Federal Register / Vol. 63, No. 96 /Tuesday, May 19, 1998 / Proposed Rules 27529

1 18 CFR 37.4(a)(2) (1997).

2 18 CFR 161.3(h)(2) (1997).

3Wisconsin Electric Power Company, 80 FERC

¶ 62,215 (1997).

(1) A pipeline must post the names

and addresses of its marketing affiliates

on its web site on the public Internet

and update the information within three

business days of any change. A pipeline

must also state the date the information

was last updated. Postings must

conform with the requirements of

§ 284.10 of this chapter.

(Issued May 13, 1998)

MASSEY, Commissioner, concurring:

The general proposal in today’s

Notice of Proposed Rulemaking has my

full support. A requirement that

pipelines report on their Internet

websites the names of their marketing

affiliates or changes in the status of their

marketing affiliates is necessary to

provide the Commission and the

industry with information that may

otherwise be unavailable in today’s

rapidly changing market environment.

The proposal raises one question,

however, which I believe should be

pursued further. Is the proposed

requirement that pipelines update

information about their affiliates within

three business days of a change in status

sufficient to meet the needs of the

Commission and the industry at large?

I would prefer a requirement for

reporting within 24 hours, and want to

make three points related to this issue.

First, the NOPR offers no justification

for the three day time period. Second,

it is widely known that with today’s

technology, updating information of this

nature on a pipeline website is not

burdensome. Therefore, the ability to

add vital information in a shorter time

frame would not be problematic.

Finally, the Commission has required

companies in the other industries we

regulate to make similar updates in a 24-

hour time period. For example, the

Commission’s regulations require

electric transmission providers to report

to the Commission and on the OASIS

each emergency that results in any

deviation from the Commission’s

standards of conduct within 24 hours of

the deviation.1 Pipelines are required to

post discounts given to their affiliates

within 24 hours of the time at which gas

first flows.2 Hydroelectric power

licensees have agreed to reporting

deviations from state water quality

standards within 24 hours.3 As the

industry contemplates the

Commission’s proposal, I would

welcome comment on this issue.

William L. Massey,

Commissioner.

[FR Doc. 98–13293 Filed 5–18–98; 8:45 am]

BILLING CODE 6717–01–P

DEPARTMENT OF ENERGY

18 CFR Part 385

Federal Energy Regulatory

Commission.

[Docket No. PL98–1–000]

Public Access to Information and

Electronic Filing; Request For

Comments and Notice of Intent to Hold

technical Conference

May 13, 1998.

AGENCY: Federal Energy Regulatory

Commission, DOE.

ACTION: Request for Comments for

Notice of Intent to Hold Technical

Conference.

SUMMARY: The Federal Energy

Regulatory Commission (Commission)

intends to develop a comprehensive

information management system that

accepts filings and disseminates

information electronically. The

Commission seeks public comment to

determine the best way to implement its

electronic filing initiative. After

reviewing the comments, the

Commission intends to hold a technical

conference to discuss its

implementation process.

DATES: Comments are due June 30, 1998.

ADDRESSES: Send comments to: Office of

the Secretary, Federal Energy Regulatory

Commission, 888 First Street, N.E.,

Washington, D.C. 20426.

FOR FURTHER INFORMATION CONTACT:

Brooks Carter, Office of the Chief

Information Officer, Federal Energy

Regulatory Commission, 888 First

Street, NE, Washington, DC 20426,

(202) 501–8145.

Carolyn Van Der Jagt, Office of the

General Counsel, Federal Energy

Regulatory Commission, 888 First

Street, NE, Washington, D.C. 20426,

(202) 208–2246.

SUPPLEMENTARY INFORMATION: In

addition to publishing the full text of

this document in the Federal Register,

the Commission also provides all

interested persons an opportunity to

inspect or copy the contents of this

document during normal business hours

in the Public Reference Room at 888

First Street, NE, Room 2A, Washington,

DC 20426.

The Commission Issuance Posting

System (CIPS) provides access to the

texts of formal documents issued by the

Commission. CIPS can be accessed via

Internet through FERC’s Homepage

(http://www.ferc.fed.us) using the CIPS

Link or the Energy Information Online

icon. The full text of this document will

be available on CIPS in ASCII and

WordPerfect 6.1 format. CIPS is also

available through the Commission’s

electronic bulletin board service at no

charge to the user and may be accessed

using a personal computer with a

modem by dialing 202–208–1397, if

dialing locally, or 1–800–856–3920, if

dialing long distance. To access CIPS,

set your communications software to

19200, 14400, 12000, 9600, 7200, 4800,

2400, or 1200 bps, full duplex, no

parity, 8 data bits and 1 stop bit. User

assistance is available at 202–208–2474

or by E-mail to

CipsMaster@FERC.fed.us.

This document is also available

through the Commission’s Records and

Information Management System

(RIMS), an electronic storage and

retrieval system of documents submitted

to and issued by the Commission after

November 16, 1981. Documents from

November 1995 to the present can be

viewed and printed. RIMS is available

in the Public Reference Room or

remotely via Internet through FERC’s

Homepage using the RIMS link or the

Energy Information Online icon. User

assistance is available at 202–208–2222,

or by E-mail to

RimsMaster@FERC.fed.us.

Finally, the complete text on diskette

in WorkPerfect format may be

purchased from the Commission’s copy

contractor, La Dorn System Corporation.

La Dorn Systems Corporation is located

in the Public Reference Room at 888

First Street, NE., Washington, DC 20426.

I. Introduction

The growing availability and use of

electronic media and the increasing

competitiveness of the natural gas, oil,

and electric industries are compelling

the Federal Energy Regulatory

Commission (Commission) to manage

its information resources more

strategically. Advances in information

technology (IT) permit the filing and

dissemination of information at a faster

rate and more cost-effectively than the

traditional paper distribution methods.

The Commission’s ultimate goal is to

improve its use of IT to reduce

regulatory burdens, cut processing

times, simplify filing processes, and

generate better information for use by its

staff, regulated industries, and the

public. The Commission views its

efforts to implement a system for

electronic filing and dissemination of

information as a large and complex

undertaking. It believes that certain
27530 Federal Register / Vol. 63, No. 96 /Tuesday, May 19, 1998 / Proposed Rules

1Commission staff also demonstrated the

Commission’s Internet site, which came on-line on

November 10, 1997.

2 18 CFR 154.4; 18 CFR 385.2011(b); Revisions to

Uniform System of Accounts, Forms, Statements,

and Reporting Requirements for Natural Gas

Companies, 60 FR 53019 (Oct. 11, 1995), FERC

Stats. and Regs. Regulation Preambles Jan. 1991 to

June 1996 ¶31.026 at 31,517 (Sep. 28, 1995).

3 Inquiry Concerning the Commission’s Merger

Policy under the Federal Power Act: Policy

Statement, 61 FR 68,595 (Dec. 30, 1996), FERC

Stats. & Regs. ¶31,044 at 30,135, 30,138 (1996),

order on reconsideration, 79 FERC ¶61,321 (1997).

4 18 CFR 141.1(b)(2); 18 CFR 385.2011(a)(6).

5 18 CFR 385.2011(a).

6See Standards For Business Practices of

Interstate Natural Gas Pipelines, Notice of Proposed

Rulemaking, 61 FR 58790 (Nov. 19, 1996), FERC

Stats. & Regs. Proposed Regulations ¶32,521 (Nov.

13, 1996).

7For example, the FCC accepts tariff documents

in 44 different formats and converts the documents

to PDF files.

aspects of electronic filings could be

implemented relatively easily in the

near future, whereas, other aspects may

take more time to develop.

The Commission requests comments

to determine the best way to proceed

with developing a faster, more costefficient electronic system for accepting,

processing, and distributing the myriad

of filings that it currently receives on

paper. The Commission requests input

from the industries it regulates and

other interested parties, including

software developers and standards

setting organizations. After reviewing

the comments, the Commission intends

to hold a technical conference to discuss

its implementation process and to

establish various working groups to

investigate the requirements necessary

for the Commission to achieve its goal

of moving towards a more efficient,

cost-effective, paperless environment

and the options available to meet that

goal. The Commission will issue a

separate, later notice announcing the

date, time, and location for the technical

conference.

II. Background

On November 7, 1997, the Chairman

of the Commission hosted a round table

forum to discuss reform of the

Commission’s regulatory processes. The

November 7 symposium focused on

public access to information and

standards for electronic filing. The

round-table forum included

Commission staff and representatives of

oil and natural gas pipelines, electric

utilities, hydropower interests, customer

groups, and other agencies with

experience in electronic filing. The

symposium featured a presentation by

officials of the National Energy Board of

Canada, who described their electronic

filing program, and an on-line

demonstration of the Federal

Communication Commission’s (FCC)

Internet World Wide Web Site.1

Generally, the symposium participants

enthusiastically supported the

Commission’s endeavors to further

proceed with electronic filing.

The Commission previously has

developed regulations for electronic

filing of certain information as part of its

ongoing effort to improve its ability to

process information and provide

information to the public. Gas pipelines

file tariffs electronically and file various

portions of their rate cases in specified

electronic format.2 Electric utilities

proposing to merge file certain

competitive analyses data

electronically.3 Electric utilities and

licensees who file FERC Form No. 1 file

that form electronically.4 Other reports

and forms also are filed electronically.5

The Commission further has encouraged

those who comment on proposed rules

to file copies of their comments in

electronic format on diskette and by

Internet E-Mail.6

The Commission believes that

electronic filing should be more

efficient and cost-effective for both the

Commission and those filing with the

Commission. For the filer, electronic

filing is faster than paper filing and

eliminates the need to arrange for

messenger or other services to hand

deliver paper copies of the Commission.

For the Commission, electronic filing

eliminates the need to process paper

filings, and electronic files are easier,

and take less space to store than paper

files.

Perhaps even more important,

electronic files provide enhanced

retrieval and document processing

capability. Electronic files can be posted

on the Internet or other electronic

mediums for viewing and downloading.

Search and other electronic cataloguing

programs can be used to find specific

information. Finally, portions of

electronic files can be copied and pasted

into other documents.

III. Request for Comments

The Commission requests comments

that address the issues and questions

raised below.

A. Filing Format

Establishing the format(s) for

electronically filed documents creates

numerous complex requirements,

including finding a format(s) that: (1) is

easy for the filing party to create; (2) is

easy for the Commission to process

electronically with minimal human

interaction; (3) can be quickly and

accurately published on the

Commission’s home page for viewing

and downloading using most common

browsers; (4) complies with the record

retention requirements of the National

Archives and Records Administration

(NARA); and (5) is searchable and from

which text or other information can be

exported into other documents or

applications. Commenters should

consider these issues in their comments.

The filings the Commission presently

accepts, processes, and distributes vary

from routine text-only filings to

complex environmental and engineering

data in natural gas certificate and

hydroelectronic filings that include

tables, graphs, charts, maps, blueprints,

and photographs. Some of these

documents are small and could be filed

electronically relatively easily.

However, some filings are quite large

and may require different consideration.

The Commission believes that certain

types of documents common to all

industries, such as tariff filings, could

be filed in the same format. However,

the Commission does not believe that

one particular format would be suitable

for all times of filings.

Possible electronic filing formats

include, but are not limited to: native

proprietary and non-proprietary word

processing spreadsheet, or text formats;

Standard Generalized Markup Language

(SGML); Hypertext Markup Language

(HTML); Extensible Markup Language

(XML); Portable Document Format

(PDF); and Rich Text Format (RTF).

Each format option has its own

particular advantages and limitations.

For example, using numerous native

proprietary and non-proprietary formats

is the least expensive option for filers.

However, the Commission would have

to support all the different software

products and versions. Further, anyone

downloading the filed documents

would also need the same capabilities

unless the Commission converts the

documents into one usable format.7

Converting files raises several additional

concerns. Different formats do not

always accurately convert into the new

format. Some conversions do not

preserve the original fonts; certain text

enhancements such as bolding and

underlining may be eliminated; or the

conversion drops footnote numbers or

converts them to text. This also creates

the problem of verifying the accuracy of

the converted document.

HTML works well for major natural

gas certificate filings because it is

relatively easy to incorporate graphs,

charts, and other types of information

into HTML documents. However, each

word processing or spreadsheet

application converts to HTML according
Federal Register / Vol. 63, No. 96 /Tuesday, May 19, 1998 / Proposed Rules 27531

8The Appendix to this order contains a

compendium of the questions contained in the body

of the order. 9 18 CFR 385.2005 (1997).

to its own specifications and will not

always handle sophisticated formatting

options. Additionally, hand coding of

HTML may be required to improve the

presentation of the document.

SGML and XML may be difficult to

use and would require users to purchase

additional software. Further, the

Commission would have to develop the

Document Type Definitions for any

filings based on those standards. PDF

preserves the integrity of the original

document, so that the PDF document

looks like the document as if it were

printed by the original word processing

format. It also converts tables and other

graphics. However, it has limited search

capabilities and filers would have to

purchase Adobe Systems Incorporated’s

software in order to create documents in

PDF format.

This is just a partial list of some of the

problems and limitations that the

Commission perceives as issues in

determining the appropriate format(s)

for its electronic filing initiative. Below

is a list of questions on which the

Commission would like comments to

assist it in evaluating different formats

it could use for electronic filings. This

list is not meant to be all inclusive.

Commenters are invited to present any

additional information that may be

relevant to the Commission’s

investigation. When responding to the

questions, the commenter should note if

its response is affected by the type of

filing it makes and/or by certain

industry-specific requirements.8

Specifically, the Commission seeks

comments on the following: (1) What

format(s) should the Commission

consider for its different types of filings

(please specify)? (2) What are the pros

and cons of each format and what

should the Commission and/or filer do

to remedy the cons? (3) Are there certain

filings for which the Commission can

implement electronic filing relatively

easily in the near future (please

specify)? (4) What types of filings will

require more time and effort to

implement electronic filing (please

specify): (5) How do you think the

Commission should proceed in selecting

which format(s) to use for which filings?

B. Citations

Another problem with electronic

filing is maintaining comparability in

citation format between electronic and

printed versions of a document. The

user of an electronic document must be

able to locate the appropriate portion of

the document cited by someone who

used the paper copy.

As discussed above, PDF format is

designed to maintain the structure and

page formatting of the original

document. Another alternative that

eliminates the problems of matching

page numbers band improves citation

accuracy is for the filer to number the

paragraphs in the filing. Numbering

paragraphs will permit accurate citation

because the numbering is not

susceptible to changes resulting from

margin or printer settings. (6) What

citation format should the Commission

establish for electronic filings and

issued documents?

C. Signatures

The Commission’s regulations require

that all filings with the Commission

must be signed.9 The existence of such

a requirement, created when documents

were filed on paper, raises a number of

questions when documents are filed

electronically. (7) Is the signature

requirement important enough to be

retained? (8) If the Commission does not

require signatures, how would the filing

party verify that the contents of the

filing are true? (9) If only certain filings

need to be signed, should the

Commission establish electronic

signature requirements for those specific

filings (please specify)?

D. Privileged Material

While much of the information filed

with the Commission is subject to

public disclosure, the Commission’s

regulations exempt certain information.

For example, site-specific historic

preservation information in

archaeological survey reports is

considered non-public information. (10)

How should privilege documents be

handled? (11) How should documents

be filed that are only partially

privileged?

E. Methods of Electronic Filing

The Commission currently receives its

filings on 31⁄2-inch diskettes formatted

for MS–DOS based computers.

However, the Commission has found

that diskette-type filings: (1) require

time-consuming processing; (2) are

cumbersome to store; and (3) are

susceptible to viruses. In one instance,

in Docket No. CP98–97–000 the

Commission received, as a

demonstration project, a certificate

application from Great Lakes Gas

Transmission Limited Partnership

which was formatted in HTML on a CD–

ROM. With some modifications, the

Commission posted the application on

its Internet site.

There are several methods the

Commission can use to accommodate

electronic filings. For very simple

filings, such as motions to intervene, the

Commission can use an HTML form that

intervenors can complete interactively.

Information from the intervention could

be loaded into a service list database,

which in turm could be updated on the

Commission’s web site. In other cases,

the Commission could use an HTML

form for basic filer information to which

the filer would have the ability to attach

files and upload them to the

Commission via the Internet. (12) which

method(s) should the Commission use

for electronic filing: (i) the HTML forms

approaches discussed below; (ii)

computer-to-computer using a leased

line/private network; (iii) uploading to

the Commission’s electronic bulletin

board; or (iv) some other method (please

specify)? (13) Should the Commission

consider different methods for different

types of filings (please specify)? (14)

How should the Commission handle

large filings?

F. The Hearing Process

Electronic filing of documents will

affect the Commission’s hearing process

in a number of ways. Although motions,

pleadings, and testimony are filed with

the Commission in the same manner as

other filings, discovery requests and

responses between and among

participants generally are not required

to be filed. Discovery often involves

unique accommodations. For instance, a

participant may be invited to review

voluminous files of documents related

to a particular matter. It may be that

only a tiny subset of those documents is

eventually introduced at hearing or

relied on by witnesses in the

proceeding. Exhibits introduced at

hearings are also not filed by the

participants, but are instead submitted

to the court reporter for introduction

into the record. Participants at

Commission hearings currently rely on

paper copies of filed documents, and on

paper copies of discovery request,

discovery responses, and trial exhibits.

(15) How should the discovery process

be modified, if at all, to accommodate

electronic filing? (16) How should trial

exhibits be introduced into the record to

accommodate electronic filing? (17)

How should trials be conducted if

pleadings, testimony, and exhibits have

been filed and served electronically?

G. Oaths, Attestations, and Notarization

Certain filings require verification

under oath, attestations, or notarization.

For example, under Parts 34 of the
27532 Federal Register / Vol. 63, No. 96 /Tuesday, May 19, 1998 / Proposed Rules

10See 18 CFR 385.2010(f)(2).

Commission’s regulations and the

Federal Power Act, an application for

authority to issue securities requires

that the application be signed by an

authorized representative and be

verified under oath. (18) To the extent

such verification is only required by the

Commission’s regulations and not be

statute, are these requirement important

enough to be retained? (19) How should

the Commission accommodate filings

which require verification under oath,

attestations, and notarization?

H. Security, Integrity, and

Authentication

The security, integrity, and

authentication of electronic filings is a

significant concern. (20) Should the

Commission consider any special

authentication or security measures,

such as encryption, digital signatures,

logon ID’s, and passwords? (21) Are

special measures only needed for

certain documents (please specify)? (22)

What steps should the Commission take

to detect security breaches in filings?

(23) How should the security breaches

be handled?

I. Automatic Acknowledgment

The Commission intends to

implement an automatic

acknowledgment mechanism. (24) How

should the Commission provide

automatic acknowledgment? (25)

Should the receipt be sent to the web

browser or by E-Mail? (26) How should

the Commission notify the filer of the

docket number of an electronic filing in

a new proceeding? (27) Would posting

the docket number on the Commission’s

Internet site be sufficient?

J. Service

The Commission’s regulations

currently do not prevent parties from

agreeing to electronic service.10 The

Commission intends to clarify its rules

to better facilitate electronic service.

Additionally, the Commission presently

provides paper copies of its issuances to

all parties in a proceeding. It intends to

provide electronic service for its

issuances in the future. (28) Should the

Commission encourage electronic

service between parties over the

Internet? (29) Should the Commission

facilitate electronic service by posting

documents on its Internet site or should

the party making the filing make it

available on its own Internet site? (30)

Is it adequate for the Commission to

serve notice to the parties in a

proceeding that it has issued an order or

should it disseminate the order directly

to the parties electronically?

IV. Public Comment Procedures

The Commission invites interested

persons to submit comments, data

views, and other information

concerning the matters set out above.

To facilitate the Commission’s review

of the comments, commenters are

requested to provide an executive

summary of their position on the issues

raised. Commenters are requested to

identify the specific question posed that

their discussion addresses and to use

appropriate headings. Additionally,

commenters should double space their

comments.

The original and 14 copies of such

comments must be received by the

Commission before 5:00 p.m., June 30,

1998. Comments should be submitted to

the Office of the Secretary, Federal

Energy Regulatory Commission, 888

First Street, NE., Washington DC 20426

and should refer to Docket No. PL98–1–

000.

Additionally, comments should be

submitted electronically. Commenters

are encouraged to file comments using

Internet E-Mail.

Comments should be submitted

through the Internet by E-Mail to

comment.rm@ferc.fed.us in the

following format: on the subject line,

specify Docket No. PL98–1–000; in the

body of the E-Mail message, specify the

name of the filing entity and the name,

telephone number, and E-Mail address

of a contact person; and attach the

comment in WordPerfect 6.1 or lower

format or in ASCII format as an

attachment to the E-Mail message. The

Commission will send a reply to the EMail to acknowledge receipt. Questions

or comments on electronic filing using

Internet E-Mail should be directed to

Brooks Carter at 202 501–8145, E-Mail

address brooks.carter@ferc.fed.us.

Commenters also can submit

comments on computer diskette in

WordPerfect 6.1 or lower format or in

ASCII format, with the name of the filer

and Docket No. PL98–1–000 on the

outside of the diskette.

All comments will be placed in the

Commission’s public files and will be

available for inspection in the

Commission’s Public Reference room at

888 First Street, NE., Washington, DC

20426, during regular business hours.

Additionally, comments can be viewed

and printed remotely via the Internet

through FERC’s Homepage using the

RIMS link or the Energy Information

Online icon. User assistance is available

at 202–208–2222, or by E-mail to

RimsMaster@FERC.fed.us.

By direction of the Commission.

Linwood A Watson, Jr.,

Acting Secretary.

Appendix—Index of Questions

For the ease of those submitting comments,

the following is a compendium of the

questions contained in body of this order:

Filing formats

(1) What format(s) should the Commission

consider for its different types of filings

(please specify)?

(2) What are the pros and cons of each

format and what should the Commission

and/or filer do to remedy the cons?

(3) Are there certain filings for which the

Commission can implement electronic filing

relatively easily in the near future (please

specify)?

(4) What types of filings will require more

time and effort to implement electronic filing

(please specify)?

(5) How do you think the Commission

should proceed in selecting which format(s)

to use for which filings?

Citations

(6) What citation format should the

Commission establish for electronic filings

and issued documents?

Signatures

(7) Is the signature requirement important

enough to be retained?

(8) If the Commission does not require

signatures, how would the filing party verify

that the contents of the filing are true?

(9) If only certain filings need to be signed,

should the Commission establish electronic

signature requirements for those specific

filings (please specify)?

Privileged Material

(10) How should privileged documents be

handled?

(11 How should documents be filed that

are only partially privileged?

Methods of Electronic Filing

(12) Which method(s) should the

Commission use for electronic filing: (i) the

approaches discussed above; (ii) computerto-computer using a leased line/private

network; (iii) uploading to the Commission’s

electronic bulletin board; or (iv) some other

method (please specify)?

(13) Should the Commission consider

different methods for different types of filings

(please specify)?

(14) How should the Commission handle

large filings?

The Hearing Process

(15) How should the discovery process be

modified, if at all, to accommodate electronic

filing?

(16) How should trial exhibits be

introduced into the record to accommodate

electronic filing?

(17) How should trials be conducted if

pleadings, testimony, and exhibits have been

filed and served electronically?

Oaths, Attestations, and Notarization

(18) To the extent such verification is only

required by the Commission’s regulations
Federal Register / Vol. 63, No. 96 /Tuesday, May 19, 1998 / Proposed Rules 27533

and not be statute, are these requirements

important enough to be retained?

(19) How should the Commission

accommodate filings which require

verification under oath, attestations, and

notarization?

Security, Integrity, and Authentication

(20) Should the Commission consider any

special authentication or security measures,

such as encryption, digital signatures, logon

ID’s and passwords?

(21) Are special measures only needed for

certain documents (please specify)?

(22) What steps should the Commission

take to detect security breaches in filings?

(23) How should the security breaches be

handled?

Automatic Acknowledgment

(24) How should the Commission provide

automatic acknowledgment?

(25) Should the receipt be sent to the web

browser or by E-Mail?

(26) How should the Commission notify

the filer of the docket number of an

electronic filing in a new proceeding?

(27) Would posting the docket number on

the Commission’s Internet site be sufficient?

Service

(28) Should the Commission encourage

electronic service between parties over the

Internet?

(29) Should the Commission facilitate

electronic service by posting documents on

its Internet site or should the party making

the filing make it available on its own

Internet site?

(3) Is it adequate for the Commission to

serve notice to the parties in a proceeding

that it has issued an order, or should it

disseminate the order directly to the parties

electronically?

[FR Doc. 98–13294 Filed 5–18–98; 8:45 am]

BILLING CODE 6717–01–M

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR PART 123

RIN 1515–AB88

Foreign-Based Commercial Motor

Vehicles in International Traffic

AGENCY: Customs Service, Department

of the Treasury.

ACTION: Proposed rule.

SUMMARY: This document proposes to

revise the Customs Regulations to allow

certain foreign-based commercial motor

vehicles, which are admitted as

instruments of international traffic, to

engage in the transportation of

merchandise between points in the

United States where such transportation

is incidental to the immediately prior or

subsequent engagement of such vehicles

in international traffic. Any movement

of these vehicles in the general direction

of an export move or as part of the

return movement of the vehicles to their

base country shall be considered

incidental to the international

movement. The benefit of this

liberalization of current cabotage

restrictions inures in particular to both

the United States and foreign trucking

industries inasmuch as it allows more

efficient and economical utilization of

their respective vehicles both

internationally and domestically.

DATE: Comments must be received on or

before July 20, 1998.

ADDRESSES: Written comments

(preferably in triplicate) may be

addressed to and inspected at the

Regulations Branch, U.S. Customs

Service, 1300 Pennsylvania Avenue,

NW., 3rd Floor, Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT:

Legal aspects: Glen E. Vereb, Office of

Regulations and Rulings, 202–927–

2320.

Operational aspects: Eileen A. Kastava,

Office of Field Operations, 202–927–

0983.

SUPPLEMENTARY INFORMATION:

Background

Section 141.4(a), Customs Regulations

(19 CFR 141.4(a)), provides that entry as

required by 19 U.S.C. 1484(a) shall be

made of all merchandise imported into

the United States unless specifically

excepted. Foreign-based commercial

motor vehicles are not among those

excepted items listed in § 141.4(b) and

would therefore be subject to entry and

payment of any applicable duty unless

otherwise exempted by law or

regulations.

Pursuant to 19 U.S.C. 1322, vehicles

and other instruments of international

traffic shall be excepted from the

application of the Customs laws to such

extent and subject to such terms and

conditions as may be prescribed in

regulations or instructions of the

Secretary of the Treasury.

This statutory mandate pertaining to

foreign-based commercial motor

vehicles is implemented under § 123.14

of the Customs Regulations (19 CFR

123.14). Section 123.14(a) states that to

qualify as instruments of international

traffic, such vehicles having their

principal base of operations in a foreign

country must be arriving in the United

States with merchandise destined for

points in the United States, or arriving

empty or loaded for the purpose of

taking merchandise out of the United

States.

Section 123.14(c), Customs

Regulations, states that with one

exception, a foreign-based commercial

motor vehicle, admitted as an

instrument of international traffic under

§ 123.14(a), shall not engage in local

traffic in the United States. The

exception, set out in § 123.14(c)(1),

states that such a vehicle, while in use

on a regularly scheduled trip, may be

used in local traffic that is directly

incidental to the international schedule.

Section 123.14(c)(2), Customs

Regulations, provides that a foreignbased truck trailer admitted as an

instrument of international traffic may

carry merchandise between points in

the United States on the return trip as

provided in § 123.12(a)(2) which allows

use for such transportation as is

reasonably incidental to its economical

and prompt departure for a foreign

country.

In regard to these cabotage

restrictions, Customs has received a

petition from the American Trucking

Association (ATA) requesting a change

in Customs interpretation of its

regulations governing the use of foreignbased trucks in local traffic in the

United States. This petition is the

culmination of joint discussions

beginning in July of 1994 between the

ATA and the Canadian Trucking

Association (CTA) to obtain mutually

agreed upon parameters with respect to

the liberalization of current truck

cabotage restrictions in their respective

countries. The proposed amendments

would, however, be universally

applicable.

By way of additional background,

reference is hereby made to a notice

published in the Customs Bulletin

pursuant to 19 U.S.C. 1625(c)(1) (see 31

Cust. Bull. and Dec. No. 40, 7 (October

1, 1997)), which revised the

interpretation of when a foreign-based

truck would be considered as used in

international traffic under existing

§ 123.14. However, the proposal

provided for herein regarding the use of

a foreign-based commercial motor

vehicle, including a truck, in

permissible local traffic under

§ 123.14(c) was, of course, not addressed

in the Customs Bulletin notice. To effect

this change requires an amendment

under the Administrative Procedure

Act, 5 U.S.C. 553.

Accordingly, Customs has determined

to propose such an amendment of

§ 123.14(c), which would allow certain

foreign-based commercial motor

vehicles, admitted as instruments of

international traffic, to engage in the

transportation of merchandise between

points in the United States where such

local traffic is incidental to the

immediately prior or subsequent

engagement of such vehicles in

international traffic. In addition, this