Federal Register / Vol. 61, No. 106 / Friday, May 31, 1996 / Rules and Regulations 27255

emergency regulation under DOT

Regulatory Policies and Procedures (44

FR 11034, February 26, 1979). If it is

determined that this emergency

regulation otherwise would be

significant under DOT Regulatory

Policies and Procedures, a final

regulatory evaluation will be prepared

and placed in the Rules Docket. A copy

of it, if filed, 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 USC 106(g), 40113, 44701.

§ 39.13 [Amended]

2. Section 39.13 is amended by

adding the following new airworthiness

directive:

96–11–14 SAAB Aircraft Ab: Amendment

39–9639. Docket 96–NM–102–AD.

Applicability: Model SAAB 2000 series

airplanes; having serial numbers 004 through

039, 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

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 (f) 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 fatigue cracking of the lower rib

of the rudder and subsequent reduced

controllability of the airplane, accomplish

the following:

(a) Within 20 days after the effective date

of this AD: Perform a visual inspection to

detect cracking of the lower rib of the rudder,

in accordance with Saab Service Bulletin

2000–55–005, dated February 2, 1996.

(b) If no cracking is detected: Thereafter,

repeat the inspection required by paragraph

(a) of this AD at intervals not to exceed 400

hours time-in-service, in accordance with

Saab Service Bulletin 2000–55–005, dated

February 2, 1996.

(c) If any cracking is detected that is 25 mm

in length or less: Prior to further flight,

perform a temporary repair in accordance

with paragraph 2.C. of the Accomplishment

Instructions of Saab Service Bulletin 2000–

55–005, dated February 2, 1996. Thereafter,

repeat the inspections required by paragraph

(a) of this AD at intervals not to exceed 7

days.

(d) If any cracking is detected that is more

than 25 mm in length: Prior to further flight,

repair it in accordance with a method

approved by the Manager, Standardization

Branch, ANM–113, FAA, Transport Airplane

Directorate.

(e) Modification of the lower rib of the

rudder (Modification No. 5736), in

accordance with Saab Service Bulletin 2000–

55–006, dated April 23, 1996, constitutes

terminating action for the repetitive

inspection requirements of this AD.

(f) 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,

Standardization Branch, ANM–113.

Operators shall submit their requests through

an appropriate FAA Principal Maintenance

Inspector, who may add comments and then

send it to the Manager, Standardization

Branch, ANM–113.

Note 2: Information concerning the

existence of approved alternative methods of

compliance with this AD, if any, may be

obtained from the Standardization Branch,

ANM–113.

(g) 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.

(h) The inspections and temporary repair

shall be done in accordance with Saab

Service Bulletin 2000–55–005, dated

February 2, 1996. 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 SAAB Aircraft AB, SAAB

Aircraft Product Support, S–581.88,

Linko ̈ping, Sweden. 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.

(i) This amendment becomes effective on

June 17, 1996.

Issued in Renton, Washington, on May 22,

1996.

John J. Hickey,

Acting Manager, Transport Airplane

Directorate, Aircraft Certification Service.

[FR Doc. 96–13496 Filed 5–30–96; 8:45 am]

BILLING CODE 4910–13–P

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 754, 758, and 762

[Docket No.960523147–01]

RIN 0694–AB44

Exports of Alaskan North Slope Crude

Oil; Establishment of License

Exception TAPS

AGENCY: Bureau of Export

Administration, Commerce

ACTION: Final rule.

SUMMARY: The Bureau of Export

Administration is amending the short

supply provisions of the Export

Administration Regulations to modify

the restrictions on exports of Alaskan

North Slope crude oil and establish

License Exception TAPS authorizing

such exports, with certain conditions.

License Exception TAPS is based on: 1)

Public Law 104–58, which allows for

the export of crude oil transported by

pipeline over right-of-way granted

pursuant to section 203 of the TransAlaska Pipeline Authorization Act

(TAPS); 2) the President’s April 28,

1996 determination that exports are in

the national interest; and 3) the

President’s direction to the Secretary of

Commerce to issue a License Exception

with conditions for export of TAPS

crude oil.

EFFECTIVE DATE: May 28, 1996.

FOR FURTHER INFORMATION CONTACT:

Bernard Kritzer, Office of Chemical and

Biological Controls and Treaty

Compliance, Bureau of Export

Administration, Department of

Commerce, Telephone: (202) 482–0894.

SUPPLEMENTARY INFORMATION:

Background

Section 7(d) of the Export

Administration Act of 1979, (50 U.S.C.

app. 2406) restricts exports of crude oil

transported over right-of-way granted

pursuant to section 203 of the TransAlaska Pipeline Authorization Act (43

U.S.C. 1652), with certain exceptions,

unless the President makes certain

findings, recommends exports to the

Congress on the basis of those findings,

and the Congress then agrees to the

recommendation by joint resolution

enacted into law. Although the Export

Administration Act (EAA) expired on

August 20, 1994, the President invoked

the International Emergency Economic

Powers Act and continued in effect, to

the extent permitted by law, the

provisions of the EAA and the EAR in

Executive Order 12924 of August 19,
27256 Federal Register / Vol. 61, No. 106 / Friday, May 31, 1996 / Rules and Regulations

1994, and notice of August 15, 1995 (60

FR 42767).

On November 28, 1995, the President

signed into law Public Law 104–58,

which created a new section 28(s) of the

Mineral Leasing Act (30 U.S.C. 185).

Public Law 104–58 allows exports of oil

transported over right-of-way granted

pursuant to section 203 of the TransAlaska Pipeline Authorization Act (43

U.S.C. 1652), ‘‘notwithstanding any

provision of this Act or any other

provision of law (including any

regulation),’’ unless the President finds

that such exports are not in the national

interest.

To address the economic and

environmental issues identified in

Public Law 104–58, the National

Economic Council and the Council on

Environmental Quality working with

the Department of Commerce’s Bureau

of Export Administration, coordinated

an intensive interagency review of the

effects of lifting the export ban on oil

transported over right-of-way granted

pursuant to section 203 of the TransAlaska Pipeline Authorization Act

(TAPS oil). After extensive public

hearings, the review of public

comments, and analytical evaluation,

the interagency working group found

that the exports are not likely to pose a

significant impact to the economy or the

environment.

On April 28, 1996, the President

determined that, subject to certain

conditions described below, exports of

crude oil transported over right-of-way

granted pursuant to section 203 of the

Trans-Alaska Pipeline Authorization

Act (TAPS) are in the national interest.

The President found that such exports:

(1) Will not diminish the total

quantity or quality of petroleum

available to the United States;

(2) Will not pose significant risks to

the environment with the imposition of

a series of measures to further ensure

the safety of the environment; and

(3) Are not likely to cause sustained

material oil supply shortages or

sustained oil price increases above

world market levels that would cause

sustained material adverse employment

effects in the United States or that

would cause substantial harm to

consumers, including those located in

noncontiguous States and Pacific

territories.

The President directed the Secretary

of Commerce to issue a License

Exception, authorizing exports of TAPS

oil, subject to certain conditions

designed to preserve the environment.

This final rule amends part 754 of the

Export Administration Regulations

(EAR) by establishing a new License

Exception TAPS. License Exception

TAPS authorizes exports of oil

transported over right-of-way granted

pursuant to section 203 of the TransAlaska Pipeline Authorization Act (42

U.S.C. 1652) provided that the

transaction meets the following

conditions:

(1) The TAPS oil is transported by a

vessel documented under the laws of

the United States and owned by a

citizen of the United States (in

accordance with section 2 of the

Shipping Act, 1916 (46 U.S.C. app.

802));

(2) All tankers involved in the TAPS

oil export trade use the same route that

they do for shipments to Hawaii until

they reach a point 300 miles due south

of Cape Hinchinbrook Light and then

turn toward Asian destinations. After

reaching that point, tankers in the TAPS

oil export trade must remain outside of

the 200 nautical mile Exclusive

Economic Zone, as defined in 16 U.S.C.

1802(6). Tankers returning from foreign

ports to Valdez, Alaska must abide by

the same restrictions, in reverse, on

their return route. This condition shall

not be construed to limit any statutory,

treaty or Common Law rights and duties

imposed upon and enjoyed by tankers

in the TAPS oil export trade, including,

but not limited to, force majeure and

maritime search and rescue rules;

(3) The owner or operator of a tanker

exporting TAPS oil shall:

(a) Adopt a mandatory program of

deep water ballast exchange (i.e., at least

2,000 meters water depth). Exceptions

can be made at the discretion of the

captain only in order to ensure the

safety of the vessel and crew. Specified

records shall be maintained and made

available for audit by government

officials.

(b) Be equipped with satellite-based

communications systems that will

enable the Coast Guard independently

to determine the tanker’s location;

(c) Maintain a Critical Area Inspection

Plan for each tanker in the TAPS oil

export trade in accordance with the U.S.

Coast Guard’s Navigation and

Inspection Circular No. 15–91 as

amended, which shall include an

annual internal survey of the vessel’s

cargo block tanks; and

(4) The exporter files with BXA a

Shipper’s Export Declaration covering

the export not later than 21 days after

the export has occurred.

This final rule also makes other

conforming changes in the short supply

provisions of the EAR by revising part

754 concerning TAPS oil exports, the

export clearance provisions of part 758

regarding the requirement to submit the

Shippers’ Export Declaration (SED) to

the Bureau of Export Administration,

and the recordkeeping requirements of

part 762.

The Export Administration

Regulations (EAR) have been totally

amended by an interim rule published

on March 25, 1996 (61 FR 12714), which

provides for a transition period within

which exporters can take advantage of

both the old rules and the new rules

until November 1, 1996. This rule

permits exports of TAPS oil pursuant to

a License Exception. Exporters can

make exports of TAPS oil under this

exception as of the effective date of this

rule. Accordingly, the old rule is not

being revised.

Rulemaking Requirements

1. This final rule has been determined

to be significant for the purpose of

Executive Order 12866.

2. Notwithstanding any other

provision of the law, no person is

required to respond to, nor shall any

person be subject to a penalty for failure

to comply with a collection of

information, subject to the requirements

of the Paperwork Reduction Act, unless

that collection of information displays a

currently valid Office of Management

and Budget Control Number. This rule

contains a collection of information

subject to the Paperwork Reduction Act,

which is cleared by the Office of

Management and Budget under existing

OMB Control Number 0694–0027. The

public reporting burdens for the new

collections of information are estimated

to range between 5 and 10 minutes for

the Shipper’s Export Declaration

requirement, and 30 minutes per voyage

for the Ballast Water Exchange

collection. These estimates include the

time for reviewing instructions,

searching existing data sources,

gathering and maintaining the data

needed, and completing and reviewing

the collections of information. Send

comments regarding these burden

estimates or any other aspect of these

collections of information, including

suggestions for reducing the burden, to

Bernard Kritzer, Office of Chemical and

Biological Controls and Treaty

Compliance, Bureau of Export

Administration, Department of

Commerce, Room 2705, 14th Street and

Pennsylvania Avenue, N.W.,

Washington, D.C. 20230.

3. This rule does not contain policies

with Federalism implications sufficient

to warrant preparation of a Federalism

assessment under Executive Order

12612.

4. This rule is being issued without

notice of proposed rulemaking and

opportunity for comment because

Public Law 104–58: (1) provides that the

administrative action under this Act is
Federal Register / Vol. 61, No. 106 / Friday, May 31, 1996 / Rules and Regulations 27257

not subject to sections 551 and 553–559

of the Administrative Procedures Act (5

U.S.C. 551, 553–559); and (2) requires

these regulations to be issued within 30

days of the President’s national interest

determination.

5. Under 8 U.S.C. 808(2), there is good

cause that notice and public procedure

thereon are unnecessary and contrary to

the public interest. Notice and public

procedure are unnecessary because

Public Law 104–58 exempts rulemaking

under this Act from the notice and

comment requirements of the

Administrative Procedures Act and

requires regulations to be issued within

30 days of the President’s national

interest determination. Notice and

public procedure are contrary to the

public interest because they would

delay allowing the exports that the

President, as authorized by Public Law

104–58, has determined are in the

national interest.

List of Subjects

15 CFR Part 754

Exports, Foreign trade, Forests and

forest products, Petroleum, Reporting

and recordkeeping requirements.

15 CFR Part 758

Administrative practice and

procedure, Exports, Foreign trade,

Reporting and recordkeeping

requirements.

15 CFR Part 762

Administrative practice and

procedure, Business and industry,

Confidential business information,

Exports, Foreign trade, Reporting and

recordkeeping requirements.

1. The authority citation for 15 CFR

part 754 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C.

7430(e); Sec. 201, Pub. L. 104–58, 109 Stat.

557 (30 U.S.C. 185(s)); 30 U.S.C. 185(u); 42

U.S.C. 6212; 43 U.S.C. 1354; 46 U.S.C. app.

466c; E.O. 12924, 59 FR 43437, 3 CFR, 1994

Comp., p. 917; Notice of August 15, 1995 (60

FR 42767, August 17, 1995).

2. The authority citation for 15 CFR

part 758 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50

U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437,

3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995).

3. The authority citation for 15 CFR

part 762 continues to read as follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50

U.S.C. 1701 et seq.; E.O. 12924, 59 FR 43437,

3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995).

PART 754—[AMENDED]

4. In § 754.2 the following changes are

made:

a. in paragraph (a), the phrase

‘‘Reserves paragraph (i) of this section

for a License Exception for certain

shipments of samples.’’ is revised to

read ‘‘Reserves, paragraph (i) of this

section for a License Exception for

certain shipments of samples, and

paragraph (j) of this section for a License

Exception for exports of oil transported

by pipeline over right-of-way granted

pursuant to section 203 of the TransAlaska Pipeline Authorization Act (43

U.S.C. 1652).’’.

b. paragraph (c)(1)(i) is amended by

adding the following sentence at the

end: ‘‘The President made a

determination on April 28, 1996.’’; and

c. a new paragraph (j) is added to read

as follows:

§ 754.2 Crude oil.

* * * * *

(j) License Exception for exports of

TAPS Crude Oil. (1) License Exception

TAPS may be used to export oil

transported over right-of-way granted

pursuant to section 203 of the TransAlaska Pipeline Authorization Act

(TAPS), provided the following

conditions are met:

(i) The TAPS oil is transported by a

vessel documented under the laws of

the United States and owned by a

citizen of the United States (in

accordance with section 2 of the

Shipping Act, 1916 (46 U.S.C. app.

802));

(ii) All tankers involved in the TAPS

export trade use the same route that

they do for shipments to Hawaii until

they reach a point 300 miles due south

of Cape Hinchinbrook Light and then

turn toward Asian destinations. After

reaching that point, tankers in the TAPS

oil export trade must remain outside of

the 200 nautical mile Exclusive

Economic Zone, as defined in 16 U.S.C.

1802(6). Tankers returning from foreign

ports to Valdez, Alaska must abide by

the same restrictions, in reverse, on

their return route. This condition shall

not be construed to limit any statutory,

treaty or Common Law rights and duties

imposed upon and enjoyed by tankers

in the TAPS oil export trade, including,

but not limited to, force majeure and

maritime search and rescue rules; and

(iii) The owner or operator of a tanker

exporting TAPS oil shall:

(A) Adopt a mandatory program of

deep water ballast exchange (i.e., at least

2,000 meters water depth). Exceptions

can be made at the discretion of the

captain only in order to ensure the

safety of the vessel and crew. Records

must be maintained in accordance with

paragraph (j)(3) of this section.

(B) Be equipped with satellite-based

communications systems that will

enable the Coast Guard independently

to determine the tanker’s location; and

(C) Maintain a Critical Area

Inspection Plan for each tanker in the

TAPS oil export trade in accordance

with the U.S. Coast Guard’s Navigation

and Inspection Circular No. 15–91 as

amended, which shall include an

annual internal survey of the vessel’s

cargo block tanks.

(2) Shipper’s Export Declaration. In

addition to the requirements of

paragraph (j)(1) of this section, for each

export under License Exceptions TAPS,

the exporter must file with BXA a

Shipper’s Export Declaration (SED)

covering the export not later than 21

days after the export has occurred. The

SED shall be sent to the following

address: Manager, Short Supply

Program, Department of Commerce,

Office of Chemical and Biological

Controls and Treaty Compliance,

Bureau of Export Administration, Room

2075, Washington, D.C. 20230.

(3) Recordkeeping requirements for

deep water ballast exchange. (i) As

required by paragraph (j)(1)(iii)(A) of

this section, the master of each vessel

carrying TAPS oil under the provisions

of this section shall keep records that

include the following information, and

provide such information to the Captain

of the Port (COTP), U.S. Coast Guard,

upon request:

(A) The vessel’s name, port of registry,

and official number or call sign;

(B) The name of the vessel’s owner(s);

(C) Whether ballast water is being

carried;

(D) The original location and salinity,

if known, of ballast water taken on,

before an exchange;

(E) The location, date, and time of any

ballast water exchange; and

(F) The signature of the master

attesting to the accuracy of the

information provided and certifying

compliance with the requirements of

this paragraph.

(ii) The COTP or other appropriate

federal agency representatives may take

samples of ballast water to assess the

compliance with, and the effectiveness

of, the requirements of paragraph

(j)(3)(i) of this section.

5. Section 758.3 is amended by

revising paragraph (d)(2) that was

formerly reserved to read as follows:

§ 758.3 Shipper’s Export Declaration

(SED).

(d) * * *

(2) You are required under the

provisions of § 754.2(j)(2) of the EAR.
27258 Federal Register / Vol. 61, No. 106 / Friday, May 31, 1996 / Rules and Regulations

PART 762—[AMENDED]

6. Section 762.2 is amended by:

a. Redesignating paragraphs (b)(26)

through (b)(34) as (b)(27) through (b)(35)

respectively; and

b. adding a new paragraph (b)(26).

§ 762.2 Records to be retained.

* * * * *

(b) * * *

(26) Section 754.2(j)(3),

Recordkeeping requirements for deep

water ballast exchange.

* * * * *

Dated: May 28, 1996.

Iain S. Baird,

Deputy Assistant Secretary for Export

Administration.

[FR Doc. 96–13708 Filed 5–28–96; 2:33 pm]

BILLING CODE 3510–DT–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8673]

RIN 1545–AM01

Enterprise Zone Facility Bonds

AGENCY: Internal Revenue Service (IRS),

Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations relating to enterprise zone

facility bonds issued by State and local

governments. These regulations reflect

changes to the law made by the

Omnibus Budget Reconciliation Act of

1993. These regulations affect issuers of

enterprise zone facility bonds.

EFFECTIVE DATE: These regulations are

effective May 31, 1996.

For dates of applicability of these

regulations to enterprise zone facility

bond issues, see § 1.1394–1(q) of these

regulations.

FOR FURTHER INFORMATION CONTACT:

Loretta J. Finger, (202) 622–3980 (not a

toll-free number).

SUPPLEMENTARY INFORMATION:

Background

On December 30, 1994, proposed

regulations (FI–72–88) were published

in the Federal Register (59 FR 67658) to

provide guidance under sections 141

(relating to private activity bonds and to

qualified bonds), 145 (relating to

qualified 501(c)(3) bonds), 148 (relating

to arbitrage), 150 (relating to change of

use), and 1394 (relating to enterprise

zone facility bonds). On June 8, 1995,

the IRS held a public hearing on the

proposed regulations. Written

comments responding to the proposed

regulations were received.

This Treasury decision addresses the

issues relating to enterprise zone facility

bonds. Later guidance will be published

relating to sections 141, 145, 148, and

150. After consideration of all the

comments, the proposed regulations

under section 1394 (relating to

enterprise zone facility bonds) are

adopted as revised by this Treasury

decision. The principal revisions to the

proposed regulations under section

1394 are discussed below.

Explanation of Provisions

Section 1394 applies to bonds issued

to provide enterprise zone facilities in

both empowerment zones and

enterprise communities (zones).

A. Period of Compliance

The proposed regulations in general

require compliance with the

requirements applicable to enterprise

zone facility bonds throughout the term

of the enterprise zone facility bonds.

The proposed regulations provide two

exceptions to this general rule: (i) A

business that is first established in

connection with the issuance of

enterprise zone facility bonds does not

need to meet the requirements of an

enterprise zone business and enterprise

zone property until the ‘‘testing date,’’

which is the later of one year after the

issue date or one year after the date on

which the financed property is placed

in service, and (ii) the issuer and

principal user of the facility are

permitted a one-year period to cure

noncompliance.

The final regulations modify the

general rule to require compliance with

the requirements applicable to

enterprise zone facility bonds

throughout the greater of (i) the

remainder of the period during which

the zone designation is in effect under

section 1391 (zone designation period),

and (ii) the period that ends on the

weighted average maturity date of the

enterprise zone facility bonds. The final

regulations also provide that, in general,

compliance with the requirements

applicable to enterprise zone facility

bonds is not required after the date on

which the last of the enterprise zone

facility bonds of the issue cease to be

outstanding.

1. Start of Compliance Period

Commentators requested that the

testing date provisions be extended to

all businesses, not just start-up

businesses. Commentators also

suggested lengthening the start-up

period. The final regulations follow the

recommendation to expand the testing

date provisions to all issuers and

principal users of property financed

with enterprise zone facility bonds if the

issuer and the principal user reasonably

expect that the requirements will be met

by the testing date and proceed with

due diligence to comply with the

requirements. The start-up period is

increased to the later of 18 months after

the issue date or 18 months after the

date on which the financed property is

placed in service.

2. Compliance Period for Certain

Requirements

Commentators suggested that

compliance with the requirements for

an enterprise zone business should be

based only on reasonable expectations

on the issue date. Commentators

suggested that, alternatively, the

required compliance period should be

reduced to either (i) three years (similar

to the test period for qualified small

issue manufacturing bonds), or (ii) the

remainder of the zone designation

period.

Issuers and principal users should be

required to meet the requirements

applicable to enterprise zone facility

bonds for a meaningful period of time

in order to further the goals of economic

development in the zones. Therefore, for

purposes of meeting the requirements

applicable to enterprise zone facility

bonds, the final regulations in general

require issuers and principal users of

financed property to meet the

requirements throughout the greater of

(i) the remainder of the zone designation

period, and (ii) the period that ends on

the weighted average maturity date of

the enterprise zone facility bonds.

While compliance is generally not

required after the enterprise zone

facility bonds are retired, the final

regulations do require issuers and

principal users to meet the requirements

of an enterprise zone business and

enterprise zone property for a minimum

compliance period of at least three years

after the initial testing date. The final

regulations permit the issuer to identify

an alternative initial testing date. This

alternative initial testing date is a date

after the issue date of the enterprise

zone facility bonds and prior to the

initial testing date that would have been

otherwise determined under the final

regulations.

Principal users are subject to the

change in use penalty of section 1394(e)

throughout the greater of (i) the

remainder of the zone designation

period, and (ii) the period that ends on

the weighted average maturity date of

the enterprise zone facility bonds.