

(2) Beginning January 1, 1998, themaximum monthly charge for each non-primary residential local exchangeservice subscriber line shall be thelower of:

(i) The maximum charge computed inaccordance with paragraph (b) of thissection; or

(ii) $5.00. On January 1, 1999, thisamount shall be adjusted by theinflation factor computed underparagraph (k) of this section, andincreased by $1.00. On July 1, 2000, andin each subsequent year, this amountshall be adjusted by the inflation factorcomputed under paragraph (k) of thissection, and increased by $1.00.

(3) Where the local exchange carrierprovides a residential line to anothercarrier so that the other carrier mayresell that residential line to a residencethat already receives a primaryresidential line, the local exchangecarrier may collect the non-primaryresidential charge described inparagraph (e) of this section from theother carrier.

(f) Except as provided in paragraphs(n) and (o) of this section, the charge foreach primary residential local exchangeservice subscriber line shall be the sameas the charge for each single linebusiness local exchange servicesubscriber line.

(g) A line shall be deemed to be aresidential subscriber line if thesubscriber pays a rate for such line thatis described as a residential rate in thelocal exchange service tariff.

(h) [Reserved](i) A line shall be deemed to be a

single line business subscriber line ifthe subscriber pays a rate that is notdescribed as a residential rate in thelocal exchange service tariff and doesnot obtain more than one such line froma particular telephone company.

(j) No charge shall be assessed for anyWATS access line.

(k)(1) On January 1, 1999:(i) The ceiling for multi-line business

subscriber lines under paragraph (b)(3)of this section will be adjusted to reflectinflation as measured by the change inGDP–PI for the 18 months endingSeptember 30, 1998.

(ii) The ceiling for non-primaryresidential subscriber lines underparagraph (e)(2)(ii) of this section willbe adjusted to reflect inflation asmeasured by the change in GDP–PI forthe 12 months ending September 30,1998.

(2) On July 1, 2000, the ceiling formulti-line business subscriber lines andnon-primary residential subscriber lineswill be adjusted to reflect inflation asmeasured by the change in GDP–PI forthe 18 months ending on March 31,2000.

(3) On July 1 of each subsequent year,the ceiling for multi-line businesssubscriber lines and non-primaryresidential subscriber lines will beadjusted to reflect inflation as measuredby the change in GDP–PI for the 12months ending on March 31 of the yearthe adjustment is made.

(l)(1) Beginning January 1, 1998, localexchange carriers shall assess no morethan one end user common line chargeas calculated under the applicablemethod under paragraph (e) of thissection for Basic Rate Interfaceintegrated services digital network(ISDN) service.

(2) Local exchange carriers shallassess no more than five end usercommon line charges as calculatedunder paragraph (b) of this section forPrimary Rate Interface ISDN service.

(m) In the event the local exchangecarrier charges less than the maximumend user common line charge for anysubscriber lines, the local exchangecarrier may not recover the differencebetween the amount collected and themaximum from carrier common linecharges or PICCs.

(n) Through December 31, 1997, theEnd User Common Line charge for aresidential subscriber shall be 50% ofthe charge specified in paragraphs (b)

and (d) of this section if the residentiallocal exchange service rate for suchsubscribers is reduced by an equivalentamount, provided that such localexchange service rate reduction is basedupon a means test that is subject toverification.

(o) Paragraphs (o)(1) and (o)(2) of thissection are effective through December31, 1997.

(1) The End User Common Linecharge for residential subscribers shallbe reduced to the extent of the stateassistance as calculated in paragraph(o)(2) of this section, or waived in fullif the state assistance equals or exceedsthe residential End User Common Linecharge under the circumstancesdescribed in this paragraph. In order toqualify for this waiver, the subscribermust be eligible for and receiveassistance or benefits provided pursuantto a narrowly targeted telephonecompany lifeline assistance program,requiring verification of eligibility,implemented by the state or localtelephone company. A state or localtelephone company wishing toimplement this End User Common Linereduction or waiver for its subscribersshall file information with theCommission Secretary demonstratingthat its plan meets the criteria set out inthis section and showing the amount ofstate assistance per subscriber asdescribed in paragraph (o)(2) of thissection. The reduction or waiver of theEnd User Common Line charge shall beavailable as soon as the Commissioncertifies that the state or local telephoneplan satisfies the criteria set out in thisparagraph and the relevant tariffprovisions become effective.

(2)(i) The state assistance persubscriber shall be equal to thedifference between the charges to bepaid by the participating subscribersand those to be paid by othersubscribers for comparable monthlylocal exchange service, serviceconnections and customer deposits,except that benefits or assistance forconnection charges and depositrequirements may only be counted onceannually. In order to be included incalculating the state assistance, suchbenefits must be a single telephone lineto the household’s principal residence.

(ii) The monthly state assistance perparticipating subscriber shall becalculated by adding the amountscalculated in paragraphs (o)(2)(ii)(A)and (o)(2)(ii)(B) of this section.

(A) The amount of the monthly stateassistance per participating subscriberfor local exchange service shall becalculated by dividing the annualdifference between charges paid by allparticipating subscribers for residential


local exchange service and the amountwhich would have been charged to non-qualifying subscribers for comparableservice by twelve times the number ofsubscribers participating in the stateassistance program. Estimates may beused when historic data are notavailable.

(B) The amount of the monthly stateassistance for service connections andcustomer deposits per participatingsubscriber shall be calculated bydetermining the annual amount of thereductions in these charges forparticipating subscribers each year anddividing this amount by twelve timesthe number of participating subscribers.Estimates may be used when historicdata are not available.

(p) Through December 31, 1997, inconnection with the filing of accesstariffs pursuant to § 69.3(a), telephonecompanies shall calculate for theassociation their projected revenuerequirement attributable to theoperation of § 69.104 (n) through (o).The projected amount will be adjustedby the association to reflect the actuallifeline assistance benefits paid in theprevious period. If the actual benefitsexceeded the projected amount for thatperiod, the differential will be added tothe projection for the ensuing period. Ifthe actual benefits were less than theprojected amount for that period, thedifferential will be subtracted from theprojection for the ensuing period.Through December 31, 1997, theassociation shall so adjust amounts tothe Lifeline Assistance revenuerequirement, bill and collect suchamounts from interexchange carrierspursuant to § 69.117 and distribute thefunds to qualifying telephonecompanies pursuant to § 69.603(d).

§ 69.153 Presubscribed interexchangecarrier charge (PICC).

(a) A charge expressed in dollars andcents per line may be assessed upon thesubscriber’s presubscribedinterexchange carrier to recover thecommon line revenues permitted underthe price cap rules in part 61 of thischapter that cannot be recoveredthrough the end user common linecharge established under § 69.152,residual interconnection chargerevenues, and certain marketingexpenses described in § 69.156(a). In theevent the ceilings on the PICC preventthe PICC from recovering all theresidual common line, residualinterconnection charge revenues, andmarketing expenses, the PICC shallrecover all residual common linerevenues before it recovers residualinterconnection charge revenues, and allresidual interconnection charge

revenues before it recovers marketingexpenses.

(b) If an end-user customer does nothave a presubscribed interexchangecarrier, the local exchange carrier maycollect the PICC directly from the enduser.

(c) The maximum monthly PICC forprimary residential subscriber lines andsingle-line business subscriber linesshall be the lower of:

(1) One twelfth of the sum of annualcommon line revenues and residualinterconnection charge revenuespermitted under our price cap rulesdivided by the projected averagenumber of local exchange servicesubscriber lines in use during suchannual period, minus $3.50; or

(2) $0.53. On January 1, 1999, thisamount shall be adjusted by theinflation factor computed underparagraph (e) of this section, andincreased by $0.50. On July 1, 2000, andin each subsequent year, this amountshall be adjusted by the inflation factorcomputed under paragraph (e) of thissection, and increased by $0.50.

(d) To the extent that a local exchangecarrier cannot recover its full commonline revenues, residual interconnectioncharge revenues, and those marketingexpense revenues described in§ 69.156(a) permitted under price capregulation through the recoverymechanisms established in § 69.152,paragraph (c) of this section, and§ 69.156 (b) and (c), the local exchangecarrier may assess a PICC on multi-linebusiness subscriber lines and non-primary residential subscriber lines.

(1) The maximum monthly PICC fornon-primary residential subscriber linesshall be the lower of:

(i) One twelfth of the annual commonline, residual interconnection charge,and § 69.156(a) marketing expenserevenues permitted under the price caprules set forth in part 61 of this chapter,less the maximum amounts permitted tobe recovered through the recoverymechanisms under § 69.152, paragraph(c) of this section, and § 69.156 (b) and(c), divided by the total number ofprojected non-primary residential andmulti-line business subscriber lines inuse during such annual period; or

(ii) $1.50. On January 1, 1999, thisamount shall be adjusted by theinflation factor computed underparagraph (e) of this section, andincreased by $1.00. On July 1, 2000, andin each subsequent year, this amountshall be adjusted by the inflation factorcomputed under paragraph (e) of thissection, and increased by $1.00.

(2) If the maximum monthly PICC fornon-primary residential subscriber linesis determined using paragraph (d)(1)(i)

of this section, the maximum monthlyPICC for multi-line business subscriberlines shall equal the maximum monthlyPICC of non-primary residentialsubscriber lines. Otherwise, themaximum monthly PICC for multi-linebusiness lines shall be the lower of:

(i) One twelfth of the annual commonline, residual interconnection charge,and § 69.156(a) marketing expenserevenues permitted under this part andpart 61 of this chapter, less themaximum amounts permitted to berecovered through the recoverymechanisms under § 69.152, paragraphs(c) and (d)(1)(i) of this section, and§ 69.156 (b) and (c), divided by the totalnumber of projected multi-line businesssubscriber lines in use during suchannual period; or

(ii) $2.75. On January 1, 1999, thisamount shall be adjusted by theinflation factor computed underparagraph (e) of this section, andincreased by $1.50. On July 1, 2000, andin each subsequent year, this amountshall be adjusted by the inflation factorcomputed under paragraph (e) of thissection, and increased by $1.50.

(e) For the PICC ceiling for primaryresidential subscriber lines and single-line business subscriber lines underparagraph (c)(2) of this section, non-primary residential subscriber linesunder paragraph (d)(1)(ii) of thissection, and multi-line businesssubscriber lines under paragraph(d)(2)(ii) of this section:

(1) On January 1, 1999, the ceilingwill be adjusted to reflect inflation asmeasured by the change in GDP–PI forthe 12 months ending September 30,1998.

(2) On July 1, 2000, the ceiling will beadjusted to reflect inflation as measuredby the change in GDP–PI for the 18months ending on March 31, 2000.

(3) On July 1 of each subsequent year,the ceiling will be adjusted to reflectinflation as measured by the change inGDP–PI for the 12 months ending onMarch 31 of the year the adjustment ismade.

(f)(1) Local exchange carriers shallassess no more than one PICC ascalculated under the applicable methodunder paragraph (d)(1) of this section forBasic Rate Interface integrated servicesdigital network (ISDN) service.

(2) Local exchange carriers shallassess no more than five PICCs ascalculated under paragraph (d)(2) of thissection for Primary Rate Interface ISDNservice.

§ 69.154 Per-minute carrier common linecharge.

(a) Local exchange carriers mayrecover a per-minute carrier common


line charge from interexchange carriers,collected on originating access minutesand calculated using the weightingmethod set forth in paragraph (c) of thissection. The maximum such chargeshall be the lower of:

(1) The per-minute rate that wouldrecover annual common line revenuespermitted less the maximum amountsallowed to be recovered under §§ 69.152and 69.153; or

(2) The sum of the local switching,carrier common line andinterconnection charge charges assessedon originating minutes on December 31,1997, minus the local switching chargesassessed on originating minutes.

(b) To the extent that paragraph (a) ofthis section does not recover frominterexchange carriers all permittedcarrier common line revenue, the excessmay be collected through a per-minutecharge on terminating access calculatedusing the weighting method set forth inparagraph (c) of this section.

(c) For each Carrier Common Lineaccess element tariff, the premiumoriginating Carrier Common Line chargeshall be set at a level that recoversrevenues allowed under paragraphs (a)and (b) of this section. The non-premium charges shall be equal to .45multiplied by the premium charges.

§ 69.155 Per-minute residualinterconnection charge.

(a) Local exchange carriers mayrecover a per-minute residualinterconnection charge on originatingaccess. The maximum such charge shallbe the lower of:

(1) The per-minute rate that wouldrecover the total annual residualinterconnection charge revenuespermitted less the portion of theresidual interconnection charge allowedto be recovered under § 69.153; or

(2) The sum of the local switching,carrier common line and residualinterconnection charges assessed onoriginating minutes on December 31,1997, minus the local switching chargesassessed on originating minutes, less themaximum amount allowed to berecovered under § 69.154(a).

(b) To the extent that paragraph (a) ofthis section prohibits a local exchangecarrier from recovering all of theresidual interconnection chargerevenues permitted, the residual may becollected through a per-minute chargeon terminating access.

(c) Any charge assessed pursuant toparagraph (a) or (b) of this section shallbe assessed only upon minutes utilizingthe local exchange carrier’s localtransport service.

§ 69.156 Marketing expenses.(a) Local exchange carriers shall

recover marketing expenses that are

allocated to the common line and trafficsensitive baskets, and the switchedservices within the trunking basketpursuant to §§ 32.6610 of this chapterand 69.403.

(b) The expenses described inparagraph (a) of this section may berecovered from non-primary residentialsubscriber lines, by increasing the enduser common line charge described in§ 69.152(e). The amount of marketingexpenses permitted to be recovered inthis manner shall be the total marketingexpenses described in paragraph (a) ofthis section divided by the sum of non-primary residential lines and multi-linebusiness lines. In no event shall the enduser common line charge for these linesexceed the lower of the ceilingsestablished in § 69.152 (b)(3) and(e)(2)(ii).

(c) The expenses described inparagraph (a) of this section may berecovered from multi-line businesssubscriber lines, by increasing the enduser common line charge described in§ 69.152(b). The amount permitted to berecovered in this manner shall be thetotal marketing expenses described inparagraph (a) of this section divided bythe sum of non-primary residential linesand multi-line business lines. In noevent shall the end user common linecharge for these lines exceed the ceilingestablished in § 69.152(b)(3).

(d) In the event that the ceilings setforth in paragraphs (b) and (c) of thissection, and § 69.153(d) prevent a localexchange carrier from recovering fullythe marketing expenses described inparagraph (a) of this section, the localexchange carrier may recover theremainder through a per-minuteassessment on originating accessminutes, so long as the charge fororiginating access does not exceed theamount defined in § 69.155(a)(2) less themaximum permitted to be recoveredunder § 69.155(a).

(e) In the event that the ceilings setforth in paragraphs (b), (c) and (d) ofthis section, and § 69.153(d) prevent alocal exchange carrier from recoveringfully the marketing expenses describedin paragraph (a) of this section, the localexchange carrier may recover theremainder through a per-minuteassessment on terminating accessminutes.

(f) The amount of marketing expensesthat may be recovered each year shall beadjusted in accordance with the pricecap rules set forth in part 61 of thischapter.

§ 69.157 Line port costs in excess ofbasic, analog service.

To the extent that the costs of ISDNline ports, and line ports associatedwith other services, exceed the costs of

a line port used for basic, analog service,local exchange carriers may recover thedifference through a separate monthlyend user charge.

§ 69.303 [Amended]

24. Section 69.303 is amended byremoving paragraph (a) and theparagraph designation ‘‘(b)’’.

§ 69.304 [Amended]

25. Section 69.304 is amended byremoving paragraph (c).

26. Section 69.305 is amended byrevising paragraphs (b) and (d), andadding paragraph (e) to read as follows:

§ 69.305 Carrier cable and wire facilities(C&WF).* * * * *

(b) Carrier C&WF, other than WATSaccess lines, not assigned pursuant toparagraph (a), (c), or (e) of this sectionthat is used for interexchange servicesthat use switching facilities fororigination and termination that are alsoused for local exchange telephoneservice shall be apportioned to the localTransport elements.* * * * *

(d) All Carrier C&WF that is notapportioned pursuant to paragraphs (a),(b), (c), and (e) of this section shall beassigned to the Special Access element.

(e) Carrier C&WF that is used toprovide transmission between the localexchange carrier’s signalling transferpoint and the local switch shall beassigned to the local switching category.

27–28. Section 69.306 is amended byrevising paragraphs (c), (d), and (e) toread as follows:

§ 69.306 Central office equipment (COE).* * * * *

(c) COE Category 2 (TandemSwitching Equipment) that is deemed tobe exchange equipment for purposes ofthe Modification of Final Judgment inUnited States v. Western Electric Co.shall be assigned to the tandemswitching charge subelement and theinterconnection charge element. COECategory 2 which is associated with thesignal transfer point function shall beassigned to the local switching category.COE Category 2 which is used toprovide transmission facilities betweenthe local exchange carrier’s signallingtransfer point and the database shall beassigned to the Line InformationDatabase subelement at § 69.120(a). Allother COE Category 2 shall be assignedto the interexchange category.

(d) COE Category 3 (Local SwitchingEquipment) shall be assigned to theLocal Switching element except asprovided in paragraph (a) of this


section; and that, for telephonecompanies subject to price capregulation set forth in part 61 of thischapter, line-side port costs shall beassigned to the Common Line rateelement.

(e) COE Category 4 (CircuitEquipment) shall be apportioned amongthe interexchange category and theCommon Line, Transport, and SpecialAccess elements. COE Category 4 shallbe apportioned in the same proportionsas the associated Cable and WirelessFacilities; except that any DS1/voice-grade multiplexer investment associatedwith analog local switches and assignedto the local transport category by thissection shall be reallocated to the localswitching category.

§ 69.307 [Amended]

29. Section 69.307 is amended byremoving paragraph (c).

§ 69.308 [Removed]

30. Section 69.308 is removed.31. Section 69.309 is revised to read

as follows:

§ 69.309 Other investment.

Investment that is not apportionedpursuant to §§ 69.302 through 69.307shall be apportioned among theinterexchange category, the billing andcollection category and access elementsin the same proportions as thecombined investment that isapportioned pursuant to §§ 69.303through 69.307.

32. Section 69.401 is amended byrevising paragraph (b) to read as follows:

§ 69.401 Direct expenses.

* * * * *(b) Plant Specific Operations

Expenses in Accounts 6210, 6220, and6230, shall be apportioned among theinterexchange category and accesselements on the basis of theapportionment of the investment inAccounts 2210, 2220, and 2230,respectively; provided that anyexpenses associated with DS1/voice-grade multiplexers, to the extent thatthey are not associated with an analogtandem switch, assigned to the localtransport category by this paragraphshall be reallocated to the localswitching category; provided furtherthat any expenses associated withcommon channel signalling included inAccount 6210 shall be assigned to thelocal transport category.* * * * *

§ 69.406 [Amended]

33. Section 69.406 is amended byremoving paragraph (a)(9).

§ 69.410 [Removed]

34. Section 69.410 is removed.35. Section 69.411 is revised to read

as follows:

§ 69.411 Other expenses.

Except as provided in §§ 69.412,69.413, and 69.414, expenses that arenot apportioned pursuant to §§ 69.401through 69.409 shall be apportionedamong the interexchange category andall access elements in the same manneras § 69.309 Other investment.

§ 69.501 [Amended]

36. Section 69.501 is amended byremoving and reserving paragraph (a).


§ 69.502 Base factor allocation.

Projected revenues from the followingshall be deducted from the base factorportion to determine the amount that isassigned to the Carrier Common Lineelement:

(a) End User Common Line charges,less any marketing expense revenuesrecovered through end user commonline charges pursuant to § 69.156;

(b) Special Access surcharges; and(c) The portion of frozen per-line

support that carriers receive pursuant to§ 54.303 that is attributable to LTSpayments received prior to January 1,1998.

§ 69.611 [Removed]

38. Section 69.611 is removed.



47 CFR Part 61

[CC Docket Nos. 94–1 and 96–262; FCC 97–159]

Price Cap Performance Review forLocal Exchange Carriers; AccessCharge Reform

AGENCY: Federal CommunicationsCommission.ACTION: Final rule.

SUMMARY: On May 7, 1997, the FederalCommunications Commission adoptedthe Fourth Report and Order in CCDocket No. 94–1, Second Report andOrder in CC Docket No. 96–262, revisingits price cap regulations applicable toincumbent local exchange carriers(incumbent LECs). Specifically, theCommission replaced the choice ofthree X-Factors in the current price capplan with a single X-Factor of 6.5

percent. The Commission alsoeliminated sharing obligations, butretained the low-end adjustmentmechanism. The Commission adopts afixed X-Factor to remain in effect untilthe next performance review, ratherthan updating the X-Factor annually onthe basis of a five-year industry-widemoving average. In the Fourth FurtherNotice in CC Docket No. 94–1, theCommission sought comment onrevising the common line PCI formulaand the price cap exogenous cost rules.The Commission adopted revisions tothe common line PCI formula in itsAccess Reform First Report and Orderadopted concurrently with this Order,and so does not need to adopt anyfurther revisions here. Also, as a resultof its decision to adopt a fixed X-Factor,the Commission does not need toaddress issues regarding the price capexogenous cost rules. The Commissionrequires price cap LECs to reset theirprice cap indices as of July 1, 1997, tobe at the levels that would have been ineffect had the 6.5 percent X-Factor takeneffect concurrently with the 1996annual access tariffs.EFFECTIVE DATE: June 16, 1997.FOR FURTHER INFORMATION CONTACT:Steven Spaeth, Competitive PricingDivision, Common Carrier Bureau, (202)418–1530.SUPPLEMENTARY INFORMATION: This is asummary of the Commission’s Orderadopted May 7, 1997, and released May21, 1997. The full text of thisCommission decision is available forinspection and copying during normalbusiness hours in the FCC PublicReference Room 230, 1919 M St., N.W.,Washington, D.C. The complete text ofthis decision may also be purchasedfrom the Commission’s copy contractor,International Transcription Service,Suite 140, 2100 M Street, N.W.,Washington, D.C. 20037.

Regulatory Flexibility AnalysisIn the Fourth Further Notice in CC

Docket No. 94–1, 60 FR 52362 (October6, 1995), we certified that the RegulatoryFlexibility Act (RFA), 5 U.S.C. 601 etseq., did not apply to this rulemakingproceeding because none of the ruleamendments under consideration wouldhave a significant economic impact ona substantial number of small entities.(The RFA was amended by the ContractWith America Advancement Act of1996, Public Law 104–121, 110 Stat. 847(1996) (CWAAA).) Title II of theCWAAA is the Small BusinessRegulatory Enforcement Fairness Act of1996 (SBREFA). Carriers subject to pricecap regulation for local exchange accessaffected by the rule amendments


adopted in this Order are generally largecorporations or the affiliates of suchcorporations. No party commentedspecifically in response to the analysisin our certification.

In passing the TelecommunicationsAct of 1996 (1996 Act), Congress soughtto establish ‘‘a pro-competitive,deregulatory national policyframework’’ for the United Statestelecommunications industry. SeeTelecommunications Act of 1996,Public Law 104–104, 110 Stat. 56(1996). These fundamental changes inthe structure and dynamics of thetelecommunications industry wroughtby the 1996 Act now necessitate that theCommission review its existing accesscharge regulations to ensure that theyare consistent and compatible with the1996 Act’s far-reaching changes. Therule revisions we adopt based on therecord developed in the Fourth FurtherNotice in CC Docket No. 94–1, and theNotice in CC Docket No. 96–262, willfacilitate the deregulatory policyestablished in the 1996 Act. Inparticular, our elimination of sharingobligations removes a majorimpediment to deregulating individualinterstate access services at the timecompetitive conditions for a particularservice warrant deregulation.

The rules we adopt in this Order areapplicable only to LECs subject to pricecap regulation. Currently, 13 incumbentLECs are subject to price cap regulation.We tentatively concluded in the FourthFurther Notice in CC Docket No. 94–1that the price cap LECs are not ‘‘smallbusiness concerns’’ because they aregenerally large corporations or affiliatesof such corporations. We hereby affirmthis analysis.

The Commission will send a copy ofthis final certification, along with thisOrder, in a report to Congress pursuantto the Small Business RegulatoryEnforcement Fairness Act of 1996, 5U.S.C. 801(a)(1)(A), and to the ChiefCounsel for Advocacy of the SmallBusiness Administration, 5 U.S.C.605(b).

Summary of Report and OrderIn conjunction with the Access

Reform First Report and Order and theUniversal Service Order, adoptedconcurrently with this Order, theCommission adopts reforms needed toset the stage for the progressivederegulation of incumbent LECs withthe development of competition.

Under price cap regulation, LECinterstate access services have beenplaced in one of four groups of accessservices, called baskets. A price capindex (PCI) limits the weighted averageof rate increases for each basket to the

rate of inflation, the Gross DomesticProduct Price Deflator (GDP-PI), minusan ‘‘X-Factor.’’ The X-Factor is intendedto measure the amount by which LECsare more productive than the economyas a whole.

Under our prior price cap rules, thebaseline X-Factor was based on theaverage of the short-term and long-termtrends in rate reductions prior to ouradoption of the original price cap planin 1990, plus a consumer productivitydividend (CPD) of 0.5 percent. Wedesigned the X-Factor and the consumerproductivity dividend so that, atminimum, rates would decline morequickly than they had declined before1990, and so would assure that the firstbenefits of price cap regulation wouldflow to access customers in the form oflower rates. In the First Report andOrder in CC Docket No. 94–1, 60 FR19526 (April 19, 1995), we tentativelyconcluded that an analysis that directlymeasured the growth of LECproductivity and input prices wouldprovide a better basis for prescribing anX-Factor than the methodology theCommission used in previous Orders. Inthe Fourth Further Notice in CC DocketNo. 94–1, 60 FR 52362 (October 6,1995), the Commission invited commenton the total factor productivity (TFP)methodology and other alternatives forcalculating the X-Factor. TheCommission invited parties tosupplement the record in the Notice ofProposed Rulemaking in CC Docket No.96–262, 62 FR 4670 (January 31, 1997).We find that the record supportsprescribing a single X-Factor of 6.5percent, based on our conclusionsregarding a reasonable method ofcalculating LEC TFP and input prices,and our decision to retain the 0.5percent CPD. This X-Factor isreasonable and challenging, and fallswithin a range of reasonable X-Factors.

Under our current price cap rules,incumbent price cap LECs are permittedto choose among three X-Factors, two ofwhich include obligations to sharecertain earnings. Sharing requiresincumbent LECs to ‘‘share’’ half or allearnings above specified rates of returnwith their access customers in the formof lower access rates during the nextyear. We adopt a system of pure pricecaps, without sharing, because sharingtends to blunt the efficiency incentivesthat we sought to create with price capregulation. We conclude that, under theprice cap rules we adopt today, anybenefits of retaining sharing areoutweighed by the benefits ofeliminating sharing. We consider the X-Factor we adopt today to be a muchmore reliable measure of incumbentLEC potential productivity gains.

Therefore, we have substantially moreconfidence that this X-Factor will flowthrough a reasonable portion of LECproductivity gains to access customers.We also find that, because we establisha price cap plan with only one X-Factor,a matching mechanism is no longernecessary. To guard against our new X-Factor requiring individual LECs tocharge unreasonably low rates, we willretain our current low-end adjustmentmechanism, which permits LECs, afterearning less than 10.25 percent in acalendar year, to make a one timeupward adjustment their rates in thenext tariff year, equal to the amount thatwould have allowed them to earn 10.25percent in the calendar year.

This Order adopts a single X-Factor.The Commission adopted multiple X-Factor options in prior orders because ofconcerns that differences in LEC serviceareas might affect their abilities toincrease their productivity growth. TheOrder observes that most of the pricecap companies have selected thehighest, no-sharing X-Factor option inour current rules, and concludes thatthe heterogeneity among LECs subject toprice cap regulation does not affect theirproductivity growth as much as theCommission thought previously.

We sought comment on whether tokeep the X-Factor up to date by basingit on an industry-wide moving averageof TFP, or to continue to update the X-Factor in occasional performancereviews. We decide, in light of thefundamental changes to the marketplaceresulting from the new competitiveparadigm of the 1996 Act, that the bettercourse is to select a new generallyapplicable X-Factor, based on thecurrent record, that will remain in placeuntil we change it in a new performancereview.

We also sought comment on whetherit is necessary to eliminate the ‘‘g/2’’term from the common line PCI formulato conform to a TFP-based X-Factor. Inthe Access Reform First Report andOrder adopted concurrently with thisOrder, we decide to eliminate the ‘‘g/2’’term after a short transition period. Inthis Order, we conclude that no furtherrevisions to the common line PCIformula are warranted.

The Commission sought comment onfashioning an X-Factor that wouldroutinely incorporate cost changescurrently considered exogenous into thePCI formula, which would eliminate theneed for separate exogenous cost rules.Because the Commission adopts a fixedX-Factor in this Order, the X-Factor willnot routinely incorporate exogenouscost changes into the PCI formula, andso no changes to the exogenous costrules are warranted at this time.


The Order directs LECs to recalculatetheir price cap ceilings for July 1, 1997,to be at the levels they would have beenhad the 6.5 percent X-Factor had takeneffect concurrently with their 1996annual access filings. The Order findsthat this adjustment is necessarybecause the interim price cap plan wasintended to remain for a short time, andthat the local companies should not bepermitted to benefit indefinitely becausethe more accurate 6.5 percent X-Factorwas not adopted sooner. TheCommission’s repeated emphasis thatthe X-Factor adopted in the LEC PriceCap Performance Review was ‘‘interim’’should reasonably have put carriers onnotice that another adjustment of thetype we had adopted in that orderwould be possible—perhaps beginningwith the 1995 tariff year, the first yearunder the interim X-Factor. Thisadjustment affects only future ratelevels; it does not have any retroactiveeffect on past prices or earnings.

In the Third Further Notice ofProposed Rulemaking in CC Docket No.94–1, 60 FR 52345 (September 26,1995), the Commission sought commenton establishing rules governing the pricecap treatment of video dialtone services.The Order concludes that one of theprovisions of the 1996 Act makes thoseissues moot.

Finally, the Order directs price capLECs to file tariffs making adjustmentsto their rates to reflect these revisions tothe price cap rules no later than June 25,1997, to take effect July 1, 1997. ThoseLECs wishing to raise any rates in thesefilings must file no later than June 16,1997. We also direct price cap LECs tofile revised tariff review plans (TRPs)containing adjustments to their PCIs,APIs, and SBIs no later than June 2,1997.

Ordering Clauses

Accordingly, it is ordered, pursuant toauthority contained in §§ 4(i), 4(j), 201–205, 303(r), and 403 of theCommunications Act of 1934, as

amended, 47 U.S.C. 154(i), 154(j), 201–205, 303(r), 403, and § 553 of Title 5,United States Code, that Part 61 of theCommission’s Rules, 47 CFR Part 61, isamended as set forth below.

It is further ordered that theprovisions in this Order will be effectiveJune 16, 1997. We find good causeunder 5 U.S.C. § 553(d)(3) to make therules effective less than thirty days afterpublication, because the local exchangecarriers subject to price cap regulationmust file tariffs by June 16, in order forthem to be effective on July 1, 1997, asrequired by § 69.3 of the Commission’srules, 47 CFR 69.3. In addition, toensure that the local exchange carrierssubject to price cap regulation haveactual notice of these rules immediatelyfollowing their release, we are servingthose entities by certified, first classmail.

It is further ordered that localexchange carriers subject to price capregulation shall file tariffs and revisedtariff review plans in accordance withthe requirements set forth above. Theserequirements are subject to review bythe Office of Management and Budget,and will be effective upon that approval.

It is further ordered that the motionfiled by Ad Hoc TelecommunicationsUsers Committee on February 23, 1996,is dismissed.

List of Subjects in 47 CFR Part 61Communications Common Carriers,

Tariffs.Federal Communications Commission.Shirley S. Suggs,Chief, Publications Branch.

Rule ChangesPart 61 of title 47 of the Code of

Federal Regulations is amended asfollows:

PART 61—TARIFFS

1. The authority citation continues toread as follows:

Authority: Secs. 1, 4(i), 4(j), 201–205, and403 of the Communications Act of 1934, as

amended; 47 U.S.C. 151, 154(i), 154(j), 201–205, and 403, unless otherwise noted.

2. Section 61.45 is amended byrevising paragraphs (b)(1), (b)(2),revising the definition for X in (c)(1),revising the last sentence of paragraph(c)(2), redesignating paragraph (d)(2) as(d)(2)(i), adding new paragraph(d)(2)(ii), and removing and reservingparagraph (h) to read as follows:

§ 61.45 Adjustments to the PCI for LocalExchange Carriers

* * * * *(b) * * *(1) Notwithstanding the value of X

defined in § 61.44(b), the X valueapplicable to the baskets specified in§ 61.42(d)(2), (3), and (6) shall be 6.5%.

(2) For the basket specified in§ 61.42(d)(4), the value of X, for all localexchange carriers subject to price capregulation, shall be 3.0%.* * * * *

(c)(1) * * *X=productivity factor of 6.5%,

* * * * *(c)(2) * * * For the purposes of this

paragraph, and notwithstanding thevalue of X defined in § 61.44(b), the Xvalue applicable to the basket specifiedin § 61.42(d)(1), shall be 6.5%.* * * * *

(d) * * *(2) (i) * * *(ii) Local exchange carriers specified

in § 61.41(a)(2) or (a)(3) shall not besubject to the sharing mechanism setforth in the Commission’s SecondReport and Order in Common CarrierDocket No. 87–313, FCC 90–314,adopted September 19, 1990, withrespect to earnings accruing on or afterJuly 1, 1997. This paragraph has noeffect on any sharing obligation of anylocal exchange carrier relating toearnings accrued before July 1, 1997.* * * * *[FR Doc. 97–14746 Filed 6–10–97; 8:45 am]BILLING CODE 6712–01–P

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Part III

Department ofHousing and UrbanDevelopment24 CFR Part 570Community Development Block Grants:New York Small Cities Program;Proposed Rule



24 CFR Part 570

[Docket No. FR–4155–P–01]

RIN 2506–AB91

Community Development BlockGrants: New York Small CitiesProgram

AGENCY: Office of the AssistantSecretary for Community Planning andDevelopment, HUD.ACTION: Proposed rule.

SUMMARY: Section 226 of theDepartments of Veterans Affairs andHousing and Urban Development, andIndependent Agencies AppropriationsAct, 1996 (the Act) requires that HUDissue proposed and final rules for therequirements of the CommunityDevelopment Block Grant program forthe State of New York before issuing aNotice of Funding Availability (NOFA)for the 1997 New York Small Citiescompetition.

In proposing this rule, HUD isinviting public comments on therequirements of the CommunityDevelopment Block Grants (CDBG)Small Cities Program for the State ofNew York (24 CFR part 570, subpart F).This proposed rule contains the currentrequirements for the program, with afew limited changes. The first changewould be to delete § 570.421(a)(3), andadd § 570.421(f) to eliminate the use ofmultiyear plans in the HUD-administered Small Cities Program forany NOFA published in calendar year1997 or later. The second changeinvolves grant limits. HUD is proposingto add § 570.421(g), to limit themaximum grant award, under a NOFA,to any single, eligible unit of generallocal government to $400,000, exceptthat counties may apply for a maximumof $600,000 in HUD-administered SmallCities funds. HUD intends to makelarger grants to honor multiyear plansapproved in response to NOFAs issuedprior to calendar year 1997. In order toimplement the reduction of grant limits,HUD intends to restrict competitionunder future NOFAs to Single PurposeGrants. Another minor change is thedeletion of obsolete references to theFiscal Year 1995 competition in§ 570.425(c), as well as a clarification ofthe application procedures in thatparagraph.DATES: Comments due date: July 11,1997.ADDRESSES: HUD invites interestedpersons to submit comments regardingthis proposed rule to the Office of the

General Counsel, Rules Docket Clerk,Department of Housing and UrbanDevelopment, Room 10276, 451 SeventhStreet, SW, Washington, DC 20410.Communications should refer to theabove docket number and title. A copyof each communication submitted willbe available for public inspection andcopying during regular business hours(7:30 a.m.–5:30 p.m. eastern time) at theabove address. HUD will not acceptcomments sent by facsimile (FAX).

FOR FURTHER INFORMATION CONTACT:Cornelia Robertson Terry, State andSmall Cities Division, Office ofCommunity Planning and Development,Department of Housing and UrbanDevelopment, Room 7184, 451 SeventhStreet, SW, Washington, DC 20410;telephone (202) 708–1322 (voice). (Thisis not a toll-free number.) Persons withhearing or speech impairments mayaccess this number via TTY by callingthe Federal Information Relay Service at(800) 877–8339.

SUPPLEMENTARY INFORMATION: Title I ofthe Housing and CommunityDevelopment Act of 1974 (42 U.S.C.5300–5320) permits each State to electto administer all aspects of theCommunity Development Block Grant(CDBG) Program annual fund allocationfor the nonentitlement areas within itsjurisdiction. The policies andprocedures for HUD’s CDBG SmallCities Program in 24 CFR part 570,subpart F apply to grants fornonentitlement areas in States, such asNew York, that did not elect toadminister the CDBG Program.

Section 226 of the Departments ofVeterans Affairs and Housing and UrbanDevelopment, and IndependentAgencies Appropriations Act, 1996(Pub. L. 104–134; approved April 26,1996) (the Act) requires that HUD issueproposed and final rules for therequirements of the CDBG program forthe State of New York before issuing anotice of funding availability for fundsmade available for fiscal year (FY) 1997.

In accordance with the provisions ofsection 226 of the Act, HUD ispublishing this rule in order to solicitpublic comments on the requirements ofthe New York CDBG Small CitiesProgram. These requirements appear in24 CFR part 570, subpart F. Although§§ 570.429 and 570.430 also appear insubpart F and are therefore set forthbelow, these sections only apply to theSmall Cities Program in Hawaii.

Summary of Proposed Changes toSubpart F

Section 570.421—New York Small CitiesProgram Design

In this rule, HUD proposes to deleteparagraph (a)(3) of § 570.421, and to adda new paragraph (f), which wouldeliminate the use of multiyear plans inthe HUD-administered Small CitiesProgram for NOFAs published incalendar year 1997 or later. HUDintends, however, to continue to honormultiyear plans approved in response toNOFAs published prior to calendar year1997. This rule also proposes to add anew paragraph (g) to the currentregulations to provide that themaximum grant amount that HUD willaward to an eligible unit of general localgovernment in response to a NOFApublished in calendar year 1997 or lateris $400,000, except that counties couldapply for a maximum of $600,000 inHUD-administered Small Cities grantfunds. HUD will not be prohibited,however, from awarding larger grants asnecessary to honor the terms ofmultiyear plans approved under theprovisions of NOFAs published prior tocalendar year 1997.

Section 570.425—HUD Review andActions on Applications for New YorkState Applicants

This proposed rule would deleteobsolete references to the FY 1995competition from paragraph (c) of§ 570.425. It would also add a sentenceclarifying the application proceduresregarding carrying an application overfrom a previous funding round orcompetition.

Justification for Reduced CommentPeriod

HUD’s general policy in its notices ofproposed rulemaking is to afford thepublic not less than 60 days forsubmission of comments, in accordancewith HUD’s regulations on rulemakingin 24 CFR 10.1. For this proposed rule,however, HUD is providing a 30-daypublic comment period. There are tworeasons for this shortened publiccomment period. First, section 226 ofthe Act requires that HUD publishproposed and final rules for the NewYork State Small Cities program beforeit can publish any NOFA announcingthe FY 1997 funding. HUD believes thata longer comment period willunnecessarily delay the FY 1997program year. Second, the regulationsfor the Small Cities program in subpartF of part 570 had previously beenpublished in their entirety in a proposedrule for public comment on September15, 1994 (59 FR 47500), with a final rule


published December 27, 1994 (59 FR66584). HUD believes that since thepublic is familiar with the issuesrelative to the earlier rulemakingprocess, and since the changes in thisproposed rule are limited, the longercomment period is not necessary.

Findings and Certifications

Environmental ImpactIn accordance with 24 CFR

50.19(c)(1)(i) of HUD’s regulations,published in a final rule on September27, 1996 (61 FR 50914) and amended onApril 2, 1997 (62 FR 15800), thisproposed rule does not direct, providefor assistance or loan and mortgageinsurance for, or otherwise govern orregulate property acquisition,disposition, lease, rehabilitation,alteration, demolition, or newconstruction, or set out or provide forstandards for construction orconstruction materials, manufacturedhousing, or occupancy. Therefore, thisproposed rule is categorically excludedfrom the requirements of the NationalEnvironmental Policy Act.

Impact on Small EntitiesThe Secretary, in accordance with the

Regulatory Flexibility Act (5 U.S.C.605(b)), has reviewed this proposed rulebefore publication, and by approving itcertifies that this proposed rule wouldnot have a significant economic impacton a substantial number of smallentities. This proposed rule would makelimited changes that would not have asignificant impact on small entities.Small entities are invited, however, tocomment on any less burdensomealternatives for compliance with theseregulations.

FederalismThe General Counsel, as the

Designated Official under section 6(a) ofExecutive Order 12612, Federalism, hasdetermined that this proposed rulewould not have substantial direct effectson States or their political subdivisions,or the relationship between the Federalgovernment and the States, or on thedistribution of power andresponsibilities among the variouslevels of government. This proposedrule would make limited changes thatwould not have Federalismimplications. As a result, this proposedrule is not subject to review under theOrder.

Unfunded Mandates Reform ActTitle II of the Unfunded Mandates

Reform Act of 1995 (Pub. L. 104–4;approved March 22, 1995) (UMRA)establishes requirements for Federalagencies to assess the effects of theirregulatory actions on State, local, and

tribal governments, and on the privatesector. This proposed rule would notimpose any Federal mandates on anyState, local, or tribal governments, or onthe private sector, within the meaning ofthe UMRA.

Catalogue of Federal DomesticAssistance

The Catalogue of Federal DomesticAssistance program number is 14.219,Community Development BlockGrants—Small Cities Program.


Administrative practice andprocedure, American Samoa,Community development block grants,Grant programs—education, Grantprograms—housing and communitydevelopment, Guam, Indians, Leadpoisoning, Loan programs—housing andcommunity development, Low andmoderate income housing, Newcommunities, Northern Mariana Islands,Pacific Islands Trust Territory, Pocketsof poverty, Puerto Rico, Reporting andrecordkeeping requirements, Smallcities, Student aid, Virgin Islands.

Accordingly, for the reasons set out inthe preamble, 24 CFR part 570 isproposed to be amended as follows:

PART 570—COMMUNITYDEVELOPMENT BLOCK GRANTS

1. The authority citation for 24 CFR570 continues to read as follows:

Authority: 42 U.S.C. 3535(d) and 5301–5320.

2. Subpart F is revised to read asfollows:

Subpart F—Small Cities Program

Sec.570.420 General.570.421 New York Small Cities Program

Design.570.422 Applications from joint applicants.570.423 Application for the HUD-

administered New York Small CitiesGrants.

570.424 Grants for imminent threats topublic health and safety.

570.425 HUD review and actions onapplications for New York Stateapplicants.

570.426 Program income.570.427 Program amendments.570.428 Reallocated funds.570.429 Hawaii general and grant

requirements.570.430 Hawaii program operation

requirements.570.431 Citizen participation.570.432 Repayment of section 108 loans.

SUBPART F—SMALL CITIESPROGRAM

§ 570.420 General.

(a) HUD administration ofnonentitlement CDBG funds. Title I ofthe Housing and CommunityDevelopment Act of 1974 permits eachState to elect to administer all aspects ofthe Community Development BlockGrant (CDBG) Program annual fundallocation for the nonentitlement areaswithin its jurisdiction. This subpart setsforth policies and procedures applicableto grants for nonentitlement areas inStates that have not elected toadminister the CDBG Program. Statesthat elected to administer the programafter the close of fiscal year 1984 cannotreturn administration of the program toHUD. A decision by a State todiscontinue administration of theprogram would result in the loss ofCDBG funds for nonentitlement areas inthat State and the reallocation of thosefunds to all States in the succeedingfiscal year.

(b) Scope and applicability. (1) Thissubpart describes the policies andprocedures of the Small Cities Programwhich apply to nonentitlement areas inStates where HUD administers theCDBG Program. HUD currentlyadministers the Small Cities Program inonly two States—New York and Hawaii.This subpart principally addresses therequirements for New York, and§§ 570.429 and 570.430 identify specialprocedures applicable to Hawaii.

(2) The allocation of formula CDBGfunds for use in nonentitlement areas ofHawaii and New York is as provided insubpart A of this part. The policies andprocedures set forth in the followingidentified subparts of this part 570apply to the HUD-administered SmallCities Program, except as modified orlimited under the provisions thereof orthis subpart:

(i) Subpart A—General Provisions;(ii) Subpart C—Eligible Activities;(iii) Subpart J—Grant Administration;(iv) Subpart K—Other Program

Requirements; and(v) Subpart O—Performance Reviews.(c) Public notification requirements.

(1) Section 102 of the Department ofHousing and Urban DevelopmentReform Act of 1989 (42 U.S.C. 3545)contains a number of provisions that aredesigned to ensure greateraccountability and integrity in theprovision of certain types of assistanceadministered by HUD. All competitivegrants in the HUD-administered SmallCities Program in New York are affectedby this legislation, and the requirementsidentified at 24 CFR part 4 apply tothem. Imminent threat grants under


§ 570.424 and section 108 repaymentgrants under § 570.432 are not affectedby section 102 as they are notcompetitive grants.

(2) The Hawaii HUD-administeredSmall Cities Program is not subject tosection 102, since the funds are notdistributed in a competitive manner.

(d) Abbreviated consolidated plan.Applications for the HUD-administeredSmall Cities Program which containhousing activities must include acertification that the proposed housingactivities are consistent with theapplicant’s consolidated plan asdescribed at 24 CFR part 91.

(e) National and primary objectives.(1) Each activity funded through theSmall Cities Program must meet one ofthe following national objectives asdefined under the criteria in § 570.208.Each activity must:

(i) Benefit low- and moderate-incomefamilies;

(ii) Aid in the prevention orelimination of slums or blight; or

(iii) Be an activity which the granteecertifies is designed to meet othercommunity development needs having aparticular urgency because existingconditions pose a serious andimmediate threat to the health orwelfare of the community where otherfinancial resources are not available tomeet such needs.

(2) In addition to the objectivesdescribed in paragraph (e)(1) of thissection, with respect to grants madethrough the Small Cities Program, notless than 70 percent of the total of grantfunds from each grant and Section 108loan guarantee funds received undersubpart M of this part within a fiscalyear must be expended for activitieswhich benefit low- and moderate-income persons under the criteria of§§ 570.208(a), or 570.208(d) (5) or (6). Inthe case of multiyear plans in New YorkState approved in response to NOFAspublished prior to calendar year 1997,not less than 70 percent of the totalfunding for grants approved pursuant toa multiyear plan for a time period of upto 3 years must be expended foractivities which benefit low- andmoderate-income persons. Thus, 70percent of the grant for year 1 of amultiyear plan approved in response toNOFAs published prior to calendar year1997 must meet the 70 percentrequirement, 70 percent of thecombined grants from years 1 and 2must meet the requirement, and 70percent of the combined grants fromyears 1, 2, and 3 must meet therequirement. In determining thepercentage of funds expended for suchactivity, the provisions of

§ 570.200(a)(3) (i), (iii), (iv), and (v) shallapply.(Approved by the Office of Managementand Budget under control number 2506–0060).

§ 570.421 New York Small Cities ProgramDesign.

(a) Selection system. (1) Competitiveapplications. Each competitiveapplication will be rated and scoredagainst the following factors:

(i) Need-absolute number of personsin poverty as further explained in theNOFA;

(ii) Need-percent of persons inpoverty as further explained in theNOFA;

(iii) Program Impact; and(iv) Fair Housing and Equal

Opportunity which may includeassessment of the applicant’s Section 3plan and implementation efforts. TheNOFA described in paragraph (b) of thissection will contain a more detaileddescription of these factors, and therelative weight that each factor will begiven.

(2) In addition HUD reserves the rightto establish minimal thresholds forselection factors and otherwise selectgrants in accordance with § 570.425 andthe applicable NOFA.

(3) Imminent threats to public healthand safety. The criteria for these grantsare described in § 570.424.

(4) Repayment of section 108 loans.The criteria for these grants aredescribed in § 570.432.

(5) Economic development grants.HUD intends to use the Section 108 loanguarantee program to the maximumextent feasible to fund economicdevelopment projects in thenonentitlement areas of New York. Inthe event that there are not enoughSection 108 loan guarantee fundsavailable to fund viable economicdevelopment projects, or if a projectneeds a grant in addition to a loanguarantee to make it viable, or if theproject does not meet the requirementsof the Section 108 program but iseligible for a grant under this subpart,HUD will fund Economic Developmentapplications as they are determined tobe fundable in a specific amount byHUD up to the sum set aside foreconomic development projects in thenotice of funding availability. HUD alsohas the option in a NOFA of fundingeconomic development activities on acompetitive basis, as a competitiveapplication as described in paragraph(a)(1) of this section. In order for anapplicant to receive Small Cities grantfunds, the field office must determinethat the economic development project

will have a substantial impact on theneeds identified by the applicant.

(b) Notice of funding availability.HUD will issue one or more Notice(s) ofFunding Availability (NOFA) each fiscalyear which will indicate the amount offunds available, the annual grant limitsper grantee, type of grants available, theapplication requirements, and the ratingfactors that will be used for those grantswhich are competitive. A NOFA may setforth, subject to the requirements of thissubpart, additional selection criteria forall grants.

(c) Eligible applicants. (1) Eligibleapplicants in New York are units ofgeneral local government, excluding:Metropolitan cities, urban counties,units of general local government whichare participating in urban counties ormetropolitan cities, even if only part ofthe participating unit of government islocated in the urban county ormetropolitan city. Indian tribes are alsoineligible for assistance under thissubpart. An application may besubmitted individually or jointly byeligible applicants.

(2) Counties, cities, towns, andvillages may apply and receive fundingfor separate projects to be done in thesame jurisdiction. Only one grant willbe made under each funding round forthe same type of project to be locatedwithin the jurisdiction of a unit ofgeneral local government (e.g., both thecounty and village cannot receivefunding for a sewer system to be locatedin the same village, but the county canreceive funding for a sewer system thatis located in the same village as arehabilitation project for which thevillage receives funding). The NOFAwill contain additional information onapplicant eligibility.

(3) Counties may apply on behalf ofunits of general local governmentlocated within their jurisdiction whenthe unit of general local government hasauthorized the county to apply. At thetime that the county submits itsapplication for funding, it must submita resolution by the governing body ofthe unit of local government thatauthorizes the county to submit anapplication on behalf of the unit ofgeneral local government. The countywill be considered the grantee and willbe responsible for executing all grantdocuments. The county is responsiblefor ensuring compliance with all laws,regulations, and Executive Ordersapplicable to the CDBG Program. HUDwill deal exclusively with the countywith respect to issues of programadministration and performance,including remedial actions. The unit ofgeneral local government will beconsidered the grantee for the purpose


of determining grant limits. The unit ofgeneral local government’s statistics willbe used for purposes of the selectionfactors referred to in § 570.421(a).

(d) Public service activities cap.Public service activities may be fundedup to a maximum of fifteen (15) percentof a State’s nonentitlement allocation forany fiscal year. HUD may award a grantto a unit of general local government forpublic service activities with up to 100percent of the funds intended for publicservice activities. HUD will apply the 15percent statewide cap to public serviceactivities by funding public serviceactivities in the highest ratedapplications in each NOFA until the capis reached.

(e) Activities outside an applicant’sboundaries. An applicant may conducteligible CDBG activities outside itsboundaries. These activities must bedemonstrated to be appropriate tomeeting the applicant’s needs andobjectives, and must be consistent withState and local law. This provisionincludes using funds provided underthis subpart in a metropolitan city or anurban county.

(f) Multiyear plans. HUD will notmake any new multiyear commitmentsfor NOFAs published in calendar year1997 or later. HUD intends to continueto honor the terms of the multiyearplans that were approved under theprovisions of NOFAs published prior tocalendar year 1997.

(g) Maximum grant amount. Themaximum grant amount that will beawarded to a single, eligible unit ofgeneral local government in response toa NOFA published in calendar year1997 or later is $400,000, except thatcounties may apply for up to $600,000in HUD-administered Small Citiesfunds. HUD may specify lower grantlimits in the NOFA, which may includedifferent limits for different types ofgrants available or different types ofapplicants. This paragraph (g) of thissection does not prohibit HUD fromawarding larger grants as necessary tohonor the terms of multiyear plans thatwere approved under the provisions ofNOFAs published prior to calendar year1997.

§ 570.422 Applications from jointapplicants.

Units of general local governmentmay submit a joint application whichaddresses common problems faced bythe jurisdictions, to the extent permittedby the NOFA. A joint application mustbe pursuant to a written cooperationagreement submitted with theapplication. The cooperation agreementmust authorize one of the participatingunits of government to act as the lead

applicant which will submit theapplication to HUD, and must delineatethe responsibilities of each participatingunit of government with respect to theSmall Cities Program. The leadapplicant is responsible for executingthe application, certifications, and grantagreement, and ensuring compliancewith all laws, regulations, and ExecutiveOrders applicable to the CDBG Program.HUD will deal exclusively with the leadapplicant with respect to issues ofprogram administration andperformance, including remedialactions. In the event of poorperformance, HUD reserves the right todeny and/or restrict future funding to allunits of general local government whichare parties to the cooperation agreement.

§ 570.423 Application for the HUD-administered New York Small Cities Grants.

(a) Proposed application. Theapplicant shall prepare and publish aproposed application and comply withcitizen participation requirements asdescribed in § 570.431. The applicantshould follow the citizen participationrequirements of 24 CFR part 91 if itsubmits a complete consolidated plan.

(b) Final application. The applicantshall submit to HUD a final applicationcontaining its community developmentobjectives and activities. This finalapplication shall be submitted, in a formprescribed by HUD, to the appropriateHUD office. The application also mustcontain a priority nonhousingcommunity development plan, inaccordance with 24 CFR 91.235.

(c) Certifications. (1) Certificationsshall be submitted in a form prescribedby HUD. If the application contains anyhousing activities, the applicant shallcertify that the proposed housingactivities are consistent with itsabbreviated consolidated plan, asdescribed at 24 CFR part 91.

(2) In the absence of evidence (whichmay, but need not, be derived fromperformance reviews or other sources)which tends to challenge in asubstantial manner the certificationsmade by the applicant, the certificationswill be accepted by HUD. However, ifHUD does have available such evidence,HUD may require the submission ofadditional information or assurancesbefore determining whether anapplicant’s certifications aresatisfactory.

(d) Thresholds. The HUD Office mayuse any information available to it tomake the threshold judgments requiredby the applicable NOFA, includinginformation related to the applicant’sperformance with respect to anyprevious assistance under this subpart.The annual performance and evaluation

report required under § 570.507(a) is theprimary source of this information. TheHUD Office may request additionalinformation in cases where it isessential to make the requiredperformance judgments. (Approved bythe Office of Management and Budgetunder control number 2506–0060).

§ 570.424 Grants for imminent threats topublic health and safety.

(a) Criteria. The following criteriaapply for an imminent threat to publichealth or safety:

(1) The Director of CommunityPlanning and Development of the HUDoffice may, at any time, invite anapplication for funds available underthis subpart in response to a request forassistance to alleviate an imminentthreat to public health or safety thatrequires immediate resolution. HUDshall verify the urgency and theimmediacy of the threat with anappropriate authority other than theapplicant prior to acceptance of theapplication, and the Director ofCommunity Planning and Developmentof the HUD Office shall review the claimto determine if, in fact, an imminentthreat to public health or safety doesexist. For example, an applicant withdocumented cases of disease resultingfrom a contaminated drinking watersupply has an imminent threat to publichealth, while an applicant ordered toimprove the quality of its drinking watersupply over the next two years does nothave an imminent threat within thedefinition of paragraph (a) of thissection. These funds are to be used todeal with those threats which representa unique and unusual circumstance, notfor the type of threat that occurs withfrequency in a number of communitieswithin the State of New York.

(2) The applicant does not havesufficient local resources, and otherFederal or State resources areunavailable to alleviate the imminentthreat.

(3) All imminent threat projects mustmeet the requirement of § 570.420(e).

(b) HUD action. (1) Fifteen percent ofthe funds allocated to New York Statein the Small Cities Program may bereserved to alleviate imminent threats tothe public health or safety unless alesser amount is specified in a NOFA.Applications shall be submitted inaccordance with § 570.423.

(2) Applications which meet therequirements of this section may beapproved by the Director of CommunityPlanning and Development of the HUDOffice without competition.

(3) The only funds reserved forimminent threats to the public health orsafety are those specified by this section


as modified by the NOFA. After thefunds have been depleted, HUD shallnot consider further requests for grantsrelating to imminent threats during thatfiscal year.

(c) Letter to proceed. Notwithstanding§ 570.425(a)(3), after a determinationhas been made that an imminent threatexists, HUD may issue the applicant aletter to proceed to incur costs toalleviate the imminent threat.Reimbursement of such costs isdependent upon HUD approval of thefinal application.

(d) Environmental review. Pursuant to24 CFR 58.34(a)(10), grants forimminent threats to public health orsafety are excluded from some or all ofthe environmental review requirementsof 24 CFR part 58, to the extentprovided therein.

§ 570.425 HUD review and actions onapplications for New York State applicants.

(a) Final application submission. (1)Submission deadline. HUD willestablish a time period during whichfinal applications must be submitted tothe appropriate office. The dates for thisperiod will be published in a notice inthe Federal Register.

(2) Incomplete applications.Applications must contain theinformation required by HUD.Information relative to the applicationwill not be accepted or considered ifreceived after the submission deadline,unless the information is specificallyrequested in writing by HUD.

(3) Pre-agreement costs. HUDauthorizes a unit of general localgovernment to incur costs during aFederal fiscal year in which a grant ismade or the prior fiscal year forpreparation of a CDBG grantapplication, planning costs eligibleunder § 570.205, environmentalassessments, and project engineeringand design costs for eligible activitiesunder §§ 570.201 through 570.204before the establishment of a formalgrant relationship between the applicantand HUD. Costs of such activities for thefunded application may be charged tothe grant should it be funded, providedthat the activities are undertaken inaccordance with the requirements ofthis subpart, and 24 CFR part 58. It isunderstood that the incurring of costsdescribed in this paragraph creates noobligation on HUD to approve theapplication.

(b) HUD action on final application.(1) Review and notification. Followingthe review of the applications, HUD willpromptly notify each applicant of theaction taken with regard to itsapplication. Documentation whichsupports HUD’s decisions on

applications will be available to thepublic.

(2) Conditional approval. HUD maymake a conditional approval, in whichcase the grant will be approved but theobligation and utilization of funds willbe restricted. The reasons for theconditional approval and the actionsnecessary to remove the condition willbe specified. Failure to satisfy thecondition may result in a termination ofthe grant.

(3) HUD will not make a Small Citiesgrant when it is determined that thegrant will only have a minimal orinsignificant impact on the grantee.

(4) Individual grant amounts. Indetermining appropriate grant amountsto be awarded, HUD may take intoaccount the size of the applicant, thelevel of demand, the scale of the activityproposed relative to need andoperational capacity, the number ofpersons to be served, the amount offunds required to achieve projectobjectives and the administrativecapacity of the applicant to completethe activities in a timely manner.

(c) Streamlined applicationrequirement for previous applicants.HUD may provide pursuant to a NOFAthat if an applicant notifies HUD inwriting within the application periodspecified in a NOFA that it wishes to beso considered, HUD will considerunfunded applications from the priorround or competition that meet thethreshold requirements of the NOFA.The applicant will have the option ofwithdrawing its application, oramending or supplementing theapplication for succeeding rounds ofcompetition. If there is no significantchange in the application involving newactivities or alteration of proposedactivities that will significantly changethe scope, location or objectives of theproposed activities or beneficiaries,there will be no further citizenparticipation requirement to keep theapplication active for succeeding roundsof competition. Applicants availingthemselves of the option to have anapplication from the previous round orcompetition reconsidered by HUD mustsubmit a new abbreviated or fullconsolidated plan, if the newcompetitive funding round is in adifferent fiscal year than the fundinground or competition for which theapplication was originally submitted.

§ 570.426 Program income.(a) The provisions of § 570.504(b)

apply to all program income generatedby a specific grant and received prior togrant closeout.

(b) If the unit of general localgovernment has another ongoing CDBG

grant at the time of closeout, theprogram income will be considered tobe program income of the ongoing grant.The grantee can choose which grant tocredit the program income to if it hasmultiple open CDBG grants.

(c) If the unit of general localgovernment has no open ongoing CDBGgrant at the time of closeout, programincome of the unit of general localgovernment or its subrecipients whichamounts to less than $25,000 per yearwill not be considered to be programincome. When more than $25,000 ofprogram income is generated from oneor more closed out grants in a year aftercloseout, the entire amount of theprogram income is subject to therequirements of this part. This will bea subject of the closeout agreementdescribed in § 570.509(c).

§ 570.427 Program amendments.

(a) HUD approval of certain programamendments. Grantees shall requestprior HUD approval for all programamendments involving new activities oralteration of existing activities that willsignificantly change the scope, location,or objectives of the approved activitiesor beneficiaries. Approval is subject tothe following:

(1) Programs or projects that includenew or significantly altered activitiesare rated in accordance with the criteriafor selection applicable at the time theoriginal preapplication or application(whichever is applicable) was rated. Therating of the program or projectsproposed which include the new oraltered activities proposed by theamendment must be equal to or greaterthan the lowest rating received by afunded project or program during thatcycle of ratings.

(2) Consideration shall be given towhether any new activity proposed canbe completed promptly.

(3) If the grant was received on anoncompetitive basis, the proposedamended project must be able to becompleted promptly, and must meet allof the threshold requirements that wererequired for the original project. If theproposal is to amend the project to atype of project that was ratedcompetitively in the fiscal year that thenoncompetitive project was funded, thenew or altered activities proposed bythe amendment must receive a ratingequal to or greater than the lowest ratingreceived by a funded project or programduring that cycle of ratings.

(b) Documentation of programamendments. Any programamendments that do not require HUDapproval must be fully documented inthe grantee’s records.


(c) Citizen participation requirements.Whenever an amendment requires HUDapproval, the requirements for citizenparticipation in § 570.431 must be met.

§ 570.428 Reallocated funds.(a) General. This section governs

reallocated funds originally allocated foruse under 24 CFR part 570, subpart F(Small Cities Program).

(b) Assignment of funds to bereallocated. Reallocated funds may be:

(1) Used at any time necessary for asection 108 repayment grant under§ 570.432;

(2) Added to the next Small CitiesProgram competition;

(3) Used to fund any application notselected for funding in the most recentSmall Cities competition, because of aprocedural error made by HUD; or

(4) Used to fund the most highlyranked unfunded application orapplications from the most recent SmallCities Program competition.

(c) Timing. Funds which becomeavailable shall be used as soon aspracticable.

§ 570.429 Hawaii general and grantrequirements.

(a) General. This section applies to theHUD-administered Small Cities Programin the State of Hawaii.

(b) Scope and applicability. Except asotherwise provided in this section, thepolicies and procedures outlined insubparts A, C, J, K, O of this part, andin §§ 570.420, 570.430, and 570.432,apply to the HUD-administered SmallCities Program in the State of Hawaii.

(c) Grant amounts. (1) For eacheligible unit of general localgovernment, a formula grant amountwill be determined which bears thesame ratio to the total amount availablefor the nonentitlement area of the Stateas the weighted average of the ratiosbetween:

(i) The population of that eligible unitof general local government and thepopulation of all eligible units ofgeneral local government in thenonentitlement areas of the State;

(ii) The extent of poverty in thateligible unit of general local governmentand the extent of poverty in all theeligible units of general localgovernment in the nonentitlement areasof the State; and

(iii) The extent of housingovercrowding in that eligible unit ofgeneral local government and the extentof housing overcrowding in all theeligible units of general localgovernment in the nonentitlement areasof the State.

(2) In determining the average of theratios under this paragraph (c), the ratio

involving the extent of poverty shall becounted twice and each of the otherratios shall be counted once. (0.25+0.50+0.25=1.00).

(d) Adjustments to grants. Grantamounts under this section may beadjusted where an applicant’sperformance is judged inadequate,considering:

(1) Capacity to utilize the grantamount effectively and efficiently;

(2) Compliance with the requirementsof § 570.902(a) for timely expenditure offunds beginning with grants made in FY1996. In making this calculation, alloutstanding grants will be considered.For the FY 1995 grant the requirementis substantial compliance with theapplicant’s schedule or schedulessubmitted in each previously fundedapplication;

(3) Compliance with other programrequirements based on monitoring visitsand audits.

(e) Reallocation. (1) Any amounts thatbecome available as a result ofadjustments under paragraph (d) of thissection, or any reductions under subpartO of this part, shall be reallocated in thesame fiscal year to any remainingeligible applicants on a pro rata basis.

(2) Any formula grant amountsreserved for an applicant that choosesnot to submit an application shall bereallocated to any remaining eligibleapplicants on a pro rata basis.

(3) No amounts shall be reallocatedunder paragraph (e) of this section inany fiscal year to any applicant whosegrant amount was adjusted underparagraph (d) of this section or reducedunder subpart O of this part.

(f) Required submissions. In order toreceive its formula grant under thissubpart, the applicant must submit aconsolidated plan in accordance with 24CFR part 91. That part includesrequirements for the content of theconsolidated plan, for the process ofdeveloping the plan, including citizenparticipation provisions, for thesubmission date, for HUD approval, andfor the amendment process.

(g) Application approval. HUD willapprove an application if thejurisdiction’s submissions have beenmade and approved in accordance with24 CFR part 91 and the certificationsrequired therein are satisfactory to theSecretary. The certifications will besatisfactory to the Secretary for thispurpose unless the Secretary hasdetermined pursuant to subpart O ofthis part that the grantee has notcomplied with the requirements of thispart, has failed to carry out itsconsolidated plan as provided under§ 570.903, or has determined that thereis evidence, not directly involving the

grantee’s past performance under thisprogram, that tends to challenge in asubstantial manner the grantee’scertification of future performance. Ifthe Secretary makes any suchdetermination, however, furtherassurances may be required to besubmitted by the grantee as theSecretary may deem warranted ornecessary to find the grantee’scertification satisfactory.

(h) Grant agreement. The grant will bemade by means of a grant agreementexecuted by both HUD and the grantee.

(i) Conditional grant. The Secretarymay make a conditional grant in whichcase the obligation and use of grantfunds for activities may be restricted.Conditional grants may be made wherethere is substantial evidence that therehas been, or there will be, a failure tomeet the performance requirements orcriteria described in subpart O of thispart. In such case, the conditional grantwill be made by means of a grantagreement, executed by HUD, whichincludes the terms of the conditionspecifying the reason for the conditionalgrant, the actions necessary to removethe condition and the deadline fortaking those actions. The grantee shallexecute and return such an agreement toHUD within 60 days of the date of itstransmittal. Failure of the grantee toexecute and return the grant agreementwithin 60 days may be deemed by HUDto constitute rejection of the grant by thegrantee and shall be cause for HUD todetermine that the funds provided inthe grant agreement are available forreallocation in accordance with section106(c) of the Act. Failure to satisfy thecondition may result in a reduction inthe grant amount pursuant to § 570.911.(Approved by the Office of Managementand Budget under control number 2506–0060)

§ 570.430 Hawaii program operationrequirements.

(a) Limitation on planning andadministrative costs. For grants madewith allocations prior to FY 1995, nomore than 20 percent of the sum of thegrant plus program income receivedduring the grant period shall beexpended for planning and programadministrative costs. For grants receivedfrom allocations in FY 1995 andthereafter, a grantee will be consideredto be in conformance with therequirements of § 570.200(g) ifexpenditures for planning andadministration during the most recentlycompleted program year do not exceed20 percent of the sum of the grant madefor that program year and the programincome received from post FY 1994grants during that program year.


(b) Performance and evaluationreports. Grantees will follow therequirements of § 570.507(a) forentitlement grant recipients for allgrants received in FY 1995 andthereafter. Grantees will continuefollowing the requirements of§ 570.507(a) for HUD-administeredsmall cities grants for grants receivedprior to FY 1995 until those grants areclosed out.

(c) Grant closeouts. Grants receivedprior to FY 1995 shall be closed out inaccordance with the procedures in§ 570.509. Grants received in FY 1995and thereafter shall not be closed outindividually. A grantee’s entire programshall be closed upon programcompletion if a grantee ceases itsparticipation in the Small CitiesProgram.

(d) Public Services. Starting with theFY 1996 grant, grantees may follow theprovisions of § 570.201(e)(1) that refer toentitlement grantees, allowing granteesto use 15 percent of the program incomereceived in the previous program year inaddition to 15 percent of the grantamount for public services.

(e) Compliance with the primaryobjective. Starting with the FY 1995grant, grantees may select a time periodof one, two or three program years inwhich to meet the requirement that notless than 70 percent of the aggregate ofCDBG fund expenditures be foractivities benefitting low-and moderate-income persons. Grants made fromallocations prior to FY 1995 will beconsidered individually for meeting theprimary objective, and expenditures forgrants from pre-FY 1995 allocationsmade during and after FY 1995 will notbe considered in determining whetherthe primary objective has been met forpost-1994 allocations. If the State ofHawaii decides to administer theCommunity Development Block GrantProgram for nonentitlement units ofgeneral local government in Hawaii, theState will be bound by the time periodfor meeting the primary objective thatwas chosen by each nonentitlementgrantee within the State until those timeperiods have expired.

(f) Program amendments for grantsreceived prior to FY 1995. Granteesmust follow the requirements of§ 91.505 of this title when amendingtheir program with regard to grantsreceived prior to FY 1995. For purposesof this paragraph (f), the term‘‘consolidated plan’’ as used in § 91.505of this title means an applicationsubmitted under the Hawaii program forpre-FY 1995 funds. Also for purposes ofthis paragraph (f), to comply with therequirements of § 91.505 of this title,grantees must refer to their current

citizen participation plans (adopted inaccordance with § 91.505 of this title) todetermine the criteria for substantialamendment and the citizenparticipation process to be followed.(Approved by the Office of Managementand Budget under control number 2506–0020.)

§ 570.431 Citizen participation.(a) General. An applicant that is

located in a nonentitlement area of aState that has not elected to distributefunds shall comply with the citizenparticipation requirements described inthis section, including requirements forthe preparation of the proposedapplication and the final application.The requirements for citizenparticipation do not restrict theresponsibility or authority of theapplicant for the development andexecution of its communitydevelopment program.

(b) Citizen participation plan. Theapplicant must develop and follow adetailed citizen participation plan andmust make the plan public. The planmust be completed and available beforethe application for assistance issubmitted to HUD, and the applicantmust certify that it is following the plan.The plan must set forth the applicant’spolicies and procedures for:

(1) Giving citizens timely notice oflocal meetings and reasonable andtimely access to local meetings,information, and records relating to thegrantee’s proposed and actual use ofCDBG funds including, but not limitedto:

(i) The amount of CDBG fundsexpected to be made available for thecoming year, including the grant andanticipated program income;

(ii) The range of activities that may beundertaken with those funds;

(iii) The estimated amount of thosefunds proposed to be used for activitiesthat will benefit low and moderateincome persons;

(iv) The proposed CDBG activitieslikely to result in displacement and theapplicant’s plans, consistent with thepolicies developed under § 570.606(b),for minimizing displacement of personsas a result of its proposed activities; and

(v) The types and levels of assistancethe applicant plans to make available (orto require others to make available) topersons displaced by CDBG-fundedactivities, even if the applicant expectsno displacement to occur;

(2) Providing technical assistance togroups representative of persons of lowand moderate income that requestassistance in developing proposals. Thelevel and type of assistance to beprovided is at the discretion of the

applicant. The assistance need notinclude the provision of funds to thegroups;

(3) Holding a minimum of two publichearings, for the purpose of obtainingcitizens’ views and formulating orresponding to proposals and questions.Each public hearing must be conductedat a different stage of the CDBGprogram. Together, the hearings mustaddress community development andhousing needs, development ofproposed activities and review ofprogram performance. There must bereasonable notice of the hearings andthe hearings must be held at times andaccessible locations convenient topotential or actual beneficiaries, withreasonable accommodations includingmaterial in accessible formats forpersons with disabilities. The applicantmust specify in its plan how it will meetthe requirement for hearings at timesand locations convenient to potential oractual beneficiaries;

(4) Meeting the needs of non-Englishspeaking residents in the case of publichearings where a significant number ofnon-English speaking residents canreasonably be expected to participate;

(5) Responding to citizen complaintsand grievances, including theprocedures that citizens must followwhen submitting complaints andgrievances. The applicant’s policies andprocedures must provide for timelywritten answers to written complaintsand grievances within 15 working daysof the receipt of the complaint, wherepracticable; and

(6) Encouraging citizen participation,particularly by low-and moderate-income persons who reside in slum orblighted areas, and in other areas inwhich CDBG funds are proposed to beused.

(c) Publication of proposedapplication. The applicant shall publisha proposed application consisting of theproposed community developmentactivities and community developmentobjectives in order to afford affectedcitizens an opportunity to:

(1) Examine the application’s contentsto determine the degree to which theymay be affected;

(2) Submit comments on the proposedapplication; and

(3) Submit comments on theperformance of the applicant.

(4) The requirement for publishingmay be met by publishing a summary ofthe proposed application in one or morenewspapers of general circulation, andby making copies of the proposedapplication available at libraries,government offices, and public places.The summary must describe thecontents and purpose of the proposed


application, and must include a list ofthe locations where copies of the entireproposed application may be examined.

(d) Preparation of a final application.An applicant must prepare a finalapplication. In the preparation of thefinal application, the applicant shallconsider comments and views receivedrelated to the proposed application andmay, if appropriate, modify the finalapplication. The final application shallbe made available to the public andshall include the communitydevelopment objectives and projecteduse of funds, and the communitydevelopment activities.

(e) New York grantee amendments. Toassure citizen participation on programamendments to final applications thatrequire HUD approval under § 570.427,the grantee shall:

(1) Furnish citizens informationconcerning the amendment;

(2) Hold one or more public hearingsto obtain the views of citizens on theproposed amendment;

(3) Develop and publish the proposedamendment in such a manner as to

afford affected citizens an opportunityto examine the contents, and to submitcomments on the proposed amendment;

(4) Consider any comments and viewsexpressed by citizens on the proposedamendment and, if the grantee finds itappropriate, modify the finalamendment accordingly; and

(5) Make the final amendment to thecommunity development programavailable to the public before itssubmission to HUD.

§ 570.432 Repayment of section 108 loans.

Notwithstanding any other provisionof this subpart, a unit of general localgovernment in a nonentitlement areawhere the State has not elected toadminister the CDBG program shall beeligible for Small Cities Grant assistancehereunder for the sole purpose of payingany amounts due on debt obligationsissued by such unit of general localgovernment (or its designated publicagency) and guaranteed by the Secretarypursuant to section 108 of the Act (seesubpart M of this part). The award ofgrant assistance for such purpose shall

be consistent with section 106(d)(3)(B)of the Act, in such amount, and subjectto such conditions as the Secretary maydetermine. Since guaranteed loan funds(as defined in § 570.701) are required tobe used in accordance with national andprimary objective requirements, andother applicable requirements of thispart, any grant made to make paymentson the debt obligations evidencing theguaranteed loan shall be presumed tomeet such requirements, unless HUDdetermines that the guaranteed loanfunds were not used in accordance withsuch requirements. Any suchdetermination by HUD shall not preventthe making of the grant in the amountof the payment due, but it may begrounds for HUD to take appropriateaction under subpart O based on theoriginal noncompliance.

Dated: May 12, 1997.Jacquie Lawing,General Deputy Assistant, Secretary forCommunity Planning and Development.[FR Doc. 97–15223 Filed 6–10–97; 8:45 am]BILLING CODE 4210–29–P

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Part IV

Department ofHousing and UrbanDevelopment24 CFR Part 585Opportunities for Youth: YouthbuildProgram Further Streamlining; Rule



24 CFR Part 585

[Docket No. FR–4226–F–01]

RIN No. 2506–AB93

Opportunities for Youth: YouthbuildProgram Further Streamlining;

AGENCY: Office of the AssistantSecretary for Community Planning andDevelopment, HUD.ACTION: Final rule.

SUMMARY: This final rule makes astreamlining amendment to 24 CFR part585 by removing subpart B regarding theapplication and grant award process.This information is set forth in theNotices of Funding Availability issuedby HUD when funding is made availablefor the Youthbuild Program, and neednot be codified.EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT: TheOffice of Economic Development,Department of Housing and UrbanDevelopment, Room 7136, 451 SeventhStreet, SW, Washington, DC 20410.Telephone (202) 708–2035; TTY (202)708–1455. (These telephone numbersare not toll-free.)


BackgroundSection 164 of the Housing and

Community Development Act of 1992(Pub. L. 102–550) amended title IV ofthe National Affordable Housing Act (42U.S.C. 1437aaa) to add a new subtitle Dwhich established the Youthbuildprogram (the ‘‘Youthbuild statute’’). OnFebruary 21, 1995, the Departmentpublished a final rule at 60 FR 9734,which is codified at 24 CFR part 585.Part 585 was streamlined by a final rulepublished on October 4, 1996, at 61 FR52186.

This RulePresident Clinton’s memorandum of

March 4, 1995, titled ‘‘RegulatoryReinvention Initiative’’ directed headsof Federal departments and agencies toreview all existing regulations toeliminate those that are outdated andmodify others to increase flexibility andreduce burden. As a part of HUD’soverall effort to reduce regulatoryburden and streamline the content oftitle 24 of the Code of FederalRegulations, this rule removes thoseprovisions which are unnecessary to becodified and can be made availablethrough other non-rulemaking means.

It is unnecessary to maintain theprovisions of subpart B of the

Youthbuild regulations in the Code ofFederal Regulations (CFR). Subpart Bpertains to the application and grantaward process. Certain provisions insubpart B (specifically, §§ 585.100through 585.107) simply repeat therequirements of the Department ofHousing and Urban DevelopmentReform Act (Pub. L. 101–235, approvedDecember 15, 1989) (HUD Reform Act)(see 42 U.S.C. 3545), now codified in 24CFR part 4. (The HUD Reform Actregulations previously were codified in24 CFR parts 4 and 12, but wereconsolidated in part 4 by final rulepublished on April 1, 1996, 61 FR1449). The requirements of the HUDReform Act and of its regulations applyto Youthbuild funding competitivelyawarded, notwithstanding any referenceto these requirements in the YouthbuildProgram regulations.

Other provisions in subpart Brepeated the statutory requirementsgoverning the application and grantaward process set out in the Youthbuildstatute. As with the HUD Reform Actrequirements, these statutoryrequirements are applicable whether ornot set out in the regulation.

Since the statutory and regulatoryrequirements governing the applicationand grant award process are announcedin the Notices of Funding Availability,it is not necessary that they be set outin the regulations. Furthermore, removalof these procedures from the CFRincreases the flexibility of theprocedures as warranted bycircumstances surrounding theindividual funding cycles. Accordingly,this final rule removes and reservessubpart B.

Justification for Final Rule onStreamlining Provisions

HUD generally publishes a rule forpublic comment before issuing a rule foreffect, in accordance with its ownregulations on rulemaking in 24 CFRpart 10. However, part 10 provides forexceptions to the general rule if theagency finds good cause to omitadvance notice and public participation.The good cause requirement is satisfiedwhen prior public procedure is‘‘impracticable, unnecessary, or contraryto the public interest’’ (24 CFR 10.1).HUD finds that good cause exists topublish this rule for effect without firstsoliciting public comment on thestreamlining provision. Thestreamlining provision merely removesunnecessary regulatory provisions anddoes not establish or affect substantivepolicy. Therefore, prior public commentis unnecessary.

Findings and Certifications

Environmental Impact

In accordance with 24 CFR50.19(c)(1), published in the FederalRegister on September 27, 1996 (61 FR40914), this final rule does not direct,provide for assistance or loan andmortgage insurance for, or otherwisegovern or regulate, real propertyacquisition, disposition, leasing (otherthan tenant-based rental assistance),rehabilitation, alteration, demolition, ornew construction. This rule merelystreamlines the Youthbuild Programregulations by removing unnecessaryprovisions. Therefore, this final rule iscategorically excluded from therequirements of the NationalEnvironmental Policy Act of 1969 andthe related Federal authorities in 24 CFR50.4.


The Secretary, in accordance with theRegulatory Flexibility Act (5 U.S.C.605(b)), has reviewed this rule beforepublication and by approving it certifiesthat this rule will not have a significanteconomic impact on a substantialnumber of small entities because therule merely makes nonsubstantivestreamlining amendments to part 585.

Executive Order 12612, Federalism

The General Counsel, as theDesignated Official under section 6(a) ofExecutive Order 12612, Federalism, hasdetermined that this rule does not have‘‘federalism implications’’ because itdoes not have substantial direct effectson the States (including their politicalsubdivisions), or on the distribution ofpower and responsibilities among thevarious levels of government.

Unfunded Mandates Reform Act

Title II of the Unfunded MandatesReform Act of 1995, Pub. L. 104–4,established requirements for Federalagencies to assess the effects of theirregulatory actions on State, local, andtribal governments and the privatesector. This rule does not impose anyFederal mandates on any State, local, ortribal governments or the private sectorwithin the meaning of the UnfundedMandates Reform Act of 1995.

Catalog of Federal Domestic Assistance

The Catalog of Federal DomesticAssistance Program number assigned tothis program is 14.243.


Grant programs—housing andcommunity development, Homeless,Low and very low-income families,


Reporting and recordkeepingrequirements.

Accordingly, for the reasons set forthin the preamble, part 585 of title 24 ofthe Code of Federal Regulations isamended as follows:

PART 585—YOUTHBUILD PROGRAM


Authority: 42 U.S.C. 3535(d) and 12899.

Subpart B—[Removed and Reserved]

2. Subpart B, consisting of §§ 585.100through 585.107, is removed andreserved.

Dated: May 19, 1997.Jacquie M. Lawing,Acting Assistant Secretary for CommunityPlanning and Development.[FR Doc. 97–15221 Filed 6–10–97; 8:45 am]BILLING CODE 4210–29–P

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Part V

Department ofCommerceInternational Trade Administration

Preliminary Determination of Sales atLess Than Fair Value; Certain Cut-to-Length Carbon Steel Plate from Ukraine;NoticePreliminary Determination of Sales atLess Than Fair Value and Postponementof Final Determination; Certain Cut-to-Length Carbon Steel Plate from SouthAfrica; NoticePreliminary Determination of Sales atLess Than Fair Value; Certain Cut-to-Length Carbon Steel Plate from theRussian Federation; NoticePreliminary Determination of Sales atLess Than Fair Value; Certain Cut-to-Length Carbon Steel Plate from thePeople’s Republic of China; Notice




[A–823–808]

Preliminary Determination of Sales atLess Than Fair Value; Certain Cut-to-Length Carbon Steel Plate fromUkraine

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of preliminarydetermination of Sales at Less Than FairValue.

EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT:Nithya Nagarajan, Eugenia Chu, or YuryBeyzarov, Import Administration,International Trade Administration,U.S. Department of Commerce, 14thStreet and Constitution Avenue, N.W.,Washington, D.C. 20230; telephone:(202) 482–0193, (202) 482–3964, or(202) 482–2243, respectively.

The Applicable Statute

Unless otherwise indicated, allcitations to the statute are references tothe provisions effective January 1, 1995,the effective date of the amendmentsmade to the Tariff Act of 1930 (the Act)by the Uruguay Rounds Agreements Act(URAA). In addition, unless otherwiseindicated, all citations to theDepartment’s regulations are to thecurrent regulations, as codified at 19CFR part 353 (April 1, 1996).

Preliminary Determination

We determine preliminarily thatcertain cut-to-length carbon steel platefrom Ukraine is being, or is likely to be,sold in the United States at less than fairvalue (LTFV), as provided in section733 of the Act. The estimated marginsare shown in the ‘‘Suspension ofLiquidation’’ section of this notice.

Case History

Since the initiation of thisinvestigation (61 FR 64051, December 3,1996), the following events haveoccurred:

On December 19, 1996, the UnitedStates International Trade Commission(ITC) issued an affirmative preliminarydetermination in this case (see ITCInvestigations Nos. 731–TA–753–756).The ITC found that there is a reasonableindication that an industry in theUnited States is threatened withmaterial injury by reason of importsfrom Ukraine of certain cut-to-lengthcarbon steel plate.

The Department issued itsantidumping questionnaires to the

Embassy of Ukraine on December 20,1996, and requested the Embassy toforward the documents to all Ukrainianproducers/exporters of certain cut-to-length carbon steel plate, as well as tomanufacturers who produced thesubject merchandise for companies whowere engaged in exporting subjectmerchandise to the United States duringthe period of investigation. Werequested the Embassy to inform thesecompanies that they must respond bythe due dates. We also sent courtesycopies to the companies whose namesand complete addresses had beenidentified in the petition.

On January 10, 1997, the Departmentconducted a questionnaire presentationin Kiev, Ukraine. Attending thepresentation were officials from theUkrainian Ministry of Foreign EconomicRelations, the Ministry of Industry, andpotential producers/exporters of carbonsteel plate.

Also on January 10, 1997, GenevaSteel Company and Gulf States SteelCompany (petitioners), alleged thatcritical circumstances exist with respectto imports of certain cut-to-lengthcarbon steel plate from Ukraine. Thisissue is addressed in the ‘‘PreliminaryDetermination of CriticalCircumstances’’ section of this notice.

On February 6, 1997, the Departmentprovided interested parties with theopportunity to submit published,publicly available information for theDepartment to consider when valuingthe factors of production and forsurrogate country selection. We receivedcomments from interested parties onFebruary 27, 1997.

In February and March 1997, threeUkrainian companies submittedresponses to sections A, C, and D of thequestionnaire. These companies are: (1)Alchevsk Iron and Steel Works(Alchevsk); (2) Azovstal Iron and SteelWorks (Azovstal); and (3) Ilyich Ironand Steel Works (Ilyich). All three areUkrainian producers/exporters ofsubject merchandise. We issuedsupplemental questionnaires to theserespondent companies on March 7,1997.

After receiving completequestionnaire responses from the threeUkrainian companies on April 4, 7, and11, 1997, we determined that one of theresponding companies, Alchevsk, didnot sell subject merchandise to theUnited States during the POI. Therefore,since Alchevsk is not a respondent, weneed not reach the issue of whether itis entitled to a separate rate. For moredetails, see Treatment of Sales Outsidethe POI Memorandum, dated May 30,1997.

Both Azovstal and Ilyich reported thatthey sold all subject merchandisethrough trading companies. In light ofthis fact, the Department concluded thatclarification was required as to whetherthese resellers sold additional subjectmerchandise (unreported by therespondents) to the United States.Therefore, in March 1997, we alsoissued trading company questionnairesto respondents’ resellers. We receivedresponses in March and April 1997.These responses supported theinformation submitted by Azovstal andIlyich regarding their total quantity ofsales made to the United States throughthe trading companies.

Also on March 25, 1997, in responseto the Ukrainian government’scomments, dated February 13, 1997, onUkraine’s nonmarket economy (NME)status, the Department issued theUkrainian government a questionnaireto clarify whether Ukraine’s NME statusshould be revoked. We received theseresponses on May 1, 1997. This issue isaddressed in the ‘‘Nonmarket EconomyCountry Status’’ section of this notice.

Except for the companies identifiedabove, none of the other companiesserved with a questionnaire respondedto the Department’s originalquestionnaire.

On April 15, 1997, petitionerssubmitted a request that the scope oftheir petitions be amended to includethree items—plate in coil; plate made tocarbon plate specifications regardless ofalloy content; and plate sold to nominalplate thicknesses whose actualthickness is slightly less than thethickness of plate but within specifiedthickness tolerances. With respect toplate in coil, petitioners maintain thatthis product has essentially the samephysical characteristics and end uses ascut-to-length plate. Petitioners furtherclaim that a post-initiation shift hasoccurred in the pattern of trade fromcut-to-length plate to plate in coil form,and that such a development indicatesthat any eventual order on cut-to-lengthplate will be susceptible tocircumvention. Petitioners submittedadditional information on May 9, 1997.Respondents submitted extensiverebuttal comments on April 25, 1997,and May 30, 1997.

Because of the very recent submissionof arguments on these complex andtechnical subjects, we were unable tofully analyze all of the relevantinformation on the record prior to thispreliminary determination. In order tofully examine petitioners’ claims, weintend to carefully examine all evidenceand argument on the record regardingthis matter and issue a decision as soonas possible.


On April 30, 1997 (62 FR 23433) wefurther postponed the preliminarydetermination until not later than June3, 1997.

Scope of the InvestigationThe products covered by this

investigation are hot-rolled iron andnon-alloy steel universal mill plates(i.e., flat-rolled products rolled on fourfaces or in a closed box pass, of a widthexceeding 150 mm but not exceeding1250 mm and of a thickness of not lessthan 4 mm, not in coils and withoutpatterns in relief), of rectangular shape,neither clad, plated nor coated withmetal, whether or not painted,varnished, or coated with plastics orother nonmetallic substances; andcertain iron and non-alloy steel flat-rolled products not in coils, ofrectangular shape, hot-rolled, neitherclad, plated, nor coated with metal,whether or not painted, varnished, orcoated with plastics or othernonmetallic substances, 4.75 mm ormore in thickness and of a width whichexceeds 150 mm and measures at leasttwice the thickness. Included as subjectmerchandise in this petition are flat-rolled products of nonrectangular cross-section where such cross-section isachieved subsequent to the rollingprocess (i.e., products which have been‘‘worked after rolling’’)—for example,products which have been bevelled orrounded at the edges. This merchandiseis currently classified in theHarmonized Tariff Schedule of theUnited States (HTS) under itemnumbers 7208.40.3030, 7208.40.3060,7208.51.0030, 7208.51.0045,7208.51.0060, 7208.52.0000,7208.53.0000, 7208.90.0000,7210.70.3000, 7210.90.9000,7211.13.0000, 7211.14.0030,7211.14.0045, 7211.90.0000,7212.40.1000, 7212.40.5000,7212.50.0000. Although the HTSsubheadings are provided forconvenience and customs purposes, ourwritten description of the scope of thisinvestigation is dispositive.

Period of InvestigationThe period of investigation (POI) is

April 1, 1996 through September 30,1996.

Nonmarket Economy Country StatusThe Department has treated Ukraine

as a nonmarket economy country (NME)in all past antidumping investigationsand administrative reviews (see, e.g.,Final Determination of Sales at LessThan Fair Value: Ferrosilicon FromKazakhstan and Ukraine, 58 FR 13050(March 9, 1993); Final Determination ofSales at Less Than Fair Value:

Silicomanganese From Ukraine, 59 FR62711 (December 6, 1994); and FinalDetermination of Sales at Less Than FairValue: Pure Magnesium From Ukraine,60 FR 16432 (March 30, 1995)). Adesignation as an NME remains in effectuntil it is revoked by the Department(see section 771(18)(C) of the Act). TheGovernment of Ukraine has requestedthat the Department examine Ukraine’sdesignation as an NME in thisinvestigation. The Department iscurrently reviewing all informationsubmitted by the Ukrainian governmentand will take into consideration thecomments of all interested parties.However, for this preliminarydetermination, the Department willcontinue to treat Ukraine as an NME.

Surrogate CountryWhen the Department is investigating

imports from an NME, section 773(c) ofthe Act directs the Department in mostcircumstances to base normal value(NV) on the NME producer’s factors ofproduction, valued in a surrogatemarket-economy country or countriesconsidered appropriate by theDepartment. In accordance with section773(c)(4), the Department, in valuing thefactors of production, shall utilize, tothe extent possible, the prices or costsof factors of production in one or moremarket-economy countries that arecomparable in terms of economicdevelopment to the NME country andare significant producers of comparablemerchandise. The sources of individualfactor prices are discussed under the NVsection below.

The Department has determined thatTunisia, Peru, Poland, Venezuela,Brazil, South Africa, and Turkey arecountries comparable to Ukraine interms of overall economic development.See Policy Memorandum, dated January29, 1997.

According to the availableinformation on the record, we havedetermined that Brazil is an appropriatesurrogate because it is at a comparablelevel of economic development and is asignificant producer of comparablemerchandise. Furthermore, there is awide array of publicly availableinformation for Brazil. Accordingly, wehave calculated NV using Brazilianprices to value the Ukrainian producers’factors of production, when availableand where appropriate. We haveobtained and relied upon publiclyavailable information whereverpossible.

Separate RatesThe Department presumes that a

single dumping margin is appropriatefor all exporters in a non-market

economy country. The Department may,however, consider requests for aseparate rate from an individualexporter. See Final Determination ofSales at Less Than Fair Value: SiliconCarbide from the People’s Republic ofChina, 59 FR 22585 (May 2, 1994). Eachof the participating respondentexporters has requested a separate,company-specific rate. During the POI,both Azovstal and Ilyich were owned byleaseholders’ organizations.

To establish whether a firm issufficiently independent fromgovernment control to be entitled to aseparate rate, the Department analyzeseach exporting entity under a testarising out of the Final Determination ofSales at Less Than Fair Value: Sparklersfrom the People’s Republic of China, 56FR 20588 (May 6, 1991) (Sparklers).Under the separate rates criteria, theDepartment assigns separate rates innonmarket economy cases only ifrespondents can demonstrate theabsence of both de jure and de factogovernmental control over exportactivities. For a complete analysis ofseparate rates, see Separate RatesMemorandum, dated June 3, 1997.

1. Absence of De Jure ControlAn individual company may be

considered for separates rates if it meetsthe following de jure criteria: (1) Anabsence of restrictive stipulationsassociated with an individual exporter’sbusiness and export licenses; (2) anylegislative enactments decentralizingcontrol of companies; and (3) any otherformal measures by the governmentdecentralizing control of companies.The respondents have placed on theadministrative record a number ofsubmissions to demonstrate absence ofde jure control. These documentsinclude laws, regulations, andprovisions enacted by the centralgovernment of Ukraine, whichdemonstrate a significant degree ofderegulation of Ukrainian businessactivity, as well as deregulation ofUkrainian export activity.

Broadly speaking, the evidence on therecord indicates that the Government ofUkraine has instituted wide-ranginglegal reforms toward about a moremarket-based economy. To do so, thegovernment has attempted to devolve dejure governmental control over somestate-owned enterprises through theprivatization process and most businessactivities of non-state-ownedenterprises. Because the government hasnow created a right of ownership ofbusiness enterprises for private personsand collectives, leaseholding societies,such as Azovstal and Ilyich, formerlystate-owned and operated, are now


distinct legal entities. In general, thisownership right allows non-state-ownedbusiness enterprises to freely engage ineconomic activity, negotiate and signcontracts, and independently developbusiness plans. Collectives, like theleaseholding societies of Azovstal andIlyich, can independently selectmanagement through elections by theworkers collective and can exercisecontrol and direction over the generaldirector through a contract between theenterprise and the general director.Enterprises can have their own bankaccount, and, after taxes, it appears thatnon-state-owned enterprises can keepthe profits from their sales, and engagein foreign economic activity, generally,without government interference.Although certain categories of goods aresubject to mandatory export controls,including registration of exportcontracts and obligatory minimumprices, respondents’ shipments ofsubject merchandise to the UnitedStates during the POI were not subjectto mandatory pricing. Although thecompanies indicated they must registertheir export contracts, it appears to havebeen more geared to monitoring/statistical purposes.

2. Absence of De Facto ControlThe Department considers four factors

in evaluating whether each respondentis subject to de facto governmentalcontrol of its export functions: (1)Whether the export prices (‘‘EP’’) are setby or subject to the approval of agovernmental authority; (2) whether therespondent has authority to negotiateand sign contracts and otheragreements; (3) whether the respondenthas autonomy from the government inmaking decisions regarding theselection of management; and (4)whether the respondent retains theproceeds of its export sales and makesindependent decisions regardingdisposition of profits or financing oflosses.

Each respondent exporter hasasserted, and supported on the record,the following: (1) It sets its own exportprices; (2) it negotiates contractswithout guidance from anygovernmental bodies; (3) it makes itsown personnel decisions with regard toselection of management throughelections by the members of theleaseholding societies, and the GeneralDirector and his appointed Deputieshave authority to negotiate and enterinto contracts on behalf of theenterprise; and (4) it has separate bankaccounts and retains the proceeds of itsexport sales (although 50 percent offoreign currency earnings must beconverted into Ukrainian currency),

uses profits according to its businessneeds, and has the authority to sell itsassets and to obtain loans. In addition,respondents’ questionnaire responsesindicate that company-specific pricingduring the POI does not suggestcoordination among exporters.

Thus, it appears that in fact theoperation of these laws did provideAzovstal and Ilyich the ability to protecttheir rights to autonomy in regard to theactual negotiation of export prices,retention and disposition of profits,selection of management and setting oflabor rates, and negotiation of contracts,including export contracts. Thisinformation supports a preliminaryfinding that there is a de facto absenceof governmental control of the exportfunctions of these companies.

Consequently, we determinepreliminarily that both of theparticipating producers/exporters meetthe criteria for application of separaterates.

Ukraine-Wide RateU.S. import statistics indicate that the

total quantity and value of U.S. importsof certain cut-to-length carbon steelplate from Ukraine is greater than thetotal quantity and value of steel platereported by all Ukrainian companiesthat submitted responses. Given thisdiscrepancy, we conclude that not allexporters of Ukrainian certain cut-to-length carbon steel plate responded toour questionnaire. Accordingly, we areapplying a single antidumping depositrate—the Ukraine-wide rate—to allexporters in Ukraine (other than the twonamed above as receiving separaterates), based on our presumption thatthose respondents who failed to respondconstitute a single enterprise, and areunder common control by the Ukrainegovernment. See, e.g., FinalDetermination of Sales at Less Than FairValue: Bicycles from the People’sRepublic of China, 61 FR 19026 (April30, 1996).

This Ukraine-wide antidumping rateis based on adverse facts available.Section 776(a)(2) of the Act providesthat ‘‘if an interested party or any otherperson—(A) withholds information thathas been requested by the administeringauthority; (B) fails to provide suchinformation by the deadlines for thesubmission of the information or in theform and manner requested, subject tosubsections (c)(1) and (e) of section 782;(C) significantly impedes a proceedingunder this title; or (D) provides suchinformation but the information cannotbe verified as provided in section 782(i),the administering authority * * * shall,subject to section 782(d), use the factsotherwise available in reaching the

applicable determination under thistitle.’’

In addition, section 776(b) of the Actprovides that, if the Department findsthat an interested party ‘‘has failed tocooperate by not acting to the best of itsability to comply with a request forinformation,’’ the Department may useinformation that is adverse to theinterests of that party as the factsotherwise available. The statute alsoprovides that such an adverse inferencemay be based on secondary information,including the information drawn fromthe petition.

As discussed above, all Ukrainianexporters that do not qualify for aseparate rate are treated as a singleenterprise. Because some exporters ofthe single enterprise failed to respond tothe Department’s requests forinformation, that single enterprise isconsidered to be uncooperative. In suchsituations, the Department generallyselects as total facts available either thehigher of the average of the margin fromthe petition or the highest ratecalculated for a respondent in theproceeding. In the present case, theaverage margin in the petition is higherthan the calculated rate. Accordingly,the Department has based the Ukraine-wide rate on information in the petition.In this case, the average petition rate is237.91 percent.

Section 776(c) of the Act provides thatwhere the Department relies on‘‘secondary information,’’ theDepartment shall, to the extentpracticable, corroborate that informationfrom independent sources reasonable atthe Department’s disposal. TheStatement of Administrative Action(SAA), accompanying the URAAclarifies that the petition is ‘‘secondaryinformation’’ and that ‘‘corroborate’’means to determine that the informationused has probative value. See SAA at870.

In accordance with section 776(c) ofthe Act, we corroborated the margins inthe petition to the extent practicable.The information contained in thepetition shows that petitionerscalculated export price based on twomethods: (1) The import values declaredto the U.S. Customs Service; and (2) anaverage export price derived from actualU.S. selling prices known to petitioners.We compared the starting prices used bypetitioners less the importer mark-upsagainst prices derived from U.S. importstatistics and found that the two sets ofprices were consistent. We alsocompared the movement charges usedin the petition with the surrogate valuesused by the Department in its margincalculations and found them to beconsistent.


The information in the petition withrespect to the normal value (NV) isbased on factors of production used bythe petitioners in the production of steelplate. Petitioners submitted usageamounts for materials, labor and energy,adjusted for known differences inproduction efficiencies. Petitionerssubmitted three cost models in thepetition: (1) Basic Oxygen Furnace(BOF) Cost Model; (2) Open-HearthFurnace Cost Model; and (3) WeightedAverage Normal Value of the BOF andOpen-Hearth methods to account fordifferences between the productionprocesses of petitioners and potentialrespondents.

The margins in the petition rangedfrom 201.61 to 274.82 percent obtainedby comparing the normal values to theexport price developed from customsvalues and to export prices developedfrom actual U.S. price quotes. For eachmethod, petitioners submitted estimateddumping margins for the BOF method,the open-hearth method and a weightedaverage of the two. See CorroborationMemorandum, dated June 3, 1997.

Fair Value ComparisonsTo determine whether certain cut-to-

length carbon steel plate from Ukrainesold to the United States by theUkrainian exporters receiving separaterates was made at less than fair value,we compared the EP to the NV, asspecified in the ‘‘Export Price’’ and‘‘Normal Value’’ sections of this notice.

Export PriceFor both Azovstal and Ilyich, we

calculated EP in accordance withsection 772(a) of the Act, because thesubject merchandise was sold directly tothe first unaffiliated purchaser in theUnited States prior to importation andconstructed export price (CEP)methodology was not otherwiseindicated. In accordance with section777A(d)(1)(A)(i) of the Act, wecompared POI-wide weighted-averageEPs to the product-specific averagenormal value.

We made company-specificadjustments as follows:

1. AzovstalWe calculated EP based on packed,

FOB or CPT prices to the port of loadingon Ukrainian territory. We madedeductions from the starting price,where appropriate, for brokerage andhandling. However, because theseservices were provided by the Ukrainianport facility, these services wereassigned a surrogate value whereavailable from publicly availablepublished data from Brazil, thesurrogate country which we are using to

value factors of production. See FactorsMemorandum, dated June 3, 1997.

2. IlyichWe calculated EP based on packed,

FOB prices to unaffiliated purchasers inthe United States. We made deductionsfrom the starting price, whereappropriate, for brokerage and handling.However, because these services wereprovided by the Ukrainian port facility,these services were assigned a surrogatevalue where available from Brazilianpublicly available published data.

Normal ValueIn accordance with section 773(c) of

the Act, we calculated NV based onfactors of production reported by thefactories in the Ukraine which producedthe carbon steel plate sold by the tworespondents. We valued all the inputfactors using publicly availableinformation as discussed in theSurrogate Country section of this notice.

Factor ValuationsThe selection of the surrogate values

was based on the quality andcontemporaneity of the data. Wherepossible, we attempted to value materialinputs on the basis of tax-exclusivedomestic prices in the surrogatecountry. Where we were not able to relyon domestic prices, we used importprices to value factors. As appropriate,we adjusted input prices to make themdelivered prices. For those values notcontemporaneous with the POI, weadjusted for inflation using wholesaleprice indices or, in the case of laborrates, consumer price indices, publishedin the International Monetary Fund’sInternational Financial Statistics. For acomplete analysis of surrogate values,see Factors Memorandum, dated June 3,1997.

To value coal, coke, anthracite, ferroalloys, aluminum, pellets, ferro-manganese, lime, black oil, and scrap(not all materials were used for bothcompanies) we used public informationfrom the latest data published by theUnited Nations for 1996 (CommodityTrade Statistics 1994, 3 Brazil Rev.1995, at 19). For iron, we usedinformation in a 1996 Brazilianpublication, Siderurigia no Mundo. Formanganese ore, we relied on publicinformation from the financialstatements of Usinas Sidergicas deMinas Gerais S. and CompaniaSiderurgica de Tubarao, two Braziliansteel companies. For limestone, we usedinformation from Commodity TradeStatistics 1993, Brazil Rev. 3, UnitedNations, 1994.

For natural gas, we relied on publicinformation reported in the Brazilian

publication of Diario Oficial No. 180,September 27, 1995. For electricity, werelied upon public information fromRevista Energetica, Year 19, No. 1, Jan-Apr 1995.

To value skilled labor, we used theCounty Reports on Human RightsPractices for 1996, from the U.S.Department of State. For unskilledlabor, we relied on data documented forunskilled labor obtained from a U.S.Department of Commerce cable datedOctober 1994. To value overhead,SG&A, and profit, we relied on financialstatements of Usinas Sidergicas deMinas Gerais S. and CompaniaSiderurgica de Tubarao, two Braziliansteel companies. To value brokerage, werelied on public data from Case No. A–351–817, Cut-to-Length Plate fromBrazil, Usiminas, Section C Response atExh. 6, dated November 21, 1996.

Preliminary Determination of CriticalCircumstances

On January 10, 1997, the petitionersalleged that there is a reasonable basisto believe or suspect that criticalcircumstances exist with respect toimports of certain cut-to-length carbonsteel plate. In accordance with 19 C.F.R.353.16(b)(2)(i) (1996), since theseallegations were filed earlier than thedeadline for the Department’spreliminary determination, we mustissue our preliminary criticalcircumstances determinations not laterthan the preliminary determination.

Section 733(e)(1) of the Act providesthat if a petitioner alleges criticalcircumstances, the Department willdetermine whether there is a reasonablebasis to believe or suspect that: (A)(i)there is a history of dumping andmaterial injury by reason of dumpedimports in the United States orelsewhere of the subject merchandise, or(ii) the person by whom, or for whoseaccount, the merchandise was importedknew or should have known that theexporter was selling the subjectmerchandise at less than its fair valueand that there was likely to be materialinjury by reason of such sales, and (B)there have been massive imports of thesubject merchandise over a relativelyshort period.

The statute and the Statement ofAdministrative Action whichaccompanies the Uruguay RoundAgreements Act (SAA) are silent as tohow we are to make a finding that therewas knowledge that there was likely tobe material injury. Therefore, Congresshas left the method of implementingthis provision to the Department’sdiscretion.

In determining whether there is areasonable basis to believe or suspect


that an importer knew or should haveknown that the exporter was selling theplate at less than fair value, theDepartment normally considers marginsof 15 percent or more sufficient toimpute knowledge of dumping forconstructed export price (CEP) sales,and margins of 25 percent or more forexport price (EP) sales. See, e.g.,Preliminary Critical CircumstancesDetermination: Honey from the People’sRepublic of China (PRC), 60 FR 29824(June 6, 1995) (Honey). Since thecompany specific margins for EP salesin our preliminary determination forcarbon steel plate are greater than 25percent for Azovstal and Ilyich, we haveimputed knowledge of dumping.

In determining whether there is areasonable basis to believe or suspectthat an importer knew or should haveknown that there was likely to bematerial injury by reason of dumpedimports, the Department normally willlook to the preliminary injurydetermination of the ITC. If the ITCfinds a reasonable indication of presentmaterial injury to the relevant U.S.industry, the Department will determinethat a reasonable basis exists to imputeimporter knowledge that there waslikely to be material injury by reason ofdumped imports during the criticalcircumstances period—the 90-dayperiod beginning with the initiation ofthe investigation (see 19 CFR 353.16(g)).If, as in this case, the ITC preliminarilyfinds threat of material injury (See Cut-to-Length Carbon Steel Plate fromChina, Russia, South Africa, andUkraine, U.S. International TradeCommission, December 1996), theDepartment will also consider the extentof the increase in the volume of importsof the subject merchandise during thecritical circumstances period and themagnitude of the margins indetermining whether a reasonable basisexists to impute knowledge thatmaterial injury was likely.

In this case, imports of Ukrainianplate increased 45 percent in the threemonths following the initiation of theinvestigation when compared to thethree months immediately precedinginitiation, or three times the level ofincrease needed to find ‘‘massiveimports’’ during the same period (seebelow). Furthermore, we havepreliminarily found margins of 99.59percent for Azovstal and 176.76 percentfor Ilyich.

Based on the ITC’s preliminarydetermination of threat of injury, theincrease in imports noted above, and thehigh preliminary margins, theDepartment determines that there is areasonable basis to believe or suspectthat the importer knew or should have

known that there was likely to bematerial injury by means of sales of thesubject merchandise at less than fairvalue.

To determine whether imports weremassive over a relatively short timeperiod, the Department typicallycompares the import volume of thesubject merchandise for the threemonths immediately preceding andfollowing the initiation of theproceeding. See 19 CFR 353.16(g).Pursuant to 19 CFR 353.16(f)(2), theDepartment will consider an increase of15 percent or more in the imports of thesubject merchandise over the relevantperiod to be massive.

As noted, imports of the subjectmerchandise increased 45 percentduring the relevant period, and thus wedetermine that imports have beenmassive.

Thus, because we determine thatthere is a reasonable basis to believe orsuspect that the importer knew orshould have known that Ukrainianexporters were selling the subjectmerchandise at less than its fair valueand that there was likely to be materialinjury by reason of such sales, and thatthere have been massive imports of thesubject merchandise over a relativelyshort time period, we preliminarilydetermine that critical circumstancesexist for Avostal and Ilyich.

For companies subject to the Ukraine-wide rate (i.e., companies which did notrespond to the Department’squestionnaire), we are imputingknowledge based on the Ukraine-widerate, and determine, based on factsavailable, that there were massiveimports of certain cut-to-length carbonsteel plate by companies that did notrespond to the Department’squestionnaire. Therefore, wepreliminarily determine that criticalcircumstances exist with regard to thesecompanies.

We find that critical circumstancesexist for cut-to-length carbon steel platesales by all Ukrainian exporters.

VerificationAs provided in section 782(i) of the

Act, we will verify the information usedin making our final determination.

Suspension of LiquidationIn accordance with section 733(d) of

the Act, we are directing the CustomsService to suspend liquidation of allimports of subject from Ukraine, that areentered, or withdrawn from warehouse,for consumption on or after the dateninety days prior to the date ofpublication of this notice in the FederalRegister. We will instruct CustomsService to require a cash deposit or the

posting of a bond equal to the weighted-average amount by which the normalvalue exceeds the EP, as indicatedbelow. These suspension of liquidationinstructions will remain in effect untilfurther notice.

The weighted-average dumpingmargins are as follows:

Manufacturer/producer/exporter

Weighted-average

margin per-centage

Azovstal .................................... 99.59Ilyich .......................................... 176.76Ukraine-wide rate ...................... 237.91

Ukraine-Wide RateA Ukraine-wide rate has been

assigned to certain cut-to-length carbonsteel plate based on the average margincontained in the petition, as amendedby the Department. The Ukraine-widerate applies to all entries of subjectmerchandise except for entries fromexporters/producers that are identifiedindividually above.

ITC NotificationIn accordance with section 733(f) of

the Act, we have notified the ITC of ourdetermination. If our finaldetermination is affirmative, the ITCwill determine before the later of 120days after the date of this preliminarydetermination or 45 days after our finaldetermination whether the domesticindustry in the United States ismaterially injured, or threatened withmaterial injury, by reasons of imports,or sales (or the likelihood of sales) forimportation, of the subject merchandise.

Public CommentIn accordance with 19 CFR 353.38

(1996), case briefs or other writtencomments in at least ten copies must besubmitted to the Assistant Secretary forImport Administration no later than 50days after the publication of thispreliminary determination, and rebuttalbriefs, no later than five days after thefiling of case briefs. A list of authoritiesused and a summary of arguments madein the briefs should accompany thesebriefs. Such summary should be limitedto five pages total, including footnotes.We will hold a public hearing, ifrequested, to afford interested parties anopportunity to comment on argumentsraised in case or rebuttal briefs. Thehearing will be held at the U.S.Department of Commerce, 14th Streetand Constitution Avenue, N.W.,Washington, DC 20230, time, date, androom to be determined. Parties shouldconfirm by telephone the time, date, andplace of the hearing 48 hours before thescheduled time.


Interested parties who wish to requesta hearing, or to participate if one isrequested, must submit a writtenrequest to the Assistant Secretary forImport Administration, U.S. Departmentof Commerce, Room 1870, within tendays of the publication of this notice.Requests should contain: (1) The party’sname, address, and telephone number;(2) the number of participants; and (3)a list of the issues to be discussed. Inaccordance with 19 CFR353.38(b)(1996), oral presentations willbe limited to issues raised in the briefs.If this investigation proceeds normally,we will make our final determination byAugust 18, 1997.

This determination is publishedpursuant to section 777(i) of the Act.




[A–794–804]

Notice of Preliminary Determination ofSales at Less Than Fair Value andPostponement of Final Determination;Certain Cut-to-Length Carbon SteelPlate from South Africa

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of preliminarydetermination of sales at less than fairvalue and postponement of finaldetermination.

EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT:Charles Rast, or Robin Gray, ImportAdministration, International TradeAdministration, U.S. Department ofCommerce, 14th Street and ConstitutionAvenue, N.W., Washington, D.C. 20230;telephone: (202) 482–5811, or (202)482–0196, respectively.

The Applicable Statute and RegulationsUnless otherwise indicated, all

citations to the statute are references tothe provisions effective January 1, 1995,the effective date of the amendmentsmade to the Tariff Act of 1930 (the Act)by the Uruguay Rounds Agreements Act(URAA). In addition, unless otherwiseindicated, all citations to theDepartment’s regulations are inreference to the regulations, codified at19 CFR part 353, as they existed onApril 1, 1996.


We determine preliminarily thatcertain cut-to-length carbon steel platefrom South Africa is being, or is likelyto be, sold in the United States at lessthan fair value (LTFV), as provided insection 733 of the Act. The estimatedmargins are shown in the ‘‘Suspensionof Liquidation’’ section of this notice.

Case History


On December 19, 1996, the UnitedStates International Trade Commission(ITC) issued an affirmative preliminarydetermination in this case (see ITCInvestigations Nos. 731–TA–753–756).The ITC found that there is a reasonableindication that an industry in theUnited States is threatened withmaterial injury by reason of importsfrom South Africa of certain cut-to-length carbon steel plate.

On December 20, 1996, theDepartment issued its antidumpingquestionnaires to the followingcompanies identified by petitioners aspossible exporters of the subjectmerchandise: Iscor Limited (Iscor) andHighveld Steel and VanadiumCorporation Limited (Highveld). Thequestionnaire is divided into foursections. Section A requests generalinformation concerning a company’scorporate structure and businesspractices, the merchandise underinvestigation that it sells, and the salesof the merchandise in all of its markets.Sections B and C request home marketsales listings and U.S. sales listings,respectively. Section D requestsinformation on the cost of production(COP) of the foreign like product andconstructed value (CV) of the subjectmerchandise.

The Department conductedquestionnaire presentations at Iscor onJanuary 21–22, 1997, and at Highveld onJanuary 23–24, 1997.

In February 1997, Iscor and Highveldsubmitted responses to sections A, B,and C of the questionnaire. We issuedsupplemental questionnaires to therespondents in March 1997, andreceived supplemental questionnaireresponses from both companies in April1997.

On February 12, 1997, Highveldrequested that the Department useactual unadjusted daily exchange rateswhen performing currency conversionsbecause of depreciation of the SouthAfrican rand relative to the U.S. dollarduring the POI. Petitioners objected toHighveld’s request on February 24,

1997, arguing that Highveld failed todemonstrate that proper grounds existfor the Department to consider thefluctuation in the rand during the POI.On March 5, 1997, Highveld respondedto petitioners’ rebuttal. (See currencyconversion section below.)

On March 28, 1997, we postponed thepreliminary determination until notlater than May 14, 1997 (62 FR 14887),because we determined thisinvestigation to be extraordinarilycomplicated within the meaning ofsection 733(c)(1)(B) of the Act.

On March 31, 1997, petitionersalleged that both Highveld and Iscor hadmade sales in the home market at pricesthat were below the cost of production(COP), pursuant to section 773(b) of theAct. On April 9, 1997, the Departmentrequested that petitioners provideadditional information regarding theirallegation on Iscor. The petitionerssupplied the requested supplementalinformation on April 11, 1997. Afteranalyzing petitioners’ allegations, theDepartment determined that there werereasonable grounds to believe or suspectthat Highveld and Iscor had made homemarket sales at prices below the cost ofproduction. On May 1, 1997, theDepartment initiated a COPinvestigation of Highveld. On May 7,1997, the Department initiated a COPinvestigation of Iscor. (Seememorandum from Linda Ludwig toRichard O. Weible dated May 1, 1997,and May 7, 1997, respectively, on file inthe Central Records Unit, Room B–099of the Department of Commerce.)

As a result of the Department’sinitiation of cost of productioninvestigations, the Departmentrequested, on May 1, 1997 and May 7,1997, respectively, that Highveld andIscor answer Section D of the originalquestionnaire. The Departmentextended Highveld’s and Iscor’s time torespond to Section D of thequestionnaire to May 30, 1997 and June4, 1997, respectively. Accordingly, weare not able to include a COP analysisin our preliminary determination. Wewill analyze the respondents’ COP andCV data for our final determination.

On April 15, 1997, petitionerssubmitted a request that the scope oftheir petitions be amended to includethree items—plate in coil; plate made tocarbon plate specifications regardless ofalloy content; and plate sold to nominalplate thicknesses whose actualthickness is slightly less than thethickness of plate but within specifiedthickness tolerances. With respect toplate in coil, petitioners maintain thatthis product has essentially the samephysical characteristics and end uses ascut-to-length plate. Petitioners further


claim that a post-initiation shift hasoccurred in the pattern of trade fromcut-to-length plate to plate in coil form,and that such a development indicatesthat any eventual order on cut-to-lengthplate will be susceptible tocircumvention. Petitioners submittedadditional information on May 9, 1997.Respondents submitted extensiverebuttal comments on April 25, 1997,and May 30, 1997.



On May 12, 1997, petitionersprovided comments on deficiencies inIscor’s response to the Department’squestionnaire, including Iscor’s failureto provide several expense items on atransaction specific basis. TheDepartment has reviewed the allocationmethodology reported by Iscor for theseitems and has decided that for purposesof the preliminary determination wewill allow the reported expense and costdata. However, at verification theDepartment will analyze the reportedallocation methodology and examineIscor’s statement that it is unable toprovide expense and cost data on atransaction specific basis.

Postponement of Final Determinationand Extension of Provisional Measures

Pursuant to section 735(a)(2)(A) of theAct, on May 14, 1997, Highveld andIscor requested that in the event of anaffirmative preliminary determinationin this investigation, the Departmentpostpone its final determination. Ourpreliminary determination isaffirmative, and Highveld and Iscoraccount for a significant proportion ofexports of the subject merchandise. Inaddition, we are not aware of theexistence of any compelling reasons fordenying this request. As a result we aregranting the postponement request, inaccordance with section 735(a)(2)(A) ofthe Act. Therefore, the finaldetermination will be due not later than135 days after the publication of thispreliminary determination. (Seememorandum from Joseph A. Spetrinito Robert S. LaRussa dated May 28,1997.) Suspension of liquidation will beextended accordingly. See Preliminary

Determination of Sales at Less Than FairValue: Large Newspaper PrintingPresses and Components Thereof,Whether Assembled or Unassembledfrom Japan, 61 FR 8029 (March 1, 1996).




October 1, 1995, through September 30,1996. The period of this investigationcomprises each exporter’s four mostrecent fiscal quarters prior to the filingof the petition.

Fair Value ComparisonsTo determine whether sales of the

subject merchandise by respondents tothe United States were made at less thanfair value, we compared the ExportPrice (EP) or Constructed Export Price

(CEP), where appropriate, to the NormalValue (NV), as described in the ‘‘ExportPrice’’ and ‘‘Normal Value’’ sections ofthis notice. In accordance with section777A(d)(1)(A)(i) of the Act, wecompared the weighted average EPs orCEPs to weighted-average NVs duringthe POI. In determining averaginggroups for comparison purposes, weconsidered the appropriateness of suchfactors as physical characteristics andlevel of trade.

(i) Physical Characteristics

In accordance with section 771(16) ofthe Act, we considered all productscovered by the description in the‘‘Scope of Investigation’’ section of thisnotice, produced in South Africa by therespondents and sold in the homemarket during the POI, to be foreign likeproducts for purposes of determiningappropriate product comparisons toU.S. sales. Where there were no sales ofidentical merchandise in the homemarket to compare to U.S. sales, wecompared U.S. sales to the most similarforeign like product on the basis of thecharacteristics listed in theDepartment’s antidumpingquestionnaire. In making the productcomparisons, we relied on the followingcriteria (listed in order of preference):paint, quality, specification and/orgrade, heat treatments, standardthickness, standard width, whether ornot checkered, and descaling. It is ourpractice where sales were made in thehome market on a different weight basisfrom the U.S. market (theoretical versusactual weight), to convert all quantitiesto the same weight basis, using theconversion factors supplied by therespondents, before making our fair-value comparisons. (See FinalDetermination of Sales at Less Than FairValue: Cut-to-Length Carbon Steel Platefrom Finland, 58 FR 37122 (July 9,1993) and Final Determination of Salesat Less Than Fair Value: Certain WeldedStainless Steel Pipes from Taiwan, 57FR 53705 (November 12, 1992.)) ForIscor, we noted inexplicablediscrepancies between the data reportedin the quantity and the convertedquantity fields. Therefore, for thepreliminary results the convertedquantities provided by Iscor weredisregarded. Consequently, weconducted our analysis based on datareported in the quantity field, whichcontains weights based on either actualor theoretical weight. We are requestingadditional information from Iscor toclarify the conversion weights. We willlook at this issue more closely atverification and invite parties tocomment on it.


(ii) Level of tradeTo the extent practicable, we

determine normal value for sales at thesame level of trade as the U.S. sales(either EP or CEP). When there are nosales at the same level of trade wecompare U.S. sales to home market (or,if appropriate third country) sales at adifferent level of trade. For both EP andCEP, the relevant transaction for level oftrade is the sale from the exporter to theimporter. While the starting price forCEP is that of a subsequent resale to anunaffiliated buyer, the construction ofthe EP results in a price that would havebeen charged if the importer had notbeen affiliated. The CEP is the priceobtained after removing from the firstresale to an independent U.S. customerprofit and expenses deducted undersection 772(d) of the Act. Theseexpenses represent activities undertakenby, or on behalf of, the affiliatedimporter. The deduction of expensesunder section 772(d) will normally yielda different level of trade for the CEPthan for the later resale which is usedfor the starting price. Movementcharges, and duties and taxes deductedunder section 772(c) of the Act do notrepresent activities of the affiliatedimporter and are not removed as they donot affect the level of trade. The NVlevel of trade is that of the starting priceof sales in the home market. When NVis based on constructed value, the levelof trade is that of the sales from whichwe derive SG&A and profit.

To determine whether home marketsales are at a different level of trade thanU.S. sales, we examine whether thehome market sales are at different stagesin the marketing process than the U.S.sales. The marketing process in bothmarkets begins with goods being sold bythe producer and extends to the sale tothe final user. The final user could bean individual consumer or an industrialuser, but the marketing process for allgoods starts with a producer and endswith a user. The chain of distributionbetween the two may have many or fewlinks, and somewhere in this processthe respondent’s sales occur. In theUnited States this is generally to animporter, whether independent oraffiliated. We review and compare thedistribution systems in the home marketand U.S. export markets, includingselling functions, class of customer, andthe extent and level of selling expensesfor alleged level of trade. Customercategories such as distributor, originalequipment manufacturer (OEM), orwholesaler are useful as they arecommonly used to describe levels oftrade by respondents, but withoutsubstantiation, are insufficient to

establish that a claimed level of trade isvalid. An analysis of selling functionssubstantiates or invalidates claimedcustomer classifications based on levelsof trade. If the claimed levels aredifferent, so should be the sellingfunctions performed in selling to thoselevels. Conversely, if levels of trade arenominally the same, so should be theselling functions performed. Differentlevels of trade necessarily involvedifferences in selling functions, butdifferences in selling functions, evensubstantial ones, are not alone sufficientto establish a difference in the level oftrade. A difference in level of trade ischaracterized by purchasers at differentplaces in the chain of distribution andsellers performing qualitatively orquantitatively different functions inselling to them.

When we compare home market salesat a different level of trade than U.S.sales, we make a level-of-tradeadjustment if the difference in level oftrade affects price comparability. Anyeffect on price comparability isdetermined by examining sales atdifferent levels of trade in a singlemarket, the home market. Any priceeffect must be manifested in a pattern ofconsistent price differences betweenhome market sales used for comparisonand sales at the equivalent level of tradeof the export transaction. We calculatethe difference in the average of the netprices of the same models sold atdifferent levels of trade. Net prices areused because any difference will be dueto differences in level of trade ratherthan other factors. The averagedifference in net prices is used to adjustthe NV when it is different from thelevel of trade of the export sale. If thereis a pattern of no price differences, thenthe difference in level of trade does nothave a price effect, and no adjustmentis necessary.

In terms of granting a CEP offset, thestatute also provides an adjustment toNV if it is compared to U.S. sales at adifferent level of trade, provided the NVlevel is more remote from the factory,and we are unable to determine whetherthere is or is not a price effect ofdifferent levels of trade in the homemarket. This latter situation can occurwhere there is no home market level oftrade equivalent to the U.S. sales level,or where there is an equivalent homemarket level, but the data areinsufficient to support a conclusion onprice effect. The CEP offset is the lowerof the two following:

• The indirect selling expenses on thehome market sale; or

• The indirect selling expensesdeducted from the starting price used tocalculate CEP.

The CEP offset is not automatic eachtime export price is constructed. It isonly applicable when the level of tradeof the affiliated importer is lessadvanced than the level of trade of thehome market purchaser, and theavailable data do not provide anappropriate basis for determiningwhether there is an effect on pricecomparability.

Iscor did not claim a difference inlevel of trade between its U.S. (EP) andhome market sales. Its responseindicates that there are significantdifferences between the sellingfunctions it performs for sales to itsunaffiliated U.S. customers, which areresellers, and either home market localmerchants or end-users. Iscor’s sales toU.S. customers appear to be at adifferent stage in the marketing processfrom either local merchants or end-usersin the home market. However, we areunable to determine if this difference inlevel of trade affects pricecomparability, as all of Iscor’s homemarket sales are at the same level oftrade. For these preliminary results, wehave treated all of Iscor’s home marketsales as being at a single level of tradeand we have made no level of tradeadjustment when matching its U.S. salesto these home market sales. We willlook at this issue more closely atverification and invite parties tocomment on it.

Highveld claimed sales were made inthe home market at two different levelsof trade—large-scale service centers/distributors and smaller service centers/distributors. Highveld claims that thedifference between these levels is thatadditional time is spent servicing thelarger service centers and that theyreceive preferential treatment. Highveldclaims that all of its U.S. sales weremade at one level of trade. That is,Highveld’s CEP sales, after making theapplicable adjustments, are at the samelevel of trade as its EP sales.

Based on our analysis of the sellingfunctions performed by Highveld, wefound that a single level of trade existsin each market. We found that withrespect to the home market, large-scaleservice centers/distributors and smallerservice centers/distributors are not atdifferent stages in the marketingprocess. Also, there do not appear to beany significant differences in sellingfunctions between these two groups ofcustomers, although Highveld mayprovide certain functions to large-scaleservice centers/distributors at a higherintensity.

We then compared selling functionsin the U.S. market and in the homemarket. There appear to be severaldifferences between the selling


functions performed for sales to U.S.and home market customers, notablywith respect to just-in-time delivery,advertising, market research andproduct development, which areprovided in the home market but not inthe United States. However, we areunsure as to whether U.S. and homemarket sales—both of which includesales to large resellers—are at differentstages in the marketing process. Nor isthere sufficient information on therecord to determine the significance ofthe noted differences in sellingfunctions. For these preliminary resultswe find, therefore, that sales in thehome market and in the U.S. market areat the same level of trade and that nolevel of trade adjustment is warranted.As there is no difference in level oftrade, Highveld does not qualify for aCEP offset. Therefore, we made noadjustment. We will look at this issuemore closely at verification and inviteparties to comment on it.

(iii) Currency ConversionFor purposes of the preliminary

determination, we made currencyconversions using the official dailyexchange rate in effect on the date of theU.S. sale. These exchange rates werederived from actual daily exchange ratescertified by the Federal Reserve Bank ofNew York. (See Change in PolicyRegarding Currency Conversions, 61 FR9434 (March 8, 1996.)) Section 773A(a)of the Act directs the Department to usea daily exchange rate in order to convertforeign currencies into U.S. dollars,unless the daily rate involves a‘‘fluctuation.’’ In accordance with theDepartment’s practice, we havedetermined that a fluctuation existswhen the daily exchange rate differsfrom a benchmark by 2.25 percent. (See,61 FR at 9435.) The benchmark isdefined as the rolling average of rates forthe past 40 business days. When wedetermine that a fluctuation exists, wesubstitute the benchmark for the dailyrate, in accordance with establishedpractice. Further, section 773A(b) of theAct directs the Department to allow a60-day adjustment period when acurrency has undergone a sustainedmovement. A sustained movement hasoccurred when the weekly average ofactual daily rates exceeds the weeklyaverage of benchmark rates by morethan five percent for eight consecutiveweeks. Such an adjustment period isrequired only when a foreign currencyis appreciating against the U.S. dollarand was not applicable in this case.

In this investigation, there werecertain days of the POI for which wesubstituted the benchmark for the dailyrate because the daily rate involved a

fluctuation. We saw no reason in thiscase to deviate from establishedpractice, since South Africa is not ahigh-inflation economy, and the declinein the rand was not so precipitous andlarge as to reasonably preclude theoccurrence of fluctuations.

Export PriceWe calculated the price of United

States sales based on EP, in accordancewith section 772(a) of the Act, when thesubject merchandise was sold tounaffiliated purchasers in the UnitedStates prior to the date of importation.In certain instances, however, wedetermined that CEP as defined insection 772(b) of the Act, was a moreappropriate basis for the price of theUnited States sales. These instancesinvolved sales made by Highveld to itsU.S. affiliate, Newco Steel Trading(NST), which negotiates prices andquantities with its U.S. customers, andsells the subject merchandise to the U.S.customers. Newco Steel Tradingcompany operates as Highveld’sexclusive distributor for sales of thesubject merchandise in the UnitedStates, and as such, undertakes sellingactivities exceeding those of processingsales-related documentation.Specifically, NST negotiates prices forparticular products with its customerson a case-by-case basis, pays Highveldfor the product order based on a priceagreement, and takes title to themerchandise which is physicallytransferred to U.S. customers bycommon carriers.

For both respondents, we calculatedEP based on packed prices tounaffiliated customers in the UnitedStates. Where appropriate, we madedeductions from the starting price forforeign inland freight, internationalfreight, foreign brokerage and handling,marine insurance, early paymentdiscounts, pre-sale warehousingexpenses, and U.S. Customs duties.

We calculated CEP based on packedprices to unaffiliated customers in theUnited States. Where appropriate, wemade deductions for the starting pricefor the foreign inland freight, foreignbrokerage and handling, internationalfreight, marine insurance, U.S. Customsduties, commissions, inventory carryingexpenses, credit expenses, and indirectselling expenses. Finally, we made anadjustment for the amount of profitallocated to these expenses, inaccordance with section 772(d)(3) of theAct.

Normal ValueBased on a comparison of the

aggregate quantity of home-market andU.S. sales, we determined that the

quantity of the foreign like product soldin the exporting country was sufficientto permit a proper comparison with thesales of the subject merchandise to theUnited States, pursuant to section 773(a)of the Act. Therefore, in accordancewith section 773(a)(1)(B)(i) of the Act,we based NV on the price which theforeign like product was first sold forconsumption in the home market, in theusual commercial quantities and in theordinary course of trade. We excludedfrom our analysis a limited number ofreported home market sales made byIscor to a member country of theSouthern African Customs Union,which we determined were not homemarket sales.

Where appropriate, we deductedrebates, discounts, credit, inland freight,pre-sale warehousing, and packing. Wealso made adjustments, whereappropriate, for home-market indirectselling expenses to offset U.S.commissions in EP and CEPcomparisons. In comparisons to EP andCEP sales, we increased NV by U.S.packing costs in accordance withsection 773(a)(6)(A) of the Act. We alsomade adjustments to NV for physicaldifferences in merchandise (‘‘diffmer’’).The Department notes that it has certainquestions regarding the diffmeradjustments calculated from Highveld’sreported data. In particular, significantlydifferent diffmer adjustments werecalculated for pairs of U.S. and homemarket product codes, which apparentlydiffered only by the same difference inspecification. We will look further atthis issue at verification and invitecomments from interested parties.

Verification

As provided in section 782(i) of theAct, we will verify the information usedin making our final determination.

Suspension of Liquidation

In accordance with section 733(d) ofthe Act, we are directing the CustomsService to suspend liquidation of allimports of subject merchandise, entered,or withdrawn from warehouse, forconsumption on or after the date ofpublication of this notice in the FederalRegister. We will instruct CustomsService to require a cash deposit or theposting of a bond equal to the weighted-average amount by which the NVexceeds EP or CEP, as indicated in thechart below. These suspension ofliquidation instructions will remain ineffect until further notice.




Weighted-average

margin per-centage

Highveld .................................... 15.77Iscor .......................................... 31.45All Other .................................... 23.77


the Act, we have notified the ITC of ourdetermination. If our finaldetermination is affirmative, the ITCwill determine before the later of 120days after the date of this preliminarydetermination or 45 days after our finaldetermination whether these importsare materially injuring, or threatenedwith material injury, by reason ofimports, or sales (or the likelihood ofsales) for importation, of the subjectmerchandise.

Public CommentIn accordance with 19 CFR 353.38,

case briefs in at least ten copies must besubmitted to the Assistant Secretary forImport Administration no later thanFriday, September 5, 1997, and rebuttalbriefs, no later than Friday, September12, 1997. A list of authorities used anda summary of arguments made in thebriefs should accompany these briefs.Such summary should be limited to fivepages total, including footnotes. We willhold a public hearing, if requested, toafford interested parties an opportunityto comment on arguments made in caseor rebuttal briefs. At this time, thehearing is scheduled for Friday,September 19, 1997, time and place tobe determined, at the U.S. Departmentof Commerce, 14th Street andConstitution Avenue, N.W.,Washington, DC 20230. Parties shouldconfirm by telephone the time, date, andplace of the hearing 48 hours before thescheduled time.

Interested parties who wish to requesta hearing, or to participate if one isrequested, must submit a writtenrequest to the Assistant Secretary forImport Administration, U.S. Departmentof Commerce, Room 1870, within tendays of the publication of this notice.Requests should contain: (1) The party’sname, address, and telephone number;(2) the number of participants; and (3)a list of the issues to be discussed. Inaccordance with 19 CFR 353.38(b) oralpresentations will be limited to issuesraised in the briefs. If this investigationproceeds normally, we will make ourfinal determination by no later than 135days after the publication of this noticein the Federal Register.

This determination is publishedpursuant to section 733(f) of the Act.




[A–821–808]

Preliminary Determination of Sales atLess Than Fair Value; Certain Cut-to-Length Carbon Steel Plate From theRussian Federation

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of preliminarydetermination of sales at less than fairvalue.

EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT:Nithya Nagarajan, Eugenia Chu, or YuryBeyzarov, Import Administration,International Trade Administration,U.S. Department of Commerce, 14thStreet and Constitution Avenue, N.W.,Washington, D.C. 20230; telephone:(202) 482–0193, (202) 482–3964, or(202) 482–2243, respectively.


Unless otherwise indicated, allcitations to the statute are references tothe provisions effective January 1, 1995,the effective date of the amendmentsmade to the Tariff Act of 1930 (the Act)by the Uruguay Rounds Agreements Act(URAA). In addition, unless otherwiseindicated, all citations to theDepartment’s regulations are to thecurrent regulations, as codified at 19CFR part 353 (April 1, 1996).


We determine preliminarily thatcertain cut-to-length carbon steel platefrom the Russian Federation is being, oris likely to be, sold in the United Statesat less than fair value (LTFV), asprovided in section 733 of the Act. Theestimated margins are shown in the‘‘Suspension of Liquidation’’ section ofthis notice.

Case History


On December 19, 1996, the UnitedStates International Trade Commission(ITC) issued an affirmative preliminarydetermination in this case (see ITC

Investigations Nos. 731–TA–753–756).The ITC found that there is a reasonableindication that an industry in theUnited States is threatened withmaterial injury by reason of importsfrom the Russian Federation of certaincut-to-length carbon steel plate.

The Department issued itsantidumping questionnaires to theRussian Embassy on December 20, 1996,and requested the Embassy to forwardthe documents to all Russian producers/exporters of certain cut-to-length carbonsteel plate, as well as to manufacturerswho produced the subject merchandisefor companies who were engaged inexporting subject merchandise to theUnited States during the period ofinvestigation. We requested theEmbassy to inform these companies thatthey must respond by the due dates. Wealso sent courtesy copies to thecompanies whose names and completeaddresses had been identified in thepetition.

On January 8, 1997, the Departmentconducted a questionnaire presentationin the Russian Federation. Attending thepresentation were officials from theRussian Ministry of Foreign EconomicRelations and potential producers/exporters of certain cut-to-length carbonsteel plate.

On January 10, 1997, Geneva SteelCompany and Gulf States SteelCompany (petitioners), alleged thatcritical circumstances exist with respectto imports of certain cut-to-lengthcarbon steel plate from the RussianFederation. This issue is addressed inthe ‘‘Preliminary Determination ofCritical Circumstances’’ section of thisnotice.

On February 6, 1997, the Departmentprovided interested parties with theopportunity to submit published,publicly available information for theDepartment to consider when valuingthe factors of production and forsurrogate country selection. We receivedcomments from interested parties at theend of February 1997.

In January and February 1997, oneRussian company, JSC Severstal(Severstal), submitted responses tosections A, C, and D of thequestionnaire. Severstal is a Russianexporter of subject merchandise. Weissued supplemental questionnaires tothis respondent company on March 7,1997 and received completed responseson April 4, and 11, 1997.

Severstal reported that it sold subjectmerchandise through unrelated tradingcompanies at the port of export inRussia or the Baltic states. In light ofthis fact, the Department concluded thatclarification was required as to whetherthese resellers sold additional subject


merchandise (unreported by therespondents) to the United States.Therefore, in March 1997, we alsoissued trading company questionnairesto Severstal’s resellers. However, wereceived no responses.

Also in March, in response to theRussian government’s comments onRussia’s nonmarket economy (NME)status, the Department issued theRussian government a questionnaire toclarify whether the Russian Federation’sNME status should be revoked.However, on March 28, 1997, theRussian Federation informed theDepartment that it will not be seekingmarket-economy status in thisproceeding. This issue is addressed inthe ‘‘Nonmarket Economy CountryStatus’’ section of this notice.

Except for Severstal, none of the othercompanies served with a questionnaireresponded to the Department’s originalquestionnaire.





investigation are hot-rolled iron andnon-alloy steel universal mill plates

(i.e., flat-rolled products rolled on fourfaces or in a closed box pass, of a widthexceeding 150 mm but not exceeding1250 mm and of a thickness of not lessthan 4 mm, not in coils and withoutpatterns in relief), of rectangular shape,neither clad, plated nor coated withmetal, whether or not painted,varnished, or coated with plastics orother nonmetallic substances; andcertain iron and non-alloy steel flat-rolled products not in coils, ofrectangular shape, hot-rolled, neitherclad, plated, nor coated with metal,whether or not painted, varnished, orcoated with plastics or othernonmetallic substances, 4.75 mm ormore in thickness and of a width whichexceeds 150 mm and measures at leasttwice the thickness. Included as subjectmerchandise in this petition are flat-rolled products of nonrectangular cross-section where such cross-section isachieved subsequent to the rollingprocess (i.e., products which have been‘‘worked after rolling’’)—for example,products which have been bevelled orrounded at the edges. This merchandiseis currently classified in theHarmonized Tariff Schedule of theUnited States (HTS) under itemnumbers 7208.40.3030, 7208.40.3060,7208.51.0030, 7208.51.0045,7208.51.0060, 7208.52.0000,7208.53.0000, 7208.90.0000,7210.70.3000, 7210.90.9000,7211.13.0000, 7211.14.0030,7211.14.0045, 7211.90.0000,7212.40.1000, 7212.40.5000,7212.50.0000. Although the HTSsubheadings are provided forconvenience and customs purposes, ourwritten description of the scope of thisinvestigation is dispositive.


April 1, 1996, through September 30,1996.

Nonmarket Economy Country StatusThe Department has treated the

Russian Federation as a nonmarketeconomy country (NME) in all pastantidumping investigations andadministrative reviews (see, e.g.,Titanium Sponge from the RussianFederation: Preliminary Results ofAntidumping Administrative Review,62 FR 25920 (May 12, 1997); Notice ofFinal Determination of Sale at LessThan Fair Value: Pure Magnesium andAlloy Magnesium from the RussianFederation, 60 FR 16440 (March 30,1995); Notice of PreliminaryDetermination of Sales at Less Than FairValue and Postponement of the FinalDetermination: Ferrovanadium andNitridid Vanadium from the Russian

Federation, 60 FR 438 (January 4,1995)). A designation as an NMEremains in effect until it is revoked bythe Department (see section 771(18)(C)of the Act). Therefore, for thispreliminary determination, theDepartment will continue to treat theRussian Federation as an NME.

On January 9, 1997 the RussianFederation submitted a filing, on therecord, requesting market economystatus. The filing consisted of a letterand several Russian laws. On March 25,1997, the Department drafted aquestionnaire addressed to theDepartment of the Ministry for ForeignEconomic Relations of the RussianFederation requesting additionalinformation for Market Economy Status.On April 22, 1997, the Departmentcontacted the Russian embassy viatelephone regarding the Department’squestionnaire on market economystatus. The Embassy conveyed toDepartment personnel that the RussianFederation will not be seeking marketeconomy status in this proceeding.Thus, the Department will continue totreat the Russian Federation as an NME.

Surrogate CountryWhen the Department is investigating

imports from an NME, section 773(c) ofthe Act directs the Department in mostcircumstances to base normal value(NV) on the NME producer’s factors ofproduction, valued in a surrogatemarket-economy country or countriesconsidered appropriate by theDepartment. In accordance with section773(c)(4), the Department, in valuing thefactors of production, shall utilize, tothe extent possible, the prices or costsof factors of production in one or moremarket-economy countries that arecomparable in terms of economicdevelopment to the NME country andare significant producers of comparablemerchandise. The sources of individualfactor prices are discussed under the NVsection below.

The Department has determined thatTunisia, Peru, Poland, Venezuela,Brazil, South Africa, and Turkey arecountries comparable to the RussianFederation in terms of overall economicdevelopment. See Policy Memorandum,dated January 29, 1997.

According to the availableinformation on the record, we havedetermined that Brazil is an appropriatesurrogate because it is at a comparablelevel of economic development and is asignificant producer of comparablemerchandise. Furthermore, there is awide array of publicly availableinformation for Brazil. Accordingly, wehave calculated NV using Brazilianprices to value the Russian producers’


factors of production, when availableand where appropriate. We haveobtained and relied upon publicinformation wherever possible.

Separate Rates

The Department presumes that asingle dumping margin is appropriatefor all exporters in a non marketeconomy country. See FinalDetermination of Sales at Less Than FairValue: Silicon Carbide from the People’sRepublic of China, 59 FR 22585 (May 2,1994) (Silicon Carbide). The Departmentmay, however, consider requests for aseparate rate from individual exporters.Severstal has requested a separate,company-specific rate. The claimedownership structure of Severstal duringthe POI is that of a publicly owned jointstock company, where the state owns20% of the shares.

To establish whether a firm issufficiently independent fromgovernment control to be entitled to aseparate rate, the Department analyzeseach exporting entity under a testarising out of the Final Determination ofSales at Less Than Fair Value: Sparklersfrom the People’s Republic of China, 56FR 20588 (May 6, 1991) (Sparklers) andamplified in Silicon Carbide. Under theseparate rates criteria, the Departmentassigns separate rates in nonmarketeconomy cases only if a respondent candemonstrate the absence of both de jureand de facto governmental control overexport activities. For a completeanalysis of separate rates, see SeparateRates Memorandum, dated June 3, 1997.

1. Absence of De Jure Control

An individual company may beconsidered for separates rates if it meetsthe following de jure criteria: (1) Anabsence of restrictive stipulationsassociated with an individual exporter’sbusiness and export licenses; (2) anylegislative enactments decentralizingcontrol of companies; and (3) any otherformal measures by the governmentdecentralizing control of companies.The respondents have placed on theadministrative record a number ofdocuments to demonstrate absence of dejure control. These documents includelaws, regulations, and provisionsenacted by the central government ofthe Russian Federation, describing thederegulation of Russian enterprise aswell as the deregulation of the Russianexport trade, except for a list of productsthat may be subject to centralgovernment export constraints.Respondents claim that the subjectmerchandise is not on this list. Thisinformation supports a preliminaryfinding that there is an absence of de

jure government control. See SeparateRates Memorandum, dated June 3, 1997.

2. Absence of De Facto ControlThe Department typically considers

four factors in evaluating whether eachrespondent is subject to de factogovernmental control of its exportfunctions: (1) Whether the export prices(‘‘EP’’) are set by or subject to theapproval of a governmental authority;(2) whether the respondent hasauthority to negotiate and sign contractsand other agreements; (3) whether therespondent has autonomy from thegovernment in making decisionsregarding the selection of management;and (4) whether the respondent retainsthe proceeds of its export sales andmakes independent decisions regardingdisposition of profits or financing oflosses.

Severstal has asserted the following:(1) It establishes its own EPs; (2) itnegotiates contracts, without guidancefrom any governmental entities ororganizations; (3) it selects its ownmanagement; and (4) it retains theproceeds of its export sales, uses profitsaccording to its business needs, and hasthe authority to sell its assets and toobtain loans. In addition, Severstal’squestionnaire responses indicate thatcompany-specific pricing during thePOI does not suggest coordinationamong exporters. This informationsupports a preliminary finding thatthere is an absence of de factogovernmental control of the exportfunctions of these companies.

Consequently, we determinepreliminarily that Severstal meets thecriteria for application of separate rates.See Separate Rates Memorandum, datedJune 3, 1997.

The Russia-Wide RateU.S. import statistics indicate that the

total quantity and value of U.S. importsof certain cut-to-length carbon steelplate from the Russian Federation isgreater than the total quantity and valueof steel plate reported by all Russiancompanies that submitted responses.Given this discrepancy, we concludethat not all exporters of Russian cut-to-length carbon steel plate responded toour questionnaire. Accordingly, we areapplying a single antidumping depositrate—the Russia-wide rate—to allexporters in the Russian Federation(other than Severstal), based on ourpresumption that those respondentswho failed to respond constitute a singleenterprise and are under commoncontrol by the Russian Federationgovernment. See, e.g., FinalDetermination of Sales at Less Than FairValue: Bicycles from the People’s

Republic of China, 61 FR 19026 (April30, 1996).

This Russia-wide antidumping rate isbased on adverse facts available. Section776(a)(2) of the Act provides that ‘‘if aninterested party or any other person (A)withholds information that has beenrequested by the administeringauthority; (B) fails to provide suchinformation by the deadlines for thesubmission of the information or in theform and manner requested, subject tosubsections (c)(1) and (e) of section 782;(C) significantly impedes a proceedingunder this title; or (D) provides suchinformation but the information cannotbe verified as provided in section 782(i),the administering authority * * * shall,subject to section 782(d), use the factsotherwise available in reaching theapplicable determination under thistitle.’’

In addition, section 776(b) of the Actprovides that, if the Department findsthat an interested party ‘‘has failed tocooperate by not acting to the best of itsability to comply with a request forinformation,’’ the Department may useinformation that is adverse to theinterests of that party as the factsotherwise available. The statute alsoprovides that such an adverse inferencemay be based on secondary information,including the information drawn fromthe petition.

As discussed above, all Russianexporters that do not qualify for aseparate rate are treated as a singleenterprise. Because some exporters ofthe single enterprise failed to respond tothe Department’s requests forinformation, that single enterprise isconsidered to be uncooperative. In suchsituations, the Department generallyselects as total facts available either thehigher of the average of the margin fromthe petition or the highest ratecalculated for a respondent in theproceeding. In the present case, theaverage margin in the petition is higherthan the one calculated rate.Accordingly, the Department has basedthe Russia-wide rate on information inthe petition. In this case, the averagepetition rate is 185.00 percent.

Section 776(c) of the Act provides thatwhere the Department relies on‘‘secondary information,’’ theDepartment shall, to the extentpracticable, corroborate that informationfrom independent sources reasonable atthe Department’s disposal. TheStatement of Administrative Action(SAA), accompanying the URAAclarifies that the petition is ‘‘secondaryinformation’’ and that ‘‘corroborate’’means to determine that the informationused has probative value. See SAA at870.


In accordance with section 776(c) ofthe Act, we corroborated the margins inthe petition to the extent practicable.The information contained in thepetition shows that petitionerscalculated export price based on twomethods: (1) The import values declaredto the U.S. Customs Service; and (2) anaverage export price derived from actualU.S. selling prices known to petitioners.We compared the starting prices used bypetitioners less the importer mark-upsagainst prices derived from U.S. importstatistics and found that the two sets ofprices were consistent. We alsocompared the movement charges usedin the petition with the surrogate valuesused by the Department in its margincalculations and found them to beconsistent.

The information in the petition withrespect to the normal value (NV) isbased on factors of production used bythe petitioners in the production of steelplate. Petitioners submitted usageamounts for materials, labor and energy,adjusted for known differences inproduction efficiencies. Petitionerssubmitted three cost models in thepetition: 1) Basic Oxygen Furnace (BOF)Cost Model; 2) Open-Hearth FurnaceCost Model; and 3) Weighted AverageNormal Value of the BOF and Open-Hearth methods to account fordifferences between the productionprocesses of petitioners and potentialrespondents.

The margins in the petition rangedfrom 139.97 to 230.38 percent obtainedby comparing the normal values to theexport price developed from customsvalues and to export prices developedfrom actual U.S. price quotes. For eachmethod, petitioners submitted estimateddumping margins for the BOF method,the open-hearth method and a weightedaverage of the two. For more detail, seeCorroboration Memorandum, dated June3, 1997.

Fair Value ComparisonsTo determine whether certain cut-to-

length carbon steel plate from theRussian Federation sold to the UnitedStates by the Russian exportersreceiving separate rates were made atless than fair value, we compared the EPto the NV, as specified in the ‘‘ExportPrice’’ and ‘‘Normal Value’’ sections ofthis notice.

Export PriceFor Severstal, we calculated EP in

accordance with section 772(a) of theAct, because the subject merchandisewas sold directly to the first unaffiliatedpurchaser in the United States prior toimportation and constructed exportprice (CEP) methodology was not

otherwise indicated. In accordance withsection 777A(d)(1)(A)(i) of the Act, wecompared POI-wide weighted-averageEPs to the factors of production.

We made adjustments as follows: Wecalculated EP based on packed, FOBprices to the port of loading on theRussian territory. We made deductionsfrom the starting price, whereappropriate, for brokerage and handling.However, because these services wereprovided by the Russian port, theseservices were assigned a surrogate valueas available from Brazilian publiclyavailable published data.

Normal Value

In accordance with section 773(c) ofthe Act, we calculated NV based onfactors of production reported by thefactory in the Russian Federation whichproduced the cut-to-length carbon steelplate sold by Severstal. We valued allthe input factors using publiclyavailable published information asdiscussed in the Surrogate Countrysection of this notice.

Factor Valuations

The selection of the surrogate valueswas based on the quality andcontemporaneity of the data. Wherepossible, we attempted to value materialinputs on the basis of tax-exclusivedomestic prices in the surrogatecountry. Where we were not able to relyon domestic prices, we used importprices to value factors. As appropriate,we adjusted input prices to make themdelivered prices. For those values notcontemporaneous with the POI, weadjusted for inflation using wholesaleprice indices or, in the case of laborrates, consumer price indices, publishedin the International Monetary Fund’sInternational Financial Statistics. For acomplete analysis of surrogate values,see Factors Memorandum.

To value coal, coke, iron, lime, ferroalloys, packing materials (locks), andscrap, we used public information fromthe latest data published by the UnitedNations for 1996 (Commodity TradeStatistics 1994, 3 Brazil Rev. 1995, at19). For limestone, we used informationfrom Commodity Trade Statistics 1993,Brazil Rev. 3, United Nations, 1994. Forpacking (bands), we used informationreported in data from the 1992 UNImport Statistics; Taken from theDepartment of Commerce NME FactorsIndex, case A–821–805.

For natural gas, we relied on publicinformation reported in the DiarioOficial No. 180, September 27, 1995. Forelectricity, we relied upon publicinformation from the September 27,1995 Official Publication of the

Brazilian Government to obtain anaverage price for electricity.

To value rail transport for coal and foriron ore, we used public informationreported in the July 1996 Cargo andTransport Magazine (ConfederacoNacional de Transporte Brazil). Theexchange rate used was .9970 US$/R$.The source for the exchange rate for railtransport was obtained from the IMF’sInternational Financial Statistics,January 1997, for the average during thePOI.

To value skilled labor, we used theCounty Reports on Human RightsPractices for 1996, from the U.S.Department of State. For unskilledlabor, we relied on data obtained froma U.S. Department of Commerce cabledated October 1994. To value overhead,SG&A, and profit, we used publicinformation reported in the 1996/1997Brazil company handbook. These arethe average percentages for variousBrazilian iron and steel companies. Tovalue brokerage, we relied on publicinformation from Case No. A–351–817,Plate from Brazil, Usiminas, Section CResponse at Exh.6, dated November 21,1996.

Severstal reported the amount of slag,a by-product of the plate productionprocess, produced in the production ofthe subject merchandise. Normally, theDepartment offsets the calculated cost ofmanufacturing by the value of any by-products. The only surrogate value forslag from Brazil was aberrationally highwhen compared to an available U.S.rate. Based on our knowledge of thesteelmaking process, we know that slagis a by-product with a relatively lowvalue (compared to the price of steelplate). We were able to locate anappropriate value for slag from the U.S.Geological Survey, MineralCommodities Summaries from February1997. We used the U.S. slag value forthe preliminary determination. We willcontinue to try to locate an appropriatesurrogate value from Brazil, or anothercountry at a comparable level ofdevelopment for our finaldetermination.

Preliminary Determination of CriticalCircumstances

On January 10, 1997, the petitionersalleged that there is a reasonable basisto believe or suspect that criticalcircumstances exist with respect toimports of certain cut-to-length carbonsteel plate. In accordance with 19 CFR353.16(b)(2)(i) (1996), since theseallegations were filed earlier than thedeadline for the Department’spreliminary determination, we mustissue our preliminary critical


circumstances determinations not laterthan the preliminary determination.

Section 733(e)(1) of the Act providesthat if a petitioner alleges criticalcircumstances, the Department willdetermine whether there is a reasonablebasis to believe or suspect that: (A)(i)There is a history of dumping andmaterial injury by reason of dumpedimports in the United States orelsewhere of the subject merchandise, or(ii) the person by whom, or for whoseaccount, the merchandise was importedknew or should have known that theexporter was selling the subjectmerchandise at less than its fair valueand that there was likely to be materialinjury by reason of such sales, and (B)there have been massive imports of thesubject merchandise over a relativelyshort period.

The statute and the Statement ofAdministrative Action whichaccompanies the Uruguay RoundAgreements Act (SAA) are silent as tohow we are to make a finding that therewas knowledge that there was likely tobe material injury. Therefore, Congresshas left the method of implementingthis provision to the Department’sdiscretion.

In determining whether there is areasonable basis to believe or suspectthat an importer knew or should haveknown that the exporter was selling theplate at less than fair value, theDepartment normally considers marginsof 15 percent or more sufficient toimpute knowledge of dumping forconstructed export price (CEP) sales,and margins of 25 percent or more forexport price (EP) sales. See, e.g.,Preliminary Critical CircumstancesDetermination: Honey from the People’sRepublic of China (PRC), 60 FR 29824(June 6, 1995) (Honey). Since thecompany specific margins for EP salesin our preliminary determination forcarbon steel plate are greater than 25percent for Severstal, we have imputedknowledge of dumping.

In determining whether there is areasonable basis to believe or suspectthat an importer knew or should haveknown that there was likely to bematerial injury by reason of dumpedimports, the Department normally willlook to the preliminary injurydetermination of the ITC. If the ITCfinds a reasonable indication of presentmaterial injury to the relevant U.S.industry, the Department will determinethat a reasonable basis exists to imputeimporter knowledge that there waslikely to be material injury by reason ofdumped imports during the criticalcircumstances period—the 90-dayperiod beginning with the initiation ofthe investigation (see 19 CFR 353.16(g)).

If, as in this case, the ITC preliminarilyfinds threat of material injury (See Cut-to-Length Carbon Steel Plate fromChina, Russia, South Africa, andUkraine, U.S. International TradeCommission, December 1996), theDepartment will also consider the extentof the increase in the volume of importsof the subject merchandise during thecritical circumstances period and themagnitude of the margins indetermining whether a reasonable basisexists to impute knowledge thatmaterial injury was likely.

In this case, imports of Russian plateincreased 145 percent in the threemonths following the initiation of theinvestigation when compared to thethree months immediately precedinginitiation, or almost ten times the levelof increase needed to find ‘‘massiveimports’’ during the same period (seebelow). Furthermore, we havepreliminarily found margins of 61.23percent for Severstal.

Based on the ITC’s preliminarydetermination of threat of injury, theincrease in imports noted above, and thehigh preliminary margins, theDepartment determines that there is areasonable basis to believe or suspectthat the importer knew or should haveknown that there was likely to bematerial injury by means of sales of thesubject merchandise at less than fairvalue.

To determine whether imports weremassive over a relatively short timeperiod, the Department typicallycompares the import volume of thesubject merchandise for the threemonths immediately preceding andfollowing the initiation of theproceeding. See 19 CFR 353.16(g).Pursuant to 19 CFR 353.16(f)(2), theDepartment will consider an increase of15 percent or more in the imports of thesubject merchandise over the relevantperiod to be massive. As noted, importsof the subject merchandise increased145 percent during the relevant period,and thus we determine that importshave been massive.

Thus, because we determine thatthere is a reasonable basis to believe orsuspect that the importer knew orshould have known that Russianexporters were selling the subjectmerchandise at less than its fair valueand that there was likely to be materialinjury by reason of such sales, and thatthere have been massive imports of thesubject merchandise over a relativelyshort time period, we preliminarilydetermine that critical circumstancesexist for Severstal.

For companies subject to the Russia-wide rate (i.e., companies which did notrespond to the Department’s

questionnaire), we are imputingknowledge based on the Russia-widerate, and determine, based on factsavailable, that there were massiveimports of certain cut-to-length carbonsteel plate by companies that did notrespond to the Department’squestionnaire. Therefore, wepreliminarily determine that criticalcircumstances exist with regard to thesecompanies.

We find that critical circumstancesexist for cut-to-length carbon steel platesales by all Russian exporters.

VerificationAs provided in section 782(i) of the

Act, we will verify the information usedin making our final determination.

Suspension of LiquidationIn accordance with section 733(d) of

the Act, we are directing the CustomsService to suspend liquidation of allimports of subject from Ukraine, that areentered, or withdrawn from warehouse,for consumption on or after the dateninety days prior to the date ofpublication of this notice in the FederalRegister. We will instruct CustomsService to require a cash deposit or theposting of a bond equal to the weighted-average amount by which the normalvalue exceeds the EP, as indicatedbelow. These suspension of liquidationinstructions will remain in effect untilfurther notice.



Weighted-average

margin per-centage

Severstal ................................... 61.23The Russia-Wide Rate ............. 185.00

The Russia-Wide RateA Russia-wide rate has been assigned

to certain cut-to-length carbon steelplate based on the average margincontained in the petition, as amendedby the Department. The Russia-widerate applies to all entries of subjectmerchandise except for entries fromexporters/factories that are identifiedindividually above.


the Act, we have notified the ITC of ourdetermination. If our finaldetermination is affirmative, the ITCwill determine before the later of 120days after the date of this preliminarydetermination or 45 days after our finaldetermination whether the domesticindustry in the United States ismaterially injured, or threatened with


material injury, by reasons of imports,or sales (or the likelihood of sales) forimportation, of the subject merchandise.

Public Comment

In accordance with 19 CFR 353.38(1996), case briefs or other writtencomments in at least ten copies must besubmitted to the Assistant Secretary forImport Administration no later than 50days after the publication of thispreliminary determination, and rebuttalbriefs, no later than 5 days after thefiling of case briefs. A list of authoritiesused and a summary of arguments madein the briefs should accompany thesebriefs. Such summary should be limitedto five pages total, including footnotes.We will hold a public hearing, ifrequested, to afford interested parties anopportunity to comment on argumentsraised in case or rebuttal briefs. Thehearing will be held at the U.S.Department of Commerce, 14th Streetand Constitution Avenue, NW.,Washington, DC 20230, time, date, androom to be determined. Parties shouldconfirm by telephone the time, date, andplace of the hearing 48 hours before thescheduled time.

Interested parties who wish to requesta hearing, or to participate if one isrequested, must submit a writtenrequest to the Assistant Secretary forImport Administration, U.S. Departmentof Commerce, Room 1870, within tendays of the publication of this notice.Requests should contain: (1) The party’sname, address, and telephone number;(2) the number of participants; and (3)a list of the issues to be discussed. Inaccordance with 19 CFR 353.38(b)(1996), oral presentations will belimited to issues raised in the briefs. Ifthis investigation proceeds normally, wewill make our final determination byAugust 18, 1997.

This determination is publishedpursuant to section 777(i) of the Act.


Robert S. LaRussa,Acting Assistant Secretary for ImportAdministration.[FR Doc. 97–15293 Filed 6–10–97; 8:45 am]

BILLING CODE 3510–DS–P



[A–570–849]

Preliminary Determination of Sales atLess Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From ThePeople’s Republic of China

AGENCY: Import Administration,International Trade Administration,Department of Commerce.ACTION: Notice of preliminarydetermination of sales at less than fairvalue.

EFFECTIVE DATE: June 11, 1997.FOR FURTHER INFORMATION CONTACT:Elizabeth Patience, Stephen Jacques, orJean Kemp, Import Administration,International Trade Administration,U.S. Department of Commerce, 14thStreet and Constitution Avenue NW.,Washington, DC 20230; telephone: (202)482–3793.


Unless otherwise indicated, allcitations to the statute are references tothe provisions effective January 1, 1995,the effective date of the amendmentsmade to the Tariff Act of 1930 (the Act)by the Uruguay Rounds Agreements Act(URAA). In addition, unless otherwiseindicated, all citations to theDepartment’s regulations are to thecurrent regulations, codified at 19 CFRpart 353 (April 1, 1996).


We determine preliminarily thatcertain cut-to-length carbon steel platefrom the People’s Republic of China(‘‘PRC’’) is being, or is likely to be, soldin the United States at less than fairvalue (‘‘LTFV’’), as provided in section733 of the Act. The estimated marginsare shown in the ‘‘Suspension ofLiquidation’’ section of this notice.

Case History


On November 27, 1997, we sent asurvey to the Chinese Ministry ofForeign Trade and EconomicCooperation (‘‘MOFTEC’’) and the ChinaChamber of Commerce of Metals,Minerals & Chemicals Importers &Exporters (‘‘CCCMC’’) to determine theidentity of producers and exporters ofsubject merchandise, but we received noresponse.

On December 19, 1996, the UnitedStates International Trade Commission(‘‘ITC’’) issued an affirmative

preliminary injury determination in thiscase (see ITC Investigations Nos.731TA–753–756). The ITC found thatthere is a reasonable indication that anindustry in the United States isthreatened with material injury byreason of imports from the PRC of steelplate. We issued an antidumpingquestionnaire to the Chinese Ministry ofForeign Trade and EconomicCooperation (‘‘MOFTEC’’) with a list of20 possible producers of subjectmerchandise and requested MOFTEC toforward it to all producers/exporters ofsubject merchandise on December 20,1996. We also sent courtesy copies tothe 20 producers on that date. Theseproducers were identified in Iron andSteel Works of the World, 11th edition,1994.

The questionnaire is divided into foursections. Section A requests generalinformation concerning a company’scorporate structure and businesspractices, the merchandise underinvestigation that it sells, and the salesof the merchandise in all of its markets.Sections B and C request home marketsales listings and U.S. sales listings,respectively. (Section B does notnormally apply in antidumpingproceedings involving the PRC). SectionD requests information on the factors ofproduction of the subject merchandise.

On January 10, 1997, Geneva SteelCompany and Gulf States SteelCompany, (petitioners) amended theirpetition to allege that criticalcircumstances existed with respect tosubject merchandise.

On January 24, 1997 the followingsubmitted their section A response:China Metallurgical Import & ExportLiaoning Company (Liaoning), anexporter of subject merchandise;Wuyang Iron and Steel Company(Wuyang), which produced themerchandise sold by Liaoning; AnshanIron and Steel Complex (AISCO), aproducer of subject merchandise;Angang International Trade Corporation(Anshan International), a wholly-ownedAISCO subsidiary in China with its ownbusiness license to import and exportmerchandise, and Sincerely Asia,Limited (SAL) a partially-owned HongKong affiliate of AISCO involved insales of subject merchandise to theUnited States, (collectively, Anshan);Baoshan Iron & Steel Corporation (Bao),a producer of subject merchandise; BaoSteel International Trade Corporation(Bao Steel ITC), a wholly-ownedsubsidiary of Bao responsible for sellingBao material domestically and abroad;and Bao Steel Metals TradingCorporation (B. M. International), apartially-owned U.S. subsidiaryinvolved in U.S. sales, (collectively


Baoshan); Wuhan Iron & Steel Company(Wuhan) a producer of subjectmerchandise; International Economicand Trading Corporation (IETC), awholly-owned subsidiary responsiblefor exporting WISCO merchandise;Cheerwu Trader Ltd. (Cheerwu) apartially-owned Hong Kong affiliate ofWuhan involved in sales of subjectmerchandise to the United States(collectively, WISCO); Shanghai PudongIron and Steel Company (ShanghaiPudong) a producer and exporter ofsubject merchandise. See the Collapsingsection of this memorandum, below. Weconsider Anshan, Baoshan, Liaoning,WISCO and Shanghai Pudong to besellers of the subject merchandiseduring the POI.

In a letter entering notice of itsappearance, Liaoning stated that itpurchased and sold subject merchandisefrom an unaffiliated producer, WuyangIron and Steel Company (‘‘Wuyang’’).We therefore requested that Wuyangalso respond to the Department’squestionnaires. Wuyang complied withthe Department’s request.

On February 12 and February 14,1997, the five exporters submitted theirsection C responses. On February 19and February 20, 1997, Anshan,Baoshan, Wuyang, Shanghai Pudong,and WISCO producer/supplier factoriessubmitted section D questionnaireresponses.

On March 11, 1997, we issued asupplemental questionnaire to Liaoningand Wuyang. On March 12, 1997 weissued supplemental questionnaires toAnshan, Shanghai Pudong, and WISCO.On March 13, 1997, we issued asupplemental questionnaire to Baoshan.

We received a supplementalquestionnaire response from Liaoningand Wuyang on April 9, 1997. Wereceived supplemental questionnaireresponses from Anshan, Baoshan ,Shanghai Pudong and WISCO on April14, 1997. Anshan provided correctionsto minor errors in its responses on April21, 1997, Baoshan submitted correctionson April 24, 1997 and Shanghai Pudongsubmitted corrections in their April 29,1997 submission.

On May 2, 1997, we issuedsupplemental questionnaires requestingadditional information regarding eachrespondent’s labor consumption factors.Additionally, we requested informationabout Shanghai Pudong’s affiliationwith Shanghai No. 1 a non-exportingproducer of subject merchandise whichShanghai Pudong had earlier indicatedshared a common trustee, ShanghaiMetallurgical Holding (Group) Co.(‘‘Shanghai Metallurgical’’). Wuyangsubmitted its response on May 9, 1997.The other respondents submitted their

labor information on May 16, 1997. Attheir request, we granted ShanghaiPudong an extension, until May 23,1997, to submit affiliation information.

On January 30, 1997, we requestedpublicly-available information forvaluing the factors of production and forsurrogate country selection. Petitionershad already provided comments onsurrogate values to be used in thisinvestigation in their petition ofNovember 5, 1996. Respondentsprovided their comments on this matteron March 4, 1997. Petitioners providedfurther surrogate values and rebuttal torespondent’s comments on April 10,1997. On April 11, 1997, respondentsobjected this filing. Respondent statedthat petitioners sought to insert newinformation on the record in anuntimely fashion. We grantedrespondents an opportunity to submitcomments on petitioners’ April 10, 1997filing. We received no response.

On March 28, 1997, we postponed thepreliminary determination until notlater than May 14, 1997 (62 FR 14887),because we determined thisinvestigation to be extraordinarilycomplicated within the meaning ofsection 733(c)(1)(B)(i) of the Act.



On April 30, 1997 (62 FR 23433) wefurther postponed the preliminary

determination until not later than June3, 1997.




April 1, 1996, through September 30,1996.

Non-Market-Economy Country StatusThe Department has treated the PRC

as a nonmarket-economy country (NME)in all past antidumping investigationsand administrative reviews. See, e.g.,Final Determination of Sales at LessThan Fair Value: Silicon Carbide fromthe People’s Republic of China, 59 FR22585 (May 2, 1994) (Silicon Carbide);and Final Determination of Sales at LessThan Fair Value: Furfuryl Alcohol fromthe People’s Republic of China, 60 FR


22545 (May 8, 1995) (Furfuryl Alcohol).Neither respondents nor petitionershave challenged such treatment.Therefore, in accordance with section771(18)(C) of the Act, we will continueto treat the PRC as an NME in thisinvestigation.

Surrogate CountryWhen investigating imports from an

NME, section 773(c)(1) of the Act directsthe Department in most circumstancesto base normal value (NV) on the NMEproducers’ factors of production, valuedin a surrogate market-economy countryor countries considered to beappropriate by the Department. Inaccordance with section 773(c)(4), theDepartment, in valuing the factors ofproduction, shall utilize, to the extentpossible, the prices or costs of factors ofproduction in one or more market-economy countries that are comparablein terms of economic development tothe NME country and are significantproducers of comparable merchandise.The sources of the surrogate factorvalues are discussed under the NVsection below.

The Department has determined thatIndia, Pakistan, Sri Lanka, Egypt andIndonesia are countries comparable tothe PRC in terms of economicdevelopment. See Memorandum fromDavid Mueller to Edward Yang, datedJanuary 29, 1997.

Customarily, we select an appropriatesurrogate based on the availability andreliability of data from these countries.For PRC cases, the primary surrogatehas usually been India if it is asignificant producer of comparablemerchandise. However, the Departmenthas determined that Indonesia also is asignificant producer of comparablemerchandise.

We used India as the primarysurrogate country and accordingly, wehave calculated NV using Indian pricesto value the PRC producers’ factors ofproduction, when available andappropriate. We have obtained andrelied upon publicly-availableinformation wherever possible. WhereIndian surrogate values were notavailable or where we considered thesevalues to be aberrational, we have usedIndonesian import prices as surrogatevalues. For one factor, slag, we wereunable to locate an appropriatesurrogate value from any of thecomparable countries identified above.Therefore, we selected a U.S. slag valueas the most appropriate surrogate. SeeConcurrence Memoranda.

Non-Responsive ExportersConsistent with Department practice,

we presumed that those respondents

who failed to respond constitute a singleenterprise, and are under commoncontrol by the PRC government. SeeFinal Determination of Sales at LessThan Fair Value: Bicycles from thePeople’s Republic of China, 61 FR 19026(April 30, 1996) (Bicycles). We applieda single antidumping deposit rate—theChina-wide rate—to these exporters andall other exporters in the PRC who didnot respond to our questionnaire.

Separate RatesAll of the respondents have requested

separate, company-specific rates. Intheir questionnaire responses,respondents state that they areindependent legal entities. Of the fiverespondents, Anshan, Baoshan,Liaoning and WISCO have reported thatthey are collectively-owned enterprises,registered as being ‘‘owned by all thepeople’’, Shanghai Pudong andShanghai No. 1 are owned by ShanghaiMetallurgical. Shanghai Metallurgical isalso owned by ‘‘all the people.’’Shanghai Pudong stated that it does nothave any corporate relationship withany level of the PRC Government. Asstated Silicon Carbide and FurfurylAlcohol, ownership of a company by allthe people does not require theapplication of a single rate. Accordingly,each of these respondents is eligible forconsideration for a separate rate.

To establish whether a firm issufficiently independent to be entitledto a separate rate, the Departmentanalyzes each exporting entity under thetest established in the FinalDetermination of Sales at Less Than FairValue: Sparklers from the People’sRepublic of China, 56 FR 20588 (May 6,1991) (Sparklers) and amplified inSilicon Carbide. Under this test, theDepartment assigns separate rates innonmarket-economy cases only if anexporter can affirmatively demonstratethe absence of both (1) de jure and (2)de facto governmental control overexport activities. See Silicon Carbideand Furfuryl Alcohol.

1. De Jure ControlThe respondents have placed on the

administrative record a number ofdocuments to demonstrate absence of dejure control. Respondents submitted the‘‘Law of the PRC on IndustrialEnterprises Owned By the WholePeople,’’ adopted on April 13, 1988 (theIndustrial Enterprises Law). TheDepartment has previously determinedthat the Civil Law does not confer dejure independence on the branches ofgovernment-owned and controlledenterprises. See Sigma Corp v. UnitedStates, 890 F. Supp. 1077, 1080 (CIT1995). However, the Industrial

Enterprises Law has been analyzed bythe Department in past cases and hasbeen found to sufficiently establish anabsence of de jure control of companies‘‘owned by the whole people,’’ such asthose participating in this case. (SeeNotice of Preliminary Determination ofSales at Less Than Fair Value andPostponement of Final Determination:Certain Partial-Extension Steel DrawerSlides with Rollers from the People’sRepublic of China, 60 FR 14725, 14727(June 5, 1995); Notice of PreliminaryDetermination of Sales at Less Than FairValue: Honey from the People’sRepublic of China, 60 FR 14725, 14727(March 20, 1995); and Furfuryl Alcohol.The Industrial Enterprises Law providesthat enterprises owned by ‘‘the wholepeople’’ shall make their ownmanagement decisions, be responsiblefor their own profits and losses, choosetheir own suppliers, and purchase theirown goods and materials. TheRegulations of the People’s Republic ofChina for Controlling the Registration ofEnterprises as Legal Persons (LegalPersons Regulations), issued on July 13,1988 by the State Administration forIndustry and Commerce of the PRC,provide that, to qualify as legal persons,companies must have the ‘‘ability tobear civil liability independently’’ andthe right to control and manage theirbusiness. These regulations also statethat, as an independent legal entity, acompany is responsible for its ownprofits and losses. See Notice of FinalDetermination of Sales at Less Than FairValue: Manganese Metal from thePeople’s Republic of China, 60 FR 56046(November 6, 1995).

In sum, in prior cases, the Departmenthas analyzed the Chinese laws andregulations on the record in this case,and found that they establish an absenceof de jure control. We have no newinformation in these proceedings whichwould cause us to reconsider thisdetermination.

2. De Facto ControlThe Department typically considers

four factors in evaluating whether eachrespondent is subject to de factogovernmental control of its exportfunctions: (1) Whether the export pricesare set by or are subject to the approvalof a governmental authority; (2) whetherthe respondent has authority tonegotiate and sign contracts and otheragreements; (3) whether the respondenthas autonomy from the government inmaking decisions regarding theselection of management; and (4)whether the respondent retains theproceeds of its export sales and makesindependent decisions regardingdisposition of profits or financing of


losses. See, e.g., Silicon Carbide andFurfuryl Alcohol.

Respondents have asserted thefollowing: (1) They establish their ownexport prices independently of thegovernment and without the approval ofa government authority; (2) theynegotiate contracts, without guidancefrom any governmental entities ororganizations; (3) they make their ownpersonnel decisions including theselection of management; and (4) theyretain the proceeds of their export sales,use profits according to their businessneeds, and have the authority to obtainloans. In addition, respondents’questionnaire responses indicate thatcompany-specific pricing during thePOI does not suggest coordinationamong exporters. The subjectmerchandise appears on the ‘‘List ofProducts Subject to Export PermitAdministration at Different Levels’’issued by the Ministry of Foreign Tradeand Economic Cooperation(‘‘MOFTEC’’) on November 9, 1995.Respondents stated that, to the best oftheir knowledge, steel plate is includedon the list because it is considered animportant raw material for the economicdevelopment of China (e.g., for the usein the construction of basicinfrastructure), and the Chinesegovernment wishes to have amechanism in place to ensure adequatedomestic supply in the event of ashortage. Despite inclusion of thesubject merchandise on this list, wehave found no indication from therespondents’ business licences that theissuing authority imposes any type ofrestriction on respondents’ business (fora more complete explanation of thisissue, see the ConcurrenceMemorandum).

Consequently, we preliminarilydetermine that the five respondingexporters have met the criteria for theapplication of separate rates. We willexamine this matter further atverification.

For non-responsive exporters, wepreliminarily determine, as factsavailable, that they have not met thecriteria for application of separate rates.

Facts Available: China-Wide RateThe petition filed on November 5,

1996 identified 28 steel producers withthe capacity to produce cut-to-lengthcarbon steel plate during the POI. Wereceived adequate responses from thefive respondents identified above. Wereceived certification of non-shipmentby seven companies from the ChinaChamber of Commerce for Metals andChemicals (CCCMC). Additionally, wereceived a letter from one respondentfactory indicating shipments through

parties who have not responded to thequestionnaire. See Non-ResponsiveExporters section above. All othercompanies did not respond to ourquestionnaire. Further, U.S. importstatistics indicate that the total quantityand value of U.S. imports of cut-to-length carbon steel plate from the PRCis greater that the total quantity andvalue of plate reported by all PRCcompanies that submitted questionnaireresponses. Given these discrepancies,we conclude that not all exporters ofPRC plate responded to ourquestionnaire. Accordingly, we areapplying a single antidumping depositrate—the China-wide rate—to allexporters in the PRC (other than thosereceiving an individual rate), based onour presumption that those respondentswho failed to respond constitute a singleenterprise, and are under commoncontrol by the PRC government. See,e.g., Final Determination of Sales at LessThan Fair Value: Bicycles From thePeople’s Republic of China, 61 FR 19026(April 30, 1996) (Bicycles).

This China-wide antidumping rate isbased on facts available. Section776(a)(2) of the Act provides that ‘‘if aninterested party or any other person—(A) withholds information that has beenrequested by the administeringauthority; (B) fails to provide suchinformation by the deadlines for thesubmission of the information or in theform and manner requested, subject tosubsections (c)(1) and (e) of section 782;(C) significantly impedes a proceedingunder this title; or (D) provides suchinformation but the information cannotbe verified as provided in section 782(i),the administering authority * * * shall,subject to section 782(d), use the factsotherwise available in reaching theapplicable determination under thistitle.’’

In addition, section 776(b) of the Actprovides that, if the Department findsthat an interested party ‘‘has failed tocooperate by not acting to the best of itsability to comply with a request forinformation,’’ the Department may useinformation that is adverse to theinterests of that party as the factsotherwise available. The statute alsoprovides that such an adverse inferencemay be based on secondary information,including information drawn from thepetition.

As discussed above, all PRC exportersthat do not qualify for a separate rate aretreated as a single enterprise. Becausesome exporters of the single enterprisefailed to respond to the Department’srequests for information, that singleenterprise is considered to beuncooperative. Accordingly, consistentwith section 776(b)(1) of the Act, we

have applied, as total adverse factsavailable, the highest margin calculatedfor a respondent in this proceeding.Based on our comparison of thecalculated margins for the otherrespondents in this proceeding to theaverage margin in the petition, we haveconcluded that the highest calculatedmargin is the most appropriate recordinformation on which to form the basisfor dumping calculations in thisinvestigation. Accordingly, theDepartment has based the China-widerate on information from respondents.In this case, the highest calculatedmargin is 172.20 percent.

Section 776(c) of the Act provides thatwhere the Department relies on‘‘secondary information,’’ theDepartment shall, to the extentpracticable, corroborate that informationfrom independent sources reasonably atthe Department’s disposal. TheStatement of Administrative Action(SAA), accompanying the URAAclarifies that the petition is ‘‘secondaryinformation.’’ See SAA at 870. The SAAalso clarifies that ‘‘corroborate’’ meansto determine that the information usedhas probative value. Id. However, wherecorroboration is not practicable, theDepartment may use uncorroboratedinformation.

The information contained in thepetition shows that petitionerscalculated export price based on twomethods: (1) The import values declaredto the U.S. Customs Service; and (2) anaverage Chinese export price derivedfrom actual U.S. selling prices ofChinese exporters, known to petitioners.Petitioners stated that in order to ensurea fair value comparison, import andexport values from the same HTScategories as subject merchandise wereused to calculate the export price andthe factor consumption rates were usedas a basis for normal value. In addition,petitioners only used those HTScategories for subject products whichincluded only subject merchandise.Petitioners made adjustments for foreigninland freight to FAS values to derive exfactory prices. They also submittedsupporting documentation including anaffidavit referring to sources and howpetitioners obtained informationconcerning adjustments and that theseadjustments represented current actualcharges or expenses associated with theimportation and sale of cut-to-lengthcarbon steel plate into the U.S. market.

The information in the petition withrespect to the normal value (NV) isbased on factors of production used bythe petitioners in the production of steelplate. Petitioners submitted usageamounts for materials, labor and energy,adjusted for known differences in


production efficiencies. Petitionerssubmitted three cost models in thepetition: (1) Basic Oxygen Furnace(BOF) Cost Model; (2) Open-HearthFurnace Cost Model; and (3) Weighted-Average Normal Value of the BOF andOpen-Hearth methods to account fordifferences between the productionprocesses of petitioners and potentialrespondents. We determine that thisinformation has probative value andthat we have corroborated, to the extentpracticable, the data contained in thepetition. See CorroborationMemorandum.

Fair Value Comparisons

To determine whether sales of certaincut-to-length carbon steel plate from thePRC to the United States were made atless than fair value, we compared theUnited States price (USP) to the foreignmarket value (FMV), as specified in the‘‘United States Price’’ and ‘‘NormalValue’’ sections of this notice.

Export Price

We based USP on export price (EP) inaccordance with section 772(a) of theAct, because the subject merchandisewas sold to unrelated purchasers in theUnited States prior to importation andbecause constructed export pricemethodology was not otherwiseindicated. In accordance with section777A(d)(1)(A)(i) of the Act, wecompared POI-wide weighted-averageexport prices (EPs) to the factors ofproduction. See Company specificCalculation Memoranda, June 3,1997.

For those exporters that responded tothe Department’s questionnaire, wecalculated EP based on prices tounaffiliated purchasers in the UnitedStates. We made deductions, whereappropriate, for foreign inland freight,ocean freight, marine insurance, andforeign brokerage. See ‘‘FactorValuations’’ section of this notice.

Normal Value

In accordance with section 773(c) ofthe Act, we calculated NV based on thevalue of the factors of productionreported by the factories in the PRCwhich produced subject merchandisefor the five exporters. Where an inputwas sourced from a market economyand paid for in market economycurrency, we have used the actual pricepaid for the input to calculate thefactors-based NV in accordance with ourpractice. See Lasko Metal Products v.United States (Lasko), 437 F. 3d 1442(Fed. Cir. 1994). Otherwise, we usedpublicly available information fromIndia where possible. Whereappropriate Indian values were not

available, we used publicly availableinformation from Indonesia.

Certain respondents purchase certainraw materials through affiliated partiesin Hong Kong. The Hong Kong partiesalso receive payment, and transfer thefunds to the PRC respondents, from U.S.customers for the respondents’ sales ofplate. The amount of funds transferredto the PRC respondents is reduced bythe cost of any inputs purchased onbehalf of the PRC respondents. TheHong Kong affiliates also reduce thepayment by administrative costs itcharges the PRC respondents. In theirresponses, respondents provided samplecontracts for market economypurchases. They included contractsbetween the Hong Kong affiliates andthe original raw material suppliers aswell as contracts between the materialsuppliers and the PRC respondents.They did not provide documentation ofthe transactions occurring between thePRC respondents and the Hong Kongaffiliates. We valued the relevant inputsat the contract, market-economy, pricesprovided in the responses for thepreliminary determination. We will seekadditional clarification of thesecontracts and administrative costs atverification.

Shanghai Pudong’s questionnaireresponse indicates that, within themeaning of section 771(33) of the Act,it may be affiliated with Shanghai No.1 based on the fact that ShanghaiMetallurgical serves as ‘‘trustee’’ forboth companies and thus may exercisecontrol over the two producers. Further,because both Shanghai Pudong andShanghai No. 1 produce subjectmerchandise, the Department willconsider whether these two firmsshould be treated as a single entity (i.e.,‘‘collapsed’’). In order for theDepartment to treat two or moreproducers as a single entity, theDepartment relies on a test set forth inNihon Cement v. United States, 17 CIT400, 425 (1993). Pursuant to that test,the Department will only collapse theproducers if each of these criteria aremet: (1) The producers must beaffiliated, (2) the producers must haveproduction facilities for similar oridentical products that would notrequire substantial retooling in order torestructure manufacturing priorities,and (3) there must be a significantpotential for the manipulation of priceor production. Because we lackedsufficient information to make theaffiliation and collapsing decisions, werequested additional information fromShanghai Pudong regarding both itsrelationship with Shanghai No. 1 andShanghai’s No. 1’s factors of production.At Shanghai Pudong’s request, we

granted an extension on the reporting ofthis information. Shanghai Pudongresponded on May 23 advising that itdoes not control Shanghai No.1 andtherefore could not obtain its factors ofproduction. Based on the data receivedprior to the preliminary determination,including portions of the responseregarding Shanghai No. 1, we havedetermined that it is not clear from thecurrent record whether ShanghaiMetallurgical controls Shanghai Pudongand Shanghai No. 1. Therefore, we willnot collapse Shanghai Pudong andShanghai No. 1 for the purposes of thepreliminary determination. We willcontinue to examine this issue and wewill verify the reported information ofboth Shanghai Pudong and ShanghaiNo. 1, and consider the informationwith respect to both producers for ourfinal determination.

Four respondents identified asignificant number of raw materialinputs. Certain of these inputs appearedto be variations or subsets of largerinputs. We were unable to locatepublicly available surrogate values forthese inputs for this preliminarydetermination. See each respondingfirm’s Calculation Memorandum. Basedon the steel production process, wecombined the inputs into the largersubcategories for which we have locateda surrogate value in our preliminarydetermination. We will continue to tryto locate a surrogate value for theseinputs for our final determination.

Four respondents have identified anumber of gases either produced andreused in the production process orpurchased from outside sources for usein the production of subjectmerchandise. These respondents haveargued that all of these gases should betreated as overhead items. Petitionersargue that these gases are direct inputsin the steelmaking process and shouldnot be considered as overhead items. Inprevious cases in which the Departmenthas used the same surrogate value,power and fuel are specifically removedfrom the overhead calculation so as tobe treated as direct inputs. See FinalResults of Antidumping DutyAdministrative Review: Sebacic Acidfrom the PRC, 62 FR 10530, March 7,1997. We treated these gases as directinputs as they, in general, serve aspower and fuel to the productionprocess. We offset the cost of productionby the amount of any by-productgenerated. This offset is based on ourassumption that the by-products eitherare re-used as an input to theproduction processes or has a market forits uses. See Calculation Memoranda.


Factor Valuations

The selection of the surrogate valueswas based on the quality andcontemporaneity of the data. Wherepossible, we attempted to value materialinputs on the basis of tax-exclusivedomestic prices. Where we were notable to rely on domestic prices, we usedimport prices to value factors. Weremoved from the import data importprices from countries which theDepartment has previously determinedto be NMEs. As appropriate, weadjusted input prices to make themdelivered prices. For those values notcontemporaneous with the POI, weadjusted for inflation using wholesaleprice indices (WPI), or, in the case oflabor rates, consumer price indices(CPI), published in the InternationalMonetary Fund’s International FinancialStatistics. For a complete analysis ofsurrogate values, see each company’sFactors Valuation Memorandum, datedJune 3, 1997.

For certain raw material surrogatevalues, we used values as reported inthe Monthly Statistics of Foreign Tradeof India, Vol. II—Imports, DirectorateGeneral of Commercial Intelligence &Statistics, Ministry of Commerce,Government of India, Calcutta. Theprice information from MonthlyStatistics of Foreign Trade of Indiarepresents cumulative values for theperiod of April 1995 through January1996. For each input value obtainedfrom the above publication, we used theaverage value per one kilogram for thatinput from market economies. Importstatistics from non-market economieswere excluded in the calculation of theaverage value. Since the data from thispublication is not contemporaneouswith the POI, we adjusted materialvalues for inflation by using WPI rate forIndia. We then converted each of theraw material inputs to U.S. dollars usingan exchange rate conversion factor.

For certain material inputs, we wereunable to obtain specific priceinformation from India. Therefore, forthese inputs, we resorted to publicinformation from Indonesia. The valuesfor these inputs were obtained from thepublication Foreign Trade StatisticsBulletin Imports, March 1996. The priceinformation represents cumulativevalues from January to March 1996.These inputs were adjusted for inflation.

Certain respondents reported theamount of slag, a by-product of the plateproduction process, produced in theproduction of subject merchandise andsold in China by some respondents.Normally, the Department offsets thecalculated cost of manufacturing by thevalue of any by-products. The only

surrogate value for slag from India orIndonesia was aberrationally high whencompared to an available U.S. rate.Based on our knowledge of thesteelmaking process, we know that slagis a by-product with a relatively lowvalue (compared to the price of steelplate). We were able to locate anappropriate value for slag from the U.S.Geological Survey, MineralCommodities Summaries from February1997. We used the U.S. slag value forthe preliminary determination. We willcontinue to try to locate an appropriatesurrogate value from India, Indonesia, oranother country at a comparable level ofdevelopment for our finaldetermination.

We were unable to locate specificsurrogate values for each of the reportedgases. Specifically, we were unable tolocate surrogate values for the gasesgenerated in the production facilities(e.g., furnace gas). We will continue tosearch for surrogate values for each ofthe gases for the final determination. Forour preliminary determination, weapplied surrogate gas values for gasesfor which we could find a surrogatevalue and applied a natural gassurrogate value to the other gases forwhich we could not locate a value.

For certain factors for which we couldnot locate import values, we used valuesprovided by petitioners which representmarket values reported in the 1995–96Annual Report for Steel Authority ofIndia Limited (‘‘SAIL’’), a producer inIndia of cut-to-length carbon steel plate.We adjusted these values for inflation.

For materials purchased from marketeconomy country suppliers that are paidfor in a market economy currency andif the portion of the input from themarket economy was significant, weused the actual purchase price paidduring the POI as reported in thequestionnaire responses. This practice isconsistent with the Department’s newregulations and with Lasko. In cases inwhich the same producer reportedseveral different market economysuppliers for the same input, we usedthe average market economy price paidfor that input.

For labor, we used the average laborcost per man-day worked for the BasicMetal and Alloys Industries as reportedin the Ministry of Labour Government ofIndia Annual Report 1994–1995. Thissource included in its calculation oflabor values ‘‘a sum of variouscomponents like wages and salaries; alltypes of bonus; money value of benefitsin kind; old age benefits; maternitybenefits; social security charges such asESI compensation for injuries, familypension, lay-off/retrenchment benefits,and other group benefits.’’ We applied

a single labor rate for all levels of labor,i.e., skilled, unskilled, and indirectlabor. Accordingly, we adjusted forinflation from the time period of theinformation (1990–1991) to the POIusing the CPI, as reported in theInternational Monetary Fund’sInternational Financial Statistics. Thework day in India is an eight-hour day.See Coumarin from PRC; PreliminaryDetermination of Sales at Less Than FairValue, 59 FR 39727 (Aug. 4, 1994),citing to Country Reports: Human RightsPractices for 1990; Coumarin from thePRC; Final Determination of Sales atLess than Fair Value, 59 FR 66895 (Dec.28, 1994) (Coumarin). Therefore, wethen divided the surrogate value by 8hours to arrive at an hourly wage rate.Petitioners have argued that the laborusage rates reported by respondents areabnormally low for steel production. Wewill carefully review the reported laborrates at verification and for our finaldetermination.

For overhead, profit and SG&Aexpenses, we used information reportedin the April 1995 Reserve Bank of IndiaBulletin. See Statement 1—‘‘CombinedIncome, Value of Production,Expenditure and AppropriationAccounts, Industry Group-Wise, 1992–93.’’

Respondents allocated a majority ofthe labor employed in their facilities tooverhead and selling and generaladministrative (SG&A) tasks. Only asmall percentage of the labor employedin respondents’ facilities has beenreported as direct costs of productionand therefore included in our NVcalculations. Conversely, the Indiansurrogate values for overhead and SG&Ado not include a separate allowance forlabor. See Factor Valuation Memoranda.We therefore increased the surrogateoverhead value to include thesignificant labor resources respondentsallocated to overhead. See, CalculationMemoranda.

We included certain indirectmaterials as part of ‘‘overheadexpenses.’’ In previous finaldeterminations, the Department hasconsidered inputs which ‘‘are not directmaterials consumed in the productionprocess’’ as part of factory overhead. SeeBrake Drums and Brake Rotors From thePRC; Notice of PreliminaryDetermination, 61 FR, 53190, 63196(Oct. 10, 1996); Brake Drums and BrakeRotors From the PRC; FinalDetermination of Sales at Less than FairValue, 62 FR 9154, 9160 (Feb. 24, 1997).The treatment of indirect materials as‘‘overhead’’ is consistent withCompendium of Statements andStandards: Accounting (India).


In calculating the cost of raw materialinputs in NME cases, we include anadjustment for the cost of transportingthe input from the supplier to therespondent. This adjustment is based onthe distance from the supplier to theproducing factory and the mode oftransportation; see, e.g., Sulfanilic Acidfrom the People’s Republic of China;Final Results and Partial Recission ofAntidumping Duty AdministrativeReview, 61 Fed. Reg. 53702, 53705(Comment 3) (October 15, 1996). Wedetermine a value from the surrogatecountry based on this distance and onmode of transportation used. While allrespondents provided distances forsome of their inputs, only one of therespondents provided distances andmode of transportation for all materialinputs. We requested this informationfor all inputs in our original andsupplemental questionnaires. For eachrespondent that did not comply withour requests for this information, as tosome inputs, we applied, as factsavailable, the highest freight costcalculated for any input of thatrespondent to those inputs for which wedid not receive the required freightinformation. This presumes that therespondents chose not to provideinformation that would be adverse tothem.

For the preliminary determination, wewere unable to find specific surrogatevalues for a small number of inputs.Therefore, we excluded them from ourcalculations for the preliminarydetermination. We will continue toresearch price information for theseinputs for the final determination.

Critical CircumstancesOn January 10, 1997, petitioners

alleged that there is a reasonable basisto believe or suspect that criticalcircumstances exist with respect tosubject merchandise. In accordancewith 19 C.F.R. 353.16(b)(2)(i) (1996),since these allegations were filed earlierthan the deadline for the Department’spreliminary determination, we mustissue our preliminary criticalcircumstances determinations not laterthan the preliminary determination.

Section 733(e)(1) of the Act providesthat the Department will determine thatthere is a reasonable basis to believe orsuspect that: (A)(i) There is a history ofdumping and material injury by reasonof dumped imports in the United Statesor elsewhere of the subject merchandise,or (ii) the person by whom, or for whoseaccount, the merchandise was importedknew or should have known that theexporter was selling the subjectmerchandise at less than its fair valueand that there was likely to be material

injury by reason of such sales, and (B)there have been massive imports of thesubject merchandise over a relativelyshort period.

The statute and the Statement ofAdministrative Action (SAA) whichaccompanies the Uruguay RoundAgreements Act are silent as to how weare to make a finding that there wasknowledge that there was likely to bematerial injury. Therefore, Congress hasleft the method of implementing thisprovision to the Department’sdiscretion.

In determining whether there is areasonable basis to believe or suspectthat an importer knew or should haveknown that the exporter was selling theplate at less than fair value, theDepartment normally considers marginsof 15 percent or more sufficient toimpute knowledge of dumping forconstructed export price (CEP) sales,and margins of 25 percent or more forexport price (EP) sales. See, e.g.,Preliminary Critical CircumstancesDetermination: Honey from the People’sRepublic of China (PRC), 60 FR 29824(June 6, 1995) (Honey). Since thecompany specific margins for EP salesin our preliminary determination forcarbon steel plate are greater than 25percent for Anshan, Shanghai Pudongand WISCO, we have imputedknowledge of dumping. We found thatBaoshan and Liaoning had marginsbelow 25 percent. Because we foundmargins to be below 25 percent, we donot impute importer knowledge ofdumping. Therefore for Baoshan andLiaoning, we find that criticalcircumstances do not exist with respectto the subject merchandise.

In determining whether there is areasonable basis to believe or suspectthat an importer knew or should haveknown that there was likely to bematerial injury by reason of dumpedimports, the Department normally willlook to the preliminary injurydetermination of the ITC. If the ITCfinds a reasonable indication of presentmaterial injury to the relevant U.S.industry, the Department will determinethat a reasonable basis exists to imputeimporter knowledge that there waslikely to be material injury by reason ofdumped imports during the criticalcircumstances period—the 90-dayperiod beginning with the initiation ofthe investigation (see 19 C.F.R.351.16(g). If, as in this case, the ITCpreliminarily finds threat of materialinjury (See, Cut-to-Length Carbon SteelPlate from China, Russia, South Africa,and Ukraine, U.S. International TradeCommission, December 1996), theDepartment will also consider the extentof the increase in the volume of imports

of the subject merchandise during thecritical circumstances period and themagnitude of the margins indetermining whether a reasonable basisexists to impute knowledge thatmaterial injury was likely.

In this case, imports of Chinese plateincreased 29 percent in the threemonths following the initiation of theinvestigation when compared to thethree months preceding initiation, ornearly two times the level of increaseneeded to find ‘‘massive imports’’during the same period (see below).Furthermore, we have preliminarilyfound margins of 40.35 percent forShanghai Pudong, 172.20 percent forAnshan and 51.70 for WISCO.

Based on the ITC’s preliminarydetermination of threat of injury, theincrease in imports noted above, and thehigh preliminary margins, theDepartment determines that there is areasonable basis to believe or suspectthat the importer knew or should haveknown that there was likely to bematerial injury by means of sales of thesubject merchandise at less than fairvalue.

To determine whether imports weremassive over a relatively short timeperiod, the Department typicallycompares the import volume of thesubject merchandise for the threemonths immediately preceding andfollowing the initiation of theproceeding. See 19 C.F.R. 353.16(g).Pursuant to 19 C.F.R. 353.16(f)(2), theDepartment will consider an increase of15 percent or more in the imports of thesubject merchandise over the relevantperiod to be massive. As noted, importsof the subject merchandise increased 29percent during the relevant period, andthus we determine that imports havebeen massive.

Thus, because we determine thatthere is a reasonable basis to believe orsuspect that the importer knew orshould have known that Anshan,Shanghai Pudong and WISCO wereselling the subject merchandise at lessthan its fair value and that there waslikely to be material injury by reason ofsuch sales, and that there have beenmassive imports of the subjectmerchandise over a relatively short timeperiod, we preliminarily determine thatcritical circumstances exist for Anshan,Shanghai Pudong and WISCO.

For companies subject to the China-wide rate (i.e., companies which did notrespond to the Department’squestionnaire), we are imputingknowledge based on the China-widerate, and determine, based on factsavailable, that there were massiveimports of certain cut-to-length carbonsteel plate by companies that did not


respond to the Department’squestionnaire.

Therefore, we preliminarily determinethat critical circumstances exist withregard to these companies.

Verification

As provided in section 782(i) of theAct, we will verify the information usedin making our final determination.

Suspension of Liquidation

In accordance with section 733(d) ofthe Act, we are directing the CustomsService to suspend liquidation of allimports of subject merchandise fromBaoshan and Liaoning, entered, orwithdrawn from warehouse, forconsumption on or after the date ofpublication of this notice in the FederalRegister. For Anshan, Shanghai Pudong,WISCO and companies subject to theChina-wide rate, we are directingCustoms to suspend liquidation of allimports of subject merchandise entered,or withdrawn from warehouse, forconsumption on or after the date 90days prior to the date of publication ofthis notice in the Federal Register. Wewill instruct Customs Service to requirea cash deposit or the posting of a bondequal to the weighted-average amountby which the NV exceeds the exportprice, as indicated in the chart below.These suspension of liquidationinstructions will remain in effect untilfurther notice.


Manufacturer/exporter

Weighted-average

margin (per-cent)

Anshan (AISCO/Anshan Inter-national/Sincerely Asia Ltd) .. 172.20

Baoshan (Bao/Bao Steel Inter-national Trade Corp/BaoSteel Metals Trading Corp) ... 14.20

Liaoning .................................... 8.19Shanghai Pudong ..................... 40.35WISCO (Wuhan/International

Economic and Trading Corp/Cheerwu Trader Ltd). ............ 51.70

China-wide Rate 1 ..................... 172.20

1 The China-wide rate applies to all entriesof the subject merchandise except for entriesfrom exporters that are identified individuallyabove.


the Act, we have notified the ITC of ourdetermination. If our finaldetermination is affirmative, the ITCwill determine before the later of 120days after the date of this preliminarydetermination or 45 days after our finaldetermination whether the domesticindustry in the United States ismaterially injured, or threatened withmaterial injury, by reason of imports, orsales (or the likelihood of sales) forimportation, of the subject merchandise.

Public CommentIn accordance with 19 CFR 353.38,

case briefs or other written comments inat least ten copies must be submitted tothe Assistant Secretary for ImportAdministration no later than 50 daysafter the publication of this preliminarydetermination, and rebuttal briefs, nolater than five days after the filing of

case briefs. A list of authorities used anda summary of arguments made in thebriefs should accompany these briefs.Such summary should be limited to fivepages total, including footnotes. We willhold a public hearing, if requestedwithin 10 days of publication of thisnotice, to afford interested parties anopportunity to comment on argumentsraised in case or rebuttal briefs. Thehearing will be held at the U.S.Department of Commerce, 14th Streetand Constitution Avenue, N.W.,Washington, D.C. 20230, time, date androom to be determined. Parties shouldconfirm by telephone the time, date, andplace of the hearing 48 hours before thescheduled time.

Interested parties who wish to requesta hearing, or to participate if one isrequested, must submit a writtenrequest to the Assistant Secretary forImport Administration, U.S. Departmentof Commerce, Room 1870, within tendays of the publication of this notice.Requests should contain: (1) The party’sname, address, and telephone number;(2) the number of participants; and (3)a list of the issues to be discussed. Inaccordance with 19 CFR 353.38(b), oralpresentations will be limited to issuesraised in the briefs. If this investigationproceeds normally, we will make ourfinal determination by August 18, 1997.

This determination is publishedpursuant to section 733(f) of the Act.


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Part VI

Department ofHousing and UrbanDevelopmentReal Estate Settlement Procedures Act;Revision of Special Information Booklet;Notice



[Docket No. FR–4243–N–01]

Real Estate Settlement ProceduresAct; Notice of Revision of SpecialInformation Booklet

AGENCY: Office of the AssistantSecretary for Housing—Federal HousingCommissioner, HUD.ACTION: Notice; revision of specialinformation booklet.

SUMMARY: This notice announces theavailability of a revised specialinformation booklet as required by theReal Estate Settlement Procedures Act of1974 (RESPA) (12 U.S.C. 2601–17) andprescribed by the Assistant Secretary forHousing—Federal HousingCommissioner.ADDRESSES: The special informationbooklet that follows this notice is alsoavailable by sending a request to theDirector, Office of Consumer andRegulatory Affairs, Attention: RESPA/Special Information Booklet, Room9146, Department of Housing and UrbanDevelopment, 451 Seventh Street, SW.,Washington, DC 20410.FOR FURTHER INFORMATION CONTACT:David R. Williamson, Office ofConsumer and Regulatory Affairs, (202)708–4560, Room 9146, Department ofHousing and Urban Development, 451Seventh Street, SW., Washington, DC20410. (This is not a toll-free number.)Persons with hearing or speechimpairments may access this numbervia TTY by calling the FederalInformation Relay Service at (800) 877–8339.SUPPLEMENTARY INFORMATION: On April23, 1987, the Department issued thecurrent edition of the specialinformation booklet (52 FR 13566). Thatversion provided a description of thenature and purpose of the costs relatingto a real estate settlement, and anexplanation of the HUD–1 SettlementStatement, escrow accounts used inconnection with the loan, providers ofreal estate settlement services, andunfair practices and unreasonable orunnecessary charges. The Real EstateSettlement Procedures Act of 1974 (12U.S.C. 2601–17) (RESPA) requireslenders to provide the specialinformation booklet to each personborrowing money to finance thepurchase of residential real estate

within 3 business days after receivingthe application.

Since 1987, RESPA has been amendedon several occasions. (Cranston-Gonzalez National Affordable HousingAct, 1990, Public Law 101–625; the DireEmergency SupplementalAppropriations Act, 1991, Public Law102–27; the Housing and CommunityDevelopment Act of 1992, Public Law102–550; the Riegle CommunityDevelopment and RegulatoryImprovement Act of 1994, Public Law103–325; the Economic Growth andRegulatory Paperwork Reduction Act of1996, Public Law 104–208.)Consequently, certain parts of thespecial information booklet areoutdated. Pursuant to 12 U.S.C. 2603,and 24 CFR 3500.6(b) of theDepartment’s RESPA regulations, theAssistant Secretary for Housing—Federal Housing Commissioner hasrevised the special information bookletby addressing the legislativeamendments, and by updatinginformational references and thebooklet’s discussion of the HUD–1Settlement Statement. The revisedbooklet is published in today’s FederalRegister following this notice.

More specifically, the AssistantSecretary for Housing—Federal HousingCommissioner has revised the booklet toreflect changes in RESPA coverage aswell as additional required disclosuresrelating to loan servicing transfers,escrow accounts, and affiliated serviceproviders. The explanation of settlementservices has been expanded to includecurrent lending and settlement charges,such as fees for mortgage brokers,Computer Loan Origination (CLO)services, tax service, flood insurance,and lead based paint inspectionservices. The booklet was also updatedto include other statutes related to faircredit, fair lending, flood insurance andlead based paint hazards which affectthe lending and settlement process.

The Department will make a copy ofthe special information bookletavailable to any firm planning topublish the booklet for distribution tolenders. Firms interested in securing acopy should send their requests to theDirector, Office of Consumer andRegulatory Affairs, Attention: RESPA/Special Information Booklet, Room9146, U.S. Department of Housing andUrban Development, 451 Seventh Street,SW., Washington, DC 20410. Thebooklet will also be available throughthe Superintendent of Documents, U.S.

Government Printing Office,Washington, DC 20402. The Departmentdoes not have a sufficient supply of thebooklet and form to provide copies to allsettlement service providers. Lendersmay use the booklet as soon as itbecomes available through normalsources. Previous editions may be useduntil supplies are exhausted or untilSeptember 9, 1997 whichever is earlier.

The Department is also making thebooklet available to settlement serviceproviders and consumers at thefollowing web site address: http://www.hud.gov/fha/res/respa—hm.html


The information collectionrequirements for the special informationbooklet have been approved by theOffice of Management and Budget(OMB) in accordance with thePaperwork Reduction Act of 1995 (44U.S.C. 3501–3520), and assigned OMBcontrol number 2502–0265. An agencymay not conduct or sponsor, and aperson is not required to respond to, acollection of information unless thecollection displays a valid controlnumber.

Environmental Impact

In accordance with 24 CFR 50.19(c)(1)of the Department’s regulations,published in a final rule on September27, 1996 (61 FR 50914), this notice andthe special information booklet do notdirect, provide for assistance or loanand mortgage insurance for, orotherwise govern or regulate propertyacquisition, disposition, lease,rehabilitation, alteration, demolition, ornew construction, or set out or providefor standards for construction orconstruction materials, manufacturedhousing, or occupancy. Therefore, thisnotice and the special informationbooklet are categorically excluded fromthe requirements of the NationalEnvironmental Policy Act.

The Department is hereby publishingthe revised special information bookletto provide appropriate notice of itscontents. The text of the specialinformation booklet for the Real EstateSettlement Procedures Act follows thisnotice.

Dated: June 2, 1997.Nicolas P. Retsinas,Assistant Secretary for Housing—FederalHousing Commissioner.[FR Doc. 97–15301 Filed 6–10–97; 8:45 am]BILLING CODE 4210–27–C






























[FR Doc. 97–15301 Filed 6–10–97; 8:45 am]BILLING CODE 4210–27–C

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Part VII

The PresidentPresidential Determination No. 97–26—Presidential Certification to WaiveProhibition on Assistance to the FederalRepublic of Yugoslavia (Serbia andMontenegro)Presidential Determination No. 97–27—Presidential Determination UnderSubsections 402(a) and 409(a) of theTrade Act of 1974, as Amended—Emigration Policies of Armenia,Azerbaijan, Georgia, Moldova, andUkrainePresidential Determination No. 97–28—Presidential Determination UnderSubsection 402(d)(1) of the Trade Act of1974, as Amended—Continuation ofWaiver Authority

Presidential Documents

32015

Federal Register

Vol. 62, No. 112


Title 3—

The President

Presidential Determination No. 97–26 of May 30, 1997

Presidential Certification to Waive Prohibition on Assistanceto the Federal Republic of Yugoslavia (Serbia andMontenegro)

Memorandum for the Secretary of State

Pursuant to the authority vested in me by the laws of the United States,including section 1511 of the National Defense Authorization Act for FiscalYear 1994 (Public Law 103–160) and section 540 of the Foreign Operations,Export Financing, and Related Programs Appropriations Act, 1997 (containedin Public Law 104–208 (the ‘‘Act’’)), I hereby certify to the Congress thatI have determined that the waiver of the application of the prohibitionin section 1511(b) of Public Law 103–160 and of the application of section540(a) of the Act is necessary to achieve a negotiated settlement of theconflict in Bosnia and Herzegovina that is acceptable to the parties, tothe extent that such provisions apply to the furnishing of assistance tofacilitate destruction of military equipment.

Therefore, I hereby waive the application of these provisions with respectto such assistance.

You are authorized and directed to transmit a copy of this determinationto the Congress and arrange for its publication in the Federal Register.

œ–THE WHITE HOUSE,Washington, May 30, 1997.

[FR Doc. 97–15460

Filed 6–10–97; 8:45 am]

Billing code 4710–10–M


32017Federal Register /Vol. 62, No. 112 / Wednesday, June 11, 1997 / Presidential Documents

Presidential Determination No. 97–27 of June 3, 1997

Presidential Determination Under Subsections 402(a) and409(a) of the Trade Act of 1974, as Amended—EmigrationPolicies of Armenia, Azerbaijan, Georgia, Moldova, andUkraine


Pursuant to the authority vested in me by subsections 402(a) and 409(a)of the Trade Act of 1974 (19 U.S.C. 2432(a) and 2439(a) (the ‘‘Act’’)), Idetermine that Armenia, Azerbaijan, Georgia, Moldova, and Ukraine arenot in violation of paragraph (1), (2), or (3) of subsection 402(a) of theAct, or paragraph (1), (2), or (3) of subsection 409(a) of the Act.

You are authorized and directed to publish this determination in the FederalRegister.

œ–THE WHITE HOUSE,Washington, June 3, 1997.

[FR Doc. 97–15461

Filed 6–10–97; 8:45 am]



32019Federal Register /Vol. 62, No. 112 / Wednesday, June 11, 1997 / Presidential Documents

Presidential Determination No. 97–28 of June 3, 1997

Presidential Determination Under Subsection 402(d)(1) of theTrade Act of 1974, as Amended—Continuation of Waiver Au-thority


Pursuant to subsection 402(d)(1) of the Trade Act of 1974, as amended(the ‘‘Act’’), I determine that the further extension of the waiver authoritygranted by subsection 402(c) of the Act will substantially promote the objec-tives of section 402 of the Act. I further determine that the continuationof the waivers applicable to Albania, Belarus, Kazakstan, Kyrgyzstan,Tajikistan, Turkmenistan, and Uzbekistan will substantially promote theobjectives of section 402 of the Act.

You are authorized and directed to publish this determination in the FederalRegister.

œ–THE WHITE HOUSE,Washington, June 3, 1997.

[FR Doc. 97–15462

Filed 6–10–97; 8:45 am]


i

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FEDERAL REGISTER PAGES AND DATES, JUNE

29649–30228......................... 230229–30426......................... 330427–30738......................... 430739–30978......................... 530979–31314......................... 631315–31506......................... 931507–31700.........................1031701–32020.........................11

CFR PARTS AFFECTED DURING JUNE

At the end of each month, the Office of the Federal Registerpublishes separately a List of CFR Sections Affected (LSA), whichlists parts and sections affected by documents published sincethe revision date of each title.

3 CFR

Proclamations:7007.................................304157008.................................304277009.................................31699Administrative Orders:Presidential

Determinations:No. 97–24 of May 23,

1997 .............................30737No. 97–25 of May 29,

1997 .............................31313No. 97–26 of May 30,

1997 .............................32015No. 97–27 of June 3,

1997 .............................32017No. 97–28 of June 3,

1997 .............................32019

5 CFR

330...................................313152641.................................318663801.................................31866Proposed Rules:338...................................30778581...................................31763582...................................31763

7 CFR

80.....................................29649272...................................29652275...................................29652301...................................30739330...................................29662340...................................29662351...................................29662372...................................29662723...................................30229800...................................31701911...................................30429944...................................30429979...................................30979985...................................317041464.................................30229Proposed Rules:911...................................30467918...................................30468944...................................304671205.................................310121951.................................29678

9 CFR

101...................................31326113...................................31329Proposed Rules:381...................................31017

10 CFR

1703.................................30432Proposed Rules:430...................................31524451...................................31524

711...................................30469835...................................30481

12 CFRProposed Rules:261...................................31526575...................................30778

14 CFR25.....................................3170733.....................................2966339 ............30230, 30433, 3133171.........................31337, 31507107...................................31672108...................................31672Proposed Rules:25.....................................3148227.....................................3147629.....................................3147639 ...........30481, 30483, 31020,

31021, 31370, 31536, 3176671 ...........29679, 30784, 31371,

31372, 31373, 31374, 31769,31770

15 CFR738...................................31473740...................................31473770...................................31473772...................................31473774...................................31473902...................................30741

16 CFRProposed Rules:1014.................................29680

17 CFR1.......................................31507190...................................31708Proposed Rules:32.....................................31375240...................................30485

18 CFR153...................................30435

19 CFR10.....................................3138312.....................................3171324.....................................30448123...................................31383128...................................31383141...................................31383143...................................31383145...................................31383148...................................31383

20 CFR

404...................................30746416.......................30747, 30980

21 CFR

101...................................31338

ii Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Reader Aids

113...................................31721172...................................30984178.......................30455, 31511184...................................30751589...................................30936872...................................31512882...................................30456886...................................30985Proposed Rules:111...................................30678812...................................31023878...................................31771

23 CFR

658...................................30757

24 CFR

200...................................30222202...................................30222203...................................30222206...................................30222585...................................31954Proposed Rules:570...................................31944

26 CFR

54.........................31669, 31670Proposed Rules:1.......................................30785301.......................30785, 30796

27 CFR

24.....................................29663Proposed Rules:24.....................................29681

28 CFR

45.....................................3186658.....................................30172

29 CFR

1910.................................296692520.................................316962590.....................31669, 31670

30 CFR

870...................................30232904...................................31473Proposed Rules:202...................................31538206...................................31538211...................................31538243...................................29682250...................................31538916...................................30535917...................................30540925...................................31541934...................................30800943...................................31543948...................................31543

33 CFR

5.......................................3133926.....................................3133927.....................................3133995.....................................31339

100 ..........30759, 30988, 31339110...................................31339117.......................31722, 31723130...................................31339136...................................31339138...................................31339140...................................31339151...................................31339153...................................31339165.......................30759, 31340177...................................31339Proposed Rules:165...................................31385

34 CFR

685...................................30411

36 CFR

Ch. I .................................302321.......................................302327.......................................302328.......................................302329.......................................3023211.....................................3023213.....................................3023217.....................................3023218.....................................3023220.....................................3023221.....................................3023228.....................................3023251.....................................3023265.....................................3023267.....................................3023273.....................................3023278.....................................302321256.................................31724Proposed Rules:1190.................................305461191.................................30546

37 CFR

Proposed Rules:2.......................................308023.......................................30802

38 CFR

4.......................................3023517.....................................30241Proposed Rules:3.......................................30547

39 CFR

111.......................30457, 31512233...................................317263001.................................30242

40 CFR

52 ...........29668, 30251, 30253,30760, 30991, 31341, 31343,31349, 31732, 31734, 31738

60.....................................3135163 ...........30258, 30993, 30995,

3136170.....................................3151680.....................................3026181.....................................30271

82.....................................3027685.....................................3119286.....................................31192136...................................30761180 ..........29669, 30996, 31190Proposed Rules:9.......................................3102551.....................................3028952 ...........29682, 30290, 30818,

30821, 31025, 31037, 31387,31388, 31394, 31398, 31775,

3177660.....................................3054863 ...........30548, 31038, 31405,

3177669.....................................3154670.....................................3028981 ............30291, 31394, 3139886.....................................30291122...................................31025123...................................31025131...................................31025132...................................31025148...................................31406180...................................30549185...................................30549260...................................30548261.......................30548, 31406264...................................30548265...................................30548266.......................30548, 31406268...................................31406270...................................30548271 .........29684, 29688, 30548,

31406300...................................30554

41 CFR

101–38.............................31740301...................................30260Proposed Rules:101...................................31550

42 CFR

Proposed Rules:412...................................29902413...................................29902489...................................29902

44 CFR

64.....................................3152065.........................30280, 3028367.....................................30285Proposed Rules:67.....................................30296

45 CFR

144.......................31669, 31670146.......................31669, 31670148.......................31695, 31670675...................................315211639.................................30763

47 CFR

24.....................................3100261 ............31003, 31868, 31939

69.....................................3186873 ...........31005, 31006, 31007,

31008, 31364Proposed Rules:1.......................................3177769.....................................31040

48 CFR

9903.................................312949904.................................31308Proposed Rules:0.......................................301864.......................................301867.......................................301868.......................................3018615.....................................3018616.....................................3018617.....................................3018622.....................................3018627.....................................3018628.....................................3018631.....................................3018632.....................................3018635.....................................3018642.....................................3018643.....................................3018644.....................................3018645.....................................3018649.....................................3018651.....................................3018652.....................................3018653.....................................30186214...................................30829215...................................30829225...................................30831245...................................30832252.......................30831, 30832932...................................30556970...................................30556

49 CFR

171 ..........29673, 30767, 31363172...................................30767195...................................31364232...................................30461571 ..........34064, 31008, 313671312.................................30286

50 CFR

17 ...........30772, 31740, 31748,31757

24.....................................30773285...................................30741630...................................30775660.......................29676, 30776679 .........30280, 30283, 31010,

31367, 31369Proposed Rules:14.....................................3104420.....................................3129823.....................................31054600...................................30835648 ..........29694, 30835, 31551660.......................30305, 31551679...................................30835

iiiFederal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Reader Aids

REMINDERSThe items in this list wereeditorially compiled as an aidto Federal Register users.Inclusion or exclusion fromthis list has no legalsignificance.

RULES GOING INTOEFFECT JUNE 11, 1997

AGRICULTUREDEPARTMENTAgricultural MarketingServiceSpearmint oil produced in Far

West; published 6-11-97COMMODITY FUTURESTRADING COMMISSIONBankruptcy:

Chicago Board of Trade—London InternationalFinancial Futures andOptions Exchange TradingLink; distribution ofcustomer property relatedto trading; published 6-11-97

HEALTH AND HUMANSERVICES DEPARTMENTFood and DrugAdministrationFood for human consumption:

Canning low-acid foods inhermetically sealedcontainers; safemanufacturing, processing,and packagingprocedures; technicalamendment; published 6-11-97

HEALTH AND HUMANSERVICES DEPARTMENTHealth Care FinancingAdministrationMedicare:

Individual claims under PartA or B; appealprocedures; published 5-12-97

LEGAL SERVICESCORPORATIONFund recipients:

Attorneys’ fees; published 5-12-97

NUCLEAR REGULATORYCOMMISSIONNuclear power reactors,

standard designcertifications; and combinedlicences; early site permits:Boiler water reactors—

Standard designcertification approval;published 5-12-97

POSTAL SERVICECivil and criminal forfeitures,

remission or mitigationpetitions; procedures;published 6-11-97

TRANSPORTATIONDEPARTMENTProcedural and special

regulations:Air and foreign air carriers

compliance withConsumer CreditProtection Act; update;inspection and copying ofDOT records, etc.; CFRpart removed; published5-12-97

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

Pratt & Whitney; published5-27-97

TREASURY DEPARTMENTCustoms ServiceMerchandise, special classes:

Archaeological andethnological materialfrom—Peru; published 6-11-97

COMMENTS DUE NEXTWEEK

AGRICULTUREDEPARTMENTAgricultural MarketingServicePotatoes (Irish) grown in—

California et al.; commentsdue by 6-18-97; published5-19-97

AGRICULTUREDEPARTMENTFederal Crop InsuranceCorporationCrop insurance regulations:

Dry peas; comments due by6-16-97; published 5-15-97

AGRICULTUREDEPARTMENTRural Utilities ServiceElectric loans:

Electric system operationsand maintenance;comments due by 6-16-97; published 4-16-97

COMMERCE DEPARTMENTNational Oceanic andAtmospheric AdministrationFishery conservation and

management:Alaska; fisheries of

Exclusive EconomicZone—Shortraker and rougheye

rockfish; comments dueby 6-18-97; published6-3-97

Magnuson Act provisionsand Northeastern UnitedStates fisheries—

Experimental fishingpermits; comments dueby 6-20-97; published6-5-97

DEFENSE DEPARTMENTFederal Acquisition Regulation

(FAR):Agency information

collection activities—Proposed collection;

comment request;comments due by 6-17-97; published 4-18-97

Empowerment contracting;comments due by 6-17-97; published 4-18-97

Subcontract consent;comments due by 6-20-97; published 4-21-97

ENVIRONMENTALPROTECTION AGENCYAir programs:

Fuels and fuel additives—California gasoline

refiners, importers, andoxygenate blenders;enforcementexemptions; commentsdue by 6-16-97;published 4-16-97

Gasoline produced byforeign refiners;baseline requirements;hearing; comments dueby 6-20-97; published5-12-97

Stratospheric ozoneprotection—Significant new

alternatives policyprogram; comments dueby 6-20-97; published5-21-97

Pesticides; tolerances in food,animal feeds, and rawagricultural commodities:Deoxyribonucleic acid etc.;

comments due by 6-16-97; published 5-16-97

Plant pesticides; commentsdue by 6-16-97; published5-16-97

Viral coat protein; commentsdue by 6-16-97; published5-16-97

Solid wastes:Hazardous waste

combustors, etc.;maximum achievablecontrol technologiesperformance standards;comments due by 6-17-97; published 6-4-97

FEDERALCOMMUNICATIONSCOMMISSIONNorth American Numbering

Council recommendations;comment request; commentsdue by 6-20-97; published5-27-97

Personal communicationsservices:Narrowband PCS—

Channels and responsechannels; eligibility andservice area issues;comments due by 6-18-97; published 5-20-97

Radio stations; table ofassignments:Arizona; comments due by

6-16-97; published 4-30-97

California; comments due by6-16-97; published 4-30-97

Louisiana; comments due by6-16-97; published 4-30-97

FEDERAL EMERGENCYMANAGEMENT AGENCYFlood insurance program:

Flood mitigation assistance;comments due by 6-18-97; published 3-20-97

Write-your-own program—Private sector property

insurers assistance;comments due by 6-16-97; published 5-1-97

GENERAL SERVICESADMINISTRATIONFederal Acquisition Regulation


collection activities—Proposed collection;

comment request;comments due by 6-17-97; published 4-18-97



JUSTICE DEPARTMENTImmigration andNaturalization ServiceImmigration:

Checkpoints; pre-enrolledaccess lane program;establishment; commentsdue by 6-17-97; published4-18-97

JUSTICE DEPARTMENTPrisons BureauInmate control, custody, care,

etc.:Classification and program

review; team meetings;comments due by 6-20-97; published 4-21-97

NATIONAL AERONAUTICSAND SPACEADMINISTRATIONFederal Acquisition Regulation


collection activities—

iv Federal Register / Vol. 62, No. 112 / Wednesday, June 11, 1997 / Reader Aids

Proposed collection;comment request;comments due by 6-17-97; published 4-18-97



RAILROAD RETIREMENTBOARDDebt Collection Improvement

Act of 1996:Collection of debts by offset

against Federal payments;comments due by 6-20-97; published 4-21-97

Railroad UnemploymentInsurance Act:Sickness benefits;

acceptance of statementof sickness executed bysubstance-abuseprofessional in support of

payment; comments dueby 6-17-97; published 4-18-97

SOCIAL SECURITYADMINISTRATIONSocial security benefits and

supplemental securityincome:Federal old age, survivors

and disability insurance—Disability claims; testing

elimination of final stepin administrative reviewprocess; comments dueby 6-16-97; published5-16-97

TRANSPORTATIONDEPARTMENTCoast GuardDrawbridge operations:

Maryland; comments due by6-20-97; published 4-21-97

New Jersey; comments dueby 6-20-97; published 4-21-97

Regattas and marine parades:Assateague Channel, VA;

marine events; commentsdue by 6-20-97; published4-21-97

TRANSPORTATIONDEPARTMENTEconomic regulations:

Domestic passengermanifest information;comments due by 6-20-97; published 5-30-97

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

Lockheed; comments dueby 6-20-97; published 5-9-97

Saab; comments due by 6-19-97; published 5-8-97

Class D airspace; commentsdue by 6-16-97; published5-1-97

Class D and Class Eairspace; comments due by6-16-97; published 4-25-97

Class E airspace; commentsdue by 6-16-97; published4-25-97

TRANSPORTATIONDEPARTMENT

National Highway TrafficSafety Administration

Motor vehicle safetystandards:

Accelerator control systems;Federal regulatory review;withdrawn; technicalworkshop; comments dueby 6-20-97; published 3-21-97

Metric conversion; weightsand measures system;comments due by 6-20-97; published 4-21-97