20394 Federal Register / Vol. 60, No. 80 / Wednesday, April 26, 1995 / Rules and Regulations

favorable decision, the district director

will designate the lender by executing

with the 503 Company the PCLP

Agreement. Before it can operate as a

Premier Certified Lender, the 503

company must execute such PCLP

Agreement.

§ 108.509–3 Eligibility.

In making the determination of

whether a 503 company may become a

Premier Certified Lender, SBA shall

consider, but is not limited to, the

following factors:

(a) Whether the 503 company has

been an active participant in the

Accredited Lenders Program under

§ 108.508 for not less than the preceding

12 months, and whether the 503

company has demonstrated ability to

work with the local SBA office in a

cooperative and constructive manner.

Prior to January 1, 1996, SBA may waive

the requirement for prior activity in the

Accredited Lenders Program if such

company is otherwise qualified to

participate in that program;

(b) Whether the 503 company has a

history of submitting to SBA complete,

accurate and adequately analyzed

debenture guaranty application

packages;

(c) Whether the 503 company agrees

to assume and to reimburse SBA for 10

percent of any loss sustained by the

SBA as a result of a default by the

company in the payment of principal or

interest on a debenture issued by such

company and guaranteed by SBA under

the PCLP Program; and

Whether the 503 company has a

historical loss rate acceptable to SBA.

§ 108.509–4 Loss reserve.

Each Premier Certified Lender shall

establish a loss reserve for financings

approved pursuant to the PCL Program.

(a) Amount. The amount of the loss

reserve shall be the greater of:

(1) The historic loss rate on all

debentures issued by such company; or

(2) 10 percent of the amount of the

company’s exposure on debentures

issued under the PCL Program.

(b) Assets. The loss reserve shall be

comprised of segregated assets of the

company which shall be securitized in

favor of the SBA.

(c) Contributions. For each debenture

issued by a Premier Certified Lender,

the company shall make a contribution

proportionate to the total amount of loss

reserve required in the following

amounts and at the following intervals:

(1) 50 percent when the debenture is

funded,

(2) 25 percent not later than one year after

the debenture is funded, and

(3) 25 percent not later than two years after

the debenture is funded.

§ 108.509–5 Suspension or revocation.

(a) Cause. The designation of a 503

Company as a Premier Certified Lender

may be suspended or revoked if the SBA

determines that:

(1) The 503 company has not continued to

meet the criteria for eligibility under

§ 108.509–3; or

(2) The 503 company has not established

or maintained the loss reserve required under

§ 108.509–4; or

(3) The 503 company has failed to adhere

to the SBA’s rules and regulations or has

violated any other applicable provision of

law.

(b) Review. At intervals not greater

than 12 months, SBA shall review the

financings made by each Premier

Certified Lender. The review shall

include the lender’s credit decisions

and general compliance with the

eligibility requirements for each

financing approved under the program

authorized by this section.

(c) Procedure. SBA reserves the

unilateral right to suspend or revoke the

designation of any Premier Certified

Lender as a result of any violation of

SBA regulations, any breach of any

agreement with SBA, or any change of

circumstance resulting in the Lender’s

inability to meet the operational

requirements set forth herein: Provided,

however, that such suspension or

revocation shall not invalidate any

guaranty previously entered into by

SBA. Proceedings for such purposes

will be initiated by a determination to

suspend or revoke issued by the

Director of the Office of Rural Affairs

and Economic Development. Such

determination may be appealed to the

Associate Deputy Administrator for

Economic Development whose decision

on any appeal shall be the final decision

of SBA.

Catalog of Federal Domestic Assistance

59.036 Certified Development Company

Loans (503 Loans); 59.041 Certified

Development Company Loans (504 Loans).

Dated: March 17, 1995.

Philip Lader,

Administrator.

[FR Doc. 95–10178 Filed 4–25–95; 8:45 am]

BILLING CODE 8025–01–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 94–NM–158–AD; Amendment

39–9205; AD 95–09–01]

Airworthiness Directives; Boeing

Model 737–300, –400, and –500 Series

Airplanes

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to certain Boeing Model 737–

300, –400, and –500 series airplanes,

that requires an inspection to determine

the type of topcoat material currently on

the insulation of the inner wall of the

fan duct cowl (the firewall) of the thrust

reversers, and application of an

improved topcoat material, if necessary.

This amendment is prompted by tests,

which demonstrated that flames can

penetrate the firewall if certain

combinations of insulation and topcoat

materials are used. The actions specified

by this AD are intended to prevent

failure of the fireproof insulation top

coat installed on the firewalls of the

thrust reverser fan cowls, which could

result in degradation or loss of the

firewall and lead to an uncontained

engine fire.

DATES: Effective May 26, 1995.

The incorporation by reference of

certain publications listed in the

regulations is approved by the Director

of the Federal Register as of May 26,

1995.

ADDRESSES: The service information

referenced in this AD may be obtained

from Boeing Commercial Airplane

Group, P.O. Box 3707, Seattle,

Washington 98124–2207. This

information may be examined at the

Federal Aviation Administration (FAA),

Transport Airplane Directorate, Rules

Docket, 1601 Lind Avenue, SW.,

Renton, Washington; or at the Office of

the Federal Register, 800 North Capitol

Street, NW., suite 700, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Stephen Bray, Aerospace Engineer,

Propulsion Branch, ANM–140S, Seattle

Aircraft Certification Office, FAA,

Transport Airplane Directorate, 1601

Lind Avenue, SW., Renton, Washington

98055–4056; telephone (206) 227–2681;

fax (206) 227–1181.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)
Federal Register / Vol. 60, No. 80 / Wednesday, April 26, 1995 / Rules and Regulations 20395

that is applicable to certain Boeing

Model 737–300, –400, and –500 series

airplanes was published in the Federal

Register on December 8, 1994 (59 FR

63277). That action proposed to require

an inspection to determine the type of

topcoat material currently on the

insulation of the inner wall of the fan

duct cowl (the firewall) of the thrust

reversers, and application of an

improved topcoat material, if necessary.

Interested persons have been afforded

an opportunity to participate in the

making of this amendment. Due

consideration has been given to the

comments received.

Several commenters request that the

rule be revised so that, if the inspection

reveals that the suspect topcoat material

is present, operators would not be

required to apply the improved topcoat

material immediately prior to further

flight. These commenters state that the

application of the improved topcoat

material should be permitted at the

operator’s convenience after a positive

inspection finding. This would

encourage operators to conduct the

inspection promptly, and then allow

them to schedule the time and materials

necessary for accomplishing the topcoat

application at their subsequent heavy

maintenance check. One commenter

contends that in-service experience has

shown that the risk of an engine fire

resulting from the problems associated

with the topcoat material is very low; in

light of this, it is appropriate to allow an

extended interval of time between

conducting the inspection and applying

the improved top coat.

The FAA does not concur with the

request to permit application of the

improved topcoat material at an

extended interval after the inspection

findings. It is the FAA’s general policy

that, once an unsafe condition has been

determined to exist, that condition

cannot be allowed to continue in the

fleet. Therefore, it is essential that, if the

inspection reveals that application of

the improved topcoat is necessary, such

application must be accomplished prior

to further flight after the inspection.

However, in light of the fact that there

have been no in-service incidents

associated with the addressed unsafe

condition, and because the topcoat

application procedures may be

extensive for some operators, the FAA

considers that the compliance time for

the required actions can be extended

somewhat. It is the FAA’s intent that, if

the application of the improved topcoat

is necessary, it should be performed

during a regularly scheduled

maintenance interval when the airplane

is at a base where special equipment,

necessary parts, and trained personnel

are available. If the compliance time for

the action required by this AD is

parallel to the operator’s regular

maintenance interval, the operator can

easily schedule both the inspection and

any necessary topcoat application to be

performed during the same maintenance

hold. In consideration of these factors,

the FAA finds that the compliance time

may be extended from the proposed 24

months to 30 months without

compromising safety. This extension

will allow the majority of affected

operators to accomplish the required

actions during scheduled maintenance

visits.

After careful review of the available

data, including the comments noted

above, the FAA has determined that air

safety and the public interest require the

adoption of the rule with the change

previously described. The FAA has

determined that this change will neither

increase the economic burden on any

operator nor increase the scope of the

AD.

There are approximately 135 Model

737–300, –400, and –500 series

airplanes of the affected design in the

worldwide fleet. The FAA estimates that

18 airplanes of U.S. registry will be

affected by this AD, that it will take

approximately 13 work hours per

airplane to accomplish the required

actions, and that the average labor rate

is $60 per work hour. Required parts

will be provided by the manufacturer at

no charge to the operators. Based on

these figures, the total cost impact of the

AD on U.S. operators is estimated to be

$14,040, or $780 per airplane.

The total cost impact figure discussed

above is based on assumptions that no

operator has yet accomplished any of

the requirements of this AD action, and

that no operator would accomplish

those actions in the future if this AD

were not adopted.

The regulations adopted herein will

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 final rule does

not have sufficient federalism

implications to warrant the preparation

of a Federalism Assessment.

For the reasons discussed above, I

certify that this action (1) is not a

‘‘significant regulatory action’’ under

Executive Order 12866; (2) is not a

‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

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

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 final evaluation has

been prepared for this action and it is

contained in the Rules Docket. A copy

of it may be obtained from the Rules

Docket at the location provided under

the caption ADDRESSES.

List of Subjects in 14 CFR Part 39

Air transportation, Aircraft, Aviation

safety, Incorporation by reference,

Safety.

Adoption of the Amendment

Accordingly, pursuant to the

authority delegated to me by the

Administrator, the Federal Aviation

Administration amends 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. App. 1354(a), 1421

and 1423; 49 U.S.C. 106(g); and 14 CFR

11.89.

§ 39.13 [Amended]

2. Section 39.13 is amended by

adding the following new airworthiness

directive:

95–09–01 Boeing: Amendment 39–9205.

Docket 94–NM–158–AD.

Applicability: Model 737–300, –400, and

–500 series airplanes; line numbers 2137

through 2271, inclusive; 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 use the authority

provided in paragraph (b) to request approval

from the FAA. This approval may address

either no action, if the current configuration

eliminates the unsafe condition; or different

actions necessary to address the unsafe

condition described in this AD. Such a

request should include an assessment of the

effect of the changed configuration on the

unsafe condition addressed by this AD. In no

case does the presence of any modification,

alteration, or repair remove any airplane from

the applicability of this AD.

Compliance: Required as indicated, unless

accomplished previously.

To prevent the failure of the fireproof

insulation topcoat installed on the firewalls

for the thrust reverser fan cowls, which can

result in degradation or loss of the firewall

and lead to an uncontained engine fire,

accomplish the following:

(a) Within 30 months after the effective

date of this AD, inspect the inner wall of the
20396 Federal Register / Vol. 60, No. 80 / Wednesday, April 26, 1995 / Rules and Regulations

1Pub. L. 101–432, 104 Stat. 963 (1990).

2H.R. Rep. No. 101–524 and 101–477, 101st

Cong., 2nd Sess. (1990).

fan duct cowl (the firewall) of the thrust

reversers to determine the type of topcoat

material installed, in accordance with Boeing

Alert Service Bulletin 737–78A1056, dated

August 11, 1994.

(1) If the existing topcoat has silica fibers

in it, no further action is required by this AD.

(2) If the existing topcoat does not have

silica fibers in it, prior to further flight,

accomplish the application of the DC92–010

topcoat to the firewall of the thrust reversers

in accordance with the service bulletin.

(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,

Transport 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, Seattle ACO.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Seattle ACO.

(c) Special flight permits may be issued in

accordance with §§ 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.

(d) The inspection and application shall be

done in accordance with Boeing Alert

Service Bulletin 737–78A1056, dated August

11, 1994. This incorporation by reference was

approved by the Director of the Federal

Register in accordance with 5 U.S.C. 552(a)

and 1 CFR part 51. Copies may be obtained

from Boeing Commercial Airplane Group,

P.O. Box 3707, Seattle, Washington 98124–

2207. Copies may be inspected at the FAA,

Transport Airplane Directorate, 1601 Lind

Avenue, SW., Renton, Washington; or at the

Office of the Federal Register, 800 North

Capitol Street, NW., suite 700, Washington,

DC.

(e) This amendment becomes effective on

May 26, 1995.

Issued in Renton, Washington, on April 14,

1995.

John J. Hickey,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 95–9771 Filed 4–25–95; 8:45 am]

BILLING CODE 4910–13–U

DEPARTMENT OF THE TREASURY

Office of the Under Secretary for

Domestic Finance

17 CFR Parts 404 and 405

RIN 1505–AA47

Amendments to Regulations for the

Government Securities Act of 1986

AGENCY: Office of the Under Secretary

for Domestic Finance, Treasury.

ACTION: Final rule.

SUMMARY: The Department of the

Treasury (‘‘Department’’ or ‘‘Treasury’’)

is publishing, as a final rule,

amendments to the recordkeeping rules

in part 404 and the reporting rules in

part 405 of the regulations issued under

the Government Securities Act of 1986

(‘‘GSA’’). The recordkeeping

amendment requires entities registered

with the Securities and Exchange

Commission (‘‘SEC’’) as specialized

government securities brokers and

dealers (‘‘registered government

securities brokers and dealers’’) under

section 15C(a)(2) of the Securities

Exchange Act of 1934 (the ‘‘Exchange

Act’’) (15 U.S.C. 78o–5(a)(2)) to

maintain and preserve records

concerning the financial and securities

activities of affiliates whose business

activities are reasonably likely to have a

material impact on the financial or

operational condition of the registered

government securities brokers and

dealers. The reporting amendment

requires registered government

securities brokers and dealers to file

with the SEC quarterly summary reports

of the information required to be

maintained and preserved by the

recordkeeping amendment. The

amendments (‘‘risk assessment rules’’)

parallel the SEC’s final temporary risk

assessment rules applicable to brokers

and dealers that conduct general or

municipal securities businesses

(‘‘registered brokers and dealers’’). The

Department’s risk assessment rules are

being promulgated pursuant to the

authority granted to the Department by

the Market Reform Act of 1990 (the

‘‘Reform Act’’) and are intended to

provide regulators with access to

information concerning the financial

risk posed to registered government

securities brokers and dealers—and to

the securities markets as a whole—as a

result of certain financial and securities

activities conducted by affiliates within

holding company structures. The

Department is adopting the amendments

essentially unchanged from their

proposed form.

DATES: The effective date is June 30,

1995. The rules are being implemented

in accordance with a phase-in schedule.

See Section III of this preamble for the

entire schedule.

FOR FURTHER INFORMATION CONTACT:

Kerry Lanham (Government Securities

Specialist) or Lee Grandy (Government

Securities Specialist) at 202–219–3632.

(TDD for hearing impaired: 202–219–

3988.)

SUPPLEMENTARY INFORMATION:

I. Background

In response to the stock market

disruption of October 1987, the

bankruptcy of Drexel Burnham Lambert

Group, Inc. (‘‘Drexel’’) in February 1990,

and other developments in the

securities markets, Congress passed the

Reform Act in September 1990.1 Among

other things, the Reform Act provided

the SEC and Treasury separate but

parallel authority to promulgate risk

assessment rules for certain brokerdealer holding company structures. The

Reform Act authorized Treasury to

require registered government securities

brokers and dealers to maintain and

report information on the financial and

securities activities of certain affiliates

that had the potential to pose material

amounts of risk to the brokers and

dealers. The Reform Act did not

authorize Treasury to require financial

institutions that have filed notice (or are

required to file notice) as government

securities brokers and dealers to

maintain and report risk assessment

information, although registered

government securities brokers and

dealers that are subject to the rules must

maintain records and submit reports

pertaining to the financial and securities

activities of certain affiliates that are

financial institutions.

The Drexel failure demonstrated that

financial difficulties or liquidity

problems of parent companies or

affiliates of brokers and dealers could

have a material and adverse effect on

brokers and dealers themselves; risk

assessment authority was therefore

intended to help regulators monitor

such developments. The primary focus

of the risk assessment authority was the

financial health of large holding

companies whose potential failures pose

risks to their affiliated brokers and

dealers, as well as to the securities

markets and the financial system as a

whole. The Department believes that

these rules will enhance the safety of

the government securities market and

provide for more effective regulatory

oversight.

The legislative history 2 of the Reform

Act indicated that risk assessment rules

would require information concerning

several particular types of potentially

risky financial and securities activities

conducted by affiliates of brokers and

dealers, including bridge loans, interest

rate swaps, foreign currency

transactions, other derivatives (e.g.,

forwards and futures), and real estate