20390 Federal Register / Vol. 65, No. 74 / Monday, April 17, 2000 / Proposed Rules

operators is estimated to be $60 per

airplane.

The FAA estimates that it would take

approximately 2 work hours per

airplane to install the hydraulic tube

assemblies incorporating a check valve,

and that the average labor rate is $60 per

work hour. Required parts would cost

approximately $2,021 per airplane.

Based on these figures, the cost impact

of the installation proposed by this AD

on U.S. operators is estimated to be

$2,141 per airplane.

The cost impact figures discussed

above are based on assumptions that no

operator has yet accomplished any of

the proposed requirements of this AD

action, and that no operator would

accomplish those actions in the future if

this AD were not adopted.

Regulatory Impact

The regulations proposed herein

would not have substantial direct effects

on the States, on the relationship

between the national government and

the States, or on the distribution of

power and responsibilities among the

various levels of government. Therefore,

in accordance with Executive Order

12612, it is determined that this

proposal would not have sufficient

federalism implications to warrant the

preparation of a Federalism Assessment.

For the reasons discussed above, I

certify that this proposed regulation (1)

is not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not

a ‘‘significant rule’’ under the DOT

Regulatory Policies and Procedures (44

FR 11034, February 26, 1979); and (3) if

promulgated, will not have a significant

economic impact, positive or negative,

on a substantial number of small entities

under the criteria of the Regulatory

Flexibility Act. A copy of the draft

regulatory evaluation prepared for this

action is contained in the Rules Docket.

A copy of it may be obtained by

contacting the Rules Docket at the

location provided under the caption

ADDRESSES.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation

safety, Safety.

The Proposed Amendment

Accordingly, pursuant to the

authority delegated to me by the

Administrator, the Federal Aviation

Administration proposes to amend part

39 of the Federal Aviation Regulations

(14 CFR part 39) as follows:

PART 39—AIRWORTHINESS

DIRECTIVES

1. The authority citation for part 39

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]

2. Section 39.13 is amended by

adding the following new airworthiness

directive:

Empresa Brasileira de Aeronautica S.A.

(EMBRAER): Docket 99–NM–356–AD.

Applicability: Model EMB–120 series

airplanes as listed in EMBRAER Service

Bulletin 120–32–0077, Change 02, dated

December 23, 1997; certificated in any

category.

Note 1: This AD applies to each airplane

identified in the preceding applicability

provision, regardless of whether it has been

modified, altered, or repaired in the area

subject to the requirements of this AD. For

airplanes that have been modified, altered, or

repaired so that the performance of the

requirements of this AD is affected, the

owner/operator must request approval for an

alternative method of compliance in

accordance with paragraph (d) of this AD.

The request should include an assessment of

the effect of the modification, alteration, or

repair on the unsafe condition addressed by

this AD; and, if the unsafe condition has not

been eliminated, the request should include

specific proposed actions to address it.

Compliance: Required as indicated, unless

accomplished previously.

To prevent the landing gear doors from

becoming blocked from opening during

application of emergency procedures in the

event of a loss of hydraulics, accomplish the

following:

(a) Within 10 flight hours after the effective

date of this AD, revise the ‘‘Emergency

Procedures’’ and ‘‘Abnormal Procedures’’

sections of the FAA-approved Airplane

Flight Manual (AFM) by inserting into the

AFM a copy of EMB–120 AFM 120/794,

Revision 45, dated October 14, 1996.

(b) For airplanes on which the check valve

has been installed in accordance with

EMBRAER Service Bulletin 120–32–0077,

dated February 7, 1997: Within 100 hours

after the effective date of this AD, conduct a

visual inspection to detect the check valve

flow direction in accordance with Service

Bulletin 120–32–0077, Change 02, dated

December 23, 1997. If the check valve is

installed incorrectly, prior to further flight,

reinstall the check valve in the proper

position in accordance with Change 02 of the

service bulletin.

(c) For airplanes on which the check valve

has not been installed in accordance with

EMBRAER Service Bulletin 120–32–0077,

dated February 7, 1997; or Change 01, dated

September 25, 1997; or Change 02, dated

December 23, 1997: Within 2,000 flight hours

after the effective date of this AD, install

hydraulic tube assemblies incorporating a

check valve in accordance with Service

Bulletin 120–32–0077, Change 01, dated

September 25, 1997; or Change 02, dated

December 23, 1997.

Alternative Methods of Compliance

(d) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, Atlanta

Aircraft Certification Office (ACO), FAA,

Small Airplane Directorate.

Operators shall submit their requests

through an appropriate FAA Principal

Maintenance Inspector, who may add

comments and then send it to the Manager,

Atlanta ACO.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Atlanta ACO.

Special Flight Permits

(e) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

Note 3: The subject of this AD is addressed

in Brazilian airworthiness directive 97–05–

03R2, dated March 16, 1998.

Issued in Renton, Washington, on April 11,

2000.

Donald L. Riggin,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 00–9556 Filed 4–14–00; 8:45 am]

BILLING CODE 4910–13–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 2000–NM–49–AD]

RIN 2120–AA64

Airworthiness Directives; McDonnell

Douglas Model DC–8 Series Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes the

adoption of a new airworthiness

directive (AD) that is applicable to

certain McDonnell Douglas Model DC–

8 series airplanes that have been

converted from a passenger to a cargocarrying (‘‘freighter’’) configuration.

This proposal would require a revision

to the Airplane Flight Manual

Supplement to ensure that the main

deck cargo door is closed, latched, and

locked; inspection of the door wire

bundle to detect discrepancies and

repair or replacement of discrepant

parts. This proposal also would require,

among other actions, modification of the

hydraulic and indication systems of the

main deck cargo door, and installation

of a means to prevent pressurization to

an unsafe level if the main deck cargo

door is not closed, latched, and locked.

This proposal is prompted by the FAA’s

determination that certain main deck

Federal Register / Vol. 65, No. 74 / Monday, April 17, 2000 / Proposed Rules 20391

cargo door systems do not provide an

adequate level of safety, and that there

is no means to prevent pressurization to

an unsafe level if the main deck cargo

door is not closed, latched, and locked.

The actions specified by the proposed

AD are intended to prevent opening of

the cargo door while the airplane is in

flight, and consequent rapid

decompression of the airplane including

possible loss of flight control or severe

structural damage.

DATES: Comments must be received by

June 1, 2000.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–114,

Attention: Rules Docket No. 2000–NM–

49–AD, 1601 Lind Avenue, SW.,

Renton, Washington 98055–4056.

Comments may be inspected at this

location between 9:00 a.m. and 3:00

p.m., Monday through Friday, except

Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Michael E. O’Neil, Aerospace Engineer,

Airframe Branch, ANM–120L, FAA,

Transport Airplane Directorate, Los

Angeles Aircraft Certification Office,

3960 Paramount Boulevard, Lakewood,

California 90712–4137; telephone (562)

627–5320; fax (562) 627–5210.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to

participate in the making of the

proposed rule by submitting such

written data, views, or arguments as

they may desire. Communications shall

identify the Rules Docket number and

be submitted in triplicate to the address

specified above. All communications

received on or before the closing date

for comments, specified above, will be

considered before taking action on the

proposed rule. The proposals contained

in this notice may be changed in light

of the comments received.

Comments are specifically invited on

the overall regulatory, economic,

environmental, and energy aspects of

the proposed rule. All comments

submitted will be available, both before

and after the closing date for comments,

in the Rules Docket for examination by

interested persons. A report

summarizing each FAA-public contact

concerned with the substance of this

proposal will be filed in the Rules

Docket.

Commenters wishing the FAA to

acknowledge receipt of their comments

submitted in response to this notice

must submit a self-addressed, stamped

postcard on which the following

statement is made: ‘‘Comments to

Docket Number 2000–NM–49–AD.’’ The

postcard will be date stamped and

returned to the commenter.

Availability of NPRMs

Any person may obtain a copy of this

NPRM by submitting a request to the

FAA, Transport Airplane Directorate,

ANM–114, Attention: Rules Docket No.

2000–NM–49–AD, 1601 Lind Avenue,

SW., Renton, Washington 98055–4056.

Discussion

Supplemental Type Certificates (STC)

SA1063SO and SA1377SO [originally

issued to Aeronautical Engineers, Inc.

(AEI)] specify a design for installation of

a main deck cargo door, associated door

cutout in the fuselage, door hydraulic

and indication systems, and Class ‘‘E’’

cargo interior with a cargo barrier on

McDonnell Douglas Model DC–8 series

airplanes. STC SA1063SO installs the

main deck cargo door and associated

hydraulic and indication systems. STC

SA1377SO installs the Class ‘‘E’’

interior with a cargo barrier, a cargo

handling system, and a 9g crash barrier.

The FAA has conducted a design review

of Model DC–8 series airplanes

modified in accordance with STC’s

SA1063SO and SA1377SO and has

conducted discussions regarding the

design with the STC holder. From the

design review and these discussions, the

FAA has identified several potential

unsafe conditions. [Results of this

design review are contained in ‘‘DC–8

Cargo Modification Review Team,

Review of AEI Supplemental Type

Certificates SA1063SO—Installation of a

Cargo Door and SA1377SO—Installation

of a Cargo Interior, Final Report, dated

July 30, 1999,’’ hereinafter referred to as

‘‘the Design Review Report,’’ which is

included in the Rules Docket for this

NPRM.]

For airplanes modified in accordance

with STC SA1063SO, this NPRM

proposes corrective actions for those

potential unsafe conditions that relate to

the hydraulic and indication systems of

the main deck cargo door and a means

to prevent pressurization to an unsafe

level if the main deck cargo door is not

fully closed, latched, and locked. These

conditions, if not corrected, could result

in opening of the cargo door while the

airplane is in flight, and consequent

rapid decompression of the airplane

including possible loss of flight control

or severe structural damage.

Other Related Rulemaking

The FAA is considering further

rulemaking to address the remaining

potential unsafe conditions on Model

DC–8 series airplanes modified in

accordance with STC SA1063SO that

relate to the main deck cargo door hinge

and fuselage structure in the area

modified by installation of a main deck

cargo door. In addition, the FAA is

considering further rulemaking to

address the potential unsafe conditions

on Model DC–8 series airplanes

modified in accordance with STC

SA1377SO that relate to the

unreinforced main deck floor, 9g crash

barrier, and fire/smoke detection

system.

Main Deck Cargo Door Systems

In early 1989, two transport airplane

accidents were attributed to cargo doors

coming open during flight. The first

accident involved a Boeing Model 747

series airplane in which the cargo door

separated from the airplane, and

damaged the fuselage structure, engines,

and passenger cabin. The second

accident involved a McDonnell Douglas

DC–9 series airplane in which the cargo

door opened but did not separate from

its hinge. The open door disturbed the

airflow over the empennage, which

resulted in loss of flight control and

consequent loss of the airplane.

Although cargo doors have opened

occasionally without mishap shortly

after the airplane was in flight, these

two accidents served to highlight the

extreme potential dangers associated

with the opening of a cargo door while

the airplane is in flight.

As a result of these cargo door

opening accidents, the Air Transport

Association (ATA) of America formed a

task force, including representatives of

the FAA, to review the design,

manufacture, maintenance, and

operation of airplanes fitted with

outward opening cargo doors, and to

make recommendations to prevent

inadvertent cargo door openings while

the airplane is in flight. A design

working group was tasked with

reviewing 14 CFR part 25.783 [and its

accompanying Advisory Circular (AC)

25.783–1, dated December 10, 1986]

with the intent of clarifying its contents

and recommending revisions to enhance

future cargo door designs. This design

group also was tasked with providing

specific recommendations regarding

design criteria to be applied to existing

outward opening cargo doors to ensure

that inadvertent openings would not

occur in the current transport category

fleet of airplanes.

The ATA task force made its

recommendations in the ‘‘ATA Cargo

Door Task Force Final Report,’’ dated

May 15, 1991 (hereinafter referred to as

‘‘the ATA Final Report’’). On March 20,

1992, the FAA issued a memorandum to

the managers of the Transport Airplane

Directorate (TAD) and Los Angeles,

20392 Federal Register / Vol. 65, No. 74 / Monday, April 17, 2000 / Proposed Rules

Seattle, and Atlanta Aircraft

Certification Offices (hereinafter

referred to as ‘‘the FAA Memorandum’’),

acknowledging ATA’s recommendations

and providing additional guidance for

purposes of assessing the continuing

airworthiness of existing designs of

outward opening doors. The FAA

Memorandum was not intended to

upgrade the certification basis of the

various airplanes, but rather to identify

criteria to evaluate potential unsafe

conditions identified on in-service

airplanes. Appendix 1 of this AD

contains the specific paragraphs from

the FAA Memorandum that set forth the

criteria to which the outward opening

doors should be shown to comply.

Utilizing the applicable requirements

of Civil Air Regulations (CAR) part 4b

and the design criteria provided by the

FAA Memorandum, the FAA has

reviewed the original type design of

major transport airplanes, including

McDonnell Douglas Model DC–8

airplanes equipped with outward

opening doors, for any design deficiency

or service difficulty. Based on that

review, the FAA identified unsafe

conditions and issued, among others,

the following AD’s and NPRM:

• For certain McDonnell Douglas

Model DC–9 series airplanes: AD 89–

11–02, amendment 39–6216 (54 FR

21416, May 18, 1989);

• For all Boeing Model 747 series

airplanes: AD 90–09–06, amendment

39–6581 (55 FR 15217, April 23, 1990);

• For certain McDonnell Douglas

Model DC–8 series airplanes: AD 89–

17–01 R1, amendment 39–6521 (55 FR

8446, March 8, 1990);

• For certain Boeing Model 747–100

and –200 series airplanes: AD 96–01–51,

amendment 39–9492 (61 FR 1703,

January 23, 1996);

• For certain Boeing Model 727–100

and –200 series airplanes: AD 96–16–08,

amendment 39–9708 (61 FR 41733,

August 12, 1996);

• For certain McDonnell Douglas

Model DC–8 series airplanes: NPRM

Rules Docket No. 99–NM–338–AD (64

FR 72689, December 22, 1999); and

• For certain McDonnell Douglas

Model DC–8 series airplanes: NPRM

Rules Docket No. 2000–NM–01–AD (65

FR 7796, February 16, 2000).

In late 1997, the FAA informed the

STC holders and operators of Model

DC–8 series airplanes that it was

embarking on a review of Model DC–8

series airplanes that have been

converted from a passenger to a cargocarrying (‘‘freighter’’) configuration by

STC. The FAA proposed at a subsequent

industry sponsored meeting in early

1998, that DC–8 operators and STC

holders work together to identify and

address potential safety concerns. This

suggestion to the affected industry

resulted in the creation of the DC–8

Cargo Conversion Joint Task Force (JTF)

(hereinafter referred to as ‘‘the JTF’’).

The current composition of the JTF

includes holders of each of the six STC’s

that addresses the installation of a main

deck cargo door in Model DC–8 series

airplanes and operators and lessors of

those modified airplanes. At the JTF’s

request, the FAA participates in its

meetings to offer counsel and guidance

with respect to the FAA’s regulatory

processes. The JTF is a clearinghouse for

the gathering and sharing of information

among the parties affected by the FAA

review of STC cargo conversions of

Model DC–8 series airplanes. The JTF

also is a liaison between the FAA,

operators, and STC holders.

The JTF has been working with the

FAA to provide data relating to the

number of STC modified Model DC–8

series airplanes and operators of those

airplanes, and identified which

airplanes are modified by each STC. It

also was instrumental in polling the

operators and providing maintenance

schedules and locations to the FAA,

which helped the FAA arrange visits to

operators of airplanes modified by each

of the STC’s. These visits allowed the

FAA to review both the available data

supporting each STC and modified

airplanes and to identify potential safety

concerns with each of the STC

modifications. Additionally, the JTF has

coordinated funding of the industry

review of the data supporting the STC’s

and ongoing efforts to resolve safety

issues identified by the FAA.

Using the applicable requirements of

CAR part 4b and the criteria specified in

the FAA Memorandum as evaluation

guides, the FAA, in collaboration with

the JTF, conducted an engineering

design review and inspection of an

airplane modified in accordance with

STC SA1063SO. The FAA identified a

number of design features of the main

deck cargo door systems of STC

SA1063SO that are unsafe and do not

meet the applicable requirements of

CAR part 4b or the criteria specified in

the FAA Memorandum. These systems

include the door indication and

hydraulic systems. The FAA design

review team also determined that the

design data of this STC did not include

an adequate safety analysis of the main

deck cargo door systems.

For airplanes modified in accordance

with STC SA1063SO, the FAA

considers the following five specific

design deficiencies of the main deck

cargo door systems to be unsafe:

1. Indication System

The main deck cargo door indication

system for STC SA1063SO utilizes door

warning lights at the door operator’s

control panel and the flight engineer’s

panel. The warning lights do not

indicate either the door open or closed

status, or latch or lock status. All three

conditions (i.e., door closed, latched,

and locked) must be monitored directly

so that the door indication system

cannot display either ‘‘latched’’ before

the door is closed or ‘‘locked’’ before the

door is latched. If a sequencing error

caused the door to latch and lock

without being fully closed, the subject

indication system, as currently

designed, would not alert the door

operator or the flight engineer of this

condition. As a result, the airplane

could be dispatched with the main deck

cargo door unsecured, which could lead

to the cargo door opening while the

airplane is in flight.

The light on the flight engineer’s

panel is labeled ‘‘Cargo Door’’ and is

displayed in red since it indicates an

event that requires immediate pilot

action. However, if the flight engineer is

temporarily away from his station, a

door unsafe warning indication could be

missed by the pilots. In addition, the

flight engineer could miss such an

indication by not scanning the panel. As

a result, the pilots and flight engineer

could be unaware of or misinterpret an

unsafe condition and could fail to

respond in the correct manner. The

warning lights have a ‘‘Press-to-Test’’

feature which is adequate to check the

light bulb functionality, but is not

adequate to check the cargo door closed,

latched, and locked functions.

Therefore, an indicator light that

monitors all three conditions (i.e., door

closed, latched, and locked) must be

located in front of and in plain view of

both pilots since one of the pilot’s

stations is always occupied during flight

operations.

During an FAA review of STC

modified airplanes, instances of distress

of the wire bundle between the fuselage

and main deck cargo door and the

associated attach hardware were noted.

Therefore, a one-time general visual

inspection of this area to detect

crimped, frayed, or chafed wires is

necessary to ensure the electrical

continuity of the existing door

indication system during the interim

period.

2. Means to Visually Inspect the Locking

Mechanism

The locking system of STC SA1063SO

consists of a lock pin installed at one of

the seven latches of the main deck cargo

Federal Register / Vol. 65, No. 74 / Monday, April 17, 2000 / Proposed Rules 20393

door. The single view port of the main

deck cargo door installed in accordance

with STC SA1063SO monitors the

position of the torque tube that actuates

the door latches, but does not provide

a means to ensure the position of the

lock pin. Therefore, a means to visually

inspect the door locking mechanism

must be installed to ensure that the door

is fully closed, latched, and locked.

As discussed in the ATA Final Report

and the FAA Memorandum, there

should be a means of directly inspecting

each lock or, at a minimum, the locks

at each end of the lock shaft of certain

designs, such that a failure condition in

the lock shaft would be detectable.

3. Means to Prevent Pressurization to an

Unsafe Level

McDonnell Douglas Model DC–8

series airplanes modified in accordance

with STC SA1063SO are not equipped

with a means to prevent pressurization

of the airplane to an unsafe level in the

event that the main deck cargo door is

not fully closed, latched, and locked.

Therefore, such a means must be

installed.

4. Powered Lock Systems

STC SA1063SO utilizes a nose gear

squat switch to remove power (i.e.,

electrical and hydraulic) from the door

control master switch while the airplane

is in flight. Latent failure of the squat

switch together with other latent and/or

single point failures could precipitate

inadvertent door openings. Therefore, a

means to remove power from the door

controls must be installed to prevent

inadvertent opening of the main deck

cargo door in flight.

A systems safety analysis would

normally evaluate and resolve the

potential for these types of unsafe

conditions. The need for a system safety

analysis is identified in the ATA Final

Report and the FAA Memorandum.

5. Lock Strength

Analysis of the existing latching and

locking mechanism of the main deck

cargo door indicates that in the event of

a system jam, continued operation of the

hydraulic cylinders could result in

structural deformation of elements of

the latching and locking mechanisms.

Structural deformation of the locking

mechanism could result in the single

door latch equipped with a lock not

being locked and consequent erroneous

indication to the pilots that the latch is

locked properly. Further, the FAA has

determined that a lock on a single latch

is inadequate to provide the level of

safety envisioned by the applicable

certification requirements. Therefore,

the latching and locking systems for the

main deck cargo door must be modified

to prevent structural deformation,

which could result in incorrect

indication to the pilots that the door is

not fully closed, latched, and locked.

Explanation of Requirements of

Proposed Rule

Since unsafe conditions have been

identified that are likely to exist or

develop on other products of this same

type design, the proposed AD would

require, within 60 days after the

effective date of this AD, a general

visual inspection of the wire bundle of

the main deck cargo door between the

exit point of the cargo liner and the

attachment point on the main deck

cargo door to detect crimped, frayed, or

chafed wires; a general visual inspection

for damaged, loose, or missing hardware

mounting components; and repair, if

necessary. These actions would be

required to be accomplished in

accordance with FAA-approved

maintenance procedures.

The proposed AD also would require,

within 60 days after the effective date of

the AD, a revision of the Limitations

Section of the appropriate FAAapproved Airplane Flight Manual

Supplement (AFMS) for STC SA1063SO

by inserting therein procedures to

ensure that the main deck cargo door is

closed, latched, and locked prior to

dispatch of the airplane; and installation

of any associated placards. These

actions would be required to be

accomplished in accordance with a

method approved by the Manager, Los

Angeles Aircraft Certification Office

(ACO), FAA, Transport Airplane

Directorate.

The proposed AD also would require,

within 18 months after the effective date

of this AD, the following actions:

• Modification of the indication

system of the main deck cargo door to

indicate to the pilots whether the main

deck cargo door is fully closed, latched,

and locked;

• Modification of the mechanical and

hydraulic systems of the main deck

cargo door to eliminate detrimental

deformation of the elements of the door

latching and locking mechanisms;

• Installation of a means to visually

inspect the locking mechanism of the

main deck cargo door;

• Installation of a means to remove

power to the door while the airplane is

in flight; and

• Installation of a means to prevent

pressurization to an unsafe level if the

main deck cargo door is not fully closed,

latched, and locked.

The modifications and installations

would be required to be accomplished

in accordance with a method approved

by the Manager, Los Angeles ACO.

Accomplishment of the modifications

and installations would constitute

terminating action for the inspections,

AFMS revision, and associated placards

described previously.

Cost Impact

There are approximately 15 Model

DC–8 series airplanes of the affected

design in the worldwide fleet. The FAA

estimates that 11 airplanes of U.S.

registry would be affected by this

proposed AD.

It would take approximately 1 work

hour per airplane to accomplish the

general visual inspections, at an average

labor rate of $60 per work hour. Based

on these figures, the cost impact of the

general visual inspections proposed by

this AD on U.S. operators is estimated

to be $660, or $60 per airplane, per

inspection cycle.

It would take approximately 1 work

hour per airplane to accomplish the

AFMS revision and installation of

associated placards, at an average labor

rate of $60 per work hour. Based on

these figures, the cost impact of the

AFMS revision and installation of

associated placards proposed by this AD

on U.S. operators is estimated to be

$660, or $60 per airplane.

The FAA estimates that it would take

approximately 210 work hours per

airplane to accomplish the modification

required by paragraph (c) of the

proposed AD, at an average labor rate of

$60 per work hour. The FAA also

estimates that required parts would cost

approximately $45,000 per airplane.

Based on these figures, the cost impact

of this modification proposed by this

AD on U.S. operators is estimated to be

$633,600, or $57,600 per airplane.

The cost impact figures discussed

above are based on assumptions that no

operator has yet accomplished any of

the proposed requirements of this AD

action, and that no operator would

accomplish those actions in the future if

this AD were not adopted.

Regulatory Impact

The regulations proposed herein

would not have a substantial direct

effect on the States, on the relationship

between the national Government and

the States, or on the distribution of

power and responsibilities among the

various levels of government. Therefore,

it is determined that this proposal

would not have federalism implications

under Executive Order 13132.

For the reasons discussed above, I

certify that this proposed regulation (1)

is not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not

a ‘‘significant rule’’ under the DOT

20394 Federal Register / Vol. 65, No. 74 / Monday, April 17, 2000 / Proposed Rules

Regulatory Policies and Procedures (44

FR 11034, February 26, 1979); and (3) if

promulgated, will not have a significant

economic impact, positive or negative,

on a substantial number of small entities

under the criteria of the Regulatory

Flexibility Act. A copy of the draft

regulatory evaluation prepared for this

action is contained in the Rules Docket.

A copy of it may be obtained by

contacting the Rules Docket at the

location provided under the caption

ADDRESSES.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation

safety, Safety.

The Proposed Amendment

Accordingly, pursuant to the

authority delegated to me by the

Administrator, the Federal Aviation

Administration proposes to amend part

39 of the Federal Aviation Regulations

(14 CFR part 39) as follows:

PART 39—AIRWORTHINESS

DIRECTIVES

1. The authority citation for part 39

continues to read as follows:

Authority: 49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]

2. Section 39.13 is amended by

adding the following new airworthiness

directive:

McDonnell Douglas: Docket 2000–NM–49–

AD.

Applicability: Model DC–8 series airplanes

that have been converted from a passenger to

a cargo-carrying (‘‘freighter’’) configuration in

accordance with Supplemental Type

Certificate (STC) SA1063SO; certificated in

any category.

Note 1: This AD applies to each airplane

identified in the preceding applicability

provision, regardless of whether it has been

otherwise modified, altered, or repaired in

the area subject to the requirements of this

AD. For airplanes that have been modified,

altered, or repaired so that the performance

of the requirements of this AD is affected, the

owner/operator must request approval for an

alternative method of compliance in

accordance with paragraph (e) of this AD.

The request should include an assessment of

the effect of the modification, alteration, or

repair on the unsafe condition addressed by

this AD; and, if the unsafe condition has not

been eliminated, the request should include

specific proposed actions to address it.

Compliance: Required as indicated, unless

accomplished previously.

To prevent opening of the cargo door while

the airplane is in flight, and consequent rapid

decompression of the airplane including

possible loss of flight control or severe

structural damage, accomplish the following:

Actions Addressing the Main Deck Cargo

Door

(a) Within 60 days after the effective date

of this AD, accomplish a general visual

inspection of the wire bundle of the main

deck cargo door between the exit point of the

cargo liner and the attachment point on the

main deck cargo door to detect crimped,

frayed, or chafed wires; and perform a

general visual inspection for damaged, loose,

or missing hardware mounting components.

If any crimped, frayed, or chafed wire, or

damaged, loose, or missing hardware

mounting component is detected, prior to

further flight, repair in accordance with FAAapproved maintenance procedures.

Note 2: For the purposes of this AD, a

general visual inspection is defined as ‘‘A

visual examination of an interior or exterior

area, installation, or assembly to detect

obvious damage, failure, or irregularity. This

level of inspection is made under normally

available lighting conditions such as

daylight, hangar lighting, flashlight, or droplight, and may require removal or opening of

access panels or doors. Stands, ladders, or

platforms may be required to gain proximity

to the area being checked.’’

(b) Within 60 days after the effective date

of this AD, revise the Limitations Section of

the appropriate FAA-approved Airplane

Flight Manual Supplement (AFMS) for STC

SA1063SO by inserting therein procedures to

ensure that the main deck cargo door is fully

closed, latched, and locked prior to dispatch

of the airplane, and install any associated

placards. The AFMS revision procedures and

installation of any associated placards shall

be accomplished in accordance with a

method approved by the Manager, Los

Angeles Aircraft Certification Office (ACO),

FAA, Transport Airplane Directorate.

Actions Addressing the Main Deck Cargo

Door Systems

(c) Within 18 months after the effective

date of this AD, accomplish the actions

specified in paragraphs (c)(1), (c)(2), (c)(3),

(c)(4), and (c)(5) of this AD in accordance

with a method approved by the Manager, Los

Angeles ACO.

(1) Modify the indication system of the

main deck cargo door to indicate to the pilots

whether the main deck cargo door is fully

closed, latched, and locked;

(2) Modify the mechanical and hydraulic

systems of the main deck cargo door to

eliminate detrimental deformation of

elements of the door latching and locking

mechanism;

(3) Install a means to visually inspect the

locking mechanism of the main deck cargo

door;

(4) Install a means to remove power to the

door while the airplane is in flight;

(5) Install a means to prevent

pressurization to an unsafe level if the main

deck cargo door is not fully closed, latched,

and locked.

(d) Compliance with paragraphs (c)(1),

(c)(2), (c)(3), (c)(4), and (c)(5) of this AD

constitutes terminating action for the

requirements of paragraphs (a) and (b) of this

AD, and the AFMS revision and placards

may be removed.

Alternative Methods of Compliance

(e) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, Los

Angeles ACO. Operators shall submit their

requests through an appropriate FAA

Principal Maintenance Inspector, who may

add comments and then send it to the

Manager, Los Angeles ACO.

Note 3: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Los Angeles ACO.

Special Flight Permit

(f) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

Appendix 1

Excerpt from an FAA Memorandum to

Director-Airworthiness and Technical

Standards of ATA, dated March 20, 1992

‘‘(1) Indication System:

(a) The indication system must monitor the

closed, latched, and locked positions,

directly.

(b) The indicator should be amber unless

it concerns an outward opening door whose

opening during takeoff could present an

immediate hazard to the airplane. In that case

the indicator must be red and located in

plain view in front of the pilots. An aural

warning is also advisable. A display on the

master caution/warning system is also

acceptable as an indicator. For the purpose

of complying with this paragraph, an

immediate hazard is defined as significant

reduction in controllability, structural

damage, or impact with other structures,

engines, or controls.

(c) Loss of indication or a false indication

of a closed, latched, and locked condition

must be improbable.

(d) A warning indication must be provided

at the door operators station that monitors

the door latched and locked conditions

directly, unless the operator has a visual

indication that the door is fully closed and

locked. For example, a vent door that

monitors the door locks and can be seen from

the operators station would meet this

requirement.

(2) Means to Visually Inspect the Locking

Mechanism:

There must be a visual means of directly

inspecting the locks. Where all locks are tied

to a common lock shaft, a means of

inspecting the locks at each end may be

sufficient to meet this requirement provided

no failure condition in the lock shaft would

go undetected when viewing the end locks.

Viewing latches may be used as an alternate

to viewing locks on some installations where

there are other compensating features.

(3) Means to Prevent Pressurization:

All doors must have provisions to prevent

initiation of pressurization of the airplane to

an unsafe level, if the door is not fully closed,

latched and locked.

(4) Lock Strength:

Federal Register / Vol. 65, No. 74 / Monday, April 17, 2000 / Proposed Rules 20395

1As noted above, the President’s Working Group

on Financial Markets is comprised of the Secretary

of the Treasury, the Chairman of the Board of

Governors of the Federal Reserve System, the

Chairman of the Securities and Exchange

Commission, and the Chairman of the Commodity

Futures Trading Commission. A number of other

federal agencies participated in the study, including

the Council of Economic Advisers, the Federal

Deposit Insurance Corporation, the National

Economic Council, the Federal Reserve Bank of

New York, the Office of the Comptroller of the

Currency, and the Office of Thrift Supervision.

2PWG Report at 25.

3 Id.

4 Id at 15.

5 Id.

6 Id at 31.

7PWG Report at 32–33.

8 Id at 34.

Locks must be designed to withstand the

maximum output power of the actuators and

maximum expected manual operating forces

treated as a limit load. Under these

conditions, the door must remain closed,

latched and locked.

(5) Power Availability:

All power to the door must be removed in

flight and it must not be possible for the

flight crew to restore power to the door while

in flight.

(6) Powered Lock Systems:

For doors that have powered lock systems,

it must be shown by safety analysis that

inadvertent opening of the door after it is

fully closed, latched and locked, is extremely

improbable.’’

Issued in Renton, Washington, on April 11,

2000.

Donald L. Riggin,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 00–9557 Filed 4–14–00; 8:45 am]

BILLING CODE 4910–13–P

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 1

RIN 3038–AB53

Public Reporting by Operators of

Certain Large Commodity Pools

AGENCY: Commodity Futures Trading

Commission.

ACTION: Proposed regulations.

SUMMARY: In April of 1999, the

President’s Working Group on Financial

Markets (comprised of the Secretary of

the Treasury, the Chairman of the Board

of Governors of the Federal Reserve

System, the Chairman of the Securities

and Exchange Commission, and the

Chairman of the Commodity Futures

Trading Commission) (the ‘‘PWG’’)

issued a report entitled ‘‘Hedge Funds,

Leverage, and the Lessons of Long Term

Capital Management: Report of The

President’s Working Group on Financial

Markets’’ (the ‘‘PWG Report’’). This

report reviewed the events surrounding

the near-collapse of Long Term Capital

Portfolio, L.P.

The PWG Report contained eight

recommendations. The first was that

‘‘more frequent and meaningful

information on hedge funds should be

made public’’ and the fourth was that

‘‘regulators should encourage

improvements in the risk management

systems of regulated entities.’’ In

furtherance of the first objective, the

report specifically recommended that

commodity pool operators (‘‘CPOs’’) of

large commodity pools should file

quarterly reports, that these reports

should ‘‘include more meaningful and

comprehensive measures of market

risk’’ such as ‘‘value at risk’’ and that

these reports be published.

Consistent with this unanimous

recommendation of the PWG, the

Commission is proposing new Rule

4.27, which would require the CPOs of

the largest commodity pools to provide

to the Commission the specified

aggregate financial and risk information

on a quarterly basis. In order to provide

context for the evaluation of this

information, these CPOs would also be

required to provide certain summary

information about their risk

management systems and practices.

DATES: Comments must be received on

or before June 16, 2000.

ADDRESSES: Comments should be

mailed to Jean A. Webb, Secretary,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155—21st Street, NW, Washington, DC

20581; transmitted by facsimile to (202)

418–5521; or transmitted electronically

to (secretary@cftc.gov). Reference

should be made to ‘‘Public Reporting by

Operators of Certain Large Commodity

Pools’’.

FOR FURTHER INFORMATION CONTACT:

Robert B. Wasserman, Associate

Director at rwasserman@cftc.gov, Tobey

Kaczensky, Special Counsel at

tkaczensky@cftc.gov, or James L. Carley,

Attorney at jcarley@cftc.gov, Division of

Trading and Markets, Commodity

Futures Trading Commission, Three

Lafayette Centre, 1155—21st Street,

NW., Washington, DC. 20581,

Telephone (202) 418–5430.

SUPPLEMENTARY INFORMATION:

I. Background

The events in 1998 involving highly

leveraged hedge funds, particularly the

near collapse of Long Term Capital

Portfolio, L.P. (‘‘LTCM’’), raised

concerns that problems at one such

financial institution, under certain

circumstances, could be transmitted to

other financial institutions and pose

material systemic risks to the financial

system of the United States and to

international financial systems. In the

months following these events, the

President’s Working Group on Financial

Markets (the ‘‘PWG’’) conducted a study

of the events and their policy

implications and, in April of 1999,

issued ‘‘Hedge Funds, Leverage, and the

Lessons of Long Term Capital

Management: Report of The President’s

Working Group on Financial Markets’’

(the ‘‘PWG Report’’).1

The PWG Report stated that the

‘‘primary mechanism that regulates risk

taking by firms in a market economy is

the market discipline provided by

creditors, counterparties (including

financial contract counterparties), and

investors.’’ 2 The report observed,

however, that ‘‘market discipline tends

to be effective only when creditors have

the incentives and the means to evaluate

the riskiness of the firm.’’ 3 The report

concluded that investors and

counterparties had ‘‘exercised minimal

scrutiny of its risk management

practices and [its] risk profile’’ and were

‘‘almost certainly not adequately aware’’

of the ‘‘nature of the exposures and risks

[LTCM] had accumulated.’’ 4 The report

attributed this ‘‘insufficient monitoring’’

to ‘‘LTCM’s practice of disclosing only

minimal information’’ about itself that

‘‘did not reveal meaningful details about

[its] risk profile.’’ 5

Thus, the members of the PWG

unanimously recommended that ‘‘more

frequent and meaningful information on

hedge funds should be made public’’ 6

and that the public disclosures should

include risk information. Specifically,

the report recommended that: (i)

registered CPOs operating large funds

begin filing with the Commission

quarterly, rather than annual, reports of

financial information; (ii) in addition to

traditional financial statements, these

reports include more ‘‘meaningful and

comprehensive measures of market risk

(e.g., value at risk or stress test results),

without requiring the disclosure of

proprietary information on strategies or

positions;’’ 7 and (iii) these reports be

published. Separately, the report

recommended that ‘‘regulators should

encourage improvements in the risk

management systems of regulated

entities.’’ 8

With respect to hedge funds that are

not currently registered as CPOs, the

PWG Report recommended that ‘‘a

means for disclosure should be

developed to ensure that similar

financial information is provided to the

public’’ but recognized that ‘‘Congress