[Federal Register Volume 88, Number 123 (Wednesday, June 28, 2023)]
[Proposed Rules]
[Pages 41863-41870]
[FR Doc No: 2023-13617]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2020-1076; Project Identifier MCAI-2020-01201-A]
RIN 2120-AA64

Airworthiness Directives; Viking Air Limited (Type Certificate
Previously Held by Bombardier Inc. and de Havilland, Inc.) Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Supplemental notice of proposed rulemaking (SNPRM).

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SUMMARY: The FAA is revising a notice of proposed rulemaking (NPRM)
that would have applied to all Viking Air Limited (Viking) (type
certificate previously held by Bombardier Inc. and de Havilland, Inc.)
Model DHC-3 airplanes. This action revises the NPRM by changing the
required action specified in the proposed airworthiness directive (AD).
Additionally, the FAA is publishing an Initial Regulatory Flexibility
Analysis (IRFA) to aid the public in commenting on the potential
impacts to small entities from this proposal. The FAA is reopening the
comment period to allow the public the chance to comment on the revised
proposed action and whether the revised proposed action would have a
significant economic impact on a substantial number of small entities.
The FAA is proposing this AD to address the unsafe condition on these
products and the agency is requesting comments on this SNPRM.

DATES: The FAA must receive comments on this SNPRM by August 14, 2023.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to regulations.gov. Follow
the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    AD Docket: You may examine the AD docket at regulations.gov under
Docket No. FAA-2020-1076; or in person at Docket Operations between 9
a.m. and 5 p.m., Monday through Friday, except

Federal holidays. The AD docket contains the NPRM, this SNPRM, the
mandatory continuing airworthiness information (MCAI), any comments
received, and other information. The street address for Docket
Operations is listed above.
    Material Incorporated by Reference:
     For service information identified in this SNPRM, contact
Viking Air Limited Technical Support, 1959 De Havilland Way, Sidney,
British Columbia, Canada, V8L 5V5; phone:<PHONE_NUMBER>; fax: (250)
656-0673; email: [email protected]; website:
vikingair.com/support/service-bulletins.
     You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 901 Locust,
Kansas City, MO 64106. For information on the availability of this
material at the FAA, call<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Deep Gaurav, Aviation Safety Engineer,
FAA, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; phone: (817)
228-3731; email: [email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2020-1076; Project Identifier
MCAI-2020-01201-A'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may again
revise this proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
regulations.gov, including any personal information you provide. The
agency will also post a report summarizing each substantive verbal
contact received about this SNPRM.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this SNPRM contain
commercial or financial information that is customarily treated as
private, that you actually treat as private, and that is relevant or
responsive to this SNPRM, it is important that you clearly designate
the submitted comments as CBI. Please mark each page of your submission
containing CBI as ``PROPIN.'' The FAA will treat such marked
submissions as confidential under the FOIA, and they will not be placed
in the public docket of this SNPRM. Submissions containing CBI should
be sent to Deep Gaurav, Aviation Safety Engineer, FAA, 1600 Stewart
Avenue, Suite 410, Westbury, NY 11590. Any commentary that the FAA
receives which is not specifically designated as CBI will be placed in
the public docket for this rulemaking.

Background

    The FAA issued an NPRM to amend 14 CFR part 39 by adding an AD that
would apply to all Viking Model DHC-3 airplanes. The NPRM published in
the Federal Register on February 8, 2022 (87 FR 7059). The NPRM was
prompted by AD CF-2018-04, dated January 19, 2018, issued by Transport
Canada, which is the aviation authority for Canada (referred to after
this as ``the MCAI''). The MCAI states that Viking developed a
supplementary inspection and corrosion control program for aging
airplanes, which identifies specific locations of an airplane that must
be inspected to ensure corrosion-related degradation does not result in
an unsafe condition.
    The MCAI requires doing all inspections specified in Part 2 of
Viking DHC-3 Otter Supplemental Inspection and Corrosion Control
Manual, PSM 1-3-5, Revision IR, dated December 21, 2017 (Viking PSM 1-
3-5, Revision IR), doing applicable corrective actions using Part 3 of
Viking PSM 1-3-5, Revision IR, and reporting to Viking Level 2 and
Level 3 corrosion as specified in Part 3 of Viking PSM 1-3-5, Revision
IR.
    Corrosion, wear, and fatigue-related degradation, if not addressed,
could lead to structural failure with consequent loss of control of the
airplane.
    You may examine the MCAI in the AD docket at regulations.gov under
Docket No. FAA-2020-1076.
    In the NPRM, the FAA proposed to require establishing a corrosion
prevention and control program to identify and correct corrosion and
cracking. In the NPRM, the FAA also proposed to require completing all
of the initial tasks identified in the program and reporting corrosion
findings to Viking.

Actions Since the NPRM Was Issued

    Since the FAA issued the NPRM, the FAA revised the proposed actions
specified in the NPRM. In the NPRM, the FAA proposed to require
establishing a corrosion prevention and control program approved by the
FAA. In this SNPRM the FAA proposes to require incorporating into the
existing maintenance records for your airplane the actions specified in
Parts 2 and 3 of Viking PSM 1-3-5, Revision IR.
    In addition, the FAA is reopening the comment period to allow the
public the chance to comment on whether the proposed AD would have a
significant economic impact on a substantial number of small entities.
The FAA is proposing this AD to address the unsafe condition on these
products.

Comments

    The FAA received comments from three commenters. The commenters
were Taquan Air, Talkeetna Air Taxi, and an individual. The following
presents the comments received on the NPRM and the FAA's response to
each comment.

Request To Withdraw the NPRM: Lack of Data on Corrosion-Related
Accidents

    Taquan Air and an individual commenter stated that they were not
aware of any corrosion-related accidents involving the affected
airplanes. The individual commenter noted that ADs are supposed to be
driven by accidents and incidents that result in injury and/or death
and stated that if this is correct, then there is no justification for
the NPRMs that would be applicable to the Beavers [Model DHC-2
airplanes] and Otters [Model DHC-3 airplanes]. The individual commenter
asked how aviation would be made better by issuing the NPRMs that would
be applicable to two dependable and reliable airplanes. The FAA infers
that these commenters are requesting that the FAA withdraw the NPRM.
    The FAA does not agree with the commenters' requests to withdraw
the NPRM. According to 14 CFR 39.5, the issuance of an AD is based on
the finding that an unsafe condition exists or is likely to exist or
develop in other products of the same type design. This section of the
Federal Aviation Regulations does not specify that an accident is
necessary for the FAA to determine that there is an unsafe condition.
In this case, the FAA independently reviewed the MCAI and related
service information and determined an unsafe condition exists and an AD
is needed to address that unsafe condition. Further, it is within

the FAA's authority and responsibility to issue ADs to require actions
to address unsafe conditions that are not otherwise being addressed (or
are not addressed adequately) by routine maintenance procedures. In
addition, based upon detailed airplane tear-down inspections performed
by Viking (the design approval holder), the FAA has determined that the
existing maintenance procedures and inspections will not adequately
detect corrosion. Although this SNPRM is not tied to a specific
corrosion-related accident, the FAA has determined that undetected
corrosion could exist and lead to structural failure. The FAA has a
responsibility to issue ADs to correct identified unsafe conditions in
aircraft, regardless of the location or cause. The FAA has not changed
this SNPRM regarding this issue.

Request To Withdraw NPRM: Impact on Small Entities

    Taquan Air and an individual commenter expressed concern regarding
the financial impact of the NPRM on small entities. The individual
commenter asked if the FAA considered the financial burden on
operators. This commenter explained that there are not enough mechanics
and asked how a company with Beavers and Otters could stay in business
trying to create and get two corrosion programs up at the same time and
maintain the flying aircraft. Taquan Air stated that the NPRM was
targeting a specific type of operator and would financially burden just
Beaver and Otter operators.
    The FAA acknowledges the commenters' concerns and infers that the
commenters are requesting that the NPRM be withdrawn due to the
perceived adverse economic impact on small entities. Under 14 CFR 39.1,
issuance of an AD is based on the finding that an unsafe condition
exists or is likely to develop in aircraft of a particular type design.
An aging airplane requires more attention during maintenance procedures
and, at times, more frequent inspections of structural components to
detect damage due to environmental deterioration, accidental damage,
and fatigue. The unsafe condition addressed in this SNPRM includes
undetected corrosion, which could lead to structural failure and
consequent loss of control of the airplane. Inspections and repair are
therefore necessary to detect and correct such corrosion before it
leads to structural failure. The FAA has not changed this SNPRM
regarding this issue.
    Regarding the question of the NPRM having a significant economic
impact on a substantial number of small entities, the FAA has developed
an IRFA for this proposed action and a reason for issuing this SNPRM is
to solicit comments on the IRFA.

Request To Supersede Certain ADs for Viking Model DHC-3 Airplanes

    Talkeetna Air Taxi requested that the NPRM be revised to supersede
certain ADs for Viking Model DHC-3 airplanes that include inspections
requirements. The commenter explained that Viking PSM 1-3-5, Revision
IR, is a broad and detailed document, and stated that if operators
chose to use Viking PSM 1-3-5, Revision IR, to establish a corrosion
control program, then the repetitive inspections required by those ADs
would be redundant and those AD should be superseded.
    The FAA disagrees with the commenter's request. The FAA has
reviewed all potentially related ADs against the proposed requirements
in this SNPRM and determined that no ADs need to be superseded or
rescinded. If an operator identifies an inspection that it considers to
be redundant, the operator can request an alternative method of
compliance (AMOC) by using the procedures specified in paragraph (i) of
this SNPRM.

Request To Add Airplanes to Aging Aircraft or Other Existing Rulemaking

    Taquan Air and an individual commenter requested that the unsafe
condition be addressed by adding Viking Model DHC-3 airplanes to the
Aging Aircraft rule (14 CFR 135.422), rather than through the NPRM. The
commenters noted that doing so would evenly spread the burden, rather
than having different corrosion control policies for different airplane
models. Taquan Air noted that airplanes operating in Alaska have been
exempted from the Aging Aircraft rule. Both commenters suggested that
14 CFR part 43 appendix D (which specifies the scope and detail of
items to be included in annual and 100-hour inspections) be rewritten
to address corrosion. The individual commenter added that 14 CFR
135.422 should apply to all part 135 operators, with a similar 14 CFR
regulation applicable to part 91 operators.
    The FAA disagrees with adding this to the Aging Aircraft rule. The
proposed action would address a known unsafe condition on the structure
of Viking Model DHC-3 airplanes. If the FAA finds that other aircraft
have similar issues to the affected airplanes, the FAA would look at
appropriate rulemaking for those aircraft also. For the Viking Model
DHC-3 airplanes, the FAA has determined that annual and 100-hour
inspections are currently not adequate to address the unsafe condition
identified in this SNPRM. The FAA has a responsibility to address an
unsafe condition that is not addressed by general maintenance by
issuing an AD. Therefore, the proposed actions of this SNPRM are the
appropriate way of addressing the unsafe condition. Adding inspections
for corrosion to 14 CFR part 43 appendix D to address the unsafe
condition identified in this SNPRM is not appropriate because that
corrective action would not be limited to the products affected by this
unsafe condition. 14 CFR part 43 appendix D contains general
inspections that are not specific to individual products. Therefore,
issuing an AD is the appropriate vehicle for addressing this identified
unsafe condition. The FAA has not changed this SNPRM regarding this
issue.

Request To Revise Requirements Based on Airplane Usage Conditions

    Taquan Air asked if the operating environment, including the use of
floats, wheels, or skis, would be considered when the FAA reviewed the
corrosion prevention program. The FAA infers that the commenter is
requesting a change to the NPRM based on different airplane operational
usage.
    The FAA disagrees with the commenter's request to change the NPRM
based on different airplane operational usage. There is no current
requirement to track the hours spent flying in different conditions or
types of water. Additionally, operators may not know the entire flight
history of an airplane. Without this detailed knowledge of each
airplane, it would be impossible for the FAA to develop a special set
of inspections based on airplane usage conditions. However, operators
may submit a proposal for revised requirements by requesting an AMOC
using the procedures specified in paragraph (i) of this SNPRM. The FAA
has not changed this SNPRM regarding this issue.

Request To Clarify Process for Creating Corrosion Prevention and
Control Program

    Taquan Air and an individual commenter asked for clarity regarding
the process of creating and getting approval for a corrosion prevention
and control program. Taquan Air asked how long it would take to get a
program approved. Taquan Air also asked if the Viking corrosion control
program is an approved method for establishing a corrosion prevention
and control

program. Taquan Air suggested that the FAA establish areas that need to
be in the program and an outline of expectations, so operators can get
it correct. The individual commenter suggested it is unfair for the FAA
to require operators to develop a program without the proper
qualifications, experience, or training. That same commenter suggested
that the lack of guidance and procedures would leave room for
interpretation, leading to multiple exchanges with the FAA and an ever-
evolving process that could lead to significant delays and could ground
airplanes.
    The FAA acknowledges the commenters' concerns regarding the
creation of a corrosion prevention and control program and has
simplified the proposed actions. This SNPRM would require incorporating
the inspections in Parts 2 and 3 of Viking PSM 1-3-5, Revision IR, into
the existing maintenance records. In Note 1 to paragraph (g) of the
NPRM, the use of Viking PSM 1-3-5, Revision IR, was identified as an
acceptable means of compliance but was not required to be used. That
note has been removed from this SNPRM and the subsequent note that
appeared as Note 2 to paragraph (g) of the NPRM has been has re-
identified as Note 1 to paragraph (g) in this proposed AD.
    The FAA also acknowledges the commenters' concerns regarding delays
and timeliness of approving a prevention and control program, however,
since this proposed AD would require operators to incorporate the
inspections in Parts 2 and 3 of Viking PSM 1-3-5, Revision IR, into the
existing maintenance records, those concerns should be mitigated.

Request To Allow Mechanics to Perform Certain Tasks

    An individual commenter requested that ``properly trained
mechanics'' be allowed to perform the non-destructive testing (NDT)
inspections (tasks).
    The FAA agrees with the commenter's request. Operators can use an
in-house properly trained individual with qualifications equivalent to
Level II or Level III to do the NDT inspections. FAA Advisory Circular
65-31B, Training, Qualification, and Certification of Nondestructive
Inspection Personnel, dated February 24, 2014, contains FAA-approved
Level II and Level III qualification standards criteria for inspection
personnel doing NDT inspections. Viking PSM 1-3-5, Revision IR,
specifies that personnel certified as Level II or higher, as acceptable
to the operator's cognizant airworthiness authority, can do the NDT
inspections. The FAA has not changed this SNPRM regarding this issue.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Viking PSM 1-3-5, Revision IR, which specifies
procedures for inspecting areas of the airplane that are particularly
susceptible to corrosion, wear, and fatigue-related degradation. Viking
PSM 1-3-5, Revision IR, also specifies repetitive inspection intervals,
defines the different levels of corrosion, and provides corrective
action if corrosion is found.
    This service information is reasonably available because the
interested parties have access to it through their normal course of
business or by the means identified in ADDRESSES.

Other Related Service Information

    The FAA also reviewed Viking DHC-3 Otter Service Bulletin V3/0010,
Revision NC, dated March 19, 2020. The service bulletin provides a list
of new inspection tasks that have been added to the DHC-3 maintenance
program in Viking PSM 1-3-5, Revision IR.

FAA's Determination

    These products have been approved by the aviation authority of
another country and are approved for operation in the United States.
Pursuant to the FAA's bilateral agreement with this State of Design
Authority, it has notified the FAA of the unsafe condition described in
the MCAI and service information described above. The FAA is issuing
this SNPRM after determining that the unsafe condition described
previously is likely to exist or develop on other products of the same
type design. At the request of some commenters, the FAA is reopening
the comment period of this SNPRM to allow the public the chance to
comment on the economic impact on a substantial number of small
entities. This SNPRM also contains the changes discussed previously.

Proposed AD Requirements in This SNPRM

    This proposed AD would require within 90 days after the effective
date of the final rule, incorporating into the existing maintenance
records the actions specified in Parts 2 and 3 of Viking PSM 1-3-5,
Revision IR, and doing each initial task within 6 months after the
effective date of the proposed AD or at the threshold for each
applicable task specified in Part 3 of Viking Product Support Manual
PSM 1-3-5, Revision IR, whichever occurs later. This proposed AD would
also require reporting corrosion findings to Viking.

ADs Mandating Airworthiness Limitations (ALS)

    The FAA has previously mandated airworthiness limitations by
issuing ADs that require revising the ALS of the existing maintenance
manual or instructions for continued airworthiness to incorporate new
or revised inspections. This proposed AD, however, would require
establishing and incorporating new inspections into the existing
maintenance records required by 14 CFR 91.417(a)(2) or 135.439(a)(2)
for your airplane. The FAA does not intend this as a substantive
change. Requiring incorporation of the new ALS requirements into the
existing maintenance records, rather than requiring individual
repetitive inspections and replacements, allows operators to record AD
compliance once after updating the existing maintenance records, rather
than recording compliance after every inspection and part replacement.

Impact on Intrastate Aviation in Alaska

    In light of the heavy reliance on aviation for intrastate
transportation in Alaska, the FAA has fully considered the effects of
this SNPRM (including costs to be borne by affected operators) from the
earliest possible stages of AD development. As previously stated, 14
CFR part 39 requires operators to correct an unsafe condition
identified on an airplane to ensure operation of that airplane in an
airworthy condition. The FAA has determined that the need to correct
corrosion, wear, and fatigue-related degradation in aging aircraft,
which could lead to structural failure with consequent loss of control
of the airplane, outweighs any impact on aviation in Alaska.

Costs of Compliance

    The FAA estimates that this AD, if adopted as proposed, would
affect 68 airplanes of U.S. registry. The FAA also estimates that it
would take about 1 work-hour per airplane at a labor rate of $85 per
work-hour to revise the existing maintenance records.
    Based on these figures, the FAA estimates the cost of the proposed
AD on U.S. operators to be $5,780 or $85 per airplane.
    The FAA estimates it would take about 1 work-hour to report any
Level 2 corrosion found during the proposed initial or subsequent
inspections or any Level 3 corrosion found during the proposed initial
or subsequent

inspections, for an estimated cost of $85 per airplane.

Paperwork Reduction Act

    A federal agency may not conduct or sponsor, and a person is not
required to respond to, nor shall a person be subject to a penalty for
failure to comply with a collection of information subject to the
requirements of the Paperwork Reduction Act unless that collection of
information displays a currently valid OMB Control Number. The OMB
Control Number for this information collection is 2120-0056. Public
reporting for this collection of information is estimated to take
approximately 1 hour per response, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information. All responses to this collection of
information are mandatory. Send comments regarding this burden estimate
or any other aspect of this collection of information, including
suggestions for reducing this burden, to: Information Collection
Clearance Officer, Federal Aviation Administration, 10101 Hillwood
Parkway, Fort Worth, TX 76177-1524.

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Flexibility Determination

    The Regulatory Flexibility Act of 1980, Public Law 96-354, 94 Stat.
1164 (5 U.S.C. 601-612) (RFA) establishes as a principle of regulatory
issuance that agencies shall endeavor, consistent with the objective of
the rule and of applicable statutes, to fit regulatory and
informational requirements to the scale of the businesses,
organizations, and governmental jurisdictions subject to regulation. To
achieve that principle, the RFA requires agencies to solicit and
consider flexible regulatory proposals and to explain the rationale for
their actions. The RFA covers a wide-range of small entities, including
small businesses, not-for-profit organizations, and small governmental
jurisdictions.
    Agencies must perform a review to determine whether a proposed or
final rule will have a significant economic impact on a substantial
number of small entities. If the agency determines that it will, the
agency must prepare a regulatory flexibility analysis as described in
the RFA. Based on the comments received following publication of the
NPRM, the FAA has completed an IRFA and requests comments from affected
small entities. The purpose of this analysis is to identify the number
of small entities affected, assess the economic impact of the proposed
regulation on them, and consider less burdensome alternatives and still
meet the agency's statutory objectives.

Initial Regulatory Flexibility Act Analysis

    The RFA, as amended by the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857, Mar. 29, 1996)
and the Small Business Jobs Act of 2010 (Pub. L. 111-240, 124 Stat.
2504, Sept. 27, 2010), requires Federal agencies to consider the
effects of the regulatory action on small business and other small
entities and to minimize any significant economic impact. The term
``small entities'' comprises small businesses and small organizations
that are independently owned and operated and are not dominant in their
fields, and small governmental jurisdictions with populations of less
than fifty thousand (50,000).
    The FAA is publishing this IRFA to aid the public in commenting on
the potential impacts to small entities from this proposal. The FAA
invites interested parties to submit data and information regarding the
potential economic impact that would result from the proposal. The FAA
will consider comments when making a determination or when completing a
Final Regulatory Flexibility Assessment.
    Under Sections 603(b) and (c) of the RFA, the initial regulatory
flexibility analysis for a proposed rule must contain the following:
    (1) A description of the reasons why the action by the agency is
being considered;
    (2) A succinct statement of the objectives of, and legal basis for,
the proposed rule;
    (3) A description of and, where feasible, an estimate of the number
of small entities to which the proposed rule will apply;
    (4) A description of the projected reporting, recordkeeping, and
other compliance requirements of the proposed rule, including an
estimate of the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record;
    (5) An identification, to the extent practicable, of all relevant
Federal rules that may duplicate, overlap, or conflict with the
proposed rule; and
    (6) A description of any significant alternatives to the proposed
rule which accomplish the stated objectives of applicable statutes and
which minimize any significant economic impact of the proposed rule on
small entities.

1. Reasons the Action Is Being Considered

    The FAA issued an NPRM that proposed to adopt a new AD for Viking
Model DHC-3 airplanes. This proposed AD results from MCAI originated by
an aviation authority of another country to identify and correct an
unsafe condition on an aviation product. The NPRM proposed to require
establishing a corrosion prevention and control program to identify and
correct corrosion and cracking. The NPRM also proposed to require
completing all of the initial tasks identified in the program and
reporting corrosion findings to Viking.

2. Objectives and Legal Basis of the Proposed Rule

    The objective of the actions proposed in this SNPRM is to meet the
same safety intent as those actions proposed in the NPRM. The FAA
issued the NPRM under the authority described in Title 49, Subtitle
VII, Part A, Subpart III, Section 44701, General requirements. Under
that section, the FAA is charged with promoting safe flight of civil
aircraft in air commerce by prescribing minimum safety standards
required in the interest of safety. This regulation is within the scope
of that authority because it addresses an unsafe condition that is
likely to exist or develop on Viking Model DHC-3 airplanes.
    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more

detail the scope of the Agency's authority.

3. Description and Estimate of the Number of Small Entities

    The FAA used the definition of small entities in the RFA for this
analysis. The RFA defines small entities as small businesses, small
governmental jurisdictions, or small organizations. In 5 U.S.C. 601(3),
the RFA defines ``small business'' to have the same meaning as ``small
business concern'' under section 3 of the Small Business Act. The Small
Business Act authorizes the Small Business Administration (SBA) to
define ``small business'' by issuing regulations.
    SBA (2022) has established size standards for various types of
economic activities, or industries, under the North American Industry
Classification System (NAICS).\1\ These size standards generally define
small businesses based on the number of employees or annual receipts.
---------------------------------------------------------------------------

    \1\ Small Business Administration (SBA). 2022. Table of Size
Standards. Effective July 14, 2022. https://www.sba.gov/document/support-table-size-standards.
---------------------------------------------------------------------------

    The FAA identified 68 Viking Model DHC-3 airplanes that would be
affected by the proposed AD. These 68 airplanes are registered to 32
private firms and 5 individuals. The individuals are excluded from this
analysis as they presumably are not small entities under the RFA.
    The 32 private firms own 63 airplanes. Of these firms, the FAA was
able to obtain the data necessary to classify 21 of them.\2\ All but
one firm qualify as small entities under the RFA. Thus, the FAA
estimates that this rule would impact 20 small entities. For these 20
small entities, the results of the of the cost impact analysis are
shown in Table 1, ``Cost Impact on Small Entities.''
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    \2\ Firm revenue and employee count are drawn from online
sources, including: Dun & Bradstreet, Inc. (www.dnb.com); Manta
Media, Inc. (www.manta.com); Buzzfile Media, Inc.
(www.buzzfile.com); Datanyze, Inc. (www.datanyze.com); Moody's
Analytics (start.cortera.com); GeneralLiabilityInsure.com
(generalliabilityinsure.com); Kona Equity (www.konaequity.com); and
ZoomInfo Technologies LLC (www.zoominfo.com).
---------------------------------------------------------------------------

4. Projected Reporting, Recordkeeping, and Other Compliance
Requirements

    The FAA estimates that the AD costs per airplane would be 1 work
hour plus $85 in reporting costs for the initial inspection, for a
total of $170. The estimated cost of this proposed AD, per small
entity, is shown in the ``Cost'' column of Table 1 and cost impact is
measured by cost as a percentage of revenues. As the table shows, the
mean cost impact is 0.1% of annual revenues,\3\ with a maximum impact
of 0.46% of annual revenues, and a minimum impact below 0.01%. This
impact did not vary with firm size; the largest cost impact was only
0.5%, which is still not considered significant. Costs under 1% of
revenues for all of the small entities lead the FAA to conclude that
this proposed rule would s not have a significant impact on a
substantial number of small entities.
---------------------------------------------------------------------------

    \3\ These revenue data come from online sources such as
zoominfo.com, opencorporates.com, buzzfile.com, manta.com,
allbiz.com, and lookupcompanyrevenue.com.

                                                         Table 1--Cost Impact on Small Entities
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                                                                              Cost/
                   Firm                     No. Acft   Revenue      Cost     revenue     NAICS          Size standard               NAICS industry
                                                       ($1,000)   ($1,000)     (%)        code
--------------------------------------------------------------------------------------------------------------------------------------------------------
SUMMIT LEASING LLC.......................          3       $110       $0.2       0.00     532490  $35 mn...................  Other Comm'l and Industrial
                                                                                Mach. and Equip. Rental &
                                                                                Leasing.
KATMAI AIR LLC...........................          2        117        0.2       0.00     532411  $40 mn...................  Comm'l Air, Rail, and Water
                                                                                Transp. Equip. Rental &
                                                                                Leasing.
JESPERSEN AIRCRAFT SERVICES INC..........          1        113        1.9       0.00     481219  $22 mn...................  Other Nonscheduled Air
                                                                                Transportation.
DOYON AIR TRANSPORT LLC..................          1        127        1.0       0.01     488999  $22 mn...................  All Other Support
                                                                                Activities for
                                                                                Transportation.
RED LEASING LLC..........................          2        359        0.2       0.01     532490  $35 mn...................  Other Comm'l and Industrial
                                                                                Mach. and Equip. Rental &
                                                                                Leasing.
RAINBOW KING LODGE INC...................          1        209        0.2       0.02     721199  $8 mn....................  All Other Traveler
                                                                                Accommodation.
PANTECHNICON AVIATION LTD................          1        235        0.2       0.02     532411  $40 mn...................  Comm'l Air, Rail, and Water
                                                                                Transp. Equip. Rental &
                                                                                Leasing.
EMERALD AIR SERVICE INC..................          1        250        1.0       0.02     481219  $22 mn...................  Other Nonscheduled Air
                                                                                Transportation.
BLUE AIRCRAFT LLC........................          2        750        0.2       0.02     483000  1,500 emp................  Scheduled Passenger Air
                                                                                Transportation.
TALON AIR SERVICE INC....................          1        520        0.2       0.02     481219  $22 mn...................  Other Nonscheduled Air
                                                                                Transportation.
BALD MOUNTAIN AIR SERVICE INC............          1        700        0.2       0.03     481219  $22 mn...................  Other Nonscheduled Air
                                                                                Transportation.
NORTHWEST SEAPLANES INC..................          1        750        0.3       0.05     481111  1,500 emp................  Scheduled Passenger Air
                                                                                Transportation.
TALKEETNA AIR TAXI INC...................          6      4,600        0.2       0.07     481211  1,500 emp................  Nonscheduled Chartered
                                                                                Passenger Air
                                                                                Transportation.
GOLDEN EAGLE OUTFITTERS INC..............          1        960        0.2       0.07     713990  $8 mn....................  All Other Amusement and
                                                                                Recreation Industries.
MUNICH HANS W DBA........................          1        998        0.2       0.08     481219  $22 mn...................  Other Nonscheduled Air
                                                                                Transportation.
DESTINATION ALASKA ADVENTURE CO LLC......          1      1,300        0.3       0.09     481211  1,500 emp................  Nonscheduled Chartered
                                                                                Passenger Air
                                                                                Transportation.
RUSTAIR INC..............................          6     10,224        0.2       0.13     532411  $40 mn...................  Comm'l Air, Rail, and Water
                                                                                Transp. Equip. Rental &
                                                                                Leasing.
KENMORE AIR HARBOR LLC...................         11     51,500        0.2       0.15     481111  1,500 emp................  Scheduled Passenger Air
                                                                                Transportation.
RAPIDS CAMP LODGE INC....................          1      7,000        0.3       0.29     721214  $8 mn....................  Recreational and Vacation
                                                                                Camps (except
                                                                                Campgrounds).
BANK OF UTAH TRUSTEE.....................          1     90,000        0.5       0.46     522110  $750 mn in assets........  Commercial Banking.
                                          --------------------------------------------------------------------------------------------------------------
    Total................................         45    170,822       7.70
    Average..............................  .........      8,541       0.38       0.06
    Median...............................  .........        725       0.17       0.02  .........  .........................  ...........................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: 1. The size standard is the maximum size for the NAICS industry considered by the SBA to be a small entity. 2. AD costs per airplane are 1 work
  hour x $85 + $85 reporting costs for initial inspection, for a total of $170.

5. All Federal Rules That May Duplicate, Overlap, or Conflict

    There are no relevant Federal rules that may duplicate, overlap, or
conflict with the proposed rule.

6. Significant Alternatives Considered

    The FAA did not find any significant regulatory alternatives to the
proposed AD that would still accomplish the safety objectives of this
proposed AD.

Regulatory Findings

    The FAA determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Would not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the RFA.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

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

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

Viking Air Limited (Type Certificate Previously Held by Bombardier
Inc. and de Havilland, Inc.): Docket No. FAA-2020-1076; Project
Identifier MCAI-2020-01201-A.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) by August 14, 2023.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Viking Air Limited (type certificate
previously held by Bombardier Inc. and de Havilland, Inc.) Model
DHC-3 airplanes, all serial numbers, certificated in any category.

(d) Subject

    Joint Aircraft System Component (JASC) Code 2700, Flight Control
System.

(e) Unsafe Condition

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) originated by an aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI describes the unsafe condition as corrosion, wear,
and fatigue-related degradation in aging aircraft. The FAA is
issuing this AD to detect and address corrosion and cracking. This
condition, if not addressed, could lead to structural failure with
consequent loss of control of the airplane.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Required Actions

    (1) Within 90 days after the effective date of this AD,
incorporate into the existing maintenance records required by 14 CFR
91.417(a)(2) or 135.439(a)(2), as applicable for your airplane, the
actions and associated thresholds and intervals, including life
limits, specified in Parts 2 and 3 of Viking DHC-3 Otter
Supplemental Inspection and Corrosion Control Manual, PSM 1-3-5,
Revision IR, dated December 21, 2017 (Viking PSM 1-3-5, Revision
IR). Do each initial task within 6 months after the effective date
of this AD or at the threshold for each applicable task specified in
Part 3 of Viking Product Support Manual PSM 1-3-5, Revision IR,
whichever occurs later. Where Viking PSM 1-3-5, Revision IR,
specifies contacting Viking regarding a component's alloy and heat
treat condition, this AD requires contacting the Manager,
International Validation Branch, FAA, Transport Canada, or Viking's
Transport Canada Design Organization Approval (DOA). If approved by
the DOA, the approval must include the DOA-authorized signature.
    Note 1 to paragraph (g)(1): Viking DHC-3 Otter Service Bulletin
V3/0010, Revision NC, dated March 19, 2020, contains additional
information related to this AD.
    (2) After the action required by paragraph (g)(1) of this AD has
been done, no alternative actions and associated thresholds and
intervals, including life limits, are allowed unless they are
approved as specified in paragraph (i) of this AD.

(h) Reporting

    (1) For inspections done after the effective date of this AD,
report to Viking any Level 2 or Level 3 corrosion, as specified in
Viking PSM 1-3-5, Revision IR, at the times specified in and in
accordance with part 3, paragraph 5, of Viking PSM 1-3-5, Revision
IR.
    (2) For inspections done before the effective date of this AD,
within 30 days after the effective date of this AD report to Viking
any Level 2 or Level 3 corrosion, as specified in Viking PSM 1-3-5,
Revision IR, in accordance with part 3, paragraph 5, of Viking PSM
1-3-5, Revision IR.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, International Validation Branch, FAA, has the
authority to approve AMOCs for this AD, if requested using the
procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19,
send your request to your principal inspector or local Flight
Standards District Office, as appropriate. If sending information
directly to the manager of the International Validation Branch, mail
it to the address identified in paragraph (j)(2) of this AD or email
to: [email protected]. If mailing information, also submit
information by email.
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.
    (3) An AMOC that provides an acceptable level of safety may be
used for any repair, modification, or alteration required by this AD
if it is approved specifically for this AD by the Manager,
International Validation Branch, FAA.

(j) Additional Information

    (1) Refer to Transport Canada AD CF-2018-04, dated January 19,
2018, for related information. This Transport Canada AD may be found
in the AD docket at regulations.gov under Docket No. FAA-2020-1076.
    (2) For more information about this AD, contact Deep Gaurav,
Aviation Safety Engineer, FAA, 1600 Stewart Avenue, Suite 410,
Westbury, NY 11590; phone:<PHONE_NUMBER>; email: [email protected].
    (3) Service information identified in this AD that is not
incorporated by reference is available at the addresses specified in
paragraphs (k)(3) and (4) of this AD.

(k) Material Incorporated by Reference

    (1) The Director of the Federal Register approved the
incorporation by reference of the service information listed in this
paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
    (2) You must use this service information as applicable to do
the actions required by this AD, unless the AD specifies otherwise.
    (i) Viking DHC-3 Otter Supplemental Inspection and Corrosion
Control Manual, PSM 1-3-5, Revision IR, dated December 21, 2017.
    (ii) [Reserved]
    (3) For service information identified in this AD, contact
Viking Air Limited Technical Support, 1959 De Havilland Way, Sidney,
British Columbia, Canada, V8L 5V5; phone:<PHONE_NUMBER>; fax: (250)
656-0673; email: [email protected]; website:
vikingair.com/support/service-bulletins.
    (4) You may view this service information at the FAA,
Airworthiness Products Section, Operational Safety Branch, 901
Locust, Kansas City, MO 64106. For information on the availability
of this material at the FAA, call<PHONE_NUMBER>.
    (5) You may view this service information that is incorporated
by reference at the

National Archives and Records Administration (NARA). For information
on the availability of this material at NARA, email:
[email protected], or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    Issued on June 21, 2023.
Michael Linegang,
Acting Director, Compliance & Airworthiness Division, Aircraft
Certification Service.
[FR Doc. 2023-13617 Filed 6-27-23; 8:45 am]
BILLING CODE 4910-13-P


           Economic Impacts Assessment for Proposed Revisions to the
             Export Provisions of the Cathode Ray Tube (CRT) Rule

                 Office of Resource Conservation and Recovery
                 Office of Solid Waste and Emergency Response
                     U.S. Environmental Protection Agency

                                 November 2011

                               EXECUTIVE SUMMARY

      The Environmental Protection Agency (EPA or the Agency) is proposing to revise the export  provisions of the Cathode Ray Tube (CRT) final rule published on July 28, 2006 (71 FR 42928).  The purpose of these proposed revisions is to address certain implementation concerns with the current export provisions of the rule.  These changes will facilitate compliance with the requirements and will enable the Agency to obtain additional information on the export of this class of used electronics.    The proposed rule would affect only the export provisions of the CRT rule.  It would not affect any requirements applicable to domestic management of used CRTs.   Nor does this proposed action affect households or conditionally exempt small quantity generators (CESQGs).  Therefore, entities potentially affected by today's action are limited to those persons or companies who export used CRTs and CRT glass for reuse or recycling.
      EPA is proposing to add a definition of "CRT exporter" to the CRT rule.  This proposed definition will clarify the responsibilities of brokers and other intermediaries in fulfilling the export notice requirements.  EPA is also proposing to revise the notifications that must be submitted to EPA when CRTs are exported for reuse or recycling, and to require annual reports from exporters of CRTs for recycling.  This document assesses the potential economic impacts of the proposed CRT Rule revisions.
Summary of Results
      Given the minor changes being imposed by this rule, the results of our cost assessment reveal very modest cost impacts.
1)  All exporters of CRTs (regardless of whether they are sending CRTs for Recycling or Reuse), will face a new one-time up-front cost to familiarize themselves with the proposed CRT rule revisions.  This one-time cost is expected to be incurred by 138 CRT exporters.  The total cost of this provision equals approximately $39,000 in the first year following promulgation of the rule.

2)   Exporters of CRTs sent for recycling will face a new requirement to produce and submit an Annual Report regarding their actual recycling exports.   However, because the new proposed requirement is expected to result in only 12 new reports each year, the total costs to exporters and EPA are very low and equal a total of approximately $2,500 per year.

3)  Added to these costs are additional annual costs to all 138 CRT Exporters ranging from $2,386 to $4,453 for adhering to the additional information requirements proposed for both of the current Recycling & Reuse Notices.  These costs, in combination with the added costs for EPA's review of these notices (estimated to be between $2,449 and $4,572), brings the total annual cost for this feature of the proposed rule to a range of approximately $4,835 to $9,025.

      In conclusion, the total estimated cost impacts from this rule are estimated to be $39,000 in year one only, plus annual costs in the range of $7,300 to $11,500 starting in year one and continuing each year thereafter.

                               TABLE OF CONTENTS

INTRODUCTION
       1.1 	Background on Existing Cathode Ray Tube (CRT) Rule
      1.2   	Need for Proposed Regulatory Action

       2.0	OVERVIEW OF PROPOSED REGULATORY REQUIREMENTS
       2.1	Definition of "CRT Exporter"
       2.2	Proposed Rule Changes Specific to the "Export of CRTs for Recycling"
            2.2.1	New Annual Report Required from Exporters of CRTs Sent for Recycling
      2.2.2	Additional Destination Data Requested as Part of the Recycling Notice
      2.3	Proposed Changes Specific to the "Export of CRTs for Reuse"
            2.3.1	Proposed Changes to Notification Requirements

 3.0	METHODOLOGY AND ASSUMPTIONS
       3.1   Estimated Number of Potentially Impacted CRT Exporters
       3.2   Labor Rate Estimates and Assumptions
       3.3   Burden Hour Estimates and Assumptions
       3.4   Material Cost Estimates and Assumptions

 4.0	ASSESSMENT OF POTENTIAL COSTS

       4.1   Estimated Costs for Reading the Rule
       4.2   Estimated Costs for New Annual Reporting by CRT Export Recyclers
       4.3   Estimated Costs for Additional Reuse and Recycling Notification Requirements
      4.4   Total Cost Impact of the Proposed CRT Rule Revisions

 5.0	QUALITATIVE DISCUSSION OF BENEFITS

   A. ATTACHMENTS   Supporting Documentation For Assessment of Costs
   1.0 INTRODUCTION

      1.1  	Background on Existing Cathode Ray Tube (CRT) Rule

      The Agency promulgated the CRT rule on July 28, 2006 (71 FR 42928).   In that rule, EPA amended its regulations under the Resource Conservation and Recovery Act (RCRA) to streamline management requirements for used CRTs and glass removed from CRTs, with the intent of encouraging their recycling and reuse.  Under 40 CFR 261.39, these materials are excluded from the definition of solid waste if certain conditions are met. Used CRTs (intact or broken) sent for reuse and recycling are subject to the speculative accumulation requirements of 261.1(c)(8).   Used, broken CRTs sent for recycling are subject to packaging and labeling requirements, as are CRT glass processors.  CRT glass processors are also subject to speculative accumulation requirements and may not use temperatures high enough to volatilize lead.
      In addition to these domestic requirements, the CRT rule also contains requirements at 40 CFR  261.39(a)(5)  for used CRTs exported for recycling. Exporters of used CRTs for recycling must notify EPA of an intended shipment 60 days before the shipment. Notifications may cover exports extending over a 12-month or shorter period. The notification must include contact information about the exporter and recycler, and an alternate recycler. It must also include a description of the recycling, frequency and rate of export, means of transport, total quantity of CRTs, and information about transit countries.
      With respect to used intact CRTs that are exported for reuse, 40 CFR 261.41 requires exporters to submit a one-time notification to EPA with contact information and a statement that they are exporting the CRTs for reuse. They must keep copies of normal business records demonstrating that each shipment will be reused. Records must be retained for three years from the date of export.
      1.2	Need for Proposed Regulatory Action
      Since promulgation of the CRT rule in 2006, exports of CRTs and CRT glass have continued, whether for reuse or recycling.  As EPA implemented the rule, two principal concerns became apparent. The first was that when CRTs and CRT glass are exported for recycling or reuse, several parties may be involved in the transaction. This multi-party involvement has sometimes led to confusion about which party is responsible for fulfilling the export notice requirements.  The second concern involves CRTs that are ostensibly exported for reuse but that are actually disassembled and recycled when they reach the receiving country, sometimes under unsafe conditions.  To address these concerns, EPA is proposing minor changes to the current CRT Rule as described in Section 2.0 below.

2.0	OVERVIEW OF PROPOSED REGULATORY REQUIREMENTS
	2.1	Definition of "CRT Exporter" (applicable to both CRTs for Reuse or Recycling)
      When CRTs are exported for recycling or reuse, there are often several parties involved and this can cause considerable confusion over exactly who must file the export notices required under 40 CFR 261.39(a)(5)(for CRTs exported for recycling) and 40 CFR 261.41(for CRTs exported for reuse). To reduce this confusion, the Agency is proposing to add a definition of "CRT exporter" to 40 CFR 260.10, which states that a CRT exporter is "any person who decides that CRTs will be sent outside the United States or its territories for recycling or reuse (including reuse after refurbishment in the receiving country), and any intermediary arranging for the export".  The reference to "any intermediary arranging for the export" is modeled on the definition of "primary exporter" of hazardous waste in 40 CFR 260.10.  As described above, there may be multiple parties who participate in the exporting of CRTs.  To avoid duplicative submissions, the Agency expects only one party to perform the exporter duties under 40 CFR 261.39(a)(5) and 40 CFR 261.41   Lastly, EPA emphasizes that this proposed definition would clarify rather than change current liability for violations of the CRT export requirements.    [Note: EPA considers there to be no economic costs associated with this definitional change.]
      2.2	Proposed Rule Changes Specific to the "Export of CRTs for Recycling"
      Under the provisions of this proposed rule, parties that "Export CRTs for purposes of Recycling" shall face the following additional requirements.

		2.2.1	New Annual Report Required from Exporters of CRTs Sent for Recycling
	Per the existing CRT Rule, parties that export CRTs for recycling currently have notification requirements regarding their projected exports, but are not required to submit any retrospective documentation regarding the amount of their actual exports in a given year.  To help ensure that CRTs exported for recycling are handled as commodities and not otherwise discarded, EPA is proposing that such parties submit Annual Reports of their exports.  [Note: This annual report requirement has been modeled after the annual reporting requirement for exporters of spent lead-acid batteries under 40 CFR 262 Subpart E (See cited reference in Footnote 1 on page 7).]
      2.2.2	Additional Destination Data Requested as Part of the Recycling Notice
      Per the current CRT Rule (40 CFR 261.39(a)(5)(F), exporters of CRTs sent for recycling are required to state the name and address of the recycler and any alternate recycler.  Because CRTs are sometimes exported to more than one recycler in the receiving country, EPA is proposing to require that the exporter state the name and address of the recycler or recyclers and the estimated quantity of CRTs to be sent to each facility, as well as the names of any alternate recyclers.  In this way EPA will be able to provide the receiving country with the most accurate information available about the ultimate fate of the CRTs when they reach that country.
      2.3	Proposed Changes Specific to the "Export of CRTs for Reuse"
      Under the provisions of this proposed rule, parties that "Export CRTs for Reuse" shall face the following additional requirements.
      2.3.1	Proposed Changes to Notification Requirements
      Per the current CRT Rule, exporters of CRTs sent for reuse are already required to submit a one-time notice to EPA with minimal information under 40 CFR 261.41.   Since original promulgation of this requirement, the Agency has become aware that some CRTs, ostensibly exported for reuse, are actually recycled in the receiving country, sometimes under unsafe conditions.  EPA is proposing to expand the current reuse notice to provide more complete information about the potential reuse of the exported CRTs.  The added items to the reuse notice are modeled on those required in the notice for CRTs exported for recycling, and will help the Agency determine whether exported CRTs are actually products which are ultimately sent for reuse.   [Note: For more detail on the additional data elements that are being proposed for the CRT Reuse Notice, please see the appropriate section of the preamble for the Proposed Rule.]
[Note:  The Agency expects only one party to perform the exporter duties under 40 CFR 261.39(a)(5) and 40 CFR 261.41 (notifications to EPA, and the annual reports as proposed and described above).]

3.0	METHODOLOGY AND ASSUMPTIONS
      Described below are the key data and assumptions underlying the cost analyses conducted for this rule.
	In assessing the cost impacts, we estimated the incremental annual costs of this proposed rule to U.S. exporters and to EPA.  In estimating these costs, EPA first reviewed the provisions under the existing regulations and under the proposed rule to determine what new requirements were being proposed in this rule.  We estimated the costs of these new requirements using the following inputs:
         * Number of affected entities
         * Hourly labor rates
         * Burden hours
         * Materials costs
         * Number of Annual Reuse/Recycling Notifications

	Section 3.1 describes the sources used in identifying the "number of entities" involved in the exporting of CRTs who will be directly affected by the proposed rule changes.  Section 3.2 describes the "hourly labor rates" that are used in our calculations.  Section 3.3 describes the "burden hours" (e.g. staff hours) assumptions that EPA utilized in its analysis.  Section 3.4 outlines the "material" costs that EPA envisions may be incurred in association with the proposed CRT Rule revisions.  Lastly, Section 3.5 details the total "number of reuse and recycling notices" the EPA projects will be submitted per year.

      3.1	Estimated Number of Potentially Impacted CRT Exporters

      The Agency estimates that a total of approximately 12 entities exported CRTs for recycling during 2011 (i.e., per EPA data on the number of approved exporters and the number of export notices that were submitted during 2011).  However, far more entities are on record as being exporters of CRTs for purposes of reuse.   Based on the number of CRT Reuse Notifications submitted during 2011, there exists approximately 126 such entities in the U.S. (i.e., according to data from Sept. 14[th], 2011 published on EPA's CRT informational website at
[ http://www.epa.gov/epawaste/hazard/international/crts/recycling.htm ]).

	3.2	Labor Rate Estimates and Assumptions

      Exhibit 3-1 presents the hourly labor rates used in this analysis.  As shown in the exhibit, for U.S. exporters, EPA estimated an average hourly labor rate (including fringe and overhead) of $103.84 for managerial staff, $64.71 for technical staff, and $33.85 for clerical staff.  These labor rates were originally obtained by relying on prior EPA Cost Assessments and then updated to 2011 using Employment Cost Indices developed by the U.S. Bureau of Labor Statistics.
      For EPA's involvement and review/approval responsibilities, we estimated an average hourly labor rate of $74.67 for managerial staff (GS-14, Step 1), $63.20 for technical staff (GS-13, Step 1), and $36.64 for clerical staff (GS-9, Step 1).  To derive these hourly estimates, we referred to the General Schedule (GS) Salary Table 2011.  This publication summarizes the unloaded (base) hourly rate for various labor categories in the Federal Government.  We then applied the standard government overhead factor of 1.6 to the unloaded rate to derive loaded hourly labor rates.

                                  Exhibit 3-1
    Average Hourly Labor Rates Used to Assess the Cost Impacts of the Rule
                                Labor Category
                                   Exporters
                                (2011 dollars)
                                      EPA
                                (2011 dollars)

                                  Managerial

                                    $107.06

                                    $74.67

                                   Technical

                                    $70.08

                                    $63.20

                                   Clerical

                                    $36.60

                                    $36.64

      3.3	 Burden Hour Estimates and Assumptions
      As with other components of the methodology underlying our analyses, to estimate the total number of hours ("burden hours") required to meet the annual notification and reporting requirements of this rule, EPA relied heavily upon previous cost analyses conducted for the 2009 SLAB Rule (See Footnote 1).  Since the proposed CRT annual reporting and notification requirements are virtually the same as those called for in the Agency's 2009 SLAB rule, we used the same burden hour estimates in our cost assumptions for this proposal.
      3.4	Materials Cost Estimates and Assumptions
      Minimal material costs were assumed to be associated with the production and submission of new Annual Reports and Notification requirements proposed for this revision of the CRT Rule.  These costs are described below:
      * Mailing costs: The Agency estimated that affected entities would incur a cost of approximately $5.20 to mail a five ounce package by certified mail ($2.20 for postage, $2.85 for the certified mail fee, and $0.15 for a 9 x 12 manila envelope).

         Affected entities are expected to incur a cost of $0.49 for each standard letter mailed ($0.44 for first class postage and $0.05 for a standard envelope).

      * Copying Costs:  The agency estimated that affected entities would incur a cost of $0.11 per page for copying.

      * Faxing costs: The Agency estimated that affected entities would incur a cost of $0.15 for each international fax they send.  This cost was derived from the average revenues per minute for a telephone call from the U.S. to an OECD Country (excluding Canada and Mexico).  Revenue figures were obtained from the 2005 International Telecommunications Data Report issued by the Federal Communications Commission on April 24, 2007.  The cost estimate assumes that the fax transmission will take one-minute.

      * Domestic telephone call costs: The Agency estimates that affected entities will incur a cost of $0.90 for each domestic telephone call they make.  This cost was derived by averaging the advertised rates of a 15-minute State-to-State telephone call from four large U.S. long distance carriers.

      3.5	Notification Estimates and Assumptions
      The number of export notifications used in our cost assessment was based on EPA's professional experience, in combination with historical records associated with the submission of reuse/recycling notices by CRT exporters.
      In EPA's experience, most CRT recyclers seldom have cause to submit more than 1 notice per year.   The number of Recycling Notices has never exceeded 60% of the number of Recycling Exporters themselves.  This means that the ratio of Recycling Notices to CRT Recycling Exporters is less than 2 to 1.  So, while the number of notices may increase subsequent to the proposed rule, EPA assumed for the purposes of this analyses that each CRT recycler would submit only 1 to 2 notices annually.  Accordingly, this results in approximately 12 to 24 Notices being submitted per year for this category of exporters.
      Exporters that send CRTs abroad for purposes of reuse tend to have a broader list of potential destinations for their CRTs.  For instance, one reuse exporter may ship their CRTs to schools, charitable organizations, and resale facilities, or any combination thereof.  Therefore, for purposes of this analysis, EPA made the following assumptions:
      * 75% of reuse exporters (95) would submit 2-4 reuse notifications per year; and
      * 25% of reuse exporters (31) would submit 1 reuse notification per year.

      When added together with the projected recycling notices, the total estimated number of notices ranges from as low as 233 to as many as 435.

 4.0	ASSESSMENT OF POTENTIAL COSTS

      Discussed below is the Agency's best projection of the costs associated with this proposed rule. Since the subject provisions currently being proposed apply only to the export of CRTs , U.S. importers will not experience any costs from these revisions.
      4.1	Estimated Costs for Reading the Rule

      As noted above, the Agency estimates that during 2011a total of approximately 12 entities exported CRTs for recycling and 126 entities exported CRTs for reuse.  Therefore, we estimated that 138 U.S. exporters will need to read the rule in order to understand and comply with the new requirements.  For purposes of this analysis, we assumed that the hours required for reading/reviewing this new rule would be similar to the hours used in EPA's assessment of the impacts associated with reading/reviewing the 2009 SLAB rule.  The one-time cost for of reading/reviewing this new rule was then estimated to be $282.26.  (See Exhibit A-1in Attachment A).   Thus, U.S. exporters may experience a one-time cost of approximately $38,952 (i.e., 138 entities x $282.26/entity) for this activity.
      4.2	Estimated Costs for New Annual Reporting by CRT Export Recyclers

      Under this proposed rule, U.S. entities who export CRTs for the purpose of recycling must now submit detailed annual reports on their CRT exports to EPA. This annual reporting is in addition to the current notice requirements and represents a new requirement for CRT Recycling Exporters not called for in the current CRT Rule.  The following paragraphs discuss the estimated costs associated with this newly required annual report.

U.S. Exporters
      As noted above, EPA estimates that approximately 12 U.S. exporters of CRTs sent for recycling will be required to prepare and submit an annual report in accordance with this provision of the proposed rule.  Furthermore, this new annual report for CRT Export Recyclers has been fashioned after other existing annual reporting requirements recently codified in the 2009 Final Rule governing the Exporting of Spent Lead-Acid Batteries (SLAB) from the U.S.  Therefore, EPA used the cost estimates for annual reporting already available in the May 2009 Cost Assessment prepared for the "SLAB Rule", as the best and most recent relevant reference (See Footnote 1).  Based on these figures, EPA estimates that the cost for a CRT Exporter to prepare and submit an annual report ranges from $ $156.07 to $203.36, depending upon whether the size of the exporter is large vs. small.  For purposes of analysis, EPA assumed a 50/50 distribution of these exporters (e.g. with half considered large and half considered small).  Thus, EPA estimated that the total cost of the annual reporting requirement for  exporting  CRTs for recycling is  $2,158.32 (i.e.,$203.36/ annual report x 6 Large Recycling Exporters, plus $156.07 / annual report x 6 Small Recycling Exporters)  (See Exhibit A-2 in Attachment A).

EPA
      EPA estimates that it will receive 12 annual reports per year.  EPA estimates that it will incur $24.64 to receive and record each annual report (See Exhibit A-2 in Attachment A). Thus, EPA estimates that the Agency will experience an annual cost of $295.68 (i.e., 12 annual reports/year x $24.64/report) to meet this requirement of the proposed rule.
      In total, the estimated costs to CRT Exporters and the EPA for the new annual reporting requirement for recyclers are $2,454 per year (See Exhibit A-2 in Attachment A).

      4.3	Estimated Costs for Additional Reuse and Recycling Notification Requirements

      Under the current CRT Rule, exporters already must submit notifications to EPA indicating their intent to export CRTs.   As noted above, the proposed CRT Rule revisions call for very minor additional reporting elements to the current CRT rule requirements.  The following paragraphs discuss the estimated costs associated with these added notification elements.

U.S. Exporters
      To calculate the notification-related cost impacts, EPA started by relying on the original burden hour estimates associated with the current notification requirements.  EPA then adjusted these burden hour estimates to reflect our best estimate of the potential burden associated with the proposed changes in the notification requirements.  Our best estimate is that these burden estimates would not exceed 10% of the burden attributable to the current notification requirements.  Then EPA utilized the adjusted burden estimates and labor rates in combination with the projected quantity of CRT Notices to derive costs associated with the relevant proposed changes to the CRT notification process.
      Based on the calculations above, EPA estimated that CRT exporters submit between 233 and 435 notices each year.  We estimated that each notice will cost an additional $10.26 (See Exhibit A-3 in Attachment A).  In total, EPA estimates that the additional costs to Exporters will be in the range of $2,386 to $4,453 (i.e., 233 to 435 notices per year x $10.26 per notice) under the proposed rule.
EPA
      We estimate that EPA will incur an additional cost of $10.51 per notice to receive and process these notices (See Exhibit A-3 in Attachment A). Thus, we estimate that the Agency will experience a total incremental annual cost in the range of $2,449 to $4,572 (i.e., 233 to 435 notices per year x $10.51 per notice) under the proposed rule.
      In total, the estimated costs to CRT Exporters and the EPA for meeting the proposed reuse and recycling notification changes are $4,835 to $9,025 per year (See Exhibit A-3 in Attachment A).
      4.4	Total Cost Impact of the Proposed CRT Rule Revisions

      In total, EPA estimates that the costs of the proposed CRT Rule revisions include approximately $39,000 in year one of the Rule, as well as annual costs in the range of $7,300 to $11,500 in year one and beyond.  Based on the methodology and cost calculations described above in Sections 3.0 and 4.0, the results of our cost assessment reveal very modest cost impacts.   Furthermore, many of the assumptions used in the analyses could be characterized as "conservative" assumptions, resulting in cost estimates that may be higher than those that would actually be incurred.

 5.0	QUALITATIVE DISCUSSION OF BENEFITS

      Promulgation of this rule will engender  benefits, both internal and external to the U.S., including: (1) increased regulatory efficiency; (2) reduced storage cost for hazardous wastes destined for recovery; (3) reduction of risks associated with treatment and disposal of hazardous wastes; (4) improved ability to acquire information regarding the quantities of CRTs exported from the U.S. and the destination facilities to which the CRTs are exported; (5) better tracking of returns and compliance with exception reporting requirements; and (6) better tracking of compliance with the terms of CRT export notices.
      More specifically, the proposed CRT Rule Revisions will help determine that CRTs exported for recycling are handled as commodities and not inappropriately discarded.  Such annual reports and notification enhancements improve the accuracy of our records and allow for proper documentation of the total amount of CRTs being exported for recycling and reuse.  The improved data that is collected will also enable EPA to compare actual vs. proposed shipments to ensure that the shipments occurred under the terms approved by the receiving country.  Finally, such data will enable EPA to provide summary information, if requested by a receiving country, which would assist the receiving country in better management of their CRTs imports.
      In conclusion, while these benefits have not been expressly quantified as part of this Economic Assessment, the resultant improvements in information provision/transparency and CRT management practices from this Rule are believed to have benefits that outweigh the costs.

                                 ATTACHMENT A

                           SUPPORTING DOCUMENTATION
                            FOR ASSESSMENT OF COSTS

                                  Exhibit A-1
                          Costs for Reading the Rule

                                Cost per Entity
                             Cost of All Entities
                                   Activity
                          Managerial Staff Hours [a]
                           Technical Staff Hours [a]
                           Clerical Staff Hours [a]
                                     Hours
                               Labor   Cost [b]
                              Materials Cost [c]
                             Total Cost per Entity
                            Number of Entities [d]
                                  Total Cost
Reading the Regulations

U.S. Exporters
                                     1.00
                                     2.50
                                     0.00
                                     3.50
                                    $282.26
                                     $0.00
                                    $282.26
                                      138

                                    $38,952

[NOTES:]
[a]   Based on hourly burden estimates discussed in Section 3.3 above.

[b]   Based on hourly labor rates discussed in Section 3.2 above.

[c]   Based on materials costs discussed in Section 3.4 above.

[d]   Based on universe assumptions discussed in Section 3.1 above.

                                  Exhibit A-2
       Costs for New Annual Reporting by Exporters of CRTs for Recycling

                                Cost per Entity
                             Cost for all Entities
                                   Activity
                          Managerial Staff Hours [a]
                           Technical Staff Hours [a]
                           Clerical Staff Hours [a]
                                 Total Hours
                             Total Labor Cost [b]
                               Material Cost [c]
                                Total      Cost
                             Number of Entities d
                                  Total Cost
Annual Report

Large U.S. Exporters

Research specific export information
                                     0.00
                                     1.00
                                     1.00
                                     2.00
                                    $106.68
                                     $0.00
                                    $106.68
                                       6
                                    $640.08
Prepare and submit report
                                     0.10
                                     1.00
                                     0.30
                                     1.40
                                    $91.77
                                     $5.20
                                    $96.97
                                       6
                                    $581.82
                                                                      Subtotal:

                                    $198.45
                                     $5.20
                                    $203.65

6
                                   $1,221.90
Small U.S. Exporters

Research specific export information
                                     0.00
                                     0.50
                                     0.50
                                     1.00
                                    $70.08
                                     $0.00
                                    $70.08
                                       6
                                    $420.48
Prepare and submit report
                                     0.10
                                     0.50
                                     0.50
                                     1.10
                                    $80.79
                                     $5.20
                                    $85.99
                                       6
                                    $515.94
                                                                      Subtotal:

                                    $150.87
                                     $5.20
                                    $156.07
                                       6
                                    $936.42
                                                           Total for Exporters:

                                   $2,158.32
EPA

Receive and record report
                                     0.00
                                     0.10
                                     0.50
                                     0.60
                                    $24.64
                                     $0.00
                                    $24.64
                                      12
                                    $295.68
                                                                 Total for EPA:
                                     0.00
                                     0.10
                                     0.50
                                     0.60
                                    $24.64
                                     $0.00
                                    $24.64
                                      12
                                    $295.68
                                    TOTAL:
                        (for both Exporters & EPA)

                                    $2,454
[NOTES:]
[a]   Based on hourly burden estimates discussed in Section 3.3 above.

[b]   Based on hourly labor rates discussed in Section 3.2 above.

[c]   Based on material costs discussed in Section 3.4 above.

[d]   Based on universe assumptions discussed in Section 3.1 above, which reveal a total of approximately 12 CRT Recycling Exporters in the U.S.  And, we assume there is a 50/50 Percent Ratio regarding the total number of Large vs. Small U.S. CRT Exporters, such that there are  6 of each type in the above calculations.

                                  Exhibit A-3
     Costs for Meeting Proposed Reuse & Recycling Notification Changes
                  (calling for minor additional information)

                                Cost per Notice

                              Cost of All Notices
                                   Activity
                           Manager Staff  Hours [a]
                           Technical Staff Hours [a]
                          Clerical    Staff Hours [a]
                     Total Hours [b] (10% of Orig. Hours)
                      Total         Labor       Cost [c]
                           Total Material Costs [d]
                          Total       Cost per Notice
                         Number       of Entities [e]
                        Estimated Number of Notices [f]
                                  Total Cost

U.S. Exporters

Prepare & submit notification  Subtotal for Exporters:
                                     0.00
                                     1.50
                                     0.00
                                     0.15
                                    $10.51
                                     $0.00
                                    $10.51
                                      138
                                 233  to  435
                              $2,449  to  $4,572

EPA

Receive and process notification
                                     0.00
                                     1.00
                                     0.00
                                     0.10
                                     $6.32
                                     $0.00
                                     $6.32
                                      138
                                 233  to  435
                              $1,473  to  $2,749
Prepare and transmit confirmation of receipt to U.S. exporter
                                     0.00
                                     0.00
                                     0.25
                                     0.025
                                     $0.92
                                     $0.00
                                     $0.92
                                      138
                                 233  to  435
                                $213  to  $398
Forward notification to the competent authorities of the countries of import and transit
                                     0.00
                                     0.00
                                     0.16
                                     0.016
                                     $0.59
                                     $0.00
                                     $0.59
                                      138
                                 233  to  435
                                $137  to  $255
Receive and process Acknowledgement of Receipt from the competent authority of the country of import
                                     0.00
                                     0.00
                                     0.25
                                     0.025
                                     $0.92
                                     $0.00
                                     $0.92
                                      138
                                 233  to  435
                                $213  to  $398
Receive and process consent/objection from the competent authorities of the countries of import and transit
                                     0.00
                                     0.00
                                     0.16
                                     0.016
                                     $0.59
                                     $0.00
                                     $0.59
                                      138
                                 233  to  435
                                $137  to  $255
Forward written Acknowledgement of Consent or objection to U.S. exporter
                                     0.00
                                     0.00
                                     0.25
                                     0.025
                                     $0.92
                                     $0.00
                                     $0.92
                                      138
                                 233  to  435
                                $213  to  $398
                                                              Subtotal for EPA:
                                     0.00
                                     1.00
                                     1.07
                                     0.207
                                    $10.26
                                     $0.00
                                    $10.26
                                      138
                                 233  to  435
                              $2,386  to  $4,453

                                            Total for both Exporters & EPA
                                     0.00
                                     2.50
                                     1.07
                                     0.357
                                    $20.77
                                     $0.00
                                    $20.77
                                      138
                                 233  to  435
                              $4,835  to  $9,025
Notes:
[a]   Staff level hourly burden estimates are discussed in Section 3.3 above.

[b]   Total final hourly burden estimates are conservatively assumed to only involve an additional burden equal to 10% of the overall  burden from
the notification requirements under the current CRT Rule.
[c]   Based on hourly labor rates discussed in Section 3.2 above.

d    Since entities are already required to submit Recycling and Reuse Notices, the effected entities face no additional costs associated with mailings,
copies, facsimiles, etc. due to the newly proposed modifications to the existing notices.
[e]  The projections for the total number of entities potentially impacted by the rule are discussed in Section 3.1 above.

[f]   The projections for the total number of notifications that may be submitted annually is discussed in Section 3.5 above.