Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Rules and Regulations 63445

TABLE 1.—COMPLIANCE TIMES

For— Initial compliance time— Repetitive interval— 

(1) Work Package 1 ........................................... Within 180 days after the effective date of this 

AD.

At intervals not to exceed 180 days, until all 

outboard roller assemblies have been replaced per Work Package 2 of the service 

bulletin. 

(2) Work Package 2 ........................................... Within 18 months after the effective date of 

this AD.

None. 

Note 1: For the purposes of this AD, a 

detailed inspection is ‘‘an intensive 

examination of a specific item, installation, 

or assembly to detect damage, failure, or 

irregularity. Available lighting is normally 

supplemented with a direct source of good 

lighting at an intensity deemed appropriate. 

Inspection aids such as mirrors magnifying 

lenses, etc. may be necessary. Surface 

cleaning and elaborate procedures may be 

required.’’

Note 2: Boeing Alert Service Bulletin 747–

25A3335 refers to Goodrich Alert Service 

Bulletin 65B60176–25-A01, dated March 3, 

2003, as an additional source of service 

information for replacing the outboard roller 

assemblies.

Alternative Methods of Compliance 

(AMOCs) 

(g) The Manager, Seattle ACO, has the 

authority to approve AMOCs for this AD, if 

requested in accordance with the procedures 

found in 14 CFR 39.19. 

Material Incorporated by Reference 

(h) You must use Boeing Alert Service 

Bulletin 747–25A3335, dated July 3, 2003, to 

perform the actions that are required by this 

AD, unless the AD specifies otherwise. The 

Director of the Federal Register approves the 

incorporation by reference of this document 

in accordance with 5 U.S.C. 552(a) and 1 CFR 

part 51. For copies of the service information, 

contact Boeing Commercial Airplanes, P.O. 

Box 3707, Seattle, Washington 98124–2207. 

For information on the availability of this 

material at the National Archives and 

Records Administration (NARA), call (202) 

741–6030, or go to http://www.archives.gov/

federal_register/code_of_federal_regulations/

ibr_locations.html. You may view the AD 

docket at the Docket Management Facility, 

U.S. Department of Transportation, 400 

Seventh Street SW, room PL–401, Nassif 

Building, Washington, DC.

Issued in Renton, Washington, on October 

21, 2004. 

Kalene C. Yanamura, 

Acting Manager, Transport Airplane 

Directorate, Aircraft Certification Service.

[FR Doc. 04–24227 Filed 11–1–04; 8:45 am] 

BILLING CODE 4910–13–P

DEPARTMENT OF HOMELAND 

SECURITY 

Bureau of Customs and Border 

Protection 

DEPARTMENT OF THE TREASURY 

19 CFR Parts 10 and 178

[CBP Dec. 04–36] 

RIN 1505–AB32

Prototypes Used Solely for Product 

Development, Testing, Evaluation, or 

Quality Control Purposes

AGENCY: Customs and Border Protection, 

Department of Homeland Security.

ACTION: Final rule.

SUMMARY: This document amends the 

Customs and Border Protection 

Regulations in order to establish rules 

and procedures under the Product 

Development and Testing Act of 2000 

(PDTA). The purpose of the PDTA is to 

promote product development and 

testing in the United States by allowing 

the duty-free entry of articles, 

commonly referred to as prototypes, that 

are to be used exclusively in product 

development, testing, evaluation or 

quality control. The final regulations set 

forth the procedures for both the 

identification of those prototypes 

properly entitled to duty-free entry, as 

well as the permissible sale of such 

prototypes, following use in the United 

States, as scrap, waste, or for recycling.

EFFECTIVE DATE: This final rule is 

effective on December 2, 2004.

FOR FURTHER INFORMATION CONTACT:

Richard Wallio, Office of Field 

Operations, 202–344–2556.

SUPPLEMENTARY INFORMATION:

Background 

The Product Development and 

Testing Act of 2000 (PDTA) was enacted 

on November 9, 2000, as part of the 

Tariff Suspension and Trade Act of 2000 

(Act) (Pub. L. 106–476). The provisions 

of the PDTA are found in sections 1431–

1435 of the Act. 

The purpose of the PDTA, as set forth 

in section 1432(b) of the Act, is to 

promote product development and 

testing in the United States by allowing 

the importation on a duty-free basis of 

articles commonly referred to as 

‘‘prototypes’’ that are to be used 

exclusively for product development, 

testing, evaluation or quality control. 

Until the enactment of the PDTA, 

prototype articles had generally been 

subject to customs duty when imported, 

unless the articles were eligible for 

duty-free treatment under a special 

trade program, such as the North 

American Free Trade Agreement 

(NAFTA) (19 U.S.C. 3301 et seq.), or 

unless they were entered under a 

temporary importation bond (TIB) 

(subheading 9813.00.30, Harmonized 

Tariff Schedule of the United States 

(HTSUS)). Furthermore, the value of 

these prototypes had to be included in 

the dutiable value of any imported 

production merchandise that resulted 

from the same design and development 

efforts to which the prototype articles 

themselves were dedicated. In effect, 

duty on a prototype good was assessed 

twice, once when the prototype was 

imported and a second time as part of 

the dutiable value of the related 

imported production merchandise. 

Consequently, to expedite and 

encourage the use of prototypes in the 

United States, section 1433 of the Act 

amended the Harmonized Tariff 

Schedule of the United States (HTSUS) 

by inserting a new subheading 

9817.85.01 in subchapter XVII of 

chapter 98, HTSUS, to provide for the 

duty-free entry of prototype articles. 

Section 1433 of the Act also included a 

new U.S. Note 6 in subchapter XVII of 

chapter 98, HTSUS, to define the term 

‘‘prototypes’’ as used in HTSUS 

subheading 9817.85.01. 

CBP Rulemaking 

By a document published in the 

Federal Register (67 FR 10636) on 

March 8, 2002, Customs (which has 

been renamed Customs and Border 

Protection (CBP) after being transferred 

to the Department of Homeland 

Security) proposed to amend the 

Customs Regulations (now the CBP 

Regulations) to add a new § 10.91, in 

accordance with the requirements of the 

63446 Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Rules and Regulations 

PDTA, that would: (1) Establish 

procedures regarding the identification 

of prototypes at the time of their 

importation into the United States; and 

(2) establish procedures regarding the 

sale of prototypes as scrap, waste, or for 

recycling, after their intended use in 

product development, testing, and 

evaluation, provided that all applicable 

duties were tendered following the sale, 

at the rate of duty in effect for such 

scrap, waste, or recycled materials at the 

time of importation of the prototype 

articles. These latter procedures relating 

to the sale of the used prototypes also 

included prototypes and parts of 

prototypes that were incorporated into 

other products that were sold as scrap, 

waste, or recycled materials. 

Discussion of Comments 

Twelve commenters responded to the 

notice of proposed rulemaking. A 

description of the issues that are raised 

by these commenters together with 

CBP’s response to these issues is set 

forth below. 

General; Duty-Free Entry 

Comment: Proposed § 10.91 does not 

create simplified procedures and 

impose only minimal burdens, as 

Congress intended in enacting the 

PDTA, regarding the entry of prototype 

articles for use under HTSUS 

subheading 9817.85.01, and the possible 

recovery and sale of the used prototypes 

thereafter as scrap, waste, or for 

recycling. 

CBP Response: CBP disagrees. It is 

CBP’s view that the proposed 

procedures as further developed in this 

final rule will efficiently and 

expeditiously promote product 

development and testing in the United 

States, as contemplated under the 

PDTA, while, at the same time, ensuring 

that the subject tariff provision is used 

only for the purposes intended, and that 

any duty that is due on the sale of scrap, 

waste or recycled material is correctly 

reported and paid, as the PDTA also 

requires. 

Comment: The heading for proposed 

§ 10.91 should add a reference to 

product evaluation and quality control 

as purposes for which prototypes may 

be entered duty-free under HTSUS 

subheading 9817.85.01.

CBP Response: CBP finds that this is 

unnecessary. Section headings and titles 

are nothing more than reference guides 

and cannot limit or restrict the plain 

meaning of the regulatory text itself. In 

accordance with the PDTA, § 10.91(b)(1) 

fully addresses the purposes for which 

prototype articles may be entered dutyfree under HTSUS subheading 

9817.85.01. 

Comment: It is observed that 

proposed § 10.91 inadvertently omits a 

paragraph (d), although it does contain 

paragraphs (e) and (f). 

CBP Response: While this observation 

is correct, CBP is adding a paragraph (d) 

in the final rule. The new paragraph (d) 

describes the obligations of an importer 

of a prototype to CBP regarding a used 

prototype if the used prototype is not 

sold. Because a paragraph (d) is added, 

paragraphs (e) and (f) in proposed rule 

§ 10.91 may retain their respective 

designations. However, because the 

proposed rule incorrectly crossreferenced paragraph (d) in 

§ 10.91(b)(2)(ii) and § 10.91(c)(3), these 

cross-references are corrected in the 

final rule. 

Comment: Proposed § 10.91(a) should 

provide that goods entered as prototypes 

under HTSUS subheading 9817.85.01 

may be exported or scrapped prior to 

being used for the required purposes. 

CBP Response: CBP disagrees. One of 

the purposes of the PDTA was to 

encourage the trade to do its testing and 

research in the United States without 

having to pay duty. Accordingly, CBP 

believes that goods that benefit under 

the PDTA must be used for testing and 

research. Proposed § 10.91(d) reflects 

this. 

Comment: Proposed § 10.91(a)(1) 

should include specific guidelines for 

the preparation of the CF 7501 (now 

CBP Form 7501) when an importer is 

entering prototypes under HTSUS 

subheading 9817.85.01. In particular, no 

other HTSUS subheading should be 

required on the CBP Form 7501. 

CBP Response: CBP disagrees that this 

regulation needs to include specific 

guidelines. The statistical note to 

Chapter 98, HTSUS, provides sufficient 

guidance. In addition, operational 

instructions will be issued covering all 

aspects of the preparation of the CBP 

Form 7501 for articles sought to be 

entered, duty-free, as prototypes under 

HTSUS subheading 9817.85.01. 

Importer Declaration; Proof of Actual 

Use; Liquidation of Entry 

Comment: Proposed § 10.91 should 

include specific requirements regarding 

the certification of the prototypes, such 

as a statement from the importer 

indicating that the material is for testing 

or evaluation under HTSUS subheading 

9817.85.01. 

CBP Response: CBP believes that 

§ 10.91(a)(2)(i) will adequately address 

this issue in the context of the importer 

declaration. 

Comment: It is pointed out that 

proposed § 10.91(a)(2) does not make 

any provision for the liquidation of a 

prototype entry under HTSUS 

subheading 9817.85.01. 

CBP Response: CBP agrees that a time 

frame for liquidation of a prototype 

entry should be provided, especially in 

relation to § 10.91(a)(2)(ii), which 

authorizes the port director to request 

proof of actual use. In this respect, 

proposed § 10.91(a)(2)(ii) is amended in 

this final rule to provide that liquidation 

of the entry will be extended until the 

requested proof of actual use is 

received, or until the three-year period 

from the date of entry allowed for its 

receipt has expired; and that if proof of 

actual use is requested and not timely 

received, the entry will be liquidated as 

dutiable under the tariff provision that 

would otherwise apply to the imported 

article. 

Comment: It is contended, under 

proposed § 10.91(a)(2)(ii), that the PDTA 

does not envision permitting the port 

director to request proof of actual use of 

the articles following their entry under 

HTSUS subheading 9817.85.01, and that 

CBP should not impose such a 

requirement. It is declared that the life 

of a prototype may easily span many 

years and that this would be 

inconsistent with requiring proof of use, 

which must usually be submitted within 

three years of the date of entry. One 

company asked that it be specifically 

exempted from any requirement to 

submit proof of actual use of the articles 

following entry.

CBP Response: CBP believes that it 

has the discretion to ask for proof of 

actual use under HTSUS subheading 

9817.85.01. To be entitled to duty-free 

entry under that HTSUS subheading, 

the imported articles must qualify as 

prototypes that are to be used 

exclusively for development, testing, 

product evaluation or quality control 

purposes. In this latter vein, CBP has a 

responsibility and an obligation under 

the PDTA to follow up, on occasion, and 

require post-entry proof of actual use as 

specified in § 10.91(a)(2)(ii), in order to 

effectively monitor and ensure the 

proper employment of this tariff 

provision for the purposes intended. To 

this end, the port director is accorded 

the discretion to require such proof in 

those cases where it is believed to be 

warranted. 

In those instances where the port 

director requests proof of actual use, 

while such proof of use must be given 

to CBP within three years of the date of 

entry, the prototype may, of course, 

continue to be used thereafter for the 

purposes enumerated in HTSUS 

subheading 9817.85.01. Proposed 

§ 10.91(a)(2)(ii) is modified in this final 

rule to make this clear. Also, in relation 

to this, proposed § 10.91(a)(2)(ii)(A) is 

Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Rules and Regulations 63447

recast in this final rule to provide that 

the proof of use, if requested, must 

include a description of the use that is 

being and/or that has been made of the 

articles so as to enable the port director 

to confirm that the articles have been 

entitled to entry as claimed. 

Comment: Proposed § 10.91(a)(2)(ii) 

should make clear what type of 

statements would be acceptable for the 

proof or declaration of actual use. Also, 

the statement required in proposed 

§ 10.91(a)(2)(ii)(B) that prototype articles 

not be put to any other use than as 

specified in HTSUS subheading 

9817.85.01 seems contradictory in that 

the articles may be sold for use as scrap, 

waste, or for recycling under the PDTA. 

CBP Response: CBP agrees in part. To 

further sharpen the focus of this 

provision, proposed § 10.91(a)(2)(ii)(B) 

is revised in this final rule to reflect that 

the prototype articles may not be put to 

any other use than as specified in 

HTSUS subheading 9817.85.01 after 

their entry or withdrawal from 

warehouse for consumption and prior to 

the completion of their use under 

HTSUS subheading 9817.85.01. Further, 

a reference to paragraphs (c) and (d) is 

added to § 10.91(a)(2)(ii)(B) in this final 

rule, indicating the permissible 

dispositions to which the articles may 

be subject following the completion of 

their use as prescribed in HTSUS 

subheading 9817.85.01. 

As thus revised, CBP finds that 

§ 10.91(a)(2)(ii)(A)–(C) sets forth the 

information required for the proof 

(declaration) of actual use with ample 

clarity and detail, and, along these same 

lines, proposed § 10.91(e)(1) is changed 

in this final rule to reference those 

records which would be necessary to 

support the proof of actual use. 

Comment: Proposed 

§ 10.91(a)(2)(ii)(C) provides that a 

declaration of actual use must include a 

statement that neither the articles nor 

any parts of the articles will be sold, or 

be incorporated into other products that 

are sold, after the articles have been 

entered or withdrawn from warehouse 

for consumption and prior to the 

completion of their use as provided in 

HTSUS subheading 9817.85.01. This 

paragraph seems unnecessary in light of 

proposed § 10.91(a)(2)(ii)(B), which 

provides that the declaration of actual 

use must also include a statement that 

articles are not to be put to any other 

use after the articles have been entered 

or withdrawn from warehouse for 

consumption and prior to the 

completion of their use under HTSUS 

9817.95.01. 

CBP Response: CBP disagrees. The 

statement required in § 10.91(a)(2)(ii)(C) 

represents an acknowledgment by the 

importer that the prototype articles may 

not be sold after importation and prior 

to their use as prototypes under HTSUS 

subheading 9817.85.01. A sale of the 

prototype articles does not constitute a 

use of those articles as contemplated 

under § 10.91(a)(2)(ii)(B). 

Articles Classifiable as Prototypes 

Under the PDTA 

Comment: Proposed § 10.91(b)(1) 

should be revised essentially to state 

that an article may be presumed to be 

entitled to duty-free entry as a prototype 

under HTSUS subheading 9817.85.01, if 

the article is otherwise eligible for entry 

under a temporary importation bond 

(TIB) pursuant to HTSUS subheading 

9813.00.30 (articles intended solely for 

testing, experimental or review 

purposes). 

CBP Response: CBP disagrees. 

Articles that may be entitled to free 

entry as prototypes under HTSUS 

subheading 9817.85.01 are defined in 

U.S. Note 6(a) to Subchapter XVII of 

Chapter 98, HTSUS. This definition is 

essentially mirrored in § 10.91(b)(1). Not 

all articles entitled to entry under TIB 

pursuant to HTSUS subheading 

9813.00.30 would necessarily meet the 

stated definition for ‘‘prototypes,’’ as 

required for duty-free entry under 

HTSUS subheading 9817.85.01.

Comment: Proposed § 10.91(b)(1) 

should expressly state that prototypes 

may encompass articles from all 

industries, and are not restricted to 

articles of certain industries. 

CBP Response: CBP agrees. The 

introductory text of proposed 

§ 10.91(b)(1) is changed in this final rule 

to affirm that articles classifiable as 

prototypes under HTSUS subheading 

9817.85.01 may encompass articles that 

pertain to any industry as long as such 

articles meet the requirements set forth 

in § 10.91(b)(1)(i) and (b)(1)(ii). 

Comment: The definition of 

prototypes should be revised to show 

that certain motor vehicles and parts of 

motor vehicles would qualify as 

‘‘original’’ articles under proposed 

§ 10.91(b)(1). Additionally, concerning 

proposed § 10.91(b)(1)(i), it is suggested 

that a definition be added for the term 

‘‘preproduction’’ to explicitly include 

research and development efforts 

expended on prototypes that may never 

result in commercial production; and 

that the phrase ‘‘development, testing, 

product evaluation or quality control’’

be further defined to include, among 

other things, ‘‘manufacturing of the 

imported [prototype] articles with any 

foreign or domestic materials, and 

further processing.’’

CBP Response: CBP is of the opinion 

that the definition of prototypes in U.S. 

Note 6(a) to subchapter XVII, chapter 

98, HTSUS, as adopted in 

§ 10.91(b)(1)(i) and (b)(1)(ii), should not 

be further expanded within the 

framework of this rulemaking. In this 

regard, whether given merchandise or 

particular activities or operations would 

fall within the scope of the definition 

for prototypes under the PDTA would 

more suitably be determined on a caseby-case basis as the need arises, taking 

into account the precise facts and 

circumstances of each case, through the 

administrative ruling process in 

accordance with the requirements of 

part 177, CBP Regulations (19 CFR part 

177). 

Comment: In proposed 

§ 10.91(b)(2)(i), the importation of 

prototypes is limited to noncommercial 

quantities based on industry practice. 

The exact limits on the numbers of 

prototypes that may be imported should 

be included in the regulation. 

CBP Response: CBP disagrees. It is not 

possible to establish rigid limitations on 

the numbers of prototypes that may be 

entered under HTSUS subheading 

9817.85.01, in view of the multifarious 

industries potentially affected and the 

myriad purposes among those industries 

for which prototypes might be used in 

testing, evaluation, product 

development or quality control. In 

certain cases, an entry may be rejected 

if CBP should conclude that an importer 

seeks to enter a commodity under 

HTSUS subheading 9817.85.01 in 

numbers that are considered to be 

excessive in light of the purposes 

intended and based on the practice of 

the specific industry involved. 

Comment: Proposed § 10.91(b)(2)(ii) 

should be revised to provide that the 

general restriction on the sale of 

prototypes or parts of prototypes after 

their importation into the United States 

does not apply to sales for export. It is 

stated that the same principle applies in 

the case of temporary importations 

under bond (TIBs). 

CBP Response: CBP believes that it is 

sufficient in the context of this 

rulemaking to generally restate the 

prohibition imposed in U.S. Note 

6(b)(ii) to subchapter XVII, chapter 98, 

HTSUS, on the sale of prototypes or 

parts of prototypes into the commerce of 

the United States after their importation 

into the United States, including their 

incorporation into other products that 

are sold. The prohibition on the sale of 

prototypes or parts of prototypes does 

not apply to sales for export. 

Analogously, the TIB provisions and 

attendant regulations are to the same 

effect. Specifically, articles entitled to 

entry under TIB may not be imported 

for sale or for sale on approval (U.S. 

63448 Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Rules and Regulations 

Note 1(a) to subchapter XIII, chapter 98, 

HTSUS); and the implementing CBP 

Regulations for TIBs merely reiterate 

this requirement (§ 10.31(a)(3)(iii), CBP 

Regulations (19 CFR 10.31(a)(3)(iii))). 

Comment: Clarification is sought as to 

proposed § 10.91(b)(2)(iii) (‘‘Articles 

excluded from being prototypes’’), 

which excludes articles from being 

classified as prototypes if they are 

subject to quantitative restrictions, 

antidumping orders or countervailing 

duties. It is asked whether this 

provision would exclude all textile and 

apparel products, as opposed to those 

that are in fact subject to quantitative 

restrictions at the time of entry. 

CBP Response: Based upon U.S. Note 

6(c) to subchapter XVII of chapter 98, 

HTSUS, articles that are in fact subject 

at the time of entry to quantitative 

restrictions, antidumping orders or 

countervailing duty orders are 

precluded from being classifiable as 

prototypes entitled to free entry under 

HTSUS subheading 9817.85.01. 

Proposed § 10.91(b)(2)(iii), entitled, 

‘‘Articles excluded from being 

prototypes,’’ is revised in this final rule 

to make this clear, and, furthermore, for 

purposes of editorial integrity, the 

provision is redesignated in this final 

rule as § 10.91(b)(2)(iv). Also, the 

introductory text of proposed 

§ 10.91(b)(2) is revised in this final rule 

to add a reference to U.S. Note 6(c). 

Sale of Prototypes Following Use; 

Alternative Dispositions 

Comment: It is asserted, in connection 

with proposed § 10.91(c), that articles 

imported as prototypes under HTSUS 

subheading 9817.85.01 do not have to 

be sold as scrap, waste or for recycling; 

that such articles may instead be 

exported, destroyed, donated to charity, 

otherwise given away to another party, 

or be retained and/or put to any other 

use by the importer. It is suggested that 

§ 10.91 should make reference to these 

possible alternative dispositions of the 

articles, and state that such alternative 

dispositions of the used prototype 

articles need not be reported to CBP. 

CBP Response: CBP agrees. Except for 

sale, section 1434(b) of the PDTA is not 

concerned with any other disposition of 

the prototypes following their use 

pursuant to HTSUS subheading 

9817.85.01. Hence, other than sale to the 

extent authorized under section 1434(b), 

no other disposition of the used 

prototype articles need be reported to 

CBP. A paragraph (d) is added to 

proposed § 10.91 in this final rule to 

address this issue. 

Comment: With respect to proposed 

§ 10.91(c), the regulation should set out 

a comprehensive definition of recycling.

CBP Response: CBP has determined, 

as with the definition for prototypes 

discussed previously, that the meaning 

of recycling for purposes of the PDTA 

would more aptly be elucidated on a 

case-by-case basis through the 

administrative ruling process pursuant 

to part 177, CBP Regulations (19 CFR 

part 177). The concept of recycling may 

have different meanings depending 

upon the merchandise concerned or the 

particular industry involved. 

Comment: Under proposed 

§ 10.91(c)(1), the provision that the used 

prototypes or parts may be sold as scrap, 

waste, or for recycling upon payment of 

applicable duty appears to erroneously 

imply that duty must be paid before the 

articles may be sold. 

CBP Response: To avoid this 

misperception, proposed § 10.91(c)(1) is 

revised in this final rule to make clear 

that duty is payable after the sale of the 

used prototypes or their parts. 

Furthermore, in § 10.91(c)(1), a 

reference is added in this final rule to 

§ 10.91(c)(3), which sets forth the timing 

and the manner in which the applicable 

duty must be paid. 

Comment: Proposed § 10.91(c)(2) 

should not require the submission of a 

notice of sale if the used prototype that 

is sold as scrap, waste, or for recycling 

is not subject to any duty. 

CBP Response: CBP disagrees. The 

report of sale under § 10.91(c)(2) is 

needed so that CBP may readily confirm 

that the used prototype material has 

been sold as scrap, waste, or for 

recycling, as authorized under the 

PDTA, and that the importer is correct 

in concluding that the scrap, waste or 

recycled material that is sold is dutyfree. 

For editorial consistency, the last 

sentence of proposed § 10.91(c)(2) is 

recast in this final rule to advise that the 

notice of sale, if applicable, should not 

be submitted to CBP prior to the 

submission of proof of actual use, in the 

event that such proof should be 

requested by the port director; likewise, 

the reference to paragraph (c)(1) in the 

last sentence of proposed § 10.91(c)(2) is 

changed in this final rule to paragraph 

(a)(2)(ii). 

Comment: Proposed § 10.91(c)(2) and 

(c)(3) should be amended to allow the 

notice of sale to be filed quarterly, 

instead of within 10 business days of 

each sale. A requirement that a separate 

notice of sale be filed for each prototype 

or part of a prototype that is scrapped 

or recycled and subsequently sold 

would impose an undue burden on the 

importer. At the same time, lengthening 

the reporting period would have no 

appreciable impact on customs revenue 

since most scrap, waste and recycled 

materials are duty-free. 

CBP Response: CBP agrees. 

Paragraphs (c)(2) and (c)(3) of proposed 

§ 10.91 are changed in this final rule to 

permit an importer to file a blanket 

notice of sale covering all sales of 

prototypes and parts that occur during 

a quarterly (3-month) calendar period. 

This blanket notice must be filed within 

10 business days following the end of 

the related quarterly calendar period in 

which the sale(s) occurred.

Comment: A question is posed as to 

whether the notice of sale in proposed 

§ 10.91(c)(3) constitutes a new entry, an 

amended entry, or a voluntary 

disclosure. 

CBP Response: The notice of sale is 

neither an import entry, nor is it a 

voluntary disclosure. The notice of sale 

is basically the required report that is 

made to CBP regarding those prototypes 

and parts of prototypes that are sold as 

scrap, waste, or for recycling following 

their use under HTSUS subheading 

9817.85.01. The employment of an 

import entry form (a CBP Form 7501), 

modified as appropriate, as provided in 

§ 10.91(c)(3), is simply a convenient 

administrative means for making the 

required report of sale to CBP. 

Comment: It is asked, regarding 

proposed § 10.91(c)(3)(I), whether the 

description requested by CBP of the 

condition of a prototype following its 

use for the purposes specified in HTSUS 

subheading 9817.85.01 relates to an 

article immediately following its use as 

a prototype or the article after it has 

been scrapped (i.e., crushed and 

shredded). 

CBP Response: CBP is interested in 

any damage, degradation or 

deterioration to the prototype articles 

resulting from their use for the specified 

purposes and resulting from any other 

cause before their sale as scrap, waste or 

for recycling. Proposed § 10.91(c)(3)(i) is 

thus clarified in this final rule. Also, a 

corresponding change is made to 

proposed § 10.91(e)(2) in this final rule 

pertaining to the valuation of the used 

prototypes or their parts for purposes of 

proper duty assessment. 

Entry Bond; Liquidated Damages for 

Failure To Report Sale/Pay Duty 

Comment: Under proposed 

§ 10.91(c)(4), the failure to file a notice 

of sale or to deposit appropriate duty 

following the sale of a used prototype as 

scrap, waste, or for recycling constitutes 

a breach of the importer’s entry bond 

that will result in the assessment of 

liquidated damages under the bond. The 

question is presented as to what action 

CBP would take, for example, assuming 

the applicability of 19 U.S.C. 1504(b), 

Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Rules and Regulations 63449

should the import entry of a prototype 

article be liquidated by operation of law 

(4 years from the date of entry), with the 

underlying import bond being 

cancelled, before the used prototype 

article is sold as scrap, waste, or for 

recycling. 

CBP Response: CBP has decided to 

delete proposed § 10.91(c)(4) in this 

final rule. The import entry bond 

referred to in proposed § 10.91(c)(4) 

covers the performance of those 

conditions (19 CFR 113.62(h)) that are 

associated with the duty-free entry of a 

prototype as defined in the PDTA that 

is to be used exclusively under HTSUS 

subheading 9817.85.01. As such, the 

duty-free entry of the prototype under 

HTSUS subheading 9817.85.01 is not 

concerned with or conditioned upon 

any liability for duty that might 

thereafter accrue pursuant to section 

1434(b) of the PDTA due to the 

subsequent sale of the prototype as 

scrap, waste, or for recycling. In sum, 

the payment of applicable duty on 

scrap, waste or recycled material under 

the PDTA is an entirely separate and 

distinct transaction that is not 

subsumed within the duty-free entry of 

the prototype article. 

Consequently, since duty to the extent 

payable on scrap, waste, or recycled 

material that is sold under section 

1434(b) of the PDTA would not be 

assessed or collected under the import 

entry for the prototype, liquidated 

damages under the associated import 

entry bond would not apply with 

respect to such a sale. 

Recordkeeping Requirements 

Comment: In proposed § 10.91(e)(1), 

the record retention period for 

documents supporting the notice of sale 

of a used prototype as scrap, waste or 

for recycling should be five years from 

the date of the entry of the prototype 

article under HTSUS subheading 

9817.85.01. 

CBP Response: CBP disagrees. As 

explained above, the possible sale of the 

used prototype as scrap, waste, or 

recycled material is not related to the 

entry of the prototype under HTSUS 

subheading 9817.85.01. Should a sale of 

the used prototype as scrap, waste, or 

for recycling in fact occur, § 10.91(e)(1) 

mandates that records supporting the 

notice of sale be retained for five years 

from the date of filing the notice of sale 

in complete and proper form under 

§ 10.91(c)(3). This is governed by 

§ 163.4(a), CBP Regulations (19 CFR 

163.4), which is referenced in 

§ 10.91(e)(1). 

Comment: Proposed § 10.91(e)(2) 

should make clear that the market value 

of any prototypes sold as scrap, waste, 

or for recycling will be based upon their 

selling price.

CBP Response: Section 10.91(e)(2) 

already makes this amply clear. 

Conversion of TIB Entry to Duty-Free 

Prototype Entry 

Comment: Proposed § 10.91(f) should 

be expanded to permit temporary 

importation bond (TIB) entries under 

HTSUS subheading 9813.00.05 to be 

converted to duty-free entries under 

HTSUS subheading 9817.85.01. 

CBP Response: CBP disagrees. Section 

1435(2) of the PDTA expressly allows 

only TIB entries under HTSUS 

subheading 9813.00.30 to be converted 

to duty-free entries under HTSUS 

subheading 9817.85.01, if those TIB 

entries otherwise qualify for such 

conversion. 

Conclusion 

In view of the foregoing, and 

following careful consideration of the 

comments received and further review 

of the matter, CBP has concluded that 

the proposed regulations with the 

modifications discussed above should 

be adopted as a final rule. 

Regulatory Flexibility Act and 

Executive Order 12866

This final rule amends the CBP 

Regulations to implement the terms and 

requirements of the PDTA, which went 

into effect on November 9, 2000. These 

regulations benefit the public by 

allowing the duty-free importation of 

prototypes that are to be used 

exclusively for development, testing, 

product evaluation or quality control 

purposes, thereby promoting such 

activities in the United States, rather 

than overseas. Accordingly, pursuant to 

the provisions of the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.), it 

is certified that these regulations will 

not have a significant economic impact 

on a substantial number of small 

entities. Nor do these regulations meet 

the criteria for a ‘‘significant regulatory 

action’’ as specified in E.O. 12866. 

Paperwork Reduction Act 

The collections of information 

encompassed within this final rule 

document have previously been 

reviewed and approved by the Office of 

Management and Budget (OMB) in 

accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3507) 

and assigned OMB Control Numbers 

1651–0032 (Importers of merchandise 

subject to actual use provisions); and 

1651–0038 (Proof of use for duty rates 

dependent on actual use). These 

collections encompass a claim for dutyfree entry for prototype articles 

imported for use exclusively for 

development, testing, product 

evaluation or quality control purposes. 

This final rule does not present any 

material change to the existing approved 

information collections. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless the collection of information 

displays a valid control number 

assigned by OMB. 

Part 178, CBP Regulations (19 CFR 

part 178), containing the list of 

approved information collections, is 

revised to make reference to the new 

§ 10.91. 

Signing Authority 

This regulation is being issued in 

accordance with 19 CFR 0.1(a)(1).

List of Subjects 

19 CFR Part 10

Customs duties and inspection, 

Imports, Preference programs, Reporting 

and recordkeeping requirements, 

Shipments. 

19 CFR Part 178

Administrative practice and 

procedure, Collections of information, 

Imports, Paperwork requirements, 

Reporting and recordkeeping 

requirements.

Amendments to the Regulations

■ Parts 10 and 178, CBP Regulations (19 

CFR parts 10 and 178), are amended as 

set forth below.

PART 10—ARTICLES CONDITIONALLY 

FREE, SUBJECT TO A REDUCED 

RATE, ETC.

■ 1. The general authority citation for 

part 10 continues to read as follows, and 

the specific sectional authority for 

§ 10.91 is added in appropriate 

numerical order to read as follows:

Authority: 19 U.S.C. 66, 1202 (General 

Note 23, Harmonized Tariff Schedule of the 

United States (HTSUS)), 1321, 1481, 1484, 

1498, 1508, 1623, 1624, 3314;

* * * * *

Section 10.91 also issued under Pub. L. 

106–476 (114 Stat. 2101), sections 1434, 

1435;

* * * * *

■ 2. Part 10 is amended by adding after 

§ 10.90 a new center heading entitled 

‘‘Prototypes’’ followed by a new § 10.91 

to read as follows:

Prototypes

§ 10.91 Prototypes used exclusively for 

product development and testing. 

(a) Duty-free entry; declaration of use; 

extension of liquidation—(1) Entry or 

63450 Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Rules and Regulations 

withdrawal for consumption. Articles 

defined as ‘‘prototypes’’ and meeting the 

other requirements prescribed in 

paragraph (b) of this section may be 

entered or withdrawn from warehouse 

for consumption, duty-free, under 

subheading 9817.85.01, Harmonized 

Tariff Schedule of the United States 

(HTSUS), on CBP Form 7501 or an 

electronic equivalent. A separate entry 

or withdrawal must be made for a 

qualifying prototype article each time 

the article is imported/reimported to the 

United States. 

(2) Importer declaration. (i) Entry 

accepted as declaration. Entry or 

withdrawal from warehouse for 

consumption under HTSUS subheading 

9817.85.01 may be accepted by the port 

director as an effective declaration that 

the articles will be used solely for the 

purposes stated in the subheading. 

(ii) Proof (declaration) of actual use.

If it is believed the circumstances so 

warrant, the port director may request 

the submission of proof of actual use, 

executed and dated by the importer. The 

title of the party executing the proof of 

actual use must be set forth. If proof of 

actual use is requested, the importer 

must provide it within three years after 

the date the article is entered or 

withdrawn from warehouse for 

consumption. Liquidation of the related 

entry may be extended until the 

requested proof or declaration of actual 

use is received or until the three-year 

period from the date of entry allowed 

for the receipt of such proof has expired. 

While requested proof of use must be 

given to CBP within three years of the 

date of entry, the prototype may 

continue to be used thereafter for the 

purposes enumerated in HTSUS 

subheading 9817.85.01. If requested 

proof of use is not timely received, the 

entry will be liquidated as dutiable 

under the tariff provision that would 

otherwise apply to the imported article. 

While there is no particular form for this 

declaration, it may either be submitted 

in writing, or electronically as 

authorized by CBP, and must include 

the following: 

(A) A description of the use that is 

being and/or that has been made of the 

articles set forth in sufficient detail so 

as to enable the port director to 

determine whether the articles have 

been entitled to entry as claimed; 

(B) A statement that the articles have 

not and are not to be put to any other 

use after the articles have been entered 

or withdrawn from warehouse for 

consumption and prior to the 

completion of their use under HTSUS 

9817.85.01 (also see paragraphs (c) and 

(d) of this section concerning the 

disposition(s) to which the articles may 

be put following their use under HTSUS 

subheading 9817.85.01); and 

(C) A statement that the articles or any 

parts of the articles have not been and 

are not intended to be sold, or 

incorporated into other products that 

are sold, after the articles have been 

entered or withdrawn from warehouse 

for consumption and prior to the 

completion of their use as provided in 

HTSUS subheading 9817.85.01 (see

paragraph (b)(2)(ii) of this section). 

(b) Articles classifiable as 

prototypes— (1) Prototypes defined. In 

accordance with U.S. Note 6(a) to 

subchapter XVII of chapter 98, HTSUS, 

applicable to subheading 9817.85.01, 

the term ‘‘prototypes’’ means originals 

or models of articles pertaining to any 

industry that: 

(i) Are either in the preproduction, 

production or postproduction stage and 

are to be used exclusively for 

development, testing, product 

evaluation, or quality control purposes 

(not including automobile racing for 

purse, prize or commercial 

competition); and 

(ii) In the case of originals or models 

of articles that are either in the 

production or postproduction stage, are 

associated with a design change from 

current production (including a 

refinement, advancement, improvement, 

development or quality control in either 

the product itself or the means of 

producing the product). 

(2) Additional requirements. In 

accordance with U.S. Note 6(b) and (c) 

to subchapter XVII of chapter 98, 

HTSUS, applicable to subheading 

9817.85.01, the following additional 

restrictions apply to articles that may be 

classified as prototypes: 

(i) Importations limited. Prototypes 

may be imported pursuant to this 

section only in limited noncommercial 

quantities in accordance with industry 

practice. 

(ii) Sale prohibited after entry and 

prior to use. Prototypes or parts of 

prototypes may not be sold, or be 

incorporated into other products that 

are sold into the commerce of the 

United States, after the prototypes have 

been entered or withdrawn from 

warehouse for consumption under 

HTSUS subheading 9817.85.01, except 

that, after having been used for the 

purposes for which they were entered or 

withdrawn from warehouse under 

HTSUS subheading 9817.85.01, such 

prototypes or any part(s) of the 

prototypes may be sold as scrap, waste, 

or for recycling, as prescribed in 

paragraph (c) of this section.

(iii) Articles subject to laws of another 

agency. Articles that are subject to 

licensing requirements, or that must 

comply with laws, rules or regulations 

administered by an agency other than 

CBP before being imported, may be 

entered as prototypes pursuant to this 

section if they meet all applicable 

provisions of law and otherwise meet 

the definition of prototypes in 

paragraph (b)(1) of this section. 

(iv) Articles excluded from being 

prototypes. Articles that are in fact 

subject at the time of entry to 

quantitative restrictions, antidumping 

orders or countervailing duty orders are 

excluded from being classified as 

prototypes under this section. 

(c) Sale of prototype following use. (1) 

Sale. Prototypes or any part(s) of 

prototypes, after having been used for 

the purposes for which they were 

entered or withdrawn under HTSUS 

subheading 9817.85.01, may only be 

sold as scrap, waste, or for recycling. 

This includes a prototype or any part 

thereof that is incorporated into another 

product, as scrap, waste, or recycled 

material. If sold as scrap, waste, or for 

recycling, applicable duty must be paid 

on the prototypes or parts as provided 

in paragraph (c)(3) of this section, at the 

rate of duty in effect for such scrap, 

waste, or recycled materials at the time 

the prototypes were entered or 

withdrawn for consumption. 

(2) Notice of sale required. If, after a 

prototype has been used for the 

purposes contemplated in HTSUS 

subheading 9817.85.01, the prototype or 

any part(s) of the prototype (including a 

prototype or any part that is 

incorporated into another product) is 

sold as scrap, waste, or for recycling, the 

importer must provide notice of such 

sale to the port director where the entry 

or withdrawal of the prototype was 

made. A notice, in the manner 

authorized in paragraph (c)(3) of this 

section, must be submitted in 

connection with the sale, whether or not 

duty is payable. The notice should not 

be submitted prior to the submission of 

proof of actual use, should such proof 

of actual use be requested by the port 

director (see paragraph (a)(2)(ii) of this 

section). 

(3) Form and content of notice; tender 

of duty. While no particular form is 

required for the notice of sale, a 

consumption entry (CBP Form 7501), 

appropriately modified, or an electronic 

equivalent as authorized by CBP, may 

be used for this purpose. The notice 

may be a blanket notice covering all 

those sales described in paragraph (c)(2) 

of this section that occur over a 

quarterly (3-month) calendar period. 

Such notice must be filed within 10 

business days of the end of the related 

quarterly period in which the sale(s) 

occurred. If an article sold is dutiable, 

Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Rules and Regulations 63451

the payment of any duty due must be 

forwarded together with the notice (see

paragraph (c)(1) of this section). If the 

notice is filed electronically, payment of 

any duty owed will be handled through 

the Automated Clearinghouse (see

§ 24.25 of this chapter). The notice of 

sale must be executed by the importer, 

or other person having knowledge of the 

facts surrounding the sale, and must 

include the following: 

(i) The identity of the prototype; the 

consumption entry number under 

which it was imported; a copy of the 

declaration of actual use, if proof of 

actual use was requested under 

paragraph (a)(2)(ii) of this section; and 

a detailed description of the condition 

of the prototype following use for the 

intended permissible purposes, 

including any damage, degradation or 

deterioration to the article resulting 

from such use and/or otherwise 

resulting to the article from any other 

cause prior to its sale for scrap, waste, 

or recycling; 

(ii) The name and address of the party 

to whom the article was sold, and (if 

known) the use to which the party 

intends to put the article; 

(iii) The HTSUS subheading number 

for scrap, waste, or recycled material, as 

applicable, claimed in connection with 

the sale of the prototype, together with 

the corresponding rate of duty in effect 

at the time the prototype was originally 

imported for consumption; 

(iv) The value of the prototype article 

(if dutiable and the duty owed is based 

upon value) (see paragraph (e)(2) of this 

section); and 

(v) The title of the party executing the 

declaration and the date of execution. 

(d) Prototypes not sold following use.

As to those prototypes or parts of 

prototypes that, after having been used 

as prescribed under HTSUS subheading 

9817.85.01, are disposed of otherwise 

than by sale (see paragraph (c)(1) of this 

section), there is no requirement that the 

importer notify CBP of any such 

alternative disposition. Nor are there 

any dutiable consequences that ensue 

from any disposition of the merchandise 

after the merchandise’s use under 

HTSUS subheading 9817.85.01 other 

than sale to the extent authorized under 

paragraph (c)(1) of this section. 

(e) Recordkeeping; retention and 

production—(1) Recordkeeping. The 

importer must be prepared to submit to 

the CBP officer, if requested, any 

information, including any supporting 

documents, reports and records, as was 

necessary for the preparation of the 

declaration of use, if the declaration of 

use was requested under paragraph 

(a)(2)(ii) of this section, and the notice 

of sale, if applicable under paragraph 

(c)(3) of this section. The notices, 

together with any related supporting 

evidence, may be subject to such 

verification as the port director 

reasonably deems necessary. Supporting 

documentary evidence must be made 

available to the CBP officer, upon 

request, for a period of five years (see

§ 163.4(a) of this chapter) from the date 

of filing in complete and proper form, 

the declaration of use, if requested, and, 

if applicable, the notice of sale. The 

supporting records must be made 

available to the CBP officer upon 

request in accordance with § 163.6 of 

this chapter. 

(i) Documents supporting the proof 

(declaration) of actual use must: 

(A) Establish that the identity and 

description of the prototype article is 

the same article that the consumption 

entry was made for under subheading 

9817.85.01, HTSUS; and 

(B) Describe the circumstances of the 

use of the article; the operations, testing, 

review, manipulation, experimentation, 

and/or other exercises that are being 

and/or that have been conducted in 

connection with the prototype; and the 

location, such as the plant or production 

facility, where these activities occurred, 

sufficient to demonstrate that the 

purposes enumerated in HTSUS 

subheading 9817.85.01 are taking and/or 

have actually taken place. 

(ii) Documents supporting the notice 

of sale must establish that: 

(A) The identity of the prototype sold 

is the same article for which a 

consumption entry was made under 

subheading 9817.85.01 HTSUS when it 

was imported, and that the article was 

in the condition described in the notice 

of sale;

(B) The article was sold to the party 

identified in the notice of sale; 

(C) The HTSUS subheading number 

for scrap, waste, or recycled material, as 

applicable, claimed in connection with 

the sale of the prototype is accurate; 

(D) The date that the prototype was 

originally imported for consumption, 

and the corresponding rate of duty in 

effect at the time for the applicable 

HTSUS subheading; and 

(E) The value of the prototype article 

(if dutiable and the duty owed is based 

upon value) (see paragraph (e)(2) of this 

section) as claimed in the notice of sale 

is accurate. 

(2) Relevant value for used prototype 

or parts sold. For purposes of this 

section, with respect to any duty owed 

on prototypes or parts of prototypes that 

are sold as scrap, or waste, or for 

recycling, where the duty owed is based 

upon value, the relevant value is the 

market value of the prototypes or parts, 

based upon their character and 

condition following use for the purposes 

prescribed in HTSUS subheading 

9817.85.01. The relevant value should 

take into consideration any damage, 

degradation or deterioration to the 

prototypes or parts resulting from their 

use as a prototype and/or otherwise 

resulting to the articles from any other 

cause prior to their sale as scrap, waste, 

or for recycling. The market value will 

generally be measured by the selling 

price. Should a prototype or part of a 

prototype become a component of 

another product that is sold as scrap, 

waste, or recycled material, the relevant 

market value would be that portion of 

the selling price attributable to the 

component (prototype or part) as 

provided in this paragraph. 

(f) Articles admitted under TIB—(1) 

Duty-free entry available. Under the 

procedure presented in paragraph (f)(2) 

of this section, an entry of an article 

made under a temporary importation 

bond (TIB) solely for testing, 

experimental or review purposes under 

HTSUS subheading 9813.00.30 may be 

converted into a duty-free entry under 

HTSUS subheading 9817.85.01, if the 

following conditions exist: 

(i) The article meets the definition for 

‘‘prototypes’’ in paragraph (b) of this 

section (U.S. Note 6(a) to subchapter 

XVII, chapter 98, HTSUS); and 

(ii) The TIB entry for the article was 

in effect and had not been closed, and 

the TIB period for the article had not 

expired, as of November 9, 2000. 

(2) Procedure for converting TIB entry 

to duty-free entry—(i) Importer request.

The importer must submit a written 

request, or an electronic equivalent as 

authorized by CBP, that a TIB entry 

made under HTSUS subheading 

9813.00.30, which was in effect and had 

not been closed, and for which the TIB 

period had not expired, as of November 

9, 2000, be converted instead into a 

duty-free consumption entry under 

HTSUS subheading 9817.85.01. 

(ii) Action by CBP. CBP will convert 

the TIB entry under HTSUS subheading 

9813.00.30 to a duty-free entry under 

HTSUS subheading 9817.85.01, 

provided that the port director is 

satisfied that the conditions set forth in 

paragraphs (f)(1)(i) and (f)(1)(ii) of this 

section have been met. When the TIB 

entry is converted, the bond will be 

cancelled and the entry closed. Once the 

conversion is complete, the port director 

will provide a courtesy 

acknowledgment to this effect to the 

importer in writing or electronically.

63452 Federal Register / Vol. 69, No. 211 / Tuesday, November 2, 2004 / Rules and Regulations 

PART 178—APPROVAL OF 

INFORMATION COLLECTION 

REQUIREMENTS

■ 1. The authority citation for part 178 

continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 

U.S.C. 3501 et seq.

■ 2. Section 178.2 is amended by adding 

the following in appropriate numerical 

sequence according to the section 

number under the columns indicated:

§ 178.2 Listing of OMB control numbers.

19 CFR section Description OMB Control No. 

*******

§ 10.91 ................................................ Importers of merchandise subject to actual use provisions; proof of use for 

duty rates dependent on actual use.

1651–0032 and 1651–

0038

*******

Robert C. Bonner, 

Commissioner, Customs and Border 

Protection.

Approved: October 27, 2004. 

Timothy E. Skud, 

Deputy Assistant Secretary of the Treasury.

[FR Doc. 04–24326 Filed 11–1–04; 8:45 am] 

BILLING CODE 4820–02–P

POSTAL SERVICE

39 CFR Part 111

Priority Mail Flat-Rate Box

AGENCY: Postal Service.

ACTION: Final rule.

SUMMARY: This final rule sets forth the 

Domestic Mail Manual (DMM) 

standards adopted by the Postal Service 

to implement the Priority Mail flat-rate 

box experiment pursuant to the October 

27, 2004, Decision of the Governors of 

the Postal Service approving the 

Recommend Decision of the Postal Rate 

Commission in its Docket No. MC2004–

2. The recommended decision is based 

on the Stipulation and Agreement that 

represented a negotiated settlement of 

the issues in that docket.

EFFECTIVE DATE: This final rule is 

effective at 12:01 a.m. on November 20, 

2004.

FOR FURTHER INFORMATION CONTACT: Rick 

Klutts, 202–268–7268.

SUPPLEMENTARY INFORMATION: The Postal 

Service is conducting the Priority Mail 

flat-rate box experiment to enhance 

customer convenience through the 

introduction of two flat-rate box options 

for Priority Mail. Many Postal Service 

customers, especially individual 

consumers and small businesses, are 

seeking simplicity and convenience 

when sending a package. Much like the 

Priority Mail flat-rate envelope offered 

since 1991, the flat-rate boxes will 

afford customers a single, 

predetermined rate, regardless of the 

actual weight or destination of the 

mailpiece. The simplified transaction 

with these two flat-rate boxes represents 

an opportunity for the Postal Service to 

enhance value for customers. 

New Domestic Mail Manual (DMM) 

G995 contains rates, eligibility criteria, 

standards, and classification 

information about the two-year Priority 

Mail flat-rate box experiment. 

For the reasons discussed above, the 

Postal Service adopts the following 

amendments to the Domestic Mail 

Manual, which is incorporated by 

reference in the Code of Federal 

Regulations (see 39 CFR 111).

List of Subjects in 39 CFR Part 111

Administrative practice and 

procedure, Postal Service.

PART 111—[AMENDED]

■ 1. The authority citation for 39 CFR 

Part 111 continues to read as follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 

401, 403, 404, 414, 3001–3011, 3201–3219, 

3403–3406, 3621, 3626, 5001.

■ 2. Revise the DMM as set forth below:

G General Information

* * * * *

G900 Experimental Classification and 

Rate Filings

* * * * *

[Add new G995 to read as follows:] 

G995 Priority Mail Flat-Rate Box 

1.0 ELIGIBILITY 

1.1 Description 

The standards in G995 apply to each 

addressed USPS-produced Priority Mail 

flat-rate box (Postal Item Numbers: 

OFRB1 and OFRB2). 

1.2 Rate Application 

Each USPS-produced Priority Mail 

flat-rate box is charged the experimental 

Priority Mail flat-rate box rate regardless 

of weight or destination. 

1.3 Basic Standards 

Any amount of mailable material can 

be mailed in a USPS-produced Priority 

Mail flat-rate box. Only USPS-produced 

Priority Mail flat-rate boxes are eligible 

for the flat-rate box rate. All other 

applicable Priority Mail standards 

apply. 

1.4 Package Preparation 

The box flaps must be able to close 

within the normal folds. Tape may be 

applied to the flap and seams for closure 

or to reinforce the box, provided the 

design of the box is not enlarged by 

opening the sides of the box and taping 

or reconstructing the box in any way. 

2.0 RATE 

2.1 Priority Mail Flat-Rate Box Rate 

The flat-rate box rate is $7.70. This 

initial rate is subject to change in a 

future rate proceeding. 

2.2 Postage Payment Methods 

Postage may be paid with postage 

stamps, meter stamps, Informationbased indicia (IBI) meter, PC Postage 

system, or permit imprint, providing all 

the standards for the postage payment 

method are met.

Neva R. Watson, 

Attorney, Legislative.

[FR Doc. 04–24555 Filed 11–1–04; 8:45 am] 

BILLING CODE 7710–12–P

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 63

[GA–112L–2004–1–FRL–7832–7] 

Approval of Section 112(l) Authority for 

Hazardous Air Pollutants; Equivalency 

by Permit Provisions; National 

Emission Standards for Hazardous Air 

Pollutants From the Pulp and Paper 

Industry; State of Georgia

AGENCY: Environmental Protection 

Agency (EPA).

ACTION: Direct final rule.

SUMMARY: Pursuant to section 112(l) of 

the Clean Air Act (CAA), the Georgia 

Environmental Protection Division