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Citation: 45 Fed. Reg. 52741 1980

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-- The search text of this PDF is generated from uncorrected OCR text.Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

the procedures of40 CFR Part 124 donot apply.

(r) Source Obligation.

(4)At such time that aparticular

source ormodification becomes a major stationary source or major modification solelyby virtue ofa relaxation in any enforceable limitation which was established afterAugust 7.1980, on the capacity ofthe source ormodification otherwise to emit a pollutant, such as a restriction on hours of operation, then therequirements orparagraphs {j) through (s)ofthis section shall apply to the source or modification as though construction had not yet commenced on the source or modification.

" (s)Environmentalimpact Statements.

(t] Disputed Permitsor Redesignations.

(u) DelegationofAuthority.

(v)Innovative ControlTechnology.(1) An owner or operator of aproposed major stationary source or major modification may request the Administrator in writing no later than the close ofthe comment periodunder 40CFR 124.10 to approve a system of innovative control technology.

(2) TheAdministrator shall, with the consent ofthe governor(s) of the affected state(s), determine that the

source or modification may employ a system ofinnovative control technology, if:(i)The proposed control system would notcause or contribute to an unreasonable risk to publichealth, welfare, or safety in its operation or function;

(ii)The owner or operator agrees to achieve a level ofcontinuous emissions reduction equivalent to thatwhich wouldhave been required under paragraph 0)(2) by a date specified by theAdministrator. Such date shall not be later than 4 years from the time of startup or7 years from permit issuance;

(ill) The source ormodification would meet the requirements ofparagraphs 

### (0) and (k)based on the emissions rate that the stationary source employing the system ofinnovative control technology would be required to meet on the date specified by the Administrator,

(iv)The source or modification would notbefore the date specified by the Administrator.

(a) Cause or contribute to a violation of an applicable national ambient air quality standard; or



### (b) Impact any Class Iarea; or Cc) Impact any area where an applicable increment is known to be violated; and

(v)All other applicable requirements including those forpublic participation have been met.

(3) TheAdministrator shall withdraw any approval to employ a system of innovative control technology made under this section, if:

(i) Theproposed system fails by the specified date to achieve the required continuous emissions reduction rate; or

(ii) The proposed system fails before the specified date so as to contribute to

an unreasonable risk to public health, welfare, or safety; or

(iii) The Administrator decides at any time that the proposed system is unlikely to achieve the required level of control orto protect the public health, welfare, or safety.

(4) If a source or modification fails to meet the required level of continuous emission reduction within the specified time period or the approval is withdrawn in accordance with paragraph (v)(3), the Administrator may allow the source ormodification up to
an additional 3 years to meet the requirement for the application ofbest available control technology through use ofa demonstrated system of control.

(w)Permitrescission. (1)Any permit issued under this section or a prior version of this section shall remain in effect, unless and until it expires under paragraph (s) ofthis section oris rescinded.

(2) Any owner or operator ofa stationary source ormodification who holds a permit forthe source or modification which was issuedunder 40 CFR 52.21 as in effect on June 19,1978, may request that the Administrator rescind the permit or aparticular portion of the permit

(3) TheAdministrator shall grant an application for rescission ifthe application shows that this section would not apply to the source or modification.

(4) Ifthe Administrator rescinds a permit under thisparagraph, the public shall be given adequate notice ofthe rescission. Publication ofan announcement ofrescission in a newspaper ofgeneral circulation in the affected region within 60 days ofthe rescission shall be considered adequate notice.

2. (b) In § 52.60 (AL, §52.96 (AK), 

### § 52.144 (AZ), §52.131 (AR), § 52.270 (CA), § 52.343 (CO), 

### §52.383 (CT), §52.432 (DE), §52.499 (DC), § 52.530 (FL), § 52.632 (HI), 

### § 52.683 (I), §62.738 (IL], § 52.793 (IN), §52.833 (IA), § 52.884 (KS), §52.931 (KY), § 52.986 (LA), § 52.1118 MD), § 52.1180 (MI, § 52.1234 

### MN), §52.1280 (MS), § 52.1339 (MO), 

### 1 52.1382 MT, §52.1436 (NB), 

### §52.1485 

### NV, §52.1529 NH, § 52.1603 NJ),

5 2.1634 (NM, § 52.1689 (NY), 

### § 52.1778 (NC). §52.1884 (OH), § 52.1929 (OK], 

### § 52.1987 (OR), §52.2058 (PA), § 52.08 (RI), §52.2131 (SC), 

### § 52.2178 (SD), 

### 1 52.23O3 (TX), §52.2346 (UT), § 52.2451 (VA), § 52.2497 [WA), §52.2528 fWV), § 52.2581 (WI), § 52.2676 (GU), § 52.2729 (PR), § 52.2779 (VI), and 

### §52.2827 (AreS), paragraphs (a) and (b) are revised to read as follows:

(a)The requirements of sections 160 through 165 of the Clean Air Act arenot met, since theplan does notinclude approvable procedures forpreventing the significant deterioration ofair quality.



### (b)Regulations for preventing significantdeterioration of

air qualty Theprovisions of52.21(b) through (w)

are hereby incorporated and made a part ofthe applicable state plan forthe State of
Emission OffsetInterpretative Ruling

3. Sections ,U.11 and IV ofthe Emission Offset Interpretative Ruling, 40 CFR Part 51 Appendix S, asrevised 44 FR 3274 (January 16,1979] and 45 FR 31307 (May 13,1980), are amended as follows:

A. By adding anew third paragraph to Section L toread as follows: LIntroduction

The requirement ofthis Ruling shallnot apply to any major stationarysource ormajor modification that was not subject to the Ruling as in effect on January 16,1979,ifthe
owner or operator.

A. Obtained all final federal. state, anl local preconstruction approvals or permits necessary under the applicable State Implementation Plan beforeAugust 7,190;,

B. Commenced construction within 18 months fromAugust 7,1980, oranyearlier timerequired underthe applicable State Implementation plan. and

C.Did not discontinue construction for a period of18 months ormore and completed construction within areasonable time.

B. By revising SectionIH, subsection A, to read as follows: ILInitial Screening Analyses and Determination ofApplicable Requirements.

A. Defzitons-For the purposes ofthis Ruling:

. "Stationary source" means anybuilding, structure, facility, orInstallation whch emits
ormay emit anyairpollutant subject to regulation under theAct.

2. "Building. structure, orfacility- means all of thepollutant-emitting activities which belong to the same industrialgrouping, are located on one ormore contiguous or adjacent properties, and are under the control 

### 5274152742 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 

### 1 Rules and Regulations

of the same person (orpersons under

common control). Pollutant-emitting activities shall be considered as part ofthe same- industrial grouping iftheybelong to the same "Major Group" (i.e., whichhave the same two digit code) as described in theStandard IndustrialClassification Manual, 1972, as amended by the 1977 Supplement (U.S. Government Printing Office stocknmbers 4101-0066 and 003-005-00176-0, xespectively).

3. "Installation"means anidentifiable piece ofprocess equipment.

4. "Potential to emit" means the maximum capacity ofa stationary source to emit a pollutant-under itsphysical and operational design.Any physical or operationallimitation

on the capacity ofthe source to emit a pollutant,including air pollution control equipment and restrictions onhoursDf operation or on the type or amount of material combusted, stored, or processej, shall be treated as part ofits design only if the limitation or the effect it would have on- emissions isfederally enforceable. Secondary emissions do not count in determining the potential to emit ofa stationary source.

5.[i) "Major stationary source" means: (a) Any stationary source ofairpollutants which emits, or hasthepotential to emit, 100 tons peryear ormore ofany pollutant subject to regulation under the Act; or

(b)Any physical change thafwould occur at a stationary source not qualifying under paragraph 5.[i}[a) as a major stationary
source, ifthe change would constitute -a major stationary source by itself.

(ii)A major stationary source that is major for volatile organic compounds shall be considered major for ozone.

6.(i) "Major modification" means any physical changein or change in the method of operation ofa major stationary source that would result in a significant netemissions increase ofanypollutant subject to regulation under the Act.

(ii)Any net emissions increase thatis considered significant forvolatile organic compounds shall be considered significant for

ozone.

(iii) A physical change or change in the method ofoperation shall not include:

(a)Routine maintenance, repair, and replacement;

(b)Use ofan alternative fuel orraw material by reason ofan order under sections 2 (a) and (b] ofthe Energy Supply and Environmental Coordination Act of1974 (or any superseding legislation) orby reason ofa natural gas curtailment plan pursuant to the Federal Power Act;

(c) Use of an alternative fuel by reasoiiof

an order orrule under section 125 ofthe Act;

(d) Use ofan alternative fuel at a steam generating unit to the extent that the fuelis generated from municipal solid waste;

(e)Use ofan alternative fuel or raw material by a stationary source which.

(1)

The source was capable of accommodating before December21, 1976, unless such change would be prohibited under any federally enforceable permit condition which was established after

- December 21, 1976, purusant to40 CFR 52.21

orunder regulations approvedpursuant to40 CFR 51.18 or40 CFR 51.24; or

(2)The source is approved to use under anypermitissued under thisxuling; M) An increase inthe hours of operation or in the production rate, unless such change is prohibited underany federally enforceable permit condition which was established after December 21,1976 pursuant to 40 CFR 52.21

orunder regulations approved pursuant to 40 CFR 51.18 or40 CFR 51.24;

(g)Any change in ownership at a stationary source.

7.(i) "Net emissions increase" means the amount bywhich the sum ofthe following exceeds zero:

(a) Any increase in actual emissions from a particular physical change or change in the method of operation ata stationary source; and

(b)Any other increases and decreases in actual emissions at the source that are contemporaneous with the particular change and are otherwise creditable.

(ii)An increase or decrease in actual emissions is contemporaneous with the increase from the particular change only ifit

occurs between:

(a) The date fiveyears before construction

on the particular change commences and

(b]The date that the increase from the particular change occurs.

(iI)An increase or decrease in actual emissions is creditable only if the Administrator has notxelied onit in'issuing a permit for the source under this Ruling which permit is in effect when the increase in actual emissionsfrom the particular change occurs.

(iv) An increase in actual emissions is creditable onlyto the extent that the new level ofactual emissions exceeds the old level.

(v)A decrease in actual emissions is creditable only tothe extent that:

(a)The old level ofactual emissions orthe old level ofallowable emissions,whichever is lower, exceeds the newlevel ofactual emissions;

(b)It is federally enforceable at and after the time that actual construction on the particular change begins;

(c)

The reviewing authority has notrelied

on it inissuing any permit underregulations approved pursuant to 40 CFR 51.18; and

(c Ithas approximately the same qualitative7 significance for public health and welfare as that attributed to theincrease from the particular change.

(vi)An increase thatresults from a physical change at a source occurs -whenthe emissions unit onwhich construction occurred becomes operational and begins to emit aparticular pollutant.Any replacement unit that requires shakedown becomes operational only after a reasonable shakedown period,not to exceed 180 days.

8. "Emissions unit" means anypart of a stationary source which emits or would have thepotential to emit anypollutant subject to regulationunder the Act.

9. "Reconstruction" willbe presumed to have takenplace where the fixed capital cost ofthe new components exceeds 50 per cent ofthe fixed capitalcost ofa comparable entirely new stationary source. Any final 'decision as to whether reconstruction has occurred shalllbe made in accordance with the provisions of40 CFR 60.15(f) (1)-(3). A reconstructed stationary source will be treated as:anew stationary source for purposes of thisRuling. in determining lowest achievable emission rate for a reconstructed stationary source, the provisions of40 CFR 60.15(f)(4) shall be taken Into account in assessing whether a new source performance standard Is applicable to such stationary

source.

10. "Fixed capital cost" means the capital needed to provide all the depreciable components.

11. "Secondary emissions" means emissions which would occur as a result of the construction or operation of a major stationary source ormajor modification, but do not come from the major stationary source
or majormodification itself.For the purpose ofthis Ruling, secondary emissionsmust be specific, well defined, quantifiable, and impact the same general area as the stationary source ormodification which

causes the secondary emissions. Secondary emissions may include, but are not limited to:

(i)

Emissionsfrom ships or trains cominlg to

or from the new ormodified stationary

source and

(ii) Emissions from any offsite support facility which would not otherwise be constructed orincrease Its emissions as a result ofthe construction or operation ofthe major stationary source ormajor modification.

12. "Fugitive emissions" means those emissions which could not reasonably pass through a stack, chimney, vent, or other functionally equivalent opening.

13.(l) "Significant" means, in reference to a net emissions increase orthe potential ofa
source to emit any ofthe following pollutants,

a rate ofemissions that would equal or exceed any ofthe following rates:
Pollutant and Emissions Rate Carbon monoxide: 100 tons peryear (tpy] Nitrogen oxides: 40 tpy Sulfur dioxide: 40 tpy Particulate matter.25 tpy Ozone: 40 tpy ofvolatile organic compounds Lead: 0.6 tpy

14. "Allowable emissions" means the emissionsrate calculated using themaximum rated capacity ofthe source (unless the

source is subject to federally enforceable limits which restrict the operating rate, or hours ofoperation, orboth) and themost stringent ofthe following:

(I)

Applicable standards as set forth in 40 CFRParts 60 and 61;

(ii) Any applicable State Implementatlon Plan emissions limitation, including those with a future compliance date; or

(iII) The emissions rate specified as a federally enforceable permit condition, including thosewith afuture compliance date.

15. "Federally enforceable" means all limitations and conditions which are enforceable by theAdministrator, Including those requirements developed pursuant to 40 CFR Parts 60 and 61, requirements within any applicable State Implementation Plan, and any permit requirements established pursuant to thisRuling, 40 CFR 52.21, or underregulations approved pursuant to 40
CFR 51.18 or 51.24.

16.(ii "Actual emissions" means the actual rate ofemissions of apollutant from anFederal Register / VoL 45, No. 154 / Thursday, August 7, 1980 

### / Rules and Regulations

emissions unit as determined inaccordance with subparagraphs (ii)-{iv)below.

(ii)In general, actual emissions as ofa particular date shall equal the average rate, in tonsper year, atwhich the unit actually emitted the pollutant during a two-year period which precedes theparticular date and which isrepresentative ofnormal source operation. The reviewing authority shall allowthe use ofa different time period upon
a determination that it is more representative ofnormal source operation. Actual emissions shallbe calculated using the unit's actual operating hours, production rates, and types ofmaterials processed, stored or combusted during the selected timeperiod.

(il) The reviewing authority may presume that source-specific allowable emissions for the unit are equivalent tothe actual emissions oftheunit.

(iv) For any emissions unit which has not begun normal operations on the particular date, actual emissions shall equal the potential toemit ofthe unit on that date.

17."Construction" means any physical change or change in the method ofoperation (including fabrication, erection installation, demolition, or modification ofan emissions unit)which wouldresult in a change in actual emissions.

18. "Commence" as applied to construction ofa major'stationary source ormajor modification means that the owner or operator has all necessary preconstruction approvals orpermits and either has:

(i)Begun, or caused tobegin, a continuous program ofactual on-site construction ofthe source, tobe completed within areasonable time; or

(ii)Entered intobinding agreements or contractual obligations, which cannotbe cancelled or modified without substantial loss to the owner or operator, toundertake a program ofactual construction ofthe source to be completed within areasonable time.

19. "Necessary preconstruction,approvals

orpermits" means those permits or approvals required under federal air quality control laws and regulations and those air quality control laws and regulations which arepart ofthe applicable State Implementation Plan.

20."'Begin actual construction" means, in general, initiation ofphysical aon-site construction activities on an emissions unit which are ofapermanent nature, Such activities include,but arenot limited to. installation ofbuilding supports and foundations, laying ofunderground pipework, and construction ofpermanent storage structures. With respect to a change in method ofoperating this term refers tothose on-site activities otherthan preparatory activities which mark theinitiation ofthe change.

21. "Lowest achievable emissionrate"
means, for any source, the more stringent rate ofemissions based on thefollowing:

(i)The moststringent emissions limitation which is contained in the implementation plan of anystate for such class or category of stationary source, unless the owner or operator oftheproposed stationary source demonstrates that such limitations are not achievable; or

(ii)The moststringent emissions limitation which is achieved in practice by such class or category ofstationary source. This limitation. when applied to a modification,means the lowest achievable emissions rate for the new or modified emissions units within the stationary source. Inno event shall the application ofthis term permit aproposed

new ormodified stationary source to emit any pollutant in excess of the amount allowable under applicable new source standards ofperformance.

22. "Resource recovery facility" means any facility at which solid waste Is processed for the purpose ofextracting, converting to energy, or otherwise separating and preparing solid waste forreuse. Energy conversion facilities must utilize solid waste toprovide more than50 percent ofthebeat input to be considered a resource recovery facility under this Ruling.

C. By amending Section II, subsection C by deleting footnote 2 and the second paragraph. The first paragraph is revised
to read as follows:

C.Re&-iew of specfiedsources for air qualityimpact.

In addition, the reviewing authority must determine whether the major stationary

source or majormodification would be constructed in an area designated in 40 CFR 81.300 etseq.as nonattainment fors pollutant for which the stationary source or modification ismajor.

D. By revising Section II, subsection F to read as follows:

F.Fugitiveemissions sources.Section IV. A. ofthis Ruling shall not apply to a source or modification thatwould be a major stationary source ormajor modification only iffugitive emissions, to theextent quantifiable, are considered in calculating the potential to emit ofthe stationarysource or modification and the source does notbelong to any of thefollowing categorles:

(1)Coal cleaning plants (with thermal dryers);

(2) Kraft pulpmills; (3)Portland cement plants; (4)

Primary zinc smelters: (5)Iron and steel mills; (0)Primary aluminum ore reduction plants- (7)

Primary copper smelters- (8)Municipal incinerators capable of charging more than 250 Ions ofrefuse per day,

(9)Hydrofluoric, sulfuric, ornitric acid plants;

(10) Petroleum refineries; (11] Lime plants; (12) Phosphate rockprocessing plants; (13) Coke oven batteries; (14) Sulfur recovery plants; (15) Carbon black plants (furnace process); (16) Primarylead smelters; (17) Fuel conversionplantr, (18) Sintering plants; (19) Secondary metal production plants. (20) Chemical process plants; (21) Fossil-fuel boilers (orcombination thereof) totalingmore than 250 million British thermal units perhour heatinput:

(22) Petroleum storage and transfer units with a totalstorage capacity exceeding 300,000 barrels;

(23) Taconite ore processing plants; (24) Glass fiberprocessing plants; (25] Charcoal production plants; (26) Fossil fuel-fired steam electric plants of more than 250million British thermal units perhour heat input;

(27) Any other stationary source category which, as ofAugust 7,1980, is beingregulated under sectop111 or112 oftheAct.

E. By deleting Footnote 3 of subsection C of Section III and revising the third paragraph as follows:

C.Reviewofs;ecif7led s2=-cesof air qualityiapact.

For ozone, sources ofvolatile organic compounds, locating outside a designated

ozonenonattainment area, willbe presumed to have no significant impact on the designated nonattainment area. Ifambient monitoring indicates that the area ofsource location Is in factnonattainment. then the

source may be permitted underthe provisions ofany state plan adopted pursuant to section 110(a](2)(D) ofthe Actuntil the area is designated nonattainment and a State Implementation Planrevision is approved.If

no state planpursuant to section110(a]2 (D) has been adopted andapproved, then this Ruling shall apply.

F.By adding a new subsection F.to IV., toread as follows: IV.Sources ThatWould Locate in a Designated Nonattainment Area

F.

Source ObLigation. At such time that aparticular source or modification becomes a majorstationary

source ormajormodification solely byvrtue ofa relaxation inany enforceable limitation which was established afterAugust 7,1980,

onthe capacity of the source ormodification otherwise to emit apollutant, suchas a restriction onhours ofoperation. then the requirements ofthisRuling shall apply to the

source ormodification asthough construction had notyet commenced on the source or modification.
State Plans ForNew Source Revriew For Nonattainment Purposes.

4. Section 40 CFR 51.18(] is amended
to read as follows
§51.18 Review of new stationarysources modifications.

(j)State Implementation Plan provisions satisfying sections 172(b)(6) and 173 ofthe Act shall meet the 

### following conditions:

(1) All such plans shall usethe specific d nitions Deviations from the following wording will be approved only ifthe state specifically demonstrates that the submitted definitionis more stringent, orat least asstringent, in all respects as the corresponding definition below:

(i) "Stationary source" means any building, structure, facility, or installation which emits ormay emit 

### 5274352744 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

any air pollutant subject to regulation under the Act.

(ii) "Building, structure, orfacility"

means all ofthe pollutant-emitting activities which belong to the same industrial grouping, are located on one
ormore contiguous or adjacent properties, and are under the control of the same person (orpersons under

common control). Pollutant-emitting activities *shall be considered as part of the same industrial grouping ifthey belong to the same "Major Group" (i.e., which have the same two-digit code) as described-m the Standard Industrial Classification Manual, 1972, as amended by the 1977 Supplement (U.S. Government Printing Office stock

. numbers 4101-0066 and 003-005-00176- 0, respectively).

(iii) "Installation" means an identifiable piece ofprocess equipment.

(iv) "Potential to emit" means the maximum capacity ofa stationary

source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity of the source to emit a pollutant, including air pollution control equipment and restrictions on hours of operation or on the type or amount of material combusted, stored, or processed, shall be treated as part ofits design only ifthe limitation or the effect it would have on emissions is federally enforceable. Secondary emissions do not count in determining the potential to emitof a stationary source.

(v)(a) "Major stationary source"

means:

(1)Any stationary source ofair pollutants which emits, or has the' potential to emit, 100 tons per year or
more ofany pollutant subject to regulation under the Act; or

(2) Any physical change that would

occur at a stationary source not qualifying under paragraph (v)(a](1) as a major stationary source, ifthe change would constitute a major stationary

source by itself.

(b) A major stationary source that is major forvolatile organic compounds shall be considered major for ozone.

(vi)(a) "Major modification" means any physical change in or change in the method of operation ofa major stationary,source thatwould result in a significant net emissions increase ofany pollutant subject to regulation under the Act.

(b)Any net emissions increase that is considered significant forvolatile organic compounds shall be considered significant for ozone.

(c)A physiral change or change in the method ofoperation shall not include:

(1)Routine maintenance, repair and replacement; (2)Use of an alternative fuel or raw material byreason of an order under sections 2(a) and (b) ofthe Energy Supply and Environmental Coordination Act of 1974 (or any superseding legislation) orby reason ofa natural gas curtailment plan pursuant to the Federal Power Act;

(3)-Use ofan alternative fuel by

- reason of an order or rule under section

125 of the Act;

(4)Use of an alternative fuel at a steam generating unit to the extent that the fuel is generated frommunicipal solid waste;

(5) Use ofan alternative fuel or raw material by a stationary source which: (i)The source was capable of accommodating before December 21, 1976, unless such change would be prohibited under any fedeially enforceable permit condition which was established after December 21, 1976 pursuant to 40 CFR 52.21 orunder regulations approved pursuant to 40 CFR 51.18 or40 CFR 51.24; or

(ii)The source is approved to use under anypermit issued under regulations approved pursuant to this section;

(6)An increase in the hours of operation or in the production rate, unless such change is prohibited under any federally enforceable permit condition which was established after December 21,1976 pursuant to 40 CFR 52.21 or regulations approved pursuant to 40 CFR 51.18 or 40 CFR 51.24.

(7) Any change in ownership at a stationary source.

(vii)(a) "Net emissions increase"

means the amount by which the sum of the following exceeds zero:

(1] Any increase in actual emissions from a particular physical change or change in the method of operation at a stationary source; and

(2)Any other increases and decreases in actual emissions at the source that

are contemporaneous with the particular change and are otherwise creditable. b) An increase or decrease in actual emissions is contemporaneous with the increase from the particular change only ifit occurs before the date that the increase from the particular change

occurs.

(c)An increase or decrease in actual emissions is creditable only if:

(1) It occurs within a reasonable period to be 4pecified by the reviewing authority; and

(2)The-reviewing authority has not relied on it in issuing a permit for the

source under regulations approved pursuant to this section which permit is in effect when the increase in actual emissions from the particular change

occurs. (d)An increase In actual emissions Is creditable only to the extent that the

new level of actual emissions exceeds the old level.

(e) A decrease in actual emissions Is creditable only to the extent that:

(1)The old level ofactual emissions

or the old level ofallowable emissions, whichever, islower, exceeds the new level ofactual emissions;

(2)It is federally enforceable at and after the time that actual construction

on the particular change begins; and

(3)The reviewing authority has not relied on it in issuing any permit under regulations approved pursuant to 40 CFR 51.18 or the state has not relied on ItIn demonstrating attainment orreasonable further progress.

(4)It has approximately the same qualitative significance forpublic health and welfare as that attributed to the increase from theparticular change. Wf)

An increase that results from a physical change at a source occurs when the emissions unit on which construction occurred becomes operational and begins to emit a particular pollutant, Any replacement unit that requires shakedown becomes operational only after a reasonable shakedown pefiod, not to exceed 180 days.

(viii) "Emissions unit" means any part ofa stationary source which emits or would have the potential to emit any pollutant subject to regulation under the Act. (ix)"Reconstruction" will be presumed to have taken place where the fixed capital cost ofthe new components exceeds 50percent ofthe fixed capital cost ofa comparable entirely new stationary source. Any final decision as to whether reconstruction has occurred shall be made in accordance with the provisions of40 CFR 60.15(fo (1)-(3). A reconstructed stationary source will be treated as a new stationary source for purposes ofthis subsection. In determining lowest achievable emission rate for a reconstructed stationary source, the provisions of40 CFR 60.15(f0(4) shall be taken into account in assessing whether anew source performance standard is applicable to such stationary source.

(x) "Fixed capital cost" means the capital needed to provide all the depreciable components.

(xi) "Secondary emissions" means emissions which would occur as a result ofthe construction or operation ofa major stationary source or major modification, but do not come from the major stationary source or major modification itself.For the purpose of this section, secondary emissions mustFederal Register / Vol. 45, No. 154 / Thursday. August 7, 1980 / Rules and Regulations

be specific, well defined, quantifiable, and impact the same general area as the stationary source or modification which

causes the secondary emissions. Secondary emissions may include, but

are not limitedto:

(a)Emissions fromships or trains coming to-or from the new ormodified stationary source; and

(b] Emissions from any offsite support facility which would not otherwise be constructed or increase its emissions as
a result ofthe construction or operation ofthe major stationarysource or major modification.

(xii) "Fugitive emissions" means those emissions which could not reasonably pass through a stack, chimney, vent, or other functionally equivalent opening.

(xiii) "Significant" means, in reference to a net emissions increase or the potential ofa source to emit any ofthe followingpollutants, a rate ofemissions that would equal or exceed any ofthe following rates: Pollutant andEnzissions Rate Carbon monoxide: 100tonsperyear (tpy) Nitrogen oxides.40 tpy Sulfur dioxide:40 tpy Particulate matter: 25 tpy Ozone 40 tpy ofvolatile organic compounds Lead. 0.6 tpy

(xiv) "Allowable emissions' means the emissions rate of a stationary source calculated using the maximum rated capacity Dfthe source [unless the source is subject tofederally enforceable limits which restrictthe operating rate, or hours ofoperation, orbn1k) and the most stringent ofthe following:

(a) The applicable standards set forth in40 CFR Parts 60or 61;

(b)Any applicable State Implementation Plan emissions limitation including those with a future compliance date; or (c) The emissions rate specified as a federally enforceable permit condition, including those with a future compliance date.

(xv)(a) "Actual emissions" means the actual rate of emissions of apollutant from an emissions anit as determined in accordance with subparagraphs (b)-(d) below.

(b)In general, actual emissions as ofa particular date shaft equal the average rate, in tons peryear, at which the unit actually emitted the pollutant during a two-year period which precedes the particular date and which is representative ofnormal source operation. Thereviewing authority shall allow the use of a different time period upon a determination that it is more representative ofnormal source operation. Actual emissions shall be calculated using the unit's actual operating hours,-productionrates, and types ofmaterials processed, stored, or combusted during the selectedlime period. (c) The reviewing authoritymay presume that the source-specific allowable emissions for the unit are equivalent to theactual emissions-of the unit.

(d)For any emissions unit which has not begun normal operations on the particular date, actual emissions shall equal the potential to emit of the unit on that date.

(xvi) "Lowest achievable emission rate" means, for any source. the more stringent rate ofemissions based on the following:

(a)The most stringent emissions' limitation which is contained in the implementation plan ofany state for such class orcategory ofstationary source, unless the owneroroperator of the proposed stationary source demonstrates that suchlimitations are not achievable; or

(b)The most stringent emissions limitation which is achieved inpractice by such class orcategoryof stationary

source. This limitation,when applied to

a modification, means the lowest achievable emissions rate for the new or modified emissions units within the stationary source. In no event shall the application ofthis term permit a proposed new or modified stationary

source to emit any pollutant in excess of the amount allowable under an applicable new source standard of performance.

(xvii) "Federally enforceable" means all limitations and conditions which are enforceable by theAdministrator, including those requirements developed pursuant to40 CFR Parts 60 and 81, requirements within any applicable State Implementation Plan, and any permit requirements established pursuant to 40 CFR 52.1 or under regulations approved pursuant totiis section, 40 CFR51.11, or 51.24.

(xviii) 'Begi actual-construction"

means in general, initiation ofphysical on-site onstruction activities on an emissions unit which are ofa permanent nature. Such activities include, but are not limited to,-installation ofbuilding supports and foundations, laying of underground pipework, and construction ofpermanent storage structures.With respect to a change in method of operating this term refers to those onsite activities otherthan preparatory activities which mark the initiation of the change.

(xix) "Commence" as applied to construction of a major stationary

source or major modification means that the owner oroperator has all necessary preconstruction approvals orpermits and either has:

(a)Begun, or caused to begin, a continuous program ofactual on-site construction ofthe source, to be completed withina reasonable time; or

(b) Entered into bindingagreements or contractual obligations, which cannot be cancelled ormodified without substantialloss to the owner or operator, to undertake a program of actual construction ofthe source to be completed within a reasonable time.

(xx) "Necessry preconstruction approvals orpermits" means those permits or approvals required under federal air quality controllaws and regulations and those air quality control laws and regulations which are part of the applicable State Implementation Plan.

(xxi) "Construction" means any physical change or change in themethod ofoperation (including fabrication, erection, installation, demolition, or modification of an emissions unit) which would resultina change in actual emissions.

(2) Each plan shall adopt a preconstruction review program to satisfy therequirements ofsections 172(b)(6) and 173 of theAct forany area designated nonattainment for any national ambient air quality standard under 40 CFR 61.300 etseq. Such a program shall apply to anynew major stationary source -or major modification that is major for thepollutant for which the area is designated nonattainment, if the stationary source ormodification would locate anywhere in the designated nonattainment area.

(3)(i) Each plan shall provide-that for

sources and modifications subject to anypreconstruction review program adoptedpursuant to this subsection the baseline for determining =edit for emissions reductions is the emissions limit under the applicable State Implementation Plan ineffect at the time the application to construct isfiled. except that the offset baseline shall be the actual emissions-ofthesource from which offset credit is obtainedwhere: (a)The demonstration ofreasonable further progress and attainment of ambient air quality standards is based upon the actual emissions ofsources located within a designated nonattainment area -for which the preconstruction review program was adopted; or

(b)The applicable State Implementation Plan does not contain

an emissions limitation for that source
or source category.

(ii)The plan shall further provide that- (a) WThere the emissions limitunder the applicable State Implementation 5274552746 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

Plan allows greater emissions than the potential to emit of the source, emissions offset credit will be allowed only for control below this potential;



### (b) For an existing fuel combustion
source, credit shall be based on theallowable emissions under the applicable State Implementation Plan for the type of fuel being burned at the time the application to construct is filed. If the existing source commits to switch to a cleaner fuel at some future date, emissions offset credit based on the allowable (or actual] emissions for the fuels involved is not acceptable, unless the permit is conditioned to require the

use ofa specified alternative control

measure which would achieve the same degree ofemissions reduction should the

source switch back to a dirtier fuel at
some later date.The reviewing authority should ensure that adequate long-term supplies ofthe new fuel are available before grariting emissions offset credit for fuel switches;

(c) Emissions reductions achieved by shutting down an existing source or permanently curtailing production or operating hours belowbaseline levels may be credited, provided that the work force to be affected has been notified of the proposed shutdown or curtailment. Source shutdowns and curtailments in production or operating hours occurring prior to the date the new source application is filed generally may not be used for emissions offset credit. However, where an applicant can establish that it shut down or curtailed production after August 7,1977, or less than one yearprior to the date ofpermit application, whichever is earlier, and' the proposed new source is a replacement for the shutdown or curtailment credit for such shutdown or curtailment may be applied to offset emissions from the.new source;

(d) No emissions credit may be allowed for replacing one hydrocarbon compound with another oflesser reactivity, except for those compounds listed in Table I ofEPA's "Recommended Policy on Control of Volatile Organic Compounds." (42FR 35314, July 8, 1977);

(e)All emission reductions claimed as offset credit shall be federally enforceable;

W Procedures relating to the permissible location ofoffsetting emissions- shall be followed which are at least as stringent as those set out in 40 CFR Part 51 Appendix S; section IV.D.

(g)Credit for an emissions reduction

can be claimed to the extent that the reviewing authority has not relied on it in issuing any permit under regulations approved pursuaxit to 40 CFR 51.18 or the state has not relied on it in demonstrating attainment orreasonable further progress. (4) Each plan mayprovide that the provisions ofthis subsection do not apply to a source or modification that would be a major stationary source or major modification onlyiffugitive emissions, to the.extent quantifiable, are considered in calculating the potential to emit ofthe stationary source or modification and the source does not belong to any ofthe following categories:

(a)Coal cleaning plants (with thermal dryers];

(b) Kraft pulp mills; (c] Portland cement plants; (d)Primary zinc smelters; (e)Iron and steelmills; (f)

Primary aluminum ore reduction plants; (g)Primary copper smelters; (h)Municipal incinerators capable of charging more than 250 tons ofrefuse per day,

(i)Hydrofluoric, sulfuric, or nitric acid plants;

U] Petroleum refineries; (k] Lime plants; (1) Phosphate rock processing plants; (m) Coke oven batteries; (n)Sulfur recovery plants; (a) Carbon black plants (furnace process);

(p) Primary lead smelters; (q) Fuel conversion plants; (r)Sintering plants; (s)Secondary metal production plants;

(t) Chemical piocess plants; (u)Fossil-fuel boilers (or combination thereof) totaling more than 250 million British thermal units per hour heat input;

(v) Petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels;

(w) Taconite ore processing plants; (x) Glass fiber processing plants; (y) Charcoal production plants; (z)Fossil fuel-fired steam electric plants ofmore than 250 million British thermal units per hourheat input;.

(aa)Any other stationary source category which, as ofAugust 7,1980, is being regulated under section 111 or 112, of the Act.

(5) Each plan shall include enforceable procedures to provide that.

(i)Approval to construct shall not relieve any owner or operator ofthe responsibility to complyfully with applicable provision ofthe plan and any other requirements under local, state or federal law.

(ii) At such time that a particular

source or modification becomes a major stationary source or major modification solely by virtue ofa relaxation in any enforcement limitationwhich was -established after August 7, 1980, on the capacity ofthe source or modification otherwise to emit a pollutant, such as a restriction on hours ofoperation, then the requirments ofregulations approved pursuant to this section shall apply to the source or modification as though construction had not yet commenced on the source or modification.
Restrictions on Construction For Nonattainment Areas

5. 40 CFR 52.24 is amended by adding

new paragraphs (f), (g), (hi) and (i)to read as follows: §52.24 Statutory restriction on new stationary sources. *t i * * *

(f) The following definitions shall apply under this section.

(1) "Stationary source" means any building, structure, facility, or installation which emits or may emit any airpollutant subject to regulation under the Act.

(2) "Building, structure, or fability"

means all ofthe pollutant-emitting activities which belong to the same industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same person (orpersons under

common control). Pollutant-emitting activities shall be considered as part of the same industrial grouping if they belong to the same "Major Group" (ie,, which have the same two-digit code) as described in the following document, Standard IndustrialClassification Manual, 1972, as amended by the 1977 Supplement (U.S. Government Printing Office stock numbers 4101-0006 and 003-005-o0176-0, respectively).

(3) "Installation" means an identifiable piece ofprocess equipment.

(4) "Potential to emit" means the maximum capacity ofa stationary

source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity ofthe source to emit a pollutant, including air pollution control equipment and restrictions on hours of operation oron amount ofmaterial combusted, stored, orprocessed, shall be treated as part ofIts design only If the limitation or the effect it would have

on emissions is federally enforceable. Secondary emissions do not count in determining thepotential to emit ofa stationary source.

(5)(i) "Major stationary source"

means:

(a)Any stationary source ofair pollutants which emits, orhas the potential to emit, 100 tons per year or more ofany pollutant subject to regulation under the Act; orFederal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

'(b) Any physical change that would

occur at a stationary source not qualifying under paragraph (5)(i](a) as a major stationary source, ifthe change would constitute a Major stationary

source by itself.

(i) A major stationary source that is major forvolatile for organic compounds shall be considered major forozone.

(6)(i) "Major modification" means any physical change in or change in the method ofoperation ofa major stationary source that would result in a significant net emissions increase ofany pollutant subject to regulation under the Act.

(ii] Any net emissions increase that is considered significant for volatile organic compounds shall be considered significant for ozone.

(ii)A physical change or change in the method ofoperation shall not include:

(a] Routine maintenance, repair, and replacement;

(b)Use ofan alternative fuel orraw material by reason ofan order under sections 2 (a) and (b) ofthe Energy Supply and Environmental Coordination Act of 1974 (or any superseding legislation] or by reason ofa natural gas curtailment plan pursuant to the Federal Power Act;

(c) Use ofan alternative fuel by

reason ofan order orrule under section 125 of the Act;

(d) Use of an alternative fuel at a steam generating unit to the extent that the fuel is generated from municipal solid waste; I (e] Use ofan alternative fuel or raw material by a stationary source which:

(1)The source was capable of accommodating before July 1,1979, unless such change would be prohibited under any federally enforceable permit condition which was established after July,1,1979 pursuant to 40 CFR 52.21 or under regulations approved pursuant to 40 CFR 51.18 or 40 CFR 51.24; or

(2]The source is approved to use under any permitissued under regulations approved pursuant to 40 CFR 51.18;

() An increase in the hours of operation or in the production rate, unless such change is prohibited under anyfederally enforceable permit ,condition which was established after July 1,1979 pursuant to 40 CFR 52.21 or underregulations approved pursuant to 40 CFR 51.18 or40 CFR 51.24. (g] Any change in ownership at a stationary source.

(7](i] "Net emissions increase" means the amount by which the sum ofthe following exceeds zero:

(a)Any increase in actual emissions from aparticular physical change or change in the method ofoperation at a stationary source; and

(b) Any other increases and decreases in actual emissions at the source that

are contemporaneous with the particular change and are otherwise creditable.

(ii)An increase or decrease in actual emissions is contemporaneous with the increase from the particular change only ifit occurs between:

(a)The date five years before construction on theparticular change

commences and

(b] The date that the increase from the particular change occurs. (iII) An increase ordecrease in actual emissions is creditable only if the Administrator has not relied on it in issuing a permit for the source under regulations approved pursuant to40 CFR 51.18 which permit is in effect when the increase in actual emissions from the particular change occurs. (iv)An increase in actual emissions is creditable only to the extent that the

new level of actual emissions exceeds the oldlevel.

(v)A decrease in actual emissions is creditable only to the extent that*

(a) The old level ofactual emissions

orthe old level ofallowable emissions, whichever is lower, exceeds the new level ofactual emissions (b)It is federally enforceable at and after the time that construction on the particular change begins; and (c)The Administrator orreviewing authority has not relied on It in issuing anypermit under regulations approved pursuant to40 CFR 51.18 or the State has not relied on it in demonstrating attainment orreasonable further progress.

(d)Ithas approximately the same qualitative significance forpublic health and welfare as that attributed to the increase from the particular change. (vi)An increase that results from a physical change at a source occurs when the emissions unit on which construction occurred becomes operational and begins to emit a particular pollutant Any replacement unit thatrequires shakedown becomes operational only after a reasonable shakedown period, not to exceed 180 days.

(8) "Emissions unit" means any part of

a stationary source which emits or would have the potential to emit any pollutant subject toregulation under the Act (9) "Reconstruction" will be presumed to have taken place where the fixed capital cost ofthe new components exceeds 50 percent of the fixed capital cost ofa comparable entirely new stationary source. Any final decision as to whether reconstruction has occurred shall be made in accordance with the provisions of40 CFR 60.15(f (1)-(3]. A reconstructed stationary source willbe treated as a new stationary source for purposes of this subsection.

(10) "Fixed capital cost" means the capital needed to provide all the depreciable components.

(11) "Secondary emissions" means emissions which would occur as a result ofthe construction or operation ofa major stationary source ormajor modification, but do not come from the major stationary source ormajor modification itself.For the purpose of this section, secondary emissions must be specific, well defined, quantifiable, and impact the same general area as the stationary source or modification which

causes the secondary emissions. Secondary emissions mayinclude, but

are notlimited to:

(i) Emissions from ships or trains coming to orfrom the new ormodified stationary source and

(ii) Emissions from any offsite support facility which would not otherwise be constructed orincrease its emissions as
a result ofthe construction oroperation ofthe major stationary source ormajor modification.

(12) "Fugitive emissions" means those emissions which could notreasonably pass through a stack, chimney, vent, or other functionally equivalent opening.

(13) "Significant" means, in reference to a net emissions increase orthe potential ofa source to emit any ofthe following pollutants, a rate ofemissions that would eijual or exceed any ofthe following rates: Pollutant and Fssions Rate Carbon monoxide: 100 tons peryear (tpy) Nitrogen oxides: 40 tpy Sulfurdioxide: 40 tpy Particulate matter.25 tpy Ozone: 40 tpy ofvolatile organic compounds Lead. 0.6 tpy (14) "Allowable emissions" means the emissions rate of a stationary source calculated using the maximum rated capacity ofthe source (unlessthe source is subject to federally enforceable limits which restrict the operating rate, or hours ofoperation, orboth] and the most stringent ofthe following:. (i)The applicable standards setforth in 40 CFR Parts 60 and 61;

(ii) Any applicable State Implementation Plan emissions limitation, including those with afuture compliance date; or

(iiI) The emissions rate specified as a federally enforceable permit condition, including those with a future compliance date.

(15] 'Tederally enforceable" means all limitations and conditions which are 

### 5274752748 Federal Register 

## I Vol. 45, No. 154 

## / Thursday, August 7., 1980 / Rules and Regulations

enforceable bythe Administrator, , including 'those '-reqfurementsdeveloped pursuant 'to40fCFRParts;60and-61, requirements within anyapplicable State Implementation Plan; and any permit requiremenlts established pursuant to40 CFR 52.21 or-under regulations approved-pursuant to,40 CFR 51.18 and 51.24.

(16)[i) "'Actual emissions" means 'the actual rate of erissions of-a pollutant from an emissions unit, as determined in accordance with subparagraphs-[ii)-(iv) below.

fii) Ingeneral, actual emissions asoof:a particular date shall equalthe average rate, In tonsper year, at -whichtheunit -actuallyemittedthe pollutant during a two-year period which"precedes the particular-date and'which is representative of-normal source operation. The Administrator shall allow the-useofad:ifferent time period upon adetermination thatitismore representative ofnormal'source .operation.Actual emissions shalbe calculated usingthezunit's actual operating-hours, production rates,mand types ofimdterials processed, stored,-or combusted during-theelected time period. (iii)The Administratornay presume that source-specific allowable emissions for themnitre'equivalent tothe actual emissions df:themnit.

,(iv)For anyemissionsmanit which has not begun normal-operations on the particular date, :actual emissions shall equal the potential to emitofthe unit on that date.

(17) "Construction" means any physical change or changein the method ofoperation (including fabrication, erection, installation, demolition, or modification) ofan emissions'uiit which would result in a change in -actual emissions.

(18) "Commence" as applied to construction ofa major stationary

source or major-modification meansthat theDowner or operatorhas all necessary preconstruction approvals orpermits and eitherhas:

(i)Begun, or causedlo begin, a continuous program-of actualon.site constructionof the source, tobe completed within a-reasonablelime; or

'(ii) Entered into binding agreements or contractual obligations, which-cannot be cancelled or modified without substantialloss to the owner-or operator,'to undertake a program-of actual construction ofthe source tobe -completed-within a-reasonable time. (-19) "Necessary preconstruction ,approvals orpermits" means those permits or approvals required under Tederal air-quality control laws and regulations and those air-qualitycontrol laws and regulations which are part of the applicable State Implementation Plan. .120) "Begin actual-construction"
means, in general, initiation'ofphysical on-sgile -constructionactivities onan emissions unit which are of a-permanent nature. Such activities nclude,but -are not limited :to, installa'ion ofbuilding

- supporls-and foundations, laying of underground pipework, andconstruction of permanentstqrage slructures. ith respect to a change inmethod-of operations, thislerm rnfers tothose onsite activities otherthan preparatory activities which mark theinitiation of 'the change..

(g)This section shall not applyto a major stationary source ortnajor modificationif 1he source or modification was not subject to 40 CFR Partl3 AppendixS. asin effect on January 16,1979, and Ihe owner or operator.

(1) 'Obtaimed all final federal,state, and local preconstruction approvals or permits necessary under the applicable State'Implementalion Planbefore August 7,1980;

,(2) Commehced construction-within 18 monthsfrom August -, 1980, or any earlier time required under the applicable StateImplementation lan; and

(3)Did not discontinue construction foraperiod of18 months or more and completea sonstruction withina reasonable.time.

(h This section shall not 'applyto a

-source ormodification Thatwouid be a majorsltationary source orimajor modifica'ion.only iffugtive emissions, to the extent quanifiable, are consideredincalculating the potential to emit ofthe stationary source or modification and the source does not belongto anyof the following categories:

(1)Coal-cleanig plants [with thermal dryers);

42)IYraft pulp mills; 13) Porfland cement plants; (4)Primary zincomelters; (5) Iron and steelmills; (6) Primary aluminum ore reduction plants;

'(7)Primary copper-smelters; (8)Municipal incinerators -capable of charging'more than250 tons-of refuse per day;

(9) Hydrofluoric,-sufuic, ornitric acid plants;

[10)Petroleum refineries; (11) lUme plants; (12) Phosphate rock processing plants; -113)Coke oven batteries; (14) Sulfur recovery-plants; (15) Carbon black-plantsi(furnace process);

(16) -Primary leadsmelters; (17)Fuel conversion-plants;" '(18)Sintering plants;

. (19) Secondary metalproduction 'plants; (20) :Chenical process plants; (21) Fossil-fuel boilers ,(orcombination thereof) totaling more than 250 million British thermal units perhourheatinput: (22)Petroleum storage and transfer units with a total storage capacity exceeding 300,000 barrels;

'(23Taconlte oreprocessing plants; (24) Glass 'fiberprocessing plants; (25) Charcoal production plants; (26)Fossil fuel-fired steam electric plants ofmore than 250 million British thermal units perhour heat input;

,(27) Any other stationary source category which, as ofAugust 7,1980, is being regulated under section 111 or 112 ofthe Act.

fi)At such time thata particular

source or-modification becomes a major stationary source or majormodification solelyby-virtue of arelaxation in any enforceable limitation which was established after August 7, 1980, on the capacity ofthe source or modification otherwise to emit a pollutant, such as a restriction onihours'of operation, then:

(1) Ifthe constructionmoratorium umposed pursuant to this section is still in effect for the nonattainment area in whichthe source ormodification is located, then thepermit maynot be so revised; or

(2) Ifthe constructionmoratorium is no-longer-ineffect in that area, then tho requirements of40 CFR 51.180) shall apply to the source or modification as though-construction had not yet commenced-on -thesource or modification.

Consolidated Permit Regulations

6.40 CFR Part 124is amended as follows:

a.40 CFR 124.3(b) Is deleted and reserved asfollows:

§ 124.3 Application for apernilt.

(b) [Reserved]

§ 124.5 [Amended]

b. 40 CFR 124.5(g)(2) is Tevisedus follows:

[2)PSDpermits may be terminated only'byxescission under §52.21[w) or by automatic expiration under § 52.21(r). Applications for rescission shallbe processed under § 52.21(w) and are not subject ,to this Part.

§ 124.42 [Amended]

,c.2Thefirst sentence of40 CER 124.42(b) is amended by substituting "submitted" for "requested."

[FRDoc 80-23780 Filed 94-M. M5 aml BILLING CODE 6560-01-M

## Thursday August 7, 1980

= a

- =

- = 

# Part IV



# Federal Trade Commission

Sale of Used Motor Vehicles; and Other Regulation DisclosureFederal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Proposed Rules

FEDERAL TRADE COMMISSION

16 CFR Part 455

Sale of Used Motor Vehicles; Disclosure and Other Regulation

AGENCY: Federal Trade Commission. ACTION: Proposed rule.

SUMMARY: OnMay 16,1980,the Federal Trade Commission tentatively adopted the proposed Trade Regulation Rule concerning the Sale of Used Motor Vehicles. The proposed Rule would requ*e dealers to post a window sticker ("Buyers Guide") on used cars offered for sale to consumers. The window sticker would explain to consumers that spoken promises may not be enforceable, and that consumers should ask that all promises be put in writing. The stickerwould also list 14 systems of the car (for example, "frame and body". "engine", "transmission and drive shaft".) Dealers would be rejuired to clieck off the condition of each ofthese systems as "OK", "Not OK" or "We Don't Know". Additionally,the sticker would inform consumers whether or not
.awarranty-or service contract was offered with the car, and how the warranty, service contract, or the lack of such protection affected the consumer's right to have the dealer make repairs on the car after sale.

An earlier version of the proposal would have required dealers to inspect all used cars that they offered for sale and to report the inspectionresults on the sticker.The Commission has determined notto adopt a Rule mandating dealers o-inspectall vehicles. The proposed Rule as tentatively adopted would not Tequire dealers to inspect all used cars prior to sale, but would require dealers who do not inspect to notify consumers that they have not done so by checking "We Don't Know" on the window sticker. Additionally, dealers would have to disclose all known defects, whether or not they inspect the vehicles.

The proposed Rule has been revised in Section 455.1(a) to include a listing of the acts or practices in the sale of used motor vehicleswhich are unfair or deceptive in order that the Rule may "define with specificity" the illegal practices in a manner that complies with the decisionin KatharineGibbs,Inc.-v. F.T.C., 612 F.2d 658 (2nd Cir. 1979). Before the Commission promulgates the final Rule, it will determine whether compliance with §§455.2-455.7 of the Rule constitutes full compliance with the Rule. The Commission has determined not to require'wiitten disclosures concerning repair cost estimates on the window sticker umless the dealerhas chosen to make such estimates to the consumer, and has also determined not to require disclosure ofwhether a vehicle has ever been declared a total insurance loss. These provisions had been included in an earlier version of the proposed Rule. '-DATES:Comments will be accepted through October 7,1980. ADDRESS: Send comments to Secretary, 'Federal Trade Commission, 6th Street.

and Pennsylvania Avenue, NW., " Washington, D.C. 20580. Submissions should be labeled "Sale of Used Motor Vehicles." FOR FURTHER INFORMATION CONTACT. Michael A.Katz orWallace W.Lovejoy, Federal Trade Commission, 6thand Pennsylvania Ave. NW., Washington. D.C. 20580, (202) 523-1670. Section A. Invitation to Comment

The Commission believesthat this ruleniaking has provided interested persons full opportunity to make submissions andpresentations on all issues relevantto the tentatively adopted proposed rule.'(41 FR 1089; 10233; 20896; 26032; 39337, January 6; March 10; May 21; June 24; September 15,1976.)

The Commission also believes that the question ofwhether the remedy selected is reasonably related to the violations found to exist is a matter largelywithin the Commission's expertise, subject to judicial review. However, the Commission has decided in its 1discretion, and pursuant to §1.14(a) of its Rules of Practice, that it would' benefit from additional written comments on certain remedial and drafting issues.

Comments are sought on whether the proposed Rule is likelyto prevent,

- diminish the incidence of,or reduce the injury to consumers from the unfair or deceptive acts or practices in the sale of used motorvehicles listed in §455.1(a) of the Rule. Comments on the format of the window sticker and comments identifying drafting errors are also sought. Comments on issues other than these remedial and drafting issues will not be considered.Written comments will be accepted through October 7, 1980. The Commission does notintend to conduct informal hearings or to permit rebuttal submissions on these issues.

Following the close ofthe comment period, the Commission will determine whether revisions should be made in the proposed Rule, including the window sticker.An effective date, that provides for aperiod of congressional review as required by Section 21 of the Federal Trade Commission Improvements Act of 1980, will be announced when the Commission promulgates a final Rule. Section B.Questions

Interested persons are urged to submit comments on the following questions. Although the proposed Rule (including the window sticker) is drafted in specific language, the Commission retains its authority to promulgate a finalRule in ways suggested by the responses to these questions and based
on the rulemaking record. Comments should indicate by number whicl question(s) are being addressed.

Questions: 1. Is the "Buyers Guide" likely to reduce the incidence of oral misrepresentations by dealers about the mechanical condition of or warranty coverage offered in connection with the sale of used cars? For example, will dealers be less likely than at present to -makeoral misrepresentations about the mechanical condition ofthe systems of a used car if the "We Don't Know" box Is checked?Willthe disclosure of warranty terms on the "Buyers Guide" make it less likely than at present that dealers will orally misrepresent the nature and extent ofwarranty coverage offered? For what reasons?

2.Whatare the incentives for dealers to mark "OK", "Not OK", or "We Don't Know"? If some dealers mark the disclosure form "OK," will that put competitive pressure on other dealers to inspect and offer "OK" vehicles as well?

3.When a vehicle's systems are marked "We Don't Know" or "Not OK" on the "Buyers Guide", will buyers be more cautiousthan at present about relying on oral promises by adealer that a vehicle is in good mechanical condition? Will it be difficult or easy for dealers to explain away thd fact that a vehicle's system is marked "We Don't Know", for example, by stating that they are saving buyers the cost of the inspection? Will buyers believe that a used car marked "OK" is in better conditionthan aused car marked "We Don't Know"? Will buyers be more or less likely than at present to demand that a dealer perform anInspection or to independently arrange for an inspection if there is a "Buyers Guide" posted on which "We Don't Know" has been marked? Will buyers be less likelythan at present to rely on oral promises by a dealer to repair defects after sale Ifthe "NoWarranty-'As Is'" disclosure is marked on the "Buyers Guide"? For whatreasons? I 

### 52750Federal Register / Vol. 45, No. 154 / Thursday. August 7, 1980 / Proposed Rules

4.Does the "Buyers Guide" make clear andwill buyers understand that the "OK" disclosure is not a promise by the dealer concerning future performance but a description ofthe condition of 14 vehicle systems at the time ofsale? How often will dealers mistakenly mark a system "OK" that is, in fact, "Not OK"? When this occurs, will buyers be misled to their detriment? If a dealer marks a system "OK" and the system breaks down shortly after sale, is the dealer more likely than at present to pay the costs ofrepair? Will dealers be able to avoid liability by claiming that the system was "OK when itleft the lot? Will buyers be able to show that

a defect existed at the time of sale because ofthe severity ofthe defect and the short time span between sale and discovery ofthe defect? Will it be more difficult for buyers to show that the defect existed at the time ofsale when the defect first manifests itselfafter several months? If a dealer marks a system "OK" and then refuses to pay the cost ofrepair, is it more likely than at present that the dealer will be sued forbreach ofwarranty by an injured

consumer or groups of consumers (perhaps represented by legal aid or public interest lawgroups)? Will it be worthwhile forbuyers to bring lawsuits, perhaps in small claims courts, ifonly $100 or $200 is at stake? Even ifit is not likely that a dealer will be sued, will an "OK disclosure put a buyer in a sufficiently better negotiating position than at present so that a dealer will pay for repairs that become necessary shortly after sale withoutresort to the courts? Will the "Buyers Guide" make it

more difficultthan atpresent for a

consumer or groups ofconsumers to succeed in litigation against a dealer who sold a seriously defective car marked "We Don't Know" or "No Warranty---'As Is' "? 5. Would a "Buyers Guide" that clearly discloses the meaning of "as is" and also clearly discloses the terms of any warranty that is offered, but does not contain a mechanical condition checklist, reduce the incidence oforal misrepresentations by dealers about the condition ofused vehicles? Would such

a "Buyers Guide" reduce the incidence ofbuyer reliance on oral promises by a dealer that a vehicle is ingood condition? Would such a "Buyers Guide" be more or less effective than the proposed "Buyers Guide" in reducing the incidence oforal misrepresentations by dealers and in reducing the incidence ofbuyer reliance

on oral promises concerning mechanical condition by the dealer? 6. Does the "Buyers Guide" provide information to buyers in a useful and understandable manner? What revisions in format or wording would improve its ability to do so?

7. Are there any technical errors in the wording ofthe Rule or "Buyers Guide"?

Section C

It isproposed to amend 16 CFR by adding anew Part 455--Used Motor Vehicle Trade Regulation Rule to read

as follows:

PART 455-USED MOTOR VEHICLE TRADE REGULATION
Se. 455.1 General duties ofa usedvehicle dealer; definitions. 455.2 Consumer sales-window form. 455.3 Window form. 455.4 Contrary statements. 455.5 Foreign languages. 455.6 Records. 455.7 Inspection standards. 455.8 Declaration ofCommission Intent.

Authority- 38 Stat. 717, as amended (15 U.S.C. 41 et seq.)

§456.1 General duties ofa used vehicle dealer, definitions

(a) It is an unfair or deceptive act or practice for any used vehicle dealer, when that dealer sells or offers for sale

aused vehicle in or affecting commerce

as "commerce" is defined in the Federal Trade Commission Act:

(1) To misrepresent the mechanical condition ofa used vehicle;

(2) To fail to disclose, priorto sale, anymaterial defect in mechanical condition ofthe used vehicle known to the dealer,

(3) To represent that a used vehicle, or any system thereof, is free frommaterial defects in mechanical condition at the time of sale unless the dealer had a reasonable basis for such representation
at the time it is made;

(4] To fail to make available, prior to sale, the terms ofany express orimplied warranty offered in cdnnection with the sale ofa used vehicle;

(5)To misrepresent the terms ofany express or implied warranty offered in connection with the sale ofa used vehicle;

(6) To fail to disclose, prior to sale, that aused vehicle is soldwithout an express or implied warranty.

(b) In order toprevent the unfair or deceptive acts or practices listed in paragraph (a) ofthis section, but regardless ofwhether any such acts or practices have been committed by an individual used vehicle dealer, it is an unfair or deceptive act or practice for any used vehicle dealer to fail to comply with § § 455.2 through 455.7 ofthis rule when that dealer sells or offers for sale

a used vehicle in oraffecting commerce
as "commerce" is defined in the Federal Trade Commission Act.

(c) The following definitions shall apply for purposes ofthis part:

(1)"Vehicle" means anymotorized vehicle, other than a motorcycle, with a gross vehicle weightrating fGVWR) of less than 8500 lbs., a curb weight ofless than 6000 lbs.,and a frontal area ofless than 46 sq.ft.

(2) "Used Vehicle" means any vehicle driven more than the limited use necessary in moving orroad testing a
new vehicleprior to delivery to a consumer, but does notinclude any vehicle sold only for scrap orparts (title documents surrendered to the state and

a salvage certificate issued).

(3) "Dealer" means anyperson or business which sells oroffers for sale a used vehicle after selling oroffering for sale five (5) ormore used vehicles in the previous twelve (12)monthperiod, but does not include abank or financial institution, a business selling a used vehicle to an employee ofthatbusiness,

or a lessor selling a leased vehicle to that vehicle's lessee oran employee of the lessee.

(4) "Consumer" means anyperson who is not a used vehicle dealer.

(5) "Warranty" means any undertaking in writing in connection with the sale by a dealer ofa used vehicle to refund, iepair,replace, maintain or take other actionwith respect to suchused vehicle and provided at no extra charge beyond the price ofthe used vehicle. (6) "Service contract" means a contract in writing for any period oftime

or any specific mileage to refund, repair, replace, maintain or take other action with respect to a used vehicle and provided at an extra charge beyond the price ofthe used vehicle. (7)"Repair insurance" means a contract in writing for any period oftime

or any specific mileage torefund, repair, replace, maintain or take other action with respect to a-used vehicle and which is regulated inyour state as thebusiness ofinsurance.

(8) "You" means any dealer, or any agent or employee ofa dealer, except where the term appears onthe window formrequired by § 455.2(a). §455.2 Consumer sales-window form.

(a) 

### General duty.Before you offer a used vehicle for sale to a consumer, you must prepare, fill in as applicable and display on thatvehicle a used vehicle "Buyers Guide" as required bythis rule.

(1) Use a side window to display the form so both sides ofthe form canbe read. with the title "Buyers Guide" to the 5275152752 Federal Register / Vol. 45, No. 154 

## I Thursday, August 7, 1980 / Proposed Rules

outside. You may remove a form temporarily from the window during any test drive, but you must return it as soon
as the test drive is over.

(2) The capitalization, punctuation and wording of all items, headings, and text

on the form must be exactly as required by this Rule. The entire form must be printed in 100% black ink on a white stock no smaller than 10.5 inches high by 8.5 inches wide in the type styles, sizes and format indicated.

BILNG CODE 6750-01-MFederal Register / Vol. 45, No. 154 / Thursday, Auqust 7, 1980 / Proposed Rules 

# BUYERSGUIDE

,2PI H.v w 

### i,- Spoken promises may beno good.Ask usto put all promises inwriting.

DEALER NAME

SXHeNehe i- ADDRESS

14P1 Helvetcib -* 

### Condition

12 tHOWtu* 

### o OK NOT OK WE DON'T KNOW El [ Frame &Bod 

### El El El Engine D 

### El El Transmission & Drive Shaft 

### El 0l 0l Differential 0l 

### El 

## El Cooling System 

### El 

## El El Electrical System 0l ,2=t Ho ----. 

### El 

## El Fuel System 

### El El El Accessories [] 

### El [] Brake System 

### El El El Steering System 

### El El 0] Suspension System 

### El 

## El E Tires 

### El E] E] Wheels 

### ] 

### El El Exhaust System 0

i ec8 el
-.-- B Look at the back ofthis form forthe details of

our inspection.

12p1 Hent"alck90 -ehveic VEHICLE MAKE

MODEL YEAR 

## Warranties SEE FOR COMPLAINTS

4(-.-- H r es MOOEL

VEHICLE IDNUMBER



### No Warranty-OAs Is" ' 1 1

This means you will payall coststo fix thkigsthat break after you buy. But we have to pay to fix --- 9;t w,,He' things marked "OK" that are not OK on delivery.



### FullILimited Warranty t'z , s am We will pay

- % of the total repair bill forcovered systems that break during thewarranty.This warranty adds to our responsibilites for htems <--9t p.l-.eea marked "OK." State law "implied warranties" may give you even nore rights. 

## I

TI*SE S(,"EV:12AiE Cr.VuZr

Items Marked "OKI
If anything we've marked "OK" is not OK on delivery, we have to fix it or give you back some money. If the problem's bad enough, you can make us take the car back. This is true whether you buywith a warranty or "asis." You must tell uswithin 4 -I Ore

Hade,er r -es after delivery if something marked "OK" was not OK

l2pt Helve!,54B-ak "4-

12 THe h~a 31 

# P1

Sc

ieC -4

Hate!is-4 Items Marked "Not OK" or "We Don't Know"
You pay all the costs to fix things marked "We Don't Know" or "Not OK," Here is what's wrong with things marked "Not OK." 

### Additional Information

Important: The informatorion thts form ispartofanycontracttoy~islst'e Rcyc ,be!:o purchase (except for purposes oftest-dving) is a violat on of federal law (t6C FR 455) 4I-- 14Ct amam

### 52753F754 

### Federal Resister / Vol. 45, No. 154 

### / Thursday, August 7, 1980 

## / Proposed Rules

1410 ca itacK

-

9 1 He4eto+ ca

P1 Heta

1441 Heie~lcaJack -Frame 

### & Body Frame-apparent cracks, corrective welds,

S or rusted through Dogtracks-bent dr twisted frame Inoperative doors

- 

### Engine Known or visible oil leakage, excluding

normal seepage Cracked block or head Belts missing or inoperable Knocks or misses Abnormal visible exhaust discharge

- 

### Transmission &Drive Shaft * Improperfluid level or visible leakage, excluding normal seepage

SCracked or damaged case, which is visible Abnormal noiseor vibration Improper shifting orfunctioning in any gear

- Manual clutch slips or chatters



### Differential

Improperfluid level or visible leakage,

excluding normal seepage Cracked or damaged housing, which is visible Abnormal noise or vibration

-- 

### Cooling System Improper fluid level or visible leakage Leaky radiator

- Improperly functioning water pump Inadequate antifreeze strength for season of j. year

_ 

### Electrical System Improper fluid level or visible leakage of S battery

- Battery fails tostart engine Improperly functioning alternator,generator.

orstarter

-Fuel 

### System Visible leakage 

### Broken Accessories I Gauges or warning devices Radio Air conditioner 'Heater &defroster Windows Dash lights

BILMNC CONz 85-0-C 

### Brake System Failure warning light broken Pedal not firm under pressure (DOT specs.) Not enough pedal reserve (DOT sipecs.) Does notstop vehicle in straight line (DOTspecs.) Hosesdamaged Drum or rotor too thin (mfgr.specs.) Lining or padthickness less than 1/32 inch Power unitnot operating or leaking Structural or mechanical parts damaged 

### Steering System

Too much-free play atsteering wheel

(DOTspecs.) Free play in linkage more than 1/4 inch Steering gearbinds orjams Front wheels aligned improperly

(DOTspecs.) Power unit belts cracked or slipping Power unitfluid level improper 

### Suspension System

$all joint seals damaged Structural parts bent or damaged Stabilizer bar disconnected Spring broken Shock absorber mounting loose Rubber bushings damaged or missing Radius rod damaged or missing Shock absbrber leaking Shock absorberfunctioning improperly 

### Tires

Tread depth less than 2/32 inch Sizes mismatched Visible damage 

### Wheels

Visible cracks, damage or repairs Mounting bolts loose or missing 

### Exhaust System

Apparent leakage



### Inspection procedures and "DOT specs." are printed inVol. 16 C.AR. (Code of Federal Regulations)Part 455. gpotHe0.etCa

14pt H,'I0.I49 acl.

90t Hetvpa

gp H etlvelta

14 ll Helvet~Ca Black

9 Ip

Hfve.a 4-, t Hteta acs 

# 1

4-14 1H Heef+<a Black 

# 1

4- 9pt H.'v <a

141 4,'..atym.

9-PI Ho'vetca 

# 4I

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.<
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9 1 H.4vtca'aw

4ll,-A- 14 PHetca Cgkl R27.R4



## If a system is marked "OK," we have 

# inspected it, and it doesn't have the problems listed below:Federal Register / Vol. 45, No. 154 / Thursday, August 7. 1980 1 Proposed Rules

When filling outthe form, follow the directions in paragraphs (b) through (g) ofthis section and § 455.4.

(b) Warranties.-(1) No Warranty- 'As Is'"hmpliedWarrantiesOnly.Ifyou offer the vehicle "as is," mark the box provided. Ifyou offer the vehicle with implied warranties only, substitute the disclosure specified below, and mark the boxprovided. Ifyou first offer the vehicle "as is" or with implied warranties only but then sell it with a warranty, cross out the "No Warranty- 'As Is"' or "Implied Warranties Only" disclosure, and fill in the warranty terms

(2) Full/LimitedWarranty. If you offer the vehicle with awarranty, mark the boxprovided and briefly describe the warranty terms in the space provided. This description must include the following warranty information:

(i)Whether the warranty offered is "Full" or "Limited." 1Cross out the inappropriate designation.

(ii)Which ofthe systems are covered (forexample, "engine, transmission, differential"-you cannot use shorthand, such as "drive train," for covered systems);

(iII)The duration (for example, "30 days or 1,000 miles, whichever occurs first");

(iv)Thepercentage of the repair cost paid by you (for example, "We will pay 100%ofthe total repair bill" or "We will pay 60%ofthe total repairbill"); and

(v) Ifthe warranty does notcover parts and labor equally, you must disclose this. Delete the line from the form which reads "We pay -% ofthe

12X He.velcaB a k --- 

## Service Contra in accordance with paragraph (b)(2) of this gection.

Ifyour state limits orprohibits "as is" sales ofvehicles, that state law overrides thispart and this rule does not give you the right to sell "as is." In such states, the heading "No Warranty-'As Is'" and the paragraph immediately below it must be deleted from the form, and the following heading and paragraph must be substituted. Ifyou sellvehicles in states that permit "as is" sales, but you choose to offer implied warranties only, you must also use the following disclosure instead of"No Warranty-'As Is' ".

total repair bill" and substitute "We will pay-% of the labor and-% ofthe parts." Fill in the percentage ofthe cost ofparts and labor you willpay under the warranty. If you first offer the vehicle with a warranty, but then sell It without one,
cross out the offered warranty and mark either the "No Warranty-'As Is' "box

or the "Implied Warranties Only" box,

as appropriate.

(3)ServiceContracts. Ifyou make a service contract available on the vehicle, you must add thb following heading and paragraph below the "Full/ Limited Warranty" disclosure and fill it in as applicable.



### IA "Full"warranty Is defined by the Federal Minimum StandardsforWarrantyset forth in 1104 of the Magnuson.Moss WarrantyAct. 15 U.S.C. § 2304(1975). The Magnuson.Moss WarrantyAct does not apply to vehicles manufactured before July 4,1975. Therefore, ifyou choose not to designate "Full" or "Limited"forsuch cars, cross outboth designations, leaving only "Warranty".

A services contract is available from for S extra. This service contract adds to our responsibilities for Items marked 9pt Helvetica Black "'OKI' and to our responsibilities under any warranty. If you buy a service contract, state law "implied warranties" may give you
even more rights. (c) Condtor-Inspections. You may. inspect, atyour option, any or all ofthe vehicle systems listed on the front side of the "Buyers Guide" form.You may choose your own inspection procedure, but that procedure mustproduce the

same results as theprocedure set outin j 455.7.

For each system listed on the "Buyers Guide," you mustmark either "OK," "Not OK," or "We Don't Know" as explained in this section.

(1) "OK": If all parts ofa system pass yourinspection you maymark that system "OK" on the form. Ifyou do not inspect, you must notmark the system ''OK."

(2) "Not OK": Ifany part ofthe system does notpass your inspection, and you don't repair theproblem, you mustmark the system "Not OK" on theform; you must notmark the system"We Don't Know." Also, you must mark a system "Not OKI ifyou know itwould fail an inspection, evenifyou do notperform

an inspection. Use the space provided to explain briefly the problem with each system marked "Not OK." Ifyou give an estimate ofthe cost to repair the problem, you mustprovide itin writing

on the form. Ifyou repair all problems in

a system,you may mark the system

Examples of "Not OK" explanations: (i) Sufficient: "Brake mastercylinder leaking." Insufficient: "Brakes need work."

(ii) Sufficient- "Engine burnsoil:' Insufficient: "Engine bad."

(3) "We Don'tKnow": Ifyou havenot inspected all parts ofa system and do notknow that anypart ofthe system would fail an inspection you mustmark it "We Don't Know." Ifall parts ofa system pass your inspection, butyou do notwish to certify the condition ofthe system to the buyer,you maymark the system "We Don't Know."

You may limithow long the buyerhas to notify you about a problem with an item marked "OK" by writing the limitation in the spacesprovided on the window form.The limitation may be defined by time and/or mileage. Ifyou do not limit the period to notify, you must insert the term "a reasonable time" in the spaces provided.

(d)Name andAddress. Putthe name and address ofyour dealership in the 12Pt Hfeve.Ca Black 

### Implied 

## Warranties Only
This means that we do not make any prom. ises to fix things that break after you buy. 9Pt Hele'aBack- *--.But, state law "implied warranties" may give you some rights to have us fix things marked "OK" ifthey are not OK on delivery. 525 R27RRFederal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Proposed Rules

space provided. Ifyou do not have a dealership, use the name and address of your place ofbusiness (forexample, your service station) oryour ownname and home address.

(e) Complaints. 'Put the name and telephone number ofthe person who will settle any complaints after sale in the space provided. This person must have full authority to negotiate and settle complaints 'foryou.

(f)

Make,Model,Model Year, VIN. Put the vehicle's name (forexample, "Chevrolet"), model (for example, "Vega"), model year, and Vehicle Identification Number (VIN) in the spaces provided.

(g)AdditionalInformation.You may include in the space provided -t the bottom of'the form repair insurance information or any other informatibn not prohibited by this rule. Lines or text may be preprinted onthe form for this information. §455.3 Window form.

(a)Partof ContracLYou must incorporate the information on the window form into the contract of sale (sales agreement) for each used vehicle you sell to a consumer by using the following language in each consumer contract of sale:

"The information yousee on the window formfor this vehicle ispart of this contract. if any.thing in this contract is different, the window form has the correct information." The capitalization, pimctuation and wording -ofthisnotice must appear exactly asushown above. The motice
must be printed in 12 point-extraboldface type usingRoman letters with 100%black ink.

(b) Copy toBuyer. Give the.buyer of a used vehicle sold byyou the original of the -windowform displayed under §455.2. Ifthe original cannot be removed from the window without damage, give the buyer a second copy, completed justlike the-original. §455.4 Contrary statements.

You may not make any statements, oral or written, or do anything'which takes away from or contradicts the disclosures in §§455.2 and 455.3. You may still negotiate over warranty coverage, as provided in §455.2b) of this part, as long as the final warranty terms

are identified in the contract of sale and summarized on the copy ofthe window form you give to the buyer. §455.5 Foreign languages.

(a) General duty. Ifyou conduct a sale in a language other than English, the window form required by § 455.2 and the contract disclosures required by §455.3 must be in that language. You may display on a vehicle both an - English language window form and .foreign language translation(s) of that form. Where possible, follow the layout requirements of § §455.2 and 455.3 (type, type size, color and format) for foreign language forms.

(b) Spanishlanguage sales.Use the following translation for Spanish language sales:

BILLING-CODE 6750-01-M I I 52756Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Proposed Rules 

# GUld DELCOIMPRADORI

12r .c8-- 

### Promesas verbales podrianresultarsin valor.Solicite hagamos todas
nuestras promesas por escrito.

1 DISTRIBUIDOR NOMBRE

8:4 He'Cr IN DIRECCION PARAOUEJASVERA

16EH:CULO MPARCA MOOELO 4 ax

0 

### ~NUMERO DE ID EUTFICAMIN I



### Condici6n

No

12CA Helw c OK Esta OK No Sabemos 0 0 Chasis y Carroceria 0 E 0 Motor 0 E 0l Transmisi6n y Eje del motor 0 0 0 Diferencial 0 0l 0 Sistema de Enfriamiento 0 El El Sistema Eldctrico 0

12,, .t. Vew"-- 

### El El Sistema de Combustible 0 El 0 Accessorios 0 El El Sistema de Frenos 0 El El Sistema de Conducci6n 0 El El Sistema ' aSuspensi6n E El El Liantas El

l 0 Ruedas El El El Sistema de Escape

9V w.ea8oI.-.o Vea e el reverso de ista forma los detalles de nuestra Inspecci6n.

12tXHel " B Articulos Marcados "O.K." Si algun articulo marcado -O.K.- resultadefectuoso a la entrega nosotros tenemos que repararlo o devolverle parte de su dinero. Si el defecto es grave, usted 9n ,-t .-.---- ene derecho a devolvernos of vehiculo Esto apica independientemente de st usted compr6 el vehiculo
con garantia o no. Debe notificamos dentro do un tdrmino de despu-s de la entrega si algo marcado O.K. no K esta. ,2,t He,, , -- Articulos Marcados "No Esta I O.K." o "No Sabemos" Usted paga el costo de reparaci6n do articukos mar- 9pt k,,a

- cados-No estaO.K. -oNo sabemos Acontinuac.6n

se encuentra el defecto. 

### Garantias 4.- 14C 0 He4.4ea ILk I
Sin Garantla("Tal como estat )

- ,#ca.j,1 Usled pagark Iareparacfn do psezas osistemas que
so datun despuos de usted haber compcado of vehiculo Nosotros tendromos que pagar el costo de Ia 90-- ' ,' reparacon do aquollosamtcutos quo nosoencuentreni 0 K- a ta entrega 

# j

Garantia Completa/Parcial 4*- 12at bl.NowxC22'.
Nosotros pagarenos

. de La cuenta total de reparacionpor esos sisternas inc!udos enla garanta 4-- , so so qu*Wen Esta garantw aumenla nuestra I responsabllldad por articulos marados'O.K.". AScr Las gawantas tmplctas- de fa ley estatal podtan --- C-' ,, reconocerle hastamas derechos que esla garama.

4 6C c

TER4-.J'. LAOAA



### Inf6rmacion Adicional 

### 4-1 S

4 -6C I$etca



# I

_

1PC

ec----pI mportante: LaanformaciOn enOsla lnaes partedo cua Out HOW4

- ii esta etiquota antes do Iacomrpra dos Osto vehculo (excepto reglamnentao6n federal (16 C.FR.45S) gqu*rccnta.od ce pra.erades.e eh-Uo Rem:onde para ccn:;ccn de prnea) corxs.?ue una vi n a [a 

### 52757

I

### Federal Register / Vol. 45, No. 154 / Thursday, August 7. 1980 / Proposed Rules

I

tO

Pl Helvelpca Mlack 

# 1 Todo systema marcado "O.K." que hemos inspectado y notiene losdefectos enumerados
a continuaci6n

14 0 Hetvetca laek

10 P4H&efi t a14PI HeVel a Black10 H01 H2C222&

-

14pt HelveticaBlack

UPI HelcaBack

$pt HH'4MetC

14Ot Hclvetza Black

101O2 He2veica

140 HelvelcaBJack

2002 Hel2eja

242 H0110a1 Black

100 H0 e 2.a

14Pt Helvelc8Black

1022 HeIMe22Ca

12pt Heve2 ,CBoM - 

### Chasis y Carroceria I Chasis-grietas, soldadurascorrectivas, oxidado,

----- chasis doblado o torcido. 

### 1 Puertasdaladas.

- Motor Escape de aceite/visible, excluyendo gasto por

uso normal. Bloque o cabezal quebrado o trizado. 

# K

Correas dafladas o inoperantes. Fallo o pistoneo. Descarga excesiva de humo por sistema de

escape.

-- 

### Transmisi6ny Eje del Motor
Nivel de liquido insuficiente o escapevisible,

excluyendofiltracimn normal.

o 'Cubierta aboyada o agrietada. Vibraci6n o ruidoanormal. Funcionamiento inadecuado o dificultad al

cambiar develocidad. Embriague mecanico patina o vibVa. 

### Diferencial

I Nivel de liquido insuficiente o escapevisible.

- excluyendo filtraci6n normal. Aboyadura o grieta visible en la cubierta. Vibraci~n o ruido anormal. 

### Sistema de Enfiamiento Sellos de conexi6n de bola defectuosos. Nivel de liquido insuficiente a escapevisible. Piezas estructtrales dobladas odaradas Escape en el radiador. Barra de estabilizaci6n desconectada. Bomba del aguadefectuosa. Resorte roto. Liquido anti-congelante con concentraci~n Amortiguador desconectado.

inadecuada para [a estaci~n del afo. Gomas del amortiguador darladas. Bujes de goma datlado o no Io tiene. 

### Sistema Electrico Escape de liquido en el amortiguador. Nivel de lic'uido oescape visibleen el Malfuncionamiento del amortiguador.

acumulador. 

### Mantas Acumulador incapaz de arrancar el motor. Alternador.generador o motor arrancador Profundidad del caucho menor de 2/32 de

defectuoso. pulgada. Tamafio de Ilantas diferentes. 

### Sistema de Combustible "Daeiovisible Escape visiblede combustible. 

### Ruedas Accesorios Daniados Trizaduras visibles, darlos o reparaciones. Relojes o instrumentos de advertencia Pernos de montaje sueltos oque faltan. Radio 

### Sistema de Escape Aire acondicionado Calentador y descarchador Escapes visibles. Ventanas Luces de ta consola 

### Los procedimientos de inspecci6n y las especificaciones del departambento de transportaci6n estan publicadas en elvolumen 16 C.ER. (C6digo de Reglamentos Federales) Parte455. ,

t1VWI~Q'OOOf's75o~o1c,' 

### 5275



### Sistema de Frenos
Luz de advertencia dafadas. Pedal no firme bajo presin. (Especificacidnes

Depto. Transportaci6n) Juego insuficiente enel pedal. (Especificaciones

Depto. Transportaci6n) No detiene vehiculo en linea recta. Mangas dafadas. Tamboro rotor muy delgados. (Especificaciones

del fabricante) Espesor de bandas de frenos menor de 1/32 de 'pulgada.

. Unidad motriz dafada o tiene escape. -Piezasdartadas.

- 

### Sistema de Direcci6n Juego excesivoen la guia. (Especificaciones

Depto. Transportaci6n) Juego en [a conecci6n en exceso de V4 de pulgada. Guia setranca. Ruedas delanteras desalineadas.

(Especificaciones Depto. Transportacin) Correasagrietadas o zafadas. Nivel de liquido del recipiente alvacio .inadequado. 

### Sistema de Suspensi6n 4

4 14tA He$/onca0ac*

.Q-4PI HV04&f2ICk I I [

i 

# I I
I
t

$
! 

# I

I it. 24 Heo2(,0GI

4 1--4pt "22ol4SM0!~k

q*-,Opt Ht~cf~a

pt40

WH01-tCJa W22Federal Register / Vol. 45. No. 154 / Thursday, August 7, 1980 / Proposed Rules

§455.6 Records.

-

When you sell.aused vehicle, keep a fully filled-in, legible copy ofeach document that you used orreceived under §§ 455.2,455.3, and 455.5. Keep these copies forthree years from the date ofsale. §455.7 Inspection standards.

To inspect any or all ofthe vehicle systems for §455.2(c), use the following inspection procedure or any other procedure-that would produce the same results.For non-safety systems (paragraphs (a}-{i) ofthis section), the inspection procedure includes a test drive, an examination under the chassis,

an examination under the hood. and a walk-around inspection. For safety systems (paragraphs (j)-{n) ofthis section), additional inspection procedures accompany each system. When deciding whether an item is "OK" or"Not OK," treat all vehicles the szrme; do not use lower standards for older or cheaper vehicles.

(a)Frameand body.(1) Frameapparent cracks, corrective welds or rusted through;

(2)Dogtracks-bent or twisted frame; (3) Inoperative doors. (b) Engine.(1) Known or visible oil leakage, excluding normal seepage;

(2) Cracked block orhead; (3)Belts missing or inoperable; (4)Knocks ormisses; (5) Abnormal visible exhaust discharge.

(c) Transmissionanddriveshaft.(1) Improper fluidleyel orvisible leakage, excludingnormal seepage;

(2) Cracked or damaged case, which is visible;

(3) Abnormal noise orvibration; (4) Improper shifting or functioning in any gear;,

(5] Manual clutch slips orchatters. (d) Differential. (1) Improper fluid level or visible leakage, excluding normal seepage;

(2) Cracked or damaged housing, which is visible;

(3)Abnormal noise orvibration. (e) Coolingsystem. (1) Improper fluid level or visible leakage;

(2) Leaky radiator;, (3)Improperly functioning water pump;

(4) Inadequate antifreeze strength for

season ofyear.

(f)Electrical system.(1) Improper fluid level or visible leakage ofbattery;

(2] Battery fails to start engine; (3) Improperly functioning alternator, generator, or starter.

(g) Fuel system. (1)Visible leakage. (h)Broken accessories. (1) Guages or warning devices;

(2) Radio; (3) Air conditioner (4) Heater and defroster (5) Windbws; (6) Dash lights. (i)Exhaust system. (1) Apparent leakage.



### (j)

Brakesystem.-Ceneral procedure. Use 25 lbs. offorce to test powerassisted or full-power brakes (50 lbs. for non-power brakes) unless a different force is givenbelow.

(1) Failurewarninglight(iforiginal equipment).Procedure: Apply the parking brake and turn the ignition to "start" or testby other means setby the manufacturer to make sure the light works.

(2)Brakesystem integrity. Procedure: With the engine running on vehicles equipped with power brake systems, and the ignition turned to "on" In other vehicles, apply a force of125 pounds to the brake pedal and hold for 10 seconds. Make sure that there isno decrease in pedal height and that the failure lamp does not light.

(3) Brake pedal reserve. Procedure: Depress the brake pedal fully (with the engine running in vehicles equipped with power assisted brakes). The pedal travel must not be more than80 percent ofthe distance from the pedal's free position to the floorboard orpedal stop. This test is not needed forfull power (central hydraulic) brake systems or for vehicles with brake systems designed to workwith more than 80percent ofpedal travel.

(4) Servicebrake performance. Procedure: With the tire pressure at the manufacturer's specification, test by either procedure (a)or (b):

(i)Roller-type ordrive-on platform procedure: Using either a drive-on platform or a roller-type brake analyzer which can measure equalization, make

sure that the forces applied by the front brakes are within 20 percent of each other and that the forces applied by the

rear brakes are within 20 percent of each other. Follow the directions ofthe maker of the test equipment.

(ii) Road test procedure: Drive on a road that islevel (notmore than one percent grade), dry, smooth, hardsurfaced and free from loose material, oil or grease. Make sure that the vehicle stops from 20 milesperhour within 25 feet staying in a 12foot-wide lane.

(5) Brake hosesand assemblies. Procedure: Look atall the brake hoses to make sure that the hoses do not touch the vehicle's body or chassis and that the hoses are not cracked, chafed or flattened. Donot count a protective device like a "rubring" as part ofthe hose or tubing. Examine the frontbrake hoses through all wheel positions from full left to right. (6)Discand drumcondition. Procedure: Remove atleast one front and onerear wheel and look (measure

as needed) to see if thedrum diameter androtor thickness are within the manufacturer's specifications. (Vehicles built after January 1,1971 and some earliermodels have drums embossed with the maximum safe drum diameter dimension and the rotors embossed with the minimum safe rotorthickness dimension.]



### (7) Fiction materials. Procedure: With atleast one front and onerear wheel removed, look to see ifthebrake linings

orpads have cracks or breaks that extend to rivet holes, except minor cracks that do notimpair attachment. See ifthe drum brake linings are securely attached to the brake shoes and the -disc brake pads are securely attached to the shoe plate. Measure to

see ifthere is atleast one thirty-secohd ofan inch oflining left. (Withriveted linings, measure the thickness ofthe lining over the rivetheads. With bonded linings orpads, measure the lining thickness overthe shoe surface at the thinnest point on the lining or pad.)

(8)Brakestructural andmechanical parts.Procedure: With at least one front and one rear wheel removed, look to see ifbacking plates and caliper assemblies

are deformed orcracked; whether systemparts are broken, misaligned. missing, binding or severely worn; and if automatic adjusters and otherparts are assembled andinstalled correctly.

(9)Power brakeunit. Procedure: With the engine running, look and listen tomade sure vacuum hoses are not collapsed, scraped, broken, improperly mounted orleaking audibly. Stop the engine and applythe service brakes several times to destroy

vacuum in the system. Depress the brake pedal with 25 pounds offorce and start the engine while maintaining that force. Thepower assist is defective if the brake pedal does not fall slightly when the engine starts. (Thistestis not needed for vehicles with fullpower brake systems. The service brake performance testis enough for those vehicles.)

(k) Steering system.-{) System play. Procedure: With the engine on and the wheels inthe straight aheadposition, turn the steering wheel in one direction until thereis a slightmovement ofa front wheeL Turn the steering wheel the otherway until the same wheel again

moves slightly. Ifyou had toturn the steering wheel more than the distance shown in Table L there is excessive lash

orfree play in the steering system.52759Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Proposed Rules

Table I.-SteelingSystem Free Play Values
[In Inches]
Steering wheel diamneter Lash

16 or es... ""2 18

............................... 2%

20

. ....... ............... 2 22
. ....... 2%

(2) Linkage play. Procedure: Elevate the front end ofthe vehicle to load the balljoints. Insure that the wheel bearings are correctly adjusted. Grasp the front and rear ofa tire and attempt to turn the tire and wheel assembly left and right. Ifthe free movement at the front orrear tread of the tire exceeds one-quarter inch there is excessive steering linkage play.

(3) Freeturning.

(5)Power steeringsystem. Procedure: Examine the fluid reservoir to see that it has enough fluid. Check to see that the pump belts are not cracked or slipping.

(1)

Suspensionsystem.-(1) Suspension.Procedure: Examine the front and rear suspension parts to make.

sure that the ball joint seals are not cut
orcracked; the structural parts are not bent ordamaged; the stabilizer bars are connected; the springs are not broken or extended by spacers; the shock absorber mountings, shackles and U-bolts are securely attached; rubber bushings are not cracked, extruded out from or missing from suspensionjoints; and the radius rods are not missing ordamaged.

(2) Shock absorber. Procedure:'Look at the shock absorbers to make sure their seals arenot leaking (oil on the housing leaking fromwithin). Make sure the vehicle does not rock freely more than two cycles by pushing down on one end of the vehicle, releasing and counting the cycles.Repeat at the other end ofthe vehicle. Test on a level surface.

(m) Tires.--(1) Treaddepth. Procedure: make sure that the tread on each tire is at least two thirty-seconds of

an inch deep. On passenger cars look for exposed tread depth indicators (check two adjacent major grooves at three points about equally spaced around the tire). On other vehicles, you may have to
measure tread depth with a tread gauge. Procedure: Turning the steering wheel through the limit oftravel in both directions. Feel forbinding orjamming in the steering gear mechanisms. (The wheel should turn freely.) (4)Alignment. Procedure: Toe-in or toe-out mustnot* be greater than 1.5 times the values listed in the vehicle manufacturer's service specification for alignment settings as measured by a bar-type scuff gauge or other toe-inmeasuring device. Values to convert toe-in readings in inches to scuff gauge readings in feet/ mile side-slip for different wheel sizes

are provided in Table II: Tire diameters used in computing scuffgauge readings

are based on the average maximum tire dimensions ofgrown tires in service for typical wheel and tire assemblies.

(2) Type. Procedure: Look to make

sure that the tires on each axle are matched in tire size designation, construction and profile, and are not a major deviation in size from the manufacturer's recommendation. (Given

on a glove box sign in 1968 or later passenger cars.)

(3) General condition.Procedure: Look to make sure that the tires are free from clunking, bumps, knots, or bulges evidencing cord, ply,or tread separation ".fromthe casing or other adjacent materials.

(4)Damage.Procedure: Look at the tires and use a blunt instrument (to " probe cuts or abrasions) to make sure that the tire cords or belting materials

arenot exposed. (n) Wheels.-i) Integrity. Procedure: Look at the wheels (tirerim, wheel disc, and spider) tomake sure that there are no visible cracks, elongated bolt holes,'

or signs ofrepair welding.

(2) Deformation. Procedure: Use a runout gauge and stand to make sure that the lateral and radialrunout ofeach rim bead area is not more than oneeighth ofan inch.oftotal indicated runrout. (Measure each wheel through a full rotation.)

"(3)Mounting.Procedure: Make sure all wheel nuts and bolts are in place and tight. §455.8 Declaration of Commission Intent (a) This rule is intended to prevent the unfair or deceptive acts orpractices set forth in 455.1(a). By requiring the disclosures ofthis part, it isnot the Commission's intent to preempt state or local laws, rules orregulations which relate to vehicle condition or warranties and which provide greater protection to the consumer than this part provides. It is also not the Commission's Intent to preempt by this part other state or local laws, rules orregulations which govern aspects ofused vehicle sales other than those regulated by this part.

(b)If, upon application ofan appropriate state or local governmental agency, the Commission determines that any requirement ofsuch state or local government (1) affords protection to
consumers greater than the requirements ofthis rule and (2)does not unduly burden int6rstate commerce, then that requirement shall be applicable to the extent specified In the Commission!s determination so long as the state or local goveuiment administers and enforces effectively any such greater requirement.

(c) Applications for exemption should be directed to the Secretary ofthe Commission.'When appropriate, proceedings will be commenced in order to make a determination and will be conducted in accordance with Subpart C of Part I ofthe Commission's Rules of Practice.

(d) These Rules, requirements and declaration ofintent and their application are each separate and severable.

By direction ofthe Commission. Carol M. Thomas, Secretary.

[FR Doc.80-23903 Filed 8-6-80. 8:45 am] BILLING CODE 6750-01-M Table II.--Toe-insettings from vehicle.MFR's Servce SpecfIcabons

Nominal Readings In feet per mile srdeslp ,Wheel size tire (included) diameter (inches) Y,@" W 1" " Wsi" %" 7A"

. " 9,is"

13 25.2 13.1 26.2 39.3 62.4 65.5 78.6 91.7 104.8 117.9 14

. 26.4 12.5 25.0 37.5 50.0 625 75.0 87.5 100.0 112.5 15

.......... 28.5 11.5 23.0 34.5 46.0 57.6 69.0 80.5 92.0 103.5 16......... 35.6 9.3 18.6 27.9 37.2 46.5 55.8 65.1 74.4 83.7 

### 52760 '

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# Part V 

# Department of Housing and Urban Development

Office of the Assistant Secretary for Community Planning and Development

Urban Homesteading Program; Implementation of Section 106 of the Housing and Community Development Amendments of 1979Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Community Planning and Development

24 CFR Part 590

[Docket No. R-80-854]

Urban Homesteading Program; Implementation of Section 106 of the Housing and Community Development Amendments of 1979
AGENCY: Department ofHousing-and Urban Development/Office ofthe Assistant Secretary for Community Planning and Development. ACTION: Interim rule.

SUMMARY: This interim rule would implement Section 106 of the Housing and Community Development Amendments of 1979 (Pub. L. 96-153) and the related Section 102(a) ofthe Housing and Community Development Amendments of 1978, (Pub. L. 95-557). Section 106 authorized HUD to use funds authorized by Section 810 ofthe Housing and Community Development Act of 1974 to reimburse the Administrator of Veterans' Affairs and the Secretary ofAgriculture for properties conveyed to a unit ofgeneral local government, State or agency for

use in a HUD-approved.local urban homesteading program.

Section 102(a) amends Section 810(f) ofthe Housing and Commudity Development Act of 1974 to allow for the provision oflists ofproperties by the Administrator ofVeterans' Affairs. DATES: Effective date: September 15, 1980. Comment due date: October 6, 1980. ADDRESS: Comments should be addressed to: Rules Docket Clerk, Room 5218, Department ofHousing and Urban Development, Office of General Consel, 451 7th Street SW., Washington, D.C. 20410. Please refer to the docket number shown in the heading ofthis interim rule.
"FORFURTHER INFORMATIONCONTACT: Lenore R. Siegelman, Urban Homesteading Division, Office of Urban Rehabilitation and Community Reinvestment, Room 7176, Department ofHousing and Urban Development, 451 7th Street SW., Washington, D.C. 20410, Telephone: (202) 755-6935. SUPPLEMENTARY INFORMATION: This interim rule is needed because earlier Urban Homesteading Program legislation limited the reimbursement for federally-owned properties conveyed for use in such local homesteading
programs to those held by HUD. Current legislation authorizes that reimbursement. HUD anticipates that appropriations currently available for reimbursement to the Federal Housing Administration Funds will have been authorized to reimburse the Department ofAgriculture and the Veterans Administration as progosed in the pending 1981 Appropriation Bill presently under Congressional consideration.'

A Finding ofNo Significant Impact respecting the National Environmental Policy Act of 1969 (24 CFR Part 590) has been made in accordance withHUD procedures. A copy of this Finding is available forpublic inspectiorf during regular business hours in the Office bf the Rules Docket Clerk at the above address. This interim rule was not listed in the Department'§ semi-annual agenda ofsignificant regulations published in the Federal Register onFebruary .5,1980. Accordingly, Part 590 is amended to read as follows:

PART 590-URBAN HOMESTEADING

Sec. 590.1 Scope ofregulation. 590.3 Purpose ofprogram. 590.5 Definitions. 590.7 Program requirements. 590.9 Listing ofHUD-owned and VA-owned properties. 590.11 Applications. 590.13 HUD Review ard Approval of Application. 590.15 Urban Homesteading Agreement. 590.17 Transfer ofHUD-Owned Properties. 590.18 Reimbursement to the Department of Agriculture and to the Veterans Administration. 590.19' Implementing Funds. 590.21 Reduction ofFunds. 590.23 Program Close Out. [Reserved] 590.25 Retention ofRecords. 590.27 Audit. 590.29 Applicable Federal Laws and Regulations. 590.31 HUD Review ofLocal Urban Homesteading Agency's Performance. 590.33 Corrective and Remedial Action. 590.35 Evaluation by HUD.

Authority: Sec. 810 ofthe Housing and Community Development Act of 1974, Pub. L. 93-383, as amended, 88 Stat. 633 (1ZU.S.C. 1706e) §590.1 Scope of regulation.

(a)The policies and procedures in this regulation are applicable to the approval ofurban homesteading programs authorized by Section 810 ofthe Housing and Community Development' Act of 1974, as amended.

(b)This part includes the functions and responsibilities ofHUD and units of general local government and States or
a designated public agency of a State or unit ofgeneral local government with regard to program requirements: application requirements; submission of applications; review and approval of applications; transfer ofHUD-owned properties; property disposition assistance; HUD program evaluation; performance review; reimbursement by HUD to the Department of Agriculture and to the Veterans Administfation for properties used in the urban homesteading program and other applicable Federal laws and regulations. §590.3 Purpose of program.

The purpose ofthe urban homesteading program is to utilize existing housing stock to provide homeownership, thereby encouraging public and private investment in selected neighborhoods and assisting In theirpreservation and revitalization, The program will provide for the transfer without payment to States.or units of general local government or their designated public agencies Federally-owned, unoccupied one- to four-family residences requested by such unit, State or agency foruse in an approved urban homesteading program. Reservations under the Section 312 Rehabilitation Loan Program are available to finance rehabilitation of single family or multifamily homestead properties, as well as other properties, within the urban homesteading neighborhoods. §590.5 Definitions.

(a) "Act" means Title VIII, Section 810 ofthe Housing and Community Development Act of 1974, as amended. (b] "Agriculture'! means the U.S. Department ofAgriculture. (c) "Agriculture- or VA-owned property" means property to which the Secretary ofAgriculture or the Administrator ofVeterans Affairs holds title.

(d) "Applicant" means any State or unit ofgeneral local government that applies to carry out an urban homesteading program under these regulations. (e) "Homesteader" means an individual or family who participates in

a local urban homesteading program by accepting a property pursuant to the requirements of § 590.7. For locally owned property, it may also mean cooperatives and condominium associations.

(f) "HUD-owned property" means property to which the Secretary ofHUD holds title.

(g)"Locally-owned property" means any real biroperty which is improved with a one- to four-family residence or a multifamily residence not obtained from 52762Federal Register 

## / Vol. 45, No. 154 / Thursday. August 7. 1980 / Rules and Regulations

the Department ofHousing and Urban Development or from the Department of Agriculture or the Veterans Administration and to which the local urban homesteading agency holds title.

(h) "Local Urban Homesteading Agency" means a State, a unit ofgeneral local government, or a public agency designated by a unit ofgeneral local government or a State, which must have the authority to accept the transfer, without payment, ofFederally-owned property.

(i] "Local Urban Homesteading Program" means the operating procedures, and requirements developed by a local urban homesteading agency in accordance with the provisions of § 590.7.

(j)"Neighborhood Strategy Area (NSA)" means an area selected by a recipient ofCommunity Development Block Grant (CDBG) entitlement funds and designated in its Community Development andHousing Plan for a program ofconcentrated community development activities which is defined by the Community Development Block Grant Regulations, Title 24, Chapter V, Part 570, Subpart D, Section 570.301(c).

(k)Private non-profit entity, neighborhood-based nonprofit organization, Small Business Investment Company and local development corporation mean:

(1] A private nonprofit entity which is any organization, corporation, or association, duly organized topromote and undertake community development activities on a not-for-profit basis;

(2) A neighborhood-based nonprofit organization which is an association or corporation, duly organized to promote and undertake community development activities on anot-for-profit basis within

a neighborhood as defined pursuant to this Part. An organization is considered to be neighborhood-based ifthe majority ofeither itsmembership, clientele, or governing body are residents ofthe neighborhood where activities assisted under this Part are to be carried out; (3)A Small Business Investment Company (SBIC) which is an entity organized pursuant to section 301(d) of the Small Business Investment Act of 1958 (15 U.S.C. 681(d)), including those which are profit making; and

(4) A local development corporation which is an entity organized pursuant to Title VII ofthe Headstart, Economic Opportunity, and Community Partnership Act of 1974 (42U.S.C. 2981);

an entity eligible for assistance under section 50Zof the Small Business Investment Act of 1958 (15 U.S.C. 696), a State development entity eligible for assistance under section 501 ofthe Small Business Investment Act of1958 (15 U.S.C. 695). or other similar entity incorporated pursuant to Federal, State.

or local law. (1)

"Secretary" means the Secretary of Housing and Urban Development or any person to whom the Secretary has delegated authority for the urban homesteading program.

(in) "Federally-owned properly"

means any real property:

(1)Which is improved with a one- to four-family residence;

(2) To which the Secretary, the Secretary ofAgriculture orthe Administrator ofVeterans Affairs holds Title;

(3)Which is not occupied. (n) "Section 312 Rehabilitation Loan Funds" means loan funds authorized by Section 312 ofthe Housing Act of1964,

as amended to finance the rehabilitation of urban homesteaded property, as well

as otherproperty within the designated ,urbanhomesteading neighborhood. (o)"Section 810 Funds" means the funds authorized under Title VIII, Section 810 ofthe Housing and Community Development Act of 1974, as amended to reimburse the Department ofHousing and Urban Development's housing loan and mortgage insurance funds for the fair market value ofHUDowned properties transferred to local urban homesteading agencies, and to reimburse the Department ofAgriculture and the Veterans Administration for their properties transferred to the urban homesteading agency in accordance with 590.18.

(p) "State" means any State ofthe United States, or any instrumentality thereof approved by the Governor. and the Commonwealth ofPuerto Rico.

(q) "Unit ofgeneral local government"

means any city. county, town, township. parish, village, or other general purpose political subdivision ofa State; Guam, the Virgin Islands, and American Samoa, or in a general purpose political subdivision thereof: The District of Columbia the TrustTerritories ofthe Pacific Islands; and Indian tribes, bands, groups, and nations ofthe United States, including Alaska Indians, Aleuts, and Eskimos.

(r)"Unoccupied residential property"

means either a Federally-owned property or a locally-owned property that is vacant.

(s) "Urban homesteading neighborhood" means a geographic area(s) approved by HUD for conducting

a local urban homesteading program that meets the requirements of § 590.7.

(t) "VA" means the Veterans Administration. § 590.7 Program requirements. An applicant shall meet the following requirements to qualify forassistance under this Part:

(a)DesignationofUrban Homesteading Neighborhood. It shall designate neighborhood(s) for carrying out urban homesteading. An urban homesteading neighborhood shall have available HUD-owned properties; HUD-owned plus locally-owned properties; orpursuant to Section 312(a)(1][D) ofthe Housing Act of 1964,

as amended, and Title I ofthe Housing Community Development Act of1974, as amended, locally-owned properties within designated areas where eligible community development block grant activities are being carried out. An urban homesteading neighborhood shall be in the following areas:

(1) The same as or contained within Neighborhood Strategy Areas designated pursuant to the Community Development Block Grant regulations published March 1,1978, in the Code of Federal Regulations, Title 24. Chapter V. Part570, Subpart D-Entitlement Grants. § 570.301(c); or

(2) Another area designated bythe applicant, if:

(i)The applicant is not a recipient of community development block grant entitlement funds authorized by Title I ofthe Housing and Community Development Act of 1974; (ii) Therequired public improvements and services will be provided from

sources other than community development block grants; or

(iii) The neighborhood selected for urban homesteading requires some improvements but not the concentrated treatment required for a Neighborhood Strategy Area.

(b)DevelopmentofLocal Urban Homestea&ngProgram. It shall develop

a program to convey unoccupied residential properties to qualified individuals or families. The program shall provide forthe following:

(1)Homesteader Selection.It shall provide equitable procedures for homesteader selection giving special consideration to the homesteader's:

(i)Need forhousing; and (ii) Capacity to make orcause to be made necessary repairs and improvements.

(2) Conditional conveyance.It shall provide for the conditional conveyance ofunoccupied. unrepaired residential property to homesteaders. Property received fromthe Federally-owned inventory shall be conditionally conveyed without substantial consideration.

(3) Homesteader Agreement.It shall provide for execution ofa Homesteader 

## 5276352764 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

Agreement between the local urban homesteading agency and the homesteader which shall require the homesteader:

(i)To make or cause tobe made any repairs required to meet minimum local health and safety housing standards prior to occupying theproperty;,

(ii) To make or cause to be made additional repairs and improvements necessary to meetthe applicable local standards for decent, safe, and sanitary housing within 18 months after occupying theproperty and to comply with any energy conservation measures designated bythe localurban homesteading agency as part ofthe repairs;

(iii) To occupy the property as principal residence for not less than three consecutive years from the initial date ofoccupancy;

(iv)To permit reasonable inspections at reasonable times by employees or designated agents ofthe local urban homesteading agency; and

(4)Revocation UponBreachof Agreement.It shall provide for the revocation ofthe conditional conveyance upon any material breach of the agreement by the homesteader.

(5) FeeSimple Title.Itshall provide for the conveyance ofthe property from the local urban homesteading agency to the homesteader in fee simple title upon full compliance with the terms ofthe agreement between the localurban homesteading agency and the homesteader.

(6) Coordinated Approach Toward Neighborhood ImprovemeYlts. It shall provide a plan forneeded public improvements and services, and community facilities in the Urban Homesteading Neighborhoods.

(i)If the Urban Homesteading Neighborhood is a Neighborhood Strategy Area, thenthe coordinated approach toward neighborhood improvement for the area described in the applicant's Community Development Block Grant entitlement application, pursuant to 24 CFR 570.304(b)(1)(i) (Community Development and Housing Plan) will satisfy this requirement. Such

an applicant will cite the appropriate

cross reference iM its applications. (ii) For designated urban homesteading neighborhoods that are outside or mostly outside ofCommunity Development Block Grant Neighborhood 'Strategy Areas bfentitlement recipients, the coordihated approach toward neighborhood improvement plan shall include:

(A)A briefdescription ofthe area's need for revitalization, community facilities, public services and improvements and housing problems; (B) A description oftheplan that will be implemented to meetthe identified needs for upgrading and improving the
area; and

(C) A description ofthe actions to mitigate any adverse effects on low-and moderate-income persons thatmay result from implementing an urban homesteading program in the designated neighborhood.
§590.9 Usting ofHUD-owned and VAowned properties.

Inorder to facilitate planning for the urban homesteading program, the Secretary ofHUD and the Administrator ofVeterans Affairs shall, upon request ofa local urban homesteading agency, provide a listing ofall unoccupied oneto four-family units to which HUD or VA holds title, and which are locatedwithin thejurisdiction ofthe urban homesteading agency, except that properties with executed repair or sale contracts may be excluded from such lists. \ §590.11 Applications.

(a) Submission Requirements. Applications shall be submitted to the HUD Area Office which hasjurisdiction

over the applicant and shall consist of the following.

(1) Standard Form 424, prescribed by 0MB CircularNo. A-102;

(2) A description ofthe coordinated approach toward neighborhood improvement as required by § 590.7(b)(6). An applicant that is applying for Commimity Development Block Grant (CDBG) entitlement funds maycite the appropriate cross reference in its community development plan pursuant to 24 CFR 570.304(b](1)(i) (Community Development and Housing Plan) tomeet this requirement.

(3) A map ofeach proposed urban homesteading neighborhood with geographic boundaries indicated and

census tracts shown. The map shall include:

(i)An estimate ofthe number and the location of any locally-owned properties to be coveyed to homesteaders during the program's firstyear;,

(ii) An estimate ofthe number and the location ofany HUD-owned properties requested for usein the proposed urban homesteading program during the program's first-year, and may include data on Agriculture- and VA-owned properties;_

(4)A description ofthe rehabilitation financing plan to be used in the urban homesteading neighborhood(s) which shall include:

(i)An estimate and brief description ofterms.and conditions ofthe Federal, State and/or localpublic funds and any private funding sources that are to be made available for interim and permanent financing ofrehabilitation; (ii) The total number ofresidential properties for rehabilitation (both homestead properties and other properties); (iii) An outline ofthe applicant's proposed schedule(s) and time periods for committing rehabilitation loan funds in its urbanhomesteading program. (5) An implementation plan which includes: (i)The description of the public entity that will carry out the program, including any agreements with private non-profit organizations, neighborhoodbased nonprofit organizations, small business investment companies and/or local development corporations, as defined in Section 590.5(h) to provide program related services (e.g. "counseling" services to homesteaders, marketing activities, neighborhood improvements, financial assistance, rehabilitation). (ii)A timetable and methods to accomplish the program which includes: (A)Transferring properties from HUD, and may include the transfer of Agriculture- and VA-owned properties to the local urban homesteading agency; (B) Advertising residential properties for homesteading purposes; (C) Conveying unoccupied, unrepalred residential property to homesteaders; and

(D) A summary oftheplan for implementing neighborhood improvements in accordance with 590.7(b)(6)(i}-(ii).

(b) Certifications. The applicant shall submit certifications in such form as HUDmay prescribe, providing

assurances that:

(1)Its governing body has duly adopted orpassed as an official act, resolution, motion, or similar action authorizing the filing of the application including all understandings and

assurances contained in the application, (2) It possesses the legal authority to: (i) Acdept the transfer without payment of Federally-owned property; (ii) Convey residential property received from HUD, Agriculture or VA to homesteaders without any substantial consideration, and (iii)Assist in orundertake the financing ofthe rehabilitation for residential property conveyed to homesteaders.

(3)It has: (i)A form for conditional conveyance
as required by § 590.7(b)(2);

(ii) Equitable procedures for selecting homesteaders as required by § 590.7(b)(1); andFederal Register / Vol. 45, No. 154 / Thursday. August 7, 1980 / Rules and Regulations

(ii) Anurban homesteader agreement required by §590.7(b)(3).

(4) It will convey the residential property received from HUD, Agriculture or VAin fee simple title without consideration to the homesteader upon full compliance with the terms ofthe agreement required in 

### § 590.7(b)(3).

(5) Ithas, priorto submission ofits application:

(i)Provided citizens an adequate opportunity to express preferences about the proposed location ofurban homesteading neighborhoods; and

(ii) Provided citizens with adequate information regarding the amount of rehabilitation loan funds, and the number ofany Federally-owned properties and/or locally-owned properties to be homesteaded and the coordinated approach toward neighborhood improvement required by 

### § 590.7(b)(6).

(6) It will submit any dnvironmental information that may be requested by HUD inmeeting the Department's environmental responsibilities under the National Environmental Policy Adt of 1969.

(7) Itwill: (i) Not discriminate upon thebasis ofrace, creed, color, handicap,
sex, ornational origin in the sale, lease,

orrental or in the use or occupancy of theproperty conveyed in accordance with this Part;

(ii) Comply with the requirements of Title VI ofthe CivilRights Act of 1964, Title VIII ofthe CivilRights Act of1968; and

(iii) Comply with Section 504 ofthe Rehabilitation Act of1973 -which prohibits discrimination against the handicapped in anyprogram or activity receiving Federal financial assistance.

(8) Itwill comply with the lead based paint procedures set forth in 24 CFR Part 35 agreeing to:

(i)Assure the elimination of the lead based painthazards for which HUD will not expend funds inresidential structures transferred under this Part; and

(ii)Make notification to potential homesteaders ofthe hazards ofleadbased paintpoisoning in residential units constructed prior to 1950.

(9) Itwill submit any information that may be requested by HUD meeting the Department's Responsibilities under the National Historic Preservation Act of 1966 (Pub.L 89-665] and the Preservation ofHistoric and Archaeological Data Act of1974 (Pub. L 93-291), including the procedures prescribed by the Advisory Council on Historic Preservation in 36 CFR Part 800. and Executive Order 11593 on Protection and Enhancement of the Cultural Environment

(10 It will, upon conveyance oftitle from HUD, Agriculture orVA assume liability for injury and damage to persons orproperty by reason ofa defect in the dwelling, its equipment, its appurtenances, or any other reason.

(11) Itwill give HUD, Agriculture, VA and the Comptroller General through any authorized representatives access to and the right to examine all records, books, papers, or documents related to the urban homesteading program.

(12) Itwill maintain in writing and on file a description ofits approved local urban homesteading program forthe purposes ofpublic information and review. (c) OMB Circular A-95, Part IL (1) The applicant shall submit the completed application to all appropriate State and areawide clearinghouses prior to, orconcurrently with, the submission of the application to HUD.

(2] The clearinghouses shall have thirty (30) days to review the completed application and transmit to the applicant and to the appropriate HUD Area Office any comments orrecommendations.

(3) Clearinghouses will be of assistance to the applicant and toHUD iftheirreviews address the impact of the proposal inrevitalizing the designated urbanhomesteading neighborhood, the relationships ofthe proposal to community and areawide planning ania any other considerations not reflected in the application which would bear on the viability ofthe proposal as well as the "subject matter ofcomments and recommendations" in Part L AttachmentA ofOMB Circular No. A-95, Item 5, with emphasis on consistency among State, areawide, and local plans and compliance with environmental and civil rights laws.

(4) Ifthe A-95 review comments contain any findings ofinconsistency with State, areawide, or localplans or noncompliance with environmental or civil rights laws, the applicant must state how It proposes to resolve the finding or state its justification for proposing to proceed with the project despite the findings developed through the A-95 review process.

(5) HUD will not approve an application until all comments have been received and considered from the clearinghouses oruntil the end ofthe thirty-day review period, whichever

occurs first.

(6) HUD shall notify the clearinghouses ofactions taken on all applications reviewed within seven working days by use ofStandard Form 424. When HUD makes approval following clearinghouse recommendations against approval or approval onlywith specific and major substantive changes, the clearinghouse will be provided an explanation for such approval with the HUD submittal ofSF 424.

(d)ApplicationSubmission. Applications shall be submitted, at anytime, to the HUD Area Office which has jurisdiction over the applicant. §590.13 HUD review and approval of application.

The appropriate HUD Area Office will review the application and will approve theproposed local urbanhomesteading program, unless theHUD Area Office determines that it doesnot comply with therequirements ofthis Part and other applicable laws and regulations. Approval ofthe application does not however, obligate HUD orAgriculture or VA to transfer a specific number of properties orparticular properties identified in the application. Ifthe application is disapproved, the applicant shall be informed in writing ofthe specific reasons for the disapproval. §590.15 Urbanhomesteading agreement.

(a) Upon approval oftheproposed local urbanhomesteading program. the appropriate HUD Area Office will sign

an Urban Homesteading Agreement with the local urbanhomesteading agency. Theregulations ofthispart become a part ofthe agreement.

(b) The agreement is renewable on an annual basis:Provided, That- (1) The localurban homesteading agency has carried out its program substantially as proposed and approved, and

(2) The localurban homesteading agency has a continuing capacity to carry out the approved program in a timely manner including the selection of homesteaders, the conveyance of residential property to homesteaders, the implementation ofits interim and permanent financing plan(s), the completion and quality ofthehousing rehabilitation and the implementation of its coordinated approach toward neighborhood improvements. §590.17 Transfer of HUD-owne4 property.

(a)Property Disposition Assistance. HUD'sproperty disposition activity shall support the Urban Homesteading Program as follows: (1) Upon the signing ofthe Urban Homesteading Agreement as required in §590.15 but priorto theinitial selection ofany HUD-owned property, a local urbanhomesteading agency may request HUD to suspend its routine property disposition activity forup to 45 days in the designated urban 5276552766 Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Rules and Regulations

homesteading neighborhood(s). Based upon this request, HUD shall state in writing the starting and closing dates of the suspension ofproperty disposition activity for all HUD-owned properties except those for which there are repair

or sales contracts.

(2) The HUD Area Offices shall develop and implement a property disposition plan for HUD-owned properties in the designated urban homesteading neighborhood which is consistent with the local urban homesteading program. This plan shall include the following procedure:

(i)As soon as feasible, but in any event not later than ten days, after receipt ofnotice ofproperty transfer and application for insurance benefits to HUD for an HUD-owned unoccupied,

one- to four-family residence in an approved urban homesteading neighborhood, the HUD Area Office shall notify the local urban homesteading agency ofthe potential availability ofthe property for homesteading. The notification shall be in writing and shall include the street address and zip code and shall inform the local urban homesteading agency that it has thirty days from the date of the notice to inform the Area Office ifit wishes to use theproperty for homesteading.

(ii) The Area Office shallnot approve
a property disposition program for that property until the local urban homesteading agency has informed that Area Office, in writing, whether or not it intends to use the property in the urban homesteading program oruntil 30 days have expired from the date ofHUD's notice to such agency, whichever comes first. The Area Office manager may extend the thirty (30) day deadline, ifthe Area Office Manager makes a determination that notification by the local urban homesteading agency within thirty (30) days is impractical. The title forany property requested in accordance with this procedure shall be transferred to a local urban bombsteading agencyif such property meets the conditions for transferring HUDowned properties listed in §590.17(b).

(b) Conditions for TransferringHUDOwned Properties. Except as provided in §590.17(c) below,HUD shall transfer the title ofHUD-owned properties to a local urban homesteading agency, without receiving payment from such agency, if the following conditions are met: (1)The local urban homesteading program has been approved by HUD;.

(2] The properties requested by the local urban homesteading agency are in

a designated urban homesteading neighborhood(s); (3) The HUD Area Office has reserved the necessary Section 810 funds to reimburse HUD's housing loan and mortgage insurance accounts for the residential property to be transferred;

(4)The requested property is HUDowned unoccupied, unrepaired and a repair or sale contract has not been signed;

(5) The requested property is determined tobe suitable for the approved localurban homesteading program by the Area Office. Inmaking this determination the Area Office will .takeinto account the following factors:

(i] The value of the property. The value ofthe property shall not exceed $15,000 for a one unit single family " residence or an additional $5,000 for each unit oftwo- to four-family residences. To compute this value, HUD shall estimate and deduct from the appraised as is fair market value ofthe property the cost ofcontinued care and handling forthe average length oftime for that area that such property might remain in HUD's inventory ifit were not transferred to a localurban homesteading agency;

(ii) The estimated cost ofhousing repairs required. The cost ofrequired repairs shall not exceed the applicable statutory limit ofthe Section 312 rehabilitation loan program;

(iii) The Area Office Manager may authorize on a property byproperty or program byprogram basis the transfer ofHUD-owned property:

(A) Whose value exceeds the limitations, cited in paragraph (b)(5)(i) of this section,if the benefit to the community, expected from the expedited occupancy ofthe property and the reduction ofdifficulties and delays (such

asvandalism to property),that HUD typically encounters in the disposition and sale ofproperty, warrant the additional cost to the Federal Government;

(B) For which the value ofhousing repairs exceeds the limitation, cited in paragraph (b)(5)(ii) ofthis section, when the value ofsuchrepairs in excess of the applicable loan limit ofthe Section 312 loanprogram will be provided by the homesteader or through other local

resources other than Section 312 rehabilitation loan funds. (c)Exceptions.(1) If a local urban homesteading agency fails to accept title within thirty (30) days ofthe agency's selection ofa HUD-owned property made available in accordance with §590.17(b)(1)-(5), the Area Office may, approve an alternative dispositionplan for the property. TheArea Office Manager may extend, for areasonable period oftime, this thirty (30) day deadline ifthe Area Office Manager makes a determination that acceptance oftitle by the local urbanhomesteading agency within thirty (30) days of property selection is impractical.

•(2) A property otherwise eligible for transfer to a local urban homesteading agency may be used tomeet higher priority needs ifthe Area Office Manager makes a determination in writing that such property is essential to meet an existing legal obligation such as the following:

(i) Settlement ofSales Warranty claims;

(ii) Settlement ofsection 518 claims for critical structural defects in one- to four-family dwellings with certain mortgages Insured by HUD;

(iiI) Emergency housing needs: (disasterhousing and urgent public housing needs);

(iv) Reconveyance for noncompliance withregulation 24 CFR Sec. 203.383;

(v)Reconveyance pursuant to Civil Frauds Act settletent; and

(vi)Reconveyance where the mortgage was never insured.

(3) A property otherwise eligible for transfer to a local urban homesteading agency foruse in its HUD approved homesteading program, mayinstead be made available to private non-profit organization, a local development corporation or a neighborhood nonprofit organization as defined In Section 590.5(h) ifthe Area Office Management determines in writing that such transfer will serve the community's best interest and is consistent with the goals of the local urban homesteading program. Such transfer does require concurrence ofthe local urban homesteading agency or the local government. §590.18 Reimbursement to the Department of Agriculture and to the Veterans Administration.

(a) The Secretary of HUD Is authorized toreimburse the Secretary of Agriculture and the Administrator of Veterans Affairs in an agreed amount, out ofSection 810 funds, forproperty which

(1)Is improved with a one- to fourfamily residence;

(2) Is not occupied; (3)Is located in an urban homesteading area, in alocality which has an approved urban homesteading program;

(4)Has been approved forurban homesteading use by the locality and by the HUD Area Office;

(5) Has a value not in excess of $15,000 for a one-unit single-family residence or an additional $5,000 for each unit oftwo- to four-family residences;Federal Register / Vol. 45, No. 154 / Thursday. August 7. 1980 / Rules and Regulations 52767

(6) Is conveyed to a local urban homesteading agency for use in an approved local urban homesteading program.

(b) The reimbursement shall not exceed an amount certified by Agriculture or VA to be a fair value based on the lesser ofThe market value and the amount ofthe claim plus the expenses connected with Federal ownership.
§590.19 Implementing funds.

HUD will reserve or otherwise provide available Section 810 funds and Section 312 rehabilitatioh loan funds necessary to assist in implementing an alproved local urban homesteading program. The Section 810 funds may not be used to reimburse local homesteading agencies for administrative costsnor, may they be used to acquire property other than through reimbursement for property owned by theSecretary of HUD, the Secretary ofAgriculture, and the Administrator ofVeterans Affairs.
§590.21 Reduction of funds.

The Secretary reserves the right to reduce any Section 810 allocation or Section 312 rehabilitation loan funds earmarked, reserved or targeted for a local urban homesteading agency should such agency not meet the schedules for

use ofsuch funds required in 

### §§590.11(a}(4)(iii) and 590.11(a)(5)(ii) (A) and (C], and does not comply with the statutory and regulatory requirements ofthis part or fails to carry out itsprogram as approved.

§590.23 Program close out [Reserved]
§590.25 Retension of records.

Financial records, property disposition documents, supporting documents, statistical records, and all other records pertinent to the urban homesteading program shall be retained b6y the local urban homesteading agency for a period ofthree years from the date of the program closeout.

§590.27 AudiL

The Secretary, the Comptroller General ofthe United States, or any of their duly authorized representatives, shall have access to all books, accounts, records, reports, files, and other papers
orproperty of local urban homesteading agencies pertaining to funding assistance related to this part and HUDowned property transferred under this part for the purpose ofmaking surveys, audits, examinations, excerpts, and transcripts. §590.29 Applicable Federal laws and regulations.

(a)Nondiscrimination. Every phase of

an approved local urban homesteading program is to be implemented in accordance with the requirements of Title VI ofthe Civil Rights Act of 1964 and Title VIII ofthe Civil Rights Act of 1968. Approved local urban homesteading programs shall also comply with Section 504 ofthe Rehabilitation Act of1973which prohibits discrimination against the handicapped.

(b)National Environmental Policy Act. In implementing and administrating the Urban Homesteading Program. HUD shall comply with the National Environmental Policy Act of1969 and all rules, regulations, and requirements issued pursuant thereto.

(c) National Historic Preservation Act. In implementing and administering the Urban Homesteading Program, HUD shall comply with the National Historic Preservation Act (Pub. L 89-665), the Preservation ofHistoric and Archeological Data Act of 1974 (Pub. L 93-291). including the procedures prescribed by the Advisory Council on Historic Preservation in 36 CFR Part 800, and Executive Order 11593 on Protection and Enhancement ofthe Cultural Environment.

(d)Lead-Based Paint Poisoninq Prevention Act. Local urban homesteading agencies shall comply with the Department's Lead-Based Paint Regulations (24 CFR Part 35) issued pursuant to the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4831 et seq.) requiring prohibition of the use oflead-based paint; elimination of immediate lead-based paint hazards in any residential structure transferred under this part; and notification of the hazards of lead-based paint poisoning to potential homesteaders in residential units constructed prior to 190 and assisted under this parL

(e)Acquisitionand Relocation.Ifa local urban homesteading agency acquires real property for an urban homesteading program approved under the regulations in this part, It shall comply with HUD relocation and acquisition regulations at 24 CFR Part 42. §590.31 HUD review of local urban homesteading agency's performance.

(a) HUD will review each local urban homestehding agency'sperformance at least annually to determifie whether:.

(1)The program complied with the requirements ofTitle VIII, Section 810, of the 1974 Act, as amended, the implementing regulations, and other applicable laws and regulations; (2) The local urban homesteading agency has carried out its program substantially as proposed and approved; and

(3) The local urban homesteading agency has a continuing capacity to carry out the approved program in a timely manner.

(b] In reviewing a local urban homesteading agency's performance. HUD will consider all available evidence which may include, but need not be limited to the following:

(1)Records maintained by the local urban homesteading agency;

(2) Results ofHUD's monitoring of local urban homesteading agency's performance;

(3) Audit reports whether conducted by the local urban homesteading agency
or by HUD auditors; and

(4) Records ofcomments and complaints by citizens and organizations, orlitigation.

§590.33 Corrective and remedial action.

When HUD determines on the basis of its review that there is a deficiency in the local urban homesteading agency's performance, the HUD Area office shall take one or more ofthe following corrective orremedial actions that are appropriate for the circumstances:

(a)Issue a letter ofwarning that advises the local urban homesteading agency ofthe deficiency and puts it on notice that more serious corrective and remedial actions will be taken ifthe deficiency is not corrected or is repeated;

(b)Advise the local urban homesteading agency to suspend. discontinue or not incur costs for the defective aspect(s) ofthe local pr6gram;

(c) Condition the renewal ofthe Urban Homesteading Agreement if there is substantial evidence ofa lack of progress, noncompliance, or alack ofa continuing capacity. In such cases, the

reasons for the conditional renewal and the actions necessary to remove the condition shall be specified; or

(d) Cancel the Urban Homesteading Agreement and explain the reasons for such action.
§590.35 Evaluation by HUD.

Local urban homesteading agencies shall supply data ormake available such records as arenecessary for the completion ofHUD's annual evaluation ofthe Urban Homesteading Program.

In accordance with Section 7(o](4) of the Department ofHUD Act. Section 324 of theHousing and Community Amendments of 1978, P.L 95-557, 92 Stat. 2060, this rule has been granted52768 Federal Register / Vol. 45, No. 154 

### / Thursday, August 7, 1980 

### / Rules and Regulations

waiver of Congressional review requirements in order to permit it to take effect on the date indicated.

Issued at Washington, D.C. onJuly 31, 1980. Robert C.Embry, Jr., AssistantSecretary for CommunityPlanning andDevelopment.

111R Doc. 80-23953 Filed 8-6-M. 8:45 am]
BILLING CODE 4210-01-M

# Reader Aids Federl Register

Vol. 45, No. 154

Thursday. August 7. 1980

INFORMATION AND ASSISTANCE CFR PARTS AFFECTED DURING AUGUST

Questions and requests for specific information may be directed to the following numbers. General inquiries may be made by dialing 202-523-5240.

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FEDERAL REGISTER PAGES AND DATES, AUGUST

51167-51538

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....................... 7 At the end of each month, the Office of the Federal Register publishes separately a list of CFR Sections Affected (LSA). which lists parts and sections affected by documents published since the revision date of each title.

3 CFR Executive Ordors 11790 (See 12231)...... 52139 12230...............- 51167
12231.........---52139 Proclamations 4776-....-.....51539 Administrative Orders: Memorandumr: July 31. 1980.....51169-51174

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.................................. 52154Federal Register / Vol. 45, No. 154 / Thursday, August 7, 1980 / Reader Aids iii

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Rules Going Into Effect Today AGRICULTURE DEPARTMENT Office of the Secretary45887 7-8-80 / Amendment of certification of essential agricultural uses and requirements; Natural Gas PolicyAct FEDERAL COMMUNICATIONS COMMISSION 46406 7-10-80 / FM broadcast stations in Bonita Springs, Goulds, and Homestead, Fla.; change to table of assignments 45593 7-7-80 / FM broadcast stations in Centralia, Mo.; changes in table of assignments INTERIOR DEPARTMENT IndianAffairs Bureau45909 7-8-80 / Rights-of-way over Indian lands

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