[Federal Register: January 17, 2008 (Volume 73, Number 12)]
[Notices]
[Page 3310-3316]
[DOCID:fr17ja08-110]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Federal Aviation Administration

[Docket No. FAA-2008-0036]
RIN 2120-AF90

Policy Regarding Airport Rates and Charges

AGENCY: Department of Transportation, Office of the Secretary and
Federal Aviation Administration.

ACTION: Notice of proposed amendment to policy statement.

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SUMMARY: This action proposes to amend the Department of Transportation
(``Department'') ``Policy Regarding the Establishment of Airport Rates
and Charges'' published in the Federal Register on June 21, 1996
(``1996 Rates and Charges Policy''). This action proposes three
amendments to the 1996 Rates and Charges Policy (two modifications and
one clarification). These amendments are intended to provide greater
flexibility to operators of congested airports to use landing fees to
provide incentives to air carriers to use the airport at less congested
times or to use alternate airports to meet regional air service needs.
Any charges imposed on international operations must also comply with
the international obligations of the United States.

DATES: Send your comments on or before March 3, 2008.

ADDRESSES: You may send comments [identified by Docket Number FAA-2007-
XXXXX] using any of the following methods:
     Government-wide rulemaking Web site: Go to http://www.regulations.gov
 and follow the instructions for sending your

comments electronically.
     Mail: Docket Operations, U.S. Department of
Transportation, West Building, Ground Floor, Room W12-140, Routing
Symbol M-30, 1200 New Jersey Avenue, SE., Washington, DC 20590.
     Fax: 1-202-493-2251.
     Hand Delivery: To Docket Operations, Room W12-140 on the
ground floor of the West Building, 1200 New Jersey Avenue, SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.
    For more information on the notice and comment process, see the
SUPPLEMENTARY INFORMATION section of this document.
    Privacy: We will post all comments we receive, without change, to
http://www.regulations.gov, including any personal information you

provide. For more information, see the Privacy Act discussion in the
SUPPLEMENTARY INFORMATION section of this document.
    Docket: To read background documents or comments received, go to
http://www.regulations.gov at any time or to Room W12-140 on the ground

floor of the West Building, 1200 New Jersey Avenue, SE., Washington,
DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays.

FOR FURTHER INFORMATION CONTACT: Barry L. Molar, Manager, Airports
Financial Assistance Division, APP-500, Federal Aviation
Administration, 800 Independence Avenue, SW., Washington, DC 20591;
telephone:<PHONE_NUMBER>; facsimile:<PHONE_NUMBER>; e-mail:
<EMAIL_ADDRESS>or Charles Erhard, Manager, Airport Compliance

Division, AAS-400, Federal Aviation Administration, 800 Independence
Avenue, SW., Washington, DC 20591, telephone:<PHONE_NUMBER>;
facsimile:<PHONE_NUMBER>; e-mail<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Comments Invited

    The Department of Transportation invites interested persons to join
in this notice and comment process by filing written comments, data, or
views. The most helpful comments reference a specific portion of the
proposal, explain the reason for any recommended change, and include
supporting data. We ask that you send us two copies of written
comments.
    We will file in the docket all comments we receive, as well as a
report summarizing each substantive public contact with Department
personnel about this proposal. The docket is available for public
inspection before and after the comment closing date. If you wish to
review the docket in person, go to the address in the ADDRESSES section
of this preamble between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. You may also review the docket using the
Internet at the web address in the ADDRESSES section.
    Privacy Act: Using the search function of our docket Web site,
anyone can find and read the comments received into any of our dockets.
This includes the name of the individual sending the comment (or
signing the comment for an association, business, labor union). You may
review DOT's complete Privacy Act Statement in the Federal Register
published on April 11, 2000 (65 FR 19477-78) or you may visit http://regulations.gov
.

    Before acting on this proposal, we will consider all comments we
receive on or before the closing date for comments. We will consider
comments filed late if it is possible to do so without incurring
expense or delay. We may change this proposal because of the comments
we receive.
    If you want the Department to acknowledge receipt of your comments
on this proposal, include with your comments a preaddressed, stamped
postcard on which the docket number appears. We will stamp the date on
the postcard and mail it to you.

Proprietary or Confidential Business Information

    Do not file in the docket information that you consider to be
proprietary or confidential business information. Send or deliver this
information directly to the person identified in the FOR FURTHER
INFORMATION CONTACT section of this document. You must mark the
information that you consider proprietary or confidential. If you send
the information on a disk or CD ROM, mark the outside of the disk or CD
ROM and also identify electronically within the disk or CD ROM the
specific information that is proprietary or confidential.
    Under 14 CFR 11.35(b), when we are aware of proprietary information
filed with a comment, we do not place it in the docket. We hold it in a
separate file to which the public does not have access and place a note
in the docket that we have received it. If we receive a request to
examine or copy this information, we treat it as any other request
under the Freedom of Information Act (5 U.S.C. 552). We process such a
request under the DOT procedures found in 49 CFR Part 7.

Availability of Documents

    You can get an electronic copy using the Internet by:
    (1) Searching the Federal eRulemaking portal (http://www.regulations.gov/search
);

    (2) Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies
; or

    (3) Accessing the Government Printing Office's Web page at http://www.access.gpo.gov/su_docs/aces/aces140.html
.

    You can also get a copy by sending a request to the Federal
Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence
Avenue, SW., Washington, DC 20591, or by calling<PHONE_NUMBER>. Make
sure to identify the docket number, notice number, or amendment number
of this proceeding.

Authority for This Proceeding

    This notice is published under the authority described in Subtitle
VII, Part B, Chapter 471, Section 47129 of Title 49 United States Code.
Under subsection (b) of this section, the Secretary of Transportation
is required to publish publishing policy statements establishing
standards or guidelines the Secretary will use in determining the
reasonableness of airport fees charged to airlines under Section 47129.

Background

    This action proposes to amend the Department of Transportation
(``Department'') ``Policy Regarding the Establishment of Airport Rates
and Charges'' published in the Federal Register on June 21, 1996,
(``1996 Rates and Charges Policy''). Portions of the policy were
subsequently vacated by the United States Court of Appeals for the
District of Columbia Circuit in Air Transport Ass'n of America v. DOT,
119 F.3d 38, amended by 129 F.3d 625 (DC Cir. 1997). This action
proposes three amendments to the 1996 Rates and Charges Policy (two
modifications and one clarification). These amendments are intended to
provide greater flexibility to operators of congested airports to use
landing fees to provide incentives to air carriers to use the airport
at less congested times or to use alternate airports to meet regional
air service needs. Any charges imposed on international operations must
also comply with the international obligations of the United States.
    First, this notice proposes to clarify the policy by explicitly
acknowledging the ability of airport operators to establish a two-part
landing fee structure consisting of both an operation charge and a
weight-based charge, in lieu of the standard weight-based charge. Such
a two-part fee would serve as an incentive for carriers to use larger
aircraft and increase the number of passengers served with the same or
fewer operations. Second, this action proposes to expand the ability of
the operator of a congested airport to include in the airfield fees of
a congested airport a portion of the airfield costs of other,
underutilized airports owned and operated by the same proprietor.
Third, this action proposes to permit the operator of a congested
airport to charge users of a congested airport a portion of the cost of
airfield projects under construction. Currently, costs of new or
reconstructed airfield facilities may be included in airfield charges
only when the new or reconstructed facilities are completed and in use,
unless carriers at the airport agree otherwise. This proposed
modification would also permit the operator of a congested airport to
include in the rate base the costs of projects under construction. This
notice proposes two alternatives. The first would permit the costs to
be included in the rate base only during periods when the airport
experiences congestion. At some airports, such as Chicago O'Hare or New
York LaGuardia, this could occur throughout the normal operating day.
The second would permit these costs to be included in the rate base of
the congested airport at all times. Because the latter two proposed
amendments would apply only at congested airports, this notice also
proposes to add a definition of ``congested airport'' in the
Applicability section.

Legal Requirements for Airport Rates and Charges

    All commercial service airports operating in the United States and
most other airports that are open to the public have accepted grants
for airport development under the Airport Improvement Program,
authorized in Title 49 of the United States Code, Subtitle VII, Part B,
Chapter 471. Under Sec.  47107, in exchange for receiving grant funds,
airport operators must give a variety of assurances regarding the
operation of their airports and the implementation of grant funded
projects. Among other things, airport operators pledge to make the
airport ``available for public use on reasonable conditions and without
unjust discrimination.'' 49 U.S.C. 47107(a)(1). This obligation
encompasses the obligation to establish reasonable and not unjustly
discriminatory fees and charges for aeronautical use of the airfield.
    Section 47129 authorizes the Department to review the
reasonableness of airport fees charged to air carriers, upon a
complaint or request for determination and a finding of a significant
dispute, and directs the publication of policies or guidelines for
determining reasonable fees and development of expedited hearing
procedures to resolve airport fee disputes. The Department's procedures
applicable to proceeding concerning airport fees are contained in
Subpart F, Title 14 CFR 302.601--Sec.  302.609.

The Policy Regarding Airport Rates and Charges

    The Department published the 1996 Rates and Charges Policy in the
Federal Register at 61 FR 31994 on June 21, 1996. The statement of
policy was required by section 113 of the Federal Aviation
Administration Authorization Act of 1994, Public Law 103-305 (August
23, 1994), now codified at 49 U.S.C. 47129. The publication of the 1996
Rates and Charges Policy followed publication of a notice of proposed
policy (59 FR 29874, June 9, 1994). That proposal predated enactment of
section 47129. After enactment of section 47129, the Department
published a supplemental notice of proposed policy (59 FR 51585,
October 12, 1994); an Interim Policy (60 FR 6906, February 3, 1995);
and a further supplemental notice of proposed policy (60 FR 47102,
September 8, 1995).
    On behalf of its member airlines, the Air Transport Association of
America (ATA) and the City of Los Angeles, operator of Los Angeles
International Airport, challenged elements of the 1996 Rates and
Charges Policy in the United States Court of Appeals for the District
of Columbia. The court vacated portions of the 1996 Rates and Charges
Policy in Air Transport Ass'n of America v. DOT, 119 F3d 38, amended by
129 F.3d 625 (DC Cir. 1997).
    The 1996 Rates and Charges Policy specified that, unless otherwise
agreed to by an airport user, fees for airfield use must be based on
costs calculated using the historic cost accounting (HCA) methodology.
1996 Rates and Charges Policy, paras. 2.2, 2.4, 2.5.1. For other
airport facilities and services, however, the airport proprietor was
free to use any reasonable methodology to determine fees, if justified
and applied on a consistent basis. 1996 Rates and Charges Policy, para.
2.6. Petitioners in the court case challenged the disparate treatment
of airfield fees and other fees. The court determined that this
distinction had not been adequately justified. 119 F.3d at 44. At the
Department's request, the Court vacated only the specific provisions of
the 1996 Rates and Charges Policy that petitioners challenged as
implementing that distinction. 129 F.3d at 625.
    Since the court's ruling, the Department has addressed significant
airport-airline fee disputes through case-by-case adjudication. The
Department's decisions are informed by the statutory limitations
imposed on airport fees. One limitation derives from requirements of
the airport improvement program grant assurances, 49 U.S.C. 47107. In
particular, a federally assisted airport sponsor must give the
Secretary of Transportation and the FAA certain assurances, including
the assurance that the airport will be available for public use on fair
and reasonable terms and without unjust discrimination. The other
limitation arises from the proprietor's exception to the Anti-Head

Tax Act, which allows the airport sponsor to collect only reasonable
rental charges, landing fees, and other service charges from aircraft
operators for the use of airport facilities.
    Our past cases have established some guidelines for our analysis of
fees challenged by airlines. Our cases have examined fees and fee
methodologies that we considered reasonable as well as those we
considered not to be reasonable. See Miami International Airport Rates
Proceeding, Order 97-3-26 (March 19, 1997), aff'd sub nom., Air Canada
v. DOT, 148 f.3D 1142 (DC Cir. 1998); Alaska Airlines, Inc., et al. v.
Los Angeles World Airports, Order 2007-6-8 (June 15, 2007) (LAX III),
on appeal to the United States Court of Appeals for the District of
Columbia Circuit).
    Additionally, we have established some guidance on unreasonable
airline fees Second Los Angeles Int'l Airport Rates Proceeding, Order
95-9-24 (Sept. 22, 1995, (LAX II), aff'd sub nom, City of Los Angeles
v. DOT, 165 F.3d 972 (DC Cir. 1999); Brendan Airways, LLC v. Port
Authority of New York and New Jersey, Order 2005-6-11 (June 14, 2005),
aff'd in part, Port. Auth. of New York and New Jersey v. DOT, 478 F.3d
21 (DC Cir. 2007).
    The Secretary has also determined whether or not certain disputed
fees were unjustly discriminatory. Brendan Airways, op cit., Order
2005-6-11; LAX III.

Airport Congestion in the United States

    Currently, the National Airspace System (NAS) handles 750 million
passengers each year. We expect this number to reach one billion by
2015, and forecasts indicate increases in demand ranging from a factor
of two to three by 2025. Market competition spurred by new-entrant,
low-cost carriers and the competitive response by legacy airlines have
generated much of the increase in air travel demand. Among the trends
are new and expanded route networks to lesser-served markets connecting
major hubs with regional jet service. The additional service in some
cases provides no net increase in seats between origins and
destinations but provides more operations in the system with greater
numbers of smaller capacity aircraft.
    The majority of the airports in the NAS have adequate airport
capacity with little, if any, delay. Generally, congestion occurs at
the largest airports. The 35 busiest airports, known as Operational
Evolution Partnership (OEP) airports, handle approximately 73 percent
of the commercial air passenger boardings in the system. Runway
construction projects have long served as a primary method to improve
capacity. Since fiscal year 2000, thirteen new runways (more than 20
miles of new pavement) have opened at the 35 OEP airports. In addition,
six more of the OEP airports have airfield projects under construction
(two airfield reconfigurations, three new runways, and one runway
extension), which should be commissioned within the next three years.
These new runways and airfield reconfigurations involve eighteen of the
35 OEP airports, providing these airports with the potential to
accommodate about two million more annual operations.
    Nevertheless, the experience of summer 2007 shows that congestion
is a problem today. Airlines at New York JFK International Airport
increased their scheduled operations by 41 percent between March 2006
and August 2007. As a result, the number of arrival delays exceeding
one hour increased by 114 percent in the first ten months of fiscal
year 2007, compared to the same period the previous year. During June
and July 2007, on-time arrival performance at JFK was only 59 percent.
Moreover, delays resulting from operations at New York metropolitan
area airports alone can account for up to one-third of the delays
throughout the entire national system. The congestion in the New York
airspace has ripple effects across the national airspace system,
causing flight delays, cancellations, and/or missed connections. These
delays impose economic and social costs on airline passengers and
shippers; airlines incur extra costs for fuel, flight crews, and
schedulers. Delays are likewise beginning to increase at San Francisco.
At Chicago O'Hare, the FAA implemented voluntary flight restrictions in
2004 to limit congestion and delays. The reconfiguration of the O'Hare
airfield will eventually provide the capacity to overcome congestion.
In the short run, however, congestion would be much worse if not for
FAA intervention.
    Most portions of the country have plans and capabilities to meet
projected aviation demand. A recent study, Capacity Needs in the
National Airspace System 2007-2025: An Analysis of Airports and
Metropolitan Area Demand and Operational Capacity in the Future,
conducted by the Federal Aviation Administration as part of the Future
Airport Capacity Task (FACT) 2, indicates metropolitan areas and
regions along the east and west coasts are experiencing large amounts
of growth in population and economic activity that cause chronic
congestion. Based on studies and analyses associated with FACT 2,
conditions are projected to get worse in the future in these coastal
regions, primarily concentrated at various OEP airports. Fourteen of
the 35 OEP airports and eight metropolitan areas are forecasted to be
capacity-constrained in 2025.
    Of the fourteen airports identified as capacity-constrained in the
study, several are further constrained by conditions, either physical
(New York LaGuardia) or environmental (Long Beach-Daugherty Field),
that prevent additional runway capacity from being built. To date, even
with planned improvements, no single solution to the congestion at
these airports has been identified. Aside from adding runway capacity,
air traffic operational improvements and airspace redesign are
additional measures that have been considered. In addition, even at
airports where expansion is possible or planned, the lead-time to bring
a planned improvement project from concept to commissioning may be
substantial (10-15 years). Until new facilities are completed and put
into service, these locations may continue to be plagued by congestion
and delays.
    To adequately prepare to handle the increasing air travel demand in
the system, it will be necessary to augment tools available to the
local governments which operate these airports to encourage regional
aviation assets to be employed to resolve the capacity issues. In areas
where the metropolitan areas may be served by more than one commercial
service airport, the dispersal or regionalization of traffic can be
encouraged by certain financial incentives, not all of which are
expressly permitted by the current rates and charges policy.

Role of Price in Addressing Congestion

    One way of addressing congestion of an airport's airside facilities
is by the pricing of those facilities. By raising the cost of operating
a flight during congested periods, an airport owner/operator can
increase the efficient utilization of the airport in a number of ways.
First, by charging higher landing fees during periods of peak
congestion, the airport proprietor gives aircraft operators the
incentive to reschedule their flights to less congested periods or to
use secondary airports. The degree to which aircraft operators
reschedule will in large part depend on their network structure and
access to secondary airports. Second, if airports structure their
airfield charges to reflect scarcity by incorporating per-operation
charges with weight-based charges, they will provide an incentive for
air carriers to use congested airfield facilities more efficiently by
increasing the size of

aircraft operating during periods of congestion. Third, properly
pricing scarce airfield capacity will yield a clearer signal as to the
desirability of expansion of capacity at that airfield. Even where
expansion is not feasible, the industry and users benefit if adjustment
of prices during congested periods increases the efficiency with which
congested airfield facilities are used.
    The proposed actions do not represent true congestion pricing
because they do not authorize airport proprietors to set fees to
balance demand with capacity without regard to allowable costs of
airfield facilities and services. Nevertheless, by enabling proprietors
at congested airports to assign additional, but still appropriate,
costs to the airfield to better reflect the cost of using congested
airfield facilities, these proposed actions should encourage more
efficient use of these facilities and encourage feasible capacity
expansion. Airport sponsors must assure the Department that the airport
is available to the public on reasonable terms and without unjust
discrimination. If we adopt the two proposed amendments targeted for
congested airports, we expect affected proprietors to implement them in
a manner that is consistent with the grant assurance and we expect that
the implementation will lead to a more efficient use of the congested
facilities

Discussion of Proposals

General Discussion

    The three specific proposals do not alter one of the fundamental
principles of the 1996 Rates and Charges Policy: that reasonable fees
must be based on the capital and operating costs of the facilities for
which the fees are assessed. Rather, two of the proposals would modify
costs that may be reasonably included in the cost base of landing fees
at a congested airport. The third would clarify the ability of airports
to adopt a ``dual-element'' landing fee with both a per-operation and
weight-based component. This authority exists today for airports with
or without congestion. While the presence or absence of congestion may
affect how an airport may reasonably implement a dual element-landing
fee, as discussed below, the 1996 Rates and Charges Policy is silent on
this point. None of the proposed amendments is intended to permit an
airport to generate revenues in excess of the allowable costs of
providing airfield facilities and services at the congested airport, as
defined in accordance with the 1996 Rates and Charges Policy.
    The effect of each of these modifications would be to allow the
airport operator to increase the cost of landing at a congested airport
during periods of congestion, even if congestion lasts through much of
the day. By raising the costs of the congested facilities, the airport
operator would provide an incentive for current or potential aircraft
operators to (1) adjust schedules to operate at less congested times
(if they exist); (2) use less congested secondary or reliever airports
to meet regional air service needs; or (3) use the congested airport
more efficiently by up-gauging aircraft. The three proposals are not
intended to be mutually exclusive. In other words, if the circumstances
justify doing so, an airport proprietor might use a combination of two,
or even all three, proposals in setting landing fees during periods of
congestion. Any charges imposed on international operations, whether
using this proposed flexibility or not, would also have to comply with
the international obligations of the United States, including
requirements that the charges be just, reasonable, and equitably
apportioned among categories of users.
    Where additions to airport capacity are financially and physically
feasible and can be accomplished without undue adverse environmental or
social impacts, the Department considers such additions to be the most
appropriate long-term actions to address airport congestion and delay.
The amendments to the 1996 Rates and Charges Policy proposed in this
action are intended to help airports manage available capacity in the
short-run, while additions to capacity are being planned and built and
to help those airports where capacity expansion is not feasible.

Definition of Congested Airport

     Two of the three proposed revisions would apply only to congested
airports. Therefore, this action proposes to add a new subsection E to
the Applicability Section of the 1996 Rates and Charges Policy that
would define a congested airport. The subsection would establish two
categories of congested airports--those meeting the statutory
definition of congested airport contained in 49 U.S.C. 47175 or those
identified in the report titled ``Capacity Needs in the National
Airspace System, 2007-2025'' (May 2007), issued by the Future Airport
Capacity Task and commonly referred to as the ``FACT 2 Report.''
Section 47175 is part of an aviation development streamlining program
enacted by Congress in 2003 (Vision-100). That program recognized the
significant negative economic impact on our national economy resulting
from congestion and delays at our major airports. It gave airport
capacity enhancement projects at those airports a national priority
status, and authorized an expedited environmental coordination process
that would protect the environment while ensuring the economic vitality
resulting from the continued growth in aviation. Public Law 108-176,
Title III, Sec.  302 (2003). A congested airport is defined as an
airport that accounted for at least one percent of all delayed aircraft
operations in the Untied States and an airport listed in Table 1 of the
FAA's Airport Capacity Benchmark Report 2001. 49 U.S.C. 47175(2). Under
its general authority to manage airspace, and after a comprehensive
analysis of current and forecasted traffic, demand, and demographic
trends, the FAA published the FACT 2 report identifying airports that
are or will be congested at three milestones--2007, 2015 and 2025. It
would not be appropriate to permit an airport that is not projected to
be congested in 2025 to rely on provisions applicable to congested
airports in setting fees today. Therefore, the proposed amendment would
also exclude airports projected to be congested in 2025 for the first
time from the scope of the definition.

Two-Part Landing Fees

     As noted, although most airports rely on a single element weight-
based landing fee, the use of a weight-based landing fee is not
required. This issue was squarely addressed in the Department's
decision in the Massport Pace case, Investigation into Massport's
Landing Fees, Opinion and Order, FAA Docket 13-88-2 (December 22,
1988), aff'd New England Legal Foundation v. Department of
Transportation, 883 F.2d 157 (1st Cir. 1989). In that case, the
Department did not determine that Massport's two-part landing fee for
Boston Logan Airport was unreasonable, per se. Rather, the Department
concluded that ``landing fee structures that vary from the traditional
weight-based approach are permissible so long as the approach adopted
reasonably allocates costs to the appropriate users on a rational and
economically justified basis.'' Opinion and Order at 11. The Department
found the landing fee to be unreasonable because it failed to meet this
standard for allocating costs. Id. This decision followed a previous
ruling in AOPA v. PANYNJ, 305 F. Supp 93 (E.D.N.Y. 1969), upholding a
minimum take-off fee (essentially a per-operation charge) imposed by
the Port Authority of New York and New Jersey at Newark, LaGuardia and
Kennedy airports.

    The proposed amendment would explicitly acknowledge the ability of
an airport to establish a two-part landing fee. The amendment would add
a new paragraph 2.1.4, in the section titled ``Fair and Reasonable
Fees,'' stating that fair and reasonable fees may include a two-part
landing fee consisting of a per-operation charge and a weight-based
charge, so long as the two-part fee reasonably allocates costs to the
appropriate users on a rational and economically justified basis. This
provision would apply to any airport. However, the presence of
congestion and the potential to serve more individual travelers if
larger aircraft are used in the limited number of operations available,
would be the most obvious circumstance for the justification of a dual
component fee.
    Carriers may have many reasons to serve routes with smaller
aircraft--regional jets or even turboprops. Smaller aircraft may have
lower operating costs or allow the carrier to offer more frequent
service economically. However, operations of smaller aircraft during
periods of airport congestion reduce the efficiency of the airport.
First, it simply takes more operations to move the same number of
people to and from the airport. Second, these aircraft may have slower
speeds on approach to and departure from the airport than larger jets.
Also, they may require larger separation distances from large jet
aircraft than other large jets.
    A purely weight-based landing fee provides no disincentive, and may
actually provide an incentive, for carriers to operate smaller
aircraft. The landing fee for small aircraft will be substantially
lower than the fee for a larger aircraft. If an airport assesses a per-
operation charge as a component of the landing fee, the cost of
operating a smaller aircraft will increase, and the cost per seat of
operating smaller aircraft will increase. The proposed amendment would
make it clear that during periods of congestion the airport proprietor
may take the presence of congestion into account in determining the
proportion of airfield costs to be recovered from the per-operation
charge, so long as the combination of the two elements do not generate
revenues in excess of the allowable costs of the airfield. The flaw
with the Massport ``PACE'' fee was that Massport justified the per
operations fee on the basis of congestion, yet applied it at all times,
even when congestion was not present. Opinion and Order at 9. For a per
operation fee imposed during times when congestion might not be
present, the per-operation charge would need to be justified on other
settled principles of cost allocation.

Costs of Facilities Under Construction

     The proposed action would amend the 1996 Rates and Charges Policy
by replacing paragraph 2.5.3, which was vacated by the court of
appeals, with a new paragraph addressing charges for facilities under
construction. The paragraph vacated by the court specified that with
limited exceptions for land acquired for future development, costs of
airfield facilities not yet built and operating could not be included
in the rate base of the airfield unless agreed to by airfield users.
The court's decision to vacate this paragraph did not necessarily
represent a determination that the provision was erroneous, per se.
Rather, as noted, the court identified the provision as one that was
intimately connected to the 1996 Rates and Charges Policy's erroneous
distinction between airfield fees and fees for other facilities.
    The court's decision did not vacate the principle that airfield
fees are limited to an amount that recovers the costs of operating and
maintaining the airfield. One of the fundamental principles of this
``cost of service'' approach to setting fees is the principle that only
the cost of facilities ``used and useful'' by the rate-payers may be
included in the rate-base. (A. Priest, 1 Principles of Public Utility
Regulation 174, 178 (1969); J. Bonbright, Principles of Public Utility
Rates 178 (1961); S. Breyer, Regulation and Its Reform 40 (1982); City
and County of Denver v. Continental Air Lines, Inc., 712 F. Supp. 834,
D.CO. (1989)). The vacated paragraph 2.5.3 represented the application
of this principle, which is still accepted practice in ``cost of
service'' fee setting. The Department has applied this principle only
once in a fee dispute adjudication, finding that an airport may
reasonably include, in its landing fee, a debt service charge for
uncompleted capital projects, since the projects were expected to be
completed during the year in which the charges were made. Second Los
Angeles International Airport Rates Proceeding, DOT Order 95-12-33
(Dec. 22, 1995).
    With that said, exceptions to the principle that the costs of
facilities not yet built and operating may not be included in the rate
base have been recognized in unusual circumstances (e.g., Consumer
Protection Board v. Public Service Commission, 78 A.D. 2d 65, 434 N.Y.
Supp. 2d 820, 822 (1980) (inclusion of construction work in progress in
rate base is an extraordinary remedy); Mid-Tex Electric Cooperative,
Inc. v. FERC, 773 F.2d 327 (DC Cir. 1985) (decision to allow
construction work in progress in rate base is consistent with the
``used and useful'' principle)). The proposed amendment would represent
a modest departure from this principle. It would permit the operator of
a congested airport to incorporate the costs of airfield facilities
under construction (including costs associated with reconstructing
facilities) into the landing fee. Two approaches are being considered,
and we solicit comment on each. Under the first approach, the costs of
facilities under construction could be included only during periods
when the airport experiences congestion. Under the second approach, the
costs could be included at the congested airport throughout the day.
Any costs recovered for principal and interest during the construction
period would have to be deducted from the amount later capitalized and
amortized for recovery in the rate-base after the facility is put into
use. To qualify for inclusion, the facilities would need to be under
construction, so that availability of the facilities for use would not
be speculative. All planning and environmental reviews would need to
have been completed, a financing plan developed, and financing
arranged. Once construction is under way, the risk that current users
will not benefit from the facility in the foreseeable future is reduced
or eliminated if the user remains at the airport. In addition, allowing
the airport proprietor to begin early recovery of capital and interest
carrying costs of the facility during construction would reduce the
long-term costs of the project by reducing the amount of financing
costs incurred during the construction period that would otherwise be
capitalized and added to the rate base. In any event, it would not
increase the total costs of the project passed on to carriers, and it
could hasten the arrival of capacity expansions which benefit the
carriers by reducing future congestion. The proposed amendment would
also direct international airports intending to charge for projects
under construction to consult the International Civil Aviation
Organization Document 9562, Airport Economics Manual, Second Edition,
Attachment 6. This document sets forth internationally accepted
principles for charging airport users for projects under construction.
    This modification would allow the airport proprietor to raise the
cost of using congested airfield facilities during periods of
congestion or alternatively during all periods of the day in the near
term. The increased cost in turn would provide additional financial
incentives to users to consider alternatives to using

the airfield when congestion is present, including shifting operations
to off-peak periods or to less congested airports that also serve the
market area of the congested airport, or to serving the airfield more
efficiently such as with up-gauged aircraft.

Including Costs of Secondary Airports in the Rate-Base of a Congested
Airport

     The 1996 Rates and Charges Policy permits, in paragraph 2.5.4, the
operator of an airport to include in the rate base of that airport
costs of another airport currently in use if three conditions are met:
(1) The two airports have the same proprietor; (2) the second airport
is currently in use; and (3) the costs of the second airport to be
included in the first airport's rate-base are reasonably related to the
aviation benefits that the second airport provides or is expected to
provide to the aeronautical users of the first airport. Subparagraph
(a) further provides that the third condition will be presumed to be
satisfied if the second airport is designated as a reliever airport to
the first in the FAA's National Plan of Integrated Airport Systems
(NPIAS).
    The proposed action would amend subparagraph (a) to add another
category of airports to the presumption--those that the FAA has
designated as secondary airports serving cities, metropolitan areas, or
regions served by congested airports. FAA has identified these airports
and tracks development at these airports in the FAA strategic plan or
``Flight Plan.'' The current list of secondary airports is included as
an appendix to this notice. The FAA will post the current list of
designated secondary airports on its website upon publication of a
final amendment to the policy statement and will keep it up to date.
    The proposed action would also add a new subparagraph (e) stating
that the proprietor of a congested airport may consider the presence of
congestion when determining the share of the airfield costs of the
secondary airport to be included in the rate base of the congested
airport during periods of congestion. In no event would the airport
operator be allowed to generate more revenue from airfield charges
imposed at the two airports than the costs of operating the two
airfields.
    The proposed action would provide incentives to aircraft operators
to shift service away from congested times at congested airports in two
ways. First, it would raise the cost of operating at the congested
airport during times of congestion. Second, by adding costs of the
secondary airport to the rate base of the first airport, the amendment
would reduce the costs of the secondary airport remaining to be
recovered from landing fees imposed at the secondary airport. Thus the
costs of serving the region through a secondary airport would go down.
    These proposed modifications to our rates and charges policy do not
affect an airport's requirement to meaningfully consult with airline
users before increasing fees, charging new fees, or changing fee
methodologies. ``Adequate information'' should be provided by the
airport to permit aeronautical users to evaluate the proprietor's
justification for the charge and to assess the reasonableness of the
charge. Each party should give ``due regard'' to the views of the other
and the airport should consider the effects of fee changes on the users
and the users should consider the financial needs of the airports. A
``good faith effort'' to reach agreement should be made. Additionally,
the Department encourages the airport operator to provide certain
historic financial information for the airport, economic, financial
and/or legal justification for change in fee methodology or level of
fees, traffic information, and planning and forecasting information.\1\
---------------------------------------------------------------------------

    \1\ DOT Policy Regarding Airport Rates and Charges, 61 Fed. Reg.
32018-32019 and 32022 (1996).
---------------------------------------------------------------------------

     In the context of considering a fee dispute complaint under 49
U.S.C. 47129, the Department has stated that ``one of the important
goals in the Policy Statement is the encouragement of airport-airline
negotiations in the establishment of new fees or fee increases'' and it
encouraged:

    All airports to comply with their obligations under the Policy
Statement and applicable bilateral aviation agreements to engage in
meaningful consultations with carriers in advance of increasing fees
or establishing new fees. We expect airports to justify their fees
and to exchange appropriate financial information to enable the
carriers to fully evaluate those proposed fees.

British Airways PLC and Virgin Atlantic Airways Limited v. The Port
Authority of New York and New Jersey, Order 2000-5-23 at 10. (May 24,
2000).

The Proposed Amendment

     Because of the foregoing, the Department of Transportation
proposes to amend the Policy Regarding Airport Rates and Charges,
published at 61 FR 31994 (June 21, 1996) as follows:

Policy Regarding Airport Rates and Charges

Applicability of Policy

    1. Add a new subsection E, Congested Airports to read as follows:
E. Congested Airports
    The Department considers a congested airport to be--

(1) An airport meeting the definition of congested airport in 49 U.S.C.
47175; or
(2) An airport identified as congested by the Federal Aviation
Administration in the report of the Future Airport Capacity Task
entitled Capacity Needs in the National Airspace System 2007-2025: An
Analysis of Airports and Metropolitan Area Demand and Operational
Capacity in the Future (FACT 2 Report), or any update to that report
that the FAA may publish from time-to-time, except for airports that
will not become congested until 2025.

Fair and Reasonable Fees

    2. Amend subsection 2.1 by adding a new paragraph 2.1.4 to read as
follows:
    2.1.4 An airport proprietor may impose a two-part landing fee
consisting of a per-operation charge and a weight-based charge provided
that (1) the two-part fee reasonably allocates costs to users on a
rational and economically justified basis; and (2) the total revenues
from the two-part landing fee do not exceed the allowable costs of the
airfield. The operator of a congested airport may consider the presence
of airfield congestion when determining the portion of allowable
airfield costs to be allocated to the per operation charge during
periods of congestion
    3. Add a new paragraph 2.5.3 to read as one of the following two
options:
Option One
    ``2.5.3. The proprietor of a congested airport may include in the
rate-base used to determine airfield charges during periods of
congestion a portion of the costs of airfield projects under
construction so long as (1) all planning and environmental approvals
have been obtained for the projects; (2) the proprietor has obtained
financing for the projects; and (3) construction has commenced on the
projects.
    ``(a) The airport proprietor must deduct from the total costs of
the projects any principal and interest collected during the period of
construction in determining the amount of project costs to be
capitalized and amortized once the project is commissioned and put in
service.

    ``(b) The airport proprietor should consult the International Civil
Aviation Organization Document 9562, Airport Economics Manual, Second
Edition, Attachment 6 before taking action to include costs of a
project under construction in the rate-base of an airport with
international air service.'';
Option Two
    ``2.5.3. The proprietor of a congested airport may include in the
rate-base used to determine airfield charges a portion of the costs of
airfield projects under construction so long as (1) all planning and
environmental approvals have been obtained for the projects; (2) the
proprietor has obtained financing for the projects; and (3)
construction has commenced on the projects.
    ``(a) The airport proprietor must deduct from the total costs of
the projects any principal and interest collected during the period of
construction in determining the amount of project costs to be
capitalized and amortized once the project is commissioned and put in
service.
    ``(b) The airport proprietor should consult the International Civil
Aviation Organization Document 9562, Airport Economics Manual, Second
Edition, Attachment 6 before taking action to include costs of a
project under construction in the rate-base of an airport with
international air service.''
    4. Revise paragraph 2.5.4(a) to read as follows:
    (a) Element no. 3 above will be presumed to be satisfied if
     (1) the other airport is designated as a reliever airport for the
first airport in the FAA's National Plan of Integrated Airport Systems
(``NPIAS''); or
    (2) the first airport is congested and the other airport has been
designated by the FAA as a secondary airport serving the community,
metropolitan area, or region served by the first airport.
     b. Add a new subparagraph (e) to read as follows:
    (e) The proprietor of a congested airport may consider the presence
of airfield congestion at the first airport when determining the
portion of the airfield costs of the other airport to be paid by the
users of the first airport during periods of congestion, so long as the
total airfield revenue recovered from the users of both airports do not
exceed the total allowable costs of the two airports combined.

    Issued in Washington, DC, on January 11, 2008.
Mary E. Peters,
Secretary of Transportation.
Robert A. Sturgell,
Acting Administrator, Federal Aviation Administration.
 [FR Doc. E8-815 Filed 1-16-08; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 81, Number 234 (Tuesday, December 6, 2016)]
[Notices]
[Pages 87925-87926]
[FR Doc No: 2016-29225]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[P-6764-038]

BMB Enterprises, Inc.; Notice of Application Accepted for Filing
and Soliciting Comments, Motions To Intervene, and Protests

    Take notice that the following hydroelectric application has been
filed with the Commission and is available for public inspection:
    a. Type of Application: Amendment of License.
    b. Project No.: 6764-038.
    c. Date Filed: July 18, 2016.
    d. Applicant: BMB Enterprises, Inc.
    e. Name of Project: Sixmile Creek Hydroelectric Project.
    f. Location: The project is located on the Sixmile Creek in Sanpete
County, Utah.
    g. Filed Pursuant to: Federal Power Act, 16 U.S.C. 791 (a)-825(r).
    h. Applicant Contact: Mr. Brad F. Hutchings, BMB Enterprises, Inc.,
282 North 1350 East, Bountiful, Utah 84010,<PHONE_NUMBER>.
    i. FERC Contact: Anumzziatta Purchiaroni,<PHONE_NUMBER>,
<EMAIL_ADDRESS>    j. Deadline for filing comments, motions to intervene, and protests
is 30 days from the issuance of this notice by the Commission. The
Commission strongly encourages electronic filing. Please file comments,
motions to intervene, and protests using the Commission's eFiling
system at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can
submit brief comments up to 6,000 characters, without prior
registration, using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information
at the end of your comments. For assistance, please contact FERC Online
Support at<EMAIL_ADDRESS>(866) 208-3676 (toll free), or
(202) 502-8659 (TTY). In lieu of electronic filing, please send a paper
copy to: Secretary, Federal Energy Regulatory Commission, 888 First
Street NE., Washington, DC 20426. The first page of any filing should
include docket number P-6764-038.
    k. Description of Request: The licensee is proposing to delete a
portion of the project transmission line that is no longer needed for
interconnection of the project and change the point of interconnection
with Manti City. The proposed changes are within the project boundary
and will have no impact on federal lands.
    l. Locations of the Applications: A copy of the application is
available for inspection and reproduction at the Commission's Public
Reference Room, located at 888 First Street NE., Room 2A, Washington,
DC 20426, or by calling<PHONE_NUMBER>. The filing may also be viewed
on the Commission's Web site at http://www.ferc.gov/docs-filing/elibrary.asp. Enter the docket number excluding the last three digits
in the docket number field to access the document (i.e., P-6764). You
may also register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filings and issuances
related to this or other pending projects. For assistance, call 1-866-
208-3676 or email<EMAIL_ADDRESS>for TTY, call (202) 502-
8659.
    m. Individuals desiring to be included on the Commission's mailing
list should so indicate by writing to the Secretary of the Commission.
    n. Comments, Motions to Intervene or Protests: Anyone may submit
comments, a motion to intervene, or a protest in accordance with the
requirements of Rules of Practice and Procedure, 18 CFR 385.210, .211,
.214. In determining the appropriate action to

take, the Commission will consider all protests or other comments
filed, but only those who file a motion to intervene in accordance with
the Commission's Rules may become a party to the proceeding. Any
comments, motions to intervene, or protests must be received on or
before the specified comment date for the particular application.
    o. Filing and Service of Responsive Documents: Any filing must (1)
bear in all capital letters the title ``COMMENTS'', ``MOTION TO
INTERVENE'', or ``PROTEST'' as applicable; (2) set forth in the heading
the name of the applicant and the project number of the application to
which the filing responds; (3) furnish the name, address, and telephone
number of the person protesting or intervening; and (4) otherwise
comply with the requirements of 18 CFR 385.2001 through 385.2005. All
comments, motions to intervene, or protests must set forth their
evidentiary basis and otherwise comply with the requirements of 18 CFR
4.34(b). All comments, motions to intervene, or protests should relate
to project works which are the subject of the amendment request.
Agencies may obtain copies of the application directly from the
applicant. A copy of any protest or motion to intervene must be served
upon each representative of the applicant specified in the particular
application. If an intervener files comments or documents with the
Commission relating to the merits of an issue that may affect the
responsibilities of a particular resource agency, they must also serve
a copy of the document on that resource agency. A copy of all other
filings in reference to this application must be accompanied by proof
of service on all persons listed in the service list prepared by the
Commission in this proceeding, in accordance with 18 CFR 4.34(b) and
385.2010.

    Dated: November 29, 2016.
Kimberly D. Bose,
Secretary.
[FR Doc. 2016-29225 Filed 12-5-16; 8:45 am]
 BILLING CODE 6717-01-P


<COMPANY FEDERAL REGISTER DOCUMENT SUBMISSION TEMPLATE  (7/1/2006)>

<EPA Registration Division contact: [Mr. Tony Kish, Product Manager
(22),<PHONE_NUMBER>]>

<INSTRUCTIONS:  Please utilize this outline in preparing tolerance
petition documents.  In cases where the outline element does not apply
please insert “NA-Remove” and maintain the outline.  The comment
notes that appear on the left margin represent hidden typesetting codes
designed to expedite the processing of the Federal Register document.
Please do not remove or alter these comment notes or change the margins,
font, or format in your document. Simply replace the instructions that
appear in italics and brackets, i.e., “[insert company name],” with
the information specific to your action.]>

<TEMPLATE:>

<[KIM-C1, LLC]>

<[Insert petition number]>

<	EPA has received a pesticide petition ([insert petition number]) from
[KIM-C1, LLC], [c/o Siemer & Associates, Inc. 135 W. Shaw, Suite 102,
Fresno, CA  93704] proposing, pursuant to section 408(d) of the Federal
Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a(d), to amend 40 CFR
part 180.>

<(Options (pick one)>

<	1. by establishing a tolerance for residues of>

<	>< [Forchlorfenuron (KT-30)] in or on the raw agricultural commodity
[Almond, Cherry, Fig, Pear, Pistachio, Plum/Prune] at [0.01] parts per
million (ppm).  EPA has determined that the petition contains data or
information regarding the elements set forth in section 408 (d)(2) of
the FDDCA; however, EPA has not fully evaluated the sufficiency of the
submitted data at this time or whether the data supports granting of the
petition. Additional data may be needed before EPA rules on the
petition.>

<A. Residue Chemistry>

<	1. Plant metabolism. [The primary residue of forchlorfenuron is parent
material.  Three plant metabolism studies were conducted, one on grapes
(MRID #44394601), one on kiwifruit (MRID #44359501), and one on apples
(MRID #44394602), all showed parent material to be the primary residue.
There were two hydroxy metabolites in all > three radio label studies at
very low levels.  That is why the parent material is considered the
primary residue.  There have been 30+ residue studies conducted
(cumulatively) on grapes, raisins and kiwifruit that have been
previously submitted to US EPA to support the Section 3 registration on
grapes, raisin, and kiwifruit.  Tolerances are established at 0.03 for
grapes, 0.02 for raisins, and 0.01 for kiwifruit.  Sixteen additional
residue studies were conducted for this EUP request, six on almonds, two
on cherry, two on fig, two on pear, two on pistachio and two on prune.
Residue levels were at or below the level of quantification (0.01) on
fruits and nuts in all sixteen studies.]

<	2. Analytical method. [Two analytical methods, both based on high
performance liquid chromotography (HPLC) procedures have been developed.
 The first method used a visible ultraviolet (UV) detector, while the
second method used a mass spectrophotometer (MS) detector.  Since the MS
detector is capable of both qualitative as well as quantitative
measurement, it is the preferred method.  The lowest level of
quantification (LOQ) in all of the crops (i.e. almond, cherry, fig,
pear, pistachio and prune) was 0.01 ppm.]>

<	3. Magnitude of residues. [The magnitude of residues in almond,
cherry, fig, pear, pistachio and prune are all at or below the LOQ.  All
analyzed samples had residue levels below detectable levels.]>

<B. Toxicological Profile>

	[A full battery of toxicology testing including studies of acute,
subchronic, chronic, oncogenicity, developmental, reproductive and
genotoxicity effects is available for KT-30 Technical active ingredient.
 The acute toxicity of KT-30 is low by all routes.  The lowest
subchronic study showed a no observable adverse effect level (NOAEL)
value of 16.8 milligrams/kilogram/day (mg/kg/day) obtained from the dog
90-day toxicity study.  Chronic studies in other animals indicated that
KT-30 is not carcinogenic.  The lowest chronic dietary NOAEL is 7
mg/kg/day from male rats fed KT-30 for 104 weeks.  KT-30 showed no
evidence of developmental toxicity in rats and rabbits.  In a rat
reproduction study, reproductive effects were only observed at
maternally toxic doses.  Finally, genetic toxicity studies indicated
that KT-30 was not genotoxic.  For the purpose of dietary risk analysis,
0.07 mg/kg/day is proposed for the chronic population adjusted dose
(cPAD).  The cPAD is based on a chronic endpoint of 7 mg/kg/day, which
is the NOAEL for male rats  from the chronic/oncogenicity feeding study
and with an uncertainty factor of 100.  No acute toxicity endpoint could
be identified and, therefore, an acute dietary risk assessment is
considered unnecessary.]

<	1. Acute toxicity.  [These toxicity studies were run with KT-30
Technical as well as the end use formulation (ABG-3207 Plant Growth
Regulator).  The acute toxicity of KT-30 is low by all routes.  The
battery of acute toxicity studies place KT-30 into Toxicity Category
III.  KT-30 has low acute toxicity when administered orally, dermally or
via inhalation to rats.  It is not a skin irritant and is only a mild
eye irritant.  KT-30 is not a skin sensitizer.]>

<	2. Genotoxicity. [The genotoxic potential of KT-30 was studied in
vitro in bacteria and mammalian cells and in vivo in the unscheduled DNA
synthesis test.  The test systems assayed did not show any evidence of
genotoxicity except in the bacterial mutagenicity assay, strain TA1535,
without metabolic activation.  The weight of the evidence indicates that
KT-30 does not possess significant genotoxicity concerns.]>

<

3. Reproductive and developmental toxicity. [Developmental effects of
KT-30 were studied in rats and rabbits and multigenerational effects on
reproduction were studied in rats.

i.  Rat developmental.  In the developmental toxicity study conducted
with rats, KT-30 was administered by gavage at levels of 0, 100, 200,
and 400 mg/kg/day.  The maternal and developmental NOAELs are 200
mg/kg/day based on reduced body weights, body weight gain, food
consumption, and an increased incidence of alopecia in dams.  There were
no developmental effects.

ii.  Rabbit developmental.  In the rabbit developmental toxicity study,
gavage doses of 0, 25, 50, and 100 mg/kg/day were administered.
Maternal toxicity (decreased body weight and body weight gains) were
observed at 50 mg/kg/day and above.  The maternal NOAEL was 25 mg/kg/day
and the developmental NOAEL was 100 mg/kg/day.  There were no
developmental effects.

iii.  Reproduction.  In the rat reproduction study, KT-30 was
administered in the diet at levels of 0, 150, 2,000 and 7,500 ppm for
two generations.  There were no adverse effects of KT-30 on reproductive
success.  Parental toxicity consisted of clinical signs, inhibition of
body weight gain, reduced food consumption, and macroscopic and
microscopic effects in the kidney.  Reproductive toxicity in the highest
dose consisted of slightly reduced live litter sizes in the F2 litters.
In the pups, body weights and survival (late lactation period) were
reduced and at the high dose, pup mortality and emaciation were
increased.  The parental, pup and reproductive NOAELs were 150 ppm, 150
ppm and 2,000 ppm, respectively.]>

<	4. Subchronic toxicity. [Subchronic studies have been conducted with
KT-30 in the rat, mouse and dog.

i.  Rats.  KT-30 Technical was tested in rats in a 3-month study at
dietary levels of 0, 200, 1,000 and 5,000 ppm.  Observations were
decreased body weight, body weight gain and food efficiency.  The NOAEL
for males was 5,000 ppm (400 mg/kg/day) and in females was 1,000 ppm (84
mg/kg/day).

ii.  Mice.  A 13-week dietary toxicity study in mice was conducted at
dose levels of 0, 900, 1,800, 3,500 and 7,000 ppm.  Effects included
decreased body weight and food consumption, increased relative liver
weight and lymphocytic cell infiltration in the kidneys.  The NOAEL was
3,500 ppm (609 mg/kg/day in males and 788 mg/kg/day in females).

iii. Dogs.  A 13-week dietary toxicity study was conducted in beagle
dogs at dose levels of 0, 50, 500 and 5,000 ppm.  Effects included
decreased body weight gain, food consumption, and food efficiency.  The
NOAEL for both sexes was 500 ppm (16.8 mg/kg/day in males and 19.1
mg/kg/day in females).]

>

<	5. Chronic toxicity. [KT-30 has been tested in chronic studies with
rats, mice and dogs.

i.  Rats.  In a 104-week combined chronic/oncogenicity study in rats,
KT-30 was administered in the diet at dose levels of 0, 150, 2,000 and
7,500 ppm.  Findings were decreased body weight and body
histopathological effects in the kidney.  No oncogenicity was found.
The NOAEL for this study was 150 ppm (7 mg/kg/day in males and 9
mg/kg/day in females).

ii.  Mice.  KT-30 was administered in the diet to mice for 78-weeks at
dose levels of 0, 10, and 1,000 mg/kg/day.  Observations were decreased
body weight,  body weight gain, food consumption, increased kidney
weights, and incidence of chronic kidney histopathological lesions.  The
NOAEL for both sexes was 10 mg/kg/day.

iii.  Dogs.  In a 12-month study, KT-30 was administered in the diet
given to dogs at dose levels of 0, 150, 3,000 and 7,500 ppm.
Observations included reduced body weight, body weight gain, food
consumption, and various hematology changes.  The NOAEL for both sexes
was 3,000 ppm (87 mg/kg/day in males and 91 mg/kg/day in females).

iv.  Carcinogenicity.  KT-30 did not produce carcinogenicity in chronic
studies with rats or mice.  The oncogenicity classification of KT-30
will be “E” (no evidence of carcinogenicity for humans).]>

<	6. Animal metabolism. [A rat metabolism study indicated that KT-30 is
almost completely absorbed and most of the 14C-forchlorfenuron-derived
radioactivity is rapidly eliminated primarily via the urine.  The
majority of the metabolism of KT-30 was via hydroxylation of the phenyl
ring.  The sulfate conjugate of hydroxyl KT-30 was the major metabolite
excreted in the urine, accounting for as much as approximately 96% of
the urinary radioactivity.  Tissue residues accounted for less than 1%
of the administered dose at 168 hours post-dosing.]>

<	7. Metabolite toxicology. [Metabolites occur at levels below 0.1 ppm
and, therefore, are below levels required to be assayed in animal
testing.]>

<	8. Endocrine disruption. [Potential endocrine effects.  No special
studies to investigate the potential for endocrine effects of KT-30 have
been performed.  However, as summarized above, a large and detailed
toxicology data base exists for the compound including studies in all
required categories.  These studies include acute, sub-chronic, chronic,
developmental, and reproductive toxicology studies, including detailed
histology and histopathology of numerous tissues, including endocrine
organs, following repeated or long-term exposures.  These studies are
considered capable of revealing endocrine effects.  The results of all
of these studies show no evidence of any endocrine-mediated effects and
no pathology of the endocrine organs.  Consequently, it is concluded
that KT-30 does not possess estrogenic or endocrine disrupting
properties.]>

<C. Aggregate Exposure>

<	1. Dietary exposure. [The dietary exposure assessment was conducted by
Environs for foods containing forchlorfenuron: CAS Number: 68157-60-8
(KT-30).]>

<	i. Food. [Reference is made to a document that shows a Dietary
Exposure Assessment that was conducted for KIM-C1 by ENVIORNS, looking
at a number of crops, some of which were almond, fig, pear, and prune.
This work was done for KIM-C1 in connection with a previous EUP that
KIM-C1 obtained for development of efficacy data on the crops listed
below.  A reference dose (RfD) was calculated using the most sensitive
species data available from the toxicological testing.  The calculated
RfD of 0.08 mg/kg/day was used to calculate the impact of the estimated
residue levels with results from treatment of the total acreage of all
crops included in the EUP.  Making the same risk exposure calculations,
it was shown that there was no significant impact on reducing the RfD by
using almonds, apples, blueberries, figs, grapes, kiwifruit, pears, and
plums in aggregate.  Combining the RfD consumption from the group of
crops with that of apples would exceed 1% of the reference dose only
slightly if the total acreage of all crops were treated.  (This study is
referenced in the Notice of Filing published by EPA at: Federal
Register: Forchlorfenuron; Notice of Filing a Pesticide Petition… [FR.
DOC 04-7651 Filed 4-6-04])]>

<	ii. Drinking Water. [The very low use rate of KT-30, i.e., 10 grams
active ingredient (a.i.) or less per acre if used constantly once a year
for 20 years would apply less than a pound of KT-30 per acre during that
20 year period.  Computer modeling, using the conservative pesticide
root zone model (PRZM) means of analysis has shown that no KT-30 would
reach ground water, even in sandy loam soils.  The results of this risk
analysis supported an unambiguous conclusion of “essentially zero risk
to ground water” even under reasonable worst-case assumptions.
Concentrations are not predicted to exceed 15 to 20 ppb of KT-30 in the
soil in the upper soil horizons, even following yearly applications for
as long as 30 years.  No secondary exposure is anticipated as a result
of contamination of drinking water.]>

<	2. Non-dietary exposure. [No non-dietary exposure is expected since
KT-30 is not anticipated to be found in the drinking water.  This
material does not translocate in plants and thus secondary exposure
through plants growing in soil receiving KT-30 is not anticipated.  The
extremely low application rates will not result in significant buildup
in the environment.  Data indicate that any parent material of KT-30
left in the soil will be strongly bound to soil particles and will not
move.]>

<D. Cumulative Effects>

<	[There are no cumulative effects expected since KT-30 is not taken up
by plants from the soil.  It slowly degrades to mineral end points.  Its
low use rates and infrequent applications are not conducive to buildup
in the environment.]>

<E. Safety Determination>

<	1. U.S. population. [As pointed out above in dietary exposure-food,
the percentage of the RfD consumed by treating the subject crops
represents only 1% of the estimated safe level for the most sensitive
segment of the population, non-nursing infants.]>

<	2. Infants and children. [No developmental, reproductive or fetotoxic
effects have been associated with KT-30.  The calculation of safety
margins with respect to these segments of the population were taken into
consideration in the TMRC estimates with respect to the risk associated
with the percentage of the reference dose being consumed.]>

<F. International Tolerances>

<	[There is no Codex maximum residue level established for KT-30.
However, KT-30 is registered for use on grapes and kiwifruit in the
U.S., and has a pending registration for blueberries.  Forchlorfenuron
is registered for use on grapes and other crops in Japan, Chile, Mexico,
and South Africa.  In Italy, forchlorfenuron is registered on
kiwifruit.]>


[Federal Register Volume 86, Number 13 (Friday, January 22, 2021)]
[Notices]
[Pages 6715-6718]
[FR Doc No: 2021-01284]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90928; File No. SR-ICC-2021-001]

Self-Regulatory Organizations; ICE Clear Credit LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
the ICC Clearing Rules

January 14, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 7, 2021, ICE Clear Credit LLC (``ICC'') filed with the
Securities and Exchange

Commission the proposed rule change as described in Items I and II
below, which Items have been prepared primarily by ICC. ICC filed the
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6) thereunder,\4\ such that the proposed rule change was
immediately effective upon filing with the Commission. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change

    The principal purpose of the proposed rule change is to revise the
ICC Clearing Rules (the ``Rules'') \5\ to clarify an existing
requirement of Participants regarding the provision of margin or
collateral (``Non-Participant Collateral'') by clients (``Non-
Participant Parties'').
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    \5\ Capitalized terms used but not defined herein have the
meanings specified in the Rules.
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II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

    In its filing with the Commission, ICC included statements
concerning the purpose of and basis for the proposed rule change,
security-based swap submission, or advance notice and discussed any
comments it received on the proposed rule change, security-based swap
submission, or advance notice. The text of these statements may be
examined at the places specified in Item IV below. ICC has prepared
summaries, set forth in sections (A), (B), and (C) below, of the most
significant aspects of these statements.

(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change

(a) Purpose
    ICC proposes revisions to Rule 406(b) to clarify an existing
requirement of Participants regarding the provision of Non-Participant
Collateral by Non-Participant Parties and to update the terminology in
a manner that is consistent with amended Commodity Futures Trading
Commission (``CFTC'') Regulation 39.13(g)(8)(ii),\6\ applicable to ICC
as a derivatives clearing organization, which requires compliance by
January 27, 2021. As such, ICC has filed the proposed rule change for
immediate effectiveness and proposes that it will be operative on or
about January 27, 2021 and subject to any regulatory review, approval,
or other process. ICC will issue a circular notification, in advance of
the operative date. The proposed revisions are described in detail as
follows.
---------------------------------------------------------------------------

    \6\ 17 CFR 39.13(g)(8)(ii).
---------------------------------------------------------------------------

    ICC proposes changes to Rule 406, which sets out certain
requirements with respect to client-related positions of futures
commission merchant (``FCM'') and broker-dealer Participants. Under
current Rule 406(b), a Participant must require each Non-Participant
Party to provide Non-Participant Collateral in an amount no less than
ICC's margin requirement with respect to the relevant client-related
position(s). The proposed changes clarify that such amount would be
commensurate with the risk presented by such Non-Participant Party. The
proposed changes also remove general language whereby ICC may require
additional margin with respect to Non-Participant Parties and, instead,
direct Participants to identify Non-Participant Parties with heightened
risk profiles and collect margin from them at a level exceeding 100% of
ICC's margin requirement, by such amount as is commensurate with the
risk presented. Such changes are intended to clarify and incorporate
terminology that is consistent with amended CFTC Regulation
39.13(g)(8)(ii) \7\ to facilitate compliance.
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    \7\ Id.
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    In connection with the proposed amendments, ICC would also revoke
Circular 2012/008 (the ``Circular'') \8\ which requires FCM
Participants to collect margin from Non-Participant Parties in respect
of such Non-Participant Parties' non-hedge positions, at a level that
is 10% greater than ICC's related margin requirement with respect to
each product and swap portfolio. Amended CFTC Regulation
39.13(g)(8)(ii) \9\ intended to replace this prior market structure,
which is reflected in current Rule 406 and the Circular.
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    \8\ The Circular was issued on April 20, 2012 and is available
at the following: https://www.theice.com/publicdocs/clear_credit/circulars/Circular_2012_008_FINAL.pdf.
    \9\ 17 CFR 39.13(g)(8)(ii).
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(b) Statutory Basis
    ICC believes that the proposed rule change is consistent with the
requirements of Section 17A of the Act \10\ and the regulations
thereunder applicable to it, including the applicable standards under
Rule 17Ad-22.\11\ In particular, Section 17A(b)(3)(F) of the Act \12\
requires that the rule change be consistent with the prompt and
accurate clearance and settlement of securities transactions and
derivative agreements, contracts and transactions cleared by ICC, the
safeguarding of securities and funds in the custody or control of ICC
or for which it is responsible, and the protection of investors and the
public interest. The proposed rule change would update Rule 406(b) to
provide clarification to the existing requirement and to update the
terminology in a manner that is consistent with amended CFTC Regulation
39.13(g)(8)(ii).\13\ Specifically, the proposed revisions clarify that
the amount of Non-Participant Collateral would be commensurate with the
risk presented by such Non-Participant Party. The proposed changes also
remove general language whereby ICC may require additional margin with
respect to Non-Participant Parties and, instead, direct Participants to
identify Non-Participant Parties with heightened risk profiles and
collect margin from them at a level exceeding ICC's margin requirement.
Such changes would accordingly replace the requirement in the Circular,
which ICC believes is appropriate to facilitate compliance with amended
CFTC Regulation 39.13(g)(8)(ii),\14\ and better support ICC's ability
to manage the risks posed by Non-Participant Parties as the proposed
changes result in Participants collecting Non-Participant Collateral at
levels commensurate with the risk presented by each Non-Participant
Party. Such changes further provide clarity and transparency on the
requirement in Rule 406(b) regarding the provision of Non-Participant
Collateral and thus strengthen the Rules with clear and more specific
guidance, which supports the prompt and accurate clearance and
settlement of securities transactions, derivatives agreements,
contracts, and transactions, the safeguarding of securities and funds
which are in the custody or control of ICC or for which it is
responsible, and the protection of investors and the public interest.
The proposed rule change is thus consistent with the prompt and
accurate clearance and settlement of securities transactions,
derivatives agreements, contracts, and transactions, the safeguarding
of securities and funds in the custody or control of ICC or for which
it is responsible, and the protection of investors and the public
interest, within the meaning of Section 17A(b)(3)(F) of the Act.\15\
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    \10\ 15 U.S.C. 78q-1.
    \11\ 17 CFR 240.17Ad-22.
    \12\ 15 U.S.C. 78q-1(b)(3)(F).
    \13\ 17 CFR 39.13(g)(8)(ii).
    \14\ Id.
    \15\ 15 U.S.C. 78q-1(b)(3)(F).

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    The amendments would also satisfy relevant requirements of Rule
17Ad-22.\16\ Rule 17Ad-22(e)(4)(ii) \17\ requires each covered clearing
agency to establish, implement, maintain, and enforce written policies
and procedures reasonably designed to effectively identify, measure,
monitor, and manage its credit exposures to participants and those
arising from its payment, clearing, and settlement processes, including
by maintaining additional financial resources at the minimum to enable
it to cover a wide range of foreseeable stress scenarios that include,
but are not limited to, the default of the two participant families
that would potentially cause the largest aggregate credit exposure for
the covered clearing agency in extreme but plausible market conditions.
The proposed changes promote ICC's ability to address and manage the
risk posed by Non-Participant Parties, including by clarifying that the
amount of Non-Participant Collateral would be commensurate with the
risk presented by such Non-Participant Party and by directing
Participants to identify Non-Participant Parties with heightened risk
profiles and collect margin from them at a level exceeding ICC's margin
requirement. In ICC's view, the amended language in Rule 406(b)
protects the financial integrity of ICC and Participants, as it results
in Participants collecting Non-Participant Collateral in an amount
commensurate with the risk presented by Non-Participant Parties and is
more appropriate in light of amended Regulation 39.13(g)(8)(ii).\18\
Such changes promote ICC's ability to manage the risks posed by Non-
Participant Parties, including by managing the potential risks arising
from Non-Participant Party transactions relating to a potential default
of a Non-Participant Party that disrupts a Participant, thereby
promoting ICC's ability to continue to maintain its financial resources
and withstand the pressures of defaults, consistent with the
requirements of Rule 17Ad-22(e)(4)(ii).\19\
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    \16\ 17 CFR 240.17Ad-22.
    \17\ 17 CFR 240.17Ad-22(e)(4)(ii).
    \18\ 17 CFR 39.13(g)(8)(ii).
    \19\ 17 CFR 240.17Ad-22(e)(4)(ii).
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    Rule 17Ad-22(e)(6)(i) and (ii) \20\ require each covered clearing
agency to establish, implement, maintain, and enforce written policies
and procedures reasonably designed to cover its credit exposures to its
participants by establishing a risk-based margin system that, at a
minimum, considers, and produces margin levels commensurate with, the
risks and particular attributes of each relevant product, portfolio,
and market and marks participant positions to market and collects
margin, including variation margin or equivalent charges if relevant,
at least daily and includes the authority and operational capacity to
make intraday margin calls in defined circumstances. As described
above, the proposed revisions are intended to clarify the existing
requirement in Rule 406(b) and to incorporate terminology that is
consistent with amended CFTC Regulation 39.13(g)(8)(ii) \21\ to
facilitate compliance. Such revisions do not change ICC's margin
methodology, which continues to consider, and produce margin levels
commensurate with, the risks and particular attributes of each relevant
product, portfolio, and market, and do not impact or alter ICC's
ability to collect margin or make intraday margin calls. Therefore, ICC
believes that the proposed rule change is consistent with the
requirements of Rule 17Ad-22(e)(6)(i) and (ii).\22\
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    \20\ 17 CFR 240.17Ad-22(e)(6)(i) and (ii).
    \21\ 17 CFR 39.13(g)(8)(ii).
    \22\ 17 CFR 240.17Ad-22(e)(6)(i) and (ii).
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    Rule 17Ad-22(e)(19) \23\ requires each covered clearing agency to
establish, implement, maintain, and enforce written policies and
procedures reasonably designed to identify, monitor, and manage the
material risks to the covered clearing agency arising from arrangements
in which firms that are indirect participants in the covered clearing
agency rely on the services provided by direct participants to access
the covered clearing agency's payment, clearing, or settlement
facilities. The proposed amendments support ICC's ability to manage the
risks posed by Non-Participant Parties, including by elaborating on the
requirement in Rule 406(b) to state that the amount of Non-Participant
Collateral would be commensurate with the risk presented by such Non-
Participant Party. The proposed changes also include language directing
Participants to identify Non-Participant Parties with heightened risk
profiles and collect margin from them at a level exceeding ICC's margin
requirement to replace general language whereby ICC may require
additional margin with respect to Non-Participant Parties. Such changes
would replace the requirement in the Circular, which would result in
Participants collecting Non-Participant Collateral at levels
commensurate with the risk presented by each Non-Participant Party and
support ICC's ability to manage the risks posed by Non-Participant
Parties given the relationship that Participants have with Non-
Participant Parties as opposed to ICC. Such changes also foster a more
clear and transparent Rule that will enhance ICC's ability to identify,
monitor, and manage the risks posed by Non-Participant Parties,
consistent with the requirements of Rule 17Ad-22(e)(19).\24\
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    \23\ 17 CFR 240.17Ad-22(e)(19).
    \24\ Id.
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(B) Clearing Agency's Statement on Burden on Competition

    ICC does not believe the proposed amendments would have any impact,
or impose any burden, on competition. The proposed rule change will
apply uniformly across all market participants. Therefore, ICC does not
believe the proposed rule change imposes any burden on competition that
is inappropriate in furtherance of the purposes of the Act.

(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants or Others

    Written comments relating to the proposed rule change have not been
solicited or received. ICC will notify the Commission of any written
comments received by ICC.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) \25\ of the Act and
Rule 19b-4(f)(6) \26\ thereunder.
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    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 17 CFR 240.19b-4(f)(6).
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    ICC has requested that the Commission waive both the five-day pre-
filing requirement and the 30-day delayed operative date under Rule
19b-4(6)(iii) \27\ so that the proposed rule change may become
effective and operative upon filing with the Commission. As noted
above, ICC designed the proposed amendments to Rule 406(b) for
consistency with amended CFTC Regulation 39.13(g)(8)(ii),\28\ which
requires ICC's compliance by January 27, 2021. ICC does not believe
that any delay in implementing rules that reflect these requirements
will benefit Participants, their customers, or any other market

participants. Any delay is also likely to be inconsistent with market
expectations in light of the compliance date of the amended CFTC
regulation. As a result, in ICC's view, immediate effectiveness is
consistent with the protection of investors and the public interest.
---------------------------------------------------------------------------

    \27\ 17 CFR 240.19b-4(f)(6)(iii).
    \28\ 17 CFR 39.13(g)(8)(ii).
---------------------------------------------------------------------------

    The Commission believes that the delay of the operation of the
proposed rule change, through the five-day pre-filing requirement and
the 30-day delayed operative date, could impede ICC's timely compliance
with amended CFTC Regulation 39.13(g)(8)(ii) \29\ and thereby defer the
intended benefits and objectives of such regulatory requirements for
customer initial margin levels. This, in turn, could disrupt market
expectations that ICC will implement the amended CFTC regulation by the
January 27, 2021 compliance date, which may adversely affect ICC and
its ability to timely replace the requirement in the Circular and
manage the risks posed by Non-Participant Parties in compliance with
applicable regulatory requirements for the collection of Non-
Participant Collateral. The Commission therefore believes that waiving
the five-day pre-filing requirement and 30-day operative delay should
facilitate ICC's timely compliance with the amended CFTC regulation and
avert any potential adverse consequences if such compliance were
delayed. Moreover, the Commission believes the proposed rule change
would not impose any significant burden on competition because it
applies uniformly to both FCM and broker-dealer Participants and their
customers as Non-Participant Parties. Thus, the Commission believes the
proposed rule change, and waiving the five-day pre-filing requirement
and 30-day operative delay, would not (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; or (iii) affect the safeguarding of
funds or securities in the custody or control of ICC or for which it is
responsible. Therefore, the Commission waives the five-day pre-filing
requirement and 30-day operative delay, and designates the proposed
rule change as operative upon filing.\30\
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    \29\ 17 CFR 39.13(g)(8)(ii).
    \30\ For purposes only of waiving the five-day pre-filing
requirement and the 30-day operative delay, the Commission has
considered the proposed rule change's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-ICC-2021-001 on the subject line.

Paper Comments

    Send paper comments in triplicate to Secretary, Securities and
Exchange Commission, 100 F Street NE, Washington, DC 20549.

All submissions should refer to File Number SR-ICC-2021-001. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filings will also be available for inspection
and copying at the principal office of ICE Clear Credit and on ICE
Clear Credit's website at https://www.theice.com/clear-credit/regulation.
    All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-ICC-2021-001 and should be
submitted on or before February 12, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-01284 Filed 1-21-21; 8:45 am]
BILLING CODE 8011-01-P