[Federal Register: March 5, 2009 (Volume 74, Number 42)]
[Notices]
[Page 9644-9648]
[DOCID:fr05mr09-86]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59477/February 27, 2009]

Order Making Fiscal Year 2009 Mid-Year Adjustment to the Fee
Rates Applicable Under Sections 31(b) and (c) of the Securities
Exchange Act of 1934

I. Background

    Section 31 of the Securities Exchange Act of 1934 (``Exchange
Act'') requires each national securities exchange and national
securities association to pay transaction fees to the Commission.\1\
Specifically, Section 31(b) requires each national securities exchange
to pay to the Commission fees based on the aggregate dollar amount of
sales of certain securities transacted on the exchange.\2\ Section
31(c) requires each national securities association to pay to the
Commission fees based on the aggregate dollar amount of sales of
certain securities transacted by or through any member of the
association other than on an exchange.\3\
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    \1\ 15 U.S.C. 78ee.
    \2\ 15 U.S.C. 78ee(b).
    \3\ 15 U.S.C. 78ee(c).
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    Sections 31(j)(1) and (3) require the Commission to make annual
adjustments to the fee rates applicable under Sections 31(b) and (c)
for each of the fiscal years 2003 through 2011, and one final
adjustment to fix the fee rates for fiscal year 2012 and beyond.\4\
Section 31(j)(2) requires the Commission, in certain circumstances, to
make a mid-year adjustment to the fee rates in fiscal years 2002
through 2011.\5\ The annual and mid-year adjustments are designed to
adjust the fee rates in a given fiscal year so that, when applied to
the aggregate dollar volume of sales for the fiscal year, they are
reasonably likely to produce total fee collections under Section 31
equal to the ``target offsetting collection amount'' specified in
Section 31(l)(1) for that fiscal year.\6\ For fiscal year 2009, the
target offsetting collection amount is $1,023,000,000.\7\
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    \4\ 15 U.S.C. 78ee(j)(1) and (j)(3).
    \5\ 15 U.S.C. 78ee(j)(2).
    \6\ 15 U.S.C. 78ee(l)(1).
    \7\ Id.
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II. Determination of the Need for a Mid-Year Adjustment in Fiscal 2009

    Under Section 31(j)(2) of the Exchange Act, the Commission must
make a mid-year adjustment to the fee rates under Sections 31(b) and
(c) in fiscal year 2009 if it determines, based on the actual aggregate
dollar volume of sales during the first five months of the fiscal year,
that the baseline estimate $113,703,210,464,919 is reasonably likely to
be 10% (or more) greater or less than the actual aggregate dollar
volume of sales for fiscal year 2009.\8\ To make this determination,
the Commission must estimate the actual aggregate dollar volume of
sales for fiscal year 2009.
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    \8\ The amount $113,703,210,464,919 is the baseline estimate of
the aggregate dollar amount of sales for fiscal year 2009 calculated
by the Commission in its Order Making Fiscal 2009 Annual Adjustments
to the Fee Rates Applicable Under Section 6(b) of the Securities Act
of 1933 and Sections 13(e), 14(g), 31(b) and 31(c) of the Securities
Exchange Act of 1934, Rel. No. 33-8916 (May 2, 2008), 73 FR 25795
(May 7, 2008).
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    Based on data provided by the national securities exchanges and the
national securities association that are subject to Section 31,\9\ the
actual aggregate dollar volume of sales during the first four months of
fiscal year 2009 was $24,218,758,303,585.\10\ Using these data and a
methodology for estimating the aggregate dollar amount of sales for the
remainder of fiscal year 2009 (developed after consultation with the
Congressional Budget Office and the OMB),\11\ the Commission estimates
that the aggregate dollar amount of sales for the remainder of fiscal
year 2009 to be $42,139,232,747,921. Thus, the Commission estimates
that the actual aggregate dollar volume of sales for all of fiscal year
2009 will be $66,357,991,051,506.
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    \9\ The Financial Industry Regulatory Authority, Inc.
(``FINRA'') and each exchange is required to file a monthly report
on Form R31 containing dollar volume data on sales of securities
subject to Section 31. The report is due on the 10th business day
following the month for which the exchange or association provides
dollar volume data.
    \10\ Although Section 31(j)(2) indicates that the Commission
should determine the actual aggregate dollar volume of sales for
fiscal 2009 ``based on the actual aggregate dollar volume of sales
during the first 5 months of such fiscal year,'' data are only
available for the first four months of the fiscal year as of the
date the Commission is required to issue this order, i.e., March 1,
2009. Dollar volume data on sales of securities subject to Section
31 for February 2009 will not be available from the exchanges and
FINRA for several weeks.
    \11\ See Appendix A.
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    Because the baseline estimate of $113,703,210,464,919 is more than
10% greater than the $66,357,991,051,506 estimated actual aggregate
dollar volume of sales for fiscal year 2009, Section 31(j)(2) of the
Exchange Act requires the Commission to issue an order adjusting the
fee rates under Sections 31(b) and (c).

III. Calculation of the Uniform Adjusted Rate

    Section 31(j)(2) specifies the method for determining the mid-year
adjustment for fiscal 2009. Specifically, the Commission must adjust
the rates under Sections 31(b) and (c) to a ``uniform adjusted rate
that, when applied to the revised estimate of the aggregate dollar
amount of sales for the remainder of fiscal year 2009, is reasonably
likely to produce aggregate fee collections under Section 31 (including
fees collected during such 5-month period and assessments collected
under Section 31(d)) that are equal to $1,023,000,000.'' \12\ In other
words, the uniform adjusted rate is determined by subtracting fees
collected prior to the effective date of the new rate and assessments
collected under Section 31(d) during all of fiscal year 2009 from
$1,023,000,000, which is the target offsetting collection amount for
fiscal year 2009. That difference is then divided by the revised
estimate of the aggregate dollar volume of sales for the remainder of
the fiscal year following the effective date of the new rate.
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    \12\ U.S.C. 78ee(j)(2). The term ``fees collected'' is not
defined in Section 31. Because national securities exchanges and
national securities associations are not required to pay the first
installment of Section 31 fees for fiscal 2009 until March 15, the
Commission will not ``collect'' any fees in the first five months of
fiscal 2009. See 15 U.S.C. 78ee(e). However, the Commission believes
that, for purposes of calculating the mid-year adjustment, Congress,
by stating in Section 31(j)(2) that the ``uniform adjusted rate * *
* is reasonably likely to produce aggregate fee collections under
Section 31 * * * that are equal to [$1,023,000,000],'' intended the
Commission to include the fees that the Commission will collect
based on transactions in the six months before the effective date of
the mid-year adjustment.
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    The Commission estimates that it will collect $190,542,394 in fees
for the period prior to the effective date of the mid-year adjustment
\13\ and $8,640 in assessments on round turn transactions in security
futures products during all of fiscal year 2009. Using the methodology
referenced in Part II above, the Commission estimates that the
aggregate dollar volume of sales for the remainder of fiscal year 2009
following the effective date of the new rate will be
$32,332,563,584,044. This amount reflects more recent information on
the dollar amount of sales of securities than was available at the time
of the setting of the initial fee rate for fiscal year 2009, and
indicates a significant reduction in sales. Based on these estimates,
and employing the mid-year adjustment mechanism established by statute,
the uniform adjusted rate is $25.70 per million of the aggregate dollar
amount of sales of securities.\14\ The aggregate

dollar amount of sales of securities subject to Section 31 fees is
illustrated in Appendix A.
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    \13\ This calculation is based on the assumption that the mid-
year adjustment will go into effect on April 1, 2009 pursuant to
Section 31(j)(4)(B) of the Exchange Act. However, see the discussion
below regarding the actual effective date of the mid-year
adjustment.
    \14\ The calculation is as follows: ($1,023,000,000-
$190,542,394--$8,640)/$32,332,563,584,044 = $0.0000257467. Round
this result to the seventh decimal point, yielding a rate of $25.70
per million.
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IV. Effective Date of the Uniform Adjusted Rate

    Section 31(j)(4)(B) of the Exchange Act provides that a mid-year
adjustment shall take effect on April 1 of the fiscal year in which
such rate applies. However, it is possible that the effective date will
be delayed this fiscal year because of the lapse of appropriation
provision in Section 31(k) of the Exchange Act. That section provides
that, if on the first day of the fiscal year a regular appropriation to
the Commission has not been enacted, the Commission shall continue to
collect fees at the rate in effect during the preceding fiscal year,
until 30 days after the date such a regular appropriation is enacted.
Therefore, the exchanges and the national securities association that
are subject to Section 31 fees must pay fees under Sections 31(b) and
(c) at the uniform adjusted rate of $25.70 per million for sales of
securities transacted on the later of (i) April 1, 2009, or (ii) 30
days after the date on which a regular appropriation to the Commission
for fiscal year 2009 is enacted. This fee rate will remain in place
until the fee rate for fiscal year 2010 takes effect.\15\
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    \15\ Section 31(j)(1) and Section 31(g) of the Exchange Act
require the Commission to issue an order no later than April 30,
2009, adjusting the fee rates applicable under Sections 31(b) and
(c) for fiscal 2010. These fee rates for fiscal 2010 will be
effective on the later of October 1, 2009 or thirty days after the
date of enactment of the Commission's regular appropriation for
fiscal 2010.
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V. Conclusion

    Accordingly, pursuant to Section 31 of the Exchange Act,\16\
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    \16\ 15 U.S.C. 78ee.
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    It is hereby ordered that each of the fee rates under Sections
31(b) and (c) of the Exchange Act shall be $25.70 per $1,000,000 of the
aggregate dollar amount of sales of securities subject to these
sections, effective on the later of (i) April 1, 2009, or (ii) 30 days
after the date on which a regular appropriation to the Commission for
fiscal year 2009 is enacted.

    By the Commission.
Elizabeth M. Murphy,
Secretary.

Appendix A

    A. Baseline estimate of the aggregate dollar amount of sales.
    First, calculate the average daily dollar amount of sales (ADS) for
each month in the sample (January 1999-January 2009). The data obtained
from the exchanges and FINRA are presented in Table A. The monthly
aggregate dollar amount of sales from all exchanges and FINRA is
contained in column C.
    Next, calculate the change in the natural logarithm of ADS from
month-to-month. The average monthly change in the logarithm of ADS over
the entire sample is 0.007 and the standard deviation 0.130. Assume the
monthly percentage change in ADS follows a random walk. The expected
monthly percentage growth rate of ADS is 1.6 percent.
    Now, use the expected monthly percentage growth rate to forecast
total dollar volume. For example, one can use the ADS for January 2009
($233,508,979,959) to forecast ADS for February 2009 ($237,184,035,788
= $233,508,979,959 x 1.016).\17\ Multiply by the number of trading days
in February 2009 (19) to obtain a forecast of the total dollar volume
for the month ($4,506,496,679,977). Repeat the method to generate
forecasts for subsequent months.
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    \17\ The value 1.016 has been rounded. All computations are done
with the unrounded value.
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    The forecasts for total dollar volume are in column G of Table A.
The following is a more formal (mathematical) description of the
procedure:
    1. Divide each month's total dollar volume (column C) by the number
of trading days in that month (column B) to obtain the average daily
dollar volume (ADS, column D).
    2. For each month t, calculate the change in ADS from the previous
month as [Delta]t = log (ADSt/ADSt-1),
where log (x) denotes the natural logarithm of x.
    3. Calculate the mean and standard deviation of the series
{[Delta]1, [Delta]2, * * *,
[Delta]120{time} . These are given by [mu] = 0.007 and
[sigma] = 0.130, respectively.
    4. Assume that the natural logarithm of ADS follows a random walk,
so that [Delta]s and [Delta]t are statistically
independent for any two months s and t.
    5. Under the assumption that [Delta]t is normally
distributed, the expected value of ADSt/ADSt-1 is
given by exp ([mu] + [sigma]2/2), or on average
ADSt = 1.016 x ADSt-1.
    6. For February 2009, this gives a forecast ADS of 1.016 x
$233,508,979,959 = $237,184,035,788. Multiply this figure by the 19
trading days in February 2009 to obtain a total dollar volume forecast
of $4,506,496,679,977.
    7. For March 2009, multiply the February 2009 ADS forecast by 1.016
to obtain a forecast ADS of $240,916,931,086. Multiply this figure by
the 22 trading days in March 2009 to obtain a total dollar volume
forecast of $5,300,172,483,900.
    8. Repeat this procedure for subsequent months.
    B. Using the forecasts from A to calculate the new fee rate.
    1. Determine the actual and projected aggregate dollar volume of
sales between 10/1/08 and 3/31/09 to be $34,025,427,467,462. Multiply
this amount by the fee rate of $5.60 per million dollars in sales
during this period and get an estimate of $190,542,394 in actual and
projected fees collected during 10/1/08 and 3/31/09.
    2. Estimate the amount of assessments on security futures products
collected during 10/1/08 and 9/30/09 to be $8,640 by summing the
amounts collected through January of $3,096 with projections of a 1.6%
monthly increase in subsequent months.
    3. Determine the projected aggregate dollar volume of sales between
4/1/09 and 9/30/09 to be $32,332,563,584,044.
    4. The rate necessary to collect the target $1,023,000,000 in fee
revenues is then calculated as: ($1,023,000,000-$190,542,394 -$8,640)/
$32,332,563,584,044 = 0.0000257467.
    5. Round the result to the seventh decimal point, yielding a rate
of 0.0000257000 (or $25.70 per million).
BILLING CODE 8011-01-P

[GRAPHIC] [TIFF OMITTED] TN05MR09.000

[GRAPHIC] [TIFF OMITTED] TN05MR09.001

[GRAPHIC] [TIFF OMITTED] TN05MR09.002

 [FR Doc. E9-4738 Filed 3-4-09; 8:45 am]

BILLING CODE 8011-01-C


[Federal Register Volume 83, Number 70 (Wednesday, April 11, 2018)]
[Notices]
[Pages 15676-15678]
[FR Doc No: 2018-07421]

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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. NHTSA-2017-0101; Notice 1]

AGC Glass Company North America, Receipt of Petition for Decision
of Inconsequential Noncompliance

AGENCY: National Highway Traffic Safety Administration (NHTSA), U.S.
Department of Transportation (DOT).

ACTION: Receipt of petition.

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SUMMARY: AGC Glass Company North America (d.b.a. AGC Automotive
Americas Co. ``AGC''), has determined that certain rear privacy glass
manufactured as replacement glass for certain model year (MY) 2013-2017
Jeep Compass motor vehicles does not fully comply with Federal Motor
Vehicle Safety Standard (FMVSS) No. 205, Glazing Materials. AGC filed a
noncompliance report dated October 13, 2017. AGC also petitioned NHTSA
on November 8, 2017, for a decision that the subject noncompliance is
inconsequential as it relates to motor vehicle safety.

DATES: The closing date for comments on the petition is May 11, 2018.

ADDRESSES: Interested persons are invited to submit written data,
views, and arguments on this petition. Comments must refer to the
docket and notice number cited in the title of this notice and
submitted by any of the following methods:
     Mail: Send comments by mail addressed to 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 comments by hand to U.S. Department
of Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590. The
Docket Section is open on weekdays from 10 a.m. to 5 p.m. except
Federal Holidays.
     Electronically: Submit comments electronically by logging
onto the Federal Docket Management System (FDMS) website at https://www.regulations.gov/. Follow the online instructions for submitting
comments.
     Comments may also be faxed to<PHONE_NUMBER>.
    Comments must be written in the English language, and be no greater
than 15 pages in length, although there is no limit to the length of
necessary attachments to the comments. If comments are submitted in
hard copy form, please ensure that two copies are provided. If you wish
to receive confirmation that comments you have submitted by mail were
received, please enclose a stamped, self-addressed postcard with the
comments. Note that all comments received will be posted without change
to https://www.regulations.gov, including any personal information
provided.
    All comments and supporting materials received before the close of
business on the closing date indicated above will be filed in the
docket and will be considered. All comments and supporting materials
received after the closing date will also be filed and will be
considered to the fullest extent possible.
    When the petition is granted or denied, notice of the decision will
also be published in the Federal Register pursuant to the authority
indicated at the end of this notice.
    All comments, background documentation, and supporting materials
submitted to the docket may be viewed by anyone at the address and
times given above. The documents may also be viewed on the internet at
https://www.regulations.gov by following the online instructions for
accessing the dockets. The docket ID number for this petition is shown
in the heading of this notice.
    DOT's complete Privacy Act Statement is available for review in a
Federal Register notice published on April 11, 2000, (65 FR 19477-78).

SUPPLEMENTARY INFORMATION:
    I. Overview: AGC, has determined that certain rear privacy glass
manufactured as replacement glass for certain MY 2013-2017 Jeep Compass
motor vehicles does not fully comply with FMVSS No. 205, Glazing
Materials (49 CFR 571.205). AGC filed a noncompliance report dated
October 13, 2017, pursuant to 49 CFR part 573, Defect and Noncompliance
Responsibility and Reports. AGC also petitioned NHTSA on November 8,
2017, pursuant to 49 U.S.C. 30118(d) and 30120(h) and 49 CFR part 556,
for an exemption from the notification and remedy requirements of 49
U.S.C. Chapter 301 on the basis that this noncompliance is
inconsequential as it relates to motor vehicle safety.
    This notice of receipt of AGC's petition is published under 49
U.S.C. 30118 and 30120 and does not represent any agency decision or
other exercise of judgment concerning the merits of the petition.
    II. Equipment Involved: Approximately 5,000 replacement privacy
glass parts manufactured for replacement of the rear liftgate glass in

certain MY 2013-2017 Jeep Compass motor vehicles and manufactured
between January 16, 2013, and June 30, 2017, are potentially involved.
    III. Noncompliance: AGC explains that the noncompliance is that the
subject rear privacy glass parts do not fully comply with paragraph S6
of FMVSS No. 205. Specifically, the replacement rear privacy glass has
the AS2 (solar glazing) marking when it should have been marked with
the AS3 (privacy glazing) marking.
    IV. Rule Requirements: Paragraphs S6, S6.1(a)(b), S6.2, and
S6.3(a)(b) of FMVSS No. 205 include the requirements relevant to this
petition:
     A Prime glazing material manufacturer must certify, in
accordance with 49 U.S.C. 30115, each piece of glazing material to
which this standard applies is designed as:
    A. a component of any specific motor vehicle or camper; or
    B. to be cut into components for use in motor vehicles or items of
motor vehicle equipment.
     A prime glazing manufacturer certifies its glazing by
adding to the marks required by section 7 of ANSI/SAE Z26.1-1996, in
letters and numerals of the same size, the symbol ``DOT'' and a
manufacturer's code mark that NHTSA assigns to the manufacturer.
     NHTSA will assign a code mark to a manufacturer after the
manufacturer submits a written request to the Office of Vehicle Safety
Compliance, National Highway Traffic Safety Administration. The request
must include the company name, address, and a statement from the
manufacturer certifying its status as a prime glazing manufacturer as
defined in paragraph S4.
     A manufacturer or distributor who cuts a section of
glazing material to which this standard applies, for use in a motor
vehicle or camper, must:
    A. mark that material in accordance with section 7 of ANSI/SAE
Z26.1-1996; and
    B. certify that its product complies with this standard in
accordance with 49 U.S.C. 30115.
    V. Summary of AGC's Petition: AGC states that after discovering
this inadvertent error, AGC launched an investigation internally and
with its core customers who may have received parts with this incorrect
``AS2'' logo mark to determine if this error occurred on more than one
occasion and if the parts had been introduced into the stream of
commerce. AGC performed testing on the parts it had in its possession
that were not shipped to any customer to confirm the glass met all
other FMVSSs. The glass met those standards. In addition, AGC's primary
customer for these parts, conducted its own testing of parts that it
had in their possession with the incorrect ``AS2'' mark in the logo.
Those tests also confirmed that the AGC parts with the incorrect
``AS2'' mark met all other required standards. The only error was
including the ``AS2'' mark rather than the correct ``AS3'' mark in the
logo. Thereafter, AGC and its customers went through an investigation
on how many of these parts with the incorrect logo may have been
shipped and/or used for replacement glass, and whether a Notice of
Noncompliance had to be filed with NHTSA as a result. Following this
investigation and numerous meetings with the customers, AGC determined
that parts with the incorrect ``AS2'' mark had been shipped and
installed in vehicles and that a Notice of Noncompliance Report had to
be filed with NHTSA.
    AGC described the subject noncompliance and stated its belief that
the noncompliance is inconsequential as it relates to motor vehicle
safety.
    In support of its petition, AGC submitted the following reasoning:
    1. The only error in the logo mark was including the incorrect
``AS2'' standard. The logo and the parts were otherwise fully
compliant. All other information was correct. The ``AS3'' mark relates
to meeting certain light transmission requirements for privacy glass.
The glass met those requirements as confirmed by both AGC and its
primary customer, FCA US LLC. The glass also met all other applicable
Federal Motor Vehicle Safety Standards. This error did not change the
character of the glass or its performance. It was a simple marking
error and will not in any way impact or affect motor vehicle safety.
AGC produced up to 5,000 parts to be installed as replacement glass
over the relevant time period. As soon as AGC found the potential
error, it was immediately corrected by replacing the print screen that
included the incorrect ``AS2'' mark and instead using a print screen
which included the correct ``AS3'' mark in the logo. No parts are
produced today for these model vehicles for replacement glass without
the correct ``AS3'' mark in the logo. All parts which AGC had in its
possession and which were confirmed a customer still had that were not
already installed were destroyed or returned to AGC.
    There is nothing that would affect or impact vehicle safety
resulting from this erroneous ``AS2'' mark being included in the logo
and this error should be classified as inconsequential to motor vehicle
safety.
    2. The logo error will not mislead or affect consumers. Consumers
would never look at a logo and know or understand that privacy glass
with an ``AS2'' logo should have an ``AS3'' mark instead in that logo.
Only someone trained in the intricate requirements of ANSI and the
differences in light transmission between a part meeting the ``AS3''
standard versus a part meeting the ``AS2'' standard would know whether
including the ``AS2'' mark was an error or not. Therefore, the fact
there are vehicles on the road which have the incorrect ``AS2'' mark in
the logo will not be misleading nor should it require any of those
parts to be replaced, since the consumer will not know the difference,
will not be misled by looking at the logo mark for this part, there
will be no confusion about the performance or compliance of the parts
with all applicable FMVSSs, and the error does not affect the safety of
the vehicle. Every consumer that had their rear lift gate replaced with
privacy glass that included the logo with the incorrect ``AS2'' mark
still has exactly what they expected to receive and paid for regardless
of this error--rear privacy glass for their Jeep Compass that does not
pose any safety risk to them or others who may ride on their vehicle.
    AGC concluded by expressing the belief that the subject
noncompliance is inconsequential as it relates to motor vehicle safety,
and that its petition to be exempted from providing notification of the
noncompliance, as required by 49 U.S.C. 30118, and a remedy for the
noncompliance, as required by 49 U.S.C. 30120, should be granted.
    AGC's complete petition and all supporting documents are available
by logging onto the Federal Docket Management System (FDMS) website at:
https://www.regulations.gov and following the online search
instructions to locate the docket number listed in the title of this
notice.
    NHTSA notes that the statutory provisions (49 U.S.C. 30118(d) and
30120(h)) that permit manufacturers to file petitions for a
determination of inconsequentiality allow NHTSA to exempt manufacturers
only from the duties found in sections 30118 and 30120, respectively,
to notify owners, purchasers, and dealers of a defect or noncompliance
and to remedy the defect or noncompliance. Therefore, any decision on
this petition only applies to the subject privacy glass parts that AGC
no longer controlled at the time it determined that the noncompliance
existed. However, any decision on this petition does not relieve
equipment distributors and dealers of the prohibitions on the sale,
offer for sale,

or introduction or delivery for introduction into interstate commerce
of the noncompliant privacy glass parts under their control after AGC
notified them that the subject noncompliance existed.
    Related Submissions: FCA US LLC (FCA US) also filed an
inconsequential noncompliance petition with NHTSA for 287,064 MY 2013-
2017 Jeep Compass motor vehicles, which were equipped and offered for
sale with noncompliant privacy glass produced by AGC. Refer to Docket
No. NHTSA-2017-0098.

    Authority:  (49 U.S.C. 30118, 30120: delegations of authority at
49 CFR 1.95 and 501.8)

Claudia Covell,
Acting Director, Office of Vehicle Safety Compliance.
[FR Doc. 2018-07421 Filed 4-10-18; 8:45 am]
 BILLING CODE 4910-59-P


[Federal Register Volume 79, Number 142 (Thursday, July 24, 2014)]
[Proposed Rules]
[Pages 42989-42991]
[FR Doc No: 2014-17461]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2014-0433; Directorate Identifier 94-ANE-39-AD]
RIN 2120-AA64

Airworthiness Directives; Rolls-Royce plc Turbofan Engines

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: We propose to supersede airworthiness directive (AD) 98-07-07,

which applies to all Rolls-Royce plc (RR) RB211-535E4 and RB211-535E4-B
turbofan engines. AD 98-07-07 requires removing certain part number (P/
N) low-pressure (LP) fuel filter-to-high-pressure (HP) fuel pump tube
assemblies and installing flexible LP fuel filter-to-HP fuel pump tube
assemblies. Since we issued AD 98-07-07, we received additional reports
of fuel leaks that have resulted in a number of engine in-flight
shutdowns. This proposed AD would expand the applicability of AD 98-07-
07 to include the RB211-535E4-C-37 turbofan engine. We are proposing
this AD to prevent loss of fuel supply to the engine, which could lead
to an in-flight shutdown of one or more engines, loss of thrust
control, and damage to the airplane.

DATES: We must receive comments on this proposed AD by September 22,
2014.

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 http://www.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.
    For service information identified in this proposed AD, contact
Rolls-Royce plc, Corporate Communications, P.O. Box 31, Derby, England,
DE248BJ; phone: 011-44-1332-242424; fax: 011-44-1332-249936; email:
http://www.rolls-royce.com/contact/civil_team.jsp; Web site: https://www.aeromanager.com. You may view this service information at the FAA,
Engine & Propeller Directorate, 12 New England Executive Park,
Burlington, MA. For information on the availability of this material at
the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2014-
0433; or in person at the Docket Management Facility between 9 a.m. and
5 p.m., Monday through Friday, except Federal holidays. The AD docket
contains this proposed AD, the mandatory continuing airworthiness
information, the regulatory evaluation, any comments received, and
other information. The address for the Docket Office (phone: 800-647-
5527) is in the ADDRESSES section. Comments will be available in the AD
docket shortly after receipt.

FOR FURTHER INFORMATION CONTACT: Kenneth Steeves, Aerospace Engineer,
Engine Certification Office, FAA, Engine & Propeller Directorate, 12
New England Executive Park, Burlington, MA 01803; phone:<PHONE_NUMBER>;
fax:<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    We invite you to send any written relevant data, views, or
arguments about this proposed AD. Send your comments to an address
listed under the ADDRESSES section. Include ``Docket No. FAA-2014-0433;
Directorate Identifier 94-ANE-39-AD'' at the beginning of your
comments. We specifically invite comments on the overall regulatory,
economic, environmental, and energy aspects of this proposed AD. We
will consider all comments received by the closing date and may amend
this proposed AD because of those comments.
    We will post all comments we receive, without change, to http://www.regulations.gov, including any personal information you provide. We
will also post a report summarizing each substantive verbal contact we
receive about this proposed AD.

Discussion

    On April 2, 1998, we issued AD 98-07-07, Amendment 39-10426 (63 FR
18119, April 14, 1998), for all RR RB211-535E4 and RB211-535E4-B
turbofan engines. AD 98-07-07 superseded AD 96-13-04 and required
removing LP fuel system tube assemblies, P/N UL16692 and AE709623-1,
and installing LP fuel system tube assembly, P/N 163521538. AD 98-07-07
resulted from reports of fuel line rupture on one of the flexible fuel
tube assemblies installed in accordance with AD 96-13-04. We issued AD
98-07-07 to prevent high volume fuel leaks and reported fuel collection
inside the engine nacelle, which could result in an uncontrolled engine
fire.

Actions Since AD 98-07-07 Was Issued

    Since we issued AD 98-07-07, Amendment 39-10426 (63 FR 18119, April
14, 1998), additional fuel leaks have occurred in LP fuel system tube
assemblies resulting in engine in-flight shutdowns. Also since we
issued AD 98-07-07, the European Aviation Safety Agency has issued AD
2014-0123, dated May 15, 2014, which requires replacing affected fuel
tube assemblies.

Relevant Service Information

    We reviewed RR Service Bulletin No. RB.211-73-H131, with
Supplement, dated May 10, 2013 and RR Non-Modification Service Bulletin
No. RB.211-73-E355, Revision 3, May 10, 2013. The service information
describes procedures for removing and installing LP fuel system tube
assemblies.

FAA's Determination

    We are proposing this AD because we evaluated all the relevant
information and determined the unsafe condition described previously is
likely to exist or develop in other products of the same type design.

Proposed AD Requirements

    This proposed AD would require removing LP fuel tube assemblies, P/
N UL16692, AE709623-1, 163521538, and 163521545 from service.

Costs of Compliance

    We estimate that this proposed AD affects 500 engines installed on
airplanes of U.S. registry. We also estimate that it would take about
7.33 hours per engine to comply with this proposed AD. The average
labor rate is $85 per hour. Required parts cost about $10,000 per
engine. Based on these figures, we estimate the cost of this proposed
AD on U.S. operators to be $5,311,525.

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.
    We are 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 proposed 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 Findings

    We have 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 that the proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Is not a ``significant rule'' under the DOT Regulatory Policies
and Procedures (44 FR 11034, February 26, 1979),
    (3) Will not affect intrastate aviation in Alaska to the extent
that it justifies making a regulatory distinction, and
    (4) Will not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

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 removing airworthiness directive (AD)
98-07-07, Amendment 39-10426 (63 FR 18119, April 14, 1998), and adding
the following new AD:

Rolls-Royce plc: Docket No. FAA-2014-0433; Directorate Identifier
94-ANE-39-AD.

(a) Comments Due Date

    We must receive comments by September 22, 2014.

(b) Affected ADs

    This AD supersedes AD 98-07-07, Amendment 39-10426 (63 FR 18119,
April 14, 1998).

(c) Applicability

    This AD applies to all Rolls-Royce plc (RR) RB211-535E4-37,
RB211-535E4-B-37, and RB211-535E4-C-37 turbofan engines with low-
pressure (LP) fuel filter-to-high-pressure (HP) fuel pump tube
assembly, part number (P/N) UL16692, AE709623-1, 163521538, or
163521545, installed.

(d) Unsafe Condition

    This AD was prompted by reports of fuel leaks that have resulted
in a number of engine in-flight shutdowns. We are issuing this AD to
prevent loss of fuel supply to the engine, which could lead to an
in-flight shutdown of one or more engines, loss of thrust control,
and damage to the airplane.

(e) Compliance

    Comply with this AD within the compliance times specified,
unless already done.
    (1) After the effective date of this AD, remove from service all
LP fuel filter-to-HP fuel pump tube assemblies, P/Ns UL16692,
AE709623-1, 163521538, and 163521545, at the next part removal or
during the next engine shop visit, whichever occurs first.
    (2) Reserved.

(f) Definition

    For the purpose of this AD, an ``engine shop visit'' is the
induction of an engine into the shop for maintenance.

(g) Alternative Methods of Compliance (AMOCs)

    The Manager, Engine Certification Office, may approve AMOCs for
this AD. Use the procedures found in 14 CFR 39.19 to make your
request.

(h) Related Information

    (1) For more information about this AD, contact Kenneth Steeves,
Aerospace Engineer, Engine Certification Office, FAA, Engine &
Propeller Directorate, 12 New England Executive Park, Burlington, MA
01803; phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>; email:
<EMAIL_ADDRESS>    (2) Refer to MCAI European Aviation Safety Agency AD 2014-0123,
dated May 15, 2014, for more information. You may examine the MCAI
in the AD docket on the Internet at http://www.regulations.gov by
searching for and locating it in Docket No. FAA-2014-0433.
    (3) For service information identified in this AD, contact
Rolls-Royce plc, Corporate Communications, P.O. Box 31, Derby,
England, DE248BJ; phone: 011-44-1332-242424; fax: 011-44-1332-
249936; email: http://www.rolls-royce.com/contact/civil_team.jsp;
Web site: https://www.aeromanager.com.
    (4) You may view this service information at the FAA, Engine &
Propeller Directorate, 12 New England Executive Park, Burlington,
MA. For information on the availability of this material at the FAA,
call<PHONE_NUMBER>.

    Issued in Burlington, Massachusetts, on July 16, 2014.
Thomas Boudreau,
Acting Assistant Directorate Manager, Engine & Propeller Directorate,
Aircraft Certification Service.
[FR Doc. 2014-17461 Filed 7-23-14; 8:45 am]
BILLING CODE 4910-13-P