24306 Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Proposed Rules

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.

Issued in Renton, Washington, on May 8,

2001.

Donald L. Riggin,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 01–12008 Filed 5–11–01; 8:45 am]

BILLING CODE 4910–13–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 2000–NM–351–AD]

RIN 2120–AA64

Airworthiness Directives; Boeing

Model 767–200 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 Boeing Model 767–200 series

airplanes. This proposal would require

replacement of certain duct assemblies

of the air distribution system for the

flight compartment with new duct

assemblies with improved insulation,

and follow-on actions. This action is

necessary to prevent ignition of foam

insulation on the air distribution ducts,

which could result in a fire in the

airplane. This action is intended to

address the identified unsafe condition.

DATES: Comments must be received by

June 28, 2001.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Transport

Airplane Directorate, ANM–114,

Attention: Rules Docket No. 2000–NM–

351–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. Comments may be

submitted via fax to (425) 227–1232.

Comments may also be sent via the

Internet using the following address: 9-

anm-nprmcomment@faa.gov. Comments

sent via fax or the Internet must contain

‘‘Docket No. 2000–NM–351–AD’’ in the

subject line and need not be submitted

in triplicate. Comments sent via the

Internet as attached electronic files must

be formatted in Microsoft Word 97 for

Windows or ASCII text.

The service information referenced in

the proposed rule may be obtained from

Boeing Commercial Airplane Group,

P.O. Box 3707, Seattle, Washington

98124–2207. This information may be

examined at the FAA, Transport

Airplane Directorate, 1601 Lind

Avenue, SW., Renton, Washington.

FOR FURTHER INFORMATION CONTACT: Don

Eiford, Aerospace Engineer, Systems

and Equipment Branch, ANM–130S,

FAA, Seattle Aircraft Certification

Office, 1601 Lind Avenue, SW., Renton,

Washington 98055–4056; telephone

(425) 227–2788; fax (425) 227–1181.

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 action may be changed in light

of the comments received.

Submit comments using the following

format:

• Organize comments issue-by-issue.

For example, discuss a request to

change the compliance time and a

request to change the service bulletin

reference as two separate issues.

• For each issue, state what specific

change to the proposed AD is being

requested.

• Include justification (e.g., reasons or

data) for each request.

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 action

must submit a self-addressed, stamped

postcard on which the following

statement is made: ‘‘Comments to

Docket Number 2000–NM–351–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–351–AD, 1601 Lind Avenue,

SW., Renton, Washington 98055–4056.

Discussion

The FAA has received a report that an

operator found burned insulation on an

air distribution system duct located in

the Electronics and Electrical (E/E) bay.

The burned insulation was discovered

while the airplane was on the ground

when a maintenance crew noticed an

odor of burning. Investigation revealed

that the ignition source was an

overheated heater tape for the water

line. Polyurethane foam insulation

which was touching the water line

heater tape ignited and burned

completely. The foam had lost its

original fire-retardant properties. The

reason for the degradation of the foam’s

fire retardant properties is unknown;

however, contamination and aging of

the material are suspected. Ignition of

foam insulation on the air distribution

ducts could result in a fire in the

airplane.

Explanation of Relevant Service

Information

The FAA has reviewed and approved

Boeing Alert Service Bulletin 767–

21A0154, dated March 16, 2000, which

describes procedures for replacement of

certain duct assemblies of the air

distribution system for the flight

compartment (which are located under

the main deck) with new duct

assemblies having fiberglass insulation.

The service bulletin also describes

procedures for a general visual

inspection of the water line heater tape

where it passes close to the new duct

assembly to detect damage such as wear,

chafing, pinching, discoloration, or

localized burn marks. The service

bulletin specifies that any damaged tape

should be replaced with new heater

tape. If no damage is found, the service

bulletin specifies that any heater tape

that is too close to the new duct

assemblies must be rerouted to increase

the distance between the water line

heater tape and duct insulation.

Accomplishment of the actions

specified in the service bulletin is

intended to adequately address the

identified unsafe condition.

Explanation of Requirements of

Proposed Rule

Since an unsafe condition has been

identified that is likely to exist or

develop on other products of this same

type design, the proposed AD would

require accomplishment of the actions

specified in the service bulletin

Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Proposed Rules 24307

described previously, except as

discussed below.

Differences Between Proposed Rule and

Service Bulletin

Operators should note that the service

bulletin does not define appropriate

clearance between the new duct

assemblies and the water line heater

tape. This proposed AD would require

that a minimum clearance of 0.25 inch

be maintained between the new duct

assemblies and the water line heater

tape.

Also, operators should note that the

service bulletin recommends

accomplishment of the actions in that

bulletin at the earliest opportunity. The

FAA finds that a more definite

compliance time is necessary to ensure

that the proposed actions are done in a

timely manner. Therefore, the proposed

AD would require the replacement of

the duct assemblies with new

assemblies and the other follow-on

actions be accomplished within 18

months after the effective date of the

AD. The FAA finds that such a

compliance time is adequate to ensure

the safety of the airplane fleet while

allowing enough time so that the

majority of affected operators would be

able to accomplish the proposed

requirements at a normal scheduled

maintenance visit.

Cost Impact

There are approximately 81 airplanes

of the affected design in the worldwide

fleet. The FAA estimates that 52

airplanes of U.S. registry would be

affected by this proposed AD, that it

would take approximately 2 work hours

per airplane to accomplish the proposed

actions, and that the average labor rate

is $60 per work hour. Required parts

would cost a maximum of $7,285 per

airplane. Based on these figures, the cost

impact of the proposed AD on U.S.

operators is estimated to be $385,060, or

$7,405 per airplane.

The cost impact figure discussed

above is 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 proposed AD were not adopted. The

cost impact figures discussed in AD

rulemaking actions represent only the

time necessary to perform the specific

actions actually required by the AD.

These figures typically do not include

incidental costs, such as the time

required to gain access and close up,

planning time, or time necessitated by

other administrative actions.

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

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:

Boeing: Docket 2000–NM–351–AD.

Applicability: Model 767–200 series

airplanes, as listed in Boeing Alert Service

Bulletin 767–21A0154, dated March 16,

2000; 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 (b) 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 ignition of foam insulation on

the air distribution ducts, which could result

in a fire in the airplane, accomplish the

following:

Replacement and Follow-On Actions

(a) Within 18 months after the effective

date of this AD, do the actions specified in

paragraphs (a)(1) and (a)(2) of this AD per the

Accomplishment Instructions of Boeing Alert

Service Bulletin 767–21A0154, dated March

16, 2000.

(1) Replace subject duct assemblies of the

air distribution system for the flight

compartment (which are located under the

main deck) with new duct assemblies having

fiberglass insulation.

(2) Before further flight after replacement

of the ducts, perform a one-time general

visual inspection of the water line heater tape

where it passes close to the new duct

assemblies to detect damage, including wear,

chafing, pinching, discoloration, localized

burn marks, etc.

(i) If no damage is detected, measure the

clearance between the new duct assemblies

and the water line heater tape. If clearance

is less than 0.25 inch, re-route the heater tape

per the service bulletin.

(ii) If any damage is detected, before

further flight, replace the heater tape with

new heater tape, per the service bulletin.

When installing the new tape, make sure that

clearance between the water line heater tape

and the new duct assemblies is a minimum

of 0.25 inch.

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.’’

Alternative Methods of Compliance

(b) 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, Seattle

Aircraft Certification Office (ACO), FAA.

Operators shall submit their requests through

an appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, Seattle ACO.

Note 3: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Seattle ACO.

Special Flight Permits

(c) Special flight permits may be issued in

accordance with sections 21.197 and 21.199

of the Federal Aviation Regulations (14 CFR

24308 Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Proposed Rules

1See Commodity Futures Modernization Act of

2000, Appendix E of Pub. L. 106–554, 114 Stat.

2763 (2000).

2For purposes of this release, use of the term

‘‘derivatives clearing organization’’ means an

applicant seeking registration as a DCO, or a DCO

registered or required to be registered, with the

Commission pursuant to section 5b of the Act.

3The Commission will consider, however, under

the exemptive authority provided by section 4(c) of

the Act, requests to clear transactions through

alternative means.

4Thus, under the CFMA, DCOs are treated as

entities that are separate and distinct from the

markets for which they provide clearing services.

5Under section 409 of the Federal Deposit

Insurance Corporation Act of 1991, as amended by

section 112 of the CFMA, OTC derivatives also may

be cleared by a multilateral clearing organization

supervised by federal banking authorities, a clearing

agency registered under the Securities Exchange

Act of 1934, or a clearing organization supervised

by a foreign financial regulator that satisfies

appropriate standards as determined by the

Comptroller of the Currency, the Board of

Governors of the Federal Reserve System, the

Federal Deposit Insurance Corporation, the

Securities and Exchange Commission, or the CFTC.

This approach to clearing is consistent with the

Report of the President’s Working Group on

Financial Markets (‘‘PWG’’), which encouraged the

development of clearing systems for OTC

derivatives to reduce systemic risk. See Over-theCounter Derivatives Markets and the Commodity

Exchange Act, Report of the PWG (Nov. 1999). The

Commission believes that appropriate standards

referred to above include regulating and overseeing

the organization pursuant to principles comparable

to the core principles set forth in section 5b of the

Act and a requirement to participate in appropriate

and adequate information sharing arrangements.

6 66 FR 14262. That release, when it is published

as a final rulemaking, will be conformed to this

release insofar as this release clarifies the

application of the DCO-related provisions of the

CFMA.

7Section 1a(9) of the Act defines the term DCO

to encompass entities that, ‘‘with respect to an

agreement, contract, or transaction—(i) enables each

party to the agreement * * * to substitute, through

novation or otherwise, the credit of the [DCO] for

the credit of the parties; (ii) arranges or provides,

on a multilateral basis, for the settlement or netting

of obligations resulting from such agreements * * *

executed by participants in the [DCO]; or (iii)

otherwise provides clearing services or

arrangements that mutualize or transfer among

participants in the [DCO] the credit risk arising

from such agreements * * * executed by the

participants.’’

8The CFMA’s definition of DCO does not

necessitate the performance of a direct credit

enhancement function. See section 1a(9)(ii). Thus,

the provision of certain settlement or netting

services in the absence of direct credit enhancement

would generally meet the definition of a DCO. An

organization that intends to provide settlement or

other clearing-type services to a designated contract

21.197 and 21.199) to operate the airplane to

a location where the requirements of this AD

can be accomplished.

Issued in Renton, Washington, on May 8,

2001.

Donald L. Riggin,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 01–12009 Filed 5–11–01; 8:45 am]

BILLING CODE 4910–13–U

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 39

RIN 3038–AB66

A New Regulatory Framework for

Clearing Organizations

AGENCY: Commodity Futures Trading

Commission.

ACTION: Proposed rulemaking.

SUMMARY: The Commodity Futures

Trading Commission (Commission or

CFTC) is proposing rules to implement

various provisions of the Commodity

Futures Modernization Act of 2000

(‘‘CFMA’’), which fundamentally alters

the regulation of derivatives clearing

organizations. These proposed rules

apply to derivatives clearing

organizations that are, are required to, or

seek to become registered with the

Commission and implement the

statutory framework in the CFMA

governing those entities.

DATES: Comments must be received by

June 13, 2001.

ADDRESSES: Comments should be sent to

the Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, N.W., Washington,

D.C. 20581, attention: Office of the

Secretariat. Comments may be sent by

facsimile transmission to (202) 418–

5521 or, by e-mail to secretary@cftc.gov.

Reference should be made to ‘‘Clearing

Organizations.’’

FOR FURTHER INFORMATION CONTACT:

Alan L. Seifert, Deputy Director,

Division of Trading and Markets, Lois J.

Gregory, Special Counsel, or David P.

Van Wagner, Associate Director,

Division of Trading and Markets,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street, N.W., Washington,

D.C. 20581. Telephone (202) 418–5260

or e-mail ASeifert@cftc.gov.,

LGregory@cftc.gov, or

DVanWagner@cftc.gov.

SUPPLEMENTARY INFORMATION:

I. Background

Congress on December 15, 2000,

passed, and the President on December

21, 2000, signed into law, the CFMA,1

which substantially amended the

Commodity Exchange Act, 7 U.S.C. 1 et

seq. (‘‘Act’’). New Section 5b(a) of the

Act, added by the CFMA, requires that

contracts of sale of a commodity for

future delivery, options on such

contracts, and options on a commodity

be cleared only by a derivatives clearing

organization (‘‘DCO’’) registered with

the Commission,2 unless the contracts

are: (i) Excluded under the Act, (ii)

exempted under the Act, or (iii) security

futures products cleared by a securities

clearing agency. Contracts traded on a

designated contract market, if cleared,

must be cleared by a DCO.3 Excluded or

exempted contracts, including those

elected pursuant to section 5a(g) to be

traded on a registered derivatives

transaction execution facility, are not

required to be cleared by a DCO,

although a clearing organization that

clears these contracts may voluntarily

apply, pursuant to section 5b(b), to

register with the Commission as a DCO.4

In addition, a DCO may clear other

contracts, agreements, or transactions,

including, but not limited to, certain

over-the-counter (‘‘OTC’’) derivative

instruments referenced in section 5b(b)

of the Act and transactions in spot and

forward contracts.5

To be registered as a DCO, an

applicant must demonstrate that it

complies with fourteen core principles

set forth in the CFMA. Section 5b

requires any person desiring to so

register to submit to the Commission an

application in such form and containing

such information as the Commission

may require for the purpose of

determining whether the applicant

meets the core principles.

The Commission is now proposing

rules to implement section 5b of the

Act. This proposal follows the

Commission’s proposal of regulations to

implement the CFMA’s provisions

governing trading facilities, which was

published for comment on March 9,

2001.6 Part 39 would stipulate the form

and provide guidance for the content of

applications for DCO registration, as

well as procedures for processing such

applications. Other provisions would

assist the Commission in carrying out its

oversight responsibilities with respect to

the operations and activities of DCOs,

enforcing compliance by DCOs with the

core principles and other provisions of

the Act and regulations, protecting

clearing participants from fraud, and

ensuring the enforceability of contracts

cleared on DCOs. Part 39 does not apply

to the execution of transactions cleared

by DCOs; its provisions apply

specifically and only to the clearing of

transactions by DCOs.7

II. Proposed Part 39

A. Application and Approval

Procedures

Proposed part 39 would apply to any

DCO, as defined under section 1a(9) of

the Act,8 that is registered with the