1–4–96 thursday pages 247–380 federal register · federal register 1 thursday vol. 61 no. 3...

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ThursdayJanuary 4, 1996Vol. 61 No. 3

Pages 247–380

1–4–96

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Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996

WASHINGTON, DC

[Two Sessions]WHEN: January 9, 1996 at 9:00 am and

January 23, 1996 at 9:00 amWHERE: Office of the Federal Register Conference

Room, 800 North Capitol Street, NW.,Washington, DC (3 blocks north of UnionStation Metro)

RESERVATIONS: 202–523–4538

Contents Federal Register

III

Vol. 61, No. 3

Thursday, January 4, 1996

Agricultural Marketing ServiceRULESMelons grown in Texas, 248–250Plant Variety Protection Act conformance; certification fee

increase, 247–248

Agricultural Research ServiceNOTICESPatent licenses; non-exclusive, exclusive, or partially

exclusive:University of Georgia Research Foundation, 345

Agriculture DepartmentSee Agricultural Marketing ServiceSee Agricultural Research ServiceSee Agriculture DepartmentSee Rural Utilities ServiceRULESDebarment and suspension (nonprocurement), 250–251

Army DepartmentNOTICESMeetings:

Science Board, 347

Commerce DepartmentSee National Oceanic and Atmospheric Administration

Commodity Futures Trading CommissionNOTICESContract market proposals:

Chicago Mercantile Exchange—Four currency cross-rates, 346–347

Customs ServiceRULESRecordkeeping, inspection, search, and seizure:

Search warrants, officer authority; restrictions removed,258

Defense DepartmentSee Army DepartmentRULESPersonnel:

Elected school boards—National Defense Authorization Act; implementation,

271–273PROPOSED RULESCivilian health and medical program of uniformed services

(CHAMPUS):Individual case management, 339–342

NOTICESMeetings:

Ballistic Missile Defense Advisory Committee, 347

Energy DepartmentSee Federal Energy Regulatory Commission

Federal Aviation AdministrationRULESAirworthiness standards:

Normal, utility, acrobatic, and commuter categoryairplanes—

Powerplant and equipment standards, 252–254Special conditions—

Hamilton standard model 568F propeller, 254–255Class C airspace, 255–257

Federal Election CommissionNOTICESMeetings; Sunshine Act, 369

Federal Energy Regulatory CommissionNOTICESApplications, hearings, determinations, etc.:

Columbia Gas Transmission Corp., 347–348LG&E Power Marketing Inc., 348Mississippi River Transmission Corp., 348Natural Gas Pipeline Co. of America, 348Northern Natural Gas Co., 349Shell Gas Pipeline Co., 349Southern Natural Gas Co., 349–350Transcontinental Gas Pipe Line Corp., 350Trunkline Gas Co., 351

Federal Reserve SystemRULESEqual opportunity rules; complaint processing procedures;

investigative file accessibility, 251–252NOTICESApplications, hearings, determinations, etc.:

Evans Bancshares, Inc., et al., 351Mellon Bank Corp. et al., 351–352National Bank of Greece et al., 352

Food and Drug AdministrationRULESAnimal drugs, feeds, and related products:

Sponsor name and address changes—American Home Products Division, American

Cyanamid, 258–259TRINADA, Inc., 259–260Wildlife Laboratories, Inc., 260

PROPOSED RULESFood for human consumption:

Food labeling—Health claims, oats and coronary heart disease, 296–

337NOTICESFood for human consumption:

Identity standards deviation; market testing permits—White chocolate, 352–353

Harmonisation International Conference guidelinesavailabilty:

Impurities in New Drug Substances, 372–376Reports; availabilty, etc.:

Fluoroquinolone Working Group, 353

IV Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Contents

Government Ethics OfficeNOTICESAgency information collection activities:

Proposed collection; comment request, 357–358

Health and Human Services DepartmentSee Food and Drug Administration

Housing and Urban Development DepartmentNOTICESOrganization, functions, and authority delegations:

Deputy Secretary, 353–354

Interior DepartmentSee Land Management Bureau

Internal Revenue ServiceRULESIncome taxes:

Indebtedness discharges; information reporting, 262–271Individual returns; filing extension, 260–262

PROPOSED RULESIncome taxes:

Controlled foreign corporations, foreign base company,and foreign personal holding company income

Hearing cancelled, 338Individual returns; filing extension; cross reference and

hearing, 338–339NOTICESAgency information collection activities:

Proposed collection; comment request, 368

Interstate Commerce CommissionNOTICESRailroad services abandonment:

Illinois Central Railroad Co., 354–355

Justice DepartmentSee Prisons Bureau

Land Management BureauNOTICESMeetings:

Lower Snake River District Resource Advisory Council,354

National Highway Traffic Safety AdministrationRULESMotor vehicle safety standards:

Manufacturers’ obligations to provide notification andremedy without charge to owners of vehicles oritems not complying with safety standards, 274–279

NOTICESMotor vehicle safety standards:

Nonconforming vehicles—Importation eligibility; determinations, 367–368

National Oceanic and Atmospheric AdministrationRULESFishery conservation and management:

Atlantic surf clam and ocean quahog, 293–294Pacific Coast groundfish, 279–291Summer flounder, 291–293

NOTICESPermits:

Endangered and threatened species, 346

Nuclear Regulatory CommissionPROPOSED RULESRadioactive devices regulation; public workshop, 295

NOTICESExports of nuclear reactor components, substances, and

items to EURATOM; general and specific licenses, 355Applications, hearings, determinations, etc.:

Omaha Public Power District, 355–356Philadelphia Electric Co.; correction, 356Toledo Edison Co. et al., 356–357

Prisons BureauRULESImate control, custody, care, etc.:

Work and performance pay program; drug abusetreatment programs and pretrial inmates, 378–379

Public Health ServiceSee Food and Drug Administration

Research and Special Programs AdministrationPROPOSED RULESPipeline safety:

Hazardous liquid transportation—Areas unusually sensitive to environmental damage;

workshop, 342–344

Rural Utilities ServiceNOTICESEnvironmental statements; availability, etc.:

South Mississippi Electric Power Association, 345–346

Securities and Exchange CommissionNOTICESJoint industry plan:

National Association of Securities Dealers, Inc., et al.;joint transaction reporting plan, 358–359

Self-regulatory organizations; proposed rule changes:Cincinnati Stock Exchange, Inc., 359–361New York Stock Exchange, Inc., 361–362

Applications, hearings, determinations, etc.:Great-West Life & Annuity Insurance Co. et al., 362–365Mutual Fund Group et al., 365–366

Transportation DepartmentSee Federal Aviation AdministrationSee National Highway Traffic Safety AdministrationSee Research and Special Programs AdministrationRULESAcquisition regulations:

Incorporation by reference; guidance adherence, 273–274

Treasury DepartmentSee Customs ServiceSee Internal Revenue Service

Separate Parts In This Issue

Part IIDepartment of Health and Human Services, Food and Drug

Administration, 372–376

Part IIIDepartment of Justice, Bureau of Prisons, 378–379

Reader AidsAdditional information, including a list of public laws,telephone numbers, and finding aids, appears in the ReaderAids section at the end of this issue.

VFederal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Contents

New Feature in the Reader Aids!Beginning with the issue of December 4, 1995, a new listingwill appear each day in the Reader Aids section of theFederal Register called ‘‘Reminders’’. The Reminders willhave two sections: ‘‘Rules Going Into Effect Today’’ and‘‘Comments Due Next Week’’. Rules Going Into EffectToday will remind readers about Rules documentspublished in the past which go into effect ‘‘today’’.Comments Due Next Week will remind readers aboutimpending closing dates for comments on Proposed Rulesdocuments published in past issues. Only those documentspublished in the Rules and Proposed Rules sections of theFederal Register will be eligible for inclusion in theReminders.

The Reminders feature is intended as a reader aid only.Neither inclusion nor exclusion in the listing has any legalsignificance.The Office of the Federal Register has been compiling datafor the Reminders since the issue of November 1, 1995. Nodocuments published prior to November 1, 1995 will belisted in Reminders.

Electronic Bulletin BoardFree Electronic Bulletin Board service for Public Lawnumbers, Federal Register finding aids, and a list ofdocuments on public inspection is available on 202–275–1538 or 275–0920.

CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in theReader Aids section at the end of this issue.

VI Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Contents

7 CFR97.........................................247979.......................................2483017.....................................250

10 CFRProposed Rules:30.........................................29531.........................................29532.........................................29540.........................................29570.........................................295

12 CFR268.......................................251

14 CFR23.........................................25235.........................................25471.........................................255

19 CFR162.......................................258

21 CFR510 (2 documents) ......258, 259522.......................................260Proposed Rules:101.......................................296

26 CFR1 (2 documents) ..........260, 262301.......................................260602 (2 documents) ......260, 262Proposed Rules:1 (2 documents) ..................338301.......................................338

28 CFR545.......................................378

32 CFR69.........................................271Proposed Rules:199.......................................339

48 CFR1215.....................................2731252.....................................2731253.....................................273

49 CFR573.......................................274576.......................................274577.......................................274Proposed Rules:195.......................................342

50 CFR611.......................................279625 (2 documents) ......291, 292652.......................................293663.......................................279

This section of the FEDERAL REGISTERcontains regulatory documents having generalapplicability and legal effect, most of whichare keyed to and codified in the Code ofFederal Regulations, which is published under50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold bythe Superintendent of Documents. Prices ofnew books are listed in the first FEDERALREGISTER issue of each week.

Rules and Regulations Federal Register

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Vol. 61, No. 3


DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 97

[Docket No. SD–95–001]

RIN 0581–AB39

Plant Variety Protection Regulations

AGENCY: Agricultural Marketing Service,USDA.ACTION: Final rule.

SUMMARY: The Department ofAgriculture is adopting as a final rule,with minor changes, the interim finalrule that revised the Plant VarietyProtection Regulations to conform tochanges made in the Plant VarietyProtection Act (PVPA). The changes willadd an additional language option to themarking and labeling provisions forvarieties that have an applicationpending or have received a certificate ofprotection. Other changes correctoutdated information and provideconsistency in language.EFFECTIVE DATE: January 4, 1996.FOR FURTHER INFORMATION CONTACT:Marsha A. Stanton, Commissioner, PlantVariety Protection Office, Telephone:(301)504–5518, FAX (301)504–5291.

SUPPLEMENTARY INFORMATION:

I. Executive Order 12866; ExecutiveOrder 12778

This final rule has been reviewedunder Executive Order 12866. The rulehas been determined to be notsignificant for the purposes of ExecutiveOrder 12866, and, therefore, has notbeen reviewed by the Office ofManagement and Budget.

This rule has also been reviewedunder Executive Order 12778, CivilJustice Reform. This action is notintended to have retroactive effect. Thisrule will not preempt any State or locallaws, regulations, or policies, unless

they present an irreconcilable conflictwith this rule. There are noadministrative procedures which mustbe exhausted prior to any judicialchallenge to the provisions of this rule.

II. Regulatory Flexibility ActThe Administrator, Agricultural

Marketing Service, has determined thatthis action will not have a significanteconomic impact on a substantialnumber of small entities as defined bythe Regulatory Flexibility Act (5 U.S.C.601–612). The fees provided for in thisdocument merely reflect a minimalincrease in the costs currently borne bythose entities which utilize PlantVariety Protection services.

III. Paperwork Reduction ActIn accordance with the Paperwork

Reduction Act of 1980 (44 U.S.C. 3501et seq.) the information collectionrequirements included in 7 CFR Part 97have been approved previously by theOffice of Management and Budget andhave been assigned OMB controlnumber 0581–0055.

IV. Background InformationThe Plant Variety Protection Act (7

U.S.C. 2321 et seq.) (PVPA) authorizesthe Secretary to issue Certificates ofPlant Variety Protection which affordvariety ownership rights similar topatent rights. As a member of theInternational Union for the Protection ofNew Varieties of Plants (UPOV) theUnited States participated innegotiations which resulted in theMarch 19, 1991 UPOV Convention. ThePVPA was amended on October 6, 1994to conform to the new UPOVConvention and the amendmentsbecame effective on April 4, 1995. Theinterim rule amending 7 CFR part 97was published at 60 FR 17188 on April4, 1995 with a request for comments.

One hundred four comments werereceived. The majority of commentsrecommended a change to Sections97.140 and 97.141, which coveroptional marking and labelingprovisions for varieties that have anapplication pending or have received acertificate of protection. Under thecurrent regulations the labeling changesuggested in the comments could bestated; but, because of the number ofcomments, a specific change to the finalrule has been made. The final rulespecifies that owners may label varietiespending or granted protection under the

1994 revisions with ‘‘PVPA 1994—Unauthorized Sales for ReproductivePurposes Prohibited’’.

Seven other non-substantive changesin the final rule have been made. Thefollowing paragraphs outline thechanges which were made to correctgrammar, provide consistency, orremove outdated references.

References to the Science Division inSections 97.2 and 97.5(c) have beenchanged to ‘‘Science and TechnologyDivision’’ to reflect the division’s namechange which was effective Oct. 1, 1995.

Section 97.3(c) is revised to correctthe reference to the Federal Seed Act.The obsolete Public Law number, P.L.92–463, is removed. Reference to theFederal Seed Act by name ismaintained.

An outdated phone number isremoved from second sentence offootnote referred to in Section97.5(b)(4). The phone number will notbe published as part of the regulationsdue to the difficulty of corrections if thephone number changes.

In Section 97.6, which deals with therequirement that the application mustbe accompanied by a seed sample orverification that a viable cell culturewill be deposited in a public depository,is revised by adding language to requireverification of deposit of self-sterile(self-incompatible) parents of hybrids.The PVPA requires deposition of viableseed or any propagating materialnecessary to reproduce the variety. Theextension of protection to tuber-propagated and first generation hybridvarieties requires deposition of materialother than basic seed. Deposition ofpropagating material for tuber crops wasadded in the interim final rule;however, language pertaining to hybridswhose parents are self-sterile wasinadvertently omitted. The modificationto the final rule will make deposit ofmaterial to propagate these varietiesconsistent with that for other types ofvarieties.

Section 97.19 is revised forgrammatical purposes. The secondoccurrence of ‘‘the’’ is removed.

Section 97.21 is revised to beconsistent with other sections of therule requiring a payment of fee. A fee forextensions was added in the interimrule in section 97.15.

Finally, the authority citation isrevised and simplified.

Pursuant to 5 U.S.C. 553, it is foundthat good cause exists for not

248 Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Rules and Regulations

postponing the effective date of this ruleuntil 30 days after publication in theFederal Register because (1) the interimrule was published in the FederalRegister for public comment, (2) thechanges made in this final action are forclarity and are considered non-substantive, and (3) no useful purposewould be accomplished in delaying theeffective date of this action.

List of Subjects in 7 CFR Part 97Novel Seed variety certification, Plant

variety and protection.Accordingly the interim rule

amending 7 CFR Part 97, which waspublished at 60 FR 17188 on April 4,1995, is adopted as a final rule with thefollowing changes:

PART 97—PLANT VARIETY ANDPROTECTION

1. The authority citation for Part 97 isrevised to read as follows:

Authority: Plant Variety Protection Act, asamended, 7 U.S.C. 2321 et seq.; and Sec. 14,Plant Variety Protection Act amendments of1994, 7 U.S.C. 2401 note.

2. In § 97.2, the definition for Officeor Plant Variety Protection Office isrevised to read as follows:

§ 97.2 Meaning of words.

* * * * *Office or Plant Variety Protection

Office. The Plant Variety ProtectionOffice, Science and TechnologyDivision, AMS, USDA.* * * * *

§ 97.3 [Amended]3. In § 97.3, paragraph (c), the words

‘‘(Pub. L. 92–463)’’ are removed.4. In § 97.5, paragraph (b)(4), footnote

number (1) is revised to read as follows:

§ 97.5 General requirements.

* * * * *1 Copies and translations of foreign laws

and regulations will be requested only if theyare not in the files of the Plant VarietyProtection Office. Applicants may learnwhether such a request will be made bywriting to the address given in paragraph (c)of this section.

§ 97.5 [Amended]5. In § 97.5(c), the second sentence is

amended by adding the words ‘‘andTechnology’’ after the word ‘‘Science’’.

6. In § 97.6, paragraph (d) is revisedto read as follows:

§ 97.6 Application for certificate.

* * * * *(d) The applicant shall submit with

the application:

(1) At least 2,500 seeds of the viablebasic seed required to reproduce thevariety;

(2) With the application for a tuberpropagated variety, verification that aviable cell culture has been deposited ina public depository approved by theCommissioner and will be maintainedfor the duration of the certificate; or

(3) With the application for a hybridfrom self-incompatible parents,verification that a plot of vegetativematerial for each parent has beenestablished in a public depositoryapproved by the Commissioner and willbe maintained for the duration of thecertificate.

§ 97.19 [Amended]7. In § 97.19, the introductory text is

amended by removing ‘‘the’’ after thewords ‘‘Journal shall show’’.

§ 97.21 [Amended]8. In § 97.21, the second sentence is

amended by adding the words ‘‘andappropriate fee’’ immediately followingthe words ‘‘A request for extension’’.

9. In § 97.140, the last sentence isrevised to read as follows:

§ 97.140 After filing.

* * * * *Where applicable, ‘‘PVPA 1994’’ or‘‘PVPA 1994—Unauthorized Sales forReproductive Purposes Prohibited’’ maybe added to the notice.

10. In § 97.141, the last sentence isrevised to read as follows:

§ 97.141 After issuance.

* * * * *Where applicable, ‘‘PVPA 1994’’ or‘‘PVPA 1994—Unauthorized Sales forReproductive Purposes Prohibited’’ maybe added to the notice.

Dated: December 27, 1995.Kenneth C. Clayton,Acting Administrator, Agricultural MarketingService.[FR Doc. 96–75 Filed 1–3–96; 8:45 am]BILLING CODE 3410–02–P

[Docket No. FV95–979–1IFR; Amendment 1]

Melons Grown in South Texas;Increased Expenses andEstablishment of Assessment Rate

AGENCY: Agricultural Marketing Service,USDA.ACTION: Amended interim final rulewith request for comments.

SUMMARY: This interim final ruleamends a previous interim final rulewhich authorized administrative

expenses for the South Texas MelonCommittee (Committee) under M.O. No.979. This interim final rule increases thelevel of authorized expenses andestablishes an assessment rate togenerate funds to pay those expenses.Authorization of this increased budgetenables the Committee to incurexpenses that are reasonable andnecessary to administer the program.Funds to administer this program arederived from assessments on handlers.DATES: Effective October 1, 1995,through September 30, 1996. Commentsreceived by February 5, 1996, will beconsidered prior to issuance of a finalrule.ADDRESSES: Interested persons areinvited to submit written commentsconcerning this action. Comments mustbe sent in triplicate to the Docket Clerk,Fruit and Vegetable Division, AMS,USDA, P.O. Box 96456, room 2523–S,Washington, DC 20090–6456, FAX 202–720–5698. Comments should referencethe docket number and the date andpage number of this issue of the FederalRegister and will be available for publicinspection in the Office of the DocketClerk during regular business hours.FOR FURTHER INFORMATION CONTACT:Martha Sue Clark, Marketing OrderAdministration Branch, Fruit andVegetable Division, AMS, USDA, P.O.Box 96456, room 2523–S, Washington,DC 20090–6456, telephone 202–720–9918, or Belinda G. Garza, McAllenMarketing Field Office, Fruit andVegetable Division, AMS, USDA, 1313East Hackberry, McAllen, TX 78501,telephone 210–682–2833.SUPPLEMENTARY INFORMATION: This ruleis issued under Marketing AgreementNo. 156 and Order No. 979 (7 CFR part979), regulating the handling of melonsgrown in South Texas, hereinafterreferred to as the ‘‘order.’’ The order iseffective under the AgriculturalMarketing Agreement Act of 1937, asamended (7 U.S.C. 601–674), hereinafterreferred to as the ‘‘Act.’’

The Department of Agriculture(Department) is issuing this rule inconformance with Executive Order12866.

This interim final rule has beenreviewed under Executive Order 12778,Civil Justice Reform. Under themarketing order provisions now ineffect, South Texas melons are subject toassessments. It is intended that theassessment rate as issued herein will beapplicable to all assessable melonshandled during the 1995–96 fiscalperiod, which began October 1, 1995,

249Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Rules and Regulations

and ends September 30, 1996. Thisinterim final rule will not preempt anyState or local laws, regulations, orpolicies, unless they present anirreconcilable conflict with this rule.

The Act provides that administrativeproceedings must be exhausted beforeparties may file suit in court. Undersection 608c(15)(A) of the Act, anyhandler subject to an order may filewith the Secretary a petition stating thatthe order, any provision of the order, orany obligation imposed in connectionwith the order is not in accordance withlaw and request a modification of theorder or to be exempted therefrom. Suchhandler is afforded the opportunity fora hearing on the petition. After thehearing the Secretary would rule on thepetition. The Act provides that thedistrict court of the United States in anydistrict in which the handler is aninhabitant, or has his or her principalplace of business, has jurisdiction inequity to review the Secretary’s rulingon the petition, provided a bill in equityis filed not later than 20 days after thedate of the entry of the ruling.

Pursuant to the requirements set forthin the Regulatory Flexibility Act (RFA),the Administrator of the AgriculturalMarketing Service (AMS) hasconsidered the economic impact of thisrule on small entities.

The purpose of the RFA is to fitregulatory actions to the scale ofbusiness subject to such actions in orderthat small businesses will not be undulyor disproportionately burdened.Marketing orders issued pursuant to theAct, and the rules issued thereunder, areunique in that they are brought aboutthrough group action of essentiallysmall entities acting on their ownbehalf. Thus, both statutes have smallentity orientation and compatibility.

There are approximately 40 producersof South Texas melons under thismarketing order, and approximately 19handlers. Small agricultural producershave been defined by the SmallBusiness Administration (13 CFR121.601) as those having annual receiptsof less than $500,000, and smallagricultural service firms are defined asthose whose annual receipts are lessthan $5,000,000. The majority of SouthTexas melon producers and handlersmay be classified as small entities.

The budget of expenses for the 1995–96 fiscal period was prepared by theSouth Texas Melon Committee, theagency responsible for localadministration of the marketing order,and submitted to the Department ofAgriculture for approval. The membersof the Committee are producers andhandlers of South Texas melons. Theyare familiar with the Committee’s needs

and with the costs of goods and servicesin their local area and are thus in aposition to formulate an appropriatebudget. The budget was formulated anddiscussed in a public meeting. Thus, alldirectly affected persons have had anopportunity to participate and provideinput.

The assessment rate recommended bythe Committee was derived by dividinganticipated expenses by expectedshipments of South Texas melons.Because that rate will be applied toactual shipments, it must be establishedat a rate that will provide sufficientincome to pay the Committee’sexpenses.

Committee administrative expenses of$234,044 for personnel, office, andcompliance expenses wererecommended in a mail vote. Theassessment rate and funding for theresearch projects were to berecommended at a later Committeemeeting. The Committee administrativeexpenses of $234,044 were published inthe Federal Register as an interim finalrule October 23, 1995 (60 FR 54294).That interim final rule added § 979.218,authorizing expenses for the Committee,and provided that interested personscould file comments through November22, 1995. No comments were filed.

The Committee subsequently met onDecember 12, 1995, and unanimouslyrecommended an increase of $1,000 foradministrative expenses, plus $160,115in research expenses, for a total budgetof $395,159. Budget items for 1995–96which have increased compared tothose budgeted for 1994–95 (inparentheses) are: Manager’s salary,$19,094 ($15,172), office salaries,$24,000 ($22,000), payroll taxes, $4,000($3,100), insurance, $8,000 ($6,250),rent and utilities, $6,500 ($6,000),supplies, $2,000 ($1,500), postage,$1,500 ($1,000), telephone andtelegraph, $4,000 ($2,500), furniture andfixtures, $2,000 ($1,000), equipmentrental and maintenance, $3,500($2,500), contingencies, $6,000 ($5,278),Committee expenses, $2,000 ($700),manager’s travel, $5,000 ($3,000),variety evaluation, $10,875 ($9,186) and$3,750 for deferred compensation(manager’s retirement), which was not aline item expense last year. Items whichhave decreased compared to the amountbudgeted for 1994–95 (in parentheses)are: field travel, $4,000 ($5,000), andfield salary, $5,500 ($8,000). All otheritems are budgeted at last year’samounts, including $86,716 for adisease management program, $18,700for an insect management program,$32,674 for breeding and varietydevelopment, and $11,150 for control ofmelon diseases.

The initial 1995–96 budget, publishedon October 23, 1995, did not establishan assessment rate. Therefore, theCommittee also unanimouslyrecommended an assessment rate of$0.07 per carton, the same as last year.This rate, when applied to anticipatedshipments of approximately 4,500,000cartons, will yield $315,000 inassessment income, which, along with$80,159 from the reserve, will beadequate to cover budgeted expenses.Funds in the reserve as of October 31,1995, were $398,821, which is withinthe maximum permitted by the order oftwo fiscal periods’ expenses.

While this action will impose someadditional costs on handlers, the costsare in the form of uniform assessmentson handlers. Some of the additionalcosts may be passed on to producers.However, these costs will be offset bythe benefits derived from the operationof the marketing order. Therefore, theAdministrator of the AMS hasdetermined that this action will nothave a significant economic impact ona substantial number of small entities.

After consideration of all relevantmatter presented, including theinformation and recommendationssubmitted by the Committee and otheravailable information, it is hereby foundthat this rule, as hereinafter set forth,will tend to effectuate the declaredpolicy of the Act.

Pursuant to 5 U.S.C. 553, it is alsofound and determined upon good causethat it is impracticable, unnecessary,and contrary to the public interest togive preliminary notice prior to puttingthis rule into effect and that good causeexists for not postponing the effectivedate of this action until 30 days afterpublication in the Federal Registerbecause: (1) The Committee needs tohave sufficient funds to pay its expenseswhich are incurred on a continuousbasis; (2) the fiscal period began onOctober 1, 1995, and the marketingorder requires that the rate ofassessment for the fiscal period apply toall assessable melons handled duringthe fiscal period; (3) handlers are awareof this action which was unanimouslyrecommended by the Committee at apublic meeting and is similar to thattaken for the 1994–95 fiscal period; and(4) this interim final rule provides a 30-day comment period, and all commentstimely received will be considered priorto finalization of this action.

List of Subjects in 7 CFR Part 979

Marketing agreements, Melons,Reporting and recordkeepingrequirements.


For the reasons set forth in thepreamble, 7 CFR part 979 is amended asfollows:

PART 979—MELONS GROWN INSOUTH TEXAS

1. The authority citation for 7 CFRpart 979 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. Section 979.218 is revised to readas follows:

Note: This section will not appear in theCode of Federal Regulations.

§ 979.218 Expenses and assessment rate.

Expenses of $395,159 by the SouthTexas Melon Committee are authorizedand an assessment rate of $0.07 percarton is established for the fiscal periodending September 30, 1996.Unexpended funds may be carried overas a reserve.

Dated: December 27, 1995Sharon Bomer Lauritsen,Deputy Director, Fruit and Vegetable Division,Agricultural Marketing Service[FR Doc. 96–74 Filed 1–3–96; 8:45 am]BILLING CODE 3410–02–P

7 CFR Part 3017

RIN 0503–AA12

Nonprocurement Debarment andSuspension

AGENCY: Department of Agriculture(USDA).ACTION: Final rule.

SUMMARY: This final rule amends theUSDA regulations that implementExecutive Order (E.O.) 12549,‘‘Debarment and Suspension.’’ E.O.12549 required executive departmentsand agencies to issue regulations,consistent with guidelines issued by theOffice of Management and Budget(OMB), to establish governmentwideeffect for an agency’s nonprocurementdebarment and suspension actions.These changes will enhance USDAparticipation in the governmentwidenonprocurement debarment andsuspension system by makingappropriate modifications to thecoverage of the regulations andclarifying the relationship of theregulations to other USDA proceduresfor establishing participant ineligibilityfor specific programs.EFFECTIVE DATE: February 5, 1996.FOR FURTHER INFORMATION CONTACT:Gary W. Butler, Deputy AssistantGeneral Counsel, Office of the GeneralCounsel, (202) 720–2577.

SUPPLEMENTARY INFORMATION: As part ofthe Federal Government’s initiatives tocurb fraud, waste, and abuse, E.O.12549, ‘‘Debarment and Suspension,’’was signed on February 18, 1986. E.O.12549 required executive departmentsand agencies to issue regulations toestablish governmentwide effect foreach agency’s nonprocurementdebarment and suspension actions.Section 3 of E.O. 12549 required thatsuch regulations be consistent withguidelines issued by OMB.

On October 20, 1987, 20 executivedepartments and agencies published aproposed common rule (52 FR 39035–39042) which implemented the finalOMB guidelines that had beenpublished on May 29, 1987 (52 FR20360–20369). USDA did not join theproposed common rule, but ratherpublished a proposed rule thataddressed some problems peculiar toUSDA while being consistent with theOMB guidelines.

On May 26, 1988, 27 executivedepartments and agencies published afinal common rule (53 FR 19159–19211)and OMB adopted the final commonrule as its amended final guidelines.Upon reconsideration of the issue ofjoining the common rule, USDApublished a final rule on January 30,1989 (54 FR 4729), which followed thetext of the final common rule publishedon May 26, 1988. However, USDAlimited the scope of coverage of the rule(7 CFR part 3017) to domestic assistancetransactions and added materialgenerally to reflect internal organizationand procedures. Following extendedconsultations with OMB, USDA hasdetermined that the coverage of this ruleshould be amended by removing theprovision that limits the coverage of therule to domestic assistance transactions.

Accordingly, on September 26, 1995,USDA published in the Federal Register(60 FR 49519–49523) a notice ofproposed rule making (NPRM) to amend7 CFR part 3017 to make the scope ofthe USDA rule consistent with the scopeof the common rule as adopted by mostother agencies. USDA, however,proposed making additional specificexceptions from coverage of thecommon rule, as implemented byUSDA, that are deemed in the publicinterest. The rational for such additionalspecific exceptions from coverage wasexplained fully in the NPRM.

USDA solicited comments concerningour proposal for 60 days endingNovember 27, 1995. We received notimely comments in response to theNPRM. We, however, did receive onesubsequent comment that was whollysupportive of the USDA proposal.Therefore, based on the rationale set

forth in the NPRM, USDA is adoptingthe provisions of the proposal as thefinal rule.

Impact Analysis

Executive Order 12866This rule has been determined to be

‘‘significant,’’ and it has been reviewedby the Office of Management andBudget.

Regulatory Flexibility Act of 1980The Regulatory Flexibility Act of 1980

(5 U.S.C. 601 et seq.) requires that, foreach rule with a ‘‘significant economicimpact on a substantial number of smallentities,’’ an analysis must be prepareddescribing the rule’s impact on smallentities and identifying any significantalternatives to the rule that wouldminimize the economic impact on thesmall entities.

USDA certifies that these regulationswill not have a significant economicimpact on a substantial number of smallentities.

Paperwork Reduction ActUSDA certifies that this rule will not

impose any reporting or recordkeepingrequirements under the PaperworkReduction Act of 1980, 44 U.S.C.Chapter 35.

List of Subjects in 7 CFR Part 3017Administrative practice and

procedure, Grant administration, Grantprograms (Agriculture).

For the reasons set forth in thepreamble, USDA amends 7 CFR part3017 as follows:

PART 3017—GOVERNMENTWIDEDEBARMENT AND SUSPENSION(NONPROCUREMENT) ANDGOVERNMENTWIDE REQUIREMENTSFOR DRUG-FREE WORKPLACE(GRANTS)

1. The authority citation for part 3017is revised to read as follows:

Authority: 5 U.S.C. 301; 41 U.S.C. 701 etseq.; E.O. 12549, 51 FR 6370, 3 CFR, 1986Comp., p. 189.

2. Section 3017.110 is amended byrevising paragraph (a) (3) to read asfollows:

§ 3017.110 Coverage.(a) * * *(3) Department of Agriculture covered

transactions. (i) With respect toparagraph (a)(1) of this section, forUSDA’s export and foreign assistanceprograms, covered transactions willinclude only primary coveredtransactions. Any lower tier transactionswith respect to UDSA’s export andforeign assistance programs will not be


considered lower tier coveredtransactions for the purposes of thispart. The export or substitution ofFederal timber governed by the ForestResources Conservation and ShortageRelief Act of 1990, 16 U.S.C. 620 et seq.(the ‘‘Export Act’’), is specificallyexcluded from the coverage of this rule.The Export Act provides separatestatutory authority to debar personsengaged in both primary coveredtransactions and lower tier transactions.

(ii) With respect to paragraph(a)(1)(ii)(B) of this section, for USDA’sdomestic food assistance programs, onlythe initial such procurement contractand the first tier subcontract under thatprocurement contract shall beconsidered lower tier coveredtransactions.

(iii) With respect to paragraph (a)(2) ofthis section, the following USDAtransactions also are not covered:transactions under programs whichprovide statutory entitlements and makeavailable loans to individuals andentities in their capacity as producers ofagricultural commodities; transactionsunder conservation programs;transactions under warehouse licensingprograms; the receipt of licenses,permits, certificates, andindemnification under regulatoryprograms conducted in the interest ofpublic health and safety and animal andplant health and safety; the receipt ofofficial grading and inspection services,animal damage control services, publichealth and safety inspection services,and animal and plant health and safetyinspection services; if the person is aState or local government, the provisionof official grading and inspectionservices, animal damage controlservices, public health and safetyinspection services, animal and planthealth and safety inspection services;and permits, licenses, exchanges andother acquisitions of real property,rights of way, and easements undernatural resource management programs.* * * * *

3. Section 3017.115 is amended byadding a new paragraph (d) to read asfollows:

§ 3017.115 Policy.

* * * * *(d) In any case in which an

administrative exclusion is consideredunder an authority other than this part,USDA will initiate, where appropriate,a debarment or suspension action underthis part for the protection of the entireFederal Government.

4. Section 3017.200 is amended byadding a new paragraph (d) to read asfollows:

§ 3017.200 Debarment or suspension.* * * * *

(d) Department of Agricultureexcepted transactions. With respect toparagraph (c) of this section, thefollowing USDA transactions also areexcepted: transactions under programswhich provide statutory entitlementsand make available loans to individualsand entities in their capacity asproducers of agricultural commodities;transations under conservationprograms; transactions under warehouselicensing programs; the receipt oflicenses, permits, certificates, andindemnification under regulatoryprograms conducted in the interest ofpublic health and safety and animal andplant health and safety; the receipt ofofficial grading and inspection services,animal damage control services, publichealth and safety inspection services,and animal and plant health and safetyinspection services; if the person is aState or local government, the provisionof official grading and inspectionservices, animal damage controlservices, public health and safetyinspection services, and animal andplant health and safety inspectionservices; and permits, licenses,exchanges, and other acquisitions of realproperty, rights of way, and easementsunder natural resource managementprograms.

Dated: December 21, 1995.Dan Glickman,Secretary of Agriculture.[FR Doc. 96–76 Filed 1–3–96; 8:45 am]BILLING CODE 3410–01–M

FEDERAL RESERVE SYSTEM

12 CFR Part 268

[Docket No. R–0894]

Rules Regarding Equal Opportunity

AGENCY: Board of Governors of theFederal Reserve System.ACTION: Final rule.

SUMMARY: The Board of Governors of theFederal Reserve System (the Board) hasamended its Rules Regarding EqualOpportunity (Rules) to correct anambiguity in the provision regardingaccess to the investigative file. TheRules set out the complaint processingprocedures governing complaints byBoard employees and applicants foremployment alleging discrimination inemployment, and related matters.EFFECTIVE DATE: February 5, 1996.FOR FURTHER INFORMATION CONTACT: J.Mills Williams, Senior Attorney (202/452–3701), or Stephen L. Siciliano,

Special Assistant to the General Counselfor Administrative Law (202/452–3920),Legal Division, Board of Governors ofthe Federal Reserve System, 20th Streetand Constitution Avenue, NW.,Washington, DC 20551. For users ofTelecommunication Device for the Deaf(TDD) only, contact Dorothea Thompson(202/452–3544).SUPPLEMENTARY INFORMATION: Theamendment to the Rules is herebyissued as a final rule. The Board soughtcomments on the proposed amendmenton August 31, 1995 (60 FR 45385), andno comments were received. No changeshave been made in the amendment asproposed.

The Board’s Rules Regarding EqualOpportunity (12 CFR part 268) prior tothis amendment provided that a personwho files an administrative complaint ofdiscrimination under the Rules must begiven a copy of the investigative filerelative to the complaint within 180days after the filing of the complaintwith the Board, unless the time isotherwise extended. 12 CFR 268.207(f).The Rules further provided that the‘‘Board may unilaterally extend the timeperiod * * * where it must sanitize acomplaint file that may containconfidential information of the Boardunder 12 CFR part 261, or otherprivileged information of the Board* * *.’’ 12 CFR 268.207(e). Thecorresponding language in the federalsector complaint processing regulationof the Equal Employment OpportunityCommission (Commission) providesthat an ‘‘agency may unilaterally extendthe time period * * * where it mustsanitize a complaint file that maycontain information classified pursuantto Executive Order 12356, or successororders, as secret in the interest ofnational defense or foreign policy* * *.’’ 29 CFR 1614.108(e).

The Board’s Rules require that, at thecompletion of an investigation, theinvestigative file be made available toeach complainant. 12 CFR 268.207(f). Itwas and continues to be the Board’sintention to provide that confidentialinformation of the Board that is relevantto the complaint be included in theinvestigative file made available to thecomplainant and to the complainant’spersonal representative.

The Board was concerned, however,that the prior language of § 268.207(e)could be interpreted as preventingconfidential Board information that isrelevant to a complainant from beingincluded in the investigative file andthus being made available to acomplainant. The Board believes that itsRules must make clear that, whererelevant, confidential information of the


1 Information subject to the Privacy Act maythereafter be disclosed when necessary inaccordance with the routine use provision. 12 CFR261a.10(b)(3). See Board System of Records,BGFRS–5, Federal Reserve Regulatory Service ¶ 8–338. A federal criminal statute regarding theunauthorized conversion of Board property mayrestrict disclosure of confidential Board informationin certain cases unless authorization has beenspecifically given. 18 U.S.C. 641.

Board may be included in a complaintfile. Accordingly, § 268.207(e) of theRules has been amended to provide thatthe time period for completing aninvestigation may be unilaterallyextended by the Board only whereclassified national security informationmust be sanitized. This amendmentconforms the Rules to the correspondingprovision in the complaint processingregulation of the Commission.

In addition, a new paragraph(§ 268.207(e)(2)) has been added to§ 268.207(e) of the Board’s Rules thatexpressly authorizes the placement bythe investigator, the EEO ProgramsDirector, or another appropriate officerof the Board of relevant confidentialinformation in the investigative file thatis provided to a complainant and to hisor her personal representative.

The new paragraph contains aprovision making clear that those whohave access to an investigative file, suchas the complainant and thecomplainant’s personal representative,containing any confidential informationare subject to all applicable restrictionsin existing law governing the disclosureof such information, in particular, theBoard’s Rules Regarding Availability ofInformation (12 CFR Part 261) and,where applicable, the Privacy Act. Thismeans that confidential information inan investigatory file may be disclosedfurther only to the extent permitted bysuch restrictions.

The Board notes, in this regard, thatits restrictions on unauthorizeddisclosure of confidential informationby persons in possession of suchinformation bind all such persons, notmerely those who are employees of theBoard. 12 CFR 261.8(c), 261.13(e),261.14.

The Board’s Rules RegardingAvailability of Information (12 CFR 261subpart C) provide a mechanism bywhich a person having confidentialinformation of the Board may requestpermission to disclose further suchinformation, however. Accordingly,application may be made to the Board’sGeneral Counsel under 12 CFR 261.13for approval of further production ordisclosure by a complainant or personalrepresentative of confidentialinformation.

In addition, aside from confidentialsupervisory information, a particularinvestigatory file may includeinformation that is subject to the PrivacyAct. Such information also may not bedisclosed to or by the complainantunless disclosure is authorizedconsistent with the requirements and/orprohibitions of the Privacy Act (5 U.S.C.

552a).1 Information subject to ExecutiveOrder 12356 may not at any point beincluded in the investigatory file andwould not be made available to thecomplainant or to his/her personalrepresentative.

In addition, the Board has made atechnical correction to§ 268.304(a)(3)(i)(A) by substituting areference to Executive Order No. 12356,dealing with national security classifiedinformation, for the former reference(Executive Order No. 10450). The Boardhas determined that this technicalcorrection is not subject to provisions ofthe Administrative Procedure Actregarding notice and public commentbecause good cause exists to support theconclusion that notice and publicprocedure thereon are unnecessary. 5U.S.C. 553(b)(B) and (d).


procedure, Aged, Civil rights, Equalemployment opportunity, Federalbuildings and facilities, Federal ReserveSystem, Government employees,Individuals with disabilities, Religiousdiscrimination, Sex discrimination,Wages.

For the reasons set forth in thepreamble, the Board amends 12 CFRpart 268 as set forth below:

PART 268—RULES REGARDINGEQUAL OPPORTUNITY

1. The authority citation for part 268continues to read as follows:

Authority: 12 U.S.C. 244 and 248(i), (k)and (l).

2. In § 268.207, paragraph (e) isrevised to read as follows:

§ 268.207 Investigation of complaints.* * * * *

(e)(1) The Board shall complete itsinvestigation within 180 days of thedate of the filing of an individualcomplaint or within the time periodcontained in the determination of theCommission on review of a dismissalpursuant to § 268.206 of this part. Bywritten agreement within those timeperiods, the complainant and the Boardmay voluntarily extend the time periodfor not more than an additional 90 days.The Board may unilaterally extend thetime period or any period of extension

for not more than 30 days where it mustsanitize an investigative file that maycontain information classified pursuantto Executive Order No. 12356, orsuccessor orders, as secret in the interestof national defense or foreign policy,provided the Board notifies thecomplainant of the extension.

(2) Confidential supervisoryinformation, as defined in 12 CFR261.2(b), and other confidentialinformation of the Board may beincluded in the investigative file by theinvestigator, the EEO Programs Director,or another appropriate officer of theBoard, where such information isrelevant to the complaint. Neither thecomplainant nor the complainant’spersonal representative may makefurther disclosure of such information,however, except in compliance with theBoard’s Rules Regarding Availability ofInformation, 12 CFR part 261, andwhere applicable, the Board’s RulesRegarding Access to and Review ofPersonal Information in Systems ofRecords, 12 CFR part 261a.* * * * *

§ 268.304 [Amended]3. In § 268.304(a)(3)(i)(A), remove the

words ‘‘Executive Order No. 10450 (3CFR, 1949–1953 Comp., P. 936)’’ andadd in their place, the words ‘‘ExecutiveOrder No. 12356 (3 CFR, 1982 Comp.; p.166)’’.

By order of the Board of Governors of theFederal Reserve System, December 28, 1995.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 96–90 Filed 1–3–96; 8:45 am]BILLING CODE 6210–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 23

[Docket No. 26344; Amendment No. 23–43]

RIN 2120–AD30

Small Airplane Airworthiness ReviewProgram Amendment No. 3; Correction

AGENCY: Federal AviationAdministration, DOT.ACTION: Correction; final rule withrequest for comments.

SUMMARY: This final rule containscorrections to the final regulation(Amendment 23–43), which waspublished April 9, 1993 (58 FR 18958).The regulation amended the powerplantand equipment airworthiness standardsfor normal, utility, acrobatic, andcommuter category airplanes. This


amendment replaces two paragraphsthat were inadvertently deleted byAmendment No. 23–43.DATES: This final rule becomes effectiveJanuary 4, 1996. Comments must besubmitted on or before April 3, 1996.ADDRESSES: Comments should besubmitted in triplicate to: FederalAviation Administration, Office of theChief Counsel, Attention: Rules Docket(AGC–200), Docket No. 26344, 800Independence Avenue, SW.,Washington, DC 20591. Commentsdelivered must be marked Docket No.26344. Comments may be inspected inRoom 915G weekdays between 8:30 a.m.and 5:00 p.m., except on Federalholidays.

In addition, the FAA is maintaining aduplicate information docket ofcomments in the Office of the AssistantChief Counsel, ACE–7, Federal AviationAdministration, Central Region, 601East 12th Street, Kansas City, Missouri64106. Comments in the duplicateinformation docket may be inspected inthe Office of the Assistant Chief Counselweekdays, except Federal holidays,between the hours of 7:30 a.m. and 4:00p.m.FOR FURTHER INFORMATION CONTACT:Norman Vetter, ACE–111, SmallAirplane Directorate, AircraftCertification Service, Federal AviationAdministration, 601 East 12th Street,Kansas City, Missouri 64106; telephone(816) 426–5688.


Comments InvitedAlthough this action is in the form of

a final rule that involves requirementsaffecting immediate flight safety and,thus, was not preceded by notice andopportunity to comment, comments areinvited on this rule. Interested personsare invited to comment on this rule bysubmitting such written data, views, orarguments as they may desire.Communications should identify theRules Docket number and be submittedin triplicate to the address specifiedabove. All communications received onor before the closing date for commentswill be considered, and this rule may beamended in light of the commentsreceived. Factual information thatsupports the commenter’s ideas andsuggestions is extremely helpful indetermining whether additionalrulemaking action would be needed.

Comments are specifically invited onthe overall regulatory, economic,environmental, and energy aspects ofthe rule that might suggest a need tomodify the rule. All commentssubmitted will be available, both beforeand after the closing date for comments,

in the Rules Docket for examination byinterested persons. A report thatsummarizes each FAA-public contactconcerned with the substance of thisrule will be filed in the Rules Docket.

Commenters wishing the FAA toacknowledge receipt of their commentssubmitted in response to this noticemust submit a self-addressed, stampedpostcard on which the followingstatement is made: ‘‘Comments toDocket No. 26344.’’ The postcard will bedate stamped and returned to thecommenter.

The regulations adopted herein willnot have substantial direct effects on theStates, on the relationship between thenational government and the States, oron the distribution of power andresponsibilities among the variouslevels of government. Therefore, inaccordance with Executive Order 12612,it is determined that this final rule doesnot have sufficient federalismimplications to warrant the preparationof a Federalism Assessment.

The FAA has determined that thisregulation is an emergency regulationand that must be issued immediately tocorrect an unsafe condition in aircraft,and is not a significant regulatory actionunder Executive Order 12866. It hasbeen determined further that this actioninvolves an emergency regulation underDOT Regulatory Policies and Procedures(44 FR 11034, February 26, 1979). If itis determined that this emergencyregulation otherwise would besignificant under DOT RegulatoryPolicies and Procedures, a finalregulatory evaluation will be preparedand placed in the Rules Docket(otherwise, an evaluation is notrequired). A copy of it, if filed, may beobtained from the Rules Docket.

AvailabilityAny person may obtain a copy of this

amendment by submitting a request tothe Federal Aviation Administration,Office of Public Affairs, Attention:Public Inquiry Center, APA–200, 800Independence Avenue, SW.,Washington, DC 20591, or by calling(202) 267–3484. Communications mustidentify the amendment number.

Persons interested in being placed onthe mailing list for future NPRM’s andrules should request, from the aboveoffice, a copy of Advisory Circular No.11–2A, Notice of Proposed RulemakingDistribution System, which describesthe application procedure.

BackgroundThe final regulations that are the

subject of this amendment, Amendment23–43 (58 FR 18958, April 9, 1993),inadvertently removed paragraphs

§ 23.965 (b)(4) and (b)(5). Theseparagraphs were never intended to beremoved and their removal was notproposed in the NPRM for Amendment23–43.

Need for Correction

As published, the final regulationscontain inadvertently deletedparagraphs 23.965 (b)(4) and (b)(5),which contain substantive requirementsthat were not intended to be removedand are considered essential to aviationsafety.

Discussion of Amendments

Section 23.965

The FAA proposed to amendparagraphs (b)(1) through (b)(3) of§ 23.965 in Amendment 23–43.However, the amendatory languageremoved paragraphs (b)(4) and (b)(5).This amendment corrects the error byreinserting those paragraphs into theregulations.


Aircraft, Aviation safety, Signs andsymbols.

The Amendments

In consideration of the foregoing, theFederal Aviation Administrationamends 14 CFR part 23 to read asfollows:

PART 23—AIRWORTHINESSSTANDARDS: NORMAL, UTILITY,ACROBATIC, AND COMMUTERCATEGORY AIRPLANES


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

2. Section 23.965, paragraph (b), isamended by adding paragraphs (b)(4)and (b)(5) to read as follows:

§ 23.965 Fuel tank tests.

(b) * * *(4) Under paragraph (b)(3) (ii) and (iii)

of this section, the time of test must beadjusted to accomplish the samenumber of vibration cycles that wouldbe accomplished in 25 hours at thefrequency specified in paragraph(b)(3)(i) of this section.

(5) During the test, the tank assemblymust be rocked at a rate of 16 to 20complete cycles per minute, through anangle of 15° on either side of thehorizontal (30° total), about an axisparallel to the axis of the fuselage, for25 hours.


Issued in Washington, DC, on December28, 1995.Michael Gallagher,Acting Director, Aircraft Certification Service.[FR Doc. 96–135 Filed 1–3–96; 8:45 am]BILLING CODE 4910–13–M

14 CFR Part 35

[Docket No. 94–ANE–61; Special ConditionNo. 35–ANE–03]

Special Conditions; Hamilton StandardModel 568F Propeller

AGENCY: Federal AviationAdministration, DOT.ACTION: Final special conditions.

SUMMARY: These special conditions areissued for Hamilton Standard Model568F propeller. This propeller isconstructed using all composite blades,a novel and unusual design feature. Part35 of the Federal Aviation Regulations(FAR’s) currently does not address theairworthiness considerations associatedwith propellers constructed using allcomposite blades. These specialconditions contain additional safetystandards which the Administratorfinds necessary to establish a level ofsafety equivalent to that established bythe airworthiness standards of part 35 ofthe FAR’s.EFFECTIVE DATE: February 5, 1996.FOR FURTHER INFORMATION CONTACT:Martin Buckman, Engine and PropellerStandards Staff, ANE–110, Engine andPropeller Directorate, AircraftCertification Service, FAA, NewEngland Region, 12 New EnglandExecutive Park, Burlington,Massachusetts 01803–5229; telephone(617) 238–7112, fax (617) 238–7199.


BackgroundOn January 26, 1994, Hamilton

Standard applied for type certificationfor a new Model 568F propeller. Thispropeller is constructed using allcomposite blades, a novel and unusualdesign feature. A Notice of ProposedSpecial Conditions was published in theFederal Register on January 20, 1995(60 FR 4116) for the Hamilton StandardModel 568F propeller constructed withcomposite material. Propellersconstructed entirely of compositematerial have additional airworthinessconsiderations not currently addressedby part 35 of the Federal AviationRegulations (FAR). Those additionalairworthiness considerations associatedwith propellers constructed using allcomposite blades are propeller integrityfollowing a bird strike, propeller

integrity following a lightning strike,and propeller fatigue strength whenexposed to the deteriorating effects ofin-service use and the environment.

Type Certificate BasisUnder the provisions of § 21.17 of the

FAR’s, Hamilton Standard must showthat the Model 568F propeller meets therequirements of the applicableregulations in effect on the date of theapplication. Those FAR’s are § 21.21and part 35, effective February 1, 1965,as amended.

The Administrator finds that theapplicable airworthiness regulations inpart 35, as amended, do not containadequate or appropriate safety standardsfor the Model 568F propeller because itis constructed using composite material.Therefore, the Administrator prescribesspecial conditions under the provisionsof § 21.16 of the FAR’s to establish alevel of safety equivalent to thatestablished in the regulations.

Special conditions, as appropriate, areissued in accordance with § 11.49 of theFAR’s after public notice andopportunity for comment, as required by§§ 11.28 and 11.29(b), and become partof the type certification basis inaccordance with § 21.101(b)(2).

Novel or Unusual Design FeaturesHamilton Standard Model 568F

propeller incorporates propeller bladesconstructed using composite material.This material has fibers that are wovenor aligned in specific directions to givethe material directional strengthproperties. These properties depend onthe type of fiber, the orientation andconcentration of fiber, and matrixmaterial. Composite materials couldexhibit multiple modes of failure.Propellers constructed of compositematerial must demonstrateairworthiness when considering thesenovel design features.

The requirements of part 35 of theFAR’s were established to address theairworthiness considerations associatedwith wood and metal propellers usedprimarily on reciprocating engines.Propeller blades of this type aregenerally thicker than composite blades,and have demonstrated good serviceexperience following a bird strike.Propeller blades constructed usingcomposite material are generally thinnerwhen used on turbine engines, and aretypically installed on high performanceaircraft. High performance aircraftgenerally fly at high airspeeds withcorrespondingly high impact forcesassociated with a bird strike. Thus,composite propellers must demonstratepropeller integrity following a birdstrike.

In addition, part 35 of the FAR’s donot currently require a demonstration ofpropeller integrity following a lightningstrike. No safety considerations arisefrom lightning strikes on propellersconstructed of metal because theelectrical current is safely conductedthrough the metal blade without damageto the propeller. Fixed pitched, woodenpropellers are generally used on enginesinstalled on small, general aviationaircraft that typically do not encounterflying conditions conducive to lightningstrikes. Composite propeller blades,however, may be used on turbineengines and high performance aircraftwhich have an increased risk oflightning strikes. Composite blades maynot safely conduct or dissipate theelectrical current from a lightning strike.Severe damage can result if thepropellers are not properly protected.Therefore, composite blades mustdemonstrate propeller integrityfollowing a lightning strike. Informationon testing for lightning protection is setout in SAE Report AE4L, entitled,‘‘Lightning Test Waveforms andTechniques for Aerospace Vehicles andHardware,’’ dated June 20, 1978.

Lastly, the current certificationrequirements address fatigue evaluationonly of metal propeller blades or hubs,and those metal components of non-metallic blade assemblies. Allowabledesign stress limits for composite bladesmust consider the deteriorating effectsof the environment and in-service use,particularly those effects fromtemperature, moisture, erosion andchemical attack. Composite blades alsopresent new and differentconsiderations for retention of theblades in the propeller hub.

Discussion of CommentsInterested persons have been afforded

the opportunity to participate in themaking of these special conditions. Dueconsideration has been given tocomments received.

One commenter is concerned that theterms ‘‘reasonable and foreseeable’’ inparagraph (3) FATIGUE EVALUATIONof the special condition is a vagueinterpretation, and will result in largevariation in how this requirement isapplied.

The FAA disagrees. The specialconditions are written with the acceptedterminology from § 35.37, Fatigue limittests, of the FAR’s, which states that‘‘The fatigue evaluation must includeconsideration of all reasonablyforeseeable vibration load patterns.’’This terminology has been establishedbecause each propeller installationpresents a unique set of operatingconditions that must be incorporated


into the fatigue evaluation. Theinclusion of specific aircraft operatingconditions may result in the fatigueevaluation of operating conditions ofminor significance while leaving outconditions of major significance.

One commenter agreed with the threeproposed special conditions as writtenand proposed two additional specialconditions concerning ice strikes due toice shedding from the airframe and iceaccretion due to the heat transferproperties of composite materials.

The FAA disagrees with the additionof the two additional special conditionsfor the following reasons. First, icestrikes due to ice shedding from theairframe is a concern for pusher typeinstallations. The Hamilton StandardModel 568F propeller is a tractorconfiguration and therefore normallywill not be exposed to ice sheddingfrom the airframe. Second, heat transferproperties of the Hamilton StandardModel 568F composite blade are similarto other composite shell and allcomposite blades with deicing systemsthat have had a good service history. Inaddition for propeller installations thatrequire deicing, the propellermanufacture provides a deicing systemand the required documentation to theairframer for compliance with thecurrent regulations.Conclusion

This action affects only the HamiltonStandard Model 568F propeller andfuture propeller models within thisseries. It is not a rule of generalapplication, and it affects only themanufacturer who applied to the FAAfor approval of this propeller model.List of Subjects in 14 CFR Part 35

Air Transportation, Aircraft, Aviationsafety, Safety.PART 35—[AMENDED]

The authority citation continues toread as follows:

Authority: 49 U.S.C. 106(g), 40113, 44701,44702, 44704; 14 CFR 11.28, 21.16.

The Special ConditionsAccordingly, pursuant to the

authority delegated to me by theAdministrator, the Federal AviationAdministration (FAA) issues thefollowing special conditions for theHamilton Standard Model 568FPropeller:

(a) For purposes of these specialconditions, a hazardous condition isconsidered to exist for each of thefollowing conditions:

(1) Loss of the propeller blade, or amajor portion of a blade.

(2) Overspeed of the propellers.(3) Unintended movement of the

blade below the established minimum

inflight blade angle, or to an angle thatresults in excessive drag.

(4) The inability to feather thepropeller when necessary.

(b) In addition to the requirements ofFederal Aviation Regulation part 35, thefollowing must be shown:

(1) BIRD STRIKEFor propeller of composite

construction it must be shown that:The propeller can withstand a 4

pound bird strike at the blade’s criticalradial location when operating at takeoffRPM and liftoff (Vr) speed of a typicalaircraft, without giving rise to ahazardous condition and whilemaintaining the capability to befeathered.

(2) LIGHTNING STRIKEA lightning strike on a propeller of a

composite construction shall not resultin a hazardous condition. The propellershall be capable of continued safeoperation.

(3) FATIGUE EVALUATIONA fatigue evaluation must be provided

and the fatigue limits determined foreach propeller hub, blade, and eachprimary load carrying component of thepropeller. The fatigue evaluation mustconsider all known and reasonableforeseeable vibration and cyclic loadpatterns that may be encountered inservice. The fatigue limits must accountfor the effects of in-service deterioration,such as impact damage, nicks, grooves,galling, or bearing wear; for variations inproduction material properties; forenvironmental effects such astemperature, moisture, erosion,chemical attack, etc., that causedeterioration.

Issued in Burlington, Massachusetts, onDecember 19, 1995.James C. Jones,Acting Manager, Engine and PropellerDirectorate, Aircraft Certification Service.[FR Doc. 96–56 Filed 1–3–96; 8:45 am]BILLING CODE 4910–13–M

14 CFR Part 71

[Airspace Docket No. 94–AWA–3]

Modification of the Atlantic CityInternational Airport Class C AirspaceArea; NJ

AGENCY: Federal AviationAdministration (FAA), DOT.ACTION: Final rule.

SUMMARY: This amendment modifies theClass C airspace area at Atlantic CityInternational Airport, Atlantic City, NJ.This action deletes the 1-mile airspaceexclusion around the Nordheim FlyingK Airport due to its closure, and returns

this airspace to the surface area of theClass C airspace. In addition, this actionreduces controller workload.EFFECTIVE DATE: 0901 UTC, February 29,1996.FOR FURTHER INFORMATION CONTACT:William C. Nelson, Airspace andObstruction Evaluation Branch (ATP–240), Airspace-Rules and AeronauticalInformation Division, Air Traffic Rulesand Procedures Service, FederalAviation Administration, 800Independence Avenue, SW.,Washington, DC 20591; telephone: (202)267–9295.


HistoryOn April 12, 1995, the FAA proposed

to amend part 71 of the Federal AviationRegulations (14 CFR part 71) to modifythe Class C airspace area at Atlantic CityInternational Airport, Atlantic City, NJ(60 FR 18552). Interested parties wereinvited to participate in this rulemakingproceeding by submitting writtencomments on the proposal to the FAA.No comments were received concerningthe proposal. Except for editorialchanges, this amendment is the same asthat proposed in the notice. Class Cairspace designations are published inparagraph 4000 of FAA Order 7400.9Cdated August 17, 1995, and effectiveSeptember 16, 1995, which isincorporated by reference in 14 CFR71.1. The Class C airspace designationlisted in this document will bepublished subsequently in the Order.

The RuleThis amendment to part 71 of the

Federal Aviation Regulations (14 CFRpart 71) modifies the Class C airspacearea at Atlantic City InternationalAirport, Atlantic City, NJ, byeliminating the 1-mile radius airspaceexclusion around the Nordheim FlyingK Airport due to its closure. Thisamendment will return this airspace tothe surface area of the Class C airspace.

Regulatory Evaluation SummaryProposed changes to Federal

regulations must undergo severaleconomic analyses. First, ExecutiveOrder 12866 directs that each Federalagency shall propose or adopt aregulation only upon a reasoneddetermination that the benefits of theintended regulation justify its costs.Second, the Regulatory Flexibility Actof 1980 requires agencies to analyze theeconomic effect of regulatory changeson small entities. Third, the Office ofManagement and Budget directsagencies to assess the effect ofregulatory changes on international


trade. In conducting these analyses, theFAA has determined that this final ruleis not ‘‘a significant regulatory action’’as defined in the Executive Order andthe Department of TransportationRegulatory Policies and Procedures.

This final rule will modify the ClassC airspace area at Atlantic CityInternational Airport, Atlantic City, NJ.This action will delete the 1-mileairspace exclusion around NordheimFlying K Airport and standardize airtraffic operations.

Costs

The FAA has determined that theimplementation of the final rule tomodify the Class C airspace area atAtlantic City International Airport willresult in little or no cost to either theagency or aircraft operators. Theelimination of the 1-mile airspaceexclusion around the Nordheim FlyingK Airport will not reduce aviation safetynor increase the risk of a mid-aircollision because that airport is closed.Also, the revision to aeronautical chartsto reflect the airspace modification willbe part of the routine and periodicupdating of charts. Finally, the FAAwill not incur any additionaladministrative costs for either personnelor equipment.

Benefits

The final rule will generate benefitsfor system users and the FAA primarilyin the form of enhanced operationalefficiency. The final rule will provideadditional controlled airspace foraircraft landing and departing from theAtlantic City International Airport. Airtraffic controllers will gain operationalefficiency as they will be able tostandardize traffic operations.

Regulatory Flexibility DeterminationThe Regulatory Flexibility Act of 1980

(RFA) was enacted by Congress toensure that small entities are notunnecessarily and disproportionatelyburdened by Federal regulations. TheRFA requires a Regulatory FlexibilityAnalysis if a final rule will have ‘‘asignificant economic impact on asubstantial number of small entities.’’FAA Order 2100.14A outlines the FAA’sprocedures and criteria forimplementing the RFA. Small entitiesare independently owned and operatedsmall businesses and small not-for-profit organizations. A substantialnumber of small entities is defined as anumber that is 11 or more and which ismore than one-third of the small entitiessubject to this final rule.

The FAA determined that revising theClass C airspace area at Atlantic CityInternational Airport will not result ina significant economic impact on asubstantial number of small entities.This determination was made becausethere are little or no costs associatedwith this final rule.

International Trade Impact AssessmentThis final rule will not constitute a

barrier to international trade, includingthe export of U.S. goods and services toforeign countries and the import offoreign goods and services into theUnited States. This final rule will notimpose costs on aircraft operators oraircraft manufacturers in the UnitedStates or foreign countries. Themodification of the Class C airspace areawill only affect U.S. terminal airspaceoperating procedures at and in thevicinity of Atlantic City, NJ. This finalrule will not have international traderamifications because it is a domesticairspace matter that will not imposeadditional costs or requirements onaffected entities.


Airspace, Incorporation by reference,Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, theFederal Aviation Administrationamends 14 CFR part 71 as follows:

PART 71—[AMENDED]


Authority: 49 U.S.C. 106(g), 40103, 40113,40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–1963 Comp., p. 389; 14 CFR 11.69.

§ 71.1 [Amended]

2. The incorporation by reference in14 CFR 71.1 of Federal AviationAdministration Order 7400.9C, AirspaceDesignations and Reporting Points,dated August 17, 1995, and effectiveSeptember 16, 1995, is amended asfollows:

Paragraph 4000—Subpart C—Class CAirspace

* * * * *

AEA NJ C Atlantic City InternationalAirport, NJ [Revised]Atlantic City International Airport, NJ

(Lat. 39°27′27′′ N., long. 74°34′38′′ W.)That airspace extending upward from the

surface to and including 4,100 feet MSLwithin a 5-mile radius of the Atlantic CityInternational Airport; and that airspaceextending upward from 1,300 feet MSL toand including 4,100 feet MSL within a 10-mile radius of the airport.* * * * *

Issued in Washington, DC, on December20, 1995.Harold W. Becker,Manager, Airspace-Rules and AeronauticalInformation Division.

BILLING CODE 4910–13–P


[FR Doc. 96–68 Filed 1–3–96; 8:45 am]BILLING CODE 4910–13–C


DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 162

[T.D. 96–6]

RIN 1515–AB72

Search Warrants

AGENCY: Customs Service, Departmentof the Treasury.ACTION: Final rule.

SUMMARY: This document amends theCustoms Regulations by removing aregulation limiting the authority ofCustoms officers to whom searchwarrants are issued. The currentregulation restricts such officers fromremoving letters, documents and otherrecords in certain circumstances. Theregulation is inconsistent with thecurrent state of the law.EFFECTIVE DATE: February 5, 1996.FOR FURTHER INFORMATION CONTACT:Lars-Erik Hjelm, Office of the ChiefCounsel, at 202–927–6900.


BackgroundSection 162.14 of the Customs

Regulations (19 CFR 162.14) providesthat Customs officers to whom a searchwarrant is issued may not removeletters, other documents and recordsduring the execution of the warrant,unless such letters, other documentsand records are instruments of crimewhich are seized pursuant to a lawfularrest. When it was drafted, thestatutory basis for this regulation wasfound in section 595 of the Tariff Act of1930 (19 U.S.C. 1595). Until 1986,section 595 only authorized Customs toobtain warrants for merchandise.

In 1986, section 595 was expanded toallow Customs to seize ‘‘. . . anydocument . . . which is evidence of aviolation . . . of any . . . lawenforced or administered by the UnitedStates Customs Service.’’ Pub. L. 99–570, Title III, § 3122, 100 Stat. 3207–87.

In addition to section 595, section 589of the Tariff Act of 1930 (19 U.S.C.1589a(2)), provides expanded authorityfor Customs officers with warrants toseize documents. Section 589 providesCustoms officers with authority toexecute and serve any warrant issuedunder the authority of the United States.As a search warrant issued under Rule41 of the Federal Rules of CriminalProcedure (Fed. R. Crim. P., Rule 41, 18U.S.C. App.) can now be issued for,among other things, documentsconstituting evidence of crimes (SeeUnited States v. Thompson, 495 F. 2d

165 (D.C. Cir 1974); United States v.Michaelian, 803 F. 2d 1042 (9th Cir.1986)), it is clear that section 589 readin conjunction with Rule 41 providesCustoms officers with authority tosearch for and seize documentaryevidence. Further, the Supreme Courthas made it clear that officers may seizeincriminating evidence during thecourse of a lawful search. Horton v.California, 496 U.S. 128 (1990).

Inasmuch as section 162.14 of theCustoms Regulations, no longer reflectsthe state of the law regarding the searchand seizure authority of Customsofficers, Customs proposed removingthe regulation in a Notice of ProposedRulemaking published in the FederalRegister on July 12, 1995 (60 FR 35881).A correction document regarding thenotice was published in the FederalRegister (60 FR 37856) on July 24, 1995.

DeterminationNo comments were received in

response to the Notice of ProposedRulemaking. After further review,Customs has determined to proceedwith the removal of section 162.14,Customs Regulations (19 CFR 162.14).

Regulatory Flexibility Act andExecutive Order 12866

Pursuant to the provisions of theRegulatory Flexibility Act (5 U.S.C. 601et seq.) and based upon the informationset forth above, it is certified that theremoval of § 162.14 will not have asignificant economic impact on asubstantial number of small entities.Accordingly, the amendment is notsubject to the regulatory analysis orother requirements of 5 U.S.C. 603 and604.

This document does not meet thecriteria for a ‘‘significant regulatoryaction’’ as specified in Executive Order12866.

Drafting InformationThe principal author of this document

was Janet L. Johnson, RegulationsBranch. However, personnel from otheroffices participated in its development.

List of Subjects in Part 162Administrative practice and

procedure, Customs duties andinspection, Drug traffic control, Exports,Law enforcement, Marijuana, Penalties,Reporting and recordkeepingrequirements, Search warrants, Seizuresand forfeitures.

Amendment to the RegulationsFor the reasons set forth in the

preamble, part 162 of the CustomsRegulations is amended as set forthbelow.

PART 162—RECORDKEEPING,INSPECTION, SEARCH AND SEIZURE

1. The general authority for part 162continues to read as follows:

Authority: 5 U.S.C. 301; 19 U.S.C. 66,1624.

§ 162.14 [Removed]

2. Section 162.14 is removed.William F. Riley,Acting Commissioner of Customs.

Approved: December 28, 1995.John P. Simpson,Deputy Assistant Secretary of the Treasury.[FR Doc. 96–133 Filed 1–3–96; 8:45 am]BILLING CODE 4820–02–P

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Food and Drug Administration

21 CFR Part 510

New Animal Drugs; Change of SponsorName and Address

AGENCY: Food and Drug Administration,HHS.ACTION: Final rule.

SUMMARY: The Food and DrugAdministration (FDA) is amending theanimal drug regulations to reflect achange of sponsor name and addressfrom American Cyanamid Co. toAmerican Cyanamid, Division ofAmerican Home Products.EFFECTIVE DATE: January 4, 1996.FOR FURTHER INFORMATION CONTACT:Thomas J. McKay, Center for VeterinaryMedicine (HFV–102), Food and DrugAdministration, 7500 Standish Pl.,Rockville, MD 20855, 301–827–0213.SUPPLEMENTARY INFORMATION: AmericanCyanamid Co., Berdan Ave., Wayne, NJ07470, has informed FDA of a change ofsponsor name and address to AmericanCyanamid, Division of American HomeProducts, P.O. Box 1339, Fort Dodge, IA50501. Accordingly, the agency isamending the regulations in 21 CFR510.600(c)(1) and (c)(2) to reflect thechange of sponsor name and address.


Administrative practice andprocedure, Animal drugs, Labeling,Reporting and recordkeepingrequirements.

Therefore, under the Federal Food,Drug, and Cosmetic Act and underauthority delegated to the Commissionerof Food and Drugs and redelegated tothe Center for Veterinary Medicine, 21CFR part 510 is amended as follows:


PART 510—NEW ANIMAL DRUGS


Authority: Secs. 201, 301, 501, 502, 503,512, 701, 721 of the Federal Food, Drug, andCosmetic Act (21 U.S.C. 321, 331, 351, 352,353, 360b, 371, 379e).

2. Section 510.600 is amended in thetable in paragraph (c)(1) by removingthe entry for ‘‘American Cyanamid Co.’’and by adding in its place a new entryfor ‘‘American Cyanamid, Division ofAmerica Home Products,’’ and in thetable in paragraph (c)(2) in the entry for

‘‘010042’’ by revising the sponsor nameand address to read as follows:

§ 510.600 Names, addresses, and druglabeler codes of sponsors of approvedapplications.

* * * * *(c) * * *(1) * * *

Firm name and address Drug labeler code

* * * * * * *American Cyanamid, Division of American Home Products, P.O.

Box 1339, Fort Dodge, IA 50501 ..................................................... 010042* * * * * * *

(2) * * *

Drug labeler code Firm name and address

* * * * * * *010042 American Cyanamid, Division of American Home Products, P.O.

Box 1339, Fort Dodge, IA 50501.* * * * * * *

Dated: December 22, 1995.Robert C. Livingston,Director, Office of New Animal DrugEvaluation, Center for Veterinary Medicine.[FR Doc. 96–122 Filed 1–3–96; 8:45 am]BILLING CODE 4160–01–F

21 CFR Part 510

New Animal Drugs; Change of SponsorAddress

AGENCY: Food and Drug Administration,HHS.

ACTION: Final rule.

SUMMARY: The Food and DrugAdministration (FDA) is amending theanimal drug regulations to reflect achange of sponsor address forTRINADA, Inc.

EFFECTIVE DATE: January 4, 1996.

FOR FURTHER INFORMATION CONTACT:Thomas J. McKay, Center for VeterinaryMedicine (HFV–102), Food and DrugAdministration, 7500 Standish Pl.,Rockville, MD 20855, 301–827–0213.SUPPLEMENTARY INFORMATION:TRINADA, Inc., P.O. Box 129,Lewisburg, OH 45338, has informedFDA that it has changed its address toOne Executive Dr., P.O. Box 1399, FortLee, NJ 07024. Accordingly, the agencyis amending the regulations in 21 CFR510.600(c)(1) and (c)(2) to reflect thechange of sponsor address.


procedure, Animal drugs, Labeling,Reporting and recordkeepingrequirements.

Therefore, under the Federal Food,Drug, and Cosmetic Act and underauthority delegated to the Commissionerof Food and Drugs and redelegated to

the Center for Veterinary Medicine, 21CFR part 510 is amended as follows:

PART 510—NEW ANIMAL DRUGS


Authority: Secs. 201, 301, 501, 502, 503,512, 701, 721 of the Federal Food, Drug, andCosmetic Act (21 U.S.C. 321, 331, 351, 352,353, 360b, 371, 379e).

2. Section 510.600 is amended in thetable in paragraph (c)(1) by revising thesponsor address for ‘‘TRINADA, Inc.,’’and in the table in paragraph (c)(2) inthe entry for ‘‘058690’’ by revising thesponsor address to read as follows:

§ 510.600 Names, addresses, and druglabeler codes of sponsors of approvedapplications.

* * * * *(c) * * *(1) * * *

Firm name and address Drug labeler code

* * * * * * *TRINADA, Inc., One Executive Dr., P.O. Box 1399, Fort Lee, NJ 07024 .... 058690

* * * * * * *


(2) * * *

Drug labeler code Firm name and address

* * * * * * *058690 TRINADA, Inc., One Executive Dr., P.O. Box 1399, Fort Lee, NJ 07024.

* * * * * * *


21 CFR Part 522

New Animal Drugs and RelatedProducts; Change of Sponsor

AGENCY: Food and Drug Administration,HHS.

ACTION: Final rule.

SUMMARY: The Food and DrugAdministration (FDA) is amending theanimal drug regulations to reflect achange of sponsor for a new animal drugapplication (NADA) from Fort DodgeLaboratories to Wildlife Laboratories,Inc.

EFFECTIVE DATE: January 4, 1996.

FOR FURTHER INFORMATION CONTACT:Thomas J. McKay, Center for VeterinaryMedicine (HFV–102), Food and DrugAdministration, 7500 Standish Pl.,Rockville, MD 20855, 301–827–0213.

SUPPLEMENTARY INFORMATION: FortDodge Laboratories, Fort Dodge, IA50501, has informed FDA that it hastransferred ownership of, and all rightsand interests in approved NADA 47–870(Etorphine hydrochloride injection) toWildlife Laboratories, Inc., 1401 DuffDr., suite 600, Fort Collins, CO 80524.This NADA was originally owned byAmerican Cyanamid Co. and transferredto Fort Dodge Laboratories but wasinadvertently not codified in theregulations. Accordingly, FDA isamending the regulations in 21 CFR522.883 to reflect the change of sponsor.


Animal drugs.Therefore, under the Federal Food,

Drug, and Cosmetic Act and underauthority delegated to the Commissionerof Food and Drugs and redelegated tothe Center for Veterinary Medicine, 21CFR part 522 is amended as follows:

PART 522—IMPLANTATION ORINJECTABLE DOSAGE FORM NEWANIMAL DRUGS


Authority: Sec. 512 of the Federal Food,Drug, and Cosmetic Act (21 U.S.C. 360b).

§ 522.883 [Amended]2. Section 522.883 Etorphine

hydrochloride injection is amended inparagraph (c) by removing ‘‘010042’’and adding in its place ‘‘053923’’.



Internal Revenue Service

26 CFR Parts 1, 301, and 602

[TD 8651]

RIN 1545–AS05

Automatic Extension of Time for FilingIndividual Income Tax Returns

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Temporary regulations.

SUMMARY: This document containstemporary regulations that reflect newsimpler procedures for an individual toobtain an automatic extension of time tofile an individual income tax return.The text of the temporary regulationsalso serves as the text of the crossreference notice of proposed rulemakingon this subject in the Proposed Rulessection of this issue of the FederalRegister.DATES: These regulations are effectiveJanuary 4, 1996.

For dates of applicability, see§ 1.6081–4T and § 301.6651–1T.FOR FURTHER INFORMATION CONTACT:Margaret A. Owens, (202) 622–6232 (nota toll-free number).


Paperwork Reduction ActThese regulations are being issued

without prior notice and publicprocedure pursuant to theAdministrative Procedure Act (5 U.S.C.553). For this reason, the collection ofinformation contained in theseregulations has been reviewed and,pending receipt and evaluation ofpublic comments, approved by theOffice of Management and Budget undercontrol number 1545–1479. Responsesto this collection of information arerequired to obtain a benefit (anautomatic 4-month extension of time tofile an individual income tax return).

An agency may not conduct orsponsor, and a person is not required torespond to, a collection of informationunless the collection of informationdisplays a valid control number.

For further information concerningthe collection of information, and whereto submit comments on the collection ofinformation and the accuracy of theestimated burden, and suggestions forreducing this burden, please refer to thepreamble to the cross-referencing noticeof proposed rulemaking published inthe Proposed Rules section of this issueof the Federal Register.

Books or records relating to acollection of information must beretained as long as their contents maybecome material in the administrationof any internal revenue law. Generally,tax returns and tax return informationare confidential, as required by 26U.S.C. 6103.

BackgroundThis document amends the Income

Tax Regulations (26 CFR Part 1) undersection 6081 of the Internal RevenueCode of 1986 to implement Notice 93–22 (1993–1 C.B. 305). Notice 93–22,released April 7, 1993, grants relief toindividuals who want an automatic 4-month extension of time to file anindividual income tax return but whoare unable to pay by the due date for thereturn the tax properly estimated to bedue. The notice allows these individualsto obtain an automatic 4-monthextension of time to file their individual


income tax returns for taxable yearsending on or after December 31, 1992,by filing Form 4868, Application forAutomatic Extension of Time to FileU.S. Individual Income Tax Return,without an accompanying remittance.Individuals may rely on Notice 93–22for taxable years ending on or afterDecember 31, 1992 and before December31, 1995. Notice 93–22 also advisedtaxpayers that the regulations undersection 6081 will be amended to reflectthis change in the procedure for anindividual to obtain an automatic 4-month extension of time to file. Inaddition, this document amends theRegulations on Procedure andAdministration (26 CFR Part 301)(relating to an automatic extension oftime for filing an individual income taxreturn).

Explanation of ProvisionsUnder § 1.6081–4, an individual

required to file an income tax return isallowed an automatic 4-monthextension of time to file if (a) anapplication is prepared on Form 4868,(b) the application is signed by theindividual or a person duly authorizedby the individual, (c) the application isfiled on or before the date the return isdue, (d) the application shows the fullamount properly estimated as tax, and(e) the application is accompanied byfull remittance of the amount properlyestimated as tax that is unpaid as of thedate prescribed for the filing of thereturn.

These temporary regulations providethat individuals may obtain anautomatic 4-month extension of time tofile an individual income tax returnwithout remitting the unpaid amount ofany tax properly estimated to be duewith the application for extension oftime to file. Under these temporaryregulations, an individual’s inability topay is not a condition for obtaining anautomatic 4-month extension. However,taxpayers are encouraged to makepayments, as large as possible, in orderto reduce interest and penalties requiredby law.

In addition, these temporaryregulations provide that the IRS mayprescribe other manners for submittingan application in lieu of a paperapplication on Form 4868.

The temporary regulations remove theregulatory requirement that applicationsfor an automatic 4-month extension besigned. Thus, notwithstanding the 1995Form 4868 instructions, an unsignedapplication will be processed. Inaddition, the Commissioner mayprescribe additional methods ofobtaining an extension of time to filethat do not require a signature.

Special Analyses

It has been determined that thesetemporary regulations are not asignificant regulatory action as definedin EO 12866. Therefore, a regulatoryassessment is not required. It has alsobeen determined that section 553(b) ofthe Administrative Procedure Act (5U.S.C. chapter 5) and the RegulatoryFlexibility Act (5 U.S.C. chapter 6) donot apply to these regulations and,therefore, a Regulatory FlexibilityAnalysis is not required. Pursuant tosection 7805(f) of the Internal RevenueCode, a copy of these regulations will besubmitted to the Chief Counsel forAdvocacy of the Small BusinessAdministration for comment on theirimpact on small business.

Drafting Information. The principal authorof these regulations is Margaret A. Owens,Office of the Assistant Chief Counsel (IncomeTax & Accounting), IRS. However, otherpersonnel from the IRS and the TreasuryDepartment participated in theirdevelopment.

List of Subjects

26 CFR Part 1

Income taxes, Reporting andrecordkeeping requirements.

26 CFR Part 301

Employment taxes, Estate taxes,Excise taxes, Gift taxes, Income taxes,Penalties, Reporting and recordkeepingrequirements.

26 CFR Part 602

Reporting and recordkeepingrequirements.

Amendments to the Regulations

Accordingly, 26 CFR parts 1, 301, and602 are amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citationfor part 1 continues to read in part asfollows:

Authority: 26 U.S.C. 7805. * * *

Par. 2. Section 1.6081–4 is amendedby revising paragraph (a) to read asfollows:

§ 1.6081–4 Automatic extension of time forfiling individual income tax returns.

(a) [Reserved] For further guidancesee § 1.6081–4T(a).* * * * *

Par. 3. Section 1.6081–4T is added toread as follows:

§ 1.6081–4T Automatic extension of timefor filing individual income tax returns—taxable years ending on or after December31, 1995 (temporary).

(a) In general—(1) Period of extension.An individual who is required to file anindividual income tax return for anytaxable year ending on or afterDecember 31, 1995, will be allowed anautomatic 4-month extension of time tofile the return after the date prescribedfor filing the return provided therequirements contained in paragraphs(a)(2), (3), and (4) of this section are met.In the case of an individual described in§ 1.6081–5(a)(5) or (6), the automatic 4-month extension will run concurrentlywith the extension of time to filegranted pursuant to § 1.6081–5.

(2) Manner for submitting anapplication. An application must besubmitted—

(i) On Form 4868, Application forAutomatic Extension of Time to FileU.S. Individual Income Tax Return; or

(ii) In any other manner as may beprescribed by the Commissioner.

(3) Time and place for filingapplication. Except in the case of anindividual described in § 1.6081–5(a)(5)or (6), the application must be filed onor before the date prescribed for filingthe individual income tax return. In thecase of an individual described in§ 1.6081–5(a)(5) or (6), the applicationmust be filed on or before the expirationof the extension of time to file grantedpursuant to § 1.6081–5. The applicationmust be filed with the IRS officedesignated in the application’sinstructions.

(4) Proper estimate of tax. Anapplication for extension must show thefull amount properly estimated as taxfor the taxable year.

(5) Allowance of extension. Uponproperly preparing and timely filing anapplication, the 4-month extension willbe considered as allowed. Except inundue hardship cases, no extension oftime for filing an individual income taxreturn will be granted under § 1.6081–1 until an automatic extension has beenallowed pursuant to the provisions ofthis paragraph (a).

(b) and (c) [Reserved].(d) Penalties. See section 6651 and the

regulations under that section for theadditions to tax for failure to file anindividual income tax return or failureto pay the amount shown as tax on thereturn. In particular, see § 301.6651–1(c)(3) of this chapter (relating to apresumption of reasonable cause incertain circumstances involving anautomatic extension of time for filing anindividual income tax return).


PART 301—PROCEDURE ANDADMINISTRATION

Par. 4. The authority citation for part301 continues to read in part as follows:

Authority: 26 U.S.C. 7805. * * *

Par. 5. Section 301.6651–1 isamended by revising paragraph (c)(3) toread as follows:

§ 301.6651–1 Failure to file tax return or topay tax.

* * * * *(c)(3) [Reserved] For further guidance

see § 301.6651–1T(c)(3).* * * * *

Par. 6. Section 301.6651–1T is addedto read as follows:

§ 301.6651–1T Failure to file tax return orto pay tax—taxable years ending on or afterDecember 31, 1995 (temporary).

(a) through (c)(2) [Reserved].(c)(3) If, for a taxable year ending on

or after December 31, 1995, anindividual taxpayer satisfies therequirements of § 1.6081–4T(a) of thischapter (relating to an automaticextension of time for filing anindividual income tax return),reasonable cause shall be presumed, forthe period of the extension of time tofile, with respect to any underpaymentof tax if—

(i) The excess of the amount of taxshown on the individual income taxreturn over the amount of tax paid onor before the regular due date of thereturn (by virtue of taxes withheld bythe employer, estimated tax payments,and any payment with an applicationfor extension of time to file pursuant to§ 1.6081–4T of this chapter) is no greaterthan 10 percent of the amount of taxshown on the individual income taxreturn; and

(ii) Any balance due shown on theindividual income tax return is remittedwith the return.

PART 602—OMB CONTROL NUMBERSUNDER THE PAPERWORKREDUCTION ACT

Par. 7. The authority citation for part602 continues to read as follows:

Authority: 26 U.S.C. 7805.

§ 602.101 [Amended]

Par. 8. In § 602.101, paragraph (c) isamended by adding an entry in

numerical order to the table to read‘‘1.6081–4T. . . .1545–1479’’.Margaret Milner Richardson,Commissioner of Internal Revenue.

Approved: December 20, 1995.Leslie Samuels,Assistant Secretary of the Treasury.[FR Doc. 96–114 Filed 1–3–96; 8:45 am]BILLING CODE 4830–01–U

26 CFR Parts 1 and 602

[TD 8654]

RIN 1545–AS21

Information Reporting for Dischargesof Indebtedness

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Final regulations.

SUMMARY: This document contains finalregulations relating to the informationreporting requirements of applicablefinancial entities for discharges ofindebtedness. The final regulationsreflect changes to the Internal RevenueCode of 1986 (Code) made by section13252 of the Omnibus BudgetReconciliation Act of 1993 (the Act).The final regulations affect certainfinancial institutions and federalexecutive agencies.DATES: These regulations are effectiveDecember 22, 1996.

For dates of applicability, see§ 1.6050P–1(h).FOR FURTHER INFORMATION CONTACT:Sharon L. Hall (timing and amount ofdischarge) at (202) 622–4930 or MichaelF. Schmit (other issues) at (202) 622–4960, both of the Office of AssistantChief Counsel (Income Tax andAccounting). Neither telephone numberis toll-free.


Paperwork Reduction Act

The collection of informationcontained in these final regulations hasbeen reviewed and approved by theOffice of Management and Budget inaccordance with the PaperworkReduction Act (44 U.S.C. 3507) undercontrol number 1545–1419. Responsesto this collection of information arerequired for the IRS to monitor whetherdischarged debtors are properlycomplying with tax laws respectingcancellations of indebtedness.


The time estimates for the reportingrequirements contained in these finalregulations are reflected in the burdenestimates for Form 1099–C.

Comments concerning the accuracy ofthis burden estimate and suggestions forreducing this burden should be sent tothe Internal Revenue Service, Attn: IRSReports Clearance Officer, T:FP,Washington, DC 20224, and to theOffice of Management and Budget, Attn:Desk Officer for the Department ofTreasury, Office of Information andRegulatory Affairs, Washington, DC20503.

Books or records relating to thiscollection of information must beretained as long as their contents maybecome material in the administrationof any internal revenue law. Generally,tax returns and tax information areconfidential, as required by 26 U.S.C.6103.

BackgroundSection 6050P was added to the Code

by section 13252 of the Act. Section6050P requires certain financial entitiesto report discharges of indebtedness of$600 or more during any calendar year,and requires reporting entities to makea return at such time and in such formas the Secretary may by regulationsprescribe.

On December 27, 1993, temporaryregulations (TD 8506) relating to thereporting of discharge of indebtednessunder section 6050P were published inthe Federal Register (58 FR 68301). Anotice of proposed rulemaking (IA–63–93) cross-referencing the temporaryregulations was published in theFederal Register for the same day (58FR 68337).

Written comments were received inresponse to the notice of proposedrulemaking. Fourteen speakers providedtestimony at a public hearing held onMarch 30, 1994. In response to thecomments and testimony, the IRS andTreasury issued Notice 94–73 (1994–2C.B. 553), providing interim relief frompenalties for failure to comply withcertain of the reporting requirements ofthe temporary regulations. The Noticeprovided that, with respect to adischarge of indebtedness occurringbefore the later of January 1, 1995, or theeffective date of the final regulationsunder section 6050P, no penaltieswould be imposed for the failure toreport a discharge of indebtedness:

(a) Under title 11 of the United StatesCode;

(b) Resulting from the expiration ofthe statute of limitations for collectionof an indebtedness;

(c) For an amount other than principalin the case of indebtedness arising in


connection with a lending transaction;or

(d) For a person other than theprimary (or first-named) debtor in thecase of indebtedness incurred beforeJanuary 1, 1995, that involves multipledebtors.

After consideration of all thecomments, the proposed regulationsunder section 6050P are adopted, asrevised by this Treasury decision,effective for discharges of indebtednessoccurring after December 21, 1996. Thetemporary regulations and interim relieffrom penalties provided in Notice 94–73remain in effect through December 21,1996, at which time the temporaryregulations are removed. However, nopenalties will be imposed for the failureto report a discharge of indebtednessoccurring after December 21, 1996, andbefore January 1, 1997, if the failure toreport would have qualified for penaltyrelief under Notice 94–73 had thedischarge occurred prior to December22, 1996. Additionally, the finalregulations provide that a financialentity subject to section 6050P may, atits discretion, apply any of theprovisions of the final regulations to anydischarge of indebtedness occurring onor after January 1, 1996, and beforeDecember 22, 1996. The comments andrevisions to the proposed regulations arediscussed below.

At the request of commentators, theIRS and Treasury are considering theissuance of guidance providing uniformprocedures for requesting extensions oftime within which to file informationreturns with the IRS and relatedstatements to taxpayers. This guidance,if issued, would apply to theinformation reporting requirements setforth in this Treasury decision.

Explanation of Revisions and Summaryof Comments

1. Identifiable Events

Comments were received relating tothe issue of when an indebtedness isdischarged for purposes of section6050P. Under the temporary andproposed regulations, indebtedness isconsidered discharged, and reporting isrequired, upon the occurrence of anidentifiable event indicating that theindebtedness will never have to berepaid by the debtor, taking into accountall of the facts and circumstances. Thetemporary and proposed regulations listthree identifiable events, but make clearthat the three items do not represent anexclusive list of events requiringreporting.

Commentators objected to this factsand circumstances test, and stated thatthe final regulations should instead

provide an exclusive list of reportingevents. The comments indicated thatcreditors do not have the resources toweigh all the facts and circumstances inorder to determine whether a debt willnever have to be repaid by the debtor.

In response to these comments, thefinal regulations provide that, forpurposes of section 6050P, indebtednessis considered discharged, and reportingis required, only upon the occurrence ofcertain identifiable events. Theregulations contain an exclusive list ofeight identifiable events, and providethat, in the absence of the occurrence ofone of these events, a Form 1099–C isnot required to be filed.

A. Discharges of Indebtedness inBankruptcy

Commentators objected to therequirement in the temporary andproposed regulations relating to thereporting of a discharge of indebtednessin bankruptcy. The commentators statedthat the obligation to report debtsdischarged in bankruptcy was extremelyburdensome due to the large number ofinformation returns that thesebankruptcies would generate. Thesecommentators also stated that somelenders do not receive informationregarding a debtor’s bankruptcydischarge in the normal course ofbusiness.

Commentators also objected to therequirement to report debts dischargedin bankruptcy because income from adischarge in bankruptcy is excludableunder section 108(a)(1)(A).Additionally, while acknowledging thatsection 108(b) generally requires thereduction of tax attributes for amountsof cancellation of indebtedness incomeexcluded under section 108(a), thesecommentators indicated that themajority of bankruptcies involveconsumer debt, the discharge of whichis unlikely to give rise to attributereduction. Thus, they contended thatthe reporting of consumer debtsdischarged in bankruptcy will notfurther the purposes of section 6050P.

Finally, based on language in section6050P, commentators contended thatthe IRS and Treasury lacked authority torequire reporting in bankruptcy. Undersection 6050P(a), ‘‘any applicablefinancial entity which discharges . . .the indebtedness of any person’’ issubject to the rules of section 6050P.Commentators argued that creditorsshould not be subject to the rules ofsection 6050P for debts discharged inbankruptcy because it is the bankruptcycourt, not the creditor, that dischargesthe debt.

In promulgating the temporaryregulations, the IRS and Treasury fully

considered the issue of whetherbankruptcy discharges could beexcluded from the reportingrequirement. The legislative history tosection 6050P states that ‘‘informationreturns are required regardless ofwhether the debtor is subject to tax onthe discharged debt. For example,Congress does not expect reportingfinancial institutions and agencies todetermine whether the debtor qualifiesfor an exclusion under section 108.’’H.R. Conf. Rep. No. 213, 103d Cong., 1stSess. 1, 671 (1993). This languageindicates that Congress intended thatdischarges resulting in excluded income(such as bankruptcy discharges) bereported.

Accordingly, the IRS and Treasury donot believe that a requirement to reportdebts discharged in bankruptcy isoutside the scope of section 6050P. Inenacting section 6050P, Congressintended to increase debtor compliancein reporting discharges of indebtedness.With respect to the tax consequences tothe debtor, it generally makes nodifference whether the debt isvoluntarily discharged by the financialentity, or discharged by a court order.Further, the creditor is receiving anamount that is less than the amount ofthe outstanding indebtedness whetherthe debt is voluntarily discharged orordered to be discharged by a court.Thus, the language ‘‘any applicablefinancial entity which discharges . . .indebtedness’’ should not be narrowlyconstrued to exclude instances in whicha debt is ordered to be discharged or isdischarged by operation of law.

The IRS and Treasury believe that anobjective of the legislative historyquoted above is that informationreporting under section 6050P notimpose an undue burden on filers byrequiring determinations regardingwhether discharges result in income todebtors. However, the legislative historydoes not preclude an exception forcertain discharges in appropriatecircumstances. Accordingly, in responseto the above concerns of thecommentators, the final regulationsprovide an exception from reporting inthe case of certain bankruptcydischarges. Under the final regulations,indebtedness discharged in bankruptcyis required to be reported only if thecreditor knows that the debtor incurredthe indebtedness for business orinvestment purposes. Therefore,reporting is not required for consumerdebts discharged in bankruptcy or incases in which the creditor is not awareof the purpose for the borrowing or thatpurpose is not clear. Informationrelating to whether a debt was incurredfor business or investment purposes will


be available to a creditor in some cases,such as those in which loan documentsrequire the borrower to state thepurpose of the loan. This limitedreporting of debts discharged inbankruptcy will exclude informationreturns relating to consumer debt, whileretaining reporting for those dischargesmost likely to involve the reduction oftax attributes under section 108(b).Pursuant to Notice 94–73, no penaltieswill be imposed for the failure to reportany indebtedness discharged beforeDecember 22, 1996, in bankruptcy.Additionally, no penalties will beimposed for the failure to report anyindebtedness discharged after December21, 1996, and before January 1, 1997, inbankruptcy, since the failure to reportwould have qualified for penalty reliefunder Notice 94–73 had the dischargeoccurred prior to December 22, 1996.

B. Expiration of Statute of Limitationsfor Collection

Under the temporary and proposedregulations, an identifiable eventincludes a cancellation orextinguishment by operation of law thatrenders a debt unenforceable, such asthe expiration of the statute oflimitations for collection of anindebtedness.

Comments were received relating tothe requirement to report indebtednessdischarged as a result of the expirationof the statute of limitations.Commentators argued that expiration ofthe statute of limitations should not bean identifiable event because of therecordkeeping and other administrativeburdens that are created by such a rule.Commentators noted that the statute oflimitations for collection of debt variesfrom state to state, and that debtors mayrelocate and be subject to the rules ofmultiple jurisdictions. Further, theycontended, an isolated payment by adebtor will frequently restart therunning of the statute of limitations.According to the commentators, makinglenders track the expiration of thestatute of limitations for reportingpurposes would require specialcomputer applications not needed forany other creditor function, require legalexpertise in the collection department,and be very costly.

As a legal matter, commentatorsargued that the statute of limitations isan affirmative defense, and affects onlyjudicial enforceability of the obligation.Most commentators indicated thatcollection activity routinely continuesafter the expiration of the statute oflimitations. The temporary andproposed regulations list collectionactivity on the part of the creditor as afactor to be considered in determining

whether debt has been discharged.Thus, even under the temporary andproposed regulations, expiration of thestatute of limitations would rarely markthe date on which debt is considereddischarged, because collection activityroutinely continues after that date.

In response to these comments, thefinal regulations provide that expirationof the statute of limitations forcollection of an indebtedness is anidentifiable event for which a Form1099–C is required to be filed only if,and at such time as, a debtor’saffirmative defense of the expiration ofthe statute of limitations is upheld in afinal judgment or decision of a judicialproceeding, and the period forappealing the judgment or decision hasexpired.

C. Other Discharges by Operation ofLaw

As stated above, the temporary andproposed regulations provide that anidentifiable event includes acancellation or extinguishment byoperation of law that renders a debtunenforceable (such as the expiration ofthe statute of limitations for collectionof the indebtedness). The temporary andproposed regulations do not specify allof the circumstances requiring reportingunder this identifiable event.

In order to further the goal ofproviding an exclusive list of reportingevents, the final regulations specifythose discharges occurring by operationof law that are required to be reportedunder section 6050P. In addition to thestatute of limitations identifiable eventpreviously discussed, the events relatingto operation of law that must bereported are (i) a cancellation orextinguishment of an indebtedness thatrenders a debt unenforceable in areceivership, foreclosure, or similarproceeding in a federal or State court, asdescribed in section 368(a)(3)(A)(ii); (ii)a cancellation or extinguishment of anindebtedness upon the expiration of astatutory period for filing a claim orcommencing a deficiency judgmentproceeding; (iii) a cancellation orextinguishment of an indebtedness thatrenders a debt unenforceable pursuantto a probate or similar proceeding; and(iv) a cancellation or extinguishment ofan indebtedness pursuant to an electionof foreclosure remedies by a creditorthat statutorily extinguishes or bars thecreditor’s right to pursue collection ofthe indebtedness. This final eventrelating to an election of foreclosureremedies will require reporting onlywhere a mortgage lender or holder isbarred by local law from pursuing adeficiency judgment or note collectionproceeding following exercise of a

power of sale contained in a mortgageor deed of trust.

A discharge of indebtedness occurringby operation of law not enumeratedabove is not required to be reportedunder the final regulations.

D. Collection Activity

Commentators indicated that thetemporary and proposed regulationswere unclear regarding the effect ofcontinuing collection activity on therequirement to report under section6050P. The temporary and proposedregulations provide that collectionactivity is one of the facts andcircumstances to be taken into accountin determining whether a discharge ofindebtedness has occurred. Thecommentators argued that the finalregulations should clarify that reportingis not required prior to termination ofcollection efforts on the part of thecreditor.

In response to these comments, thefinal regulations address the effect ofcollection efforts on the requirement toreport under section 6050P. Under thefinal regulations, an identifiable eventoccurs and reporting is required upon adecision by the creditor, or theapplication of a defined policy of thecreditor, to discontinue collectionactivity and discharge indebtedness. Forthis purpose, a defined policy may beeither a written policy or a creditor’sestablished business practice.

Additionally, under the finalregulations, there is a rebuttablepresumption that an identifiable eventhas occurred during a calendar year ifa creditor has not received a payment onan indebtedness at any time during a 36-month testing period ending at the closeof the year. This presumption isrebutted by the creditor if the creditor(or a third-party collection agency onbehalf of the creditor) has engaged insignificant, bona fide collection activityat any time during the 12-month periodending at the close of the calendar year,or if facts and circumstances existing asof January 31 of the calendar yearfollowing expiration of the 36-monthtesting period indicate that theindebtedness has not been discharged.Under the final regulations, significant,bona fide collection activity does notinclude merely nominal or ministerialcollection action, such as an automatedmailing. Further, facts andcircumstances indicating that anindebtedness has not been dischargedinclude the existence of a lien relatingto the indebtedness against the debtor(to the extent of the value of thesecurity), or the sale or packaging forsale of the indebtedness by the creditor.


E. Other Reportable Discharges

Under the temporary and proposedregulations, an identifiable eventincludes an agreement between theapplicable financial entity and thedebtor to discharge an indebtedness,provided that the last event necessary toeffectuate the discharge has occurred.The final regulations retain thisreporting requirement, restating that anidentifiable event includes a dischargeof indebtedness pursuant to anagreement between an applicablefinancial entity and a debtor todischarge indebtedness at less than fullconsideration. As under the temporaryregulations, this identifiable event willnot occur until the last event necessaryto effectuate the discharge has occurred.

The final regulations also provide thata discharge of indebtedness occurringbefore the date on which an identifiableevent occurs may, at the creditor’sdiscretion, be reported under section6050P.

2. Definition of Indebtedness

Commentators objected to the broaddefinition of indebtedness provided inthe temporary and proposed regulations.The temporary and proposedregulations provide that, for purposes ofreporting the amount of indebtednessdischarged, an indebtedness is anyamount owed to the creditor includingprincipal, interest, penalties, fees,administrative costs, and fines, to theextent the amount constitutes anindebtedness under section 61(a)(12).Commentators argued that thisdefinition is overly broad and should beamended to include principal only (orthe primary indebtedness in the case ofa non-lending transaction). In responseto these comments, the final regulationsprovide certain exceptions relating tothe reporting of amounts other thanstated principal.

A. Reporting of Interest

Commentators offered two mainobjections to the reporting of interest.First, commentators stated thatreporting interest was burdensomebecause interest is not tracked bylenders once indebtedness is written offor placed on nonaccrual status on thelender’s books. Second, commentatorssuggested that reporting of interestwould be of marginal benefit to the IRSbecause in many cases dischargedinterest may be excluded from grossincome under sections 108(e)(2) and111.

In response to these comments, and inan effort to reduce the informationreporting burden on affected filers, thefinal regulations do not require the

reporting of amounts of dischargedinterest (whether or not arising inconnection with a lending transaction),despite the fact that some dischargedinterest will give rise to gross income.However, at the option of the applicablefinancial entity, interest may beincluded in the amount reported.Additionally, as provided in Notice 94–73, in the case of a discharge ofindebtedness before December 22, 1996,no penalties will be imposed for failureto report an amount other than principalin the case of indebtedness arising inconnection with a lending transaction.

B. Penalties, Fees, Administrative Costs,and Fines

Commentators also argued that, likeinterest, penalties, fees, administrativecosts, and fines are not tracked bylenders once an indebtedness is writtenoff on the books of the lender. Thus,they contended, tracking these amountswould require additional computerprogramming and recordkeeping, andwould be very costly. With respect tolending transactions, the IRS andTreasury have concluded that thebenefits that would be derived fromrequiring the reporting of penalties, fees,administrative costs, and fines areoutweighed by the burden associatedwith the requirement. Accordingly, thefinal regulations provide that, in thecase of a lending transaction, onlydischarged amounts of stated principalare required to be reported. In the caseof non-lending transactions, the amountowed, such as a fee, fine, or penalty, isreportable if discharged.

3. Reporting for Multiple DebtorsCommentators recommended that the

multiple debtor rules of the temporaryand proposed regulations be amendedso that reporting is required only withrespect to the primary or first-nameddebtor on the lender’s account. Therationale for this approach is that, ingeneral, lenders track loans involvingmultiple debtors only by the name ofthe borrower of record, and thus, theinformation required to be reportedunder section 6050P (e.g., the name,address, and taxpayer identificationnumber (TIN)) for debtors other than theprimary debtor is generally not availableto lenders. In addition, thecommentators pointed out that mostother information return regulationsrequire reporting only with respect to asingle taxpayer (e.g., § 1.6050H–1requires reporting only with respect toone designated interest payor even ifmultiple debtors are liable on amortgage). Finally, these commentatorsstated that the majority of multipledebtor situations involve a husband and

wife who will likely file a joint return,and therefore, requiring reporting foreach debtor is not necessary.

The IRS and Treasury believe,however, that requiring reporting formultiple debtors is consistent withsection 6050P(a)(1), which provides thatthe reporting of a name, address, andTIN is required for each person whoseindebtedness was discharged. Further,while reporting with respect to only onetaxpayer is required under manyinformation reporting sections of theCode, section 6050J, which iscomparable to section 6050P in that itrelates to the reporting of acquisitionsand abandonments of property securingindebtedness, requires reporting foreach person who is a borrower withrespect to the secured indebtedness.Moreover, in Notice 94–73, the IRSaddressed the concerns of commentatorsby providing that no penalties would beimposed for failure to report a dischargeof indebtedness for other than theprimary (or first-named) debtor in thecase of indebtedness incurred beforeJanuary 1, 1995, thus allowing creditorstime to begin collecting the necessaryinformation for all debtors in the case ofindebtedness incurred after December31, 1994. The final regulationsincorporate this relief.

In order to reduce the informationreporting burden on applicable financialentities, the final regulations containtwo exceptions relating to multipledebtor reporting. In the case ofindebtedness of less than $10,000incurred on or after January 1, 1995, thatinvolves multiple debtors, reporting isrequired only for the primary (or first-named) debtor. Additionally, to avoidduplication, the final regulationsprovide a husband/wife exception to therequirement for reporting in the case ofmultiple debtors. Under this exception,only one Form 1099–C must beprepared if the creditor knows, or hasreason to know, that the co-obligorswere husband and wife living at thesame address when the indebtednesswas incurred, and does not know orhave reason to know that suchcircumstances have changed at the timeof the discharge. These two exceptionsapply to discharges of indebtednessafter December 31, 1994.

The final regulations retain the rule ofthe temporary and proposed regulationsrelating to the amount to be reportedwith respect to each joint and severaldebtor.

4. Multiple Creditors/Lending Pools/REMICs

Commentators indicated that furtherguidance should be provided in thefinal regulations regarding section


6050P reporting obligations in the caseof participation loans, lending pools,and other multiple-creditor situations.In response to these comments, the finalregulations provide a general rule that,in the case of an indebtedness owned(or treated as owned for federal incometax purposes) by more than one creditor,each creditor that is an applicablefinancial entity must comply with thereporting requirements of this sectionwith respect to any discharge ofindebtedness of $600 or more allocableto such creditor. A creditor will beconsidered to have complied with therequirements of this section if a leadbank or other designee of the creditorcomplies on its behalf.

Comments were received advocatingan exception from reporting fordischarges of certain widely-ownedsecuritized indebtedness. Thecommentators reasoned that the ownersof widely-held securitized indebtednesswill generally have no knowledgeregarding when a discharge occurs, orthe amount of discharged debt allocableto each owner. Further, commentatorssuggested that it is likely that asignificant portion of such securitizedindebtedness may be owned by personsthat are not applicable financial entitiesand, therefore, are not subject to section6050P.

The IRS and Treasury believe,however, that it would be inconsistentwith the purpose of section 6050P toprovide a general exception fromreporting for such securitizedindebtedness. Section 6050P is intendedto increase the likelihood that a debtorwill comply with the tax laws relatingto discharge of indebtedness byrequiring the reporting of that event tothe IRS. The fact that indebtedness hasbeen securitized and sold to numerousowners generally does not affect the taxconsequences to the debtor upon adischarge of that indebtedness. Thus,the IRS and Treasury do not believe thata discharge of indebtedness should beexcepted from section 6050P reportingsimply because that indebtedness waspart of a securitization arrangement.

Commentators also argued that thedischarge of an indebtedness held by areal estate mortgage investment conduit(REMIC) should not be required to bereported under section 6050P. Becausea REMIC is not an applicable financialentity, commentators contended thatsection 6050P should not apply upon adischarge of indebtedness held by aREMIC.

However, section 860F(e) providesthat, for purposes of subtitle F of theCode (Procedure and Administration,including section 6050P), a REMIC istreated as a partnership and holders of

residual interests in the REMIC aretreated as partners. Under the finalregulations, indebtedness owned by apartnership is treated as owned by thepartners. Thus, arguably a discharge ofREMIC indebtedness should be treatedsimilar to partnership indebtedness andthus should be reported to the extent theresidual owners of the REMIC areapplicable financial entities.

Because the IRS and Treasury believethat further study of these issues iswarranted, the final regulations reserveon the application of section 6050P todischarges of indebtedness held (1) in apass-through securitized indebtednessarrangement, or (2) by a REMIC. For thispurpose, a pass-through securitizedindebtedness arrangement is anyarrangement whereby one or more debtobligations are pooled and held fortwenty or more persons whose interestsin the debt obligations are undivided co-ownership interests that are freelytransferrable. Co-ownership intereststhat are actively traded personalproperty (as defined in § 1.1092(d)–1)are presumed to be freely transferrableand held by twenty or more persons.Pending issuance of further guidance,no penalties will be imposed for failureto report a discharge of indebtednessheld under these circumstances. Thisrelief from penalties does not extend toarrangements formed for a principalpurpose of avoiding the reportingrequirements of this section. The IRSand Treasury welcome commentsregarding compliance with section6050P in the case of pass-throughsecuritized indebtedness arrangementsand REMICs.

5. Coordination of Form 1099–A andForm 1099–C

The legislative history to section6050P indicates that Congress intendedthat the IRS and Treasury coordinatereporting under section 6050P with thereporting required under section 6050J.Section 6050J requires informationrelating to foreclosures andabandonments of secured property to bereported on Form 1099–A.

The final regulations provide that if,in the same calendar year, a dischargeof indebtedness reportable undersection 6050P occurs in connection witha foreclosure or abandonment of securedproperty reportable under section 6050J,it is not necessary to file both a Form1099–A and a Form 1099–C for the samedebtor. Under the final regulations, thefiling requirements of section 6050J willbe satisfied with respect to a debtor if,in lieu of filing a Form 1099–A, a Form1099–C is filed in accordance with theinstructions for the filing of that form.This coordinated filing provision

applies to discharges of indebtednessafter December 31, 1994.

6. Direct or Indirect Subsidiary

Commentators requested that the finalregulations include a definition of adirect or indirect subsidiary forpurposes of section 6050P. Section6050P(c)(1)(C) provides that thedefinition of applicable financial entityincludes a direct or indirect subsidiaryof an entity described in section6050P(c)(1)(A). In response to thesecomments, the final regulations providethat, for purposes of section6050P(c)(1)(C), the term direct orindirect subsidiary means a corporationin a chain of corporations beginningwith the entity described in section6050P(c)(1)(A), if at least 50 percent ofthe total combined voting power of allclasses of stock entitled to vote, or atleast 50 percent of the total value of allclasses of stock, of such corporation isdirectly owned by the entity describedin section 6050P(c)(1)(A), or by one ormore other corporations in the chain.

7. Other Exceptions From Reporting

The IRS and Treasury receivednumerous comments advocating that thefinal regulations include exceptionsfrom reporting with respect to certaindischarges of indebtedness.

A. Reporting for Non-U.S. Debtors

Comments were received relating tothe inclusion in final regulations of anexception for reporting discharges ofindebtedness of certain foreign debtors.These comments noted that, in somecases, discharges of indebtedness thatinvolve such debtors will not result inincome that is taxable in the UnitedStates.

On the other hand, there clearly arecases in which a foreign person may besubject to U.S. tax with respect to adischarge of indebtedness. Becausethere is no clear guidance on whichfinancial institutions may rely forpurposes of determining whether aforeign person would be subject to U.S.tax with respect to cancellation ofindebtedness income, it is notappropriate to provide a generalexception for foreign persons. However,the IRS and Treasury are continuing tostudy the issue of whether reporting isnecessary in the case of foreign debtorswhose debt is discharged by foreignbranches of U.S. financial institutions.Accordingly, pending the issuance offurther guidance, no penalties will beimposed if an applicable financial entityfails to report a discharge ofindebtedness of a foreign debtor by aforeign branch of the entity.


B. Reporting Where Debt Is Acquired byRelated Persons

Comments were received requestingthat the final regulations clarify whetherreporting is required in circumstancesin which there is a deemed discharge ofindebtedness pursuant to theregulations under section 108(e)(4).Section 108(e)(4) and implementingregulations (see § 1.108–2) provide thatthe acquisition of outstandingindebtedness by a person related to thedebtor from a person who is not relatedto the debtor is treated as if the debtorhad acquired the indebtedness and mayresult in a realization by the debtor ofincome from discharge of indebtedness.Commentators indicated that applicablefinancial entities often will be unawarethat the conditions of section 108(e)(4)have been satisfied and that the debtor’sindebtedness is considered to have beendischarged. In response to thesecomments, the final regulations providethat no reporting is required undersection 6050P in the case of a dischargeof indebtedness under section 108(e)(4)unless the disposition of theindebtedness by the creditor was madewith a view to avoiding the reportingrequirements of this section.

C. Reporting for Guarantors ofIndebtedness

Commentators also requestedguidance on whether, and under whatcircumstances, a Form 1099–C must befiled for a guarantor of an indebtednesswhen the underlying indebtedness isdischarged. The final regulationsprovide that, in the case of guaranteeddebt, a guarantor is not treated as adebtor for purposes of reporting undersection 6050P. Thus, reporting forguarantors is not required.

D. Reporting for Non-lendingTransactions

A number of comments were receivedadvocating an exception in the finalregulations for discharges ofindebtedness where the indebtedness isincurred in a non-lending transaction.Advocates of this exception argued thatthe primary reason applicable financialentities, and not all trade or businesses,were made subject to section 6050P isthat financial entities have extensiveinvolvement in lending transactionswhere the majority of discharges ofindebtedness will occur. Commentatorsargued that when an applicablefinancial entity is a creditor as a resultof a non-lending transaction, it shouldbe treated in the same manner as a non-applicable financial entity with respectto that indebtedness, and not be subjectto section 6050P if a discharge occurs.

Neither the language of section 6050Pnor its legislative history provides anyindication that Congress intended fordischarges of non-lending indebtednessto be excluded from reporting.Moreover, it makes no difference indetermining whether a debtor hasincome under section 61(a)(12) that theindebtedness was incurred in a non-lending transaction. Accordingly, thefinal regulations do not adopt thissuggestion.

E. Reporting of Disputed LiabilitiesThe temporary and proposed

regulations do not address the reportingrequirements under section 6050P in thecase of the settlement of a disputedliability. The preamble to the temporaryregulations solicited public commentrelating to this issue. Severalcommentators urged that the finalregulations include an exception fromreporting for settlements of bona fidedisputed liabilities.

The determination regarding whetherthe settlement of a disputed liabilityresults in discharge of indebtednessincome under section 61(a)(12) isinherently factual. Thus, it continues tobe the position of the IRS and Treasurythat this issue should be addressed ona case-by-case basis, rather than by thesefinal regulations. Therefore, the finalregulations do not provide an exceptionfrom reporting for disputed liabilities.Instead, resolution of the question ofwhether there may have been adischarge of indebtedness reportableunder this section remains theobligation of the applicable financialentity. The IRS and Treasury recognizethat a creditor and debtor may takeinconsistent positions on this issue. TheIRS does not intend to impose penaltiesfor good faith failures to reportsettlements that constitute discharges ofindebtedness.

8. Miscellaneous CommentsComments were also received relating

to whether applicable financial entitieshave any information reportingobligations in instances where paymentsare received on previously dischargeddebts. In response to those inquiries, thefinal regulations clarify that noadditional reporting or Form 1099–Ccorrection is required if a creditorreceives a payment of all or a portion ofa discharged debt that has been reportedto the IRS for a prior calendar year.

Comments were received respectingthe TIN solicitation requirements of thetemporary and proposed regulations. Inresponse to those comments, the finalregulations provide that a reasonableeffort (rather than all reasonable efforts)must be made to obtain the correct

name/TIN combination of the personwhose indebtedness is discharged.

The IRS and Treasury received anumber of other comments in additionto those summarized above. Some of thesuggestions contained in the commentshave been adopted in the finalregulations. Other suggested changeswere not adopted primarily becausethose suggestions were inconsistentwith the purpose of the statute and itslegislative history.

Special Analyses

It has been determined that thisTreasury decision is not a significantregulatory action as defined in EO12866. Therefore, a regulatoryassessment is not required. It also hasbeen determined that section 553(b) ofthe Administrative Procedure Act (5U.S.C. chapter 5) and the RegulatoryFlexibility Act (5 U.S.C. chapter 6) donot apply to these regulations, and,therefore, a Regulatory FlexibilityAnalysis is not required. Pursuant tosection 7805(f) of the Internal RevenueCode, the notice of proposed rulemakingpreceding these regulations wassubmitted to the Chief Counsel forAdvocacy of the Small BusinessAdministration for comment on itsimpact on small business.

Drafting Information

The principal authors of theseregulations are Sharon L. Hall andMichael F. Schmit, Office of theAssistant Chief Counsel (Income Taxand Accounting), IRS. However, otherpersonnel from the IRS and TreasuryDepartment participated in theirdevelopment.

List of Subjects

26 CFR Part 1


26 CFR Part 602

Reporting and recordkeepingrequirements.

Adoption of Amendments to theRegulations

Accordingly, 26 CFR parts 1 and 602are amended as follows:


Paragraph 1. The authority citationfor part 1 is amended by removing theentry for § 1.6050P–1T and adding anentry in numerical order to read asfollows:

Authority: 26 U.S.C. 7805. * * *Section 1.6050P–1 also issued under 26

U.S.C. 6050P. * * *


Par. 2. Sections 1.6050P–0 and1.6050P–1 are added to read as follows:

§ 1.6050P–0 Table of contents.

This section lists the major captionsthat appear in § 1.6050P–1.

§ 1.6050P–1 Information reporting fordischarges of indebtedness by certainfinancial entities

(a) Reporting requirement.(1) In general.(2) No aggregation.(3) Amounts not includible in income.(4) Time and place for reporting.(i) In general.(ii) Indebtedness discharged in bankruptcy.(b) Date of discharge.(1) In general.(2) Identifiable events.(i) In general.(ii) Statute of limitations.(iii) Decision to discontinue collection

activity; creditor’s defined policy.(iv) Expiration of non-payment testing

period.(3) Permitted reporting.(c) Indebtedness.(d) Exceptions from reporting requirement.(1) Certain bankruptcy discharges.(i) In general.(ii) Business or investment debt.(2) Interest.(3) Non-principal amounts in lending

transactions.(4) Indebtedness of foreign persons held by

foreign branches of U.S. financialinstitutions.

(i) Reporting requirements.(ii) Definition.(5) Acquisition of indebtedness by related

party.(6) Releases.(7) Guarantors and sureties.(e) Additional rules.(1) Multiple debtors.(i) In general.(ii) Amount to be reported.(2) Multiple creditors.(i) In general.(ii) Partnerships.(iii) Pass-through securitized indebtedness

arrangement.(A) Reporting requirements.(B) Definition.(iv) REMICs.(3) Coordination with reporting under section

6050J.(4) Direct or indirect subsidiary.(5) Use of magnetic media.(6) TIN solicitation requirement.(i) In general.(ii) Manner of soliciting TIN.(7) Recordkeeping requirements.(8) No multiple reporting.(f) Requirement to furnish statement.(1) In general.(2) Furnishing copy of Form 1099–C.(3) Time and place for furnishing statement.(g) Penalties.(h) Effective dates.(1) In general.(2) Earlier application.

§ 1.6050P–1 Information reporting fordischarges of indebtedness by certainfinancial entities.

(a) Reporting requirement—(1) Ingeneral. Except as provided inparagraph (d) of this section, anyapplicable financial entity (as defined insection 6050P(c)(1)) that discharges anindebtedness of any person (within themeaning of section 7701(a)(1)) of at least$600 during a calendar year must file aninformation return on Form 1099–Cwith the Internal Revenue Service.Solely for purposes of the reportingrequirements of section 6050P and thissection, a discharge of indebtedness isdeemed to have occurred, except asprovided in paragraph (b)(3) of thissection, if and only if there has occurredan identifiable event described inparagraph (b)(2) of this section, whetheror not an actual discharge ofindebtedness has occurred on or beforethe date on which the identifiable eventhas occurred. The return must includethe following information—

(i) The name, address, and taxpayeridentification number (TIN), as definedin section 7701(a)(41), of each personfor which there was an identifiableevent during the calendar year;

(ii) The date on which the identifiableevent occurred, as described inparagraph (b) of this section;

(iii) The amount of indebtednessdischarged, as described in paragraph(c) of this section;

(iv) An indication whether theidentifiable event was a discharge ofindebtedness in a bankruptcy, if known;and

(v) Any other information required byForm 1099–C or its instructions, orcurrent revenue procedures.

(2) No aggregation. For purposes ofreporting under this section, multipledischarges of indebtedness of less than$600 are not required to be aggregatedunless such separate discharges arepursuant to a plan to evade thereporting requirements of this section.

(3) Amounts not includible in income.Except as otherwise provided in thissection, discharged indebtedness mustbe reported regardless of whether thedebtor is subject to tax on thedischarged debt under sections 61 and108 or otherwise by applicable law.

(4) Time and place for reporting—(i)In general. Except as provided inparagraph (a)(4)(ii) of this section,returns required by this section must befiled with the Internal Revenue Serviceoffice designated in the instructions forForm 1099–C on or before February 28of the year following the calendar yearin which the identifiable event occurs.

(ii) Indebtedness discharged inbankruptcy. Indebtedness discharged in

bankruptcy that is required to bereported under this section must bereported for the later of the calendaryear in which the amount of dischargedindebtedness first becomesascertainable, or the calendar year inwhich the identifiable event occurs.

(b) Date of discharge—(1) In general.Solely for purposes of this section,except as provided in paragraph (b)(3) ofthis section, indebtedness is dischargedon the date of the occurrence of anidentifiable event specified in paragraph(b)(2) of this section.

(2) Identifiable events—(i) In general.An identifiable event is—

(A) A discharge of indebtedness undertitle 11 of the United States Code(bankruptcy);

(B) A cancellation or extinguishmentof an indebtedness that renders a debtunenforceable in a receivership,foreclosure, or similar proceeding in afederal or State court, as described insection 368(a)(3)(A)(ii) (other than adischarge described in paragraph(b)(2)(i)(A) of this section);

(C) A cancellation or extinguishmentof an indebtedness upon the expirationof the statute of limitations forcollection of an indebtedness, subject tothe limitations described in paragraph(b)(2)(ii) of this section, or upon theexpiration of a statutory period for filinga claim or commencing a deficiencyjudgment proceeding;

(D) A cancellation or extinguishmentof an indebtedness pursuant to anelection of foreclosure remedies by acreditor that statutorily extinguishes orbars the creditor’s right to pursuecollection of the indebtedness;

(E) A cancellation or extinguishmentof an indebtedness that renders a debtunenforceable pursuant to a probate orsimilar proceeding;

(F) A discharge of indebtednesspursuant to an agreement between anapplicable financial entity and a debtorto discharge indebtedness at less thanfull consideration;

(G) A discharge of indebtednesspursuant to a decision by the creditor,or the application of a defined policy ofthe creditor, to discontinue collectionactivity and discharge debt; or

(H) The expiration of the non-payment testing period, as described inparagraph (b)(2)(iv) of this section.

(ii) Statute of limitations. In the caseof an expiration of the statute oflimitations for collection of anindebtedness, an identifiable eventoccurs under paragraph (b)(2)(i)(C) ofthis section only if, and at such time as,a debtor’s affirmative statute oflimitations defense is upheld in a finaljudgment or decision of a judicialproceeding, and the period for


appealing the judgment or decision hasexpired.

(iii) Decision to discontinue collectionactivity; creditor’s defined policy. Forpurposes of the identifiable eventdescribed in paragraph (b)(2)(i)(G) ofthis section, a creditor’s defined policyincludes both a written policy of thecreditor and the creditor’s establishedbusiness practice. Thus, for example, acreditor’s established practice todiscontinue collection activity andabandon debts upon expiration of aparticular non-payment period isconsidered a defined policy forpurposes of paragraph (b)(2)(i)(G) of thissection.

(iv) Expiration of non-payment testingperiod. There is a rebuttablepresumption that an identifiable eventunder paragraph (b)(2)(i)(H) of thissection has occurred during a calendaryear if a creditor has not received apayment on an indebtedness at any timeduring a testing period (as defined inthis paragraph (b)(2)(iv)) ending at theclose of the year. The testing period isa 36-month period increased by thenumber of calendar months during all orpart of which the creditor wasprecluded from engaging in collectionactivity by a stay in bankruptcy orsimilar bar under state or local law. Thepresumption that an identifiable eventhas occurred may be rebutted by thecreditor if the creditor (or a third-partycollection agency on behalf of thecreditor) has engaged in significant,bona fide collection activity at any timeduring the 12-month period ending atthe close of the calendar year, or if factsand circumstances existing as of January31 of the calendar year followingexpiration of the 36-month periodindicate that the indebtedness has notbeen discharged. For purposes of thisparagraph (b)(2)(iv)—

(A) Significant, bona fide collectionactivity does not include merelynominal or ministerial collection action,such as an automated mailing;

(B) Facts and circumstancesindicating that an indebtedness has notbeen discharged include the existence ofa lien relating to the indebtednessagainst the debtor (to the extent of thevalue of the security), or the sale orpackaging for sale of the indebtednessby the creditor; and

(C) In no event will an identifiableevent described in paragraph (b)(2)(i)(H)of this section occur prior to December31, 1997.

(3) Permitted reporting. If a dischargeof indebtedness occurs before the dateon which an identifiable event occurs,the discharge may, at the creditor’sdiscretion, be reported under thissection.

(c) Indebtedness. For purposes of thissection, indebtedness means anyamount owed to an applicable financialentity, including stated principal, fees,stated interest, penalties, administrativecosts and fines. The amount ofindebtedness discharged may representall, or only a part, of the total amountowed to the applicable financial entity.

(d) Exceptions from reportingrequirement—(1) Certain bankruptcydischarges—(i) In general. Reporting isrequired under this section in the caseof a discharge of indebtedness inbankruptcy only if the creditor knowsfrom information included in thereporting entity’s books and recordspertaining to the indebtedness that thedebt was incurred for business orinvestment purposes as defined inparagraph (d)(1)(ii) of this section.

(ii) Business or investment debt.Indebtedness is considered incurred forbusiness purposes if it is incurred inconnection with the conduct of anytrade or business other than the trade orbusiness of performing services as anemployee. Indebtedness is consideredincurred for investment purposes if it isincurred to purchase property held forinvestment, as defined in section163(d)(5).

(2) Interest. The discharge of anamount of indebtedness that is interestis not required to be reported under thissection.

(3) Non-principal amounts in lendingtransactions. In the case of a lendingtransaction, the discharge of an amountother than stated principal is notrequired to be reported under thissection. For this purpose, a lendingtransaction is any transaction in whicha lender loans money to, or makesadvances on behalf of, a borrower(including revolving credits and lines ofcredit).

(4) Indebtedness of foreign debtorsheld by foreign branches of U.S.financial institutions—(i) Reportingrequirements. [Reserved]

(ii) Definition. An indebtedness heldby a foreign branch of a U.S. financialinstitution is described in thisparagraph (d)(4) only if—

(A) The financial institution isengaged through a branch or office inthe active conduct of a banking orsimilar business outside the UnitedStates;

(B) The branch or office is apermanent place of business that isregularly maintained, occupied, andused to carry on a banking or similarfinancial business;

(C) The business is conducted by atleast one employee of the branch oroffice who is regularly in attendance at

such place of business during normalworking hours;

(D) The indebtedness is extendedoutside of the United States by thebranch or office in connection with thattrade or business; and

(E) The financial institution does notknow or have reason to know that thedebtor is a United States person.

(5) Acquisition of indebtedness byrelated party. No reporting is requiredunder this section in the case of adeemed discharge of indebtednessunder section 108(e)(4) (relating to theacquisition of an indebtedness by aperson related to the debtor), unless thedisposition of the indebtedness by thecreditor was made with a view toavoiding the reporting requirements ofthis section.

(6) Releases. The release of a co-obligor is not required to be reportedunder this section if the remainingdebtors remain liable for the full amountof any unpaid indebtedness.

(7) Guarantors and sureties. Solely forpurposes of the reporting requirementsof this section, a guarantor is not adebtor. Thus, in the case of guaranteedindebtedness, reporting under thissection is not required with respect toa guarantor, whether or not there hasbeen a default and demand for paymentmade upon the guarantor.

(e) Additional rules—(1) Multipledebtors—(i) In general. In the case ofindebtedness of $10,000 or moreincurred on or after January 1, 1995, thatinvolves more than one debtor, areporting entity is subject to therequirements of paragraph (a) of thissection for each debtor discharged fromsuch indebtedness. In the case ofindebtedness incurred prior to January1, 1995, and indebtedness of less than$10,000 incurred on or after January 1,1995, involving multiple debtors,reporting under this section is requiredonly with respect to the primary (orfirst-named) debtor. Additionally, onlyone return of information is requiredunder this section if the reporting entityknows, or has reason to know, that co-obligors were husband and wife livingat the same address when anindebtedness was incurred, and doesnot know or have reason to know thatsuch circumstances have changed at thedate of a discharge of the indebtedness.This paragraph (e)(1) applies todischarges of indebtedness afterDecember 31, 1994.

(ii) Amount to be reported. In the caseof multiple debtors jointly and severallyliable on an indebtedness, the amount ofdischarged indebtedness required to bereported under this section with respectto each debtor is the total amount ofindebtedness discharged. For this


purpose, multiple debtors are presumedto be jointly and severally liable on anindebtedness in the absence of clear andconvincing evidence to the contrary.

(2) Multiple creditors—(i) In general.Except as otherwise provided in thisparagraph (e)(2), if indebtedness isowned (or treated as owned for federalincome tax purposes) by more than onecreditor, each creditor that is anapplicable financial entity must complywith the reporting requirements of thissection with respect to any discharge ofindebtedness of $600 or more allocableto such creditor. A creditor will beconsidered to have complied with therequirements of this section if a leadbank, fund administrator, or otherdesignee of the creditor complies on itsbehalf in any reasonable manner, suchas by filing a single return reporting theaggregate amount of indebtednessdischarged, or by filing a return withrespect to the portion of the dischargedindebtedness allocable to the creditor.For purposes of this paragraph (e)(2)(i),any reasonable method may be used todetermine the portion of dischargedindebtedness allocable to each creditor.

(ii) Partnerships. For purposes ofparagraph (e)(2)(i) of this section,indebtedness owned by a partnership istreated as owned by the partners.

(iii) Pass-through securitizedindebtedness arrangement—(A)Reporting requirements. [Reserved]

(B) Definition. For purposes of thisparagraph (e)(2)(iii), a pass-throughsecuritized indebtedness arrangement isany arrangement whereby one or moredebt obligations are pooled and held fortwenty or more persons whose interestsin the debt obligations are undivided co-ownership interests that are freelytransferrable. Co-ownership intereststhat are actively traded personalproperty (as defined in § 1.1092(d)–1)are presumed to be freely transferrableand held by twenty or more persons.

(iv) REMICs. [Reserved](3) Coordination with reporting under

section 6050J. If, in the same calendaryear, a discharge of indebtednessreportable under section 6050P occursin connection with a transaction alsoreportable under section 6050J (relatingto foreclosures and abandonments ofsecured property), an applicablefinancial entity need not file both aForm 1099–A and a Form 1099–C withrespect to the same debtor. The filingrequirements of section 6050J will besatisfied with respect to a borrower if,in lieu of filing Form 1099–A, a Form1099–C is filed in accordance with theinstructions for the filing of that form.This paragraph (e)(3) applies todischarges of indebtedness afterDecember 31, 1994.

(4) Direct or indirect subsidiary. Forpurposes of section 6050P(c)(1)(C), theterm direct or indirect subsidiary meansa corporation in a chain of corporationsbeginning with an entity described insection 6050P(c)(1)(A), if at least 50percent of the total combined votingpower of all classes of stock entitled tovote, or at least 50 percent of the totalvalue of all classes of stock, of suchcorporation is directly owned by theentity described in section6050P(c)(1)(A), or by one or more othercorporations in the chain.

(5) Use of magnetic media. Any returnrequired under this section must befiled on magnetic media to the extentrequired by section 6011(e) and theregulations thereunder. A failure to fileon magnetic media when requiredconstitutes a failure to file aninformation return under section 6721.Any person not required by section6011(e) to file returns on magneticmedia may request permission to do sounder applicable regulations andrevenue procedures.

(6) TIN solicitation requirement—(i)In general. For purposes of reportingunder this section, a reasonable effortmust be made to obtain the correctname/taxpayer identification number(TIN) combination of a person whoseindebtedness is discharged. A TINobtained at the time an indebtedness isincurred satisfies the requirement of thissection, unless the entity required to fileknows that such TIN is incorrect. If theTIN is not obtained prior to theoccurrence of an identifiable event, itmust be requested of the debtor forpurposes of satisfying the requirementof this paragraph (e)(6).

(ii) Manner of soliciting TIN.Solicitations made in the mannerdescribed in § 301.6724–1(e)(1)(i) and(2) of this chapter will be deemed tohave satisfied the reasonable effortrequirement set forth in paragraph(e)(6)(i) of this section. A TINsolicitation made after the occurrence ofan identifiable event must clearly notifythe debtor that the Internal RevenueService requires the debtor to furnish itsTIN, and that failure to furnish such TINmay subject the debtor to a $50 penaltyimposed by the Internal RevenueService. A TIN provided under thissection is not required to be certifiedunder penalties of perjury.

(7) Recordkeeping requirements. Anyapplicable financial entity required tofile a return with the Internal RevenueService under this section must alsoretain a copy of the return, or have theability to reconstruct the data requiredto be included on the return underparagraph (a)(1) of this section, for atleast four years from the date such

return is required to be filed underparagraph (a)(4) of this section.

(8) No multiple reporting. Ifdischarged indebtedness is reportedunder this section, no further reportingunder this section is required for theamount so reported, notwithstandingthat a subsequent identifiable eventoccurs with respect to the same amount.Further, no additional reporting or Form1099–C correction is required if acreditor receives a payment of all or aportion of a discharged indebtednessreported under this section for a priorcalendar year.

(f) Requirement to furnish statement—(1) In general. Any applicable financialentity required to file a return under thissection must furnish to each personwhose name is shown on such return awritten statement that includes thefollowing information—

(i) The information required byparagraph (a)(1) of this section;

(ii) The name, address, and TIN of theapplicable financial entity required tofile a return under paragraph (a) of thissection;

(iii) A legend identifying thestatement as important tax informationthat is being furnished to the InternalRevenue Service; and

(iv) Any other information requiredby Form 1099–C or its instructions, orcurrent revenue procedures.

(2) Furnishing copy of Form 1099–C.The requirement to provide a statementto the debtor will be satisfied if theapplicable financial entity furnishescopy B of the Form 1099–C or asubstitute statement that complies withthe requirements of the current revenueprocedure for substitute Forms 1099.

(3) Time and place for furnishingstatement. The statement required bythis paragraph (f) must be furnished tothe debtor on or before January 31 of theyear following the calendar year inwhich the identifiable event occurs. Thestatement will be considered furnishedto the debtor if it is mailed to thedebtor’s last known address.

(g) Penalties. For penalties for failureto comply with the requirements of thissection, see sections 6721 through 6724.

(h) Effective dates—(1) In general. Therules in this section apply to dischargesof indebtedness after December 21,1996, except paragraphs (e)(1) and (e)(3)of this section, which apply todischarges of indebtedness afterDecember 31, 1994.

(2) Earlier application.Notwithstanding the provisions ofparagraph (h)(1) of this section, anapplicable financial entity may, at itsdiscretion, apply any of the provisionsof this section to any discharge ofindebtedness occurring on or after


January 1, 1996, and before December22, 1996.

§§ 1.6050P–0T and 1.6050P–1T [Removed]

Par. 3. Sections 1.6050P–0T and1.6050P–1T are removed.

PART 602—OMB CONTROL NUMBERSUNDER THE PAPERWORKREDUCTION ACT

Par. 4. The authority citation for part602 continues to read as follows:


§ 602.101 [Amended]

Par. 5. In § 602.101, paragraph (c) isamended by removing the entry for1.6050P–1T and adding an entry innumerical order in the table to read‘‘1.6050P–1..........1545–1419’’.Margaret Milner Richardson,Commissioner of Internal Revenue.

Approved: December 12, 1995.Leslie Samuels,Assistant Secretary of the Treasury.[FR Doc. 96–131 Filed 1–3–96; 8:45 am]BILLING CODE 4830–01–U

DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 69

[DoD Instruction 1342.jj]

School Boards for Department ofDefense Domestic DependentElementary and Secondary Schools

AGENCY: Office of the Secretary, DoD.ACTION: Interim final rule.

SUMMARY: This interim final ruleprovides guidance to the Department ofDefense (DoD) Domestic DependentElementary and Secondary Schools(DDESS) implementing the NationalDefense Authorization Act in FiscalYear 1995, which provides for electedSchool Boards in DoD DDESS. Pursuantto this legislation, school boards in DoDDDESS may participate in thedevelopment and oversight of fiscal,personnel, and educational policies,procedures, and programs for theseschools. This interim final rule providesguidance outlining the responsibilities,operating procedures, composition,electorate and election procedures forthe DoD DDESS school boards.DATES: This part is effective January 4,1996. Written comments on this interimfinal rule must be received by March 4,1996.ADDRESSES: Forward comments to theOffice of the Director, DoD Domestic

Dependent Elementary and SecondarySchools, 4040 North Fairfax Drive,Arlington, VA 22203–1635.FOR FURTHER INFORMATION CONTACT:Dr. Hector O. Nevarez at (703) 696–4373/4354.SUPPLEMENTARY INFORMATION: Because ofthe importance of providing guidancefor elected school boards, this interimfinal rule is being issued. The public’scomments are welcomed and will becarefully considered in the issuance ofa final rule. The Office of Managementand Budget has determined that this isa significant regulatory action. However,since this rule is not ‘‘economicallysignificant’’ as defined in ExecutiveOrder 12866, the extensive analysisreport is not required, and the rulecomplies with the requirements of theExecutive Order. It has been determinedthat this rule is not subject to PublicLaw 96–354, ‘‘Regulatory FlexibilityAct’’ (5 U.S.C. 601) because it wouldnot, if promulgated, have a significanteconomic impact on a substantialnumber of small entities. The primaryeffect of this rule will be a reduction inadministrative costs and other burdensresulting from the simplification andclarification of policies. It has beendetermined that Public Law 109–13,‘‘Paperwork Reduction Act of 1995,’’ (44U.S.C. Chapter 35) does not applybecause the rule does not impose anyreporting or recordkeeping requirementson persons or entities outside theFederal Government.


Elementary and secondary education,Government employees, Militarypersonnel.

Accordingly, Title 32, Chapter I,Subchapter C is amended to add Part 69to read as follows:

PART 69—SCHOOL BOARDS FOR THEDEPARTMENT OF DEFENSEDOMESTIC DEPENDENTELEMENTARY AND SECONDARYSCHOOLS

Sec.69.1 Purpose.69.2 Applicability and scope.69.3 Definitions.69.4 Policy.69.5 Responsibilities.69.6 Procedures.


§ 69.1 Purpose.

This part prescribes policies andprocedures for the establishment andoperation of elected School Boards forschools operated by the Department ofDefense (DoD) under 10 U.S.C. 2164 and32 CFR part 345.

§ 69.2 Applicability and scope.

This part applies to:(a) The Office of the Secretary of

Defense (OSD), the MilitaryDepartments, the Coast Guard whenoperating as a service of the Departmentof the Navy or by agreement betweenDoD and the Department ofTransportation, the Chairman of theJoint Chiefs of Staff, the Unified andSpecified Combatant Commands, theInspector General of the Department ofDefense, the Uniformed ServicesUniversity of the Health Sciences, theDefense Agencies, and the DoD FieldActivities.

(b) The schools (pre-kindergartenthrough grade 12) operated by the DoDunder 10 U.S.C. 2164 and 32 CFR part345 within the Continental UnitedStates, Alaska, Hawaii, Puerto Rico,Wake Island, Guam, American Samoa,the Northern Mariana Islands, and theVirgin Islands, known as DoD DDESSArrangements.

(c) This part does not apply to electedschool boards established under State orlocal law for DoD DDESS specialarrangements.

§ 69.3 Definitions.

(a) Arrangements. Actions taken bythe Secretary of Defense to provide afree public education to dependentchildren under 10 U.S.C. 2164 throughDoD DDESS arrangements or DoDDDESS special arrangements:

(1) DDESS arrangement. A schooloperated by the Department of Defenseunder 10 U.S.C. 2164 and 32 CFR 345to provide a free public education foreligible children.

(2) DDESS special arrangement. Anagreement, under 10 U.S.C. 2164,between the Secretary of Defense, ordesignee, and a local public educationagency whereby a school or a schoolsystem operated by the local publiceducation agency provides educationalservices to eligible dependent childrenof U.S. military personnel and federallyemployed civilian personnel.Arrangements result in partial or totalFederal funding to the local publiceducation agency for the educationalservices provided.

(b) Parent. The biological father ormother of a child when parental rightshave not been legally terminated; aperson who, by order of a court ofcompetent jurisdiction, has beendeclared the father or mother of a childby adoption; the legal guardian of achild; or a person in whose householda child resides, provided that suchperson stands in loco parentis to thatchild and contributes at least one-half ofthe child’s support.


§ 69.4 Policy.(a) Each DoD DDESS arrangement

shall have an elected school board,established and operated in accordancewith this part and other pertinentguidance.

(b) Because members of DoD DDESSelected school boards are not officers oremployees of the United Statesappointed under the AppointmentsClause of the United States Constitution(Art. II, Sec. 2, Cl. 2), they may notexercise discretionary governmentalauthority, such as the taking ofpersonnel actions or the establishmentof governmental policies. ThisInstruction clarifies the role of schoolboards in the development andoversight of fiscal, personnel, andeducational policies, procedures, andprograms for DoD DDESS arrangements,subject to these constitutionallimitations.

(c) The DoD DDESS chain ofcommand for matters relating to schoolarrangements operated under 10 U.S.C.2164 and 32 CFR 345 shall be from theDirector, DoD DDESS, to theSuperintendent of each schoolarrangement. The Superintendent willinform the school board of all mattersaffecting the operation of the localschool arrangement. Direct liaisonamong the school board, the Director,and the Superintendent is authorizedfor all matters pertaining to the localschool arrangement.

§ 69.5 Responsibilities.The Assistant Secretary of Defense for

Force Management Policy (ASD(FMP)),under the Under Secretary of Defensefor Personnel and Readiness, shall:

(a) Make the final decision on allformal appeals to directives and otherguidance submitted by the school boardor Superintendent.

(b) Ensure the Director, DoD DDESS,shall:

(1) Ensure the establishment ofelected school boards in DoD DDESSarrangements.

(2) Monitor compliance by theSuperintendents and school boards withapplicable statutory and regulatoryrequirements, and this Instruction. Inthe event of suspected noncompliance,the Director, DoD DDESS, shall takeappropriate action, which will includenotification of the Superintendent andthe school board president of theaffected DoD DDESS arrangement.

(3) Determine when the actions of aschool board conflict with an applicablestatute, regulation, or other guidance orwhen there is a conflict in the views ofthe school board and theSuperintendent. When such conflictsoccur, the Director, DoD DDESS, shall

assist the Superintendent and the schoolboard in resolving them or direct thatsuch actions be discontinued. Suchdisapprovals must be in writing to theschool board and the Superintendentconcerned and shall state the specificsupporting reason or reasons.

(c) Ensure the school board for DoDDDESS arrangements shall:

(1) Participate in the development andoversight of fiscal, personnel, andeducational policies, procedures, andprograms for the DoD DDESSarrangement concerned, consistent withthis part.

(2) Approve agendas and prepareminutes for school board meetings. Acopy of the approved minutes of schoolboard meetings shall be forwarded tothe Director, DoD DDESS, within 10working days after the date the minutesare approved.

(3) Provide to the Director, DoDDDESS, names of applicants for avacancy in the Superintendent’sposition after a recruitment has beenaccomplished. The school board shallsubmit to the Director, DoD DDESS, alist of all applicants based on its reviewof the applications and interviews(either in person or telephonically) ofthe applicants. The list of applicantswill be accompanied by therecommended choice of the schoolboard. The Director will select theSuperintendent and will submit writtennotice with justification to the schoolboard if the recommendation of theschool board is not followed.

(4) Prepare an annual written on-sitereview of the Superintendent’sperformance for consideration by theDirector, DoD DDESS. The writtenreview shall be based on criticalelements recommended by the schoolboard and Superintendent and approvedby the Director, DoD DDESS. The schoolboard’s review will be an officialattachment to the Superintendent’sappraisal.

(5) Participate in the development ofthe school system’s budget forsubmission to the Director, DoD DDESS,for his or her approval as endorsed bythe school board; and participate in theoversight of the approved budget, inconjunction with the Superintendent, asappropriate for operation of the schoolarrangement.

(6) Invite the Superintendent ordesignee to attend all school boardmeetings.

(7) Provide counsel to theSuperintendent on the operation of theschool and the implementation of theapproved budget.

(8) Channel communications withschool employees to the DoD DDESSSuperintendent. Refer all applications,

complaints, and other communications,oral or written, to the DoD DDESSArrangement Superintendent.

(9) Participate in the development ofschool policies, rules, and regulations,in conjunction with the Superintendent,and recommend which policies shall bereflected in the School Policy Manual.At a minimum, the Policy Manual,which shall be issued by theSuperintendent, shall include thefollowing:

(i) A statement of the schoolphilosophy.

(ii) The role and responsibilities ofschool administrative and educationalpersonnel.

(iii) Provisions for promulgation of anannual school calendar.

(iv) Provisions on instructionalservices, including policies fordevelopment and adoption ofcurriculum and textbooks.

(v) Regulations affecting students,including attendance, grading,promotion, retention, and graduationcriteria, and the student code of rights,responsibilities, and conduct.

(vi) School policy on communityrelations and noninstructional services,including maintenance and custodialservices, food services, and studenttransportation.

(vii) School policy and legal limits onfinancial operations, includingaccounting, disbursing, contracting, andprocurement; personnel operations,including conditions of employment,and labor management regulations; andthe processing of, and response to,complaints.

(viii) Procedures providing for newschool board member orientation.

(ix) Any other matters determined bythe school board and the superintendentto be necessary.

(10) Under 10 U.S.C. 2164(b)(4)(B),prepare and submit formal appeals todirectives and other guidance that in theview of the school board adverselyimpact the operation of the schoolsystem either through the operation andmanagement of DoD DDESS or a specificDoD DDESS arrangement. Writtenformal appeals with justification andsupporting documentation shall besubmitted by the school board orSuperintendent to ASD(FMP). TheASD(FMP) shall make the final decisionon all formal appeals. The Director, DoDDDESS, will provide the appealing bodywritten review of the findings relating tothe merits of the appeal. Formal appealswill be handled expeditiously by allparties to minimize any adverse impacton the operation of the DoD DDESSsystem.

(d) Ensure school board operatingprocedures are as follows:


(1) The school board shall operatefrom a written agenda at all meetings.Matters not placed on the agenda beforethe start of the meeting, but approved bya majority of the school board present,may be considered at the ongoingmeeting and added to the agenda at thattime.

(2) A majority of the total number ofschool board members authorized shallconstitute a quorum.

(3) School board meetings shall beconducted a minimum of 9 times a year.The school board President or designeewill provide school board memberstimely notice of all meetings. Allregularly scheduled school boardmeetings will be open to the public.Executive session meetings may beclosed under 10 U.S.C. 2164(d)(6).

(4) The school board shall not bebound in any way be any action orstatement of an individual member orgroup of members of the board, exceptwhen such action or statement isapproved by a majority of the schoolboard members during a school boardmeeting.

(5) School board members are eligiblefor reimbursement for official travel inaccordance with the DoD Joint TravelRegulations and guidance issued by theDirector, DoD DDESS.

(6) School board members may beremoved by the ASD(FMP), or designee(who may not be below the level of aDeputy Assistant Secretary of Defense)for dereliction of duty, malfeasance, orother grounds for cause shown. Theschool board concerned mayrecommend such removal with a two-thirds majority vote. Before a membermay be removed, the member shall beafforded due process, to include writtennotification of the basis for the action,review of the evidence ordocumentation considered by the schoolboard, and an opportunity to respond tothe allegations.

§ 69.6 Procedures.(a) Composition of school board. (1)

The school board shall recommend tothe Director, DoD DDESS, the number ofelected school board voting members,which shall be no fewer than 3 and nomore than 9, depending upon localneeds. The members of the school boardshall select by majority vote of the totalnumber of school board membersauthorized at the beginning of eachofficial school board term, one memberto act as President and another to act asVice President. The President and VicePresident shall each serve for one year.The President shall preside over schoolboard meetings and provide leadershipfor related activities and functions. TheVice President shall serve in the absence

of the President. If the position ofPresident is vacated for any reason, theVice President shall be the Presidentuntil the next regularly scheduledschool board election. The resultingvacancy in the position of the VicePresident shall be filled by the majorityvote of all members of the incumbentboard.

(2) The DoD DDESS ArrangementSuperintendent, or designee, shall serveas a non-voting observer to all schoolboard meetings. The InstallationCommander, or designee, shall serve asa non-voting observer to the schoolboard. The Installation Commander, ordesignee, shall convey commandconcerns to the school board and theSuperintendent and keep the schoolboard and the Superintendent informedof changes and other matters within thehost installation that affect schoolexpenditures or operations.

(3) The Antilles Consolidated SchoolSystem (ACSS) School Board shall bemade up of representatives of the RameySchool, the schools on the RooseveltRoads Naval Station, and the schools onFort Buchanan.

(4) School board members may notreceive compensation for their serviceon the school board.

(5) Members of the school board maynot have any financial interest in anycompany or organization doing businesswith the school system. Waivers to thisrestriction may be granted on a case-by-case basis by the Director, DoD DDESS,in coordination with the Office ofGeneral Counsel of the Department ofDefense.

(b) Electorate of the school board. Theelectorate for each school board seatshall be composed of parents of thestudents attending the school. Eachmember of the electorate shall have onevote.

(c) Election of school board members.(1) To be elected as a member of theschool board, an individual must be aresident of the military installation inwhich the DoD DDESS arrangement islocated, and in the case of candidatesfor the ACSS School Board, satisfy therequirements in paragraph (a)(3), of thissection. Personnel employed by a DoDDDESS arrangement may not serve asschool board members.

(2) The term of office for electedmembers shall be 3 years, with amaximum of 2 consecutive terms. Thebeginning of the term shall coincidewith local elections.

(3) When there is a sufficient numberof school board vacancies that result innot having a quorum, which is definedas a majority of seats authorized, aspecial election shall be called by theDoD DDESS Arrangement

Superintendent or designee. A specialelection is an election that is heldbetween the regularly scheduled annualschool board election. The nominationand election procedures for a specialelection shall be the same as those ofregularly scheduled school boardelections. Individuals elected by specialelection shall serve until the nextregularly scheduled school boardelection. Vacancies may occur due tothe resignation, death, removal forcause, transfer, or disenrollment of aschool board member’s child(ren) fromthe DoD DDESS arrangement.

(4) Regularly scheduled school boardelections shall be conducted to coincidewith local elections. Parents shall haveadequate notice of the time and place ofthe election. The election shall be bysecret ballot. All votes must be cast inperson at the time and place of theelection. The candidate(s) receiving thegreatest number of votes shall be electedas school board member(s).

(5) Each candidate for school boardmembership must be nominated inwriting by at least one member of theelectorate to be represented by thecandidate. Votes may be cast at the timeof election for write-in candidates whohave not filed a nomination petition ifthe write-in candidates otherwise arequalified to serve in the positionssought.

(6) The election process shall providestaggered terms for board members, e.g.,on the last day of the last month of eachyear, the term for some board memberswill expire.

(7) The DoD DDESS Superintendent,in consultation with the school board,shall be responsible for developing theplans for nominating school boardmembers and conducting the schoolboard election and the special electionprocess. The DoD DDESSSuperintendent shall announce electionresults within 7 working days of theelection.

Dated: December 27, 1995.L.M. Bynum,Alternate OSD Federal Register LiaisonOfficer, Department of Defense.[FR Doc. 96–67 Filed 1–3–96; 8:45 am]BILLING CODE 5000–04–M


48 CFR Parts 1215, 1252, and 1253

RIN 2105–AC–32

Revision of Department ofTransportation Acquisition Regulation

AGENCY: Transportation.ACTION: Final rule.


SUMMARY: This final rule completes therulemaking necessary to issue revisionsto the Transportation AcquisitionRegulation (TAR) which were publishedin the November 3, 1995 FederalRegister (60 FR 55801) as an interimfinal rule with a request for comments.EFFECTIVE DATE: January 1, 1996.FOR FURTHER INFORMATION CONTACT:Elaine Wheeler, Office of Acquisitionand Grant Management, M–61, 400Seventh Street, SW., Washington, DC20590: (202) 366–4272.


A. BackgroundOn November 3, 1995, revisions to the

TAR were published in the FederalRegister (60 FR 55801) as an interimfinal rule. Comments were solicitedfrom interested parties, including thepublic and other Federal agencies andnone were received. The interim finalrule established a public commentperiod which closed on December 4,1995. This notice finalizes thatrulemaking.

B. Regulatory Analyses and NoticesThe Department has determined that

this action will not have a significanteconomic impact on a substantialnumber of small entities because thebasic policies remain unchanged andonly editorial corrections oradministrative changes are being made.

C. Paperwork Reduction ActThe Paperwork Reduction Act does

not apply because the changes to theTAR do not impose additional recordkeeping information collectionrequirements, or additional collectionsof information from offerors,contractors, or members of the publicwhich require the approval of the Officeof Management and Budget under 44U.S.C. 3501 et seq.

List of Subjects in 48 CFR Parts 1215,1252, and 1253

Government procurement.The interim final rule amending 12

CFR parts 1215, 1252, and 1253 whichwas published at 60 FR 55801 onNovember 3, 1995, is adopted as a finalrule without change.

This final rule is issued underdelegated authority under 49 CFR part1.59(q). This authority has beenredelegated to the Senior ProcurementExecutive.

Issued this 22nd day of December 1995, atWashington, DC.David J. Litman,Senior Procurement Executive.[FR Doc. 96–105 Filed 1–3–96; 8:45 am]BILLING CODE 4910–62–P

National Highway Traffic SafetyAdministration

49 CFR Parts 573, 576, and 577

[Docket No. 93–68; Notice 8]

RIN 2127–AG15

Defect and Noncompliance Reports;Record Retention; and Defect andNoncompliance Notification

AGENCY: National Highway TrafficSafety Administration, DOT.ACTION: Grant in part and denial in partof petitions for reconsideration.

SUMMARY: In this document, theNational Highway Traffic SafetyAdministration (NHTSA) is granting inpart petitions for reconsideration of anApril 5, 1995 final rule that, amongother things, amended 49 CFR Parts 573,576, and 577 (60 FR 17254). Onreconsideration, the agency is amendingprovisions of that final rule concerningsubmission by manufacturers ofschedules for recall campaigns,recordkeeping regarding recalls ofleased vehicles, record retention period,and notification to lessees of recallcampaigns. NHTSA has concluded thatthese changes will reduce manufacturerburdens without adversely affecting theagency’s recall program.DATES: Effective date: The amendmentsmade by this final rule are effective onJanuary 4, 1996.

Any petitions for reconsiderationmust be received by NHTSA no laterthan February 5, 1996.ADDRESSES: Any petitions forreconsideration should refer to thedocket and notice number of this noticeand be submitted to: Docket Section,Room 5109, National Highway TrafficSafety Administration, 400 SeventhStreet SW., Washington, DC 20590.(Docket Room hours are 9:30 a.m. to 4p.m., Monday through Friday.)FOR FURTHER INFORMATION CONTACT:Jonathan D. White, Office of DefectsInvestigation, National Highway TrafficSafety Administration, 400 SeventhStreet SW., Room 5319, Washington, DC20590; (202) 366–5227.


Background

This final rule amends severalsections of 49 CFR Parts 573, 576, and577, as those parts were recentlyamended on April 5, 1995. Thesechanges are being adopted by NHTSA inresponse to four petitions forreconsideration of the April 5 final rulethat were submitted by the Associationof International Automobile

Manufacturers (AIAM), ChryslerCorporation (Chrysler), Ford MotorCompany (Ford), and General MotorsCorporation (GM).

In addition to seeking substantivechanges, the petitions asked for anextension of the original May 5, 1995effective date of the April 5amendments on the ground that itwould be difficult to achievecompliance by that date. On May 16,1995, the agency published a notice inthe Federal Register setting a neweffective date of July 7, 1995 for theApril 5 amendments. 60 FR 26002.Subsequently, on July 7, 1995, NHTSAsuspended until further notice theeffective date of four of the provisionsfor which the petitioners had soughtreconsideration. 60 FR 35458. Thatnotice also confirmed that all otherprovisions of the April 5 final rulewould go into effect on July 7, 1995.

In September 1995, the Office of theFederal Register informed NHTSA thatit could not leave the effective date ofa regulation indefinite, as it had done inthe July 7 Federal Register notice.Accordingly, NHTSA published anothernotice setting January 2, 1996, as theeffective date of those four provisions,pending the decision onreconsideration. 60 FR 50476 (Sept. 29,1995).

Based on its review of the petitionsfor reconsideration, NHTSA alsodecided that it would be advisable toobtain further information from thepublic on four of the issues raised in thepetitions. Accordingly, the agencyannounced that it would hold a publicmeeting in Detroit, Michigan to receiveoral presentations on those issues and toask questions of those present, and thatit would also receive written commentson those issues. 60 FR 35459 (July 7,1995).

The following five entities madepresentations at the Detroit meeting,which took place on July 24, 1995:AIAM, Chrysler, Ford, GM, and the R.L. Polk Company (Polk). The followingten entities submitted written commentsto the public docket: Advocates forHighway and Auto Safety (Advocates),American Automotive LeasingAssociation (AALA), American HondaMotor Company, Inc. (Honda),Association of Consumer VehicleLessors (ACVL), Ford, GM, Institute ofInternational Container Lessors (IICL),National Automobile DealersAssociation (NADA), National VehicleLeasing Association (NVLA), and TruckRenting and Leasing Association(TRALA). In addition, NHTSA placed awritten transcript of the Detroit meetingin the public docket for this rulemaking.


The notice published today grants thepetitions for reconsideration withrespect to the four provisions specifiedabove and denies the petitions insofar asthey sought amendments to otherprovisions of the April 5 final rule. Thefour provisions pertain to theenforcement of the provisions ofChapter 301 of Title 49 of the UnitedStates Code (49 U.S.C. § § 30101–30169)that set forth the obligations ofmanufacturers of motor vehicles andmotor vehicle equipment to providenotification that motor vehicles or itemsof motor vehicle equipment contain asafety-related defect or do not complywith a Federal motor vehicle safetystandard and to remedy the defect ornoncompliance without charge. 49U.S.C. 30116–30121. The provisions ofthe final rule regarding notification ofdefects and noncompliances in leasedvehicles implement a provision of theIntermodal Surface TransportationEfficiency Act of 1991 (ISTEA) thatrequires vehicle lessors to send theirlessees a copy of notifications receivedfrom manufacturers regarding a safety-related defect or noncompliance in thelessees’ vehicles. 49 U.S.C. 30119(f).

Amendments to Part 573—Defect andNoncompliance Reports

NHTSA is amending two sections of49 CFR Part 573, one that sets forthrequirements regarding the submittal bymanufacturers of schedules for ownernotification and remedy campaigns(recalls) under certain circumstances(section 573.5(c)(8)), and one thatspecifies recordkeeping requirementsfor manufacturers in connection withrecalls of leased vehicles (section573.7(d) and (e)).

Schedule for Recall CampaignsIn order to address an increase in the

number of recalls in which there hasbeen a significant delay between themanufacturer’s decision that a defect ornoncompliance exists and thecommencement and conclusion of themanufacturer’s recall campaign, NHTSAincluded in the April 5 final rule arequirement that manufacturers includein their defect/noncompliance reportssubmitted to NHTSA pursuant to 49U.S.C. 30119 and 49 CFR Part 573 (Part573 Report) a detailed schedule forthose notification campaigns that wouldnot begin within thirty days of the Part573 Report or end within 75 days of thatReport. Several petitioners objected tothis requirement as unnecessary andunduly burdensome. In oral statementsat the public meeting and in theirwritten comments, manufacturersindicated that the time periods specifiedin the final rule would mean that

detailed schedules would be required inmost recalls, because most notificationcampaigns are either begun more than30 days after the Part 573 Report or notcompleted within 75 days of thatReport. In addition, they asserted thatthe need to file detailed schedulinginformation with NHTSA at the outsetof most recalls would have the effect ofdelaying implementation of recalls,because personnel and resources wouldhave to be taken away from otheraspects of recall implementation toensure compliance with the addedreporting requirements.

Pursuant to 49 U.S.C. 30119(c),manufacturers must notify owners,purchasers, and dealers of safety defectsand noncompliances ‘‘within areasonable time’’ after the decision thatthe defect or noncompliance exists.NHTSA continues to believe stronglythat safety recalls should beimplemented as soon as reasonablypossible. However, it also recognizesthat the concerns raised by themanufacturers are serious and need tobe considered.

In order to make the rule moreresponsive both to the manufacturers’concerns and to the public safetyinterest in prompt notification of safety-related defects and noncompliances,NHTSA has decided to modify theburdensome aspects of the recallschedule provisions of the April 5 finalrule. Thus, the agency is deleting therequirement that extensive schedulinginformation and explanatory material beprovided in the manufacturer’s Part 573Report in instances where notificationwould begin more than 30 days after thePart 573 Report is submitted or endmore than 75 days after the Report.Instead, under the rule adopted today,manufacturers will only be required toinclude in their Part 573 Reports theestimated date when owners will first benotified that a remedy for the defect ornoncompliance is available and theestimated date when all owners willhave been so notified.

No additional scheduling informationwill be required under the regulation. Inthose relatively rare instances where theagency wishes to further examinewhether the manufacturer’s time framefor the recall is reasonable under thecircumstances, it may request moredetailed information from themanufacturer on a case-by-case basis.

As NHTSA noted in the preamble tothe April 5 final rule, in most cases,manufacturers develop a recallimplementation schedule for their owninternal use at the time they decide thata defect or noncompliance exists, orpromptly thereafter. The final ruleadopted today simply requires

manufacturers to provide the agencywith the two most basic elements of thisscheduling information when they filetheir Part 573 Reports. Under thisrevision, manufacturers will haveflexibility to tailor the recall notificationschedule to the circumstances of theparticular recall, with far less of areporting burden, while NHTSA willretain the ability, on a case-by-casebasis, to ensure that the timing of recallnotification is reasonable. The agency isretaining its authority, as set forth innew section 577.7(a)(1), to order amanufacturer to notify owners on aspecific date when it finds, afterconsideration of available informationand the views of the manufacturer, thatsuch notification is in the publicinterest.

NHTSA recognizes that in some casesa manufacturer may not have anyscheduling information at the time itsubmits its Part 573 Report (e.g., wherethe remedy has not been developed ortested, or where the scope of the recallis uncertain). In such instances, themanufacturer should indicate in theReport that the information is notavailable. Thereafter, in accordancewith section 573.5(b), the requiredinformation ‘‘shall be submitted as itbecomes available.’’

On reconsideration, NHTSA has alsodecided to rescind new section573.5(c)(8)(iii), which would haverequired a manufacturer to describe allfactors that it anticipated could interferewith its ability to adhere to theproposed recall schedule and todescribe with specificity the likely effectof each of those factors. The agencybelieves that the burden of requiringadvance information about eventswhich might never actually have anyeffect on the recall significantlyoutweighs whatever safety benefit mightbe derived from it. In addition, theagency believes that the purpose of thatrequirement can as readily be served bythe requirement, retained in today’sfinal rule, that a manufacturer mustpromptly advise NHTSA ifcircumstances arise that can result inunanticipated delays of two weeks ormore in recall campaignimplementation. This requirement,formerly included in section573.5(c)(8)(iv), is now renumbered as§ 573.5(c)(8)(ii).

This final rule renumbers sections573.5(c)(8) (v) and (vi) as sections573.5(c)(8) (iii) and (iv), respectively,and makes minor changes in thoseparagraphs to reflect the changes to thissection described above, but makes nosubstantive changes. These provisionsare concerned with the effect on therequirement to file a notification


schedule of a manufacturer’s intent tosubmit a petition for an exemption fromthe recall requirements of the statute onthe ground that the defect ornoncompliance is inconsequential.

Recordkeeping Regarding Recalls ofLeased Vehicles

After reviewing the petitions forreconsideration and the oral and writtencomments, NHTSA has decided torevise 49 CFR § 573.7 (d) and (e), whichimposed requirements on manufacturersand lessors to maintain lists of thenames and addresses of ‘‘known’’lessees of vehicles covered by recallcampaigns.

All of the manufactures thatparticipated in the reconsiderationprocess stated that the divisions of thecompany that deal with recalls andmaintain owner lists do not knowwhether a particular vehicle is leased.However, the manufacturers wereconcerned that they could be heldresponsible under the rule for‘‘knowing’’ that a vehicle was leasedbecause that information is contained inrecords maintained elsewhere in theorganization, such as corporate officesor subsidiaries involved with fleetoperations or consumer credit matters.

These manufacturers stated that itwould be extremely costly and time-consuming to integrate their leasedvehicle records with the vehicle ownerlists prepared in connection with recallcampaigns. Such records are generallymaintained in separate databases inseparate parts of the company andintegrating the databases andreprogramming the systems to generatethe information in the manner requiredby section 573.7(d) would require manymonths of work and substantialadditional financial cost. Similarly,Polk, which is the principal source ofvehicle registration information used bymanufacturers in recall mailings, statedat the public meeting that it could notspecifically identify for theirmanufacturer clients which vehicles ona given list of registered vehicles wereleased. Finally, even apart from costconsiderations, the manufacturerscontended that they should not have tobear the burden of maintaining recordsreflecting lessee notification, since thatshould be the responsibility of thevehicle lessors.

On the basis of the foregoinginformation, NHTSA has concluded thatany benefit to be gained by requiringmanufacturers to identify those vehicleson its recall notification lists that areleased and the person or entity to whomnotification was sent as the lessor orlessee is far outweighed by the cost andtime burdens that manufacturers would

incur to implement such a system.Moreover, the agency agrees that it isnot appropriate to requiremanufacturers to bear the burdensassociated with keeping recordsregarding the notification of lessees,when Congress imposed theresponsibility for such notification onthe lessors.

Accordingly, NHTSA has decided torescind in its entirety section 573.7(d) ofthe April 5 final rule. The agency willmonitor lessor compliance withnotification requirements of section30119(f) through direct contact withlessors rather than by reviewingmanufacturer records. To identify suchlessors, NHTSA plans to obtaininformation from manufacturers andlessor organizations.

For similar reasons, the agency is alsoamending section 573.7(e), whichprimarily sets forth recordkeepingrequirements applicable to lessors, bydeleting language in the last twosentences that are applicable to recordretention by manufacturers who sendout recall notifications directly tolessees pursuant to agreements withlessors. Such lessees are, in effect, beingnotified as if they were owners, withoutany lessor involvement, so there is noneed to apply additional recordkeepingburdens on the manufacturers to assurecompliance requirements of section30119(f).

Two commenters, AALA and TRALA,representing lessors, contended that therecordkeeping requirements for lessorsset forth in section 573.7(e) are overlyburdensome and time consumingbecause they require them to establishnew systems for keeping these records.In addition, AALA questioned theutility of requiring lessors to maintainthese records in light of the fact that,once the lease has expired, the vehiclegenerally undergoes one or more rapidchanges of ownership. AALAquestioned the purpose behind therequirement to maintain records on‘‘vehicles whose future ownership thelessor would be unable to verify.’’

The purpose of this recordkeepingrequirement is not to verify ‘‘futureownership’’ of vehicles; it is to giveNHTSA a means of verifying that lessorsare complying with their duty toprovide their lessees with copies ofsafety recall notifications. This isanalogous to the requirement thatmanufacturers must keep a record ofrecall notifications sent to registeredowners.

The agency has made every effort toensure that the recordkeepingrequirements impose as little burden aspossible on lessors. The informationrequired is minimal (less than what is

required of manufacturers), and itshould not entail great expenditure ofresources to develop and maintain arecord retention system. For thesereasons, NHTSA is retaining thesubstantive requirements of section573.7(e) as they apply to the lists thatmust be maintained by lessors.

Amendments to Part 576—RecordRetention

Prior to the April 5 final rule, 49 CFR§ 576.5 required vehicle manufacturersto retain relevant records for five yearsfrom the date they are generated oracquired. The April 5 rule amendedsection 576.5 to require such records tobe maintained for eight years from thelast date of the model year in which thevehicle to which the records relate wasproduced. After considering thepetitions for reconsiderations and theoral and written comments submittedon this subject, NHTSA has decided torescind the amendment to section 576.5and reinstate the preexistingrequirement.

The primary reason for this decisionis the time and cost burdens that theamendment would have placed uponvehicle manufacturers. Severalmanufacturers stated that it would behighly costly and extremely timeconsuming to change theircomputerized record keeping systems tocomply with the new record retentionrequirements. The agency hasconcluded that the safety benefit thatwould be derived from revising therecord retention period requirementswould be far outweighed by costs andother burdens on resources that wouldbe incurred by manufacturers in order tomake the change.

The agency is also making a technicalamendment to 49 CFR § 576.6, whichdefines the records that must beretained by manufacturers under Part576. Ford pointed out that in the text ofthe April 5 amendment, the word‘‘such’’ does not appear as a modifier tothe term ‘‘malfunctions’’ the secondtime that word appears (in the secondsentence of the section). Ford expressedconcern that the removal of the word‘‘such’’ could be construed to broadenthe scope of the section to coveradditional types of records beyond thoserelated to motor vehicle safety.

The agency does not agree that theslight change in the wording of thisphrase would have had a substantiveaffect on the record retentionrequirements, since the revised languagespecified that the requirement onlyapplied to records of ‘‘malfunctions thatmay be related to motor vehicle safety.’’Nevertheless, to prevent any possiblemisunderstanding, NHTSA is making a


technical amendment to this section toreinstate the preexisting wording. Theagency wishes to emphasize that theApril 5 amendment to section 576.6 thatclarified that the record retentionrequirements apply to records made onelectronic media has not changed, andremains in effect.

Amendments to Part 577—Defect andNoncompliance Notification

In its September 1993 notice ofproposed rulemaking (NPRM) toimplement the ISTEA requirement thatvehicle lessors furnish their lessees withcopies of notifications of safety-relateddefects and noncompliances in leasedvehicles, NHTSA proposed to requiremanufacturers to include language in allrecall notification letters to lessors thatwould remind them of their statutoryobligations. Several commentssubmitted in response to the NPRMpointed out that it would be verydifficult for manufacturers to identifywhich owners were lessors. On the basisof those comments, the April 5 final ruleadded a new section 577.5(h), whichrequired manufacturers to includelanguage describing a lessor’s obligationto notify lessees of safety recalls in allowner notification letters.

During the reconsideration process,this requirement was vigorouslychallenged. Most commenters statedthat the inclusion of lessor/lesseelanguage in all owner notification letterswould add clutter to the letter and couldconfuse the recipients of the ownernotification letter who are not lessors/lessees. In addition, commentersrepresenting various elements of theleased vehicle industry generallyexpressed the view that requiringmanufacturers to notify lessors of theirobligations is unnecessary for severalalternative reasons: (1) Many lessorshave an arrangement withmanufacturers in which the latter mailsrecall letters directly to individuals ona list furnished by the lessor; (2) manyindividual lessees receive notificationletters directly from manufacturersbecause the name of the lessee appearson the title as the owner; and (3) manylessors are already aware of theirobligations and are complying withthem.

These commenters also argued thatthe rule as written failed to take intoaccount several features of the leasedvehicle market: e.g., the fact that inconsumer leasing, the lessee is likely tobe the driver, whereas in commercialleasing, the vehicles will be driven byindividuals who are not the lessee ofrecord; and the fact that some lessorsregard their lists of lessees as tradesecrets and do not disclose them to

manufacturers (which are oftenperceived as competitors).

On reconsideration, the agency hasconcluded that section 577.5(h) shouldbe rescinded. The likely confusionresulting from the inclusion of thisinformation in all owner notificationletters will outweigh any potentialsafety benefit associated with remindinglessors of their obligations, particularlysince there is reason to believe that mostlessors are already aware of thoseobligations. However, since it is likelythat not all lessors are aware of the dutyto notify their lessees of recalls, theagency believes that further steps areappropriate to maximize the number oflessors that are informed of theirobligations under the statute andregulations. To that end, NHTSA plansto send a notice to vehicle lessorsinforming them of their statutory andregulatory obligations with respect torecall notification of their lessees. Theagency will also monitor theperformance of such lessors throughperiodic compliance reviews. Theagency plans to identify vehicle lessorsfrom several sources, includingmanufacturers, lessor associations, andcommercial publications.

Other IssuesThe agency has also considered issues

raised by petitioners and commentersconcerning other aspects of the April 5final rule. Several entities asserted thatNHTSA should have allowed more timeto comply with the April 5amendments. The agency recognizedthat the original 30-day period may nothave allowed sufficient time for thoseaffected by the changes to come intocompliance. However, NHTSA remainsconvinced that the extension of theeffective date for the provisions notaffected by the petitions forreconsideration to July 7 (providing atotal of over 90 days) was sufficient.

Most of the concerns about the timecentered on the provisions regardingmanufacturer recordkeeping for leasedcar notifications (section 573.7) and thechanges in the duration of the recordretention requirements of section 576.5.However, those concerns are now mootdue to the substantive changes made tothose sections on reconsideration.

The other issues raised by thepetitions for reconsideration wereessentially restatements of argumentsmade during the comment period priorto issuance of the final rule. The agencyhas concluded that no change of thoseprovisions is warranted.

Advocates objected to the fact thatNHTSA postponed the effective date ofseveral provisions of the final rule whileit was considering the merits of the

petitions for reconsideration. It notedthat the agency had recently failed tostay a regulatory action when Advocatesfiled a petition for reconsideration.

Under 49 CFR § 553.35(d), a petitionfor reconsideration does not stay theeffectiveness of a rule ‘‘unless theAdministrator so provides.’’ Thus, adecision whether or not to stay theeffective date of a rule pendingconsideration of petitions forreconsideration is within the discretionof the Administrator.

In the Federal Register notice thatfirst extended the effective date of allprovisions of the April 5 rule from May5 to July 7, 1995 (60 FR 26002), theagency noted, ‘‘The [petitioners] havepresented NHTSA with information thatmakes a credible showing that they arenot able to achieve compliance with atleast some provisions of the final rule byMay 5, and that it will be some monthsbefore they are able to do so.’’ Inaddition, NHTSA noted that the shorttime between the filing of the petitionsfor reconsideration and originaleffective date precluded it from sortingthrough all of the provisions of thismultifaceted rule and the arguments inthe petitions in order to identifyparticular provisions whose effectivedate should have been extended. Id.

The agency extended the effectivedate of four specified provisions of thefinal rule beyond July 7, because it haddecided that it needed to gather furtherinformation on those issues. See 60 FR35458 (July 7, 1995). The agencybelieves that this decision wasreasonable under the circumstances,and was adequately explained at thetime.

The fact that the agency did not staya rule for which Advocates soughtreconsideration is not material. Unlikethe manufacturers, Advocates did notrisk noncompliance with Federal law ifthe agency had not stayed its action.

Advocates also contended thatNHTSA should not have considered themerits of the arguments raised in thepetitions for reconsideration because themanufacturers did not present any newinformation that could not have beenpresented prior to the issuance of thefinal rule. While it may be true that theinformation was previously available,there were relatively significant changesmade to each of the four provisionsbetween the NPRM and the April 5 finalrule. The manufacturers could not haveknown exactly what the agency wouldrequire in those provisions. Thus, it wasappropriate to consider the additionalinformation and arguments presented inthe reconsideration petitions and in thesubsequent comments.


Rule Making Analyses and Notices

1. Executive Order 12866 (FederalRegulations) and DOT RegulatoryPolicies and Procedures

NHTSA has analyzed the changesmade by this revised final rule anddetermined that it is not ‘‘significant’’within the meaning of the Departmentof Transportation regulatory policiesand procedures. OMB has alsodetermined that it is not significantwithin the meaning of Executive Order12866. These changes will not imposeany costs on the regulated parties andare likely to reduce such costs.

2. Regulatory Flexibility ActThe agency has also considered the

effects of this rulemaking action underthe Regulatory Flexibility Act (5 U.S.C.601 et seq.). I certify that this proposedrule will not, if promulgated, have asignificant economic impact on asubstantial number of small entities.

3. National Environmental Policy ActIn accordance with the National

Environmental Policy Act of 1969, theagency has analyzed the environmentalimpacts of this rulemaking action anddetermined that implementation of thisaction will not have a significant impacton the quality of the humanenvironment.

4. Paperwork Reduction ActThe amendments made by this final

rule on reconsideration will not imposeany new recordkeeping burdens and arelikely to reduce such burdens.

5. Executive Order 12612 (Federalism)This action has been analyzed in

accordance with the principles andcriteria contained in Executive Order12612, and it has been determined thatthe rule making does not have sufficientfederalism implications to warrant thepreparation of a Federalism Assessment.

6. Civil Justice Reform ActThis final rule does not have a

retroactive or preemptive effect. Judicialreview of this rule may be obtainedpursuant to 5 U.S.C. section 702. Thatsection does not require that a petitionfor reconsideration be filed prior toseeking judicial review.

List of Subjects

49 CFR Part 573Imports; Motor vehicle safety; Motor

vehicles; Reporting and record keepingrequirements; Tires.

49 CFR Part 576Motor vehicle safety; Reporting and

recordkeeping requirements.

49 CFR Part 577

Motor vehicle safety.In consideration of the foregoing,

Parts 573, 576, and 577 of Title 49 of theCode of Federal Regulations areamended as follows:

PART 573—DEFECT ANDNONCOMPLIANCE REPORTS


Authority: 49 U.S.C. 30102–30103, 30112,30117–30121, 30166–30167; delegation ofauthority at 49 CFR 1.50

2. Section 573.5 is amended byremoving paragraphs (c)(8) (ii), (iii), and(iv), redesignating paragraphs (c)(8) (v)and (vi) as paragraphs (c)(8) (iii) and (iv)and revising them, and by adding a newparagraph (c)(8)(ii) to read as follows:

§ 573.5 Defect and noncomplianceinformation report.

* * * * *(c) * * *(8) * * *(ii) The estimated date on which it

will begin sending notifications toowners that there is a safety-relateddefect or noncompliance and that aremedy without charge will beavailable, and the estimated date onwhich it will have completed suchnotification. If a manufacturersubsequently becomes aware that eitherthe beginning or the completion datereported to the agency will be delayedby more than two weeks, it shallpromptly advise the agency of the delayand the reasons therefor, and furnish arevised estimate.

(iii) If a manufacturer intends to filea petition for an exemption from therecall requirements of the Act on thebasis that a defect or noncompliance isinconsequential as it relates to motorvehicle safety, it shall notify NHTSA ofthat intention in its report to NHTSA ofthe defect or noncompliance under thissection. If such a petition is filed andsubsequently denied, the manufacturershall provide the information requiredby paragraph (c)(8)(ii) of this sectionwithin five Federal governmentbusiness days from the date the petitiondenial is published in the FederalRegister.

(iv) If a manufacturer advises NHTSAthat it intends to file such a petition forexemption from the notification andremedy requirements on the groundsthat the defect or noncompliance isinconsequential as it relates to motorvehicle safety, and does not do sowithin the 30-day period established by49 CFR 556.4(c), the manufacturer mustsubmit the information required by

paragraph (c)(8)(ii) of this section nolater than the end of that 30-day period.

3. Section 573.7 is amended byremoving paragraph (d), redesignatingparagraph (e) as paragraph (d), andrevising new paragraph (d) to read asfollows:

§ 573.7 Lists of purchasers, owners,lessors and lessees.* * * * *

(d) Each lessor of leased motorvehicles that receives a notification fromthe manufacturer of such vehicles thatthe vehicle contains a safety-relateddefect or fails to comply with a Federalmotor vehicle safety standard shallmaintain, in a form suitable forinspection, such as computerinformation storage devices or card files,a list of the names and addresses of alllessees to which the lessor has providednotification of a defect ornoncompliance pursuant to 49 CFR577.5(h). The list shall also include themake, model, model year, and vehicleidentification number of each suchleased vehicle, and the date on whichthe lessor mailed notification of thedefect or noncompliance to the lessee.The information required by thisparagraph must be retained by the lessorfor one calendar year from the date thevehicle lease expires.

PART 576—RECORD RETENTION


Authority: 49 U.S.C. 30112, 30115, 30117–30121, 30166–30167; delegation of authorityat 49 CFR 1.50.

5. Section 576.5 is revised to read asfollows:

§ 576.5 Basic requirements.Each manufacturer of motor vehicles

shall retain as specified in § 576.7 allrecords described in § 576.6 for a periodof five years from the date on whichthey were generated or acquired by themanufacturer.


§ 576.6 Records.Records to be retained by

manufacturers under this part includeall documentary materials, films, tapes,and other information-storing mediathat contain information concerningmalfunctions that may be related tomotor vehicle safety. Such recordsinclude, but are not limited to,communications from vehicle users andmemoranda of user complaints; reportsand other documents, includingmaterial generated or communicated bycomputer, telefax or other electronicmeans, that are related to work


performed under, or claims made under,warranties; service reports or similardocuments, including electronictransmissions, from dealers ormanufacturer’s field personnel; and anylists, compilations, analyses, ordiscussions of such malfunctionscontained in internal or externalcorrespondence of the manufacturer,including communications transmittedelectronically.

PART 577—DEFECT ANDNONCOMPLIANCE NOTIFICATION


Authority: 49 U.S.C. 30102–30103, 30112,30115, 30117–30121, 30166–30167;delegations of authority at 49 CFR 1.50 and49 CFR 501.8.

§ 577.5 [Amended]

8. Section 577.5 is amended byremoving paragraph (h) andredesignating paragraph (i) as paragraph(h).

Issued on: December 21, 1995.Ricardo Martinez,Administrator.[FR Doc. 95–31583 Filed 12–29–95; 10:49 am]BILLING CODE 4910–59–M

DEPARTMENT OF COMMERCE

National Oceanic and AtmosphericAdministration


[Docket No. 951227306–5306–01; I.D.121295C]

Foreign Fishing; Pacific CoastGroundfish Fishery; AnnualSpecifications and ManagementMeasures

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: 1996 groundfish fisheryspecifications and managementmeasures; 1996 preliminary fisheryspecifications for Pacific whiting;receipt of applications for experimentalfishing permits; request for comments.

SUMMARY: NMFS announces the 1996fishery specifications and managementmeasures for groundfish taken in theU.S. exclusive economic zone (EEZ) andstate waters off the coasts ofWashington, Oregon, and California asauthorized by the Pacific CoastGroundfish Fishery Management Plan(FMP). The specifications include thelevel of the acceptable biological catch(ABC) and harvest guidelines includingthe distribution between domestic andforeign fishing operations. The harvestguidelines are allocated between thelimited entry and open access fisheries.The management measures for 1996 aredesigned to keep landings within theharvest guidelines, for those species forwhich there are harvest guidelines, andto achieve the goals and objectives ofthe FMP and its implementingregulations. The intended effect of theseactions is to establish allowable harvestlevels of Pacific Coast groundfish and toimplement management measuresdesigned to achieve but not exceedthose harvest levels, while extendingfishing and processing opportunities aslong as possible during the year.DATES: Effective 0001 hours (local time)January 1, 1996, until the 1997 annualspecifications and managementmeasures are effective, unless modified,superseded, or rescinded. The 1997annual specifications and managementmeasures will be published in theFederal Register. Comments will beaccepted until February 5, 1996.ADDRESSES: Comments on thesespecifications should be sent to Mr.William Stelle, Jr., Director, NorthwestRegion, National Marine FisheriesService, 7600 Sand Point Way N.E., BINC15700, Bldg. 1, Seattle, WA 98115–0070; or Ms. Hilda Diaz-Soltero,Director, Southwest Region, NationalMarine Fisheries Service, 501 WestOcean Blvd., Suite 4200, Long Beach,CA 90802–4213. Information relevant tothese specifications and managementmeasures, including the stockassessment and fishery evaluation(SAFE) report, has been compiled inaggregate form and is available forpublic review during business hours atthe office of the Director, NorthwestRegion, NMFS (Regional Director), ormay be obtained from the Pacific

Fishery Management Council (Council),by writing the Council at 2130 SW FifthAvenue, Suite 224, Portland, OR 97201.

FOR FURTHER INFORMATION CONTACT:William L. Robinson (Northwest Region,NMFS) 206–526–6140; or Rodney R.McInnis (Southwest Region, NMFS)310–980–4040.

SUPPLEMENTARY INFORMATION: The FMPrequires that fishery specifications forgroundfish be evaluated each calendaryear, that harvest guidelines or quotasbe specified for species or speciesgroups in need of additional protection,and that management measuresdesigned to achieve the harvestguidelines or quotas be published in theFederal Register and made effective byJanuary 1, the beginning of the fishingyear. This action announces and makeseffective the final 1996 fisheryspecifications and the managementmeasures designed to achieve them.These specifications and measures wereconsidered by the Council at twomeetings and were recommended toNMFS by the Council at its October1995 meeting.

I. Final Specifications: ABCs andHarvest Guidelines; Apportionments toForeign and Joint Venture Fisheries;Open Access and Limited EntryAllocations

The fishery specifications includeABCs, the designation of harvestguidelines or quotas for species thatneed individual management, theapportionment of the harvest guidelinesor quotas between domestic and foreignfisheries, and allocation between theopen access and limited entry segmentsof the domestic fishery.

The final 1996 specifications forABCs, harvest guidelines, and limitedentry and open access allocations arelisted in Table 1, followed by adiscussion of each 1996 specificationthat differs from 1995. Theapportionment between foreign anddomestic fisheries is explainedseparately at the end of this section. Asin the past, the specifications includefish caught in state ocean waters (0–3nautical miles (nm) offshore) as well asfish caught in the EEZ (3–200 nmoffshore).


TABLE 1.—1996 SPECIFICATIONS OF ACCEPTABLE BIOLOGICAL CATCH (ABC), HARVEST GUIDELINES, AND LIMITED ENTRYAND OPEN ACCESS ALLOCATIONS, BY INTERNATIONAL NORTH PACIFIC FISHERIES COMMISSION (INPFC) SUBAREAS

Species

Acceptable biological catch (ABC)(x 1,000 mt) Harvest

guideline(x 1,000

mt)

Allocations(x 1,000 mt)

Van-couver a Columbia Eureka Monterey Concep-

tionTotalABC

Limited entry Open access

1000 mt Percent 1000 mt Percent

Roundfish:Lingcod b ............................ 1.3 0.3 0.7 0.1 2.4 2.4 1.21 80.9 0.29 19.1Pacific cod ......................... 3.2 (c) (c) (c) 3.2 ................ ................ ................ ................Pacific whiting d ................. Preliminary 123.0 123.0 98.4 ................ ................ ................ ................Sablefish e f ........................ 8.7 0.425 9.1 7.8 6.557 93.4 0.463 6.6Jack mackerel g ................. 52.6 ................ 52.6 52.6 ................ ................ ................ ................

Rockfish:POP h ................................. 0.0 0.0 (c) (c) (c) 0.0 0.75 ................ ................ ................ ................Shortbelly .......................... 23.5 23.5 23.5 ................ ................ ................ ................Widow i .............................. 7.7 7.7 6.5 6.26 96.3 0.24 3.7Thornyheads: .................... 8.0 ................ 8.0 ................ ................ 0.00 ................

Shortspine e j ............... 1.0 ................ 1.0 1.5 1.496 99.75 0.004 0.25Longspine e j ............... 7.0 ................ 7.0 6.0 ................ ................ ................ ................

Sebastes complex: k .......... 11.9 13.2 11.9 N 11.2 N 10.12 90.4 1.08 9.613.2 S 13.2 S 8.76 67.4 4.24 32.6

Bocaccio l ................... (G5c) (c) 1.7 1.7 1.7 1.01 67.4 0.49 32.6Canary m ..................... 1.0 0.25 (c) (c) 1.25 0.85 0.78 91.2 0.07 8.8Chilipepper ................. (c) (c) 4.0 4.0 ................ ................ ................ ................Yellowtail n .................. 1.19 2.9 2.58 (c) (c) 6.74 3.59 N 3.25 90.4 0.35 9.6

7 ................ ................ ................ 2.58 S 2.33 90.4 0.25 9.6Remaining rockfish ........... 0.8 3.7 7.0 11.5 ................ ................ ................ ................

Flatfish:

Dover sole e o ..................... 0.82–1.57 3.0 2.9 3.16–4.36 1.0 10.88–12.83

11.05WOC

2.85 Col

................ ................ ................ ................

English sole ....................... 2.0 1.1 3.1 ................ ................ ................ ................Petrale sole ....................... 1.2 0.5 0.8 0.2 2.7 ................ ................ ................ ................Arrowtooth flounder ........... 5.8 5.8 ................ ................ ................ ................Other flatfish ...................... 0.7 3.0 1.7 1.8 0.5 7.7 ................ ................ ................ ................

Other fish p ................................ 2.5 7.0 1.2 2.0 2.0 14.7 ................ ................ ................ ................

a U.S. Vancouver only, except for Pacific whiting.b The lingcod stock assessment covers the entire Vancouver INPFC area, including Canada, and the Columbia subarea north of Cape Falcon. The U.S. ABC is

based on 50 percent of the ABC for this assessment area plus 400 mt for the Columbia subarea south of Cape Falcon. The coastwide harvest guideline equals thesum of the ABCs and includes a recreational harvest of 900 mt. The limited entry and open-access percents are applied only to the commercial portion of the harvestguideline, which is 1,500 mt (the 2,400 mt harvest guideline minus 900 mt for estimated recreational harvest).

c These species are not common nor important in the areas footnoted. Accordingly, for convenience, Pacific cod is included in the ‘‘other fish’’ category for theareas footnoted, and rockfish species are included in the ‘‘remaining rockfish’’ category for the areas footnoted only.

d Whiting specifications are preliminary. The ABC is coastwide, including Canadian waters. The U.S. harvest guideline is preliminarily set at 80 percent of the U.S./Canada ABC. The allocation to Washington coastal treaty tribes will be determined in a separate rulemaking. The 40 percent reserve for shore-based processing willbe based on the commercial portion of the harvest guideline (the U.S. harvest guideline minus the tribal allocation).

e Dover sole, thornyheads, and trawl-caught sablefish are managed together as the ‘‘DTS complex’’ (formerly called the deepwater complex). There is no harvestguideline for the DTS complex.

f The 7,800 mt sablefish harvest guideline is the 8,700 mt ABC north of the Conception subarea (north of 36° N. latitude) reduced by 900 mt for estimated discards.The 7,800-mt harvest guideline is reduced by 780 mt for the treaty tribes before dividing the remaining 7,020 mt between the limited entry (6,557 mt) and open-ac-cess (463 mt) fisheries. The limited entry allocation is further allocated 58 percent (3,803 mt) to the trawl fishery, and 42 percent (2,754 mt) to the nontrawl fishery,both of which are harvest guidelines.

g Only jack mackerel north of 39°00′ N. latitude are managed by the FMP. The ABC and harvest guideline include area beyond 200 nm.h The POP harvest guideline for landed catch applies to the Vancouver/Columbia subareas combined.i The 6,500 mt harvest guideline for widow rockfish is derived by subtracting 16 percent for estimated discards (1,200 mt) from the ABC (7,700 mt).j The thornyhead ABCs and harvest guidelines apply north of Point Conception, CA. The harvest guideline represents landed catch. Limited entry and open-access

allocations are set for the first time for shortspine thornyheads because open-access harvest has exceeded traditional levels during the 1984–1988 window period.k The Sebastes-North harvest guideline (11,200 mt) applies to the Vancouver and Columbia subareas and equals the sum of the ABCs as follows: canary (1,000

mt), yellowtail rockfish (6,740 mt coastwide minus 300 mt for the Eureka subarea), and remaining rockfish (4,500 mt), minus 720 mt for estimated discards (150 mtfor canary rockfish and 570 mt for yellowtail rockfish north of Cape Lookout). Within the Sebastes-North harvest guideline are two small harvest guidelines for com-mercial harvest of black rockfish by the Makah, Quileute, Hoh, and Quinault Indian tribes: 20,000 pounds (9,072 kg) for the EEZ north of Cape Alava (48°09′30′′ N.latitude) and 10,000 pounds (4,536 kg) between Destruction Island (47°40′00′′ N. latitude) and Leadbetter Point 46°38′10′′ N. latitude). The Sebastes-South harvestguideline is the sum of the ABCs for the species in the Eureka/Monterey/Conception subareas: bocaccio (1,700 mt), canary (250 mt), chilipepper (4,000 mt), yellowtailrockfish (300 mt), and remaining rockfish (7,000 mt).

l The bocaccio harvest guideline applies to the Eureka, Monterey, and Conception subareas; as trip-limit induced discards are believed to be minimal, there is nodeduction for discards. The open-access and limited entry allocation percentages for bocaccio are applied only to the commercial portion of the harvest guideline,which is 1,500 mt in 1995 (1,700 mt harvest guideline minus 200 mt estimated recreational harvest).

m The canary rockfish harvest guideline for the Vancouver/Columbia area is the sum of the ABCs minus 150 mt for estimated discards.n The 1993 yellowtail rockfish assessment addressed three separate areas: U.S. Vancouver; Columbia north of Cape Falcon; and Columbia south of Cape Falcon

plus Eureka. For this table, the 2,970 mt Columbia ABC is for north Columbia only, and the Eureka ABC is for the Eureka subarea plus south Columbia. The totalABC for yellowtail rockfish is divided into two harvest guidelines: 3,600 mt for the northern area (4,160 mt for Vancouver plus Columbia north of Cape Lookout, closeto Cape Falcon minus 570 mt for discards) and 2,580 mt for the southern area (Eureka plus Columbia area south of Cape Lookout). The harvest guidelines for theSebastes complex apply to different areas, north and south of the Columbia/Eureka border at 43°00′00′′ N. latitude. For calculating the Sebastes complex harvestguidelines, 300 mt of yellowtail rockfish is estimated for the Eureka subarea. Therefore, 300 mt of the yellowtail rockfish southern harvest guideline is included in thesouthern Sebastes complex harvest guideline, and the remainder of the yellowtail rockfish southern harvest guideline is included in the northern Sebastes complexharvest guideline.)

o The 11,050 mt coastwide harvest guideline for Dover sole (the upper end of the ABC range for the Vancouver subarea and the lower end of the ABC for the Mon-terey subarea (which are the recent average catches in those two subareas), plus the ABCs for the Columbia, Eureka and Conception subareas, minus 580 mt forestimated discards. The coastwide harvest guideline includes a 2,850 mt harvest guideline for the Columbia subarea (3,000 mt ABC minus 150 mt estimated dis-cards).

p Includes sharks, skates, rays, ratfish, morids, grenadiers, and other groundfish species noted above in footnote c.


Changes to the ABCs and HarvestGuidelines

The ABCs represent the total catch—amounts that are discarded as well asretained. Information considered indetermining the ABCs is available fromthe Council and was made available tothe public, before the Council’s October1995 meeting, in the Council’s SAFEdocument (see ADDRESSES). The 1996final ABCs are changed from the 1995ABCs only for Dover sole, as explainedbelow. The preliminary whiting ABC for1996 also differs from the 1995 ABC.These changes are based on the bestavailable scientific information.Changes that result only from roundingare not explained.

Those species or species groupsmanaged with harvest guidelines in1995 will continue to be managed withharvest guidelines in 1996. As in 1995,no quotas are established. The 1996harvest guidelines differ from those in1995 for: Pacific ocean perch (POP), theSebastes complex in the Vancouver/Columbia subareas (north of 43°00′ N.lat.), yellowtail rockfish north of CapeLookout (45°20′15′′ N. lat.), and Doversole coastwide. The preliminary harvestguideline for Pacific whiting (whiting)in 1996 also differs from the 1995harvest guideline. Where information isavailable, a discard factor is subtractedfrom the ABC to determine the harvestguideline. Therefore, except for whiting,the 1996 harvest guidelines representonly that portion of the catch that islanded.

The changes to the ABCs and harvestguidelines are described briefly below.All other ABC and annual harvestguideline specifications announced for1995 (Table 1 at 60 FR 2331, January 9,1995) will apply again in 1996 and areincluded in Table 1. More detailedinformation appears in the Council’sSAFE document (September 1995), the‘‘Final Groundfish Management TeamAcceptable Biological Catch and HarvestGuideline Recommendations for 1996’’(GMT Report C.1.) from the October1995 Council meeting, and the Council’snewsletters for its August and October1995 meetings (see ADDRESSES).

POP

Since 1981, POP has been managedunder a schedule intended to rebuildPOP to a level that would annuallysupport removals of 1,000 metric tons(mt). Landings were higher than this asrecently as 1993. To achieve an annualharvest of about 1,000 mt whilemaintaining a biologically soundharvest rate, the current biomass wouldhave to double. This would be a slowprocess unless there is a fortuitous

sequence of large recruitments. Theharvest guideline for POP is meant toaccommodate only small, incidentalcatches and, therefore, is not a target tobe achieved deliberately. Trip limits forPOP will not be increased to achieve theharvest guideline, and may be reducedif landings are too high. The harvestguideline for POP is reduced from 1,300mt in 1995 to 750 mt in 1996, close tothe projected landings in 1995.

Yellowtail Rockfish—NorthThe 1996 harvest guideline for

yellowtail rockfish north of CapeLookout is reduced by 570 mt, from4,160 mt in 1995 to 3,590 mt in 1996,to account for trip-limit induceddiscards in that area. The harvestguideline in 1996 represents landingsrather than total catch. Before 1996, theharvest guideline represented totalcatch, and estimates of discards wereadded to landings during the season.

Sebastes Complex—NorthThe harvest guideline for the Sebastes

complex in the Vancouver andColumbia subareas, which consists ofthe sum of the ABCs of the differentspecies that make up the complexminus estimated discards, is reduced by570 mt, from 11,800 mt in 1995 to11,200 mt in 1996 (rounded to thenearest hundred mt). This amountrepresents the difference aftersubtracting the estimate of discards foryellowtail rockfish.

As in 1995, the 1996 ABCs andharvest guidelines for the Sebastescomplex and yellowtail rockfish applyto different areas due to differences instock assessment areas. The ABCs andharvest guidelines for the Sebastescomplex apply north and south of43°00′00′′ N. lat. (the Columbia/Eurekasubarea boundary). The yellowtailrockfish ABCs in the Columbia area aredivided at Cape Falcon (45°46′00′′ N.lat.), which is the boundary used in thestock assessment, and the harvestguidelines are divided at Cape Lookout(45°20′15′′ N. lat.), about 26 nm to thesouth, for management purposes.

Dover SoleNew stock assessments were

conducted for Dover sole in theVancouver and Monterey subareas.However, uncertainty in the stockassessments and the surveys on whichthey are based prompted the Council torecommend ranges of ABCs for thesetwo subareas in 1996. In the Vancouversubarea, the lower end of the ABC range(820 mt) is the ABC recommended inthe recent stock assessment, and theupper end (1,570 mt) is based on the1990–94 average landings. In the

Monterey subarea, the lower end of theABC range (3,160 mt) is based on the1990–94 average landings and the upperend (4,360 mt) is the level proposed inthe recent stock assessment. The 1996coastwide ABC is the sum of the areaABCs, which ranges from 10,880 mt to12,830 mt.

The 1996 coastwide harvest guidelinefor Dover sole is based on the recentaverage catch in the Vancouver andMonterey subareas (the upper end of theVancouver ABC range and the lowerend of the Monterey ABC range), plusthe ABCs for the Columbia, Eureka, andConception subareas, which are thesame as in 1995. The total is thenreduced by 5 percent (580 mt) forexpected discards. The 1996 coastwideharvest guideline is 11,050 mt, which isreduced from 13,600 mt in 1995. Theharvest guideline for Dover sole in theColumbia subarea is the same as in1995.

Whiting—PreliminaryIn order to consider the results of a

new stock assessment, the Council hasrecommended only the preliminarywhiting ABC and harvest guideline atthis time, and will recommend the finalABC and harvest guideline in March1996.

In 1994, the ABC for whiting wassubstantially higher than in previousyears, primarily because it was based ondata from the 1992 hydroacousticsurvey that utilized new, more sensitiveequipment, and extended fartheroffshore and farther north to encompassthe species’ range. To provide forcautious exploitation until the 1992survey results could be confirmed, aconservative harvest rate policy wasadopted in 1994 and 1995 to minimizethe risk to the resource if the ABC werelater found to be too high. The mostrecent stock assessment, prepared in1995, supported resumption of themoderate exploitation rate, and theCouncil recommended a preliminary1996 whiting ABC (for the U.S. andCanada combined) of 123,000 mt,assuming large recruitment from the1994 year class. This continues thedecline in ABC from 325,000 mt in 1994and 223,000 mt in 1995, as the strong1980 and 1984 year classes become lessabundant. As in recent years, thepreliminary U.S. harvest guideline is 80percent of the U.S.-Canada ABC (98,400mt). An update to the 1995 stockassessment based on the results of thesummer/fall 1995 hydroacoustic surveyis expected to be completed early in1996. The Council will review theresults of the new stock assessment atits March 1996 meeting and willrecommend the final ABC and harvest


guideline at that time. The final ABCmay be higher or lower than thepreliminary ABC.

The recent overages have not causeda biological problem, particularly giventhe large increase in the ABC in 1994and use of a conservative exploitationrate in 1994 and 1995. Even though thepreliminary ABC and harvest guidelinereturn to a higher, moderate exploitationrate, the total harvest in 1996 isexpected to be lower than theoverfishing level. Bilateral discussionswith Canada are expected to continue.

The regulations at 50 CFR 663.23(b)(4)set aside 40 percent of the U.S. harvestguideline in 1994–96 for priority use byvessels delivering whiting to shoresideprocessors. The amount available forthis shoreside reserve in 1996 dependson the level of the final U.S. harvestguideline and the amount set aside fortribal fisheries, which are not yetdetermined.

Setting Harvest Guidelines Greater ThanABC

In most cases, harvest guidelines areless than or equal to the ABCs, orprorated ABCs, for specific areas.However, for 1996 as in 1995, theCouncil recommended harvestguidelines that exceed the ABCs for twospecies, POP and shortspinethornyheads. The FMP requires that theCouncil consider certain factors whensetting a harvest guideline above anABC. These factors were analyzed bythe Council’s groundfish managementteam (GMT) and considered at theCouncil’s October 1995 meeting beforethe Council recommended the 1996harvest guidelines. These factors alsowere considered when establishing the20-year rebuilding schedule for POP inthe 1981 FMP, in the most recent stockassessments for POP (in the September1995 SAFE document) and shortspinethornyheads (in the October 1994 SAFEdocument), and in the GMT’srecommendations for 1996 (GMT ReportC.1., October 1995).

OverfishingThe FMP defines ‘‘overfishing’’ as a

fishing mortality rate that would, in thelong term, reduce the spawning biomassper recruit below 20 percent of what itwould have been if the stock had neverbeen exploited (unless the species isabove the level that would producemaximum sustainable yield (MSY)). Therate is defined in terms of thepercentage of the stock removed peryear.

Therefore, high catch rates can causeoverfishing at any stock abundancelevel. Conversely, overfishing does notnecessarily occur for stocks at low

abundance levels if the catch can bekept to a sufficiently small fraction ofthat stock level. The target rate ofexploitation for Pacific Coast groundfishtypically is the rate that would reducespawning biomass per recruit to 35percent of its unfished level. Thisdesired rate of fishing will always beless than the overfishing rate, so thereis a buffer between the managementtarget and the level that could harm thestock’s long-term potential productivity.If the overfishing level is reached, theGuidelines for Fishery ManagementPlans at 50 CFR part 602 require theCouncil to identify actions to beundertaken to alleviate overfishing.

None of the ABCs for 1996 reaches orexceeds the level of overfishing.However, for those species whoseharvest guidelines exceed ABC (POPand shortspine thornyheads), theharvest guideline approaches theoverfishing level. In addition, theoverfishing level for POP and shortspinethornyheads was projected to bereached in 1995. Landings of POP wereprojected at 857 mt in 1995, very closeto the 852 mt overfishing level forlanded catch. Landings of shortspinethornyheads were projected at about1,800 mt through November 1995, buttotal catch may have exceeded the 1,757mt overfishing level (for total catch) byas much as 170 mt (10 percent),depending on assumptions made aboutthe level of trip-limit induced discards.Further discussion appears in the GMTSupplemental Report C.1. (October1995). Overfishing in 1996 will beavoided by establishment or reductionof harvest guidelines and by morerestrictive management of the fisheriesfor these species.

DiscardsIn 1996, the ABCs represent total

catch, and the harvest guidelines, exceptfor whiting, represent only that portionof the catch that is landed. Stockassessments and inseason catchmonitoring are designed to account forall fishing mortality, including thatresulting from fish discarded at sea.Discards of rockfish and sablefish in thefishery for whiting are well monitoredand are accounted for inseason as theyoccur. In the other fisheries, discardscaused by trip limits have not beenmonitored, so discard factors have beendeveloped to account for this extracatch. A level previously measured forwidow rockfish (about 16 percent of thetotal catch) in a scientific study isassumed to be appropriate for thecommercial fisheries for widowrockfish, yellowtail rockfish (in thenorthern area), canary rockfish, andPOP. A discard level of 8 percent is

used for the deepwater thornyheadfishery, 5 percent for Dover sole, and 20percent for sablefish. The discard factorsare typically applied by setting theharvest guideline for landed catch at alevel that is equal to the ABC minusexpected discard. More detailedinformation is found in the Council’sSAFE document.

Foreign and Joint Venture FisheriesFor those species needing individual

management that will not be fullyutilized by domestic processors orharvesters, and that can be caughtwithout severely affecting species thatare fully utilized by domestic processorsor harvesters, foreign or joint ventureoperations may occur. A joint ventureoccurs when U.S. vessels deliver theircatch to foreign processing vessels inthe EEZ. The harvest guidelines orquotas for these species may beapportioned to domestic annual harvest(DAH, which includes domestic annualprocessing (DAP) and joint ventureprocessing (JVP)) and to the totalallowable level of foreign fishing(TALFF). In January 1996, no surplusgroundfish are available for jointventure or foreign fishing operations.Consequently, all the harvest guidelinesin 1996 are designated entirely for DAP(which also equals DAH), and JVP andTALFF are set at zero.

In the unlikely event that fish arereallocated inseason and a foreign orjoint venture fishery should occur, theincidental catch levels would be asfollows: For a whiting fishery, the sameas announced at Table 2, footnote 1 of58 FR 2990 (January 7, 1993); for a jackmackerel joint venture, initially thesame as those suggested in section12.5.2 of the FMP but subject to changeduring the year.

II. The Limited Entry ProgramAmendment 6 to the FMP established

a limited entry program that, on January1, 1994, divided the commercialgroundfish fishery into twocomponents, the limited entry fisheryand the open access fishery, each ofwhich has its own allocations andmanagement measures. The limitedentry and open access allocations arecalculated according to a formulaspecified at section II.E. of the appendixto 50 CFR part 663, which takes intoaccount the relative amounts of aspecies taken by each component of thefishery during the 1984–88 limited entrywindow period. At its October 1995meeting, the Council recommended thespecies and areas subject to open accessand limited entry allocations in 1996,and the Regional Director calculated theamounts of the allocations that are


presented in Table 1. Unless otherwisespecified, the limited entry and openaccess allocations are treated as harvestguidelines in 1996.

Open Access AllocationsThe open access fishery is composed

of vessels using (1) exempt gear, or (2)longline or pot (trap) gear used pursuantto the harvest guidelines, quotas, andother management measures governingthe open access fishery. Exempt gearmeans all types of legal groundfishfishing gear except groundfish trawl,longline, and pots. (Exempt gearincludes trawls used to harvest pinkshrimp or spot or ridgeback prawns(shrimp trawls), and, south of PointArena, CA (38°57′30′′ N. lat.), Californiahalibut or sea cucumbers.)

The open access allocation is derivedby applying the open access allocationpercentage to the annual harvestguideline or quota after subtracting anyset-asides for recreational fishing ortreaty Indians (see sections II.E.(b) and(c) of the Appendix to 50 CFR part 663).For those species in which the openaccess share would have been less than1 percent, no open access allocation isspecified unless significant open accesseffort is anticipated. At the time thecalculations were made, the status ofsome vessels (whether they wouldreceive a limited entry permit) was notcertain. These amounts are minor andwould not affect the level of trip limitsfor the limited entry or open accessfisheries.

At its October 1995 meeting, theCouncil learned that the harvest ofshortspine thornyheads in 1995 hadincreased from the level of harvestduring the 1984–88 limited entrywindow period. More than 150 mt ofshortspine thornyheads were landed inCalifornia alone in 1995, whereas thecoastwide harvest by open access gearduring the 1984–88 window period wasless than one percent (15 mt) of theharvest guideline. Consequently, theCouncil recommended that an openaccess allocation for shortspinethornyheads be set in 1996 and thatmanagement measures be implementedto keep landings within that harvestguideline. The open access allocationpercentage for shortspine thornyheadssubsequently was determined to be 0.25percent of the harvest guideline, whichis 4 mt in 1996.

Limited Entry AllocationsThe limited entry fishery means the

fishery composed of vessels usinglimited entry gear fished pursuant to theharvest guidelines, quotas, and othermanagement measures governing thelimited entry fishery. Limited entry gear

means longline, pot, or groundfish trawlgear used under the authority of a validlimited entry permit, issued under 50CFR part 663, affixed with anendorsement for that gear. (Groundfishtrawl gear excludes shrimp trawls usedto harvest pink shrimp, spot prawns, orridgeback prawns, and other trawls usedto fish for California halibut or seacucumbers south of Point Arena, CA.)

The limited entry allocation is theallowable catch (harvest guideline orquota) reduced by: (1) Set-asides, if any,for treaty Indian fisheries or recreationalfisheries; and (2) the open accessallocation.

Recreational Harvest

Before calculating limited entry andopen access allocations, estimates ofrecreational fishing currently aresubtracted for two species, 200 mt forbocaccio (which also is reflected in theallocations for the Sebastes complex inthe Eureka, Monterey, and Conceptionsubareas), and 900 mt for lingcod.

Washington Coastal Tribal Fisheries

The treaty Indian fisheries will bemanaged by the tribes. The treaty Indianfisheries for sablefish and whiting arenot governed by the limited entry oropen access regulations or allocations.

Sablefish

From 1991 through 1994, theWashington Coastal Treaty Tribesconducted a tribal sablefish fishery of300 mt that was recognized in theseannual management measures. In 1994,the U.S. Government formallyrecognized the treaty right to fish forgroundfish of the four WashingtonCoastal Treaty Tribes (the Makah, Hoh,Quileute, and Quinault) and concludedthat, in general terms, the quantificationof the right is 50 percent of theharvestable surplus of groundfishavailable in the tribes’ usual andaccustomed fishing areas (marine watersunder U.S. jurisdiction north of46°53′18′′ N. lat. and east of 125°44′00′′W. long.). For 1996 as in 1995, thetribes’ treaty right to sablefish is 10percent of the sablefish harvestguideline, or 780 mt in 1996.

Whiting

The Washington Coastal Treaty Tribeshave requested that whiting be set asidefor tribal fishing in 1996. The amount ofthe tribal allocation for 1996 has not yetbeen determined, and will beannounced in a separate rulemakingthat will provide a procedure forimplementing tribal treaty rights forgroundfish.

Rockfish

The tribes continue to have a smallharvest guideline, the same as in 1995,for black rockfish off Washington State,to which the non-tribal trip limits donot apply (50 CFR 663.23(b)). For otherrockfish, the open access trip limits willapply for fixed gear. The limited entrytrip limits will apply for trawl-caughtrockfish, and this will be implementedwith a separate rule governing tribalgroundfish.

III. 1996 Management Measures

Projections of landings in 1995 arebased on the information available tothe Council at its October 1995 meeting(GMT Supplemental Report C.3.a.,October 1995).

A. Limited Entry Fishery

The following management measuresapply to vessels operating in the limitedentry fishery after January 1, 1996, andare designed to keep landings within theharvest guidelines or limited entryallocations. Cumulative trip limitscontinue to be used for most of thelimited entry fishery, which allowsfishers to accumulate fish over a periodof time without limit on the number oflandings. However, in response to theindustry’s concerns about discards andthe difficulty of accurately weighingsmall amounts of fish at sea to assurecompliance with trip limits, 2-monthrather than 1-month cumulative limitswill be used for the limited entry fisheryin 1996. However, no more than 60percent of the 2-month limit may betaken in either calendar month,resulting in a variable monthly trip limitwithin the 2-month limit. This enablesthe limited entry fleet to maintain itscurrent monthly fishing pattern, targeton 50 percent of the 2-monthcumulative limit in a month, and havethe protection of a buffer equivalent to10 percent of the 2-month cumulativelimit to account for inaccuracies inweighing fish at sea or for smallamounts caught above the target level.The 2-month periods are: January-February, March-April, May-June, July-August, September-October, November-December.

Widow rockfish

In 1995, the cumulative trip limit forwidow rockfish continued at 30,000 lb(13,608 kg) per month until July 14,when it was increased to 45,000 lb(20,412 kg) per month. Landings areprojected to exceed the 6,500-mt harvestguideline by about 1 percent in 1995. In1996, a 2-month cumulative limit of70,000 lb (31,752 kg) will beimplemented, which is intended to


reduce the need for abrupt adjustmentduring the year.

The Sebastes complex (includingyellowtail rockfish, canary rockfish, andbocaccio). In 1995, three differentcumulative monthly trip limits were setfor the Sebastes complex, whichcontinued throughout the year: 35,000lb (15,876 kg) north of Cape Lookout,50,000 lb (22,680 kg) between CapeLookout and Cape Mendocino, and100,000 lb (45,359 kg) south of CapeMendocino. The monthly cumulativetrip limit for yellowtail rockfish was18,000 lb (8,165 kg) north of CapeLookout and 30,000 lb (13,608 kg)between Cape Lookout and CapeMendocino until May 1, when it wasincreased to 18,000 lb (8,165 kg) northof Cape Lookout and 40,000 lb (18,144kg) between Cape Lookout and CapeMendocino. The cumulative monthlytrip limit for canary rockfish was 6,000lb (2,722 kg) coastwide until August 1,when it was increased to 9,000 lb (4,082kg). By the end of 1995, landings areprojected as follows: Sebastes complexin the Vancouver/Columbia subarea—6,825 mt (30 percent below the harvestguideline); yellowtail rockfish north ofCape Lookout—3,416 mt (5 percent overthe harvest guideline); yellowtailrockfish south of Cape Lookout—1,489mt (27 percent below the harvestguideline); canary rockfish—627 mt (26percent below the harvest guideline);and bocaccio—741 mt (39 percent belowthe harvest guideline).

In January 1996, the 2-monthcumulative trip limits for the Sebastescomplex will be: 70,000 lb (31,752 kg)north of Cape Lookout, 100,000 lb(45,359 kg) between Cape Lookout andCape Mendocino, and 200,000 lb(90,719 kg) south of Cape Mendocino.Two-month cumulative limits alsoapply to yellowtail rockfish, canaryrockfish and bocaccio, which also counttoward the limits for the Sebastescomplex. These 2-month cumulativelimits are: Yellowtail rockfish—32,000lb (14,515 kg) north of Cape Lookout or70,000 lb (31,752 kg) between CapeLookout and Cape Mendocino; canaryrockfish—18,000 lb (8,165 kg); bocacciosouth of Cape Mendocino—60,000 lb(27,216 kg).

The declaration proceduresimplemented by the States ofWashington and Oregon for vesselsoperating north and south of CapeLookout remain in effect for theSebastes complex and yellowtailrockfish. The declarations enable avessel to operate both north and southof Cape Lookout during the trip limitperiod, and to take and retain the moreliberal, southern limits of the Sebastescomplex and yellowtail rockfish, but

only if the appropriate state is notified,as required by state law. In 1996, thetrip limit period is changed to 2 monthsfor most limited entry fisheries, andremains at 1 month for most open accessfisheries.

POPIn 1995, the cumulative trip limit for

POP of 6,000 lb (2,722 kg) per monthcontinued throughout the year.Landings were projected to be 785 mt atthe end of 1995, 36 percent below theharvest guideline. The 1996 harvestguideline was reduced close to the levelof 1995 landings, and the cumulativetrip limit is changed to 10,000 lb (4,536kg) per 2-month period. POP is managedto achieve a rebuilding schedule, so triplimits will not be increased to achievethe harvest guideline.

SablefishThe sablefish harvest guideline is

subdivided among several fisheries. Thetribal fishery allocation is set aside priorto dividing the balance of the harvestguideline between the commerciallimited entry and open access fisheries.These three fisheries are manageddifferently. The limited entry allocationis further subdivided into trawl (58percent) and nontrawl (42 percent)allocations. Trawl-caught sablefish aremanaged together with Dover sole andthornyheads as the DTS complexbecause they often are caught together.Landings of sablefish are expected to beclose to the 7,800 mt harvest guidelinein 1995.

DTS complex (Dover sole,thornyheads, and trawl-caughtsablefish). In 1995, the two cumulativemonthly trip limits for the DTS complexremained in effect until December 1:35,000 lb (15,876 kg) north of CapeMendocino and 50,000 lb (22,680 kg)south of Cape Mendocino. Thisdifferential trip limit was intended toprovide additional protection forshortspine thornyheads, the mostvaluable and least abundant species inthe DTS complex, while encouragingthe harvest of Dover sole in moresouthern areas. In 1996, the trip limitwill be doubled to accommodate the 2-month periods: 70,000 lb (31,752 kg)north of Cape Mendocino, and 100,000lb (45,359 kg) south of Cape Mendocino.

Further protection for shortspinethornyheads was provided by managingthe two thornyhead species separatelyin 1995. On January 1, a cumulative triplimit was set for shortspine andlongspine thornyheads combined of20,000 lb (9,072 kg) per month,containing no more than 4,000 lb (1,814kg) of shortspine thornyheads. On April1, the monthly cumulative limit was

reduced to 15,000 lb (6,804 kg) ofthornyheads, containing no more than3,000 lb (1,361 kg) of shortspinethornyheads. On September 1, thecumulative monthly limit was reducedfurther to 8,000 lb (3,629 kg) ofthornyheads, of which no more than1,500 lb (680 kg) could be shortspines.Even so, landings of shortspinethornyheads reached the harvestguideline on September 20, and areprojected to exceed the overfishing levelby as much as 170 mt, even with thefishery closure in December. Landingsof longspine thornyheads are projectedto be about 5,800 mt in 1995, 200 mtbelow its harvest guideline. Landings ofboth thornyhead species wereprohibited on December 1, since the twospecies often are caught together. InJanuary 1996, the trip limits forthornyheads are half the amount oflimits in effect at the beginning of 1995:20,000 lb (9,072 kg) of thornyheads ina 2-month period, of which no morethan 4,000 lb (1,814 kg) may beshortspine thornyheads.

The monthly cumulative trip limit fortrawl-caught sablefish remained at 6,000lb (2,722 kg) cumulative per month fromJuly 1994 until it was raised to 7,000 lb(3,175 kg) on May 1, 1995. The ‘‘pertrip’’ limit for sablefish smaller than 22inches (56 cm) remained at 500 lb (227kg). Landings of trawl-caught sablefishwere projected to exceed the limitedentry trawl allocation by the end of1995. Therefore, to keep landings withinthe trawl allocation, and becauseshortspine thornyheads often are caughtwith sablefish, the trawl fishery forsablefish also was closed on December1. In 1995, landings are projected to bevery close to the limited entry trawlallocation of 3,803 mt. In 1996, thecumulative trip limit is doubled to12,000 lb (5,443 kg) to accommodate thenew, 2-month cumulative trip limitperiod. The 500-lb (227-kg) per-triplimit for sablefish smaller than 22inches (56 cm) remains in effect.

Dover sole were managed somewhatindirectly in 1995, as in previous years.Until December 1, the amount of theDTS limit that was not comprised ofthornyheads or trawl-caught sablefishcould be Dover sole. A ‘‘per trip’’ limitof 3,000 lb (1,361 kg) was implementedon December 1, concurrent with theclosure of the limited entry and openaccess fisheries for thornyheads andtrawl-caught sablefish, to accommodatebycatch in the petrale sole fishery.Landings of Dover sole are expected tobe far below its harvest guidelines in1995 (projected at 42 percent below thecoastwide harvest guideline and 30percent below the Columbia subareaharvest guideline, even before the


reduction to 3,000 lb (1,361 kg)cumulative in December 1995). These‘‘underages’’ were not addressed byincreasing the trip limits in 1995because of the close association of Doversole, sablefish, and thornyheads, andnew information supporting morecautious management of Dover sole. In1996, Dover sole will be managed thesame as in 1995; the trip limit will bethe amount of the DTS limit remainingafter subtracting landings of sablefishand thornyheads.

Nontrawl sablefishSmall daily trip limits were applied to

the nontrawl fishery again in 1995before and after the August 6–13, 1995,‘‘regular’’ and September 1–31, 1995,‘‘mop-up’’ seasons. A 300-lb (136-kg)daily trip limit was applied only northof the Conception subarea (36°00′00′′ N.lat.), the same area covered by theharvest guideline. In the Conceptionarea, where there is no harvest guidelineand landings had been below the 425-mt ABC, the daily trip limit was 350 lb(159 kg) to accommodate most landingswithout encouraging excessive effortshifts into that area. The trip limit forsablefish smaller than 22 inches (56 cm)of 1,500 lb (680 kg) or 3 percent of alllegal sablefish on board, whichever isgreater, remained in effect during theregular and mop-up seasons. In 1995,the regular (derby) season was precededby a 72-hour closure for all limited entryand open access fixed gear used to takeand retain groundfish, with oneexception. Pot gear could be set 24hours before the regular season becausethis gear takes longer to deploy.Landings in 1995 are expected to be justbelow the limited entry nontrawlallocation for sablefish of 2,754 mt.

In 1996, the same daily trip limits forthe limited entry fishery will applyoutside the regular and mop-up seasonsand any closure. The ‘‘per trip’’ limit fornontrawl sablefish smaller than 22inches (56 cm) will remain in effectduring the regular and mop-up fisheries,but, for ease of calculation, thepercentage is modified to apply only tolegal sablefish 22 inches (56 cm) orlarger (total length). The Councilrecommended that the date of theregular season be changed to September1 in 1996. This change has not yet beenapproved by NMFS. The Council also isconsidering different managementstrategies for 1997 and beyond, but hasnot yet submitted a recommendation toNMFS.

WhitingApproximately 176,600 mt of whiting

was harvested in 1995, 74,000 mt by theshore-based fleet and 102,600 mt by the

at-sea processing sector (which includesdeliveries to motherships). The 10,000-lb (4,536-kg) trip limit for whiting takenbefore and after the regular whitingseason and inside the 100-fathom (183-m) contour in the Eureka subarea(40°30′00′′-43°00′00′′ N. lat.) continuesin effect in 1996. Additional regulations,including the allocation of whiting tovessels that deliver shoreside and thosethat deliver at-sea, are found at 50 CFR663.23(b) (3) and (4). The Council hasrecommended that the start of theregular season north of 42° N. lat. bechanged from April 15 to May 15, butthis recommendation has not yet beenapproved by NMFS.

LingcodThroughout 1995, lingcod was

managed under a monthly cumulativetrip limit of 20,000 lb (9,072 kg).Lingcod smaller than 22 inches (56 cm)could not be landed in the commercialor recreational fisheries until August 1,1995, when a 100-lb (45-kg) per tripexception was made for trawl-caughtlingcod. Landings of lingcod areprojected at 1,431 mt in 1995, 3 percentbelow the harvest guideline. Tomaintain similar landing rates in 1996,the cumulative limit is doubled to40,000 lb (18,144 kg) per 2-monthperiod.

Black RockfishBlack rockfish off the State of

Washington continue to be managedunder the regulations at 50 CFR663.23(b). The State of Oregonimplements trip limits for black rockfishoff the Oregon coast. The Council hasconsidered trip limits off Oregon but hasnot yet submitted its recommendation toNMFS for review.

B. Open Access FisheryThe trip limits for the open access

fishery are designed to keep landingswithin the open access allocation, whileallowing the fisheries to operate for aslong as possible during the year. Theoverall open access limits for rockfish,sablefish and ‘‘all groundfish’’ in 1996are the same as in 1995 with severalexceptions, explained below.

(1) As in 1995, any more restrictivelimits imposed on limited entry vesselsalso apply to open access vessels.However, in 1996, a vessel operating inthe open access fishery may not, in anycalendar month, exceed 50 percent ofany 2-month cumulative trip limit in thelimited entry fishery. This is intended tomaintain a relatively consistent patternof landings and to discourage new entryinto the open access fishery.

(2) A daily trip limit is added forthornyheads to keep landings within the

new open access allocation (4 mt in1996). Landings of shortspinethornyheads by open access vessels areestimated at over 150 mt in 1995, muchhigher than landings during the 1984–88 window period. The best availableinformation at the October 1995 Councilmeeting indicated that a trip limit of 50lb (23 kg) per day would accommodatemost open access trips, but still may betoo liberal to keep landings within theopen access allocation in 1996. After theCouncil made its recommendation,some members of the industry statedthat 50 lb (23 kg) per day was too lowto sustain current fisheries south ofPoint Conception CA (34°27′ N. lat.).Historical landings by open accessvessels were less than 1 percentcoastwide during the window period, sothey were even smaller south of Pt.Conception, suggesting this is new effortin the area which the FMP seeks todiscourage. Nonetheless, the Councilmay reconsider this issue in the future.

(3) The open access trip limits in 1995applied to all shrimp and prawn gear. In1996, they will apply only to shrimp/prawn trawl gear because the openaccess trip limits for pots alreadyaccommodate shrimp gear that conformswith the Federal requirements forgroundfish pots: To have biodegradableescape panels constructed with #21 orsmaller untreated cotton twine in sucha manner that an opening at least 8inches (20.5 cm) in diameter resultswhen the twine deteriorates (50 CFR663.22(e)).

C. Operating in Both Limited Entry andOpen Access Fisheries

Vessels using open access gear aresubject to the management measures forthe open access fishery, whether or notthe vessel has a valid limited entrypermit endorsed for any other gear. Inaddition, a vessel operating in the openaccess fishery must not exceed any triplimit, frequency limit, and/or size limitfor the same gear and/or subarea in thelimited entry fishery (as announced inthis Federal Register document inparagraphs titled ‘‘limited entry’’). Avessel that operates in both the openaccess and limited entry fisheries is notentitled to two separate trip limits forthe same species. Fish caught with openaccess gear will also be counted towardthe limited entry trip limit. Forexample: In one month, a trawl vesselcatches 6,000 lb (2,722 kg) of sablefishin the limited entry fishery, and in thesame month catches 1,500 lb (680 kg) ofsablefish with shrimp trawl (openaccess) gear, for a total of 7,500 lb (3,402kg) of sablefish. Because the open accesslandings are counted toward the limitedentry limit, the vessel would have


exceeded its limited entry, cumulativelimit of 7,200 lb (3,266 kg) (60 percentof the 12,000-lb (5,443-kg) 2-monthcumulative limit for the limited entryfishery).

D. Operating in Areas with DifferentTrip Limits

Trip limits may differ for a species orspecies complex at different locationson the coast. Unless otherwise stated (asfor yellowtail rockfish, black rockfish,and the Sebastes complex), the samecross-over provisions utilized in 1995will apply.

E. Changes to Trip Limits; Closures

Unless otherwise stated, a vessel musthave initiated offloading its catch beforethe fishery is closed or before a morerestrictive trip limit becomes effective.As in the past, all fish on board thevessel when offloading begins arecounted toward the landing limits (See50 CFR 663.2, the definition of‘‘landing’’).

F. Designated Species B Permits

Designated species B permits may beissued if the limited entry fleet will notfully utilize the harvest guideline forPacific whiting, shortbelly rockfish, orjack mackerel. However, the limitedentry fleet has requested the full use ofthese species in 1996, so issuance ofdesignated species B permits is notexpected. If designated species Bpermits for jack mackerel are issued, thebycatch limits announced in the 1995annual management measures (60 FR2331, January 9, 1995) may be used ormodified.

G. Recreational Fishing

Bag limits in the 1996 recreationalfishery remain the same as in 1995.

IV. NMFS ActionsFor the reasons stated above, the

Assistant Administrator for Fisheries,NOAA (Assistant Administrator),concurs with the Council’srecommendations and announces thefollowing management actions for 1996,including those that are the same as in1995.

A. General Definitions and Provisions

The following definitions andprovisions apply to the 1996management measures, unless otherwisespecified in a subsequent notice:

(1) Trip limits. Trip limits are used inthe commercial fishery to specify theamount of fish that may legally be takenand retained, possessed, or landed, pervessel, per fishing trip, or cumulativelyper unit of time, or the number oflandings that may be made from a vessel

in a given period of time, as explainedbelow.

(a) A trip limit is the total allowableamount of a groundfish species orspecies complex, by weight, or bypercentage of fish on board, that may betaken and retained, possessed, or landedper vessel from a single fishing trip.

(b) A daily trip limit is the maximumamount that may be taken and retained,possessed, or landed per vessel in 24consecutive hours, starting at 0001hours local time. Only one landing ofgroundfish may be made in that 24-hourperiod. Daily trip limits may not beaccumulated during multiple day trips.

(c) A cumulative trip limit is themaximum amount that may be takenand retained, possessed, or landed pervessel in a specified period of time,without a limit on the number oflandings or trips.

(i) Limited entry fishery. Unlessotherwise specified, cumulative triplimits in the limited entry fishery applyto 2-month periods. No more than 60percent of the applicable 2-monthcumulative limit may be taken andretained, possessed or landed in eithermonth of a 2-month period; this iscalled the ‘‘60-percent monthly limit.’’The 2-month periods are: January–February, March–April, May–June,July–August, September–October,November–December.

(ii) Open access fishery. Unlessotherwise specified, cumulative triplimits apply to 1-month periods in theopen access fishery. Within these limits,in any calendar month, no more than 50percent of the applicable 2-monthcumulative limit for the limited entryfishery may be taken and retained,possessed, or landed from a vessel inthe open access fishery; this is calledthe ‘‘50-percent monthly limit.’’

(2) Unless the fishery is closed, avessel that has landed its cumulative ordaily limit may continue to fish on thelimit for the next legal period, so longas no fish (including but not limited togroundfish with no trip limits, shrimp,prawns, or other nongroundfish speciesor shellfish) are landed (offloaded) untilthe next legal period. As stated in theregulations at 50 CFR 663.2, onceoffloading of any species begins, all fishaboard the vessel are counted as part ofthe landing.

(3) All weights are round weights orround-weight equivalents.

(4) Percentages are based on roundweights, and, unless otherwisespecified, apply only to legal fish onboard.

(5) ‘‘Legal fish’’ means fish legallytaken and retained, possessed, or landedin accordance with the provisions of 50CFR part 663, the Magnuson Fishery

Conservation and Management Act(Magnuson Act), any notice issuedunder subpart B of part 663, and anyother regulation promulgated or permitissued under the Magnuson Act.

(6) Size limits and lengthmeasurement. Unless otherwisespecified, size limits in the commercialand recreational groundfish fisheriesapply to the longest measurement of thefish without mutilation of the fish or theuse of force to extend the length of thefish. No fish with a size limit may beretained if it is in such condition that itslength has been extended or cannot bedetermined by these methods.

(a) For a whole fish, total length willbe measured from the tip of the snout(mouth closed) to the tip of the tail ina natural, relaxed position.

(b) For a fish with the head removed(‘‘headed’’), the length will be measuredfrom the origin of the first dorsal fin(where the front dorsal fin meets thedorsal surface of the body closest to thehead) to the tip of the upper lobe of thetail; the dorsal fin and tail must be leftintact.

(7) ‘‘Closure,’’ when referring toclosure of a fishery, means that takingand retaining, possessing, or landing theparticular species or species group isprohibited. (See the regulations at 50CFR 663.2.) Unless otherwiseannounced in the Federal Register,offloading must begin before the timethe fishery closes.

(8) The fishery management area forthese species is the EEZ off the coastsof Washington, Oregon, and Californiabetween 3 and 200 nm offshore,bounded on the north by the ProvisionalInternational Boundary between theUnited States and Canada, and boundedon the south by the InternationalBoundary between the United Statesand Mexico. All groundfish possessedbetween 0–200 nm offshore, or landedin, Washington, Oregon, or Californiaare presumed to have been taken andretained from the fishery managementarea, unless otherwise demonstrated bythe person in possession of those fish.

(9) Inseason changes to trip limits areannounced in the Federal Register.Most trip and bag limits in thegroundfish fishery have been designated‘‘routine,’’ which means they may bechanged rapidly after a single Councilmeeting. Information concerningchanges to trip limits is available fromthe NMFS Northwest and SouthwestRegional Offices (see ADDRESSES).Changes to trip limits are effective at thetimes stated in the Federal Register.Once a change is effective, it is illegalto take and retain, possess, or land morefish than allowed under the new triplimit. This means, unless otherwise


announced in the Federal Register,offloading must begin before the time afishery closes or a more restrictive triplimit takes effect.

(10) It is unlawful for any person totake and retain, possess, or landgroundfish in excess of the landing limitfor the open access fishery withouthaving a valid limited entry permit forthe vessel affixed with a gearendorsement for the gear used to catchthe fish (50 CFR 663.7(t)).

(11) Operating in both limited entryand open access fisheries. The openaccess trip limit applies to any fishingconducted with open access gear, evenif the vessel has a valid limited entrypermit with an endorsement for anothertype of gear. A vessel that operates inboth the open access and limited entryfisheries is not entitled to two separatetrip limits for the same species. Fishcaught with open access gear will alsobe counted toward the limited entry triplimit.

(12) Operating in areas with differenttrip limits. Trip limits for a species orspecies complex may differ in differentgeographic areas along the coast. Thefollowing ‘‘crossover’’ provisions applyto vessels operating in differentgeographical areas that have differentcumulative or ‘‘per trip’’ trip limits forthe same species or species complex.They do not apply to species that areonly subject to daily trip limits, or to thetrip limits for black rockfish off the Stateof Washington (see 50 CFR 663.23(b)).They also do not apply to the trip limitsfor yellowtail rockfish and the Sebastescomplex when the vessel is incompliance with paragraph IV.C.(2)(c)below.

If a vessel fishes, for any species, inan area where a more restrictive triplimit applies, then that vessel is subjectto the more restrictive trip limit for theentire period to which that trip limitapplies, no matter where the fish aretaken and retained, possessed, orlanded. Similarly, if a vessel takes andretains a species (or species complex) inan area where a higher trip limit (or notrip limit) applies, and possesses orlands that species (or species complex)in an area where a more restrictive triplimit applies, then that vessel is subjectto the more restrictive trip limit for thattrip limit period.

In 1996, the trip limit period forcumulative trip limits is 2 months forthe limited entry fishery and 1 monthfor the open access fishery, unlessotherwise specified.

(13) Sorting. Regulations at 50 CFR663.7(l) make it unlawful for any personto ‘‘fail to sort, prior to the firstweighing after offloading, thosegroundfish species or species groups for

which there is a trip limit, if the weightof the total delivery exceeds 3,000 lb(1,361 kg) (round weight or roundweight equivalent).’’ This provisionapplies to both the limited entry andopen access fisheries.

[Note: The Council has recommended thatthis regulation be changed to require allspecies or species groups with a trip limit,harvest guideline, or quota to be sorted.There would be no exception for landingsunder 3,000 lb (1,361 kg). The States ofWashington and Oregon already have thesame or similar requirements. If approved,the regulation is expected to be implementedin 1996, after publication in the FederalRegister.]

(14) Experimental fisheries. U.S.vessels operating under an experimentalfishing permit issued under 50 CFR663.10 also are subject to theserestrictions, unless otherwise providedin the permit.

(15) Paragraphs IV.B. through IV.I.below pertain to the commercialgroundfish fishery. The provisions inparagraphs IV.B. through IV.I. that arenot covered under the headings ‘‘limitedentry’’ or ‘‘open access’’ apply to allvessels in the commercial fishery thattake and retain groundfish, unlessotherwise stated. Paragraph IV.J.pertains to the recreational fishery.

(16) Commonly used geographicalcoordinates.

(a) Cape Falcon, OR—45°46′ N. lat.(b) Cape Lookout, OR—45°20′15′′ N.

lat.(c) Cape Mendocino, CA—40°30′ N.

lat.(d) Point Conception, CA—34°27′ N.

lat.(e) International North Pacific

Fisheries Commission (INPFC) subareas(for more precise coordinates for theCanadian and Mexican boundaries, see50 CFR 663.5):

(i) Vancouver—U.S.- Canada border to47°30′ N. lat.

(ii) Columbia—47°30′ to 43°00′ N. lat.(iii) Eureka—43°00′ to 40°30′ N. lat.(iv) Monterey—40°30′ to 36°00′ N. lat.(v) Conception—36°00′ N. lat. to the

U.S.-Mexico border.

B. Widow Rockfish (Widow rockfish arecommonly called brownies)

(1) Limited entry fishery. Thecumulative trip limit for widow rockfishis 70,000 lb (31,752 kg) per vessel per2-month period. The 60-percentmonthly limit is 42,000 lb (19,051 kg).

(2) Open access fishery. Within thelimits at paragraph IV.I. below, the 50-percent monthly limit for widowrockfish is 35,000 lb (15,876 kg).

C. Sebastes Complex (includingBocaccio, Yellowtail, and CanaryRockfish)

(1) General. Sebastes complex meansall rockfish managed by the FMP exceptPacific ocean perch (Sebastes alutus),widow rockfish (S. entomelas),shortbelly rockfish (S. jordani), andSebastolobus spp. (also calledthornyheads, idiots, or channelrockfish). Yellowtail rockfish (S.flavidus) are commonly called greenies.Bocaccio (S. paucispinis) are commonlycalled rock salmon. Canary rockfish (S.pinniger) are commonly called orangerockfish.

(2) Limited entry fishery(a) Cumulative trip limits(i) North of Cape Lookout. The

cumulative trip limit for the Sebastescomplex taken and retained north ofCape Lookout is 70,000 lb (31,752 kg)per vessel per 2-month period. Withinthis cumulative trip limit for theSebastes complex, no more than 32,000lb (14,515 kg) may be yellowtail rockfishtaken and retained north of CapeLookout, and no more than 18,000 lb(8,165 kg) may be canary rockfish.

(ii) Cape Lookout to Cape Mendocino.The cumulative trip limit for theSebastes complex taken and retainedbetween Cape Lookout and CapeMendocino is 100,000 lb (45,359 kg) pervessel per 2-month period. Within thiscumulative trip limit for the Sebastescomplex, no more than 70,000 lb(31,752 kg) may be yellowtail rockfishtaken and retained between CapeLookout and Cape Mendocino, and nomore than 18,000 lb (8,165 kg) may becanary rockfish.

(iii) South of Cape Mendocino. Thecumulative trip limit for the Sebastescomplex taken and retained south ofCape Mendocino is 200,000 lb (90,719kg) per vessel per 2-month period.Within this cumulative trip limit for theSebastes complex, no more than 60,000lb (27,216 kg) may be bocaccio takenand retained south of Cape Mendocino,and no more than 18,000 lb (8,165 kg)may be canary rockfish.

(iv) The 60-percent monthly limitsare: For the Sebastes complex, 42,000 lb(19,051 kg) north of Cape Lookout,60,000 lb (27,216 kg) between CapeLookout and Cape Mendocino, and120,000 lb (54,431 kg) south of CapeMendocino; for yellowtail rockfish,19,200 lb (8,709 kg) north of CapeLookout, and 42,000 lb (19,051 kg)between Cape Lookout and CapeMendocino; for bocaccio, 36,000 lb(16,329 kg) south of Cape Mendocino;and, for canary rockfish, 10,800 lb(4,899 kg) coastwide.


(b) For operating in areas withdifferent trip limits for the same species,see paragraph IV.A.(12) above.

(c) State declarations. The provisionsof paragraph IV.A.(12) do not apply tovessels fishing in conformance with thisparagraph. The States of Oregon andWashington are implementingdeclaration procedures that enable avessel that fishes or transits both northand south of Cape Lookout during a triplimit period (2 months for the limitedentry fishery, 1 month for the openaccess fishery) to retain the largercumulative limit for the Sebastescomplex and yellowtail rockfish takenand retained south of Cape Lookout.Declarations must be made, according tostate law, to the state where the fish willbe landed. To make a declaration or forfurther information, contact:Washington Department of Fish andWildlife, Montesano, WA, at 206–249–4628; or Oregon Department of Fish andWildlife, Newport, OR, at 503–867–4741or 503–867–0300.

(3) Open access fishery.(a) The state declaration procedures

are available to all vessels, whether inthe limited entry or open access fishery.

(b) Within the limits at paragraph IV.I.below, the 50-percent monthly limitsare: For the Sebastes complex, 35,000 lb(15,876 kg) north of Cape Lookout,50,000 lb (22,680 kg) between CapeLookout and Cape Mendocino, and100,000 lb (45,359 kg) south of CapeMendocino; for yellowtail rockfish,16,000 lb (7,258 kg) north of CapeLookout, and 35,000 lb (15,876 kg)between Cape Lookout and CapeMendocino; for bocaccio, 30,000 lb(13,608 kg) south of Cape Mendocino;and, for canary rockfish, 9,000 lb (4,082kg) coastwide.

D. POP(1) Limited entry fishery. The

cumulative trip limit for POP is 10,000lb (4,536 kg) per vessel per 2-monthperiod. The 60-percent monthly limit is6,000 lb (2,722 kg).

(2) Open access fishery. Within thelimits at paragraph IV.I. below, the 50-percent monthly limit for POP is 5,000lb (2,268 kg).

E. Sablefish and the DTS Complex(Dover Sole, Thornyheads, and Trawl-Caught Sablefish)

(1) 1996 Management goal. Thesablefish fishery will be managed toachieve the 7,800-mt harvest guidelinein 1996.

(2) Washington coastal tribal fisheries.The U.S. Government recognizes thatthe Makah, Hoh, Quileute, and Quinaulttribes have treaty rights to fish forgroundfish. Each tribe has such right in

its usual and accustomed fishinggrounds. The tribal treaty allocation forsablefish for 1996 is 780 mt. The tribeswill regulate their fisheries so as not toexceed this allocation.

(3) Limited entry fishery(a) Gear allocations. After subtracting

the tribal-imposed catch limit and theopen access allocation from the harvestguideline for sablefish, the remainder isallocated 58 percent to the trawl fisheryand 42 percent to the nontrawl fishery.

[Note: The 1996 harvest guideline forsablefish north of 36° N. lat. is 7,800 mt. The780-mt tribal allocation is subtracted, and thelimited entry and open access allocations arebased on the remaining 7,020 mt. The limitedentry allocation of 6,557 mt for 1996 isallocated 3,803 mt (58 percent) to the trawlfishery and 2,754 mt (42 percent) to thenontrawl fishery. The trawl and nontrawlgear allocations are harvest guidelines in1996, which means the fishery will bemanaged not to exceed the harvestguidelines, but will not necessarily be closedif they are reached.]

(b) Limited entry trip and size limitsfor the DTS complex. These provisionsapply to Dover sole and thornyheadscaught with any limited entry gear andto sablefish caught with limited entrytrawl gear. ‘‘DTS complex’’ means Doversole (Microstomus pacificus),thornyheads (Sebastolobus spp.), andtrawl-caught sablefish (Anoplopomafimbria). Sablefish are also calledblackcod. Thornyheads, also calledidiots, channel rockfish, or hardheads,include two species, shortspinethornyheads (S. alascanus) andlongspine thornyheads (S. altivelis).

(i) North of Cape Mendocino. Thecumulative trip limit for the DTScomplex taken and retained north ofCape Mendocino is 70,000 lb (31,752 kg)per vessel per 2-month period. Withinthis cumulative trip limit, no more than12,000 lb (5,443 kg) may be sablefish,and no more than 20,000 lb (9,072 kg)may be thornyheads. No more than4,000 lb (1,814 kg) of the thornyheadsmay be shortspine thornyheads.

(ii) South of Cape Mendocino. Thecumulative trip limit for the DTScomplex taken and retained south ofCape Mendocino is 100,000 lb (45,359kg) per vessel per 2-month period.Within this cumulative trip limit, nomore than 12,000 lb (5,443 kg) may besablefish, and no more than 20,000 lb(9,072 kg) may be thornyheads. No morethan 4,000 lb (1,814 kg) of thethornyheads may be shortspinethornyheads.

(iii) The 60-percent monthly limitsare: For the DTS complex, 42,000 lb(19,051 kg) north of Cape Mendocino,and 60,000 lb (27,216 kg) south of CapeMendocino; for trawl-caught sablefish,7,200 lb (3,266 kg); for both species of

thornyheads combined, 12,000 lb (5,443kg); and for shortspine thornyheads,2,400 lb (1,089 kg).

(iv) In any trip, no more than 500 lb(227 kg) may be trawl-caught sablefishsmaller than 22 inches (56 cm) totallength. (See paragraph IV.A.(6)regarding length measurement.)

(v) For operating in areas withdifferent trip limits for the same species,see paragraph IV. A.(12) above.

(c) Limited entry trip and size limitsfor nontrawl sablefish. These daily triplimits, which apply to sablefish of anysize, apply until the closed periodbefore the start of the regular season (asspecified at 50 CFR 663.23(b)(2)),between the end of the regular seasonand the beginning of the mop-up season,and after the mop-up season.

[Note: The Council recommended that theregular season be delayed until September 1,1996. Before this change can be madeeffective, it must be approved by NMFS andthen implemented by a regulation publishedin the Federal Register.]

(i) North of 36°00′ N. lat. The dailytrip limit for sablefish taken andretained with nontrawl gear north of36°00′ N. lat. is 300 lb (136 kg).

(ii) South of 36°00′ N. lat. The dailytrip limit for sablefish taken andretained with nontrawl gear south of36°00′ N. lat. is 350 lb (159 kg).

(iii) During the ‘‘regular’’ or ‘‘mop-up’’seasons, the only trip limit in effectapplies to sablefish smaller than 22inches (56 cm) total length, which maycomprise no more than 1,500 lb (680 kg)or 3 percent of all legal sablefish 22inches (56 cm) (total length) or larger,whichever is greater. (See paragraphIV.A.(6) regarding length measurement.)

(d) For headed and gutted sablefish:(i) The minimum size limit for headed

sablefish, which corresponds to 22inches (56 cm) total length for wholefish, is 15.5 inches (39 cm).

(ii) The conversion factor establishedby the state where the fish is or will belanded will be used to convert theprocessed weight to round weight forpurposes of applying the trip limit. (Theconversion factor currently is 1.6 inWashington, Oregon, and California.However, the state conversion factorsmay differ; fishermen should contactfishery enforcement officials in the statewhere the fish will be landed todetermine that state’s official conversionfactor.)

(4) Open access fishery. Within thelimits in paragraph IV.I. below, a vesselusing exempt trawl gear in the openaccess fishery is subject to the 50-


percent monthly limits, which are asfollows: For the DTS complex, 35,000 lb(15,876 kg) north of Cape Mendocino,and 50,000 lb (22,680 kg) south of CapeMendocino; for trawl-caught sablefish,6,000 lb (2,722 kg); for both species ofthornyheads combined, 10,000 lb (4,536kg); and for shortspine thornyheads,2,000 lb (907 kg).

F. Whiting(1) Limited entry fishery. Additional

regulations that apply to the whitingfishery are found at 50 CFR 663.7 and663.23(b)(3) and (4).

(a) No more than 10,000 lb (4,536 kg)of whiting may be taken and retained,possessed, or landed, per vessel perfishing trip before the regular season forwhiting begins, as specified at 50 CFR663.23(b)(3). This includes any whitingcaught shoreward of 100 fathoms (183m) in the Eureka subarea (see paragraphIV.F.(1)(b)).

(b) No more than 10,000 lb (4,536 kg)of whiting may be taken and retained,possessed, or landed by a vessel that, atany time during a fishing trip, fished inthe fishery management area shorewardof the 100-fathom (183-m) contour (asshown on NOAA Charts 18580, 18600,and 18620) in the Eureka subarea.

(2) Open access fishery. See paragraphIV.I. below.

G. Lingcod(1) Limited entry fishery. The

cumulative trip limit for lingcod is40,000 lb (18,144 kg) per vessel per 2-month period. The 60-percent monthlylimit is 24,000 lb (10,886 kg). Nolingcod may be smaller than 22 inches(56 cm) total length, except for a 100-lb(45-kg) trip limit for trawl-caughtlingcod smaller than 22 inches (56 cm).Length measurement is explained atparagraph IV.A.(6)

(2) Open access fishery. Within thelimits in paragraph IV.I. below, the 50-percent monthly limit for lingcod is20,000 lb (9,072 kg).

(3) Conversions(a) Size conversion. For lingcod with

the head removed, the minimum sizelimit, which corresponds to 22 inches(56 cm) total length for whole fish, is 18inches (46 cm).

(b) Weight conversion. The conversionfactor established by the state where thefish is or will be landed will be used toconvert the processed weight to roundweight for purposes of applying the triplimit. (The states’ conversion factorsmay differ and fishers should contactfishery enforcement officials in the statewhere the fish will be landed todetermine that state’s official conversionfactor.) If a state does not have aconversion factor for lingcod that is

headed and gutted, or only gutted, thefollowing conversion factors will beused. To determine the round weight,multiply the processed weight times theconversion factor.

(i) Headed and gutted. Theconversion factor for headed and guttedlingcod is 1.5. (The State of Washingtoncurrently uses a conversion factor of1.5.)

(ii) Gutted, with the head on. Theconversion factor for lingcod that hasonly been eviscerated is 1.1.

H. Black Rockfish

The regulations currently at 50 CFR663.23(b)(1)(iii) state: ‘‘The trip limit forblack rockfish (Sebastes melanops) forcommercial fishing vessels using hook-and-line gear between the U.S.-Canadaborder and Cape Alava (48°09′30′′ N.lat.), and between Destruction Island(47°40′00′′ N. lat.) and Leadbetter Point(46°38′10′′ N. lat.), is 100 lb or 30percent by weight of all fish on board,whichever is greater, per vessel perfishing trip. This trip limit does notapply to coastal treaty Indian fishermenoperating under harvest guidelinesestablished under paragraph (b)(1)(ii) ofthis section [§ 663.23].’’ The provisionsat paragraphs IV.A.(12) and IV.C.(2)(c)do not apply.

I. Trip Limits in the Open AccessFishery

A vessel operating in the open accessfishery must not exceed any trip limit,frequency limit, and/or size limit for theopen access fishery; or for the same gearand/or subarea in the limited entryfishery; or, in any calendar month, 50percent of any 2-month cumulative triplimit for the same gear and/or subareain the limited entry fishery, called the‘‘50-percent monthly limit.’’ Forpurposes of this paragraph, exemptedtrawl gear (that is used to harvestshrimp, prawns, California halibut orsea cucumbers as provided in thisparagraph I.) may not exceed any limitfor the limited entry trawl fishery, or 50percent of any 2-month cumulative limitthat applies to limited entry trawl gear.No groundfish landing by shrimp orprawn pot (trap) gear may be in excessof the limited entry trip limit fornontrawl gear. The cross-overprovisions at paragraph IV.A.(12) thatapply to the limited entry fishery applyto the open access fishery as well.

(1) Rockfish. Rockfish means allrockfish as defined at 50 CFR 663.2,which includes the Sebastes complex(including yellowtail rockfish, bocaccio,and canary rockfish), shortbellyrockfish, widow rockfish, POP, andthornyheads.

(a) North of Cape Lookout. Thecumulative monthly trip limit forrockfish taken and retained north ofCape Lookout is 35,000 lb (15,876 kg)per vessel per month.

(b) South of Cape Lookout. Thecumulative monthly trip limit forrockfish taken and retained south ofCape Lookout is 40,000 lb (18,144 kg)per vessel per month.

(c) Coastwide. The following triplimits also apply and are countedtoward the cumulative monthly limit forrockfish:

(i) 10,000-lb (4,536-kg) of rockfish pervessel per fishing trip, except for vesselsusing setnet or trammel net gear; and,

(ii) A daily trip limit of 50 lb (23 kg)of thornyheads.

(d) For operating in areas withdifferent trip limits for the same species,see paragraph IV.A.(12) above.

(2) Sablefish. [Note: Under currentregulations, the closure prior to the‘‘regular season’’ for the limited entryfishery also applies to the open accessfishery.]

(a) North of 36°00′ N. lat. The dailytrip limit for sablefish taken andretained north of 36°00′ N. lat. is 300 lb(136 kg).

(b) South of 36°00′ N. lat. The dailytrip limit for sablefish taken andretained south of 36°00′ N. lat. is 350 lb(159 kg).

(3) Groundfish taken by shrimp orprawn trawl

(a) Pink shrimp. The trip limit for avessel engaged in fishing for pinkshrimp is 1,500 lb (680 kg) (multipliedby the number of days of the fishingtrip) of groundfish.

(b) Spot and ridgeback prawns. Thetrip limit for a vessel engaged in fishingfor spot or ridgeback prawns is 1,000 lb(454 kg) of groundfish species perfishing trip.

(c) This rule is not intended tosupersede any more restrictive state lawrelating to the retention of groundfishtaken in shrimp or prawn pots or traps.

(4) Groundfish taken by Californiahalibut or sea cucumber trawl. The triplimit for a vessel participating in theCalifornia halibut fishery or in the seacucumber fishery south of Point Arena,CA (38°57′30′′ N. lat.) is 500 lb (227 kg)of groundfish per vessel per fishing trip.

(a) A trawl vessel will be consideredparticipating in the California halibutfishery if:

(i) It is not fishing under a validlimited entry permit issued under 50CFR part 663 for trawl gear;

(ii) All fishing on the trip takes placesouth of Point Arena; and

(iii) The landing includes Californiahalibut of a size required by CaliforniaFish and Game Code section 8392(a),


which states: ‘‘No California halibutmay be taken, possessed or sold whichmeasures less than 22 inches in totallength, unless it weighs four pounds ormore in the round, three and one-halfpounds or more dressed with the headon, or three pounds or more dressedwith the head off. Total length meansthe shortest distance between the tip ofthe jaw or snout, whichever extendsfarthest while the mouth is closed, andthe tip of the longest lobe of the tail,measured while the halibut is lying flatin natural repose, without resort to anyforce other than the swinging or fanningof the tail.’’

(b) A trawl vessel will be consideredparticipating in the sea cucumberfishery if:

(i) It is not fishing under a validlimited entry permit issued under 50CFR part 663 for trawl gear;

(ii) All fishing on the trip takes placesouth of Point Arena; and

(iii) The landing includes seacucumbers taken in accordance withCalifornia Fish and Game Code section8396, which requires a permit issued bythe State of California.

J. Recreational Fishery(1) California. The bag limits for each

person engaged in recreational fishingseaward of the State of California are:five lingcod per day, which may be nosmaller than 22 inches (56 cm) totallength; and 15 rockfish per day. Multi-day limits are authorized by a validpermit issued by the State of Californiaand must not exceed the daily limitmultiplied by the number of days in thefishing trip.

(2) Oregon. The bag limits for eachperson engaged in recreational fishingseaward of the State of Oregon are:Three lingcod per day, which may be nosmaller than 22 inches (56 cm) totallength; and 15 rockfish per day, ofwhich no more than 10 may be blackrockfish (Sebastes melanops).

(3) Washington. The bag limits foreach person engaged in recreationalfishing seaward of the State ofWashington are: three lingcod per dayno smaller than 22 inches (56 cm) totallength, and either 15 rockfish per daysouth of Leadbetter Point (46°38′10′′ N.lat.) or 12 rockfish per day north ofLeadbetter Point.

V. Issuance of Experimental FishingPermits (EFPs) in 1995

In 1995, applications were receivedand approved for three different types ofexperimental fishing permits (50 CFR663.10).

(1) The first was from the State ofOregon (representing Washington andCalifornia as well) for the purpose of

renewing the EFP to monitor thebycatch of salmon in the shore-basedwhiting fishery. Under this permit, 35vessels were issued EFPs that requiredall salmon caught incidentally in thewhiting fishery to be landed shoreside.Almost 15 percent of the shore-basedlandings were observed, higher than the10 percent goal.

(2) The second application was avariation of the whiting EFP. The Stateof California requested that, in additionto the terms and conditions governingthe whiting EFP, a small number offishers be allowed to fish for whitinginside of the 100-fathom (183-m)contour in the Eureka subarea, whichcurrently is prohibited. The purposewas to see if the bycatch rate of salmoncould be kept at acceptable levels bythis small, shore-based sector of the fleetdelivering to Eureka and Crescent City,CA. However, whiting did not appear infishable concentrations in 1995, so eventhough this experimental fishery wasapproved, the EFPs were not issued.

(3) The third application was for anew, enhanced data collection programthat applied to other groundfishfisheries. This application wassubmitted by the State of Oregon, butcould include involvement by the Statesof Washington and California as well.The purpose of the experiment was tomonitor trip-limit-induced discards andthe bycatch of salmon and non-targetspecies in the groundfish trawl fishery.All participating vessels will berequired to land salmon caughtincidentally in groundfish trawl gearand to keep enhanced logbooks requiredby the State of Oregon. Some vesselswill carry at-sea observers to monitortrip-limit induced discards, and somevessels will be required to bringvirtually their entire catch to shore foradditional monitoring. This is intendedto be the first of a multi-year cooperativedata collection program with theindustry and state and Federalgovernments. This fishery started laterthan expected. Three EFPs have beenissued since early November 1995. TheEFP program may continue through1996.

VI. Applications for ExperimentalFishing Permits in 1996

Three applications also were receivedfor experimental fishing permits in1996. Two, the whiting EFPs describedin paragraphs (1) and (2) of paragraph V.above, had been approved for 1995. Thescope of the experiment and level ofparticipation would be the same asrequested for 1995. The third is for anew experiment to obtain biologicalinformation on sablefish to confirm orimprove data used in the stock

assessment for this species. Thisexperiment would allow one vessel toretain 500 lb (227 kg) in excess of thetrawl trip limit for sablefish, and is notexpected to exceed 5 mt per year. Astate or Federal scientist would beaboard every trip to gather the biologicaldata. These applications were presentedat the Council’s October 1995 meeting.The Council recommended issuance ofall three in 1996. (In addition, theenhanced data collection programdiscussed as number (3) in the previousparagraph continues in 1996.)Comments on the three applications for1996 are invited. If approved, thewhiting EFPs would be issued by March1 for vessels delivering in the State ofCalifornia, and mid-April for vesselsdelivering in Washington and Oregon;and the EFP for sablefish would beissued early in 1996. The decision onwhether to issue EFPs anddeterminations on appropriate permitconditions will be based on a number ofconsiderations, including the Council’srecommendation and commentsreceived from the public.

ClassificationThe final specifications and

management measures for 1996 areissued under the authority of and are inaccordance with 50 CFR parts 611 and663, the regulations implementing theFMP.

Much of the data necessary for thesespecifications and managementmeasures came from the current fishingyear. Because of the timing of thereceipt, development, review, andanalysis of the fishery informationnecessary for setting the initialspecifications and managementmeasures, and the need to have thesespecifications and managementmeasures in effect at the beginning ofthe 1996 fishing year, there is goodcause under 5 U.S.C. 553(b)(B) to waiveprior notice and opportunity for publiccomment for the specifications andmanagement measures. Amendment 4 tothe FMP, implemented on January 1,1991, recognized these timelinessconsiderations, and set up a system bywhich the interested public is notified,through Federal Register publicationand Council mailings, of meetings andof the development of these measures,and is provided the opportunity tocomment during the Council process.The public participated in GMT,Groundfish Advisory Subpanel,Scientific and Statistical Committee,and Council meetings in August andOctober 1995 where theserecommendations were formulated.Additional public comments will beaccepted for 30 days after publication of


this document in the Federal Register.The Assistant Administrator willconsider all comments made during thepublic comment period and maypropose modifications as appropriate.

Because prior notice and opportunityfor public comment is not requiredunder 5 U.S.C. 553, or under any otherpublic law, preparation of a RegulatoryFlexibility Analysis under 5 U.S.C.603(a) and 604(a) is not required andnone has been prepared.

The Administrative Procedure Actrequires that publication of an action bemade not less than 30 days before itseffective date unless the AssistantAdministrator finds and publishes withthe rule good cause for an earliereffective date (5 U.S.C. 553(d)(3)). Thesespecifications announce the harvestgoals and the management measuresdesigned to achieve those harvest goalsin 1996. A delay in implementationcould compromise the managementstrategies that are based on the projectedlandings from these trip limits.Therefore, a delay in effectiveness iscontrary to the public interest and theseactions are effective on January 1, 1996.

Dated: December 28, 1995.Gary Matlock,Program Management Officer, NationalMarine Fisheries Service.[FR Doc. 95–31580 Filed 12–29–95; 11:57am]BILLING CODE 3510–22–P

50 CFR Part 625

[Docket No. 951116270–5308–02; I.D.110195B]

Summer Flounder Fishery; FinalSpecifications for 1996; TechnicalAmendment

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Final specifications for the 1996summer flounder fishery; final rule,technical amendment.

SUMMARY: NMFS issues the finalspecifications for the 1996 summerflounder fishery, which include

commercial catch quotas and mesh sizerequirements, and revises the applicableregulations to accurately reflect theintent of the Mid-Atlantic FisheryManagement Council regarding the‘‘cap’’ on the harvest limit. The intent ofthis document is to comply withimplementing regulations for the fisherythat require NMFS to publish measuresfor the upcoming fishing year that willprevent overfishing of the summerflounder resource, and to modify thelanguage specifying the ‘‘cap’’ on theannual harvest limit.EFFECTIVE DATE: December 29, 1995.ADDRESSES: Copies of theEnvironmental Assessment andsupporting documents used by theMonitoring Committee are availablefrom: Executive Director, Mid-AtlanticFishery Management Council, Room2115, Federal Building, 300 S. NewStreet, Dover, DE 19901–6790.FOR FURTHER INFORMATION CONTACT:Regina Spallone, Fishery PolicyAnalyst, 508–281–9221.SUPPLEMENTARY INFORMATION: TheFishery Management Plan for theSummer Flounder Fishery (FMP) wasdeveloped jointly by the Atlantic StatesMarine Fisheries Commission (ASMFC)and the Mid-Atlantic FisheryManagement Council (Council) inconsultation with the New England andSouth Atlantic Fishery ManagementCouncils. The management unit for theFMP is summer flounder (Paralichthysdentatus) in U.S. waters of the AtlanticOcean from the southern border ofNorth Carolina northward to theCanadian border. Implementingregulations for the fishery are found at50 CFR part 625.

Section 625.20 of Title 50, Code ofFederal Regulations implementing theFishery Management Plan for theSummer Flounder Fishery (FMP)specifies the process for setting annualmanagement measures in order toachieve the fishing mortality (F) ratesspecified in the FMP. UnderAmendment 7 to the FMP, the scheduleof F rates established sets a targetfishing mortality rate of 0.41 in 1996,0.3 in 1997, and 0.23 (Fmax) in 1998 andthereafter, provided the allowable levels

of fishing in 1996 and 1997 may notexceed a ‘‘cap’’ of 18.51 million lb (8.4million kg), unless such fishing levelshad an associated F of 0.23. This ‘‘cap’’reflected a rounding of the actualpoundage. The Council felt that such arounding, while convenient for thereader, did not accurately reflect thetrue intent, which was 18,518,830 lb(8,400 mt). Therefore, this actionmodifies the ‘‘cap’’ to reflect theCouncil’s intent that the maximumallowable harvest level associated withthis ‘‘cap’’ is 18,518,830 lb (8,400 mt).This clarification is outlined in thesection below, which specifies changesfrom the proposed specifications.

Pursuant to § 625.20, the Director,Northeast Region, NMFS, implementscertain measures for the fishing year toensure achievement of the appropriatefishing mortality rate. The measuresinclude those that are changed, andthose that are not changed, from theproposed 1996 specifications that werepublished in the Federal Register onNovember 28, 1995 (60 FR 58593). Theunchanged measures include: (1) Aminimum commercial fish size of 13inches (33 cm); and (2) a minimummesh size restriction of 5.5-inch (14.0-cm) diamond or 6-inch (15.2-cm)square. The changed measures include:(1) A coastwide harvest limit of18,518,830 lb (8.40 million kg); (2) acoastwide commercial quota of11,111,298 lb (5.04 million kg); and (3)a coastwide recreational harvest limit of7,407,532 lb (3.36 million kg).

Commercial Quota

The coastwide commercial quota isallocated among the states based onhistoric catch shares specified in theregulations. Table 1 presents the 1996commercial quota (11,111,298 lb;5,040,000 kg) apportioned among thestates according to the percentage sharesspecified in § 625.20(d)(1). These stateallocations do not reflect theadjustments required under § 625.20, if1995 landings exceed the 1995 quota forany state. A notification of allocationadjustment will be published in theFederal Register if such an adjustmentis necessary.

TABLE 1.—1996 STATE COMMERCIAL QUOTAS

State Share(%)

1996 quota(lb)

1996 quota(kg)

ME ............................................................................................................................................................ 0.04756 5,284 2,397NH ............................................................................................................................................................ 0.00046 51 23MA ............................................................................................................................................................ 6.82046 757,841 343,751RI .............................................................................................................................................................. 15.68298 1,742,583 790,422CT ............................................................................................................................................................ 2.25708 250,791 113,757NY ............................................................................................................................................................ 7.64699 849,680 385,408NJ ............................................................................................................................................................. 16.72499 1,858,363 842,939


TABLE 1.—1996 STATE COMMERCIAL QUOTAS—Continued

State Share(%)

1996 quota(lb)

1996 quota(kg)

DE ............................................................................................................................................................ 0.01779 1,977 897MD ............................................................................................................................................................ 2.03910 226,570 102,770VA ............................................................................................................................................................ 21.31676 2,368,569 1,074,365NC ............................................................................................................................................................ 27.44584 3,049,589 1,383,270

Recreational catch data for 1995 arenot yet available. The Council andASMFC will consider modifications tothe recreational possession limit andrecreational season after a review of thatinformation.

Final Rule, Technical Amendment andChanges From Proposed Specificationsto Final Specifications

This document modifies the languagespecified in § 625.20(a) established bythe final rule for Amendment 7 to theFMP that set the harvest limit ‘‘cap’’ at18.51 million lb (8,396 mt). The finalrule, technical amendment contained inthis action changes the harvest limit‘‘cap’’ to be 18,518,830 lb (8,400 mt),making the ‘‘cap’’ consistent withCouncil intent as stated in the commentsubmitted by the Council and addressedbelow. The value of 8,400 mt iscontained in Amendment 7 and thatvalue is equivalent to 18,518,830 lb,which is 8,830 lb greater than therounded off value of 18.51 million lb.As a result, the state allocations ofcommercial quota have been alteredslightly relative to the proposedspecifications.

Comments and ResponsesOne comment was received regarding

the 1996 summer flounderspecifications from the Council.

Comment: The Council checked theadministrative record andacknowledged an error in thepublication of the harvest limit ‘‘cap’’,as published in Amendment 7 to theFMP. The Council wishes to correct thespecifications to reflect accurately theirintent regarding the total harvest limitand subsequent specifications for thecommercial and recreational fisheries.Specifically, the Council intended thetotal harvest limit to equal 18,518,830 lb(8,400 mt), rather than 18.51 million lbwhich actually equals 8,396 mt. Thevalue of 18,518,830 lb would result inan allocation of 11,111,298 lb (5,040,000kg) to the commercial sector, and7,407,532 lb (3,360,000 kg) to therecreational sector.

Response: NMFS agrees. Theadministrative record shows that, for thepurpose of reading ease, the numbers forpounds were rounded during

publication. However, this roundingresulted in a loss of the original intentof the Council. To modify theregulations to reflect more accuratelythe record, a technical amendment tothe final rule for Amendment 7 isnecessary. That action accompanies thepublication of these final specifications.

ClassificationThis action is authorized by 50 CFR

part 625 and complies with the NationalEnvironmental Policy Act.

These final specifications are exemptfrom review under E.O. 12866.

For the technical regulatory change,NMFS finds good cause to waive priornotice and opportunity for publiccomment under 5 U.S.C. 553(b)(B). Thetechnical change corrects theregulation’s codification of the quotacap in Amendment 7 to reflectaccurately the language adopted by theCouncil. As such, NMFS finds that priornotice and comment are unnecessary.Further, there is no requirement to delaythe effective date of this technicalchange as it is not a substantive rule.

List of Subjects in 50 CFR Part 625Fisheries, Reporting and

recordkeeping requirements.Dated: December 28, 1995.

Gary Matlock,Program Management Officer, NationalMarine Fisheries Service.

For the reasons set out in thepreamble, 50 CFR part 625 is amendedas follows:

PART 625—SUMMER FLOUNDERFISHERY


Authority: 16 U.S.C. 1801 et seq.

2. In § 625.20, paragraph (a)introductory text is revised to read asfollows:

§ 625.20 Catch quotas and otherrestrictions.

(a) Annual review. The SummerFlounder Monitoring Committee willreview the following data on or beforeAugust 15 of each year to determine theallowable levels of fishing and otherrestrictions necessary to achieve a

fishing mortality rate (F) of 0.53 in 1993through 1995, 0.41 in 1996, 0.30 in1997, and 0.23 in 1998 and thereafter,provided the allowable levels of fishingin 1996 and 1997 may not exceed18,518,830 lb (8,400 mt), unless suchfishing levels have an associated F of0.23:* * * * *[FR Doc. 95–31584 Filed 12–29–95; 12:22pm]BILLING CODE 3510–22–P

50 CFR Part 625

[I.D. 122895A]

Summer Flounder Fishery;Commercial Quota Transfer

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration, (NOAA),Commerce.ACTION: Notification of commercialquota transfer.

SUMMARY: NMFS announces that theState of New Jersey is transferring138,000 lb (62,596 kg) of commercialsummer flounder quota to theCommonwealth of Massachusetts.NMFS adjusted the quotas andannounces the revised commercialquota for each state involved.EFFECTIVE DATE: December 31, 1995.FOR FURTHER INFORMATION CONTACT:Regina L. Spallone, Fishery PolicyAnalyst, (508) 281–9221.SUPPLEMENTARY INFORMATION:Regulations implementing Amendment2 to the Fishery Management Plan forthe Summer Flounder Fishery are foundat 50 CFR part 625. The regulationsrequire annual specification of acommercial quota that is apportionedamong the coastal states from NorthCarolina through Maine. The process toset the annual commercial quota and thepercent allocated to each state isdescribed in § 625.20.

The commercial quota for summerflounder for the 1995 calendar year wasset equal to 14,690,407 lb (6,663,569 kg),and the allocations to each state werepublished February 16, 1995 (60 FR8958). At that time, New Jersey was


allocated a quota of 2,456,969 lb(1,114,462 kg), and Massachusetts wasallocated a quota of 1,001,953 lb(454,478 kg). The 1995 quotas forseveral states were adjusted for overagesoccurring in 1994, as required under§ 625.20(d)(2), on May 26, 1994 (60 FR27906). The Commonwealth ofMassachusetts’ quota after theadjustment for overages was 984,246 lb(446,446 kg). Since New Jersey’s quotawas not exceeded in 1994, its 1995quota was unaffected by thisadjustment.

On August 30, 1995, the State ofNorth Carolina transferred 7,229 lb(3,279 kg) of commercial quota to theState of New Jersey (60 FR 45107). Asa result of that transfer, the revisedquota for New Jersey was 2,464,198 lb(1,117,741 kg). On December 26, 1995,New Jersey transferred 20,000 lb (9,072kg) of its commercial quota to the Stateof New York. As a result of that transfer,the revised quota for New Jersey was2,444,198 lb (1,108,670 kg).

The final rule implementingAmendment 5 to the FMP waspublished December 17, 1993 (58 FR65936), and allows two or more states,under mutual agreement and with theconcurrence of the Director, NortheastRegion, NMFS (Regional Director) totransfer or combine summer floundercommercial quota. The RegionalDirector is required to consider thecriteria set forth in § 625.20(f)(1), in theevaluation of requests for quota transfersor combinations.

New Jersey has agreed to transfer138,000 lb (62,596 kg) of its commercialquota to Massachusetts. The RegionalDirector has determined that the criteriaset forth in § 625.20(f)(1) have been met,and publishes this notification of quotatransfer. The revised quotas for thecalendar year 1995 are: New Jersey,2,306,198 lb (1,046,074 kg); andMassachusetts, 1,122,246 lb (509,042kg).

This action does not alter any of theconclusions reached in theenvironmental impact statementprepared for Amendment 2 to the FMPregarding the effects of summer flounderfishing activity on the humanenvironment. Amendment 2 establishedprocedures for setting an annualcoastwide commercial quota for summerflounder and a formula for determiningcommercial quotas for each state. Thequota transfer provision was establishedby Amendment 5 to the FMP and theenvironmental assessment prepared forAmendment 5 found that the action hadno significant impact on theenvironment. Under section6.02b.3(b)(i)(aa) of NOAAAdministrative Order 216–6, this action

is categorically excluded from therequirement to prepare additionalenvironmental analyses. This is aroutine administrative action thatreallocates commercial quota within thescope of previously publishedenvironmental analyses.

ClassificationThis action is taken under 50 CFR

part 625 and is exempt from reviewunder E.O. 12866.

Authority: 16 U.S.C. 1801 et seq.Dated: December 28, 1995.

Gary Matlock,Program Management Officer, NationalMarine Fisheries Service.[FR Doc. 95–31579 Filed 12–29–95; 11:10am]BILLING CODE 3510–22–P

50 CFR Part 652

[Docket No. 951017252–5307–02; I.D.101695C]

Atlantic Surf Clam and Ocean QuahogFisheries; 1996 Fishing Quotas

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Final 1996 fishing quotas forsurf clams and ocean quahogs.

SUMMARY: NMFS issues final quotas forthe Atlantic surf clam and ocean quahogfisheries for 1996. These quotas areselected from a range defined asoptimum yield (OY) for each fishery.The intent of this action is to establishallowable harvests of surf clams andocean quahogs from the exclusiveeconomic zone in 1996.EFFECTIVE DATES: Effective January 1,1996, through December 31, 1996.ADDRESSES: Copies of the Mid-AtlanticFishery Management Council’s analysisand recommendations andenvironmental assessment are availablefrom David R. Keifer, ExecutiveDirector, Mid-Atlantic FisheryManagement Council, Room 2115,Federal Building, 300 South New Street,Dover, DE 19901–6790.FOR FURTHER INFORMATION CONTACT:Myles Raizin (Resource Policy Analyst)508–281–9104.SUPPLEMENTARY INFORMATION: TheFishery Management Plan for theAtlantic Surf Clam and Ocean QuahogFisheries (FMP) directs NMFS, acting onbehalf of the Secretary of Commerce(Secretary) and in consultation with theMid-Atlantic Fishery ManagementCouncil (Council), to specify quotas forsurf clams and ocean quahogs on an

annual basis from a range defined by theFMP as the OY for each fishery. Further,the Council follows the policy that thequotas selected should allow fishing tocontinue at that level for at least 10years for surf clams and 30 years forocean quahogs. While staying withinthese constraints, the quotas are also tobe set at a level that would meet theestimated annual demand.

For surf clams, the quota must fallwithin the OY range of 1.85 millionbushels (mil. bu.) (652 thousandhectoliters (hL)) to 3.40 mil. bu. (1.2 mil.hL). For ocean quahogs, the quota mustfall within the OY range of 4.00 mil. bu.(1.4 mil. hL) to 6.00 mil. bu. (2.1 mil.hL). These ranges are specified in 50CFR 652.21 (a) and (b).

During its discussions of the 1996quota recommendations, the Councilbegan developing new overfishingdefinitions for both species managedunder the FMP. Overfishing is presentlydefined for both species in terms ofactual yield levels in excess of thespecified quota levels. These definitionsdo not incorporate biologicalconsiderations to protect againstoverfishing. Although preferredalternatives for overfishing definitionshave not yet been chosen for eachspecies, NMFS believes that none of thealternatives being considered by theCouncil for each species, if adopted,would necessitate any revision of the1996 quotas contained in this action.

This action establishes a surf clamquota of 2.565 mil. bu. (1.36 mil. hL)and an ocean quahog quota of 4.45 mil.bu. (2.36 mil. hL) for the 1996 fisheries.The 1996 surf clam quota is identical tothe 1995 quota, and the 1996 oceanquahog quota represents a 9 percentreduction from the 1995 quota. Thesequotas established by NMFS on behalfof the Secretary are unchanged from theproposed quotas published in theFederal Register on October 23, 1995(60 FR 54330).

FINAL 1996 SURF CLAM/OCEANQUAHOG QUOTAS

Fishery mil. bu. mil. hL

Surf clam .............. 2,565,000 1,362,000Ocean quahog ...... 4,450,000 2,363,000

Comments and ResponsesThree comments were received during

the public comment period. Aconsulting firm involved in the industrycommented in support of the proposedquotas. The National Fisheries Instituteand an attorney involved in the industryopposed the proposed quotas.

Comment: The consulting firmcommented that the proposed 1996 surf


clam quota is very liberal and should beset 8 percent below the proposed quotaof 2.565 mil. bu. (1.36 mil. hL) becauseof declining landings per unit of effort.

Response: This level of surf clamquota was recommended by theScientific and Statistical Committee ofthe Council and meets the Councilpolicy of leaving 10 years of supplyavailable. NMFS believes a reduction of8 percent would be overly conservativeand is not justified based on the mostrecent stock assessment.

Comment: The opponents of theproposed quotas commented that NMFSshould reevaluate the assumptions,conclusions, and recommendations ofthe 19th Stock Assessment Workshop(19th SAW), upon which these quotasare based, to incorporate what theybelieve is new information that wasrevealed during testimony in theirlawsuit against the agency concerningthe 1995 quota levels. Both accuseNMFS scientists of withholding criticalinformation from the Council andindustry.

Response: The Council and NMFShave accepted the advice of the 19thSAW and consider it to be the bestscientific information available. No newinformation that would require NMFS toreevaluate the conclusions of the 19thSAW was presented at the hearing held

in the lawsuit referred to by thecommenters. The only additionalinformation was speculation that thedredge may have traveled farther thanbelieved during the 1994 survey.However, the dredging distance couldnot account for the three-fold increasein the catch experienced during the1994 survey.

The quota setting process, includingthe Stock Assessment Workshop thatoccurred in January 1995, is a very openand participatory process. The scientistsprovided the Council with all of theinformation relative to the surf clam andocean quahog resource that wasavailable at that time. The scientists stillhave not been able to determine thereason for the statistical anomaliescontained in the 1994 survey and didnot speculate as to their cause.However, even if the scientists hadspeculated on the reasons for theanomalies, the Council is still requiredto base its quota recommendation on thebest scientific information available,especially any recommendations of theSAW. The scientists still have not beenable to determine the reason for thestatistical anomalies contained in the1994 survey. When a reasonableexplanation is determined, the Councilwill be informed.

Comment: At a minimum, NMFSshould maintain the 1995 quota levelsfor both species until affected industryparticipants have an opportunity toevaluate the assumptions andconclusions of the 19th SAW with theassistance of scientific advisers fromoutside NMFS.

Response: NMFS sees no scientificbasis for maintaining the 1995 quotalevels for other than surf clams. The bestscientific information available supportsa reduction in the ocean quahog quotaby 9 percent. NMFS further points outthat independent scientific adviserswere involved in the 19th SAW and thatindustry advisers were activelyencouraged to participate in thatprocess.

Classification

This action is authorized by 50 CFRpart 652 and is exempt from reviewunder E.O. 12866.

Authority: 16 U.S.C. 1801 et seq.Dated: December 28, 1995.

Gary Matlock,Program Management Officer, NationalMarine Fisheries Service.[FR Doc. 95–31578 Filed 12–29–95; 11:01am]BILLING CODE 3510–22–P

This section of the FEDERAL REGISTERcontains notices to the public of the proposedissuance of rules and regulations. Thepurpose of these notices is to give interestedpersons an opportunity to participate in therule making prior to the adoption of the finalrules.

Proposed Rules Federal Register

295

Vol. 61, No. 3


NUCLEAR REGULATORYCOMMISSION

10 CFR Parts 30, 31, 32, 40 and 70

Public Workshop on the Regulation ofRadioactive Devices

AGENCY: Nuclear RegulatoryCommission.ACTION: Notice of meeting.

SUMMARY: The NRC will hold a publicworkshop in Rockville, Maryland toreview the regulatory program fordevices containing radioactive materialslicensed under 10 CFR Parts 30, 31, 32,40 and 70. Interested members of thepublic are welcome to attend themeeting, however, for efficient conductof the workshop, participation will be inthe format of a round table discussionamong invited representatives ofpotentially affected parties. The NRChas prepared a workshop agenda. Thisand related documents are available forreview prior to the workshop andinterested parties are encouraged toreview this information. The NRC willaccept and consider written commentsfrom interested parties on thisregulatory issue.DATES: The workshop will be held onJanuary 18, 1996 from 9:00 am to 5:00pm. The workshop will continue, ifnecessary, on January 19, 1996 from9:00 am to 12 noon. Comments on thisregulatory issue should be received nolater than January 31, 1996.ADDRESSES: The public workshop willbe held in the NRC auditorium at TwoWhite Flint North, 11545 RockvillePike, Rockville, Maryland. Visitorparking around the NRC building islimited, however, the workshop site isadjacent to the White Flint station onthe Metro Red Line. Written commentscan be provided at the workshop or byJanuary 31, 1996 to the Secretary, U.S.Nuclear Regulatory Commission,Washington, DC 20555, Attention:Docketing and Service Branch. Copies ofthe agenda and related documents canbe obtained from the NRC’s PublicDocument Room, 2120 L Street NW,

Washington DC 20037; Phone: 202–634–3273; Fax: 202–634–3343.FOR FURTHER INFORMATION CONTACT:Francis X. Cameron, Mail Stop O–15B18, U.S. Nuclear RegulatoryCommission, Washington, DC 20555;Phone: 301–415–1642; Fax: 301–415–3200; INTERNET:[email protected] INFORMATION:Inadequate control of radioactivedevices by licensees has lead toradioactive materials being included inmetal scrap intended for recycling (seeJ. Lubenau & J. Yusko, ‘‘Radioactivematerials in Recycled Metals,’’ HealthPhysics, 68:4, April, 1995). Radioactivesources have been accidentally smeltedin metal mills resulting in radioactivecontamination of mills, metal productsand mill byproducts. In the U.S., costsattributable to decontamination, wastedisposal and temporary mill closuresfollowing a smelting of a radioactivesource have been as much as$23,000,000 per event. There is a risk ofradiation exposure to unsuspectingworkers and members of the public. In1990, the Commission determined thatthe problem needed to be addressed anddirected a rulemaking to improveoversight of generally licensed devices.The proposed rule was published forpublic comment in 1991 (56 FR 67011,26 December 1991). In 1993, however,finalization of the rule was deferredbecause of resource constraints. Instead,the Commission directed the staff topursue alternatives. In 1995, theCommission approved formation of ajoint Agreement State—NuclearRegulatory Commission (NRC) WorkingGroup to review the regulation of alldevices containing licensed radioactivematerials to assess the currentregulatory program for these devicesand provide recommendations to theCommission.

The Working Group held its initialmeeting October 24–25, 1995, and asecond meeting on December 19–20,1995, in Rockville, Maryland. TheWorking Group members are RobertFree, Texas and Joel Lubenau, NRC, Co-chairs; Robin Haden, North Carolina,Martha Dibblee, Oregon; Rita Aldrich,New York (alternate); Lloyd Bolling,NRC and John Telford, NRC. JamesYusko, Pennsylvania, is serving asliaison to the Working Group for theConference of Radiation ControlProgram Directors. James Richardson,NRC Nuclear Safety Attache in Vienna,

Austria is serving as liaison for theInternational Atomic Energy Agency. Atits initial meeting, in addition to theWorking Group members, 28representatives of the metal recyclingand steel manufacturing industries,devices vendors and users, healthphysics consultants and governmentagencies attended. Minutes of the firstand second meetings of the WorkingGroup and other backgroundinformation are available for publicinspection and copying for a fee at theNRC Public Document Room, under thefile, ‘‘Review Group—RadioactiveDevices.’’

The public workshop is intended toprovide an opportunity for stakeholdersto have an input into the WorkingGroup assessment of the need forregulatory changes and development ofrecommendations, as needed, forregulatory options to improve controlsof licensed devices and assure theirproper disposal. A target date of May1996 has been set for the WorkingGroup to develop and finalize itsrecommendations.

For efficient conduct of the workshop,the meeting format will be a round tablediscussion among invitedrepresentatives from affected interests,e.g., the metal recycling industry andrecycled metal consumers, devicevendors and users, Federal and stateregulators and citizen groups. Theworkshop will be open to the public,and the public will be providedopportunities throughout the workshopto comment on the issues presented fordiscussion.

If the Working Group recommendschanges in NRC regulations and theCommission agrees, such changeswould be proposed through asubsequent NRC public rulemakingprocess.

Dated at Rockville, Maryland, this 28th dayof December 1995.

For the Nuclear Regulatory Commission.Malcolm R. Knapp,Deputy Director, Office of Nuclear MaterialsSafety and Safeguards.[FR Doc. 96–108 Filed 1–3–96; 8:45 am]BILLING CODE 7590–01–P

296 Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Proposed Rules



21 CFR Part 101

[Docket No. 95P–0197]

RIN 0910–AA19

Food Labeling: Health Claims; Oatsand Coronary Heart Disease

AGENCY: Food and Drug Administration,HHS.ACTION: Proposed rule.

SUMMARY: The Food and DrugAdministration (FDA) is proposing toauthorize the use, on food labels and infood labeling, of health claims on theassociation between oat products, i.e.,oat bran and oatmeal, and reduced riskof coronary heart disease (CHD). FDA isproposing this action in response to apetition filed by the Quaker Oats Co.(the petitioner). The agency hastentatively concluded that, based on thetotality of publicly available scientificevidence, diets high in oatmeal and oatbran and low in saturated fat andcholesterol may reduce the risk of CHD.DATES: Written comments by April 3,1996. The agency is proposing that anyfinal rule that may issue based upon thisproposal become effective upon itspublication in the Federal Register.ADDRESSES: Written comments to theDockets Management Branch (HFA–305), Food and Drug Administration,12420 Parklawn Dr., rm. 1–23,Rockville, MD 20857.FOR FURTHER INFORMATION CONTACT:Joyce J. Saltsman, Center for Food Safetyand Applied Nutrition (HFS–165), Foodand Drug Administration, 200 C St. SW.,Washington, DC 20204, 202–205–5916.


I. Background

A. The Nutrition Labeling andEducation Act of 1990

On November 8, 1990, the Presidentsigned into law the Nutrition Labelingand Education Act of 1990 (the 1990amendments) (Pub. L. 101–535). Thisnew law amended the Federal Food,Drug, and Cosmetic Act (the act) in anumber of important ways. One of themost notable aspects of the 1990amendments was that they confirmedFDA’s authority to regulate healthclaims on food labels and in foodlabeling. As amended by the 1990amendments, section 403(r)(1)(B) of theact (21 U.S.C. 343(r)(1)(B)) provides thata product is misbranded if it bears aclaim that characterizes the relationship

of a nutrient to a disease or health-related condition, unless the claim ismade in accordance with the proceduresand standards contained in regulationsadopted by FDA.

Under section 403(r)(3)(B)(i) of theact, the Secretary of Health and HumanServices (and, by delegation, FDA) shallissue regulations authorizing suchclaims only if he or she determines,based on the totality of publiclyavailable scientific evidence (includingevidence from well-designed studiesconducted in a manner which isconsistent with generally recognizedscientific procedures and principles),that there is significant scientificagreement, among experts qualified byscientific training and experience toevaluate such claims, that the claim issupported by such evidence.

Sections 403(r)(3)(B)(ii) and(r)(3)(B)(iii) of the act describe theinformation that must be included inany claim authorized under the act. Theact provides that the claim shall be anaccurate representation of thesignificance of the substance in affectingthe disease or health-related condition,and that it shall enable the public tocomprehend the information andunderstand its significance in thecontext of the total daily diet. Finally,section 403(r)(4)(A)(i) of the actprovides that any person may petitionFDA to issue a regulation authorizing ahealth claim.

The 1990 amendments, in addition toamending the act, directed FDA toconsider 10 substance-diseaserelationships as possible subjects ofhealth claims. One of the 10 substance-disease relationships was therelationship between dietary fiber andcardiovascular disease (CVD) (58 FR2552, January 6, 1993) (hereinafterreferred to as the 1993 dietary fiber andCVD final rule).

B. FDA’s ResponseIn the Federal Register of January 6,

1993 (58 FR 2478), FDA adopted a finalrule that implemented the health claimprovisions of the act (hereinafterreferred to as the 1993 health claimsfinal rule). In that final rule, FDAadopted § 101.14 (21 CFR 101.14),which sets out the circumstances inwhich a substance is eligible to be thesubject of a health claim (§ 101.14(b)),adopts the standard in section403(r)(3)(B)(i) of the act as the standardthat the agency will apply in decidingwhether to authorize a claim about asubstance-disease relationship(§ 101.14(c)), sets forth general rules onhow authorized claims are to be madein food labeling (§ 101.14(d)), andestablishes limitations on the

circumstances in which claims can bemade (§ 101.14(e)). The agency alsoadopted § 101.70 (21 CFR 101.70),which establishes a process forpetitioning the agency to authorizehealth claims about a substance-diseaserelationship (§ 101.70(a)) and sets outthe types of information that any suchpetition must include (§ 101.70(d)).These regulations became effective onMay 8, 1993.

In addition, FDA conducted anextensive review of the evidence on the10 substance-disease relationships listedin the 1990 amendments. As a result ofits review, FDA has authorized claimsthat relate to 8 of these 10 relationships.While the agency denied the use onfood labeling of health claims relatingdietary fiber to reduced risk of CVD (58FR 2552), it authorized a health claimrelating diets low in saturated fat andcholesterol and high in fruits,vegetables, and grain products thatcontain dietary fiber (particularlysoluble fiber) to a reduced risk of CHD,the most common, most frequentlyreported, and most serious form of CVD.

In denying the dietary fiber and CVDhealth claim, the agency stated that aproblem in determining whether there isa relationship between dietary fiber andheart disease is presented by the factthat dietary fiber is a diverse group ofchemical substances that may beassociated with different physiologicalfunctions (58 FR 2552 at 2572).Chemically and physiologically,cellulose, lignin, hemicellulose, pectin,and alginate (all relatively purified fibertypes) behave differently. Wheat bran,oat bran, and rice bran (allheterogeneous mixtures of fibers) arenot similar in composition. The agencyalso noted that it is very difficult tochemically analyze dietary fibercomponents, and that it is consequentlyhard to correlate the role of specificfiber components to health effects.

Based on its review of numerousauthoritative documents, includingFederal government reports and recentresearch on dietary fiber and CHD, andon its consideration of commentsreceived in response to its ‘‘HealthClaims; Dietary Fiber andCardiovascular Disease’’ proposed rule(56 FR 60582, November 27, 1991)(hereinafter referred to as the 1991dietary fiber and CVD proposal), FDAconcluded that the publicly availablescientific evidence supports anassociation between diets low insaturated fat and cholesterol and high infruits, vegetables, and grain products,foods that are low in saturated fat andcholesterol and that are good sources ofdietary fiber, and reduced risk of heartdisease (58 FR 2552 at 2572). The

297Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Proposed Rules

agency further stated that, although thespecific roles of the numerouspotentially protective substances insuch plant foods are not yet understood,populations with diets rich in thesefoods experience many healthadvantages, including lower rates ofheart disease. The agency noted,however, that there was no scientificagreement as to whether the observedprotective effects against heart diseaseare the result of a combination ofnutrient components of the foods,including soluble fiber; of the othercomponents of soluble fiber-rich diets(for example, potassium andmagnesium); of the displacement ofsaturated fat and cholesterol from thediet; or of non-nutritive substances inthese foods. For all these reasons, theagency stated that the fact that thesefoods contain dietary fiber, particularlysoluble fiber, can serve as a usefulmarker for identifying those fruits,vegetables, and grain products that,when added to diets low in saturated fatand cholesterol, may help in reducingblood LDL-cholesterol levels (58 FR2552 at 2572). Thus, the agencyauthorized a health claim in § 101.77(21 CFR 101.77) on the associationbetween diets low in saturated fat andcholesterol and high in vegetables, fruit,and grain products that contain solublefiber and a reduced risk of heart disease.

In the 1993 dietary fiber and CVDfinal rule, in response to a commentregarding the apparenthypocholesterolemic properties ofspecific food fibers, e.g., oats, FDAagreed that the effectiveness of naturallyoccurring fibers in foods may bedocumented for specific food products(e.g., oat brans meeting specifiedparameters) (58 FR 2552 at 2567).Further, the agency stated that ifmanufacturers can document, throughappropriate studies, that dietaryconsumption of the soluble fiber in theirparticular food has the effect of loweringlow density lipoprotein cholesterol(LDL)-cholesterol, and has no adverseeffects on other heart disease risk factors(e.g., high density lipoprotein (HDL)-cholesterol), they should petition for ahealth claim for their particular product.

The present rulemaking is in responseto a manufacturer’s health claimpetition on the relationship between aspecific fiber-containing food, oats, andheart disease.

II. Petition for Oat Products andReduced Risk of CHD

A. BackgroundOn March 22, 1995, the Quaker Oats

Co. submitted a health claim petition toFDA requesting that the agency

authorize a health claim on therelationship between consumption ofoat products and the risk of CHD (Ref.1). On June 29, 1995, the agency sent thepetitioners a letter stating that it hadcompleted its initial review of thepetition, and that the petition would befiled in accordance with section403(r)(4) of the act (Ref. 2). In thisdocument, the agency will considerwhether a health claim on this food-disease relationship is justified underthe standard in section 403(r)(3)(B)(i) ofthe act and § 101.14(c) of FDA’sregulations. The following is a review ofthe health claim petition.

B. Preliminary Requirements

1. The Substances Are Associated Witha Disease for Which the U.S. PopulationIs at Risk

CHD remains a major public healthproblem and the number one cause ofdeath in the United States. Despite thedecline in deaths from CHD over thepast 30 years, this disease is stillexacting a tremendous toll in morbidityand mortality (Refs. 3 and 4). There aremore than 500,000 deaths each year forwhich CHD is an underlying cause, andanother 250,000 deaths for which CHDis a contributing cause. About 20percent of adults (male and female;black and white) ages 20 to 74 yearshave blood total cholesterol (or serumcholesterol) levels in the ‘‘high risk’’category (total cholesterol greater than(>) 240 milligrams (mg) per (/) deciliter(dL) and LDL-cholesterol greater than160 mg/dL) (Ref. 47). Another 31percent have ‘‘borderline high’’cholesterol levels (total cholesterolbetween 200 and 239 mg/dL and LDL-cholesterol between 130 and 159 mg/dL)in combination with two or more riskfactors.

CHD has a significant effect on health-care costs. In 1985, total direct costsrelated to CHD were estimated at $13billion, and indirect costs from loss ofproductivity due to illness, disability,and premature deaths from this diseasewere an estimated $36 billion (Ref. 3).

Based on these facts, FDA concludesthat, as required in § 101.14(b)(1), CHDis a disease for which the U.S.population is at risk.

2. The Substances Are Food

Oatmeal and oat bran are foods andare used as ingredients in other foods.These oat products contribute taste,aroma, or nutritive value that areretained when consumed at levelsnecessary to justify the petitioned claim.

Therefore, FDA tentatively concludesthat these substances satisfy the

preliminary requirements of§ 101.14(b)(3)(i).

3. The Substances Are Safe

Oatmeal and oat bran are safe andlawful under the act. Both substanceshave a long history of use as food andfood ingredients and are generallyrecognized as safe under § 170.30(d) (21CFR 170.30(d)).

Thus, FDA tentatively concludes thatthe petitioner has satisfied therequirement of § 101.14(b)(3)(ii).

III. Review of Scientific Evidence

A. Basis for Evaluating the RelationshipBetween Oats and CHD

In the 1991 dietary fiber and CVDproposal, the agency set forth the basisof the relationship between dietary fiberand CVD (56 FR 60582 at 60583). In thatdocument, the agency stated that thereare many risk factors that contribute tothe development of CVD, andspecifically CHD, the most serious formof CVD and the leading cause ofdisability. The agency also stated thatthere is general agreement that elevatedblood cholesterol levels are one of themajor ‘‘modifiable’’ risk factors in thedevelopment of CVD and, morespecifically, CHD. The Federalgovernment and other reviews haveconcluded that there is substantialepidemiologic and clinical evidencethat high blood levels of totalcholesterol and LDL-cholesterol are acause of atherosclerosis (inadequatecirculation of blood to the heart due tonarrowing of the arteries) and representmajor contributors to CHD (56 FR 60727at 60728, November 27, 1991; Refs. 3through 6). Factors that decrease totalcholesterol and LDL-cholesterol willalso tend to decrease the risk of CHD.High intakes of saturated fat and, to alesser degree, of dietary cholesterol areassociated with elevated blood total andLDL-cholesterol levels (56 FR 60727 at60728). Thus, it is generally acceptedthat total cholesterol and LDL-cholesterol levels can predict the risk ofdeveloping CHD, and that dietaryfactors affecting blood total cholesterollevels affect the risk of CHD (Refs. 3through 6).

When considering the effect that thediet or components of the diet have onblood (or serum) lipids, it is alsoimportant to consider the effect thatthese factors may have on blood levelsof HDL-cholesterol. Evidence fromepidemiologic studies show thatelevated levels of HDL-cholesterol areinversely related to the incidence ofatherosclerosis and thus CHD (Ref. 3).HDL- cholesterol is involved in theregulation of cholesterol transport out of


cells and to the liver from which it isultimately excreted (Refs. 3 and 48).Therefore, HDL-cholesterol has aprotective effect in the body by helpingto lower total cholesterol. Dietary factorsthat help to significantly lower totalcholesterol should, themselves, not havean adverse affect on the level of HDL-cholesterol.

For these reasons, FDA limited itsreview of the relationship betweenoatmeal and oat bran and CHD to effectsof these food components on blood lipidlevels and on the risk of developingCHD. The agency based its evaluation ofthis relationship on changes in totalblood and LDL-cholesterol from dietaryintervention with oatmeal and oat branand with oat- containing products. Thisfocus is consistent with that used by theagency in response to the 1990amendments in deciding on the dietarysaturated fat and cholesterol and CHDhealth claim (§ 101.75) (56 FR 60727and 58 FR 2739, January 6, 1993) andthe fruits, vegetables, and grain productsand CHD claim (§ 101.77) (56 FR 60582and 58 FR 2552).

B. Review of Scientific Evidence

1. Evidence Considered in Reaching theDecision

The petitioner submitted scientificstudies evaluating the relationshipbetween oat bran and oatmeal,consumed as foods and as ingredients infoods, and serum lipid levels (Ref. 1).These studies were conducted between1980 and 1995. The petition included areview of these studies and a summaryof the evidence. Most of the studies thatwere published before 1993 had beenreviewed by the agency in the proposedand final rules on dietary fiber and CVD(56 FR 60582 at 60596 and 58 FR 2552at 2581). A review of the studiesevaluating the effect of oat products onblood lipids submitted by the petitioner,including those previously reviewed bythe agency, is provided in Table 1. Inaddition, in its review of the petition,the agency considered the conclusionsof the Life Sciences Research Office(LSRO) of the Federation of AmericanSocieties for Experimental Biology(FASEB) (Ref. 7) relative to studiesinvolving oats.

2. Criteria for Selection of HumanStudies

The criteria that the agency used toselect pertinent studies were that thestudies: (1) Present data and adequatedescriptions of the study design andmethods; (2) be available in English; (3)include estimates, or enoughinformation to estimate, soluble dietaryfiber intakes; (4) include direct

measurement of blood total cholesteroland other blood lipids related to CHD;and (5) be conducted in persons whorepresent the general U.S. population(adults with blood total cholesterollevels less than (<) 300 mg/dL).

In selecting human for review, theagency excluded studies that werepublished in abstract form because theylacked sufficient detail on study designand methodologies, and because theylacked necessary primary data. Studiesusing special population groups, such asinsulin-dependent diabetics,individuals with very high serumcholesterol (mean greater than 300 mg/dL), children withhypercholesterolemia, and persons whohad already experienced a myocardialinfarction, were also generally notweighed heavily because of questionsabout their relevance to the generalhealthy U.S. population.

3. Criteria for Evaluating theRelationship Between Oat Products andCHD

FDA applied the same criteria inevaluating the relationship between oatproducts and CHD that it did inevaluating the relationship betweendietary fiber and CVD in the 1991dietary fiber and cardiovascular diseaseproposal (56 FR 60582 at 60587). Thecriteria that the agency used inevaluating these studies included: (1)Reliability and accuracy of the methodsused in nutrient intake analysis,including measurements of total dietarysoluble fiber and total dietary fiber; (2)available information on the solublefiber or beta-glucan (β-glucan, thepredominant soluble fiber in oats)content of the oat products and controlfood; (3) measurement of studyendpoints (i.e., total cholesterol, LDL-cholesterol, and HDL-cholesterol); and(4) general study design characteristics.The characteristics of general studydesign included randomization ofsubjects, appropriateness of controls,selection criteria for subjects, attritionrates (including reasons for attrition),potential for misclassification ofindividuals with regard to dietaryintakes, presence of recall bias andinterviewer bias, recognition andcontrol of confounding factors (forexample, intake of saturated fat andother nutrients, monitoring bodyweight, and control of weight loss),appropriateness of statistical tests andcomparisons, and statistical power ofthe studies. The agency consideredwhether the intervention studies that itevaluated had been of long enoughduration to reasonably ensurestabilization of blood lipids (greaterthan or equal to 3 weeks duration).

Finally, the agency considered it highlydesirable if the available information ona study included information on thetotal dietary fiber and total dietarysoluble fiber content of baseline,treatment, and control diets and on thenutrient intakes of the subjects duringthe course of the study.

As stated above, dietary saturated fatand cholesterol affect blood lipid levels(Refs. 4 through 6). Previous reviewershave generally concluded that, inpersons with relatively higher baselinelevels of blood cholesterol, responses totreatment tend to be of a largermagnitude than is seen in persons withmore normal blood cholesterol levels(56 FR 60582 at 60587 and Refs. 4through 6). To take into account thesefactors, FDA separately evaluatedstudies on mildly to moderatelyhypercholesterolemic individuals(persons with elevated blood totalcholesterol levels of 200 to 300 mg/dL)and studies on normocholesterolemicindividuals (persons with normal bloodtotal cholesterol levels (< 200 mg/dL)).FDA also separately evaluated studies inwhich oat products’ effects wereevaluated as part of a ‘‘typical’’American diet (approximately 37percent of calories from fat, 13 percentof calories from saturated fat, and morethan 300 mg of cholesterol daily) andstudies in which the test protocolsincorporated a Step I or similar (e.g.,American Heart Association (AHA))dietary regimen (less than 30 percent ofcalories from fat, less than 10 percent ofcalories from saturated fat, and less than300 mg of cholesterol daily). Moreover,to ensure that results were not reflectiveof transient changes, such as failure ofblood cholesterol levels to stabilize tothe dramatic changes in dietary patternsthat occur with the introduction of largeamounts of test substances, FDA gaveless weight to studies with treatmentperiods of less than 3 weeks than it gaveto studies of longer duration.

C. Summary of Human StudiesFDA’s review of the 37 human studies

on oat bran and oatmeal and serumcholesterol (Refs. 8 through 32, 34through 39, and 41 through 46) thatwere submitted with the petition issummarized in detail in Table 1. Theresults of a metaanalysis (Ref. 33) thatincluded a number of the oat studies isdiscussed in section III.C.5. of thisdocument.

1. Hypercholesterolemics: ‘‘Typical’’ or‘‘Usual’’ Diets

Eight of the studies (Refs. 8, 12, 20,21, 25, 35, 44, and 45) show arelationship between consumption ofoat products and reduced serum


cholesterol in hypercholesterolemicsubjects consuming a typical Americandiet. Anderson et al. (Ref. 8) in ametabolic ward study reportedsignificantly lower total (12.8 percent)and LDL-cholesterol (12.1 percent) inmale subjects consuming 110 grams (g)(7.6 g soluble fiber, 13.4 g total dietarysoluble fiber) oat bran for 21 days (d).A wheat group, which consumed 40 gof wheat bran (1.3 g soluble fiber, 7.8 gtotal dietary soluble fiber), experiencednonsignificant decreases in total (4.4percent) and LDL-cholesterol (5.5percent). There was no significantchange in HDL-cholesterol in eithergroup. Both groups experienced asignificant decrease in weight (1kilogram (kg)) compared to their meanbaseline weight values. There was nodifference in weight loss between theoat and wheat groups.

Braaten et al. (Ref. 12) evaluated theeffects on blood cholesterol levels ofinstant oat gum (7.2 g; 5.8 g β-glucan),an extract of oat bran comprised ofalmost entirely β-glucan soluble fiberplus some trace elements, or a placebo(maltodextrin) when mixed with anoncarbonated diet fruit drink (250milliliters (mL)) and consumed twice aday at each main meal for 4 weeks byhypercholesterolemic subjects. Resultsshowed significantly lower totalcholesterol by 9.2 percent (p<0.0001)and LDL-cholesterol by 10 percent(p<0.001) in the oat gum groupcompared to baseline.

Hegsted et al. (Ref. 20) evaluated thehypocholesterolemic properties of ricebran and oat bran inhypercholesterolemic subjects. Using across-over design, subjects consumedtreatment diets providing 100 g/d of ricebran and oat bran for 3-week periodseach. A control diet, which consisted ofthe treatment diet but with wheat flourand no bran, was consumed for 2 weeksbefore each bran period. The resultsshowed significant reductions in totalcholesterol with both the rice and oatbran diets compared to the control diet(p<0.001). During the two oat testperiods, serum cholesterol was reducedabout 10 percent (phase 1) and 4 percent(phase 2) compared to serum cholesterolvalues during the control period. Oatbran intervention also resulted insignificant reductions (about 13 percentin phase 1 and about 7 percent in phase2) in LDL-cholesterol. Rice bran was aseffective in lowering serum cholesterolas oat bran.

Kahn et al. (Ref. 21) evaluated thehypocholesterolemic properties of fouroat bran muffins/d (80 g total daily oatbran) in hypercholesterolemic subjectsrandomized into immediate oat branintervention and delayed oat bran

intervention groups. The delayed oatbran intervention group served as thecontrol group. After correcting for thetime delay of the study, the resultsshowed that oat bran dietaryintervention significantly reduced totalcholesterol by almost 8 percent(p<0.02), LDL-cholesterol by about 10percent (p<0.02), and HDL-cholesterolby almost 1 percent (p<0.03) frombaseline.

Kestin et al. (Ref. 25) reporteddecreased levels of total cholesterol (4.9percent) and LDL-cholesterol (6.8percent) in hypercholesterolemicsubjects consuming 95 g/d (5.8 g solublefiber) oat bran. These values weresignificantly lower than those observedin subjects consuming rice bran (p<0.01)and wheat bran (p<0.001). HDL-cholesterol increased in all groups. Theoat bran was incorporated into breadand muffins.

Spiller et al. (Ref. 35) reportedsignificantly lower total cholesterol (3.7percent) and LDL-cholesterol (6.6percent), and a nonsignificant increasein HDL-cholesterol (1 percent), inhypercholesterolemic subjectsconsuming 77 g/d (5 g soluble fiber) oatbran. Changes in total cholesterol wereexperienced within the first 14 dayswith no significant changes occurringbetween days 14 and 21 of the study.The oat bran was mixed with water andconsumed before meals. The caloriesprovided by the oat bran replaced aboutan equal amount of carbohydratecalories in the subjects’ diets.

Whyte et al. (Ref. 45) reporteddecreases in total cholesterol of 3.1percent (p<0.01) and LDL-cholesterol of5.7 percent (p<0.01) compared tobaseline values afterhypercholesterolemic subjectsconsumed 123 g (10.3 g soluble fiber)oat bran/day for 4 weeks. The oat branwas consumed as a breakfast cereal.Consumption of total fat and saturatedfat remained the same during the testperiod.

Van Horn et al. (Ref. 44) reportedreductions in total cholesterol (about 6.2percent) and LDL-cholesterol (9.2percent) levels, compared to a controlgroup, in subjects consuming 57 g ofinstant oats daily for 8 weeks. Thecontrol group experienced decreases intotal cholesterol and LDL-cholesterol of1.4 percent and 3.7 percent,respectively. The differences betweenthe oat and control groups weresignificant (p<0.05). The authorsreported greater reductions in totalcholesterol in those individuals whohad a baseline cholesterol level abovethe baseline median cholesterol level of243 mg/dL. The authors also reportedsignificantly different dietary intakes

after 4 weeks of intervention for anumber of nutrients in the oat group’sdiet compared to that of the controlgroup. After 4 weeks of intervention, theoat group had higher intakes of solubleand total fiber and lower intakes ofsaturated fat and cholesterol. Ametaanalysis conducted by Ripsin et al.(Ref. 33), which is discussed in sectionIII.C.5. of this document, evidences thatthe changes in dietary fats andcholesterol intake in this study did notappear to be responsible for the drop inserum cholesterol levels, thussuggesting that oat bran and oatmealwere responsible for the observed effect.

Results of four studies (Refs. 18, 26,34, and 38) were inconclusive regardingthe relationship between oat bran oroatmeal consumption and reducedserum lipids. Gormley et al. (Ref. 18)reported no effect of oatmeal porridgeon serum cholesterol or HDL-cholesterolin hypercholesterolemic men andnormocholesterolemic women. Theauthors stated that dietary intakes weremonitored, but the subjects’ dietaryintakes were not reported. The amountof total dietary fiber and soluble fiber inthe total diet and oatmeal porridge werenot provided. Insufficient dietarycontrols make the results of this studydifficult to interpret.

Leadbetter et al. (Ref. 26) reported nosignificant effect of increasing intakes ofβ–glucan from oat bran on serumcholesterol in 40 hypercholesterolemicmen and women. Subjects consumed 0,30, 60, or 90 g oat bran/day for 1-monthintervals. The authors stated that theNew Zealand oats used in this studywere lower in soluble fiber (3.7 to 4.2percent β–glucan) than oat bran used instudies that showed a significantlowering of serum cholesterol with oatbran supplementation.

Saudia et al. (Ref. 34) reported nosignificant difference in serumcholesterol levels inhypercholesterolemic subjectsconsuming oat bran daily for 93 days.The subjects consumed 3 ounces (oz)(about 84 g) of oat bran daily with theirusual diet for 3 months. The subjects’total dietary intake, including theirintake of total and saturated fat andcholesterol, before and during the trialwere not reported. The authors statedthat the subjects may have changed theirdiets during the test period because thestudy took place over summer monthsand because of an increased awarenessby the subjects of risk-reducing behaviorand lifestyles. The study also lacked acontrol group, thus making the results ofthis study difficult to interpret.

Torronen et al. (Ref. 38) showed smallreductions in serum cholesterol, LDL-,and HDL-cholesterol in an oat bran


group compared to baseline, but thesereductions were not statisticallysignificant. An oat bran concentrate wasprepared and incorporated into a loaf ofbread (11.2 g β-glucan per loaf). Acontrol bread was made with wheatflour. The use of oat bran concentrate inthis study does not provide evidence foran effect of oat bran per se on serumcholesterol because the authors statethat the method of concentrating andprocessing the oat bran and β-glucanmay have affected the effectiveness ofthe β-glucan in lowering serumcholesterol. Animal studies by theseauthors confirmed that the method ofproducing the oat bran concentrateproduced significantly weakerhypocholesterolemic responses thanuntreated oat bran or concentrates withhigher viscosities.

One study (Ref. 32) showed equivocalresults in reducing total cholesterol.Poulter and coworkers reported smallbut significant reductions in serumcholesterol and LDL-cholesterol inhypercholesterolemic subjectsconsuming 50 g of oat cereal comparedto subjects consuming the same amountof cereal without oats. Subjects withbaseline cholesterol values greater than231 mg/dL experienced the mostsignificant reduction in serumcholesterol. However, the results of thisstudy are difficult to interpret becausesome subjects made changes in theirdiets after starting the trial. There wasa significant reduction in total energyfrom fat compared to baseline intakes.Similarly, the ratio of polyunsaturatedfat to saturated fat in the subjects’ dietalso fell significantly during the oatperiod.

2. Hypercholesterolemics: Low Fat DietsResults of six studies (Refs. 11, 15, 23,

24, 39, and 43) showed a cholesterolreducing effect of oatmeal or oat bran inhypercholesterolemic subjects whoconsumed the oat products as part of alow fat diet. Beling et al. (Ref. 11)divided the subjects into 3 groups.Group 1 consumed their regular (not fatmodified) diet. Groups 2 and 3consumed an AHA fat modified diet.There were significantly lower total andLDL-cholesterol levels after 4 weeks ingroups 2 and 3. In groups 2 and 3, totalcholesterol decreased by 10 percent and11.8 percent, and LDL-cholesteroldecreased by 11.5 percent and 11.8percent, respectively. From weeks 5 to8, group 2 continued on the AHA diet,while group 3 consumed the AHA dietplus 56 g oat bran cereal/day. At the endof week 8, total cholesterol haddecreased by 2.3 percent, 8.4 percent,and 12.2 percent from baseline levels forgroups 1, 2, and 3, respectively. The

mean total cholesterol level of the oatgroup was significantly different fromthe control group and the group thatconsumed only the AHA diet (p<0.05).At week 8, LDL-cholesterol levels were10.1 percent below baseline for group 2and 14.9 percent below baseline forgroup 3 (p<0.05). HDL-cholesteroldecreased 1 percent, 3 percent, and 8percent in groups 1, 2, and 3,respectively, at 8 weeks. The differencesin HDL-cholesterol between the 3groups were not significant. Thedifferences in HDL-cholesterol in groups2 and 3 were significantly different fromthe control (p<.05). Groups 2 and 3experienced weight loss, but thedifferences between these groups werenot significant.

Davidson et al. (Ref. 15) evaluated thehypocholesterolemic effects ofincreasing amounts of β-glucan from oatbran and oatmeal inhypercholesterolemic subjectsconsuming a Step 1 diet. The resultsshowed that groups consuming dietscontaining 3 g/d or more of β-glucanexperienced significant declines inblood total cholesterol (7 to 10 percent)and LDL-cholesterol (10 to 16 percent)compared to baseline. Blood totalcholesterol levels of groups consumingdiets containing 1 to 2.4 g daily of β-glucan did not differ significantly frombaseline.

Turnbull and Leeds (Ref. 39)evaluated the effects of oats and wheaton total cholesterol inhypercholesterolemic subjectsconsuming a low fat diet. During a 1-month run-in period (baseline), thesubjects consumed the low fat diet aloneand experienced a 7.6 percent (notsignificant) reduction in totalcholesterol. The subjects were thenrandomized to receive 150 g/d of oats orwheat while consuming the low fat dietfor another month. At the end of themonth, subjects crossed over to theother grain supplement. The results ofthis study showed that during the oatperiod, subjects experienced significantreductions in total cholesterol (p<0.03)and LDL-cholesterol (p<0.002)compared to baseline despite anincrease in energy and total fat intake.There were no significant changes intotal cholesterol and LDL-cholesterolwhen subjects consumed the wheat diet.HDL-cholesterol showed anonsignificant increase from baselineduring the oat period and no changeduring the wheat period.

In a large, controlled clinical trial,Van Horn et al. (Ref. 43) instructedmoderately hypercholesterolemicsubjects (mean total cholesterol of 208mg/dL) on the AHA low fat diet. Thesubjects consumed the AHA diet alone

for 6 weeks, during which time theyexperienced significantly reduced totalcholesterol compared to baseline. Thesubjects were then randomized to one of3 groups: two oat groups (2 oz of oatbran or oatmeal daily) or the controlgroup (AHA diet only) for another 6weeks. At the end of the interventionperiod, subjects consuming 56 g of oatbran and oatmeal had total cholesterolvalues 8 percent and 9.3 percent lowerthan baseline, respectively. The controlgroup experienced a 4.5 percentreduction in serum cholesterol. At theend of the study, the differences in totalcholesterol levels for all three groupscompared to baseline levels werestatistically significant (p<0.05), butthere was no significant differencebetween the oat groups and the control.Both the oat bran and the oatmealgroups experienced a modest (3 percent)reduction in serum cholesterol beyondthat achieved by the low fat diet alone.

The modest effect of oat bran andoatmeal on serum cholesterol in thisstudy may have been affected by thesubjects’ cholesterol levels beforedietary intervention. The subjects’ meancholesterol level was 208.4 mg/dL. Afterdietary intervention, the meancholesterol levels were 201 mg/dL(control), 196.4 mg/dL (oat bran group),and 195.2 mg/dL (oatmeal group).Studies have shown that subjects withhigher initial blood cholesterol levelsusually experience the most reductionin total cholesterol from oat intervention(Refs. 6 and 33). Thus, because of thesubjects’ relatively low cholesterollevels at the initiation of the oatsintervention period, the differencesamong the groups may have beenminimized.

Keenan et al. (Ref. 23) reportedvariable responses in serum lipidsdepending on the order of feeding of thediets supplemented with 56 g of oatbran or wheat cereal during an 18-weekdouble-blind study with crossover.Subjects consumed a Step 1 diet duringthe first period (6 weeks) and then wererandomized to 1 of 3 groups. Thecontrol group consumed a Step 1 dietfor another 12 weeks. The two testgroups consumed wheat cereal or oatcereal for 6 weeks before crossover tothe other test cereal for another 6 weeks.Interpretation of results wascomplicated by the fact that the controlgroup showed an initial decline inblood cholesterol levels followed by areturn to baseline at the end of thestudy. Only the oat groups maintainedreduced serum cholesterol and LDL-cholesterol throughout the test periods.When compared to the control andwheat groups, these reductions weresignificant (p<.01).


Kelley et al. (Ref. 24) reportedsignificantly reduced serum cholesterol(p<0.04) and LDL-cholesterol (p<0.05) atthe end of 4 weeks in subjects who wereparticipating in a program of supervisedaerobic exercises. The subjectsconsumed about 94 g of oat bran dailyas part of their usual low fat, lowsaturated fat diets. This study lacked anappropriate placebo control.

Six studies (Refs. 13, 16, 27, 28, 36,and 41) gave inconclusive resultsregarding the relationship between oatconsumption and reduced serum lipidsin hypercholesterolemic subjectsconsuming low fat diets. In a study byBremer et al. (Ref. 13), subjectsconsumed either oat or wheat bread(about 8 slices/day) in place of othercarbohydrate foods as part of their AHAphase II diet (total fat 25 to 30 percentof energy, saturated fat <8 percent ofenergy, polyunsaturated fat 5 to 10percent of energy, cholesterol <250 mg/day). Subjects had a mean intake of 44.6g/day of oat bran (range of 34.2 to 68.4g/day). The study showed no significantdifferences in total serum cholesterol orLDL-cholesterol between the period inwhich the subjects consumed oat breadand the period in which they consumedwheat bread. However, the lack of anobserved effect on serum cholesterolfrom oat bran could be attributable tothe lower soluble fiber content of theNew Zealand oat bran used in this studycompared to oat bran used in otherstudies.

Demark-Wahnefried et al. (Ref. 16)evaluated the hypocholesterolemicproperties of oat bran inhypercholesterolemic subjects followingone of four dietary protocols for 12weeks: Step 1 diet alone, Step 1 dietplus added soluble fiber from 50 g of oatbran, regular diet plus 50 g of oat bran,and regular diet plus 42 g of processedoat bran. The results of this studyshowed significant reductions (p<0.05)in serum cholesterol in all diet groups.The serum cholesterol levels of groupsconsuming diets containing the highersoluble fiber (approximately 4 g addedsoluble fiber daily) did not differ fromgroups on a dietary regimen modifiedonly in fat and cholesterol content.Variable weight loss was reportedamong the groups, and dietary changesin all groups confound the results of thisstudy.

In a study by Lepre and Crane (Ref.27), subjects received a prescribed lowfat diet for 8 weeks before beingrandomly assigned to either the oat orwheat group. Subjects consumed 2 oatbran muffins (60 g of oat bran, 3.2 gsoluble fiber) or 2 wheat bran muffins(60 g wheat bran) daily for 8 weeks. Atthe end of the first 8-week test period,

subjects crossed over to the other testgroup for another 8 weeks. The resultsshowed small, nonsignificant reductionsin serum cholesterol (2.2 percent) andLDL-cholesterol (3.1 percent) and anonsignificant increase in HDL-cholesterol (3.0 percent) during the oatbran period compared to diet onlyperiod. During the wheat bran period,there was a nonsignificant increase intotal cholesterol, LDL-cholesterol, andthe ratio of LDL- to HDL-cholesterol(LDL:HDL) and a nonsignificantdecrease in HDL-cholesterol. The resultsof this study were confounded becausesubjects made significant dietarychanges during the diet only and the oatbran periods. The subjects were awareof their hyperlipidemias and werealready on a low fat diet before the startof this study. They also knew inadvance which days they were requiredto record their dietary intake. Theintakes of dietary cholesterol andsaturated fat were significantly less, anddietary fiber intake was significantlymore, during the oat bran periodcompared to the diet only period. Theresults of this study, therefore, areinconclusive for an effect of oat bran onserum cholesterol.

Mackay and Ball (Ref. 28) evaluatedthe hypocholesterolemic properties of55 g each of low-fiber and high-fiber oatbran (New Zealand cultivars) and ofbeans in hypercholesterolemic subjectsconsuming a moderately low fat diet.The oat bran used in this study wasspecially formulated to provide specificamounts of β-glucan. The low-fiber oatbran provided 1.9 g β-glucan, and thehigh-fiber oat bran provided about 3 gβ-glucan. The results of this studyshowed no significant changes in serumcholesterol or LDL-cholesterol from anyof the test substances. HDL-cholesterol,however, increased in all groupscompared to baseline values, and theseincreases were statistically significant(p<0.05). The energy intake on the high-fiber oat bran diet was significantlyhigher than that of the low-fat dietalone; however, there was no reportedchange in body weights. This studylacked a placebo control which makesthe study difficult to interpret. Also, thesource of this oat bran, a New Zealandcultivar, may have contributed to thelack of a hypocholesterolemic responseto oat bran in this study (see Refs. 13and 26).

Stewart et al. (Ref. 36) reported nosignificant differences in serumcholesterol, LDL-, or HDL-cholesterol insubjects consuming an oat-free, low fatdiet or a low fat diet with 50 g/d of oatbran for 6 weeks each. However, thesubjects’ compliance with the requireddietary protocol in this study was poor.

The authors reported a wide variabilityamong the subjects’ diets at baseline aswell as a variability in the intake of oatbran. Moreover, both processed andunprocessed New Zealand oat branswere used in this study. As stated in theprevious paragraph, the type of oat brancultivar used, and the method ofprocessing the oat bran, may haveaffected the results of this study.

Uusitupa et al. (Ref. 41) evaluated thehypocholesterolemic effects of a β-glucan-enriched oat bran and regularwheat bran in hypercholesterolemicsubjects consuming an AHA Step 1 diet.Baseline serum cholesterol values weredetermined during a 4-week run-inperiod when the subjects consumed theAHA Step 1 diet with no bran. Thesubjects were then randomized into twogroups to receive the β-glucan-enrichedoat bran or regular wheat bran for an 8-week test period. The brans wereprovided in sachets (62 g/sachet), andthe subjects instructed to increase theirdaily consumption of bran in a step-wise approach until they consumed theentire contents of the sachet or untilthey reached the highest tolerableamount. The mean intake of oat branduring the test period was 50 g. At theend of 4 weeks of bran intervention,there was a significant reduction inserum cholesterol in the oat bran groupcompared to baseline. By the end of 8weeks, however, the differences were nolonger significant. There was no changein LDL-cholesterol in the oat bran groupafter 4 weeks, but a small,nonsignificant reduction (about 3percent) after 8 weeks. There was asmall, nonsignificant increase in serumcholesterol in the wheat bran group. Theresults of this study were difficult tointerpret because subjects did notadhere to the reduced fat diet and failedto consume the required amount ofbran.

Two studies (Refs. 10 and 46) showedequivocal results in reducing totalcholesterol. Bartram et al. (Ref. 10)evaluated the effect of oat bran mueslicereal on serum cholesterol in 13 menand women who had been on a lowcholesterol diet for 6 months. Thesubjects consumed 60 g of oat muesli(made with lowfat milk and 120 g ofbananas, grapes, and apples) for 3weeks. The results of this study showeda significant reduction in serumcholesterol (8–10 percent) (p<0.01) andLDL-cholesterol (p<0.05) during the oatcereal period. However, the results aredifficult to interpret because the fruitsconsumed with the muesli cereal mayhave contributed to the observedreduction in serum cholesterol.

Zhang et al. (Ref. 46) compared thehypocholesterolemic properties of oat


bran (118 g) with wheat flour using acrossover design. The subjectsconsumed one of the test substances aspart of a low fiber base diet for 3 weeksbefore crossover to the other testsubstance. During the oat period, serumcholesterol was significantly lower thanduring the wheat flour period. Theresults of this study are difficult tointerpret because all subjects hadileostomies (i.e., an opening from theileum through the abdominal wall,permitting drainage of the contents ofthe small intestine) and the mechanismby which oat bran lowers serum lipidsin this group may not apply to thegeneral population.

3. Normocholesterolemics: ‘‘Typical’’ or‘‘Usual’’ Diets

The results of two studies (Refs. 17and 29) support a cholesterol loweringeffect of oat bran or oatmeal in subjectswith normal serum cholesterol values. Athird study (Ref. 14) showed evidence ofthe cholesterol-lowering effects of oatbran postprandially.

Gold and Davidson (Ref. 17) reporteda significant (p<0.05) reduction in totalcholesterol (5.3 percent) and LDL-cholesterol (8.7 percent) compared tobaseline measures innormocholesterolemic subjectsconsuming 2 oat bran muffins/d for 4weeks. The oat bran muffins provided atotal of 34 g oat bran. There were nodata given on the subjects’ dietaryintake before or during the test period.

Marlett et al. (Ref. 29) studied themechanism of serum cholesterolreduction by oat bran using a singleisotope to determine bile acid kinetics.During the first month, normo-cholesterolemic subjects consumed alow fiber control diet provided in ametabolic unit. During the secondmonth, this same diet wassupplemented with 100 g of oat bran.The results showed significantlylowered serum cholesterol compared tobaseline values during both periods.Serum cholesterol on the low fiber dietwas reduced 14 percent (p<0.01) and onthe oat bran diet 22 percent (p<0.01)compared to baseline values. Serumcholesterol during the high fiber periodwas also significantly lower than that ofthe low fiber period (an additionaldecrease of 9 percent).

Cara et al. (Ref. 14) evaluated theeffects of oat bran and other high fiber-containing foods on postprandiallipemia in 6 normocholesterolemic men.The subjects consumed, on separatedays, a low fiber (control) meal or a highfiber test meal enriched with 10 g of oatbran, rice bran, wheat fiber, or wheatgerm. The results of this study showedthat the oat bran test meal produced the

greatest reduction in serum cholesterolcompared to the other fibers tested. Thedifferences between serum cholesterollevels in the oat bran test and those inthe control test remained significant(p<0.05) 7 hours postprandial. Theresults of this study support asignificant short term effect on serumcholesterol, but they do not address longterm effectiveness of oat bran inmaintaining reduced serum cholesterollevels.

The results of one study (Ref. 31) wasinconclusive for an effect of oatmeal onserum cholesterol in normo-cholesterolemic subjects. O’Kell andDuston (Ref. 31) reported no significantdifferences in serum cholesterol andHDL-cholesterol in subjects consuming1/2 to 3/4-cup of oatmeal daily for aseries of 3-month test periods over thecourse of a year. After each 3-monthoatmeal period, the subjects consumedtheir usual diets without oatmeal for 3months. The results of this study weredifficult to interpret because thesubjects’ dietary intakes before andduring the study were not reported, andsubject compliance was not adequatelyaddressed.

One study (Ref. 37) showed equivocalresults in reducing total cholesterol.Swain et al. evaluated thehypocholesterolemic effects of oat branand wheat bran in a group of youngfemales with normal serum cholesterol(mean total cholesterol of 185 mg/dL)using a double-blind, cross-over studydesign. The subjects consumed anaverage of 87 g oat bran and 93 g wheatbran/day during each 6-week testperiod. The authors reportedstatistically significant reductions frombaseline levels in total cholesterol(p<0.05) and LDL-cholesterol (p<0.05)in both bran test periods. Thedifferences between the oat bran andwheat bran groups were not significant.The results of this study are difficult tointerpret because of dietary changesduring the oat bran period. The subjectssignificantly increased their intake oftotal calories from fat and saturated fatcompared to the wheat period. Meanbody weight was unchanged over theshort test period suggesting that therewas a substitution effect with the diet.Young premenopausal women with lowserum cholesterol levels do notrepresent a population at risk for CHD.Therefore, the benefits of oat bran maynot be reflected in this group.

4. Normocholesterolemics: Low FatDiets

One study (Ref. 42) reportedsignificantly lower total cholesterol,compared to a control group, after 4-weeks of oat intervention in subjects

with normal to mildly elevated totalcholesterol. The oat group consumed aPhase II AHA diet (low fat, lowsaturated fat, low cholesterol) plus 56 gof oatmeal daily compared to a controlgroup that consumed only the Phase IIdiet. Over the next 4 weeks, however,serum cholesterol levels increasedslightly in the oat group and decreasedslightly in the control group. After 8weeks, serum cholesterol was reduced3.1 percent in the oat group and 1.4percent in the control group. There wereno significant differences in total serumcholesterol levels between the groups.Subgroup analysis of the data showedgreater reductions in serum cholesterolamong those subjects in the oat groupwho had the highest baselinecholesterol levels. The results of thisstudy suggest a modest benefit ofoatmeal in lowering serum cholesterolin subjects with normal cholesterollevels.

One survey (Ref. 19) showedequivocal results for an effect of oat branor oatmeal on serum cholesterol. He etal. (Ref. 19) evaluated the relationshipbetween the intakes of oats andbuckwheat and serum cholesterol in apopulation of Chinese by conducting asurvey of their dietary habits. Thisparticular population group consumed ahigh energy, low fat, and high fiber diet,and had active working lifestyles. Theresults of this study showed that thegroups consuming greater than 25 g ofoats a day had significantly lower serumcholesterol than those who ate less than25 g of oats a day or no oats. Allbaseline serum cholesterol values,however, were under 160 mg/dL. Theresults of this study were difficult tointerpret because this population groupis one whose diets and lifestyles do notreflect that of the general Americanpopulation. The results of this study arealso confounded because of thequestionable assessment of dietaryintake of oat bran and oatmeal and theabsence of any controls.

5. Other StudiesEvidence for the cholesterol-lowering

effect of soluble fiber from oatmeal andoat bran was evaluated using ametaanalysis (Ref. 33). In this study,after pooling the raw data from 13studies (Refs. 11, 15 through 17, 23, 25,30, 37, 39, 40, and 42 through 44) thatreported on the effect of consumption ofoatmeal and oat bran on totalcholesterol, a modest reduction (averagedecrease of 5 to 6 mg/dL) on blood totalcholesterol levels was found.

To assess whether other dietaryfactors, i.e., substitution of oats fordietary fats and cholesterol, might havebeen responsible for the drop in blood


total cholesterol levels, Ripsin andcoworkers used the experimentallyderived, predictive equation of Keys tosee whether dietary changes in fatcomponents of the test diets couldaccount for the observed decreases inserum cholesterol (Ref. 33). The resultsof their analysis showed that reductionin fat and cholesterol intake attributableto substituting oat bran or oatmeal forthese food components did not accountfor all of the blood cholesterol reductionobserved. Oat bran and oatmealapparently had some effect beyond thatof simply replacing fat and cholesterolin the diet. The authors concluded,therefore, that incorporation of oatproducts into diets causes a modestdecrease in average blood cholesterol.

The authors also suggested that therewas a dose-response relationshipbetween the amount of soluble fiberfrom oat bran or oatmeal and thereduction in blood cholesterol levels,with intakes of soluble fiber from oatsabove 3 g/day showing more effect thanlower intakes. They stated that there issignificant evidence of an interactionbetween dose and initial cholesterollevels. The trials that used subjects withinitial serum cholesterol levels of 229mg/dL or higher demonstrated fivefoldgreater reductions in total cholesterolwith 3 g/d or more of soluble fiber fromoat bran or oatmeal than trials whosesubjects had lower initial cholesterollevels. Additionally, the authors notedthat other components in oats may playa role in the observed cholesterolreduction and suggested the need forlong-term clinical trials (6 months ormore) with multiple doses to verify theirconclusions from the metaanalysis.

LSRO, in its 1987 report entitled‘‘Physiological Effects and HealthConsequences of Dietary Fiber,’’ statedthat oat bran has been shown to exert asubstantial cholesterol-lowering effectin patients with hypercholesterolemia(Ref. 7). It noted that the effects of oatbran are not as pronounced in subjectswith normal serum cholesterol as theyare in subjects with elevated serum lipidlevels.

6. SummaryOf the 37 studies that FDA reviewed,

4 studies (Refs. 9, 14, 22, and 30) hadshort test periods, ranging from 7 hoursto 18 days and, thus, did not meet theagency’s criteria for selecting pertinentstudies with respect to study duration(i.e., intervention test period of no lessthan 3 weeks).

Seventeen studies (Refs. 8, 11, 12, 15,17, 20, 21, 23, 24, 25, 29, 35, 39, 42through 45) demonstrated a positiveeffect of oat bran or oatmeal on total andLDL-cholesterol. The majority of these

studies showed statistically significantreductions in total and LDL-cholesterolin hypercholesterolemic subjectsconsuming either a typical Americandiet (Refs. 8, 12, 20, 21, 25, 35, 44, and45) or a low fat diet (Refs. 11, 15, 23,24, 39, 42, and 43). The results of threestudies showed a statistically significanteffect of oat bran or oatmeal in subjectswith normal serum cholesterolconsuming either a typical Americandiet (Refs. 17 and 29) or a low fat diet(Ref. 42). The amount of oat bran oroatmeal consumed daily to lower totaland LDL-cholesterol in the abovestudies ranged from 34 g (2.5 g solublefiber) (Ref. 17) to 123 g (10.3 g solublefiber) (Ref. 45). In those studies thatevaluated HDL-cholesterol responses tooat intervention, three reported a slight,nonsignificant decrease in HDL-cholesterol (Refs. 8, 11, and 21); fourreported no change (Refs. 12, 20, 23, and35); and five reported a slight increasein HDL- cholesterol as a result of oatintervention (Refs. 24, 25, 39, 42, and45).

Five studies (Refs. 10, 19, 32, 37, and46) showed equivocal results inreducing serum cholesterol. The resultsby Bartram et al. (Ref. 10) were difficultto interpret because fruits were includedin the oat bran cereal. The soluble fiberof the fruit may have had anindependent effect on serum lipidlevels. The questionable assessment ofdietary intake and the lack of temporalsequence in an uncontrolled, cross-sectional survey conducted by He et al.(Ref. 19) make the beneficial results ofthis study difficult to interpret. Inaddition, the population group used inthis study (i.e., Chinese farmers andmigrants) do not reflect the generalpopulation in the United States. Theagency also questioned theappropriateness of the populationgroups used in two other studies (Refs.37 and 46). Zhang et al. (Ref. 46)showed significant reductions in totalcholesterol in subjects who hadileostomies. The mechanism by whichoat bran or oatmeal help lower serumlipids in this population may not reflectthe general population in the UnitedStates. Swain and coworkers (Ref. 37)evaluated the cholesterol-loweringproperties of oat bran and wheat in agroup of young pre-menopausal womenwith low serum cholesterol levels, agroup who does not represent apopulation at risk for CHD. Dietarychanges were reported during the oatperiod which also make interpretationof the results difficult.

Significant dietary changes during theoat intervention period made it difficultto interpret the results of another study(Ref. 32). Poulter et al. (Ref. 32) reported

significant reductions in total and LDL-cholesterol in subjects consuming 56 gof oat cereal. There were no significantchanges in total and LDL-cholesterolwhen the subjects consumed their usual(control) cereal. However, an analysis ofthe nutrient data revealed a significantreduction in total energy from fat and inthe ratio of polyunsaturated to saturatedfat (P:S) during the oat period.

In the 11 studies in which no effecton serum lipid levels were found (Refs.13, 16, 18, 26 through 28, 31, 34, 36, 38,and 41), a number of reasons wereadvanced for the lack of a positivefinding. A lack of compliance andchanges in dietary intakes by thesubjects plagued a number of thesestudies (Refs. 18, 27, 31, 34, and 41).The source of the oat cultivars allegedlycontributed to the lack of an effect of oatbran or oatmeal on serum lipids in fourothers (Refs. 13, 26, 28, and 36). Theauthors of these studies noted that NewZealand oat cultivars tend to have lowerlevels of soluble fiber than oat cultivarsused in studies showing cholesterol-lowering properties.

The processing of oats allegedlycaused a loss of effectiveness in anotherstudy (Ref. 38). Torronen and coworkersfound that wet milling Finnish oats toproduce an oat bran concentratenegatively affected thehypocholesterolemic properties of oat β-glucan.

The results of the study by Demark-Wahnefried et al. (Ref. 16) suffered froma lack of statistical power to detectchanges between groups, variableweight loss among the groups, andsignificant dietary changes during thecourse of the study.

IV. Decision To Propose a Health ClaimRelating Oat Products to Reduction inRisk of CHD

The petition set out the conclusionsreached by the Federal government andother recognized scientific bodies, aswell as those reached in review articlesand in pertinent human studiespublished since 1987. FDA reviewedthis information as well as those studiesthat evaluated the effects on serumcholesterol and LDL-cholesterol levelsfrom dietary intervention with oat branor oatmeal in subjects with normal toelevated serum cholesterol levels.

FDA tentatively concludes that, basedon the totality of publicly availablescientific evidence, there is significantscientific agreement to support therelationship between consumption ofoat bran or oatmeal as foods, or asingredients in foods, and the risk ofCHD. The strongest evidence for theeffect of oat bran or oatmeal on the riskof CHD is provided by studies that


measured the effect of dietary oatconsumption on the two major riskfactors for CHD, total and LDL-cholesterol. FDA is aware of five studiesof that effect in which problemsassociated with subject compliance andweight loss were avoided and in whichappropriate controls were used (Refs.12, 25, 29, 39, and 45). All of thesestudies showed a significantrelationship between oat consumptionand lowered serum total and LDL-cholesterol levels and no adverse effecton other CHD risk factors, such assignificantly lowering HDL-cholesterol.The daily oat intake ranged from anestimated 70 g oat bran (Ref. 12) to 150g oat bran (Ref. 39). Four of thesestudies (Refs. 12, 25, 39, and 45) wereconducted in subjects with mild tomoderately elevated levels of serumcholesterol. One study (Ref. 29) usedsubjects with normal serum cholesterollevels.

Braaten et al. (Ref. 12) showed thatwhen subjects consumed an amount ofpurified oat gum (containing 80 percentβ-glucan) equivalent to consuming 70 goat bran daily, total and LDL-cholesterolwere significantly reduced, and HDL-cholesterol remained unchanged. Theoat gum was consumed with a typicalAmerican diet.

Kestin et al. (Ref. 25) showedsignificant reductions in total and LDL-cholesterol, compared to blood lipidlevels during wheat and rice branperiods, in subjects who consumed 95 goat bran/day for 4 weeks (Ref. 25). HDL-cholesterol showed slight,nonsignificant increases compared tobaseline in all diet periods. The subjectsconsumed the test foods as part of theirusual diet.

Subjects with moderatehypercholesterolemia showedsignificant reductions in total and LDL-cholesterol after they consumed 150 goats/day for 4 weeks compared tobaseline lipid levels (Ref. 39). Thesesame subjects experienced smallincreases in total and LDL-cholesterol(not significant) after consuming wheatproducts. Blood levels of HDL-cholesterol increased slightly (notsignificant) during the oat period butremained the same during the wheatperiod. All subjects consumed a low fatdiet in this study.

Whyte et al. (Ref. 45) reportedsignificant reductions in total and LDL-cholesterol in subjects who consumed123 g oat bran/day for 4 weeks as partof their usual diets. The subjectsexperienced a slight increase in totalcholesterol and no change in LDL-cholesterol after consuming wheat bran.HDL-cholesterol increased slightly (notsignificant) during both bran periods.

In a study designed to assess themechanism by which oat bran lowerstotal cholesterol, Marlett et al. (Ref. 29)reported significant reductions in totalcholesterol in the period in whichsubjects consumed oat bran compared toa wheat control period. The subjectsconsumed 100 g oat bran/day for 4weeks during the high fiber period andwheat gluten during the low fiber,control period, with their usual diets.

The results of 12 other studies (Refs.8, 11, 15, 17, 20, 21, 23, 24, 35, and 42through 44) also support therelationship between oat consumptionand reduction in total and LDL-cholesterol. Six studies (Refs. 8, 17, 20,21, 35, and 44) showed the benefits ofoat intervention in reducing serum totaland LDL-cholesterol in subjectsconsuming a typical American diet.HDL-cholesterol showed no significantchange in four of these studies (Refs. 8,20, 21, and 35) and a significantreduction in one study (Ref. 21). Theamount of oat bran or oatmealconsumed in these studies ranged from34 g/day (Ref. 17) to 110 g/d (Ref. 8).

Three studies (Refs. 15, 23, and 24)showed a significant effect of oat branor oatmeal on total and LDL-cholesterolthat was beyond that of a Step 1 dietalone. The results of the three otherstudies (Refs. 11, 42, and 43) showedlower, nonsignificant, total and LDL-cholesterol in subjects who consumedoat bran or oatmeal compared to thegroup who consumed the Step 1 or Step2 diets alone. In two of these studies(Refs. 42 and 43), the subjects’ lipidvalues after a run-in period on the lowfat diet ranged from a mean of 193 to197 mg/dL. The lack of significantdifference between the diet only and theoat groups in these studies may beovershadowed by the effect of the dietalone on subjects who had initially lowtotal and LDL-cholesterol levels. Therewere no significant changes in HDL-cholesterol from the consumption of alow fat diet plus oats. The range of oatintake in these studies ranged from 35g (Ref. 43) to 100 g/day (Ref. 24).

Two studies (Ref. 20 and 23) usedwheat as a placebo control. The resultsof these studies showed significantlylower total and LDL-cholesterol insubjects who consumed oat brancompared to those who consumedwheat.

A metaanalysis (Ref. 33) using pooled,raw data from a number of oat studies(Refs. 11, 15 through 17, 23, 25, 30, 37,39, 40, and 42 through 44) found that anintake of 3 g soluble fiber (used as amarker for oat bran and oatmeal) ormore produced modest reductions(average decrease of 5 to 6 mg/dL) ofserum total cholesterol levels. The

decrease in total cholesterol was largestin those trials with subjects that initiallyhad high total cholesterol levels.

As stated in section III.A. of thisdocument, Federal government andother reviews have concluded that thereis substantial epidemiologic and clinicalevidence that high blood levels of totalcholesterol and LDL-cholesterolrepresent major contributors to CHD (56FR 60727 at 60728, and Refs. 3 through5). Dietary factors that decrease totalcholesterol and LDL-cholesterol willaffect the risk of CHD (Refs. 3 through6). Based on the scientific evidencepresented in the petition, the agencytentatively concludes that there issignificant scientific evidence to showthat oat bran and oatmeal will helpreduce serum lipids, and that suchreductions may reduce the risk of CHD.In the majority of clinical studiesevaluating oat products, total and LDL-cholesterol fractions were shown to bethe most affected by oat intervention.Regular consumption of oat bran oroatmeal, in an amount to provide 3 g ormore of oat β-glucan soluble fiber,resulted in reduced total and LDL-cholesterol levels in subjects withnormal and elevated serum cholesterollevels.

Changes in HDL-cholesterol levels asa result of oat intervention weregenerally absent or not significant (Refs.8, 11 through 13, 18, 20, 23 through 28,32, 35 through 39, 41, 42, and 45). Atendency toward an increase in HDL-cholesterol was shown in nine studies(Refs. 13, 24, 25, 27, 28, 32, 39, 42, and45); no change was shown in ninestudies (Refs. 8, 12, 18, 20, 23, 24, 35,36, and 41); and a nonsignificantdecrease in HDL-cholesterol was shownin three studies (Ref. 11, 26, and 38).Although HDL-cholesterol was reduced0.9 percent (p<0.03) in the study byKahn et al. (Ref. 21), the HDL:LDL andHDL:total cholesterol ratios wereimproved, compared to baseline,because of significant reductions in totalcholesterol (8 percent) and LDL-cholesterol (10 percent).

Oat bran and oatmeal were tested ina variety of food forms but producedfairly consistent results, showing thatthe way in which these foods areconsumed does not alter their effect onserum lipids. They were consumed ashot and cold cereals or used in a varietyof other foods, such as muffins, breads,shakes, and entrees.

The eleven studies that did not showreduced total and LDL-cholesterol fromthe consumption of oat bran or oatmeal(Refs. 13, 16, 18, 26 through 28, 31, 34,36, 38, and 41) do not detract from theagency’s tentative conclusion about thisrelationship or that the claim is valid.


The lack of result in five of these studies(Refs. 13, 26, 28, 36, and 38) wasapparently attributed to the oat source,i.e., New Zealand cultivars, or to themethod of processing oat bran. Theresults of the remaining six studies wereassociated with a lack of subjectcompliance and significant changes indietary intake during the test periods, orto problems in study design, i.e., a lackof statistical power to detect changesbetween groups.

Given all of this evidence, the agencyis proposing a health claim on therelationship between oat bran andoatmeal and reduced risk of CHD.

V. Description and Rationale forComponents of Health Claim

A. Relationship Between Oatmeal andOat Bran and CHD and the Significanceof the Relationship

Proposed § 101.81(a) describes therelationship between diets high in oatbran or oatmeal and the risk of CHD. Inproposed § 101.81(a)(1), the agencyrecounts that CHD is the most commonand serious form of CVD, and that CHDrefers to diseases of the heart muscleand supporting blood vessels. Theregulation also notes that high bloodtotal and LDL-cholesterol levels areassociated with increased risk ofdeveloping CHD. The regulationidentifies the levels of total cholesteroland LDL-cholesterol that would put anindividual at high risk of developingCHD and those serum lipid levels thatare associated with borderline high risk.The intent is to provide consumers withinformation to help them understandthe seriousness of CHD.

In proposed § 101.81(a)(2), the agencyrecounts that populations with a lowincidence of CHD tend to have lowblood total and LDL-cholesterol levels.It states that these populations also tendto have dietary patterns that are low intotal fat, saturated fat, and cholesteroland high in fruits, vegetables, and grainproducts, such as oatmeal and oat bran.This information is consistent with thatprovided in the authorized health claimfor fruits, vegetables, and grain productsand CHD (§ 101.77). The agencytentatively finds that this informationprovides a basis for a betterunderstanding of the numerous factorsthat contribute to the risk of CHD andthe relationship between oat bran andoatmeal and a low fat diet.

Proposed § 101.81(a)(3) describes therelationship between oat bran andoatmeal, foods low in saturated fat andcholesterol, and reduction in the CHDrisk factors. The paragraph states thatseveral studies have shown that dietshigh in oatmeal or oat bran are

associated with reduced blood lipidlevels. This information encapsulatesthe scientific evidence about howoatmeal and oat bran can contribute toreduction in heart disease risk factors.

Proposed § 101.81(b) describes thesignificance of the diet-diseaserelationship. In proposed § 101.81(b)(1),the agency recounts that CHD remains amajor public health concern in theUnited States because the diseaseaccounts for more deaths than any otherdisease or group of diseases. The claimstates that early management ofmodifiable risk factors for CHD is amajor public health goal that can assistin reducing the risk of CHD. Thisinformation is consistent with theevidence that lowering blood total andLDL-cholesterol levels reduces the riskof CHD (56 FR 60727, 58 FR 2739, andRefs. 3 through 6 and 47).

In proposed § 101.81(b)(2), thesignificance of the relationship betweenoatmeal and oat bran and CHD riskfactors in context of the total diet isdiscussed. The agency recounts thatmany Americans’ intakes of saturatedfat and cholesterol exceedrecommended levels, and it summarizespublic health recommendations for thediet (56 FR 60727 at 60738 and§ 101.75(b)(3)). This paragraph alsostates that scientific evidencedemonstrates that diets high in oatmealand oat bran and low in saturated fatand cholesterol are associated withreduced blood lipids. FDA tentativelyconcludes that the latter statement isscientifically valid based on theevidence that it has reviewed on thisnutrient-disease relationship.

B. Nature of the ClaimIn § 101.81(c)(1) (21 CFR 101.81(c)(1)),

FDA is proposing to require that all ofthe general requirements for healthclaims set out in § 101.14 be met. Thisprovision is consistent with theprovisions of the other specific healthclaim regulations in part 101, subpart E,of the Code of Federal Regulations (CFR)(21 CFR part 101, subpart E).

In § 101.81(c)(2)(i), FDA is proposingto authorize a health claim on therelationship between diets high in oatbran or oatmeal and the risk of CHD.The agency is proposing to do so basedon its review of the scientific evidenceon this nutrient-disease relationshipwhich shows that diets that are high inoat bran or oatmeal help to reduce totaland LDL-cholesterol levels inindividuals with normal to elevatedblood total cholesterol (Refs. 8, 11, 12,15, 17, 20, 21, 23 through 25, 29, 35, 39,44, and 45). This result is significant forthe risk of heart disease becauseelevated levels of total and LDL-

cholesterol are associated withincreased risk of CHD (Refs. 3 through6).

In § 101.81(c)(2)(i)(A), the agency isproposing to require, consistent withother health claims, that therelationship be qualified with the terms‘‘may’’ or ‘‘might.’’ These terms are usedto make clear that not all persons cannecessarily expect to benefit from thesedietary changes (56 FR 60727 at 60740and 58 FR 2552 at 2573).

In § 101.81(c)(2)(i)(B), the agency isproposing to require, consistent withother authorized health claims, that theterms ‘‘coronary heart disease’’ or ‘‘heartdisease’’ be used in specifying thedisease. These terms are commonlyused in dietary guidance materials, andtherefore they should be readilyunderstandable to the consumer (56 FR60727 at 60740 and 58 FR 2552 at 2573).

In § 101.81(c)(2)(i)(C)(1), the agency isproposing that the claim describe therelationship between diets high inoatmeal or oat bran and risk for CHD.Based on its review of the scientificevidence submitted with the petition,the agency tentatively concludes thatthere is significant scientific agreementthat diets high in oat bran or oatmealmay help to reduce blood total and LDL-cholesterol levels, the major modifiablerisk factors for CHD (Refs. 12, 17, 20, 21,25, 29, 35, 44, and 45).

The petitioner stated in its petitionthat there is significant scientificevidence to show that the effect of oatson lowering serum lipids isindependent of a diet low in saturatedfat and cholesterol. In light of thisevidence, the petitioner argued that anyhealth claim that is authorized need notrefer to such a diet. The petitionerexplained that important public healthpolicy objectives, as well as FDA’sstatutory mandate to authorize healthclaims supported by significantscientific agreement, mandate that FDAissue a regulation that requires only thatclaims describe the relationshipbetween oat products and reduced riskof CHD (Ref. 1, p. 68).

The agency acknowledges that therewere a number of studies that showedthat high intakes of oat bran andoatmeal lowered blood total and LDL-cholesterol in subjects that otherwiseconsumed a typical American diet (Refs.12, 17, 20, 21, 25, 29, 35, 44, and 45).However, as stated in section V.A. ofthis document, CHD is a major publichealth concern in the United States, andthat the totality of the scientificevidence provides strong and consistentsupport that diets high in saturated fatand cholesterol are associated withelevated levels of blood total and LDL-cholesterol, and thus CHD (56 FR 60727


at 60737). Dietary estimates forAmerican adults show that the averagesaturated fat intakes of American adultsare about 13 percent of calories, total fatintakes are about 37 percent of calories,and average cholesterol intakes rangefrom 300 to over 400 mg daily for adultmen and women (56 FR 60727 at60738). The current intakes of saturatedfat and total fat are thus well in excessof recommended goals of less than 10percent and 30 percent of calories.Dietary guidelines from bothgovernment and private-recognizedscientific bodies conclude that themajority of the American populationwould benefit from decreasedconsumption of dietary saturated fat andcholesterol (Refs. 3 through 6).

The results of several studies showedthat while daily consumption of oatbran or oatmeal lowered totalcholesterol and LDL-cholesterol, theeffects of dietary intake of oat bran oroatmeal were particularly evident whenthe diets were low in saturated fat andcholesterol (Refs. 11, 15, 24, 39, and 43).Thus, the agency tentatively finds thatit will be more helpful to Americans’efforts to maintain healthy dietarypractices if the effect of oats on serumlipids is described in context of ahealthy diet. This information isextremely important to a fullunderstanding of the significance of theclaim.

The agency tentatively finds that forthe public to understand fully, in thecontext of the total daily diet, thesignificance of consumption of oat branand oatmeal on the risk of CHD (seesection 403(r)(3)(B)(iii) of the act),information about the total diet needs tobe included as part of the claim.Therefore, in § 101.81(c)(2)(i)(C)(2), theagency is proposing to require that theclaim include the fact that the effect ofdietary consumption of oatmeal or oatbran on the risk of CHD is particularlyevident when these foods are consumedas part of a diet that is low in saturatedfat and cholesterol. Based on its reviewof the scientific evidence submittedwith the petition, the agency tentativelyconcludes that there is significantscientific agreement that diets high inoat bran or oatmeal and low in saturatedfat and cholesterol are associated withreduced blood total and LDL-cholesterollevels (Refs. 11, 15, 23, 24, 39, 42, and43).

FDA is proposing to require that thisdietary information be included as partof the full health claim to ensure thatpeople understand the significance ofthe information in the claim. A diet lowin saturated fat and cholesterol isimportant because if intake of thesedietary components are not controlled,

then there is a significant question as towhether high fiber diets will have theirfull effect on blood total and LDL-cholesterol levels, and thus on the riskof heart disease. However, based oninformation supplied by the petitioner,FDA tentatively concludes that a claimthat diets high in oat bran or oatmealmay reduce the risk of heart disease istruthful, not misleading, andscientifically valid without thisadditional information. Therefore, FDAtentatively finds that it is appropriate torequire that a label that bears an oatbran or oatmeal health claim disclosethe fact that a diet should be high in oatbran and oatmeal and low in saturatedfat and cholesterol, but that it is notnecessary to require that the latterdietary information be disclosed inimmediate proximity of the oat bran oroatmeal claim each time the claimappears on the label or in labeling (seethe discussion of § 101.81(c)(2)(ii)below). FDA is proposing to requireonly that the full statement of the claimdisclose the fact that the effect of thedietary intake of oat bran or oatmeal isparticularly evident when the diet islow in saturated fat and cholesterol.

Proposed § 101.81(c)(2)(i)(D),consistent with other authorized healthclaims, requires that the claim notattribute any degree of risk reduction ofCHD to consumption of oat products.None of the studies that the agencyreviewed provide a basis fordetermining the percent reduction inrisk of CHD likely from consuming dietshigh in oat products.

The agency considered proposing torequire that the claim state that thedevelopment of CHD depends on manyfactors. This statement has beenrequired in the two authorized heartdisease health claims (§§ 101.75 and101.77) (although the agency hasrecently proposed to delete thisrequirement in a document thatpublished in the Federal Register ofDecember 21, 1995 (60 FR 66206)(hereinafter referred to as the 1995proposal). The petitioner requested thatthe statement regarding themultifactorial nature of CHD be listedunder optional requirements for thehealth claim (Ref. 1, p. 68). Thepetitioner stated that based on an everincreasing background of healthinformation made available throughvarious media, consumers alreadyunderstand that foods are not drugs, andthat health enhancement depends notonly on consumption of a particularfood but also on other dietary practices,exercise, heredity, lifestyle, and a hostof other factors. The petitioner did notprovide any data to support thisobservation. The petition stated that the

‘‘depends on many factors’’ languagemakes the health claim cumbersome,unnecessarily long, and detracts from itscentral and critical consumer message.The petition stated that using therequired statement ‘‘may help’’ (i.e.,‘‘may help reduce the risk of heartdisease’’) more simply, directly, andsuccinctly indicates to consumers thatoatmeal and oat bran are not magicbullets, and that other factors areassociated with CHD risk.

The agency agrees with the petitionerthat the requirement that the claim usethe term ‘‘may’’ or ‘‘might’’ to relate theability of oat bran or oatmeal to reducethe risk of heart disease is intended toreflect the multifactorial nature of thedisease. In response to comments on thescientific standard proposed for healthclaims, the agency stated in the 1993health claims final rule (58 FR 2478 at2505):* * * Further, absolute claims aboutdiseases affected by diet are generally notpossible because such diseases are almostalways multifactorial. Diet is only one factorthat influences whether a person will getsuch a disease. For example, in the case ofcalcium and osteoporosis, geneticpredisposition (e.g., where there is a familyhistory of fragile bones with aging) can playa major role in whether an individual willdevelop the disease. Because of factors otherthan diet, some individuals may develop thedisease regardless of how they change theirdietary patterns to avoid the disease. Forthose individuals, a claim that changes indietary patterns will reduce the risk ofdisease would be false. Thus, health claimsmust be free to use the term ‘‘may’’ withrespect to the potential to reduce the risk ofdisease. * * *

The agency notes that FDA has beenasked in a petition from the NationalFood Processors Association (NFPA)(Docket No. 94P–0390) to reevaluate therequired elements of the health claimand to consider a number of optionsincluding the option of using anabbreviated health claim andeliminating the multifactorial element ofthe health claim requirements. In the1995 proposal, the agency initiatedrulemaking that, in part, proposed toeliminate or make optional some of therequired elements. More specifically,the agency proposed to make optionalthe statement ‘‘a disease caused bymany factors’’ (see section IV.E. of the1995 proposal), and to permit the use ofcertain abbreviated health claims on thelabel or labeling of a product (seesection IV.C. of the 1995 proposal) (60FR 66206). In this proposed rule on oatbran and oatmeal and CHD, the agencyis proposing to make the phrase‘‘depends on many factors’’ optionalinformation. In place of the requirementfor stating the multifactorial nature of


the disease, the agency is proposing§ 101.81(c)(2)(i)(E) to require that theclaim not imply that the consumption ofoat bran and oatmeal is the onlyrecognized means of achieving areduced risk of CHD. Thus, the agencytentatively concludes that the concept ofthe multifactorial nature of CHD will bepreserved without adding additionalwords to the claim. The agency requestscomment on whether consumers will bemisled to believe that reduction of riskwill be achieved if the multifactorialnature of CHD is not stated on the claim.This proposed rule would also permituse of a shortened version of the claimin conjunction with the full claim (seesection IV.C. of the 1995 proposal).

C. Presentation of the ClaimIn proposed § 101.81(c)(2)(ii), the

agency is providing for how the healthclaim is to be presented on the label orlabeling. This paragraph states that all ofthe elements listed in § 101.81(c)(2)(i)must be included in one presentation ofthe claim on the label or labeling. Asdiscussed in sections V.A. and B. of thisdocument, the scientific evidenceprovides strong and consistent supportthat diets high in saturated fat andcholesterol are associated with elevatedlevels of blood total and LDL-cholesterol, the major modifiable riskfactors for CHD. Because the typicalAmerican diet tends to be high insaturated fat and cholesterol, dietaryguidelines recommend that Americansmodify their intakes of food that containsignificant levels of saturated fat andcholesterol. From a public healthstandpoint, it is important for the publicto comprehend the significance of therelationship between diets high in oatbran or oatmeal and CHD risk in contextof a diet low in saturated fat andcholesterol. This relationship issupported by significant scientificevidence as discussed above.

However, the 1995 proposal permits ashort, simple statement of certain healthclaims that is truthful, not misleading,and scientifically valid, which may beused on the principal display panel, aslong as the full claim appears on theparticular label or in the particularlabeling in which the short statementappears, and there is a referral statementfrom the shortened to the full claim (60FR 66206). In recognition of this fact,FDA is providing in proposed§ 101.81(c)(2)(ii) that if a full statementof the claim appears on a label or in apiece of labeling, other presentations ofthe claim may appear on the label or inlabeling that do not include theinformation required in proposed§ 101.81(c)(2)(i)(C)(2) so long as there isa referral statement to the full statement

of the claim in immediate proximitywith the shortened statement. FDA hasexplained above the basis for itstentative conclusion that the shortenedclaim need not include the informationin paragraph (c)(2)(i)(C)(2) regarding theimportance of low saturated fat andcholesterol diet.

The referral statement that FDA isproposing accompany the shortenedclaim is consistent with that providedfor in the general requirements fornutrient content claims (§ 101.13) andhealth claims (§ 101.14(d)(2)(iv)). Thisreferral statement is short and thusconsistent with the use of anabbreviated claim. It is important,however, because the agency tentativelyfinds that it is essential that theconsumer be directed to the full claim.Specifically drawing the consumer’sattention to the full claim will help toensure that he or she is able tocomprehend the information that isbeing presented in the context of thetotal daily diet.

In its 1993 health claims final rule,the agency stated that it did not believethat it is appropriate to use abbreviatedhealth claims as referral statements (58FR 2478 at 2512). The agency wasconcerned that an abbreviated claimwould not include facts that are materialin light of the representation that ismade and that are necessary tounderstand the claim in the context ofthe daily diet. The agency wasconcerned that confusion is possiblewhenever the full health claiminformation appears in a locationdifferent from that of the referencestatement and is especially likely tooccur when a multiplicity of labeling isassociated with a product.

The agency has tentatively concludedthat this proposed rule addresses theseconcerns. It is providing for anabbreviated statement that reflects thefacts that are material under section201(n) of the act (21 U.S.C. 321(n)) andthat are necessary to ensure that theclaim is scientifically valid. It is alsoproviding for an accompanying referralstatement to additional information thatis necessary for a full understanding ofthe claim. The agency is concerned,however, about the possibility thatconsumers may not read the completeclaim, and thus that they will not haveall of the facts necessary to fullyunderstand the significance of the claimbeing made and to comprehend theclaim in the context of the daily diet.For this reason, the agency is asking fordata to demonstrate that permitting ashortened claim in this manner will notsignificantly decrease the likelihoodthat consumers will read the full claim

so long as it appears prominently on thelabel or in the piece of labeling.

In new § 101.81 (c)(2)(ii)(A) and(c)(2)(ii)(B), the agency is proposing,consistent with requirements fornutrient content claims in § 101.13 (g)(1)and (g)(2), requirements for the typesizeand location of the referral statement.

FDA has long held that accompanyinginformation should be in a sizereasonably related to that of theinformation that it modifies. Section403(f) of the act requires thatinformation required under the act beplaced on the label with suchconspicuousness as to render it likely tobe read. Section 403(r)(2)(B) of the actrequires that a referral statement fornutrient content claims appearprominently, although it does notspecify specific requirements such as totypesize or style. For nutrient contentclaims, FDA established type sizerequirements for referral and disclosurestatements related to the area of thesurface bearing the principal displaypanel rather than to the type size usedfor the nutrient content claim. Theproportionality between the size of thereferral statement and the size of thelabel ensures that the referral statementis presented with appropriateprominence. However, when the claimis less than twice what the minimumsize of the referral statement would begiven the size of the label and§ 101.105(i) (21 CFR 101.105(i)) the typesize of the referral statement may be lessthan that required under § 101.105 fornet quantity of contents. In suchcircumstances, the referral statement isof appropriate prominence if it is atleast one-half the size of the claim andnot less than one-sixteenth of an inch.This approach to the type sizerequirement for the referral statementprovides flexibility to firms in utilizinglabel space but still ensures adequateprominence for this statement. Becausehealth claim referral statements are usedsimilarly to those that accompanynutrient content claims and are likely toappear on the principal display panel,the agency tentatively concludes that ahealth claim referral statement shouldhave the same type size requirements asthose for nutrient content claims.Therefore, the agency tentativelyconcludes that the requirements for thereferral statement set forth in § 101.105(c)(2)(ii)(A) and (c)(2)(ii)(B) areappropriate when a shortened healthclaim is used and is including them inthis proposed rule.

D. Nature of the FoodProposed § 101.81(c)(2)(iii)(A)

requires that the food bearing the healthclaim contain 13 g of oat bran or 20 g


oatmeal, and that the oat bran oroatmeal contain, without fortification, atleast 1.0 g of β-glucan soluble fiber. Theparagraph states that oat β-glucan bedetermined by the Association ofOfficial Analytical Chemists (AOAC)official method (i.e., method 992.28),per reference amount customarilyconsumed (RACC).

The requirement that the food containoat bran or oatmeal is consistent withthe scientific evidence that shows thatoat bran or oatmeal, when consumed asa food or as an ingredient in food, helpsto lower total and LDL-cholesterol.

The agency is not proposing to permita claim for oat gums or oat fibers,substances that may be manufactured bydifferent methods and are not welldefined chemically or physically. Thesesubstances, like all food fibers, are acomplex matrix and factors, such as thefermentability; particle size; molecularweight; chemical structure; waterholding capacity; nonfiber components;net charge; viscosity; and cation-exchange capacity, binding, andchelation, may affect their physiologicalproperties (Ref. 7).

The effects of processing on thephysiological properties of oat branwere evidenced in three studies. In astudy by Torronen et al. (Ref. 38), aspecially processed oat bran concentrateincorporated into bread to provide 11.2g/d β-glucan showed no effect onlowering serum lipids in a controlledstudy with hypercholesterolemicsubjects. Two other studies testing aspecially processed oat fiber sourceproviding 3.3 g/d β-glucan soluble fiber(Ref. 35) and oat gum providing 5.8 g/d β-glucan soluble fiber (Ref. 12)showed significant reductions in bloodtotal and LDL-cholesterol levels. Thelatter two studies showing a cholesterol-lowering response did not adequatelycharacterize the material being tested topermit their (oat fiber source and oatgum) inclusion in the regulations,however. If manufacturers candocument, through appropriate studies,that dietary consumption of a well-characterized oat product, e.g., purifiedextracts of oat gum or modified oat fiberisolates, has the effect of lowering totaland LDL-cholesterol levels, and has noadverse effects on other heart diseaserisk factors (e.g., HDL-cholesterol), theyshould submit that information incomments or petition FDA to amend§ 101.81 to cover the substance.

Because the subject of this healthclaim petition is the effect of oatmeal oroat bran on the risk of CHD, it isappropriate to consider the levels of oatbran and of oatmeal intake that havebeen shown to have significant effectson the levels of serum total and LDL-

cholesterol in establishing qualifyinglevels for foods to bear an oatmeal or oatbran and CHD health claim. In theclinical studies that showed thatconsumption of oatmeal or oat branlowered total and LDL-cholesterol, dailyconsumption ranged from 35 g (Ref. 43)to 84 g (Ref. 15) of oat bran and 34 g(Ref. 17) to 150 g (Ref. 39) of oatmeal.Based on values provided in thepetition, 35 g of oatmeal would provideabout 1.75 g of β-glucan soluble fiber,and 34 g of oat bran would provideabout 2.5 g of β-glucan soluble fiber(Ref. 1, p. 66). The higher the dailyintake of oatmeal and oat bran, thehigher the intake of β-glucan solublefiber and the better the response inlowering serum lipids. This observationis supported by the metaanalysis of oatproducts by Ripsin et al. (Ref. 33) andis consistent with the agency’scomments on the Davidson et al. study(Ref. 15) in the preamble to the 1993dietary fiber and CVD final rule (58 FR2552 at 2568):

* * * [B]ased on the results of this study,an intake of soluble fiber (in this case, β-glucan from oats) of about 3 g per day ormore was beneficial in that it resulted in asignificant lowering of serum cholesterol inpersons consuming a low-fat diet.

An intake of 3 g of β-glucan solublefiber is equivalent to approximately 60g of oatmeal or 40 g of oat bran (dryweight) (Ref. 1, p. 67), the approximatemidpoints of the consumption ranges ofoat bran and oatmeal that had an effecton blood lipids. The petitionersuggested that 40 g of oat bran, 60 g ofoatmeal, and 3 g β-glucan soluble fiberbe considered as the standard fordetermining the qualifying levels of oatbran and oatmeal for this health claim.Applying a regression analysis to theresults of Davidson et al. (Ref. 15), andusing β-glucan soluble fiber as a markerfor oat bran and oatmeal, the petitionerdetermined that 3 g β-glucan would berequired to achieve a 5 percentreduction in serum cholesterol (Ref. 1,p. 22–27). The petition stated that a 5percent reduction in serum cholesterolis a desirable goal because that is thelevel that was achieved as a result of adietary fat and cholesterol focusedintervention in the Multiple Risk FactorIntervention Trial (MRFIT) and LipidResearch Council (LRC) clinical trials(Refs. 1 and 40).

The petitioner stated that whilecurrent research may not demonstratethat β-glucan is the only component ofoats that affects blood lipids, it doessuggest that it is an excellent marker forcholesterol reduction potential (Ref. 1,p. 64). The petitioner stated that theamount of β-glucan also serves as a

marker for the content of oat bran andoatmeal in foods. Using 40 g of oat bran,60 g of oatmeal, and 3 g β-glucan as thequalifying amounts for a CHD claim, thepetitioner suggested that a single servingof an oat-containing product (i.e., 1RACC) should provide 1⁄3 of this amount(based on 3 servings a day). Thus, an oatbran-containing product would have tocontain at least 13 g oat bran (1⁄3 × 40g) that provides 1 g β-glucan (1⁄3 × 3 g)soluble fiber per RACC. An oatmeal-containing product would have tocontain no less than 20 g oatmeal (1⁄3 ×60) that provides 1 g β-glucan solublefiber. The petitioner stated that thisapproach is reasonable because it wouldpermit a wide variety of low fat, oat-containing products, e.g., muffins,cereals, and breads, to qualify for thishealth claim. The petitioner providedseveral examples of meals, developedon the basis of U.S. Dietary Guidelines,that demonstrated how 40 g of oat branand 60 g of oatmeal, providing 3 g of β-glucan soluble fiber, could beincorporated into a diet that isconsistent with dietary guidelines (Ref.1, pp. 43–54).

The agency agrees that, based onDavidson et al. (Ref. 15), themetaanalysis (Ref. 33), and other studiesthat reported the amount of β-glucansoluble fiber in oat products, 3 or moregrams of oat β-glucan soluble fiber wereassociated with significant reductions inserum cholesterol. The agency alsoagrees that not all oat bran or oatmeal-containing products that mightotherwise qualify for this claim containthat amount per RACC of oat product.Based on nutrient composition datapresented in the petition (Ref. 1, pp. 38–39), only oat bran hot and cold cerealscontain 3 g β-glucan soluble fiber wouldqualify for this proposed health claim.Thus, limiting eligibility for the claim toproducts with 3 g β-glucan soluble fiberwould have the unintended effect ofeliminating a number of low fat, oat-containing products, e.g., oatmealcereals, oatmeal waffles, oat branmuffins, and oatmeal breads, frombearing an oatmeal or oat bran and CHDhealth claim.

The petition states that the mostcommon oat food forms are oat bran andoatmeal consumed as hot cereals (Ref. 1,p.33). The mean daily dietary intake byoat consumers of oatmeal and oat branhot cereals is 43.3 g (dry weight basis)and the median intake is 40.1 g (Ref. 1,p. 33). The petition states that the 90thand 95th percentiles of intake are 71.3and 84.2 g (dry weight basis) per day,respectively. Therefore, it is reasonableto assume that a person could consumea total of, or more than, 40 g oat bran,60 g oatmeal, or a combination of the


two that provides 3 g β-glucan solublefiber if the oat products are consumedover the course of a day.

The agency has generally made theassumption that a daily foodconsumption pattern includes threemeals and a snack (see 58 FR 2302 at2379, January 6, 1993). Therefore, oneapproach to determining the qualifyinglevels of oat bran, oatmeal, and oat β-glucan soluble fiber for a CHD healthclaim is to divide the effective levels ofthese substances by four eatingoccasions per day. Using this approach,an oat bran product would have toprovide at least 10 g of oat bran and 0.75g β-glucan soluble fiber, and an oatmealproduct would have to provide at least15 g of oatmeal and 0.75 g β-glucansoluble fiber per RACC in order toqualify to bear an oat and CHD healthclaim. However, considering that themean daily dietary intake of oatmealand oat bran is 43 g, and that thatamount is consumed mostly in the formof hot cereal, and considering the natureof this food, it is not expected thatpeople will consume oat-containingproducts 4 times a day. The agency ispersuaded by the petitioner’s argumentthat oat products can reasonably beexpected to be consumed 3 times a day,being incorporated into a variety ofproducts. Thus, an oat bran-containingproduct would have to provide no lessthan 13 g oat bran and 1 g β-glucansoluble fiber per RACC, and an oatmeal-containing product would have toprovide no less than 20 g oatmeal and1 g β-glucan soluble fiber. Therefore, theagency tentatively finds that use of 13g oat bran and 20 g oatmeal that provide1 g β-glucan soluble fiber as thequalifying criteria for this proposed ruleis appropriate and is proposing theselevels in this document.

The proposed qualifying requirementof 1 g β-glucan soluble fiber per RACCof oat bran or oatmeal-containingproduct is higher than the amount ofsoluble fiber that is required for a foodto qualify to bear the fruits, vegetables,and grain products and CHD healthclaim (§ 101.77). Under§ 101.77(c)(ii)(C), a food need onlycontain, without fortification, 0.6 gsoluble fiber per RACC. In the preambleto the 1993 dietary fiber and CVD finalrule, the agency explained that the 0.6g of soluble fiber was based in part onthe recommendation by the LSROexpert panel that 25 percent of therecommended daily intake of fiber besoluble fiber (58 FR 2552 at 2573 and2574). The agency also stated that the0.6 g soluble fiber is consistent with thedefinition of a ‘‘good source’’ of anutrient (i.e., 10 percent of the dailyreference value (DRV)). The agency

explained that the 10 percent level isdeemed useful and appropriate becausevery few foods could naturally meet therequirement for a ‘‘high’’ source ofsoluble fiber. The current dietaryguidance recommendations of five ormore servings of fruits and vegetablesand six or more servings of grainproducts daily, if followed, would likelyresult in intakes of soluble fiber close toor exceeding the recommended dailyintake of 6 g (58 FR 2552 at 2574). Thus,the 0.6 g of soluble fiber was intendedto allow a number of fruits, vegetables,and grain products to qualify. Theagency stated that without this alternatelevel very few fruits, vegetables, andgrain products would qualify for thehealth claim (58 FR 2552 at 2574).

Based on the scientific evidencereviewed in this document, higher dailyintakes of oat bran and oatmeal (about40 g and 60 g, respectively) thatprovided 3 g/d or more of β-glucansoluble fiber were associated withsignificant cholesterol-lowering benefits(Refs. 15 and 33). As discussed above,it is reasonable to assume that oat branand oatmeal would likely not beconsumed in more than three eatingoccasions per day. Therefore, the agencytentatively finds that the proposedcriterion that the oat bran or oatmealprovide 1 g β-glucan soluble fiber perRACC is appropriate for this healthclaim. The agency is asking forcomments on this tentativedetermination.

In § 101.81(c)(2)(iii)(B), the agency isproposing, consistent with otherauthorized heart disease health claims,that foods bearing the health claim meetrequirements for ‘‘low saturated fat,’’‘‘low cholesterol,’’ and ‘‘low fat.’’ In thepreamble to the final rule on fruits,vegetables, and grain products and heartdisease (§ 101.77, 58 FR 2552 at 2572),the agency stated that populations withdiets rich in these low saturated fat andlow cholesterol foods experience manyhealth advantages, including lower ratesof heart disease. In the preamble to theproposed rule on dietary lipids andheart disease (56 FR 60727 at 60739),the agency stated that while total fat isnot directly linked to increased risk ofCHD, it may have significant indirecteffects. Foods that are low in total fatfacilitate reductions in intakes ofsaturated fat and cholesterol torecommended levels. Therefore, theagency tentatively concludes thatproposed § 101.81(c)(2)(iii)(B) sets forthan appropriate requirement for food tobe eligible to bear the oatmeal and oatbran/CHD claim.

E. Optional Information

FDA is proposing in § 101.81(d)(1)that the claim may state that thedevelopment of heart disease dependson many factors and, consistent withauthorized CHD health claims, may listthe risk factors for heart disease that arelisted in §§ 101.75(d)(1) and101.77(d)(1). The agency is alsoproposing, in response to the petition,that the claim may provide additionalinformation about the benefits ofexercise and body weight management.This additional information can providea context that is useful for anunderstanding of the relationshipbetween oat bran and oatmeal and heartdisease, but manufacturers should becautioned that it should not bepresented in a way that is misleading tothe consumer.

In proposed § 101.81(d)(2), consistentwith §§ 101.75(d)(2) and 101.77(d)(2),FDA is providing that the claim maystate that the relationship between a diethigh in oat bran or oatmeal and reducedrisk of heart disease is through theintermediate link of ‘‘blood cholesterol’’or ‘‘blood total cholesterol’’ and ‘‘LDL-cholesterol.’’ The relationship betweenoat bran or oatmeal and reduced bloodtotal cholesterol and LDL-cholesterol issupported by the scientific evidencepresented in this proposal.

In § 101.81(d)(3), the agency isproposing that, consistent with§§ 101.75(d)(3) and 101.77(d)(3), theclaim may include information from§ 101.81(a) and (b). These paragraphssummarize information regarding therelationship between diets high in oatbran or oatmeal and the risk of CHD andabout the significance of thatrelationship. This information helps toconvey the seriousness of CHD and therole that a diet high in oat bran andoatmeal can play to help reduce the riskof CHD.

In § 101.81(d)(4), the agency isproposing that the claim may state thatoat bran or oatmeal are good sources ofdietary fiber, particularly soluble fiber.In referring to the fiber components theclaim may use the terms ‘‘fiber,’’‘‘dietary fiber,’’ and ‘‘soluble fiber.’’ Ifthe term ‘‘soluble fiber’’ is used in theclaim, the declaration of soluble fibercontent is required. This proposedprovision is consistent with§ 101.9(c)(6)(i)(A), which states that thedeclaration of soluble fiber on thenutrition label is voluntary, except thatwhen a claim is made on the label or inlabeling about soluble fiber, labeldeclaration is required.

The agency is proposing that theclaim may include any of the optionalinformation authorized to be included


in §§ 101.75(d)(5), (d)(6), and (d)(7) and101.77(d)(5), (d)(6), and (d)(7). Thehealth claim may state that diets high inoat bran or oatmeal and low in saturatedfat and cholesterol are part of a dietarypattern that is consistent with dietaryguidelines for Americans. The claimmay state that individuals with elevatedserum lipids should consult theirphysicians for medical advice andtreatment and may include informationon the prevalence of CHD in the UnitedStates. The intent of this information isto provide consumers with informationthat will help them understand theseriousness of CHD in the United Statesand to help them understand that dietshigh in oat bran or oatmeal areconsistent with dietary guidelines.

In proposed § 101.81(d)(8), inresponse to the petition, the claim mayprovide information about the amountof food, such as bowls, servings orslices, to be consumed daily. Thisinformation may give the consumer abetter perspective on how much oatbran and oatmeal is needed to helplower serum cholesterol levels.

F. Model Health ClaimsIn proposed § 101.81(e), FDA is

providing model health claims toillustrate the requirements of new§ 101.81. FDA emphasizes that thesemodel health claims are illustrativeonly. These model claims illustrate therequired, and some of the optional,elements of the proposed rule. If theagency authorizes a claim about therelationship between oat products andCHD, manufacturers will be free todesign their own claim so long as it isconsistent with § 101.81(c).

In § 101.81(e)(1), the model claimillustrates all of the required elements ofthe proposed health claim. The claimstates ‘‘Diets high in [oat bran oroatmeal] and low in saturated fat andcholesterol may reduce the risk of heartdisease.’’

In § 101.81(e)(2), the model claimsprovide examples of a shortened claimwith the required referral statement.

VI. Environmental ImpactThe agency has determined under 21

CFR 25.24(a)(11) that this action is of atype that does not individually orcumulatively have a significant effect onthe human environment. Therefore,neither an environmental assessmentnor an environmental impact statementis required.

VII. Analysis of ImpactsFDA has examined the impacts of the

proposed rule under Executive Order12866 and the Regulatory Flexibility Act(Pub. L. 96–354). Executive Order 12866

directs agencies to assess all costs andbenefits of available regulatoryalternatives and, when regulation isnecessary, to select regulatoryapproaches that maximize net benefits(including potential economic,environmental, public health and safety,and other advantages; distributiveimpacts; and equity).

The Regulatory Flexibility Actrequires analyzing options for regulatoryrelief for small businesses. FDA findsthat this proposed rule is not asignificant rule as defined by ExecutiveOrder 12866. In accordance with theRegulatory Flexibility Act, the agencycertifies that the proposed rule will nothave a significant impact on asubstantial number of small businesses.

This proposed rule will not result insignificant costs to industry. Some oatmanufacturers are currently using FDA’sapproved health claim regarding thebenefits of fruits, vegetables, and grainproducts. This proposed health claimwill allow them to specifically highlightthe benefits of oat bran and oatmeal.Consumers will benefit from theadditional information regarding therelationship of oat products and CHD.

VIII. Paperwork Reduction Act

FDA tentatively concludes that thisproposed rule contains no reporting,recordkeeping, labeling, or other thirdparty disclosure requirements; thusthere is no ‘‘information collection’’necessitating clearance by the Office ofManagement and Budget. However, toensure the accuracy of this tentativeconclusion, FDA is seeking comment onwhether this proposed rule to permithealth claims on the associationbetween oat products (i.e., oat bran andoatmeal) and reduced risk of CHDimposes any paperwork burden.

IX. Effective Date

FDA is proposing to make theseregulations effective upon publicationin the Federal Register of a final rulebased upon this proposal.

X. Comments

Interested persons may, on or beforeApril 3, 1996, submit to the DocketsManagement Branch (address above)written comments regarding thisproposal. Two copies of any commentsare to be submitted, except thatindividuals may submit one copy.Comments are to be identified with thedocket number found in brackets in theheading of this document. Receivedcomments may be seen in the officeabove between 9 a.m. and 4 p.m.,Monday through Friday.

XI. References

The following references have beenplaced on display in the DocketsManagement Branch (address above)and may be seen by interested personsbetween 9 a.m. and 4 p.m., Mondaythrough Friday.

1. The Quaker Oats Co., ‘‘Petition for HealthClaim—Oat Products and Coronary HeartDisease,’’ March 22, 1995 [CP1].

2. Scarbrough, F. Edward, CFSAN, FDA,Letter to Ted Moeller, Quaker Oats Co.,June 29, 1995.

3. DHHS, Public Health Service (PHS), ‘‘TheSurgeon General’s Report on Nutritionand Health,’’ U.S. Government PrintingOffice, Washington, DC, pp. 83–137,1988.

4. National Research Council, NationalAcademy of Sciences, ‘‘Diet and Health,’’National Academy Press, Washington,DC, pp. 291–309 and 529–547, 1989.

5. DHHS, PHS, and the National Institutes ofHealth (NIH), ‘‘National CholesterolEducation Program: Report of the ExpertPanel on Detection, Evaluation, andTreatment of High Blood Cholesterol inAdults,’’ NIH, Bethesda, MD, pp. 1–79,1989.

6. DHHS, PHS, and NIH, ‘‘NationalCholesterol Education Program:Population Panel Report,’’ Bethesda, MD,pp. 1–27, 1989.

7. LSRO, FASEB, ‘‘Physiological Effects andHealth Consequences of Dietary Fiber,’’Bethesda, MD, 1987.

8. Anderson, J. W., N. H. Gilinsky, D. A.Deakins, S. F. Smith, D. S. O’Neal, D. W.Dillon, and P. R. Oeltgen, ‘‘LipidResponses of Hypercholesterolemic Mento Oat-bran and Wheat Bran Intake,’’American Journal of Clinical Nutrition,54:678–683, 1991.

9. Anderson, J. W., D. B. Spencer, C. C.Hamilton, S. F. Smith, J. Tietyen, C. A.Bryant, and P. Oeltgen, ‘‘Oat-bran CerealLowers Serum Total and LDL Cholesterolin Hypercholesterolemic Men,’’American Journal of Clinical Nutrition,52:495–499, 1990.

10. Bartram, P., S. Gerlach, W. Scheppach, F.Keller, and H. Kasper, ‘‘Effect of a SingleOat Bran Cereal Breakfast on SerumCholesterol, Lipoproteins, andApolipoproteins in Patients withHyperlipoproteinemia Type IIa,’’ Journalof Parenteral and Enteral Nutrition,16:533–537, 1992.

11. Beling, S., L. Detrick, and W. Castelli,‘‘Serum Cholesterol Response to aProcessed Oat Bran Cereal AmongHypercholesterolemics on a Fat-modifiedDiet,’’ unpublished clinical trialsubmitted by the Quaker Oats Co., 1991.

12. Braaten, J. T., P. J. Wood, F. W. Scott, M.S. Wolyneta, M. K. Lowe, P. Bradley-White, M. W. Collins, ‘‘Oat Beta-glucanReduces Blood CholesterolConcentration in HypercholesterolemicSubjects,’’ European Journal of ClinicalInvestigation, 48:465–474, 1994.


13. Bremer, J. M., R. S. Scott, and C. J. Lintott,‘‘Oat Bran and Cholesterol Reduction:Evidence Against Specific Effect,’’Australia and New Zealand Journal ofMedicine, 21:422–426, 1991.

14. Cara, L., C. Cubois, P. Borel, M. Armand,M. Senft, H. Portugal, A. M. Pauli, P. M.Bernard, and D. Lairon, ‘‘Effects of OatBran, Rice Bran, Wheat Fiber, and WheatGerm on Postprandial Lipemia inHealthy Adults,’’ American Journal ofClinical Nutrition, 55:81–88, 1992.

15. Davidson, M. H., L. D. Dugan, J. H. Burns,J. Bova, K. Story, and K. B. Drennan,‘‘The Hypocholesterolemic Effects ofBeta-glucan in Oatmeal and Oat Bran—a Dose-Controlled Study,’’ Journal of theAmerican Medical Association,265(14):1833–1839, 1991.

16. Demark-Wahnefried, W., J. Bowering, andP. S. Cohen, ‘‘Reduced SerumCholesterol with Dietary Change UsingFat-Modified and Oat BranSupplemented Diets,’’ Journal of theAmerican Dietetic Association, 90:223–229, 1990.

17. Gold, K. V., and D. M. Davidson, ‘‘OatBran as a Cholesterol-reducing DietaryAdjunct in a Young, HealthyPopulation,’’ Western Journal ofMedicine, 148:299–302, 1988.

18. Gormley, T. R., J. Kevany, J. P. Egan, andR. McFarland, ‘‘Investigation of thePotential of Porridge as aHypocholesterolemic Agent,’’ IsraelJournal of Food Science and Technology,2:85–91, 1978.

19. He, J., M. J. Klag, P. K. Whelton, J-P. Mo,J-Y. Chen, P-S. Mo, and G-Q. He, ‘‘Oatsand Buckwheat Intakes andCardiovascular Disease Risk Factors inan Ethnic Minority of China,’’ AmericanJournal of Clinical Nutrition, 61:366–372, 1995.

20. Hegsted, M., M. M. Windhauser, K.Morris, and S. B. Lester, ‘‘Stabilized RiceBran and Oat Bran Lower Cholesterol inHumans,’’ Nutrition Research, 13:387–398, 1993.

21. Kahn, R. F., K. W. Davidson, J. Garner,and R. S. McCord, ‘‘Oat BranSupplementation for Elevated SerumCholesterol,’’ Family Practice ResearchJournal, 10:37–46, 1990.

22. Kastan, H. H., S. Stern, D. J. A. Jenkins,K. Hay, N. Marcon, S. Minkin, and W. R.Bruce, ‘‘Wheat Bran and Oat-branSupplements’ Effects on Blood Lipidsand Lipoproteins,’’ American Journal ofClinical Nutrition, 55:976–980, 1992.

23. Keenan, J. M., J. B. Wenz, S. Myers, C.Ripsin, and Z. Huang, ‘‘RandomizedControlled Cross-over Trial of Oat Branin Hypercholesterolemic Subjects,’’Journal of Family Practice, 33:600–608,1991.

24. Kelley, M. J., J. Hoover-Plow, J. F.Nichols-Bernhard, L.S. Verity, and H.B.Brewer, ‘‘Oat Bran Lowers Total andLow-Density Lipoprotein Cholesterol butNot Lipoprotein in Exercising Adultswith Borderline Hypercholesterolemia,’’Journal of the American DieteticAssociation, 94:1419-1421, 1994.

25. Kestin, M., R. Moss, P. M. Clifton, and P.J. Nestel, ‘‘Comparative Effects of ThreeCereal Brans on Plasma Lipids, BloodPressure, and Glucose Metabolism inMildly Hypercholesterolemic Men,’’American Journal of Clinical Nutrition,52:661–666, 1990.

26. Leadbetter, J., M. J. Ball, and J. I. Mann,‘‘Effects of Increasing Quantities of OatBran in Hypercholesterolemic People,’’American Journal of Clinical Nutrition,54:841–845, 1991.

27. Lepre, F., and S. Crane, ‘‘Effect of OatBran on Mild Hyperlipidaemia,’’ TheMedical Journal of Australia, 157:305–306, 1992.

28. Mackay, S., and M. J. Ball, ‘‘Do Beans andOat Bran Add to the Effectiveness of aLow-fat Diet?’’, European Journal ofClinical Nutrition, 46:641–648, 1992.

29. Marlett, J. A., K. B. Hosig, N. W.Vollendorf, F. L. Shinnick, V.S. Haack,and J. A. Story, ‘‘Mechanism of SerumCholesterol Reduction by Oat Bran,’’Hepatology, 20:1450-1457, 1994.

30. O’Brien, L. T., R. J. Barnard, and J. A.Hall, ‘‘Effects of a High-Complex-Carbohydrate Low-cholesterol Diet plusBran Supplement on Serum Lipids,’’Journal of Applied Nutrition, 37:26–34,1985.

31. O’Kell, R. T., and A. A. Duston, ‘‘Lack ofEffect of Dietary Oats on SerumCholesterol,’’ Missouri Medicine, 85:726–728, 1988.

32. Poulter, N., C. L. Chang, A. Cuff, C.Poulter, P. Sever, and S. Thom, ‘‘LipidProfiles after the Daily Consumption ofan Oat-Based Cereal: A ControlledCrossover Trial,’’ American Journal ofClinical Nutrition, 58:66–69, 1993.

33. Ripsin, C. M., J. M. Keenan, D. R. Jacobs,P. J. Elmer, R. R. Welch, L. Van Horn, K.Liu, W. H. Turnbull, F. W. Thye, M.Kestin, M. Hegsted, D. M. Davidson, M.H. Davidson, L. D. Dugan, W. Demark-Wahnefried, and S. Beling, ‘‘OatProducts and Lipid Lowering—AMetaanalysis,’’ Journal of the AmericanMedical Association, 267:3317–3325,1992.

34. Saudia, T. L., B. R. Barfield, and J. Barger,‘‘Effect of Oat Bran Consumption onTotal Serum Cholesterol Levels inHealthy Adults,’’ Military Medicine,157:567–568, 1992.

35. Spiller, G. A., J. W. Farquhar, J. E. Gates,and S. F. Nichols, ‘‘Guar Gum andPlasma Cholesterol, Effect of Guar Gumand an Oat Fiber Source on PlasmaLipoproteins and Cholesterol inHypercholesterolemic Adults,’’Arteriosclerosis and Thrombosis,11:1204–1208, 1991.

36. Stewart, F. M., J. M. Neutze, and R.Newsome-White, ‘‘The Addition of OatBran to a Low Fat Diet Has No Effect onLipid Values in HypercholesterolaemicSubjects,’’ New Zealand Medical Journal,106:398–340, 1992.

37. Swain, J. F., I. L. Rouse, C. B. Curley, andF. M. Sacks, ‘‘Comparison of the Effectsof Oat Bran and Low Fiber Wheat onSerum Lipoprotein Levels and BloodPressure,’’ New England Journal ofMedicine, 322:147–152, 1990.

38. Torronen, R., L. Kansanen, M. Uusitupa,O. Hanninen, O. Myllymaki, H.Harkonen, and Y. Malkki, ‘‘Effects of anOat Bran Concentrate on Serum Lipids inFree-Living Men with Mild to ModerateHypercholesterolaemia,’’ EuropeanJournal of Clinical Nutrition, 46:621–627, 1992.

39. Turnbull, W. H., and A. R. Leeds,‘‘Reduction of Total and LDL-cholesterolin Plasma by Rolled Oats,’’ Journal ofClinical Nutrition and Gastroenterology,2:1–4, 1987.

40. Grover, S. A., M. Abrahamowicz, L.Joseph, C. Brewer, L. Coupal, S. Suissa,‘‘The Benefits of TreatingHyperlipidemia to Prevent CoronaryHeart Disease,’’ Journal of the AmericanMedical Association, 267:816–822, 1992.

41. Uusitupa, M. I. J., E. Ruuskanen, E.Makinen, J. Laitinen, E. Toskala, K.Kervinen, and A. Kesaniemi, ‘‘AControlled Study on the Effect of Beta-Glucan-Rich Oat Bran on Serum Lipidsin Hypercholesterolemic Subjects:Relation to Apolipoprotein EPhenotype,’’ Journal of the AmericanCollege of Nutrition, 11:651–659, 1992.

42. Van Horn, L., L. A. Emidy, K. Liu, Y.Liao, C. Ballew, J. King, and J. Stamler,‘‘Serum Lipid Response to a Fat-Modified, Oatmeal-Enhanced Diet,’’Preventive Medicine, 17:377–386, 1988.

43. Van Horn, L., K. Liu, D. Parker, L. Emidy,Y. Liao, W. H. Pan, D. Giumetti, J.Hewitt, and J. Stamler, ‘‘Serum LipidResponse to Oat Product Intake with aFat-Modified Diet,’’ Journal of theAmerican Dietetic Association, 86:759–764, 1986.

44. Van Horn, L., A. Moag-Stahlberg, K. Liu,C. Ballew, K. Ruth, R. Hughes, J. Stamler,‘‘Effects on Serum Lipids of AddingInstant Oats to Usual American Diets,’’American Journal of Public Health,81:183–188, 1991.

45. Whyte, J., R. McArthur, D. Topping, andP. Nestel, ‘‘Oat Bran Lowers PlasmaCholesterol in MildlyHypercholesterolemic Men,’’ Journal ofthe American Dietetic Association,92:446–449, 1992.

46. Zhang, J. G. Hallmans, H. Andersson, I.Bosaeur, P. Aman, P. Tidehag, R.Stenling, E. Lundin, and S. Dahlgren,‘‘Effect of Oat Bran on PlasmaCholesterol and Bile Acid Excretion inNine Subjects With Ileostomies,’’American Journal of Clinical Nutrition,56:99–105, 1992.

47. Sempos, C. T., J. I. Cleeman, M. D.Carroll, C. L. Johnson, P. S. Bachorik, D.J. Gordon, V. L. Burt, R. R. Briefel, C. D.Brown, K. Lippel, and B. M. Rifkind,‘‘Prevalence of High Blood CholesterolAmong U.S. Adults. An Update Based onGuidelines from the Second Report ofthe National Cholesterol EducationProgram Adult Treatment Panel,’’Journal of the American MedicalAssociation, 269:3009–3014, 1993.

48. Ross, R., ‘‘Atherosclerosis,’’ in Cecil—Textbook of Medicine, edited byWyngaarden, J. B., L. H. Smith, and J. C.Bennett, Harcourt Brace Jovanevich, Inc.,Philadelphia, p. 293–295, 1992.


49. Saltsman, Joyce J., CFSAN, FDA,Memorandum to file, May 19, 1995.

50. DHHS and USDA, ‘‘Nutrition and YourHealth: Dietary Guidelines forAmericans,’’ U.S. Gov. Printing Office,273–930, 1990.

51. Schultz, William B., FDA, Letter to JohnR. Cady, National Food ProcessorsAssociation, May 11, 1995.


Food labeling, Incorporation byreference, Nutrition, Reporting andrecordkeeping requirements.

Therefore, under the Federal Food,Drug, and Cosmetic Act and underauthority delegated to the Commissionerof Food and Drugs, it is proposed that21 CFR part 101 be amended as follows:

PART 101—FOOD LABELING

1. The authority citation for 21 CFRpart 101 is revised to read as follows:

Authority: Secs. 4, 5, 6 of the FairPackaging and Labeling Act (15 U.S.C. 1453,1454, 1455); secs. 201, 301, 402, 403, 409,501, 502, 505, 701 of the Federal Food, Drug,and Cosmetic Act (21 U.S.C. 321, 331, 342,343, 348, 351, 352, 355, 371).

2. New § 101.81 is added to subpart Eto read as follows:

§ 101.81 Health claims: Oat products andrisk of coronary heart disease.

(a) Relationship between diets high inoatmeal and oat bran and the risk ofcoronary heart disease. (1)Cardiovascular disease means diseasesof the heart and circulatory system.Coronary heart disease (CHD) is themost common and serious form ofcardiovascular disease and refers todiseases of the heart muscle andsupporting blood vessels. High bloodtotal cholesterol and low densitylipoprotein (LDL)-cholesterol levels areassociated with increased risk ofdeveloping CHD. High CHD rates occuramong people with high totalcholesterol levels of 240 milligrams perdeciliter (mg/dL) (6.21 millimoles perliter (mmol/L)) or above and LDL-cholesterol levels of 160 mg/dL (4.13mmol/L) or above. Borderline high risktotal cholesterol levels range from 200 to239 mg/dL (5.17 to 6.18 mmol/L) and130 to 159 mg/dL (3.36 to 4.11 mmol/L) of LDL-cholesterol. The scientificevidence establishes that diets high insaturated fat and cholesterol areassociated with increased levels ofblood total- and LDL-cholesterol and,thus, with increased risk of coronaryheart disease.

(2) Populations with a low incidenceof coronary heart disease tend to haverelatively low blood total cholesteroland LDL-cholesterol levels. Thesepopulations also tend to have dietary

patterns that are not only low in totalfat, especially saturated fat, andcholesterol but are also relatively highin fiber-containing fruits, vegetables,and grain products, such as oatmeal andoat bran.

(3) Oat bran and oatmeal are low insaturated fat and cholesterol and a goodsource of soluble fiber. Scientificevidence demonstrates that diets high inthese oat products are associated withreduced blood total and LDL-cholesterollevels.

(b) Significance of the relationshipbetween diets high in oatmeal and oatbran and the risk of coronary heartdisease. (1) Coronary heart disease is amajor public health concern in theUnited States. It accounts for moredeaths than any other disease or groupof diseases. Early management of riskfactors for coronary heart disease is amajor public health goal that can assistin reducing the risk of coronary heartdisease. High blood total and LDL-cholesterol are major modifiable riskfactors in the development of CHD.

(2) Intakes of saturated fat exceedrecommended levels in the diets ofmany people in the United States.Intakes of cholesterol are, on average, ator above recommended levels. One ofthe major public healthrecommendations relative to coronaryheart disease risk is to consume lessthan 10 percent of calories fromsaturated fat and an average of 30percent or less of total calories from allfat. Recommended daily cholesterolintakes are 300 mg or less per day.Scientific evidence demonstrates thatdiets high in oat bran and oatmeal andlow in saturated fat and cholesterol areassociated with lower blood total andLDL-cholesterol levels.

(c) Requirements. (1) All requirementsset forth in § 101.14 shall be met.

(2) Specific requirements. (i) Natureof the claim. A health claim associatingdiets high in oatmeal or oat bran withreduced risk of coronary heart diseasemay be made on the label or labeling ofa food described in paragraph (c)(2)(iii)of this section, provided that:

(A) The claim states that oatmeal oroat bran ‘‘may’’ or ‘‘might’’ reduce therisk of heart disease.

(B) In specifying the disease, theclaim uses the following terms: ‘‘heartdisease’’ or ‘‘coronary heart disease.’’

(C) The claim states that:(1) Diets high in oatmeal or oat bran

may reduce the risk of coronary heartdisease; and

(2) The effect of dietary intake ofoatmeal or oat bran on the risk ofcoronary heart disease is particularlyevident when these foods are consumed

as part of a diet that is low in saturatedfat and cholesterol.

(D) The claim does not attribute anydegree of risk reduction for coronaryheart disease to diets high in oat bran oroatmeal and low in saturated fat andcholesterol.

(E) The claim does not imply thatconsumption of oat bran or oatmeal isthe only recognized means of achievinga reduced risk of coronary heart disease.

(ii) Presentation of the claim. All ofthe elements listed in paragraph (c)(2)(i)of this section must be included in onepresentation of the claim displayedprominently on the label or in thelabeling on which the claim appears.Other presentations of the claim on thatlabel or labeling, including on theprincipal display panel, need notinclude the information in paragraph(c)(2)(i)(C)(2) of this section providedthat, displayed prominently and inimmediate proximity to a shortenedstatement of the claim, the followingreferral statement is used: ‘‘Seelllll for more information’’ withthe blank filled in with the identity ofthe panel on which is presented thestatement of the claim that includes allof the elements in paragraph (c)(2)(i) ofthis section.

(A) The referral statement ‘‘See[appropriate panel] for moreinformation’’ shall be in easily legibleboldface print or type, in distinctcontrast to other printed or graphicmatter, that is no less than that requiredby § 101.105(i) for net quantity ofcontents, except where the size of theclaim is less than 2 times the requiredsize of the net quantity of contentsstatement, in which case the referralstatement shall be no less than one-halfthe size of the claim but no smaller thanone-sixteenth of an inch.

(B) The referral statement shall beimmediately adjacent to anypresentation of the health claim thatdoes not include all of the elements inparagraph (c)(2)(i) of this section, andthere may be no intervening materialbetween the claim and the referralstatement. If the abbreviated healthclaim appears on more than one panelof the label, the referral statement shallbe adjacent to the claim on each panelexcept for the panel that bears the fullhealth claim, where it may be omitted.

(iii) Nature of the food. (A) The foodshall contain no less than 20 g oatmealor 13 g oat bran that provides, withoutfortification, at least 1 g of β-glucansoluble fiber per reference amountcustomarily consumed. Beta-glucan willbe determined by method No. 992.28from the ‘‘Official Methods of Analysisof the Association of Official AnalyticalChemists,’’ 15th ed. (1993), which is


incorporated by reference in accordancewith 5 U.S.C. 552(a) and 1 CFR part 51.Copies may be obtained from theAssociation of Official AnalyticalChemists, 481 North Frederick Ave.,suite 500, Gaithersburg, MD 20877–2504, or may be examined at the Centerfor Food Safety and Applied Nutrition’sLibrary, 200 C St. SW., rm. 3321,Washington, DC, or at the Office of theFederal Register, 800 North Capitol St.NW., suite 700, Washington, DC;

(B) The food shall meet the nutrientcontent requirements in § 101.62 for a‘‘low saturated fat,’’ ‘‘low cholesterol,’’and ‘‘low fat’’ food.

(d) Optional information. (1) Theclaim may state that the development ofheart disease depends on many factorsand may identify one or more of thefollowing risk factors for heart diseaseabout which there is general scientificagreement: A family history of coronaryheart disease; elevated blood total andLDL-cholesterol; excess body weight;high blood pressure; cigarette smoking;diabetes; and physical inactivity. Theclaim may also provide additionalinformation about the benefits ofexercise and management of bodyweight to help lower the risk of heartdisease.

(2) The claim may state that therelationship between intake of oat branand oatmeal and reduced risk of heartdisease is through the intermediate linkof ‘‘blood cholesterol’’ or ‘‘blood total-and LDL-cholesterol.’’

(3) The claim may includeinformation from paragraphs (a) and (b)

of this section, which summarize therelationship between oat bran oroatmeal and coronary heart disease andthe significance of the relationship.

(4) The claim may state that oat branand oatmeal are good sources of dietaryfiber, particularly soluble fiber. Inreferring to the oat fiber component, theclaim may use the terms ‘‘fiber,’’‘‘dietary fiber,’’ or ‘‘soluble fiber.’’ If theclaim uses the term soluble fiber, thetotal soluble fiber content shall bedeclared in the nutrition informationpanel, consistent with§ 101.9(c)(6)(i)(A).

(5) The claim may state that a diet lowin saturated fat and cholesterol and highoatmeal or oat bran is consistent with‘‘Nutrition and Your Health: DietaryGuidelines for Americans,’’ U.S.Department of Agriculture (USDA) andDepartment of Health and HumanServices (DHHS), Government PrintingOffice (GPO);

(6) The claim may state thatindividuals with elevated blood total-and LDL-cholesterol should consulttheir physicians for medical advice andtreatment. If the claim defines high ornormal blood total- and LDL-cholesterollevels, then the claim shall state thatindividuals with high blood cholesterolshould consult their physicians formedical advice and treatment;

(7) The claim may includeinformation on the number of people inthe United States who have heartdisease. The sources of this informationshall be identified, and it shall becurrent information from the National

Center for Health Statistics, the NationalInstitutes of Health, or ‘‘Nutrition andYour Health: Dietary Guidelines forAmericans,’’ USDA and DHHS, GPO;

(8) The claim may provideinformation about the amounts of oat-containing food, e.g., bowls, servings,slices, to be consumed in a day.

(e) Model health claim. The followingmodel health claims may be used infood labeling to describe therelationship between oat bran andoatmeal and reduced risk of heartdisease:

(1) The following is an example of afull claim: Diets high in [oat bran/oatmeal] and low in saturated fat andcholesterol may reduce the risk of heartdisease.

(2) The following are examples of ashortened claim:

(A) [Front panel] Diets high in [oatbran or oatmeal] may reduce the risk ofheart disease

See [side/back] panel for moreinformation

(B) [Front panel] Eating [oat bran oroatmeal] daily may reduce heart diseaserisk

See [side/back] panel for moreinformation

Dated: December 22, 1995.William B. Schultz,Deputy Commissioner for Policy.

Note: The following tables will not appearin the Code of Federal Regulations.

BILLING CODE 4160–01–P


[FR Doc. 96–29 Filed 1–3–96; 8:45 am]BILLING CODE 4160–01–C




26 CFR Part 1

[IL–0075–92]

RIN 1545–AR31

Definition of Foreign Base CompanyIncome and Foreign Personal HoldingCompany Income of a ControlledForeign Corporation; HearingCancellation

AGENCY: Internal Revenue Service,Treasury.

ACTION: Cancellation of notice of publichearing on proposed regulations.

SUMMARY: This document providesnotice of cancellation of a publichearing on proposed regulations relatingto the definition of subpart F incomeand foreign personal holding companyincome of a controlled foreigncorporation and the allocation ofdeficits for purposes of computing thedeemed-paid foreign tax credit.

DATES: The public hearing originallyscheduled for Thursday, January 4,1996, beginning at 10 a.m. is cancelled.

FOR FURTHER INFORMATION CONTACT:Mike Slaughter of the Regulations Unit,Assistant Chief Counsel (Corporate),(202) 622–7190, (not a toll-free number).

SUPPLEMENTARY INFORMATION: Thesubject of the public hearing is proposedregulations under sections 952, 954(c)and 960 of the Internal Revenue Code.A notice of proposed rulemaking andnotice of public hearing appearing inthe Federal Register for Thursday,September 7, 1995 (60 FR 46548),announced that the public hearing onproposed regulations under sections952, 954(c) and 960 of the InternalRevenue Code would be held onThursday, January 4, 1996, beginning at10 a.m., in the IRS Auditorium, InternalRevenue Building, 1111 ConstitutionAvenue, NW., Washington, D.C.

The public hearing scheduled forThursday, January 4, 1996, is cancelled.Cynthia E. Grigsby,Chief, Regulations Unit, Assistant ChiefCounsel (Corporate).[FR Doc. 95–31581 Filed 12–29–95; 11:24am]BILLING CODE 4830–01–M


[IA–41–93]

RIN 1545–AS04

Automatic Extension of Time for FilingIndividual Income Tax Returns

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Notice of proposed rulemakingby cross reference to temporaryregulations and notice of public hearing.

SUMMARY: In the Rules and Regulationssection of this issue of the FederalRegister, the IRS is issuing temporaryregulations that reflect the newprocedures for obtaining an automaticextension of time to file an individualincome tax return. The text of thetemporary regulations also serves as thecomment document for this notice ofproposed rulemaking. This documentalso provides notice of a public hearingon these proposed regulations.DATES: Written comments must bereceived by April 1, 1996. Outlines oftopics to be discussed at the publichearing scheduled for May 8, 1996,beginning at 10:00 a.m. must bereceived by April 1, 1996.ADDRESSES: Send submissions to:CC:DOM:CORP:R (IA–41–93), room5228, Internal Revenue Service, POB7604, Ben Franklin Station, Washington,DC 20044. In the alternative,submissions may be hand deliveredbetween the hours of 8 a.m. and 5 p.m.to: CC:DOM:CORP:R (IA–41–93),Courier’s Desk, Internal RevenueService, 1111 Constitution Avenue,NW., Washington, DC. The publichearing will be held in the IRSAuditorium.FOR FURTHER INFORMATION CONTACT:Concerning the regulations, Margaret A.Owens, 202–622–6232 (not a toll-freenumber). Concerning submissions andthe public hearing, Michael Slaughter,202–622–7190 (not a toll-free number).


Paperwork Reduction Act

The collection of informationcontained in this notice of proposedrulemaking has been submitted to theOffice of Management and Budget forreview in accordance with thePaperwork Reduction Act of 1995 (44U.S.C. 3507).

Comments on the collection ofinformation should be sent to the Officeof Management and Budget, Attn: DeskOfficer for the Department of theTreasury, Office of Information andRegulatory Affairs, Washington, DC20503, with copies to the Internal

Revenue Service, Attn: IRS ReportsClearance Officer, T:FP, Washington, DC20224. Comments on the collection ofinformation should be received byMarch 4, 1996.


The collection of information is in§ 1.6081–4T(a). This information isrequired by the IRS to monitor the filingof individual income tax returns. Thisinformation will be used to determinewhich individuals need automatic 4-month extensions of time to file. Thelikely respondents are individuals orhouseholds. Responses to this collectionof information are required to obtain abenefit (an automatic 4-month extensionof time to file an individual income taxreturn).

Books or records relating to acollection of information must beretained as long as their contents maybecome material in the administrationof any internal revenue law. Generally,tax returns and tax return informationare confidential, as required by 26U.S.C. 6103.

Estimates of the reporting burden inthis Notice of Proposed Rulemaking willbe reflected in the burden of Form 4868.

BackgroundThe temporary regulations published

in the Rules and Regulations section ofthis issue of the Federal Registercontain amendments to the Income TaxRegulations (26 CFR part 1) and theRegulations on Procedure andAdministration (26 CFR part 301). Thetemporary regulations provide rulesrelating to obtaining an automatic 4-month extension of time to file anindividual income tax return. The textof the temporary regulations also servesas the text of these proposedregulations. The preamble to thetemporary regulations explains theseproposed regulations.

Special AnalysesIt has been determined that this notice

of proposed rulemaking is not asignificant regulatory action as definedin EO 12866. Therefore, a regulatoryassessment is not required. It also hasbeen determined that section 553(b) ofthe Administrative Procedure Act (5U.S.C. chapter 5) and the RegulatoryFlexibility Act (5 U.S.C. chapter 6) donot apply to these rules, and therefore,a Regulatory Flexibility Analysis is notrequired. Pursuant to section 7805(f) ofthe Internal Revenue Code, a copy ofthis notice of proposed rulemaking willbe submitted to the Chief Counsel for


Advocacy of the Small BusinessAdministration for comment on itsimpact on small business.

Comments and Public HearingBefore these proposed regulations are

adopted as final regulations,consideration will be given to anywritten comments (a signed original andeight (8) copies) that are submittedtimely to the IRS. All comments will beavailable for public inspection andcopying.

A public hearing has been scheduledfor May 8, 1996, at 10:00 a.m., at the IRSAuditorium. Because of accessrestrictions, visitors will not beadmitted beyond the building lobbymore than 15 minutes before the hearingstarts.

The rules of 26 CFR 601.601(a)(3)apply to the hearing.

Persons who wish to present oralcomments at the hearing must submitwritten comments by April 1, 1996, andsubmit an outline of the topics to bediscussed and the time to be devoted toeach topic (signed original and eight (8)copies) by April 1, 1996.

A period of 10 minutes will beallotted to each person for makingcomments.

An agenda showing the scheduling ofthe speakers will be prepared after thedeadline for receiving comments haspassed. Copies of the agenda will beavailable free of charge at the hearing.

Drafting InformationThe principal author of these

regulations is Margaret A. Owens, Officeof the Assistant Chief Counsel (IncomeTax & Accounting), IRS. However, otherpersonnel from the IRS and TreasuryDepartment participated in theirdevelopment.

List of Subjects

26 CFR Part 1


26 CFR Part 301

Employment taxes, Estate taxes,Excise taxes, Gift taxes, Income taxes,Penalties, Reporting and recordkeepingrequirements.

Proposed Amendments to theRegulations

Accordingly, 26 CFR parts 1 and 301are proposed to be amended as follows:


Paragraph 1. The authority citationfor part 1 continues to read in part asfollows:

Authority: 26 U.S.C. 7805. * * *

Par. 2. Section 1.6081–4 is amendedby:

1. Revising paragraph (a).2. Adding paragraph (d).The revised and added provisions

read as follows:

§ 1.6081–4 Automatic extension of time forfiling individual income tax returns.[The text of proposed paragraphs (a) and(d) are the same as the text of § 1.6081–4T (a) and (d) published elsewhere inthis issue of the Federal Register].

PART 301—PROCEDURE ANDADMINISTRATION

Par. 3. The authority citation for part301 continues to read in part as follows:

Authority: 26 U.S.C. 7805. * * *

Par. 4. In § 301.6651–1, paragraph(c)(3) is revised to read as follows:

§ 301.6651–1 Failure to file tax return or topay tax.

* * * * *(c)(3) [The text of this proposed

paragraph (c)(3) is the same as the textof § 301.6651–1T(c)(3) publishedelsewhere in this issue of the FederalRegister].* * * * *Margaret Milner Richardson,Commissioner of Internal Revenue.[FR Doc. 96–115 Filed 1–3–96; 8:45 am]BILLING CODE 4830–01–U



32 CFR Part 199

[DoD 6010.8–R]

Civilian Health and Medical Program ofthe Uniformed Services (CHAMPUS);Individual Case Management

AGENCY: Office of the Secretary, DoD.ACTION: Proposed rule.

SUMMARY: This proposed ruleimplements provisions of the 1993National Defense Authorization Actwhich allows the Secretary of Defense toestablish a case management programfor CHAMPUS beneficiaries withextraordinary medical or psychologicaldisorders and to allow suchbeneficiaries medical or psychologicalservices, supplies, or durable medicalequipment excluded by law orregulation as a CHAMPUS benefit.Under this program, waiver of benefitlimits to the Basic CHAMPUS programmay be authorized for beneficiarieswhen the provision of such services orsupplies is cost effective and clinically

appropriate, as compared to historical orprojected CHAMPUS/MTF utilization ofhealth care services. It is designed todevelop a cost-effective plan of care bytargeting appropriate resources to meetthe individual needs of the beneficiary.DATES: Written public comments mustbe received on or before March 4, 1996.FOR FURTHER INFORMATION CONTACT:CAPT Deborah Kamin, Office of theAssistant Secretary of Defense (HealthAffairs), (703)–697–8975.SUPPLEMENTARY INFORMATION: TheCivilian Health and Medical Program ofthe Uniformed Services (CHAMPUS)supplements the availability of healthcare in military hospitals and clinics.Case management centering on amultidisciplinary treatment approachoffers the beneficiary and providerassurance that specific services andsupplies are allowable as CHAMPUSbenefits and provides an opportunity touse those benefits efficiently.

Statutory AuthorityThe case management program is

based on the authority of 10 U.S.C.1079(a)(17), which provides:

The Secretary of Defense may establish aprogram for the individual case managementof a person covered by this section or section1086 of this title who has extraordinarymedical or psychological disorders and,under such a program, may waive benefitlimitations contained in paragraphs (5) and(13) of this subsection or section 1077(b)(1)of this title and authorize the payment forcomprehensive home health care services,supplies, and equipment if the Secretarydetermines that such a waiver is costeffective and appropriate.

Case ManagementThe CHAMPUS individual case

management program seeks to achievecost effective quality health care byconsidering alternatives to inpatienthospitalization and by recommending awaiver of the current CHAMPUS benefitlimits that, when provided in lieu ofinpatient care (or to prevent recurrenthospitalizations), are cost effective andclinically appropriate. Waivers ofbenefit limits must be approved andcoordinated by the case manager andmay include, but not be limited toservices or supplies such as homehealth care, medical supplies, back-updurable medical equipment, extendedskilled nursing care and home healthaides. CHAMPUS case managers will beemployees or contractors of theDepartment of Defense. We propose toadd to section 199.4 authorization, as acase management related benefit and ona case-by-case basis, services or suppliesthat would otherwise be excluded asnon-medical or duplicate durable


equipment, custodial care, ordomiciliary care. We also propose toadd definitions for waiver of benefitlimits, case management, case manager,case management multidisciplinaryteam, extraordinary condition, andprimary caregiver.

Eligibility

A beneficiary’s eligibility forparticipation in the CHAMPUS casemanagement program is dependent on:(1) The presence of an extraordinarymedical or psychological conditionwhich has resulted in high utilization ofCHAMPUS/MTF resources in aninpatient setting, (2) the cost-effectiveness of providing services ofsupplies outside inpatient settings, and(3) the willingness of the beneficiary toparticipate, and (4) the presence of aprimary caregiver in the home when theservices provided include home healthcare.

Role/Purpose of a Primary Caregiver

Candidates for this program willrequire a level of support which cannotoccur safely outside an inpatient settingunless there is a primary caregiver inthe home. Therefore, the presence of aprimary caregiver to provide services isa pre-condition of participation. Weenvision that, in most cases, the role ofprimary caregiver will fall to membersof the beneficiary’s family.

Covered Services

A list of services or supplies that maybe covered as a waiver of benefit limitswill not be established. Rather, wepropose that, under the casemanagement program, clinicallyappropriate services and/or suppliesmay be provided when those services orsupplies are cost effective.

Custodial Care

The provision of custodial care as awaiver of benefit limits is proposed asa transitional benefit for patients andfamilies facing extraordinary medical orpsychological conditions. To qualify forthis waiver of benefit limits, thefollowing conditions must be met: (1)The patient must have beenrehospitalized for exacerbations orcomplications of his/her custodialcondition on a recurring basis in theprior year, (2) The proposed treatmentmust be cost effective when comparedto alternative treatment which wouldotherwise occur, (3) The patient’scondition at referral for casemanagement is either acute or there areindicators of a rapidly approachingacute episode, and (4) There must be aprimary caregiver.

We expect individual patients willrequire varying levels of support andtime to stabilize in the homeenvironment. We propose a maximumof 30 (thirty) days for custodial careunder case management. However, thisrule would allow case managers toextend the period of time beyond thirtydays when it is considered cost effectiveto do so.

Prior Authorization

Prior authorization from casemanagers will be required before thedelivery of any case managed benefits.Because eligibility for a waiver ofbenefit limits is based on an indepthassessment of medical needs, as well asthe cost effectiveness and clinicalappropriateness of alternate services,any services provided absent priorauthorization will not be covered byCHAMPUS. Retrospective requests forcoverage under this program will not beauthorized.

Military Health Services SystemResource Management

To ensure cost efficient as well as costeffective use of resources, theDepartment of Defense will include casemanagement requirements, as describedin this rule, in nationwide managed caresupport contracts now being procured.Managed care support contractors willbe authorized to make available casemanagement services to MilitaryMedical Treatment Facilities. In areaswhere transition to managed caresupport contracts has not occurred, casemanagement services will be providedthrough existing regional peer revieworganizations (Regional Review Centers,or RRCs). MTFs will be provided theopportunity to refer potential candidatesto the appropriate CHAMPUS casemanager. Where possible, MilitaryMedical Treatment Facilities willprovide care and services or supplies insupport of regional case managementprograms.

Beneficiary Acknowledgment

Case management is a collaborativeprocess among the case manager,beneficiary, primary caregiver, andprofessional health care providers. Forcase management to be successful, thebeneficiary and primary caregiver mustparticipate in the process and be awareof and agree with the requirements ofthe program. To document theunderstanding of their roles, rights andresponsibilities, a standardacknowledgment, signed by thebeneficiary (or representative) and theprimary caregiver, will be required priorto the start of case management services.

CHAMPUS HHC/HHC–CMDemonstration

The 1986 Home Health Care and 1988Home Health Care-Case ManagementDemonstration projects were developedto test whether case management,coupled with home health care benefits,could reduce medical costs and improveservices to CHAMPUS beneficiaries.Under the 1986 demonstration, casemanagement services were limited tobeneficiaries who, in the absence of casemanaged home health care, would haveremained hospitalized. The 1988program was less restrictive and nolonger required case managementservices only as a substitute forcontinued hospitalization. Theeffectiveness of methods for identifyingpotentially eligible beneficiaries andestablishing the clinical appropriatenessand cost-effectiveness of servicesprovided was addressed by the GeneralAccounting Office (GAO). In theirreport, ‘‘DEFENSE HEALTH CARE:Further Testing and Evaluation of CaseManagement Home Care Is Needed,’’ theGAO identified a need for stronger costcontrols and improved targeting ofpotential candidates beforeimplementation of a permanent casemanagement program under CHAMPUS.While the GAO identified someweaknesses in both demonstrations, themore restrictive design of the 1986program was seen as one whichpresented an acceptable level of risk tothe government. With the GAO’srecommendations and observations inmind, the Department is proposing aCHAMPUS case management programwhich is limited to beneficiaries whowould remain hospitalized in theabsence of such a program, or who havedemonstrated a recent history ofmultiple inpatient episodes.

Regulatory ProceduresExecutive Order (EO) 12866 requires

that a comprehensive regulatory impactanalysis be performed on anyeconomically significant regulatoryaction, defined as one which wouldresult in an annual effect of $100million or more on the nationaleconomy or which would have othersubstantial impacts.

The Regulatory Flexibility Act (RFA)requires that each Federal agencyprepare, and make available for publiccomment, a regulatory flexibilityanalysis when the agency issues aregulation which would have asignificant impact on a substantialnumber of small entities.

This proposed rule is a significantregulatory action under EO 12866 andhas been reviewed by the Office of


Management and Budget. In addition,we certify that this proposed rule willnot significantly affect a substantialnumber of small entities.

Paperwork Reduction ActThis rule, as written, imposes no

burden as defined by the PaperworkReduction Act of 1995. If however, anyprogram implemented under this rulecauses such a burden to be imposed,approval therefore will be sought of theOffice of Management and Budget inaccordance with the Act, prior toimplementation.

List of Subjects in 32 CFR Part 199Claims, handicapped, health

insurance, and military personnel.Accordingly, 32 CFR part 199 is

proposed to be amended as follows:

PART 199—[AMENDED]


Authority: 5 U.S.C. 301; 10 U.S.C. chapter55.

2. Section 199.2(b) is amended byadding new definitions in alphabeticalorder:


* * * * *Case management. Case management

is a collaborative process whichassesses, plans, implements,coordinates, monitors, and evaluates theoptions and services required to meet anindividual’s health needs, usingcommunication and available resourcesto promote quality, cost effectiveoutcomes.

Case manager. A licensed registernurse or licensed social worker who hasa minimum of two (2) years of casemanagement experience.* * * * *

Extraordinary condition. A complexclinical condition which resulted, or isexpected to result, in inpatientCHAMPUS/MTF costs or utilizationabove a threshold established by theDirector, OCHAMPUS, or designee.* * * * *

Primary caregiver. An individual whorenders to a beneficiary services tosupport the essentials of daily living (asdefined in § 199.2) and specific servicesessential to the safe management of thebeneficiary’s condition.* * * * *

Waiver of benefit limits. Coverage,under the Case Management Program, ofmedical care, services, and orequipment not otherwise a benefitunder the Basis CHAMPUS program.* * * * *

3. Section 199.4 is amended byadding new paragraphs (e)(20) and (i) asfollows:

§ 199.4 Basic program benefits.

* * * * *(e) Special benefit information.

* * * * *(20) Case management services. As

part of case management forbeneficiaries with complex medical orpsychological conditions, payment forservices or supplies not otherwisecovered by the Basic CHAMPUSprogram may be authorized when theyare provided in accordance with§ 199.4(i). Waiver of benefit limits to thebasic CHAMPUS program may be costshared where it is demonstrated that theabsence of such services would result inthe exacerbation of an existingextraordinary condition, as defined in§ 199.2, to the extent that frequent orextensive institutional services arerequired; and such services are a costeffective alternative to the BasicCHAMPUS program.* * * * *

(i) Case management program.(1) In general. Case management, as it

applies to this program, provides acollaborative process among the casemanager, beneficiary, primary caregiver,professional health care providers andfunding sources to meet the medicalneeds of an individual with anextraordinary condition. It is designedto promote quality and cost-effectiveoutcomes through assessment, planning,implementing, monitoring andevaluating the options and servicesrequired. Payment for services orsupplies not otherwise covered by thebasic CHAMPUS program may beauthorized when they are provided inaccordance with this paragraph (i).Waiver of benefit limits may be cost-shared where it is demonstrated that theabsence of such services would result inthe exacerbation of an existingextraordinary condition, as defined in§ 199.2, to the extent that frequent orextensive hospitalizations are required;and such services are a cost-effectivealternative to the Basic CHAMPUSprogram.

(2) Applicability of case managementprogram. A CHAMPUS eligiblebeneficiary may participate in the casemanagement program if he/she has anextraordinary condition which isdisabling and requires inpatient care ata CHAMPUS-covered level-of-care. Themedical or psychological conditionmust also:

(i) Be contained in the latest revisionof the International Classification ofDiseases Clinical Modification, or the

Diagnostic and Statistical Manual ofMental Disorders;

(ii) Meet at least one of the following:(A) Demonstrate a prior history of

frequent, multiple inpatient admissions,generating high CHAMPUS costs in theyear immediately preceding eligibilityfor the case management program; or

(B) Require clinically appropriateservices or supplies from multipleproviders to address an extraordinarycondition; and

(iii) More cost effectively and in amore clinically appropriate manner betreated at a less resource intensive levelof care.

(3) Prior authorization required.Services or supplies allowable as abenefit exception under this Sectionshall be cost-shared only when abeneficiary’s entire treatment hasreceived prior authorization through anindividual case management program.

(4) Cost effectiveness requirement.Treatment cost effectiveness shall becalculated as the reduction in the costto the Department of Defense forproposed treatment which substitutesindividual case management services formore expensive care which would haveotherwise been reimbursed under thebasic program. Generally, costeffectiveness determinations willinvolve comparisons betweentreatments primarily using an inpatientsetting and those primarily using anoutpatient or in-home setting. Treatmentmust meet the requirements ofappropriate medical care as defined in§ 199.2.

(5) Limited waiver of exclusions andlimitations. Limited waivers ofexclusions and limitations normallyapplicable to the basic program may begranted for specific services or suppliesonly when a beneficiary’s entiretreatment has received priorauthorization through the individualcase management program described inthis paragraph (i). The Director,OCHAMPUS may grant a patient-specific waiver of benefit limits forservices or supplies in the followingcategories, subject to the waiverrequirements of this section.

(i) Durable equipment. The cost of adevice or apparatus which does notqualify as Durable Medical Equipment(as defined in § 199.2) or back-updurable medical equipment may beshared when determined by theDirector, OCHAMPUS to be cost-effective and clinically appropriate.

(ii) Custodial Care. The cost ofservices or supplies rendered to abeneficiary that would otherwise beexcluded as custodial care (as defined in§ 199.2) may be cost-shared for a periodof 30 (thirty) days when determined by


the Director, OCHAMPUS, to be costeffective and clinically appropriate. Toqualify for a waiver of benefit limits ofcustodial care, the patient must meet alleligibility requirements of thisparagraph (i), including an acutecondition or an acute exacerbation of achronic condition.

(A) The patient must have beenrehospitalized for exacerbations orcomplications of his/her custodialcondition on a recurring basis in theprior year;

(B) The proposed case managementtreatment must be cost effective whencompared to alternative treatmentwhich would otherwise occur;

(C) The patient’s condition at referralfor case management is either acute orthere are indicators of a rapidlyapproaching acute episode; and

(D) There is a primary caregiver.(iii) Domiciliary care. The cost of

services or supplies rendered to abeneficiary that would otherwise beexcluded as domiciliary care (as definedin § 199.2) may be shared whendetermined by the Director,OCHAMPUS to be cost effective andclinically appropriate.

(iv) In home services. The cost of thefollowing in-home services may beshared when determined by theDirector, OCHAMPUS to be costeffective and clinically appropriate:nursing care, physical, occupational,speech therapy, medical social services,intermittent or part-time services of ahome health aide, beneficiarytransportation required for treatmentplan implementation, and training forthe beneficiary and primary caregiversufficient to allow them to assume allfeasible responsibility for the care of thebeneficiary that will facilitate movementof the beneficiary to the least resource-intensive, clinically appropriate setting.(Qualifications for home health aidesshall be based on the standards at 42CFR 484.36.)

(v) Waiver of custodial care limits.The Director, OCHAMPUS may, inextraordinary cases, waive the custodialcare day limits described in paragraph(e)(5)(ii) of this section and authorizethis exception to benefits beyond the 30-day limit. The criteria for waiver of the30-day limit shall be those set inparagraph (e)(5)(ii) of this section.Additionally, there must be a specificdetermination that discontinuation ofthis waiver of benefit limits will resultin immediate onset or exacerbation ofan acute care episode and requirehospitalization or services or supplieswhich increase significantly the costand intensity of care.

(6) Case managementacknowledgment. The beneficiary, or

representative, and the primarycaregiver, shall sign a case managementacknowledgment as a prerequisite toprior authorization of case managementservices. The acknowledgment shallinclude, in part, all of the followingprovisions:

(i) The right to participate fully in thedevelopment and ongoing assessment ofthe treatment;

(ii) That all health care services forwhich CHAMPUS cost sharing is soughtshall be authorized by the case managerprior to their delivery;

(iii) That there are limitations inscope and duration of the planned casemanagement treatment, includingprovisions to transition to otherarrangements;

(iv) The conditions under which casemanagement services are provided,including the requirement that theservices must be cost effective andclinically appropriate; and

(v) That a beneficiary’s participationin the case management program shallbe discontinued for any of the followingreasons:

(A) The loss of CHAMPUS eligibility;(B) A determination that the services

or supplies provided are not costeffective or clinically appropriate;

(C) The beneficiary, or representative,and/or primary caregiver, terminatesparticipation in writing;

(D) The beneficiary and/or primarycaregiver’s failure to comply withrequirements in this paragraph (i); or

(E) A determination that thebeneficiary’s condition no longer meetsthe requirements of participation asdescribed in this paragraph (i).

(7) Other administrative requirements.(i) Qualified providers of services or

items not covered under the basicprogram, or who are not otherwiseeligible for CHAMPUS-authorizedstatus, may be authorized for a time-limited period when such authorizationis essential to implement the plannedtreatment under case management. Suchproviders must not be excluded orsuspended as a CHAMPUS provider,and must agree to participate on allclaims related to the case managementtreatment.

(ii) Retrospective requests forauthorization of waiver of benefit limitswill not be considered. Authorization ofwaiver of benefit limits is allowed onlyafter all other options for services orsupplies have been considered andeither appropriately utilized ordetermined to be clinicallyinappropriate and/or not cost-effective.

(iii) Experimental or investigationaltreatment or procedures shall not becost-shared as an exception to standardbenefits under this part.

(iv) CHAMPUS case managementservices may be provided by contractorsdesignated by the Director,OCHAMPUS.

Dated: December 28, 1995.L.M. Bynum,Alternate OSD Federal Register LiaisonOfficer, Department of Defense.[FR Doc. 96–65 Filed 1–3–96; 8:45 am]BILLING CODE 5000–04–M


Research and Special ProgramsAdministration

49 CFR Part 195

[Docket PS–140(b), Notice 4]

RIN 2137–AC34

Areas Unusually Sensitive toEnvironmental Damage

AGENCY: Research and Special ProgramsAdministration (RSPA), DOT.ACTION: Public workshop.

SUMMARY: RSPA invites industry,government representatives, and thepublic to a third workshop on unusuallysensitive areas (USAs). The workshop’spurpose is to openly discuss the guidingprinciples for determining areasunusually sensitive to environmentaldamage from a hazardous liquidpipeline release. This workshop is acontinuation of the June 15–16, 1995and October 17, 1995 workshops onUSAs.DATES: The workshop will be held onJanuary 18, 1996 from 8:30 a.m. to 4p.m. Persons who are unable to attendmay submit written comments induplicate by February 5, 1996. However,persons submitting guiding principles tobe considered at the January 18workshop must do so by January 12,1996. Interested persons should submitas part of their written comments allmaterial that is relevant to a statementof fact or argument. Late filed commentswill be considered so far as practicable.ADDRESSES: The workshop will be heldat the U.S. Department ofTransportation, Nassif Building, 400Seventh Street, SW, Room 6200–04,Washington, DC. Non-federal employeevisitors are admitted into the DOTheadquarters building through thesouthwest entrance at Seventh and EStreets, SW. Persons who want toparticipate in the workshop should call(202) 366–2392 or e-mail their name,affiliation, and phone number [email protected] before close ofbusiness January 12, 1996. The


workshop is open to all interestedpersons but RSPA may limitparticipation because of spaceconsiderations and the need to obtain aspectrum of views. Callers will benotified if participation is not open.

Send written comments in duplicateto the Dockets Unit, Room 8421,Research and Special ProgramsAdministration, U.S. Department ofTransportation, 400 Seventh Street, SW,Washington, DC 20590–0001. Identifythe docket and notice numbers stated inthe heading of this notice.

All comments and docketed materialswill be available for inspection andcopying in Room 8421 between 8:30a.m. and 4:30 p.m. each business day. Asummary of the workshop will beavailable from the Dockets Unit aboutthree weeks after the workshop.FOR FURTHER INFORMATION CONTACT:Christina Sames, (202) 366–4561, aboutthis document, or the Dockets Unit,(202) 366–5046, for copies of thisdocument or other material in thedocket.SUPPLEMENTARY INFORMATION: 49 U.S.C.60109 requires the Secretary ofTransportation to:

• Consult with the EnvironmentalProtection Agency and describe areasthat are unusually sensitive toenvironmental damage if there is ahazardous liquid pipeline accident, and

• Establish criteria for identifyingeach hazardous liquid pipeline facilityand gathering line, whether otherwisesubject to regulation, located in an areaunusually sensitive to environmentaldamage in the event of a pipelineaccident.

Consistent with the President’sregulatory policy (E.O. 12866), RSPAwants to accomplish this congressionalmandate at the least cost to society.Toward this end, RSPA is seeking earlypublic participation in the rulemakingprocess by holding public workshops atwhich participants, including RSPAstaff, may exchange views on relevantissues. RSPA hopes these workshopswill enable government and industry toreach a better understanding of theproblem and the potential solutionsbefore proposed rules are issued.

On June 15 and 16, 1995, RSPA helda public workshop to openly discuss thecriteria being considered to determineUSAs (60 FR 27948; May 26, 1995).Participants included representativesfrom the hazardous liquid pipelineindustry; the Departments of Interior,Agriculture, Transportation, andCommerce; the EnvironmentalProtection Agency; non-governmentagencies; and the public. Participants atthe workshop requested that additional

workshops be held to further discussthis complex topic.

On October 17, 1995, RSPA held asecond public workshop on USAs (60FR 44824; August 29, 1995). The secondworkshop focused on developing aprocess that can be used to determine ifan area is unusually sensitive toenvironmental damage. The AmericanPetroleum Institute (API) providedinformation on their current research onUSAs and recommended that the finaldefinition consider the resource to beprotected, the likelihood of a givenpipeline to impact that resource, andwhat can be done to reduce the risk tothe resource. Other participantsrecommended integrating factorsconcerning the likelihood of a ruptureoccurring and the severity of theconsequence into the USA definition.

Participants at the workshopbrainstormed guiding principles thatcould be used when determining if agiven area is a USA and possible topicsfor additional USA workshops. APIvolunteered to conduct mini-workshopsto discuss some of the technical issuesand to bring their findings into largerforums.

The following is a summary of theguiding principles that were discussedat the October 17 workshop orsubmitted after the workshop bymembers of the pipeline industry orother Federal agencies. The guidingprinciples are separated into twocategories: Substance and Process.Guiding principles on substance relateto the criteria that should be includedin the USA definition. Guidingprinciples on process relate to how toevaluate the criteria to be included inthe USA definition, the process to createthe USA definition, and how to applythe USA definition. The lists are notprioritized or final. The lists sometimesinclude more than one recommendationwhich may conflict with one another.Conflicting views are labeled a. and b.under a common number forcomparison. RSPA invites comments onthese recommended guiding principlesand invites submissions of additionalguiding principles. This list and anyadditional guiding principles that aresubmitted to the docket before January12 will be considered at the January 18workshop:

Substance

1. Human health and safety areprimary concerns.

2. Areas where there is serious threatof contamination to a drinking water‘‘zone of influence’’ should beconsidered USAs.

3a. A resource must be subject to orthreatened by irretrievable loss or injurybefore it can be considered a USA. or

3b. Areas where there is serious threatof contamination to a significantenvironmental or cultural resourceshould be considered a USA.

4a. USAs are biological or ecologicalin nature and should not includecultural, economic, or recreationalresources. Cultural, economic, orrecreational resources should bedesignated as separate categories andviewed as distinct entities. or

4b. Consider cultural resources andIndian tribal concerns when definingUSAs.

5. Only areas in the trajectory of apotential spill, e.g. down gradient,should be considered when determiningUSAs.

6. It is expected that no pipelineoperator is required to collect naturalresources field data to determine USAs.

7. Highly volatile liquid (HVL)pipelines should not be included.

Process1. The standards and criteria for

resource sensitivity should be uniformon a national basis such that equivalentresources receive equivalent sensitivityassessments regardless of regionallybased priorities.

2. The government agencies shoulddescribe and identify USAs so that thedata will not be subject to variousinterpretations and will be appliedconsistently.

3. USAs should be subject to asystematic review process since USAsmay change through time as speciesmigrate, change location, or for otherreasons. The USA definition should beexplicit and practical in application.

4. The USA definition should be pilottested, complete, and fully definedbefore OPS uses the definition inrulemaking. Each part of the USAdefinition should be pilot tested forvalidity, practicability, and workability.

5. Sources of USA data should bereadily available to the public anduniform in criteria and standards.

6. Data quality objectives shouldinclude consistency, accuracy, andextent of coverage.

7. The extent of how much additionalgeographic area a criterion adds shouldbe considered.

8. Risk elements mandated in 49U.S.C. § 60109 to NOAA’s Guidance forFacility and Vessel Response Plans (59FR 14714; March 29, 1994) should beapplied when determining USAs.

9. OPS should exempt operators thattake proactive measures to minimize thepotential for spills from additionalrequirements to protect USAs.


10. Consultation with land or resourcemanagers may be necessary whenoperators consider a range ofpreventative measures in significantenvironmental resource areas.

11. The process should clarify howsensitive areas are protected under thePipeline Safety Act of 1992 separate andapart from protection under the OilPollution Act of 1990.

Several recommendations were madethat RSPA has determined areacceptable but are not guidingprinciples. These are:

1. Workshops for each phase ofdeveloping a USA definition shouldinclude appropriate technical experts,representatives, and field personnelwith appropriate experience fromagencies as well as industry.

2. Public workshops should be usedto gather information on the criteria thatwill determine USAs. The USAdefinition should be complete before itsuse in a rulemaking. Theimplementation of resource assessmentand protection under the USAdefinition could be phased.

3. All terms used in the USAdefinition should be defined.

4. National consistency in interpretingall definitions should be the goal.

The following are the additionalworkshops that were recommendedduring the October 17 workshop:

1. Guiding Principles Workshop.2. Definitions of Terms Workshop.3. Source Water Supply Workshop

(Surface and Subsurface).4. Biological Resources Workshop.

5. Cultural Resources and IndianTribal Concerns Workshop.

6. Pilot Testing Process Workshop.Persons interested in receiving a

transcript of the first workshop or thesummary of the second workshop,material presented at the first or secondworkshop, or comments submitted onthe material presented in the first orsecond public workshop notice shouldcontact the Dockets Unit at (202) 366–5046 and reference docket PS–140(b).

Issued in Washington, DC, on December28, 1995.Cesar DeLeon,Deputy Associate Administrator for PipelineSafety.[FR Doc. 96–107 Filed 1–3–96; 8:45 am]BILLING CODE 4910–60–P

This section of the FEDERAL REGISTERcontains documents other than rules orproposed rules that are applicable to thepublic. Notices of hearings and investigations,committee meetings, agency decisions andrulings, delegations of authority, filing ofpetitions and applications and agencystatements of organization and functions areexamples of documents appearing in thissection.

Notices Federal Register

345

Vol. 61, No. 3


DEPARTMENT OF AGRICULTURE

Agricultural Research Service

Notice of Intent to Grant ExclusiveLicense

AGENCY: Agricultural Research Service,USDA.ACTION: Notice of availability and intent.

SUMMARY: Notice is hereby given thatthree Federally owned cultivars offorage pearl millet, ‘‘Tifleaf 3,’’ ‘‘Tift8593,’’ and ‘‘Tift 93’’, are available forlicensing and that the United StatesDepartment of Agriculture, AgriculturalResearch Service, intends to grant anexclusive license to the University ofGeorgia Research Foundation.Applications for Plant VarietyProtection Certificates for each of thesecultivars have been filed with the PlantVariety Protection Office in the UnitedStates Department of Agriculture.DATES: Comments must be received byno later than April 3, 1996.ADDRESSES: Send comments to: USDA–ARS-Office of Technology Transfer,Beltsville Agricultural Research Center,Baltimore Boulevard, Building 005,Room 416, BARC–W, Beltsville,Maryland 20705–2350.FOR FURTHER INFORMATION CONTACT:Andrew Watkins of the Office ofTechnology Transfer at the Beltsvilleaddress given above; telephone 301/504–6905.SUPPLEMENTARY INFORMATION: TheFederal Government’s plant varietyprotection rights to this variety areassigned to the United States ofAmerica, as represented by theSecretary of Agriculture. It is in thepublic interest to so license thisinvention, for the University of GeorgiaResearch Foundation has submitted acomplete and sufficient application fora license. The prospective exclusivelicense will be royalty-bearing and willcomply with the terms and conditionsof 35 U.S.C. 209 and 37 CFR 404.7. The

prospective exclusive license may begranted unless, within ninety days fromthe date of this published Notice, ARSreceives written evidence and argumentwhich establishes that the grant of thelicense would not be consistent with therequirements of 35 U.S.C. 209 and 37CFR 404.7.R.M. Parry, Jr.,Assistant Administrator.[FR Doc. 96–77 Filed 1–3–96; 8:45 am]BILLING CODE 3410–03–M

Rural Utilities Service

South Mississippi Electric PowerAssociation; Finding of No SignificantImpact

AGENCY: Rural Utilities Service, USDA.ACTION: Notice of Finding of NoSignificant Impact.

SUMMARY: Notice is hereby given thatthe Rural Utilities Service (RUS) hasmade a finding of no significant impact(FONSI) with respect to its actionrelated to an expansion and repoweringproject by South Mississippi ElectricPower Association (SMEPA) at itsexisting Moselle Generating Station. TheFONSI is the conclusion of anEnvironmental Assessment prepared byRUS. The Environmental Assessment isbased on a environmental analysissubmitted to RUS by SMEPA. RUSconducted an independent evaluation ofthe environmental analysis and concurswith its scope and content.FOR FURTHER INFORMATION CONTACT:Lawrence R. Wolfe, SeniorEnvironmental Protection Specialist,Engineering and Environmental Staff,RUS, South Agriculture Building, AgBox 1569, Washington, DC 20250,telephone (202) 720–1784.SUPPLEMENTARY INFORMATION: Theproposed expansion and repoweringproject would be installed at SMEPA’sexisting Moselle Generating Stationlocated in Jones County, Mississippi,approximately 2 miles west of Interstate59 on Mississippi Highway 589.Currently in operation at this station arethree 59 megawatt (MW) gas/oil firedsteam turbines. The proposed facilitieswill utilize the existing plantinfrastructure such as the natural gasand oil supply, electric transmissionlines, and water system. SMEPA hasoptioned to purchase 20 acres

contiguous with the north side of theMoselle site to accommodate theexpansion needed for the additionalgenerating facility.

The proposed facility will consist ofa simple cycle combustion turbine andair-cooled generator. The turbine willhave a generating output estimated to bebetween 80 and 120 megawatts (MW).The FONSI includes a combined cyclefacility also under consideration bySMEPA which would be designed andconstructed at a future date. Thecombined cycle facility would have agenerating output estimated to bebetween 80 and 120 MW. This phase ofthe project would be conducted inconjunction with the repowering of theexisting 59 MW number 3 steam turbineat the Moselle Generating Station.However, at this time RUS is onlyconsidering taking an action related tothe simple cycle combustion phase ofthe proposed expansion and repoweringwhich it considers to be justified byneed.

The new simple cycle generationfacility would be made up of thefollowing components: combustionturbine generator, fuel oil forwardingsystem, flue gas scrubber, demineralizedwater monitoring system, generatorstep-up transformer, station auxiliarytransformer, medium voltage switchgearauxiliary station supply, secondary unitswitchgear, including low voltage,switchgear, motor control centers, andbus duct.

The facility will be designed tooperate using natural gas as the primaryfuel and number 2 fuel oil as thesecondary fuel. Natural gas would besupplied via the existing gas pipeline atthe site. Fuel oil will be shipped to thesite by truck and stored on site instorage tanks.

The future addition of the combinedcycle facility would involve thefollowing components: combustionturbine generator, heat recovery steamgenerator, boiler feedwater system, fluegas scrubber, demineralized watertransfer pumps, continuous emissionsmonitoring system, generator step-uptransformer, station auxiliarytransformer, medium voltage switchgearauxiliary station supply, secondary unitswitchgear including low voltageswitchgear, motor control centers, andbus duct.

The combined cycle facility wouldutilize many of the existing

346 Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Notices

infrastructure systems at the MoselleGenerating Station.

A continuous emissions monitoring(CEM) system would be used to monitorflue gas emissions from both the simplecycle and the combined cycle facilities.The CEM would measure opacity,nitrogen oxides, carbon monoxide,oxygen, volatile organic compounds,and sulfur dioxide for the purpose ofensuring compliance with federal andState of Mississippi air qualitystandards.

The alternatives of no action, demandside management, power purchases,hydroelectric units, wind and solarpower, geothermal power, andalternative site locations wereconsidered.

Copies of the environmentalassessment and FONSI are available forreview at, or can be obtained from, RUSat the address provided herein or fromMr. Joey Ward, South MississippiElectric Power Association, P.O. Box15849, Hattiesburg, Mississippi,telephone (601) 268–2083. Interestedparties wishing to comment on theadequacy of the EnvironmentalAssessment should do so within 30 daysof the publication of this notice. RUSwill take no action that would approveclearing or construction activitiesrelated to this expansion andrepowering project prior to theexpiration of the 30-day commentperiod.

Dated: December 27, 1995.Blaine D. Stockton, Jr.,Acting Deputy Administrator ProgramOperations.[FR Doc. 96–78 Filed 1–3–96; 8:45 am]BILLING CODE 3410–15–P

DEPARTMENT OF COMMERCE

National Oceanic and AtmosphericAdministration

[I.D. 122795B]

Endangered Species; Permits

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Issuance of an amendment ofpermit 747 (P45H).

SUMMARY: Notice is hereby given thatNMFS has issued an amendment to apermit that authorizes a take of listedspecies for the purpose of scientificresearch and enhancement, subject tocertain conditions set forth therein, tothe U.S. Fish and Wildlife Service(FWS) located in Red Bluff, CA.

ADDRESSES: The action request andrelated documents are available forreview in the following offices, byappointment:Office of Protected Resources, F/PR8,

NMFS, 1315 East-West Highway,Silver Spring, MD 20910–3226 (301–713–1401); and

Director, Southwest Region, NMFS,NOAA, 501 West Ocean Blvd., Suite4200, Long Beach, CA 90802–4213(310–980–4016).

SUPPLEMENTARY INFORMATION: Theamendment of permit 747 was issuedunder the authority of section 10 of theEndangered Species Act of 1973 (ESA)(16 U.S.C. 1531–1543) and the NMFSregulations governing listed fish andwildlife permits (50 CFR parts 217–222).

The amendment of permit 747 wasissued on December 20, 1995. Permit747 authorizes FWS to take endangeredSacramento River winter-run chinooksalmon (Oncorhynchus tshawytscha)associated with scientific research andenhancement activities. The amendmentprovides an extension of the permit for90 days; a moratorium on the collectionof adult listed fish for broodstock for theduration of the permit; andauthorization to release juvenile, listed,artificially-propagated, winter-runchinook salmon in December, 1995,rather than January, 1996 as previouslyauthorized.

Permit 747 was to expire on December31, 1995. An extension of the permit isnecessary to allow FWS to continueresearch and enhancement activitiesuntil new permits replace permit 747and to have an opportunity to addresstechnical concerns with FWS’ listed fishartificial propagation program, asproposed in their new section 10enhancement permit application, P45V(60 FR 58334, November 27, 1995).Genetics research has found that FWS’artificial propagation of winter-runchinook salmon has likely resulted insome hybridization with spring-runchinook salmon. In addition, hatchery-produced winter-run chinook salmonhave not been returning to the mainstemSacramento River as intended, butrather have been returning to BattleCreek where Coleman National FishHatchery is located, apparently as aresult of imprinting on Battle Creekwater.

The purpose of the moratorium on thecollection of adult listed fish forbroodstock is to avoid compromisingthe genetic integrity of the winter-runchinook salmon population due to thepresent circumstances and to avoid asignificant drain on the 1996 spawningpopulation if juveniles continue toimprint exclusively on Battle Creek. The

earlier juvenile fish release is an attemptto improve the likelihood that the fishwill imprint on mainstem SacramentoRiver water. Any suspected progeny ofhybrid crosses between winter-runchinook salmon and spring-run chinooksalmon will not be released. Theamendment is in effect for the durationof the permit. The new expiration dateof permit 747 is March 31, 1996.

Issuance of the amendment, asrequired by the ESA, was based on afinding that such action: (1) Wasrequested in good faith, (2) will notoperate to the disadvantage of the listedspecies that is the subject of the permit,and (3) is consistent with the purposesand policies set forth in section 2 of theESA and the NMFS regulationsgoverning listed species permits.

Dated: December 27, 1995.Ann D. Terbush,Acting Director, Office of Protected Resources,National Marine Fisheries Service.[FR Doc. 96–99 Filed 1–3–96; 8:45 am]BILLING CODE 3510–22–P

COMMODITY FUTURES TRADINGCOMMISSION

Chicago Mercantile ExchangeProposed Futures and Futures OptionsContracts on Four Currency Cross-Rates

AGENCY: Commodity Futures TradingCommission.ACTION: Notice of availability of theterms and conditions of proposedcommodity futures and optionscontracts.

SUMMARY: The Chicago MercantileExchange (CME or Exchange) hasapplied for designation as a contractmarket in futures and options contractsin four currency cross-rates: theDeutsche Mark/French Franc, theDeutsche Mark/Italian Lira, theDeutsche Mark/Spanish Peseta, and theDeutsche Mark/Swedish Krona. TheDirector of the Division of EconomicAnalysis (Division) of the Commission,acting pursuant to the authoritydelegated by Commission Regulation140.96, has determined that publicationof the proposals for comment is in thepublic interest, will assist theCommission in considering the views ofinterested persons, and is consistentwith the purposes of the CommodityExchange Act.DATES: Comments must be received onor before February 5, 1996.ADDRESSES: Interested persons shouldsubmit their views and comments toJean A. Webb, Secretary, Commodity

347Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Notices

Futures Trading Commission, 1155 21stStreet NW, Washington, DC 20581.Reference should be made to the CMEfutures and options on four currencycross-rates.FOR FURTHER INFORMATION CONTACT:Please contact Steve Sherrod of theDivision of Economic Analysis,Commodity Futures TradingCommission, 1155 21st Street NW,Washington, DC 20581, telephone 202–418–5277.SUPPLEMENTARY INFORMATION: Copies ofthe terms and conditions will beavailable for inspection at the Office ofthe Secretariat, Commodity FuturesTrading Commission, 1155 21st Street,N.W., Washington, D.C. 20581. Copiesof the terms and conditions can beobtained through the Office of theSecretariat by mail at the above addressor by phone at (202) 418–5097.

Other materials submitted by the CMEin support of the applications forcontract market designation may beavailable upon request pursuant to theFreedom of Information Act (5 U.S.C.552) and the Commission’s regulationsthereunder (17 CFR part 145 (1987)),except to the extent they are entitled toconfidential treatment as set forth in 17CFR 145.5 and 145.9. Requests forcopies of such materials should be madeto the FOI, Privacy and Sunshine ActCompliance Staff of the Office of theSecretariat at the Commission’sheadquarters in accordance with 17 CFR145.7 and 145.8.

Any person interested in submittingwritten data, views, or arguments on theproposed terms and conditions, or withrespect to other materials submitted bythe CME, should send such commentsto Jean A. Webb, Secretary, CommodityFutures Trading Commission, 1155 21stStreet, NW., Washington, DC 20581 bythe specified date.

Issued in Washington, DC, on December29, 1995.Blake Imel,Acting Director.[FR Doc. 96–138 Filed 1–3–96; 8:45 am]BILLING CODE 6351–01–P


Office of the Secretary of Defense

Ballistic Missile Defense AdvisoryCommittee; Notice of AdvisoryCommittee Meeting

Summary: The Ballistic MissileDefense (BMD) Advisory Committeewill meet in closed session in ColoradoSprings, Colorado, on January 29–30,1996.

The mission of the BMD AdvisoryCommittee is to advise the Secretary ofDefense and Deputy Secretary ofDefense, through the Under Secretary ofDefense for Acquisition andTechnology, on all matters relating toacquisition, system development andtechnology for defense against theballistic missile threat.

In accordance with Section 10(d) ofthe Federal Advisory Committee Act,Public Law No. 92–463, as amended by5 U.S.C., Appendix II, it is herebydetermined that this BDM AdvisoryCommittee meeting concerns matterslisted in 5 U.S.C. 552b(c)(1), andaccordingly the meeting will be closedto the public.

Dated: December 28, 1995.Linda M. Bynum,OSD Federal Liaison Officer, Department ofDefense.[FR Doc. 96–66 Filed 1–3–96; 8:45 am]BILLING CODE 5000–04–M

Department of the Army

Army Science Board; Notice of ClosedMeeting

In accordance with Section 10(a)(2) ofthe Federal Advisory Committee Act(Pub. L. 92–463), announcement ismade of the following CommitteeMeeting:

Name of Committee: Army Science Board(ASB).

Date of Meeting: 10 January 1996.Time of Meeting: 1300–1700.Place: Pentagon–Washington, DC.Agenda: The Army Science Board’s

Research and Development (R&D) Sub-panelfor the study on ‘‘Reengineering theAcquisition and Modernization Processes ofthe Institutional Army’’ will meet forbriefings and discussions on the R&Dprocesses and ways to improve efficiency.This meeting will be closed to the public inaccordance with Section 552b(c) of Title 5,U.S.C., specifically subparagraph (1) thereof,and Title 5, U.S.C., Appendix 2, subsection10(d). The classified and unclassified mattersto be discussed are so inextricablyintertwined so as to preclude opening anyportion of this meeting. For furtherinformation, please contact Michelle Diaz at(703) 695–0781.Michelle P. Diaz,Acting Administrative Officer, Army ScienceBoard.[FR Doc. 96–92 Filed 1–3–96; 8:45 am]BILLING CODE 3710–08–M

Army Science Board; Notice of ClosedMeeting

In accordance with Section 10(a)(2) ofthe Federal Advisory Committee Act(Pub. L. 92–463), announcement is

made of the following CommitteeMeeting:

Name of Committee: Army Science Board(ASB).

Date of Meeting: 24 January 1996.Time of Meeting: 1300–1700.Place: Pentagon—Washington, DC.Agenda: The Army Science Board’s

Research and Development (R&D) Sub-panelfor the study on ‘‘Reengineering theAcquisition and Modernization Processes ofthe Institutional Army’’ will meet forbriefings and discussions on the R&Dprocesses and ways to improve efficiency.This meeting will be closed to the public inaccordance with Section 552b(c) of Title 5,U.S.C., specifically subparagraph (1) thereof,and Title 5, U.S.C., Appendix 2, subsection10(d). The classified and unclassified mattersto be discussed are so inextricablyintertwined so as to preclude opening anyportion of this meeting. For furtherinformation, please contact Michelle Diaz at(703) 695–0781.Michelle P. Diaz,Acting Administrative Officer, Army ScienceBoard.[FR Doc. 96–98 Filed 1–3–96; 8:45 am]BILLING CODE 3710–08–M

DEPARTMENT OF ENERGY

Federal Energy RegulatoryCommission

[Docket No. RP96–90–000]

Columbia Gas TransmissionCorporation; Notice of ProposedChanges in FERC Gas Tariff

December 28, 1995.Take notice that on December 21,

1995, Columbia Gas TransmissionCorporation (Columbia) tendered forfiling as part of its FERC Gas Tariff,Second Revised Volume No. 1, thefollowing tariff sheets, to becomeeffective February 1, 1996.Third Rev Eleventh Revised Sheet No. 28First Rev Fourth Revised Sheet No. 262Third Revised Sheet No. 395First Revised Sheet No. 466

The instant filing is being submittedpursuant to Article X, Resolution of GasSupply Realignment and Order Nos.500/528 Costs, of the ‘‘CustomerSettlement’’ in Docket No. GP94–02, etal., approved by the Commission onJune 15, 1995 (71 FERC 61,337 (1995)).The Customer Settlement becameeffective on November 28, 1995, whenthe Bankruptcy Court’s November 15,1995 order approving Columbia’s Planof Reorganization became final. Underthe terms of Article X, Columbia isentitled to recover the sum of $1 millionfrom ITS customers through a $0.01/Dthsurcharge as full and completesatisfaction of any right it may have to


recover Gas Supply Realignment Costs,Order No. 500/528 Costs, overridingroyalties, and all Producer ContractRejection Costs in the BankruptcyProceedings. The tariff sheets being filedherein set forth the indicated $0.01/Dthsurcharge applicable to Rate ScheduleITS to be applied against ITS quantitiesuntil a total amount of $1 million hasbeen collected, plus FERC Interest onthe uncollected amounts which shallaccrue commencing February 1, 1996.Columbia will true up recoveries fromits interruptible customers for theseamounts upon collection of the totalamount recoverable by Columbia.

Therefore, Columbia is submitting forfiling herein, Section 42 Recovery ofArticle X Costs to its FERC Gas Tariff,Second Revised Volume No. 1, toprovide for the recovery and true up ofthe above described costs.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, Washington, D.C. 20426, inaccordance with Sections 385.214 and385.211 of the Commission’s Rules andRegulations. Pursuant to Section154.210 of the Commission’sRegulations, all such motions or protestsmust be filed not later than 12 days afterthe date of the filing noted above.Protests will be considered by theCommission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Any person wishing tobecome a party must file a motion tointervene. Copies of this filing are onfile with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 96–82 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M

[Docket No. ER94–1188–008]

LG&E Power Marketing Inc.; Notice ofFiling


1995, LG&E Power Marketing Inc. fileda Notice of a Change in Status.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Rules 211 and 214of the Commission’s Rules of Practiceand Procedure (18 CFR 385.211 and 18CFR 385.214). All such motions orprotests should be filed on or before

January 12, 1996. Protests will beconsidered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection.Lois D. Cashell,Secretary.[FR Doc. 96–127 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M


Mississippi River TransmissionCorporation; Notice of ProposedChanges in FERC Tariff


1995, Mississippi River TransmissionCorporation (MRT) tendered for filingthe following tariff sheets to ThirdRevised Volume No. 1 of its FERC GasTariff (Tariff):Fifteenth Revised Sheet No. 5Fifteenth Revised Sheet No. 6

MRT states that the purpose of thisfiling is to adjust its rates to reflectadditional Gas Supply RealignmentCosts (GSRC) of $352,789, plusapplicable interest, pursuant to Section16.3 of the General Terms andConditions of MRT’s Tariff. MRT statesthat its filing includes the ‘‘PriceDifferential’’ cost of continuing toperform under certain gas supplycontracts during the months of Julythrough September 1995 and GSRCBuyout/Buydown costs incurred duringthe period June 23, 1995 throughNovember 20, 1995. MRT states that itfiling also reflects the removal of GSRCsurcharges attributable to its InitialGSRC Recovery Period which ends onDecember 31, 1995.

MRT requests an effective date ofJanuary 1, 1996 for these tariff sheets.MRT states that copies of its filing areavailable for inspection at its businessoffices, located in St. Louis, Missouri,and have been mailed to all of itsaffected customers and the StateCommissions of Arkansas, Missouri andIllinois.

Any person desiring to be heard orprotest said filing should file a motionto intervene or protests with the FederalEnergy Regulatory Commission, 888First Street, Washington, DC 20426, inaccordance with Sections 385.211 and385.214 of the Commisson’s Rules andRegulations. Pursuant to Section154.210 of the Commission’sregulations, all such motions and

protests must be filed not later than 12days after the date of the filing notedabove. Protests will be considered bythe Commission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Any person wishing tobecome a party must file a motion tointervene. Copies of this filing are onfile with the Commission and availablefor public inspection.Lois D. Cashell,Secretary.[FR Doc. 96–83 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M

[Docket Nos. RP95–326–006 and RP95–242–007]

Natural Gas Pipeline Company ofAmerica; Notice of Compliance Filing


1995, Natural Gas Pipeline Company ofAmerica (Natural) tendered for filingproposed changes in its FERC GasTariff, Sixth Revised Volume No. 1, tobecome effective December 1, 1995.

Natural states that the purpose of thisfiling is to comply with theCommission’s ‘‘Order Accepting TariffSheets, Subject to Conditions, andGranting Abandonment’’ issuedNovember 30, 1995 in Docket No. RP95–326–001, et al.

Natural requests whatever waiversmay be necessary to permit the tariffsheets as submitted to become effectiveDecember 1, 1995.

Natural states that copies of the filingare being mailed to all parties on therestricted service list in the referenceddockets.

Any person desiring to protest saidfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street, N.E., Washington, D.C.20426, in accordance with Section385.211 of the Commission’s Rules andRegulations. Pursuant to Section154.210 of the Commission’sRegulations, all such protests must befiled not later than 12 days after the dateof the filing noted above. Protests willbe considered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestants parties to the proceeding.Copies of this filing are on file with theCommission and are available for publicinspection in the Public ReferenceRoom.Lois D. Cash,Secretary.[FR Doc. 96–86 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M



Northern Natural Gas Company; Noticeof Compliance Filing


1995, Northern Natural Gas Company(Northern), tendered for filing changesin its FERC Gas Tariff, Fifth RevisedVolume No. 1. Northern asserts that thepurpose of this filing is to comply withthe Commission’s order issued October26, 1995, in Docket No. RP96–3–000.

This filing is to establish the revised1995–1996 SBA Cost Recoverysurcharge rate. Therefore, Northern hasfiled 8th Revised Seventeenth RevisedSheet Nos. 50 and 51 and Twenty-SixthRevised Sheet No. 53 to revise thesesurcharges effective January 1, 1996.

Northern states that copies of thisfiling were served upon the Company’scustomers and interested statecommissions.

Any person desiring to protest saidfiling should file a protest with theFederal Energy Regulatory Commission,888 First Street N.E., Washington, DC20426, in accordance with section385.211 of the Commission’s Rules andRegulations. Pursuant to Section154.210 of the Commission’sregulations, all such protests must befiled not later than 12 days after the dateof the fling noted above. Protests will beconsidered by the Commission indetermining the appropriate action to betaken, but will not serve to makeprotestant a party to the proceedings.Copies of this filing are on file with theCommission and are available forinspection in the Public ReferenceRoom.Lois D. Cashell,Secretary.[FR Doc. 96–85 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M

[Docket No. CP96–113–000]

Shell Gas Pipeline Company; Notice ofPetition for Declaratory Order


1995, Shell Gas Pipeline Company(SGPC), P.O. Box 576, Houston, Texas77001, filed a petition for declaratoryorder in Docket No. CP96–113–000,requesting that the Commission declarethat certain facilities SGPC proposes toconstruct and operate in the OuterContinental Shelf (OCS) would have theprimary function of gathering naturalgas and would thereby be exempt fromthe Commission’s jurisdiction pursuantto Section 1(b) of the Natural Gas Act.These natural gas pipeline and

appurtenant facilities, known as theGarden Banks Gathering System, will belocated entirely in OCS waters and willconsist of a 50-mile, 30-inch diameterpipeline with multiple lateral lines thatwill deliver gas into the 30-inchpipeline from various committedproduction blocks. The facts are fullyset forth in the petition on which is onfile with the Commission and open topublic inspection.

SGPC requests that the Commissionevaluate the proposed Garden BanksGathering System under the ‘‘currentmodified primary function test’’ used bythe Commission to apply its jurisdictionover OCS facilities, and not to delayacting on its petition pending theoutcome of Commission review ofcurrent policies regarding jurisdictionover OSC facilities in the Notice ofInquiry issued in Docket No. RM96–5–000.

Any person desiring to be heard or tomake a protest with reference to saidpetition should, on or before January 18,1996, file with the Federal EnergyRegulatory Commission (888 FirstStreet, NE, Washington, DC 20426) amotion to intervene or protest inaccordance with the requirements of theCommission’s Rules of Practice andProcedure (18 CFR 385.214 or 385.211).All protests filed with the Commissionwill be considered by it in determiningthe appropriate action to be taken, butwill not serve to make the protestantsparties to the proceeding. Any personwishing to become a party to aproceeding or to participate as a partyin any hearing therein must file amotion to intervene in accordance withthe Commission’s Rules.Lois D. Cashell,Secretary.[FR Doc. 96–88 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M


Southern Natural Gas Company;Notice of Application


1995, Southern Natural Gas Company(Southern), P.O. 2563, Birmingham,Alabama 35202–2563, filed anapplication in Docket No. CP96–114–000 pursuant to Sections 7(b) andSection 7(c) of the Natural Gas Actrequesting permission and approval toabandon certain pipeline andappurtenant facilities and for acertificate of public convenience andnecessity authorizing it to construct,install and operate modifications tocertain facilities, all as more fully set

forth in the application on file with theCommission and open to publicinspection.

Southern requests authorization to (1)abandon by sale to the City of LaGrange,Georgia (LaGrange) approximately 34miles of Southern’s Grantville Lateral,commencing in Troup County, Georgiaand extending to and includingSouthern’s existing Grantville meterstation in Coweta County, Georgia, andtwo laterals extending from thispipeline, as well as appurtenantfacilities including five meter stationsand one regulator station and (2) tomodify and operate the LaGrange No. 2meter station at Milepost 33.74 onSouthern’s Auburn-Grantville Line inTroup County, Georgia. Southernestimates the total cost of these facilitiesto be $202,000, which will bereimbursed to Southern by LaGrange.

Southern states that the abandonmentwill result in reduced operatingexpenses. The Auburn-Grantville Line, along small-diameter pipeline withmultiple meter stations, extends off ofSouthern’s mainline facilities. Southernstates that since the line is over 40 yearsold, maintenance expenses are relativelyhigh. By the sale to LaGrange, Southernasserts that it will realize future savingson repairs. Southern states that as partof the purchase, LaGrange has agreed toextend the term of and increase contractdemand under its firm transportationagreement with Southern, which willbenefit Southern’s system. Southernstates that the proposal will not resultin any abandonment of transportationservice or change in the quality of suchservice to Southern’s shippers and hasbeen consented to by all of the operatorsof the delivery points to be affected.Southern states that all existingcustomers which are served at deliverypoints on the portion of the line to besold have agreed to be served at themodified LaGrange No. 2 meter station.

Any person desiring to be heard or tomake any protest with reference to saidapplication should on or before January18, 1996, file with the Federal EnergyRegulatory Commission, Washington,D.C. 20426, a motion to intervene or aprotest in accordance with therequirements of the Commission’s Rulesof Practice and Procedure (18 CFR385.214 or 385.211) and the Regulationsunder the Natural Gas Act (18 CFR157.10). All protests filed with theCommission will be considered by it indetermining the appropriate action to betaken but will not serve to make theprotestants parties to the proceeding.Any person wishing to become a partyto a proceeding or to participate as aparty in any hearing therein must file a


motion to intervene in accordance withthe Commission’s Rules.

Take further notice that, pursuant tothe authority contained in and subject tojurisdiction conferred upon the FederalEnergy Regulatory Commission bySections 7 and 15 of the Natural Gas Actand the Commission’s Rules of Practiceand procedure, a hearing will be heldwithout further notice before theCommission or its designee on thisapplication if no motion to intervene isfiled within the time required herein, ifthe Commission on its own review ofthe matter finds that a grant of thecertificate and permission and approvalfor the proposed abandonment isrequired by the public convenience andnecessity. If a motion for leave tointervene is timely filed, or if theCommission on its own motion believesthat a formal hearing is required, furthernotice of such hearing will be dulygiven.

Under the procedure herein providedfor, unless otherwise advised, it will beunnecessary for Southern to appear orbe represented at the hearing.Lois D. Cashell,Secretary.[FR Doc. 96–87 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M


Southern Natural Gas Company;Notice of Application for Authorizationto Abandon Facilities

December 28, 1995.Take notice that, on December 19,

1995, Southern Natural Gas Company(Southern), AmSouth-Sonat Tower,Birmingham, Alabama 35203, filed anapplication in Docket No. CP96–112–000, pursuant to Section 7(b) of theNatural Gas Act and Part 157 of theCommission’s Regulations, forauthorization to abandon its AlabasterLime Lateral, along with a meter stationand related facilities, all as more fullyset forth in the application, which is onfile with the Commission and open topublic inspection.

Southern’s Alabaster Lime lateral is a2-inch diameter pipeline that isapproximately 1.215 miles in length. Itextends from milepost 25.969 on theBessemer-Calera line, located in Section3, T21S, R3W, in Shelby County,Alabama, to Chemical Lime Company’s(ChemLime) plant in Section 35, T20S,R3W, in Alabaster, Alabama. Southernrequests authorization to abandon theAlabaster Lime Lateral in-place.Southern also requests authorization toabandon, by removal, its meter station atthe ChemLime plant (including the

regulator) and the orderizer located atthe tap on the Bessemer-Calera Line.Southern states that the Alabaster LimeLateral and meter station which itproposes to abandon are used to provideinterruptible transportation solely to theChemLime plant, that the ChemLimeplant is the only delivery point on theAlabaster Lime Lateral, and thatChemLime is the only customer thatwill be affected by the proposedabandonment. Southern further statesthat it seeks to abandon these facilitiesbecause the cost of keeping theAlabaster Lime Lateral and meter stationin service has increased to the point thatit is no longer economically feasible todo so.

Any person desiring to be heard, or tomake any protest with reference to saidapplication should, on or before January18, 1996, file with the Federal EnergyRegulatory Commission, Washington DC20426, a motion to intervene or protestin accordance with the requirements ofthe Commission’s Rules of Practice andProcedure (18 CFR 385.214 or 385.211)and the regulations under the NaturalGas Act (18 CFR 157.10). All protestsfiled with the Commission will beconsidered by it in determining theappropriate action to be taken, but willnot serve to make the protestants partiesto the proceeding. Any person wishingto become a party to the proceeding, orto participate as a party in any hearingtherein, must file a motion to intervenein accordance with the Commission’sRules.

Take further notice that, pursuant tothe authority contained in and subject tothe jurisdiction conferred upon theFederal Energy RegulatoryCommission’s by Sections 7 and 15 ofthe Natural Gas Act and theCommission’s Rules of Practice andProcedure, a hearing will be heldwithout further notice before theCommission or its designee on thisapplication, if no motion to intervene isfiled within the time required herein, orif the Commission on its own review ofthe matter finds that a grant of thecertificate is required by the publicconvenience and necessity. If a motionfor leave to intervene is timely filed, orthe Commission on its own motionbelieves that a formal hearing isrequired, further notice of such hearingwill be duly given.

Under the procedure herein providefor, unless otherwise advised, it will beunnecessary for Southern to appear orbe represented at the hearing.Lois D. Cashell,Secretary.[FR Doc. 96–89 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M

[Docket No. TM96–7–29–000]

Transcontinental Gas Pipe LineCorporation; Notice of ProposedChanges in FERC Gas Tariff


1995, Transcontinental Gas Pipe LineCorporation (Transco) tendered forfiling certain revised tariff sheets to itsFERC Gas Tariff, Third Revised VolumeNo. 1 enumerated in Appendix Aattached to the filing.

Transco states that the purpose of theinstant filing is to track rate changesattributable to storage service purchasedfrom CNG Transmission Corporation(CNG) under its Rate Schedule GSS thecosts of which are included in the ratesand charges payable under Transco’sRate Schedules LSS and GSS. Thistracking filing is being made pursuant toSection 4 of Transco’s Rate ScheduleLSS and Section 3 of Transco’s RateSchedule GSS.

Appendices B and C attached to thefiling contain explanations of the ratechanges and details regarding thecomputation of the revised LSS and GSSrates, respectively.

Transco states that copies of the filingare being mailed to each of its LSS andGSS customers and interested StateCommissions.

In accordance with the provisions ofSection 154.16 of the Commission’sRegulations, copies of this filing areavailable for public inspection, duringregular business hours, in a convenientform and place at Transco’s main officeat 2800 Post Oak Boulevard in Houston,Texas.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, Washington, D.C. 20426, inaccordance with Sections 385.214 and385.211 of the Commission’s Rules andRegulations. Pursuant to Section154.210 of the Commission’sregulations, all such motions or protestsmust be filed not later than 12 days afterthe date of the filing noted above.Protests will be considered by theCommission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Any person wishing tobecome a party must file a motion tointervene. Copies of this filing are onfile with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 96–81 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M



Trunkline Gas Company; Notice ofProposed Changes in FERC Gas Tariff

December 28, 1995.

Take notice that on December 21,1995, Trunkline Gas Company(Trunkline) tendered for filing as part ofits FERC Gas Tariff, First RevisedVolume No. 1, the following tariffsheets, to become effective January 21,1996:

First Revised Sheet No. 1Second Revised Sheet No. 3First Revised Sheet No. 80Second Revised Sheet No. 214First Revised Sheet No. 381

Trunkline states the revised tariffsheets reflect the cancellation of RateSchedule USS, which was established tosell gas to converting customers for thefourteen months following the effectivedate of Trunkline’s restructured tariff.All service agreements underTrunkline’s Rate Schedule USSterminated on or before October 31,1994.

Trunkline states that a copy of thisfiling is available for public inspectionduring regular business hours atTrunkline’s office at 5400 WestheimerCourt, Houston, Texas 77056–5310. Inaddition a copy of this filing was mailedto affected shippers and interested stateregulatory agencies.

Any person desiring to be heard or toprotest said filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Sections 385.214and 385.211 of the Commission’s Rulesand Regulations. Pursuant to Section154.210 of the Commission’sregulations, all such motions or protestsmust be filed not later than 12 days afterthe date of the filing noted above.Protests will be considered by theCommission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Any person wishing tobecome a party must file a motion tointervene. Copies of this filing are onfile with the Commission and areavailable for public inspection in thePublic Reference Room.Lois D. Cashell,Secretary.[FR Doc. 96–84 Filed 1–3–96; 8:45 am]BILLING CODE 6717–01–M

FEDERAL RESERVE SYSTEM

Evans Bancshares, Inc., et al.;Formations of; Acquisitions by; andMergers of Bank Holding Companies

The companies listed in this noticehave applied for the Board’s approvalunder section 3 of the Bank HoldingCompany Act (12 U.S.C. 1842) and §225.14 of the Board’s Regulation Y (12CFR 225.14) to become a bank holdingcompany or to acquire a bank or bankholding company. The factors that areconsidered in acting on the applicationsare set forth in section 3(c) of the Act(12 U.S.C. 1842(c)).

Each application is available forimmediate inspection at the FederalReserve Bank indicated. Once theapplication has been accepted forprocessing, it will also be available forinspection at the offices of the Board ofGovernors. Interested persons mayexpress their views in writing to theReserve Bank or to the offices of theBoard of Governors. Any comment onan application that requests a hearingmust include a statement of why awritten presentation would not sufficein lieu of a hearing, identifyingspecifically any questions of fact thatare in dispute and summarizing theevidence that would be presented at ahearing.

Unless otherwise noted, commentsregarding each of these applicationsmust be received not later than January30, 1996.

A. Federal Reserve Bank of Chicago(James A. Bluemle, Vice President) 230South LaSalle Street, Chicago, Illinois60690:

1. Evans Bancshares, Inc., Evansdale,Iowa; to acquire 100 percent of thevoting shares of Olmsted National Bank,Rochester, Minnesota, a de novo bank.

B. Federal Reserve Bank of KansasCity (John E. Yorke, Senior VicePresident) 925 Grand Avenue, KansasCity, Missouri 64198:

1. Wilson Bancshares, Inc., Wilson,Kansas; to become a bank holdingcompany by acquiring 100 percent ofthe voting shares of The Wilson StateBank, Wilson, Kansas.

Board of Governors of the Federal ReserveSystem, December 28, 1995.Jennifer J. Johnson,Deputy Secretary of the Board.[FR Doc. 96–95 Filed 1–3–96; 8:45 am]BILLING CODE 6210–01–F

Mellon Bank Corporation, et al.; Noticeof Applications to Engage de novo inPermissible Nonbanking Activities

The companies listed in this noticehave filed an application under §225.23(a)(1) of the Board’s Regulation Y(12 CFR 225.23(a)(1)) for the Board’sapproval under section 4(c)(8) of theBank Holding Company Act (12 U.S.C.1843(c)(8)) and § 225.21(a) of RegulationY (12 CFR 225.21(a)) to commence or toengage de novo, either directly orthrough a subsidiary, in a nonbankingactivity that is listed in § 225.25 ofRegulation Y as closely related tobanking and permissible for bankholding companies. Unless otherwisenoted, such activities will be conductedthroughout the United States.

Each application is available forimmediate inspection at the FederalReserve Bank indicated. Once theapplication has been accepted forprocessing, it will also be available forinspection at the offices of the Board ofGovernors. Interested persons mayexpress their views in writing on thequestion whether consummation of theproposal can ‘‘reasonably be expected toproduce benefits to the public, such asgreater convenience, increasedcompetition, or gains in efficiency, thatoutweigh possible adverse effects, suchas undue concentration of resources,decreased or unfair competition,conflicts of interests, or unsoundbanking practices.’’ Any request for ahearing on this question must beaccompanied by a statement of thereasons a written presentation wouldnot suffice in lieu of a hearing,identifying specifically any questions offact that are in dispute, summarizing theevidence that would be presented at ahearing, and indicating how the partycommenting would be aggrieved byapproval of the proposal.

Unless otherwise noted, commentsregarding the applications must bereceived at the Reserve Bank indicatedor the offices of the Board of Governorsnot later than January 22, 1996.

A. Federal Reserve Bank of Cleveland(John J. Wixted, Jr., Vice President) 1455East Sixth Street, Cleveland, Ohio44101:

1. Mellon Bank Corporation,Pittsburgh, Pennsylvania; to engage denovo through its subsidiary, MellonBank, F.S.B., Paramus, New Jersey, intrust activities by acquiring certainassets from various banks and trustcompany subsidiaries of KeyCorp,Cleveland, Ohio, and thereby engage intrust activities, pursuant to §225.25(b)(3) of the Board’s Regulation Y.

B. Federal Reserve Bank of Chicago(James A. Bluemle, Vice President) 230


South LaSalle Street, Chicago, Illinois60690:

1. Firstbank of Illinois Co.,Springfield, Illinois; to engage de novothrough its subsidiary, MidCountryFinancial, Inc., Highland, Illinois, inconsumer finance business, pursuant to§ 225.25(b)(1)(i) of the Board’sRegulation Y.


National Bank of Greece, et al.;Acquisitions of Companies Engaged inPermissible Nonbanking Activities

The organizations listed in this noticehave applied under § 225.23(a)(2) or (f)of the Board’s Regulation Y (12 CFR225.23(a)(2) or (f)) for the Board’sapproval under section 4(c)(8) of theBank Holding Company Act (12 U.S.C.1843(c)(8)) and § 225.21(a) of RegulationY (12 CFR 225.21(a)) to acquire orcontrol voting securities or assets of acompany engaged in a nonbankingactivity that is listed in § 225.25 ofRegulation Y as closely related tobanking and permissible for bankholding companies. Unless otherwisenoted, such activities will be conductedthroughout the United States.

Each application is available forimmediate inspection at the FederalReserve Bank indicated. Once theapplication has been accepted forprocessing, it will also be available forinspection at the offices of the Board ofGovernors. Interested persons mayexpress their views in writing on thequestion whether consummation of theproposal can ‘‘reasonably be expected toproduce benefits to the public, such asgreater convenience, increasedcompetition, or gains in efficiency, thatoutweigh possible adverse effects, suchas undue concentration of resources,decreased or unfair competition,conflicts of interests, or unsoundbanking practices.’’ Any request for ahearing on this question must beaccompanied by a statement of thereasons a written presentation wouldnot suffice in lieu of a hearing,identifying specifically any questions offact that are in dispute, summarizing theevidence that would be presented at ahearing, and indicating how the partycommenting would be aggrieved byapproval of the proposal.

Unless otherwise noted, commentsregarding each of these applicationsmust be received at the Reserve Bankindicated for the application or the

offices of the Board of Governors notlater than January 22, 1996.

A. Federal Reserve Bank of NewYork (William L. Rutledge, Senior VicePresident) 33 Liberty Street, New York,New York 10045:

1. National Bank of Greece, Athens,Greece; to retain shares of WorthingtonLimited Partnership, New York, NewYork, and thereby indirectly engage inacquiring and servicing loans and leasespursuant to §§ 225.25(b)(1) and (b)(5) ofthe Board’s Regulation Y.

B. Federal Reserve Bank of SanFrancisco (Kenneth R. Binning,Director, Bank Holding Company) 101Market Street, San Francisco, California94105:

1. The Sumitomo Bank, Limited,Osaka, Japan; to acquire through TheSumitomo Bank New York TrustCompany, New York, New York, thetrust business of Daiwa Bank TrustCompany, New York, New York, andthe custody business of the New Yorkbranch of The Daiwa Bank, Limited,Osaka, Japan, and thereby engage intrust company functions, pusuant to §225.25(b)(3) of the Board’s Regulation Y.




[Docket No. 93P–0310]

White Chocolate Deviating FromIdentity Standard; Amendment ofTemporary Permit for Market Testing

AGENCY: Food and Drug Administration,HHS.ACTION: Notice.

SUMMARY: The Food and DrugAdministration (FDA) is announcingthat it is amending an extendedtemporary permit issued to HersheyFoods Corp. (Hershey) to market testproducts identified, in part, as ‘‘whitechocolate’’ that deviate from the U.S.standards of identity for chocolateproducts, e.g., chocolate liquor, sweetchocolate, milk chocolate, buttermilkchocolate, skim milk chocolate, ormixed dairy product chocolates. Thepurpose of the amendment to theextended temporary permit is to allowHershey to collect data on consumeracceptance of a different product,containing white chocolate, that also

contains chocolate cookies, and toidentify mass production problems.FOR FURTHER INFORMATION CONTACT:Nannie H. Rainey, Center for FoodSafety and Applied Nutrition (HFS–158), Food and Drug Administration,200 C St. SW., Washington, DC 20204,202–205–5099.SUPPLEMENTARY INFORMATION: Inaccordance with § 130.17 (21 CFR130.17) concerning temporary permits,FDA gave notice in the Federal Registerof November 5, 1993 (58 FR 59050), thata temporary permit had been issued toHershey Foods Corp., P.O. Box 810,Hershey, PA 17033. The temporarypermit was issued to market testproducts containing a componentdesignated as ‘‘white chocolate’’ and tofacilitate market testing of foodsdeviating from the requirements of thestandards of identity promulgated undersection 401 of the Federal Food, Drug,and Cosmetic Act (21 U.S.C. 341). Thewhite chocolate component of theseproducts deviates from the standards ofidentity for certain chocolate products,e.g., chocolate liquor (21 CFR 163.111),sweet chocolate (21 CFR 163.123), milkchocolate (21 CFR 163.130), buttermilkchocolate (21 CFR 163.135), skim milkchocolate (21 CFR 163.140), or mixeddairy product chocolates (21 CFR163.145) in that: (1) It is preparedwithout the nonfat components of theground cacao nibs, but contains the fat(cocoa butter) expressed from theground cacao nibs; and (2) safe andsuitable antioxidants are added. The testcomponent meets all the otherrequirements of the standards forchocolate products in 21 CFR part 163.

Subsequently, Hershey requested thattheir temporary permit (Docket No.93P–0310) be extended to allow foradditional time for the firm to continueto collect data on consumer acceptanceof the products while the agency takesaction on two petitions (Docket Nos.86P–0297/CP 2 and 86P–0297/CP 3 (see59 FR 67302, December 29, 1994, fordiscussion)) to establish a standard ofidentity for white chocolate that weresubmitted by Hershey and by theChocolate Manufacturers Association.FDA granted the request for theextension and provided for continuedtesting on an annual basis of up to21,800,000 kilograms (kg) (48,000,000pounds (lb)) of the test product. The testproducts bear the fanciful names‘‘Hershey’s Hugs, Mini Hershey’s KissesHugged by White Chocolate’’ and‘‘Hershey’s Hugs, Mini Hershey’s KissesHugged by White Chocolate, withAlmonds.’’ In the Federal Register ofDecember 29, 1994 (59 FR 67302), FDAextended the expiration date of the


permit so that the permit expires eitheron the effective date of a final rule toestablish a standard of identity for whitechocolate, which may result from thepetitions, or 30 days after termination ofsuch rulemaking.

Hershey is now requesting that theextended temporary permit be amendedto provide for up to 13,600,000 kg(30,000,000 lb) of a different product,containing white chocolate, that alsocontains chocolate cookies. Hershey isalso requesting that the permit beamended to allow an additional plantwhere this product can bemanufactured.

The agency finds that it is in theinterest of the consumer to amend theextended temporary permit to allow formarket testing of another productcontaining white chocolate. Therefore,under the provisions of § 130.17(f), FDAis modifying the extended temporarypermit granted to Hershey to provide forthe market testing of up to 13,600,000 kg(30,000,000 lb) of the new test producton an annual basis in addition to the21,800,000 kg (48,000,000 lb) of testproduct authorized in the originalpermit. The new test product, in bar andbite size forms, will bear the fancifulname ‘‘Hershey’s Cookies ’n’ CremeChocolate Cookie Bits in WhiteChocolate.’’ The white chocolate meetsthe compositional requirements of thecurrent temporary permit. FDA is alsomodifying the extended temporarypermit to provide for an additional plantat Hershey Chocolate, U.S.A., 19 EastChocolate Ave., Hershey, PA 17033,where the product may bemanufactured. The product will bedistributed nationwide.

Each of the ingredients used in thefood must be declared on the label asrequired by the applicable sections of 21CFR part 101. This amended extendedpermit expires either on the effectivedate of a final rule to establish astandard of identity for white chocolate,which may result from the petitions, or30 days after termination of suchrulemaking. All other conditions andterms of the extended permit remain thesame.

Dated: December 15, 1995.F. Edward Scarbrough,Director, Office of Food Labeling, Center forFood Safety and Applied Nutrition.[FR Doc. 96–124 Filed 1–3–96; 8:45 am]BILLING CODE 4160–01–F

[Docket No. 95S–0199]

Report of the Fluoroquinolone WorkingGroup; Availability


SUMMARY: The Food and DrugAdministration (FDA) is announcing theavailability of the report of the Centerfor Veterinary Medicine’s (CVM’s)Fluoroquinolone Working Group(FQWG). The report addresses issuesand contains recommendationsregarding policies and proceduresrelated to approval of fluoroquinolone(FQ) antimicrobial drugs in foodanimals. The report of the FQWG is inresponse to concerns that approval ofFQ drugs for use in food animals mayresult in increased development of FQresistance in zoonotic organismsharbored by food animals that aretransmitted to humans and causedisease.DATES: Written comments on the reportmay be submitted at any time.ADDRESSES: Submit written requests forsingle copies of the report to theCommunication and Education Branch(HFV–12), Center for VeterinaryMedicine, Food and DrugAdministration, 7500 Standish Pl.,Rockville, MD 20855. Send two self-addressed adhesive labels to assist thatoffice in processing your requests.Submit written comments on the reportto the Dockets Management Branch(HFA–305), Food and DrugAdministration, rm. 1–23, 12420Parklawn Dr., Rockville MD, 20857.Requests and comments should beidentified with the docket numberfound in brackets in the heading of thisdocument. A copy of the report andreceived comments are available forpublic examination in the DocketsManagement Branch between 9 a.m. and4 p.m., Monday through Friday.FOR FURTHER INFORMATION CONTACT:Linda A. Grassie, Center for VeterinaryMedicine (HFV–12), Food and DrugAdministration, 7500 Standish Pl.,Rockville, MD 20855, 301–594–1755.SUPPLEMENTARY INFORMATION: FDA isannouncing the availability of the reportof CVM’s FQWG. The report addressesissues and recommendations concerningapproval of FQ drugs for use in foodanimals. In response to concerns thatapproval of FQ drugs for use in foodanimals may result in increaseddevelopment of FQ resistance inzoonotic organisms harbored by foodanimals that are transmitted to humansand cause disease. FDA convened ajoint meeting of the CVM and Center for

Drug Evaluation and Research advisorycommittees on May 11 and 12, 1994.Members of the joint advisorycommittee stated that FQ drugs could beapproved for use in food animals, ifCVM restricts their use so that FQ’s aresafe and effective under approvedconditions of use and recommendedthat CVM monitor the emergence of FQresistance. In response to the publichealth concerns that were raised, CVMformed the FQWG to providerecommendations of policies andprocedures relevant to the approval ofFQ drugs in food animals. FDA isannouncing that the report of the FQWGhas been accepted by the Director, CVM,and is available for public inspectionand comment.

Interested persons may, at any time,submit to the Dockets ManagementBranch (address above) writtencomments on the report of CVM’sFQWG. Two copies of any commentsare to be submitted, except thatindividuals may submit one copy.Comments are to be identified with thedocket number found in the heading ofthis document. The report, appendices,and comments may be seen at theDockets Management Branch (addressabove), between 9 a.m. and 4 p.m.,Monday through Friday.

The report and recommendationsrepresent the agency’s current positionon the issues discussed therein,however, they do not create or conferany rights, privileges, or benefits for oron any person, nor do they operate tobind FDA in any way. CVM willconsider any comments received indetermining the continuedappropriateness of therecommendations in the reportregarding the approval of FQ’s foranimal use.

Dated: December 27, 1995.William K. Hubbard,Associate Commissioner for PolicyCoordination.[FR Doc. 96–125 Filed 1–3–96; 8:45 am]BILLING CODE 4160–01–F

DEPARTMENT OF HOUSING ANDURBAN DEVELOPMENT


[Docket No. FR–4007–D–01]

Delegation of Concurrent Authority tothe Deputy Secretary

AGENCY: Office of The Secretary, HUD.ACTION: Notice of delegation ofconcurrent authority.


1 A stay will be issued routinely by theCommission in those proceedings where aninformed decision on environmental issues(whether raised by a party or by the Commission’sSection of Environmental Analysis in itsindependent investigation) cannot be made beforethe effective date of the notice of exemption. SeeExemption of Out-of-Service Rail Lines, 5 I.C.C.2d377 (1989). Any entity seeking a stay onenvironmental concerns is encouraged to file itsrequest as soon as possible in order to permit theCommission to review and act on the request beforethe effective date of this exemption.

2 See Exempt. of Rail Abandonment—Offers ofFinan. Assist., 4 I.C.C.2d 164 (1987).

3 The Commission will accept a late-filed trail userequest as long as it retains jurisdiction to do so.

4 Legislation to sunset the Commission onDecember 31, 1995, and transfer remainingfunctions is currently under consideration. Untilfurther notice, parties submitting pleadings shouldcontinue to use the current name and address.

SUMMARY: The Secretary of Housing andUrban Development is delegating to theDeputy Secretary of Housing and UrbanDevelopment, Dwight P. Robinson,concurrently with the Secretary, thepower and authority vested in ordelegated or assigned to the Secretary ofHousing and Urban Development, withthe exception of the power to sue andbe sued.EFFECTIVE DATE: December 28, 1995.FOR FURTHER INFORMATION CONTACT:Sam E. Hutchinson, Associate GeneralCounsel for Human Resources Law,Office of General Counsel, Departmentof Housing and Urban Development,Room 10242, 451 7th Street, SW,Washington, DC 20410, telephone (202)708–0888. (This is not a toll-freenumber.)SUPPLEMENTARY INFORMATION: UnderSection 7(d) of the Department ofHousing and Urban Development Act,42 U.S.C. 3535(d), the Secretary ofHousing and Urban Development maydelegate any of the Secretary’sfunctions, powers and duties to suchofficers and employees of theDepartment as the Secretary maydesignate, and may authorize successiveredelegations of such functions, powersand duties as determined to benecessary or appropriate. In thedelegation of authority issued today, theSecretary is delegating to the DeputySecretary of Housing and UrbanDevelopment, Dwight P. Robinson, allthe power and authority vested in ordelegated or assigned to the Secretary ofHousing and Urban Development, to beexercised concurrently with theSecretary, with the exception of thepower to sue and be sued.

Accordingly, the Secretary delegatesas follows:

Section A. Authority DelegatedThe Deputy Secretary of Housing and

Urban Development, Dwight P.Robinson, is hereby authorized,concurrently with the Secretary, toexercise all the power and authorityvested in or delegated or assigned to theSecretary of Housing and UrbanDevelopment.

Section B. Authority ExceptedThere is excepted from the authority

delegated under Section the authority tosue and be sued.

Section C. Delegation of ConcurrentAuthority Superseded

The Delegation of ConcurrentAuthority to the President, GovernmentNational Mortgage Association,published in the Federal Register onFebruary 13, 1995, at 60 FR 8250, ishereby superseded.

Authority: Section 7(d), Department ofHousing and Urban Development Act (42U.S.C. 3535(d)).

Dated: December 28, 1995.Henry G. Cisneros,Secretary of Housing and UrbanDevelopment.[FR Doc. 96–101 Filed 1–3–96; 8:45 am]BILLING CODE 4210–32–M

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

Lower Snake River District; Notice ofMeeting

SUMMARY: The Lower Snake RiverDistrict Resource Advisory Council willhold two meetings to discuss anddevelop draft statewide standards forrangeland health and guidelines formanaging livestock grazing on publiclands. Public comment periods will beheld at 1 p.m. on January 25 and at 8p.m. on February 15.DATES: January 25, 1996 beginning at8:15 a.m.; and February 15, 1996,beginning at 6:30 p.m.ADDRESSES: The meetings will be held atthe Idaho State Office of the Bureau ofLand Management, 3380 AmericanaTerrace, Boise, Idaho, 83706.FOR FURTHER INFORMATION CONTACT:Barry Rose, Lower Snake River DistrictOffice (208–384–3393).Barry Rose,Public Affairs Specialist.[FR Doc. 96–91 Filed 1–3–96; 8:45 am]BILLING CODE 1020–GG–P

INTERSTATE COMMERCECOMMISSION

[Docket No. AB–43 (Sub-No. 169X)]

Illinois Central Railroad Company—Abandonment Exemption—in WestFeliciana Parish, LA

Illinois Central Railroad Company (IC)has filed a notice of exemption under 49CFR 1152 Subpart F—ExemptAbandonments to abandonapproximately 0.8 miles of its line ofrailroad between milepost LB–9.7 tomilepost LB–10.5 near Riddle (Zee), inWest Feliciana Parish, LA.

IC has certified that: (1) No localtraffic has moved over the line for atleast 2 years; (2) all overhead trafficpreviously routed over this line hasbeen rerouted to alternate lines; (3) noformal complaint filed by a user of railservice on the line (or by a state or localgovernment entity acting on behalf ofsuch user) regarding cessation of service

over the line either is pending with theCommission or with any U.S. DistrictCourt or has been decided in favor ofthe complainant within the 2-yearperiod; and (4) the requirements at 49CFR 1105.7 (environmental report), 49CFR 1105.8 (historic report), 49 CFR1105.11 (transmittal letter), 49 CFR1105.12 (newspaper publication), and49 CFR 1152.50(d)(1) (notice togovernmental agencies) have been met.

As a condition to use of thisexemption, any employee adverselyaffected by the abandonment shall beprotected under Oregon Short Line R.Co.—Abandonment—Goshen, 360 I.C.C.91 (1979). To address whether thiscondition adequately protects affectedemployees, a petition for partialrevocation under 49 U.S.C. 10505(d)must be filed.

Provided no formal expression ofintent to file an offer of financialassistance (OFA) has been received, thisexemption will be effective on February3, 1996, unless stayed pendingreconsideration. Petitions to stay that donot involve environmental issues,1formal expressions of intent to file anOFA under 49 CFR 1152.27(c)(2),2 andtrail use/rail banking requests under 49CFR 1152.29 3 must be filed by January16, 1996. Petitions to reopen or requestsfor public use conditions under 49 CFR1152.28 must be filed by January 24,1996, with: Office of the Secretary, CaseControl Branch, Interstate CommerceCommission, 1201 Constitution Ave.,N.W., Washington, DC 20423.4

A copy of any pleading filed with theCommission should be sent toapplicant’s representative: Myles L.Tobin, Illinois Central RailroadCompany, 455 North Cityfront Plaza Dr.,20th Floor, Chicago, IL 60611.

If the notice of exemption containsfalse or misleading information, theexemption is void ab initio.

IC has filed an environmental reportwhich addresses the abandonment’s


1 The new Agreement must sit before Congress forreview for up to 90 days of continuous legislativesession.

2 The EURATOM Member States are: Austria,Belgium, Denmark, Finland, France, Germany,Greece, Ireland, Italy, Luxembourg, Netherlands,Portugal, Spain, Sweden, and the United Kingdom.Licensees authorized under general or specificlicenses to make Section 109b exports to Austria,Finland, Spain, or Sweden may continue directexports to these countries because they haveprovided separate bilateral assurances to the U.S.that remain in effect.

3 In accordance with 10 C.F.R. § 110.52(c), theCommission finds that Licensees need not beafforded an opportunity to reply and be heardbecause this action is required by operation of lawand the common defense and security.

effects, if any, on the environment andhistoric resources. The Section ofEnvironmental Analysis (SEA) willissue an environmental assessment (EA)by January 9, 1996. Interested personsmay obtain a copy of the EA by writingto SEA (Room 3219, InterstateCommerce Commission, Washington,DC 20423) or by calling Elaine Kaiser,Chief of SEA, at (202) 927–6248.Comments on environmental andhistoric preservation matters must befiled within 15 days after the EA isavailable to the public.

Environmental, historic preservation,public use, or trail use/rail bankingconditions will be imposed, whereappropriate, in a subsequent decision.

Decided: December 28, 1995.By the Commission, David M. Konschnik,

Director, Office of Proceedings.Vernon A. Williams,Secretary.[FR Doc. 96–136 Filed 1–3–96; 8:45 am]BILLING CODE 7035–01–P

NUCLEAR REGULATORYCOMMISSION

[Docket No. Part 110]

General and Specific LicensesAuthorizing Exports of NuclearReactor Components, Substances, andItems Under Section 109b of theAtomic Energy Act to EURATOM;Order Suspending Licenses (EffectiveJanuary 1, 1996)

I

The licensees that are subject to thisorder are authorized by the NuclearRegulatory Commission (‘‘NRC’’ or‘‘Commission’’) through general andspecific licenses granted under Section109b of the Atomic Energy Act of 1954,as amended (AEA), and 10 C.F.R. Part110 to export nuclear reactorcomponents, substances, and items fornuclear end uses to EURATOM on thebasis of assurances provided byEURATOM to the U.S. pursuant toSection 109b (‘‘EURATOMassurances’’). The expiration date of theEURATOM assurances underlying theNRC’s general and specific licenseauthorizations for exports of nuclearreactor components, substances, anditems under Section 109b is tied to theexpiration date of the currentAgreement for Cooperation between theU.S. and EURATOM under Section 123of the AEA.

II

The EURATOM assurances willexpire on December 31, 1995, the

expiration date of the currentAgreement for Cooperation between theU.S. and EURATOM. Although a newSection 123 Agreement for Cooperationhas been approved by authorities onboth sides,1 the U.S. has not receivednew Section 109b assurances fromEURATOM. The NRC is prohibited fromauthorizing any exports of nuclearreactor components, substances, anditems to a foreign nation under Section109b in the absence of such assurancesfrom the foreign nation.

III

Accordingly, pursuant to Sections109b, 161b, 161i, 183, and 186 of theAEA, and 10 C.F.R. §§ 110.50(a) (1) and(2) and 110.52, from January 1, 1996until such time that the U.S. receivesthe assurances required for exports ofnuclear reactor components, substances,and items under Section 109b of theAEA from EURATOM or its individualmember countries,2 NRC general andspecific license authorizations underSection 109b and 10 C.F.R. §§ 110.26and 110.42(b) for exports of nuclearreactor components to EURATOMcountries are suspended.3 Thissuspension order will expire byoperation of law when the assurancesrequired under Section 109b arereceived from EURATOM or itsindividual member countries. The NRCwill publish notice of the receipt ofthese assurances in the FederalRegister.

For the Nuclear Regulatory Commission.Dated at Rockville, Maryland this 28th day

of December, 1995.

Carlton R. Stoiber,Director, Office of International Programs.[FR Doc. 96–111 Filed 1–3–96; 8:45 am]BILLING CODE 7590–01–M

[Docket No. 50–285]

Omaha Public Power District, FortCalhoun Station, Unit 1; Exemption

I

The Omaha Public Power District(OPPD or the licensee) holds FacilityOperating License No. DPR–40, whichauthorizes operation of the Fort CalhounStation, Unit 1. The license provides,among other things, that the facility issubject to all rules, regulations, andorders of the Nuclear RegulatoryCommission (the Commission) now orhereafter in effect. The facility consistsof one pressurized water reactor locatedat the licensee’s site in WashingtonCounty, Nebraska.

II

Section 50.54(q) of 10 CFR part 50requires a licensee authorized to operatea nuclear power reactor to follow andmaintain in effect emergency planswhich meet the standards of 10 CFR50.47(b) and the requirements ofAppendix E to 10 CFR part 50. SectionIV.F.2.c of Appendix E requires thateach licensee at each site conduct anexercise with offsite authorities suchthat the State and local governmentemergency plans for each operatingreactor site are exercised biennially.Section IV.F.2 also requires full orpartial participation by State and localgovernments within the plume exposurepathway emergency planning zone(EPZ).

The NRC may grant exemptions fromthe requirements of the regulationswhich, pursuant to 10 CFR 50.12(a), are(1) authorized by law, will not presentan undue risk to the public health andsafety, and are consistent with thecommon defense and security; and (2)present special circumstances. Section50.12(a)(2)(v) of 10 CFR 50 describes thespecial circumstances where anexemption would provide onlytemporary relief from the applicableregulations and the licensee or applicanthas made good faith efforts to complywith the regulations.

III

By letter dated December 8, 1995, andsupplemental letter dated December 15,1995, OPPD requested a schedularexemption from the requirements of 10CFR 50, Appendix E, Section IV.F.2.cthat requires a biennial exercise withState and local government authoritieswithin the plume exposure pathwayemergency planning zone (EPZ). Thelicensee has requested to postpone,until the first quarter of 1996, the offsiteportion of the biennial full-scale


emergency preparedness exercise whichhad been scheduled for November 1995.

This schedular exemption isrequested by the licensee since theFederal Emergency Management Agency(FEMA) and the States had to canceltheir evaluation and participation in theoffsite portion of the exercise conductedon November 14, 1995. This requestresulted from the impasse relative topassage of the Federal budget thatcaused a shutdown of FEMA and lackof funding for some Stateappropriations.

The licensee provided the followingbasis for supporting the requestedschedular exemption:

OPPD, along with the States ofNebraska and Iowa, as well as localofficials and volunteer agencies, werefully prepared to conduct a biennialfull-scale emergency exercise for theFort Calhoun Station (FCS) onNovember 14, 1995. The onsite andoffsite objectives and scenario wereapproved respectively by NRC andFEMA. This exercise was designed tosatisfy the requirements of 10 CFR 50,Appendix E, Section IV.F.2.c. The lastbiennial exercise was conducted onJune 29–30, 1993.

In the weeks prior to the exercise,FEMA was unsure whether it couldsupport the exercise as the result of theFederal budget impasse. Some State ofNebraska personnel were also affectedby the budget crisis in that some Statepositions are federally funded. Thelicensee satisfactorily conducted theonsite portion of the exercise in theabsence of full participation by theStates and evaluation by FEMA. Therewere no identified exercise weaknessesassociated with the onsite portion of theexercise.

Based upon a review of the licensee’srequest for a schedular exemption fromthe requirements of 10 CFR 50,Appendix E, Section IV.F.2.c, the stafffinds that the exemption would provideonly temporary relief from theapplicable regulations.

IV

Accordingly, the Commission hasdetermined pursuant to 10 CFR 50.12,this exemption is authorized by law andwill not endanger life or property or thecommon defense and security and isotherwise in the public interest. TheCommission further determines thatspecial circumstances described by 10CFR 50.12(a)(2)(v) exist in that grantingthe exemption would provide onlytemporary relief from the applicableregulations and the licensee has madegood faith efforts to comply with theregulations.

Therefore, the Commission herebygrants Omaha Public Power District anexemption from the requirements of 10CFR 50, Appendix E, Section IV.F.2.c.

Pursuant to 10 CFR 51.32, theCommission has determined that thegranting of this exemption will have nosignificant impact on the quality of thehuman environment (60 FR 66995).


This exemption is effective uponissuance.

For the Nuclear Regulatory Commission.Gail H. Marcus,Acting Director, Division of Reactor ProjectsIII/IV, Office of Nuclear Reactor Regulation.[FR Doc. 96–112 Filed 1–3–96; 8:45 am]BILLING CODE 7590–01–P

[Docket Nos. 50–352 and 50–353]

Philadelphia Electric Company;Correction

The December 6, 1995, FederalRegister contained a ‘‘Notice of Issuanceof Amendment to Facility OperatingLicenses,’’ for the Limerick GeneratingStation, Units 1 and 2. This noticecorrects the notice published in theFederal Register on December 6, 1995,(60 FR 62500). The ‘‘Amendment Nos.’’Section should read ‘‘105 and 69.’’


For the Nuclear Regulatory Commission.John F. Stolz,Director, Project Directorate I–2, Division ofReactor Projects–I/II, Office of NuclearReactor Regulation.[FR Doc. 96–109 Filed 1–3–96; 8:45 am]BILLING CODE 7590–01–P

[Docket No. 72–14 (50–346)]

Toledo Edison Co., Davis-BesseNuclear Power Station, IndependentSpent Fuel, Storage Installation;Exemption

IToledo Edison Company (the

licensee), under the general license inPart 72, Subpart K, is authorized toreceive and store spent fuel from itsDavis-Besse Nuclear Power Station at anindependent spent fuel storageinstallation (ISFSI) located on the Davis-Besse Nuclear Power Station site. Thisfacility is located at the licensee’s site inOak Harbor, Ohio.

IIPursuant to 10 CFR 72.7, the Nuclear

Regulatory Commission (NRC) maygrant exemptions from the requirements

of the regulations in 10 CFR Part 72 asit determines are authorized by law, willnot endanger life or property or thecommon defense and security, and areotherwise in the public interest.

Section 72.82(e) of 10 CFR Part 72requires each licensee to provide areport of preoperational test acceptancecriteria and test results to theappropriate NRC Regional Office with acopy to the Director, Office of NuclearMaterial Safety and Safeguards, at least30 days prior to receipt of spent fuel orhigh-level radioactive waste for storagein an ISFSI. The purpose of the 30-daywaiting period is to allow the NRC anopportunity to review test results priorto initial operation of the ISFSI. If anexemption from the requirement of 10CFR 72.82(e) for a 30-day waiting periodwas granted, the licensee still would berequired to submit the necessary report;however, the licensee could thereafterstart loading the first cask before the endof the 30-day period.

IIIBy letter dated September 22, 1995,

the licensee requested a schedularexemption pursuant to 10 CFR 72.7from the requirement of 10 CFR72.82(e). The licensee committed tosubmit its report no less than 3 daysprior to receipt of spent fuel at its ISFSI.The licensee’s exemption request toreduce the 30-day waiting period to 3days was based on the licensee’s needto assure the availability of adequatestorage space in Davis-Besse’s spent fuelpool to support a refueling outagescheduled to begin in April 1996. Tomeet that schedule, spent fuel must beremoved from the pool and loaded intothe dry storage casks at the Davis-Besseplant for transport to the ISFSI prior toreceipt of new fuel in February 1996.Because moving and loading thecanisters into the horizontal storagemodules occurs outside the auxiliarybuilding, and because conducting suchactivities during inclement weatherwould complicate these activities, thelicensee had planned to begin loadingactivities in October 1995. Delays,however, have forced the licensee topostpone its schedule. Nonetheless, theneed for and underlying basis of thelicensee’s exemption requests remains.Granting the requested exemption fromthe 30-day waiting period in 10 CFR72.82(e) would assist the licensee inassuring it has sufficient time tocomplete loading operations for drycask storage before the end of January1996 while, to the extent possible,minimizing the need to conduct fuelhandling activities during inclementweather. Moreover, as noted below, theNRC has completed review of the


licensee’s preoperational test report andtherefore does not need the full 30 dayscontemplated by 10 CFR 72.82(e).

In a letter dated December 18, 1995,the licensee reiterated the need for therequested exemption and providedadditional information on currentcircumstances supporting NRCapproval. The December 18 letter (andadditional information in it) are notnecessary to a favorable consideration ofthe exemption request by NRC.However, the letter confirms thepropriety of an exemption.

The NRC conducted an inspectionrelated to the manufacture of the storagecanisters at the vendor’s fabrication site,and on July 7, 1995, issued aConfirmatory Action Letter to thevendor. The vendor responded to theConfirmatory Action Letter onSeptember 5, 20, 22, and October 2 and3, 1995. In a letter dated October 12,1995, NRC found the vendor’s responsesacceptable. NRC was able to resolve theinspection issues based on theadditional information provided by thevendor which included documentationof design changes and associated safetyevaluations, engineering analysisregarding the minimum requiredcanister wall thickness, the results ofmeasurements of the actual wallthickness of the canisters, and detailedinformation on leak testing performed.NRC verified the adequacy of theadditional information provided by thevendor and the safety of the canistersand the transfer cask by performingdetailed reviews, engineeringevaluations, and inspections.

Since receipt of the first canisters onsite, NRC has observed selected portionsof the preoperational testing activitiesand has reviewed associated testprocedures and results. The licenseesubmitted the report of preoperationaltest acceptance criteria and test resultsrequired by 10 CFR 72.82(e) to NRCRegion III on December 14, 1995. Thepreoperational tests conducted by thelicensee included, among other things,the actual exercise of the licensee’swritten procedures for loading andunloading the storage canisters. Thelicensee reviewed the results of thesetests, made changes and subsequentlyapproved the canister loading andunloading procedures. The NRCobserved licensee’s validation of theacceptability of these procedures and issatisfied with the results.

IVBased on the aforementioned

oversight and inspection of thepreoperational testing activities at theDavis-Besse ISFSI, as well as the NRC’sreview of the licensee’s report of

preoperational test criteria and results,the NRC finds that Toledo Edison hassatisfactorily addressed all of the safetyissues associated with cask loading,handling, and storage. The results ofthese NRC activities confirm there isadequate assurance that the cask canperform its intended safety functionsand that Toledo Edison has thenecessary equipment and procedures inplace, as well as appropriately trainedpersonnel, to safely conduct spent fuelcask handling activities.

Accordingly, the NRC has determinedin accordance with 10 CFR 72.7 that thisexemption is authorized by law, will notendanger life or property or the commondefense and security, and is otherwisein the public interest. Therefore, theNRC hereby grants the licensee anexemption from the 30-day waitingperiod required by 10 CFR 72.82(e). Theeffective date of this exemption shall beDecember 26, 1995. This exemption willallow the licensee, effective December26, to commence loading spent fuel intothe dry storage canister, for subsequenttransfer to and storage in the Davis-Besse ISFSI. The exemption alsopermits the licensee, prior to December26, to start any necessary work that isa prerequisite to loading fuel onDecember 26. While not providingToledo Edison Company the fullschedular relief it requested, theexemption will result in the Companybeing able to begin dry storage activitiesapproximately two weeks earlier thanwithout the exemption.

The documents related to thisproposed action are available for publicinspection and for copying (for a fee) atthe NRC Public Document Room at theGelman Building, 2120 L Street, NW,Washington, DC 20555, and at the LocalPublic Document Room located in theWilliam Carlson Library, University ofToledo, 2801 West Bancroft Avenue,Toledo, Ohio 43605.

Pursuant to 10 CFR 51.32, the NRChas determined that granting thisexemption will have no significantimpact on the quality of the humanenvironment (60 FR 52709).

Dated at Rockville, Maryland this 20th dayof December 1995.

For the Nuclear Regulatory Commission.William D. Travers,Director, Spent Fuel Project Office, Office ofNuclear Material Safety and Safeguards.[FR Doc. 96–110 Filed 1–3–96; 8:45 am]BILLING CODE 7590–01–P

OFFICE OF GOVERNMENT ETHICS

Advance Notice of Proposed ModifiedForm for Requesting Access toExecutive Branch Public FinancialDisclosure Reports and Other CoveredRecords to Be Submitted to OMB forApproval Under the PaperworkReduction Act

AGENCY: Office of Government Ethics(OGE).ACTION: Notice.

SUMMARY: The Office of GovernmentEthics plans to submit a slightlymodified OGE form used by persons forrequesting access to executive branchpublic financial disclosure reports andother covered records for approval bythe Office of Management and Budget(OMB) under the Paperwork ReductionAct. This modified form will replace theexisting one.DATES: Comments on this proposalshould be received by March 19, 1996.ADDRESSES: Comments should be sent toWilliam E. Gressman, Office ofGovernment Ethics, Suite 500, 1201New York Avenue, NW., Washington,DC 20005–3917.FOR FURTHER INFORMATION CONTACT: Mr.Gressman at the Office of GovernmentEthics; telephone: 202–523–5757, ext.1110; FAX: 202–523–6325. A copy ofOGE’s draft form may be obtained,without charge, by contacting Mr.Gressman.SUPPLEMENTARY INFORMATION: The Officeof Government Ethics is planning tosubmit, after this notice and commentperiod (with any modifications that mayappear warranted), a proposed modifiedOGE Form 201 ‘‘Request to Inspect orReceive Copies of SF 278 ExecutiveBranch Personnel Public FinancialDisclosure Report or Other CoveredRecord’’ for three-year approval by OMBunder the Paperwork Reduction Act of1995 (44 U.S.C. chapter 35). Oncefinally approved by OMB and adoptedby OGE, the modified version of thisOGE form will replace the existingversion (whose paperwork clearance isscheduled to expire at the end of nextJuly).

The Office of Government Ethics, asthe supervising ethics office for theexecutive branch of the FederalGovernment under the Ethics inGovernment Act (the ‘‘Ethics Act’’), isplanning to modify and update theexisting access form. That form, theOGE Form 201, collects informationfrom, and provides certain informationto, persons who seek access to SF 278reports and other covered records. Theform reflects the requirements of the


1 The signatories to the Plan, i.e., the NationalAssociation of Securities Dealers, Inc. (‘‘NASD’’),and the Chicago Stock Exchange, Inc. (‘‘Chx’’)(previously, the Midwest Stock Exchange, Inc.), thePhiladelphia Stock Exchange, Inc. (‘‘Phlx’’), and theBoston Stock Exchange, Inc. (‘‘BSE’’), are the‘‘Participants.’’ The BSE, however, joined the Planas a ‘‘Limited Participant,’’ and reports quotationinformation and transaction reports only in Nasdaq/National Market (previously referred to as ‘‘Nasdaq/NMS’’) securities listed on the BSE. Originally, theAmerican Stock Exchange, Inc., was a Participantto the Plan, but did not trade securities pursuant tothe Plan, and withdrew from participation in thePlan in August 1994.

2 Section 12 of the Act generally requires anexchange to trade only those securities that theexchange lists, except that Section 12(f) of the Actpermits unlisted trading privileges (‘‘UTP’’) undercertain circumstances. For example, Section 12(f),among other things, permits exchanges to tradecertain securities that are traded over-the-counter(‘‘OTC/UTP’’), but only pursuant to a Commissionorder or rule. The present order fulfills this Section12(f) requirement. For a more complete discussionof this Section 12(f) requirement, see November1995 Extension Order, infa note 3, at n. 2.

3 On November 13, 1995, the Commissionextended the effectiveness of the Plan throughDecember 12, 1995, by partially approvingAmendment No. 6. Amendment No. 6 requested anextension of the effectiveness of the Plan throughDecember 29, 1995. See Securities Exchange ActRelease No. 36481 (November 13,1 995), 60 FR58119 (‘‘November 1995 Extension Order’’).Thereafter, the Commission approved theremainder of Amendment No. 6 by approvingoperation of the Plan through December 29, 1995.See Securities Exchange Act Release No. 36589(December 13, 1995), 60 FR 65696 (‘‘December 1995Extension Order’’).

Ethics Act and OGE’s implementingregulations that must be met by a personbefore access can be granted. Theserequirements relate to information aboutthe identity of the requester, as well asany other person on whose behalf arecord is sought, and a notification ofprohibited uses of SF 278 reports. Seesection 105 (b) and (c) of the Ethics Act,5 U.S.C. app., sec. 105 (b) and (c), and5 CFR 2634.603 (c) and (f). For manyyears, OGE has disseminated toexecutive branch departments andagencies a locally reproducible uniformform to serve as the statutorily requiredwritten application to inspect or receivecopies of SF 278 reports and othercovered records. Departments andagencies are encouraged to utilize theOGE Form 201, but they can, if they sochoose, continue to use or develop theirown forms (see the discussion below).

This proposed modified version of theOGE Form 201 will add expressmention (in part III of the form) toanother category of materials subject topublic access under the Ethics Act—Ethics Act-qualified blind trust andqualified diversified trust instrumentsand the list of assets transferred to suchtrusts (& of assets sold in the case of aqualified blind trust). See 5 CFR2634.603(g)(2). The other change to theform would add to the part C publicburden information block a statementrequired under the 1995 amendments tothe paperwork law to the effect that ‘‘anagency may not conduct or sponsor, andno person is required to respond to, acollection of information unless itdisplays a currently valid OMB controlnumber,’’ together with a parentheticalmention that such number is displayedin the upper right-hand corner of thefront page of the OGE Form 201.

In light of OGE’s experience over thepast three years (1993–1995), theestimate of the total number of accessforms expected to be filed annually atOGE by members of the public(primarily by news media, publicinterest groups and private citizens) isproposed to be adjusted up somewhatfrom 250 to 275 (access requests byother Federal agencies or Federalemployees are not included). Theestimated average amount of time tocomplete the form, including review ofthe instructions, remains at ten minutes.Thus, the overall estimated annualpublic burden for the OGE Form 201 forforms filed at the Office of GovernmentEthics will increase from 42 hours in thecurrent OMB paperwork inventorylisting (250 forms X 10 minutes perform—number rounded off) to 46 hours(275 forms X 10 minutes per form—number rounded off). Moreover, OGEestimates, based on the agency ethics

program questionnaire responses for thepast couple of years, that some 1,500access request forms will be filed eachyear at the other executive branchdepartments and agencies.

The Office of Government Ethicsexpects that the new form should beready, after OMB clearance, fordissemination to executive branchdepartments and agencies next summer.The Office of Government Ethics willprovide appropriate guidance andphase-in time to departments andagencies once the new form is available.The new form will be made availablefree-of-charge to departments andagencies on paper, on electronic diskand on OGE’s electronic bulletin boardentitled ‘‘The Ethics Bulletin BoardSystem’’ (TEBBS). In addition, if there issufficient interest, OGE will considermaking available a future electronicversion of the form, to allow persons theoption of preparing it on a computer.The Office of Government Ethics alsowill permit departments and agencies tophotocopy or have copies printed of theform as well as to develop or utilize, ontheir own, electronic versions of theform provided that they preciselyduplicate the paper original to theextent possible. As noted above,agencies can also develop their ownaccess forms, provided all theinformation required by the Ethics Actand OGE regulations is placed on theform, along with appropriate PrivacyAct and paperwork notices with theattendant clearances being obtainedtherefor.

Public comment is invited on eachaspect of the proposed modified OGEForm 201 as set forth in this notice,including specifically views on the needfor and practical utility of this proposedmodified collection of information, theaccuracy of OGE’s burden estimate, theenhancement of quality, utility andclarity of the information collected, andthe minimization of burden (includingthe use of information technology).

Comments received in response tothis notice will be summarized for, andmay be included with, the OGE requestfor OMB paperwork approval for thismodified information collection. Thecomments will also become a matter ofpublic record.

Approved: December 28, 1995.Donald E. Campbell,Deputy Director, Office of Government Ethics.[FR Doc. 96–94 Filed 1–3–96; 8:45 am]BILLING CODE 6345–01–U

SECURITIES AND EXCHANGECOMMISSION

[Release No. 34–36650; File No. S7–24–89]

Joint Industry Plan; Solicitation ofComments and Order ApprovingAmendment No. 7 to Reporting Planfor Nasdaq/National Market SecuritiesTraded on an Exchange on an Unlistedor Listed Basis, Submitted by theNational Association of SecuritiesDealers, Inc., and the Boston, Chicagoand Philadelphia Stock Exchanges

December 28, 1995.

On December 28, 1995, the NationalAssociation of Securities Dealers, Inc.,and the Boston, Chicago, andPhiladelphia Stock Exchanges(collectively, ‘‘Participants’’) 1 submittedto the Commission proposedAmendment No. 7 to a joint transactionreporting plan (‘‘Plan’’) for Nasdaq/National Market securities traded on anexchange on an unlisted or listed basis.2Amendment No. 7 would extend theeffectiveness of the plan through March5, 1996.3 This order approvesAmendment No. 7 to the Plan, therebyapproving its operation through March5, 1996.


4 See Securities Exchange Act Release No. 28146(June 26, 1990), 55 FR 27917 (‘‘1990 ApprovalOrder’’). For a detailed discussion of the history ofUTP in OTC securities, and the events that led tothe present plan and pilot program, see 1994Extension Order, infra note 5.

5 See Securities Exchange Act Release No. 34371(July 13, 1994), 59 FR 37103 (‘‘1994 ExtensionOrder’’). See also Securities Exchange Act ReleaseNo. 35221, (January 11, 1995), 60 FR 3886 ReleaseNo. 36102 (August 14, 1995), 60 FR 43626 (‘‘August1995 Extension order’’), Securities Exchange ActRelease No. 36226 (September 13, 1995), 60 FR49029 (‘‘September 1995 Extension Order’’),Securities Exchange Act Release No. 36368 (October13, 1995), 60 FR 54091 (‘‘October 1995 ExtensionOrder’’), and the November and December 1995Extension Orders, supra note 3.

6 In the December 1995 Extension Order, theCommission extended these exemptions throughDecember 29, 1995. Pursuant to a request made bythe NASD, this order further extends theeffectiveness of the relevant exemptions throughMarch 5, 1996. See letter from Richard Ketchum,Chief Operating Officer and Executive VicePresident, NASD, to Jonathan G. Katz, Secretary,Commission, dated December 22, 1995. 1 15 U.S.C. 78s(b)(1).

I. Background

The Commission originally approvedthe Plan on June 26, 1990.4 The Plangoverns the collection, consolidationand dissemination of quotation andtransaction information for Nasdaq/National Market securities listed on anexchange or traded on an exchangepursuant to UTP. The Commission hasextended the effectiveness of the Plansix times since then to allow theParticipants to trade pursuant to thePlan while they finalize theirnegotiations for revenue sharing underthe plan.5

As originally approved by theCommission, the Plan required theParticipants to complete theirnegotiations regarding revenue sharingduring the one-year pilot period. TheJanuary 1995 Extension Order approvedthe effectiveness of the Plan throughAugust 12, 1995. Since January 1995,the Commission has expected theParticipants to conclude their financialnegotiations promptly and to submit afiling to the Commission that reflectedthe results of the negotiations.Moreover, the Commission’s August1995 Extension Order required theParticipants to submit a filingconcerning revenue sharing on or beforeAugust 31, 1995. The Commission’sDecember 1995 Extension Order notedthat request, and further requested thatthe Participants submit to theCommission, on or before December 20,1995, a proposed revenue sharingamendment, along with a proposedamendment to extend the effectivenessof the Plan through the pending periodfor the financial proposal.

The Commission currently believes itis appropriate to extend theeffectiveness of the Plan through March5, 1996, so that operation of the Planmay continue while the Commissionawaits these amendments and preparesthem for publication in the FederalRegister.

II. Extension of Certain ExemptiveRelief

In conjunction with the Plan, on atemporary basis scheduled to expire onDecember 29, 1995, the Commissiongranted an exemption from Rule 11Ac1–2 under the Act regarding the calculatedbest bid and offer (‘‘BBO’’), and grantedthe BSE an exemption from theprovision of Rule 11Aa3–1 under theAct that requires transaction reportingplans to include market identifiers fortransaction reports and last sale data.This order extends these exemptionsthrough march 5, 1996. Further, thisextension will remain in effect only ifthe Plan continues in effect through thatdate pursuant to a Commission order.6The Commission continues to believethat this exemptive relief is appropriatethrough March 5, 1996.

III. Comments on the Operation of thePlan

In the January 1995 Extension Order,the August 1995 Extension Order, theSeptember 1995 Extension Order, theOctober 1995 Extension Order, and theNovember 1995 Extension Order, theCommission solicited, among otherthings, comment on: (1) Whether theBBO calculation for the relevantsecurities should be based on price andtime only (as currently is the case) or ifthe calculation should include size ofthe quoted bid or offer; and (2) whetherthere is a need for an intermarketlinkage for order routing and executionand an accompanying trade-throughrule. The Commission continues tosolicit comment on these matters.

IV. Solicitation of CommentsInterested persons are invited to

submit written data, views andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, NW.,Washington, DC 20549. Copies of thesubmission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from the

public in accordance with theprovisions of 5 U.S.C. § 552, will beavailable for inspection and copying atthe Commission’s Public ReferenceRoom. All submissions should refer toFile No. S7–24–89 and should besubmitted by January 25, 1996.

V. Conclusion

The Commission finds that proposedAmendment No. 7 to the Plan to extendthe operation of the Plan and thefinancial negotiation period throughMarch 5, 1996, is appropriate and infurtherance of Section 11A of the Act.The Commission finds further thatextension of the exemptive reliefthrough March 5, 1996, as describedabove, also is consistent with the Actand the Rules thereunder. Specifically,the Commission believes that theseextensions should serve to provide theParticipants with more time to concludetheir financial negotiations and tosubmit the necessary filings to theCommission. This, in turn, shouldfurther the objects of the Act in general,and specifically those set forth inSections 12(f) and 11A of the Act andin Rules 11Aa3–1 and 11Aa3–2thereunder.

It is therefore ordered, pursuant toSections 12(f) and 11A of the Act and(c)(2) of Rule 11Aa3–2 thereunder, thatAmendment No. 7 to the JointTransaction Reporting Plan for Nasdaq/National Market securities traded on anexchange on an unlisted or listed basisis hereby approved and tradingpursuant to the Plan is hereby approvedon a temporary basis through March 5,1996.

For the Commission, by the Division ofMarket Regulation, pursuant to delegatedauthority, 17 CFR 200.30–3(a)(29).Jonathan G. Katz,Secretary.[FR Doc. 96–128 Filed 1–3–96; 8:45 am]BILLING CODE 8010–01–M

[Release No. 34–36631; File No. SR–CSE–95–08]

Self-Regulatory Organizations; Noticeof Filing and Immediate Effectivenessof Proposed Rule Change by theCincinnati Stock Exchange, Inc.Relating to Exchange Rule 11.10,National Securities Trading SystemFees

December 21, 1995.Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934(‘‘Act’’),1 notice is hereby given that onNovember 16, 1995 the Cincinnati Stock


2 See Letter from Robert Ackermann, VicePresident Regulatory Services, CSE, to GlenBarrentine, Team Leader, Division of MarketRegulation, SEC, dated December 1, 1995. InAmendment No. 1, the Exchange clarified thatDesignated Dealer (‘‘DD’’) transactions resultingfrom trades assigned to the DD acting as ‘‘Dealer ofthe Day’’ are charged at the rate of $0.005 per share.

3 See Letter from Robert Ackermann, VicePresident Regulatory Services, CSE, to GlenBarrentine, Team Leader, Division of MarketRegulation, SEC, dated December 20, 1995. InAmendment No. 2, the Exchange submitted revisedtext to proposed CSE Rule 11.10 G(1).

4 In order to encourage all members to placepublic agency limit orders on the CSE book, theExchange in August 1994 amended Rule 11.10 toeliminate the transaction charge on public agencylimit orders. See Securities Exchange Act ReleaseNo. 34493, (August 5, 1994), 59 FR 41531 (August12, 1994) (approving File No. SR–CSE–94–6).

5 A Designated Dealer (‘‘DD’’) is a proprietarymember who maintains a minimum net capital ofat least the greater of $100,000 or the amountrequired under Rule 15c3–1 of the Act, and who hasbeen approved by the Exchange’s SecuritiesCommittee to perform market functions by enteringbids and offers for securities designated by theSecurities Committee to be traded in the CSE’sNational Securities Trading System (‘‘designatedissues’’) into that System. See CSE Rule 11.9(a)(3).The DD status obligates the dealer to guaranteeexecution of all public agency market orders andagency limit orders up to 2,099 shares. See ReleaseNo. 34493, supra note 4.

6 15 U.S.C. 78f(b).7 15 U.S.C. 78f(b)(4).

8 15 U.S.C. 78s(b)(3)(A).9 17 CFR 240.19b–4.10 17 CFR 200.30–3(a)(12).

Exchange, Inc. (‘‘CSE’’ or ‘‘Exchange’’)filed with the Securities and ExchangeCommission (‘‘Commission’’) theproposed rule change as described inItems I, II, and III below, which Itemshave been prepared by the self-regulatory organization. On December 1,1995, the Exchange submittedAmendment No. 1 text to the proposedrule change.2 On December 20, 1995,the Exchange submitted AmendmentNo. 2 to the proposed rule change.3 TheCommission is publishing this notice tosolicit comments on the proposed rulechange from interested persons.

I. Self-Regulatory Organization’sStatement of the Terms of Substance ofthe Proposed Rule Change

The Exchange hereby amends Rule11.10 regarding fees imposed by theExchange. The text of the proposed rulechange is as follows [new text isitalicized; deleted text is bracketed]:

Rule 11.10 National Securities TradingSystem Fees

A. Agency Transactions.Except for Preferenced transactions,

members acting as an agent will be charged$0.0025 per share ($0.25/100 shares) forpublic agency transactions. [except that therewill be no transaction fee charge for publicagency limit orders executed from the CSElimit order book.]

B. through F. No. Change.G. Proprietary (principal) Transactions.1. All Designated Dealers, except those

acting as Preferencing Dealers orContributing Dealers, will be charged $0.005per share ($0.50/100 shares) [$.0075 pershare ($0.75/100 shares)] for principaltransactions excluding ITS transactions.[unless acting as Dealer of the Day, aPreferencing Dealer or a Contributing Dealerexcept, ITS Transactions] Designated Dealerswill be billed $0.0050 per share on outboundITS trades and $0.0000 per share on inboundITS trades. All Designated Dealers’ chargesare subject to the minimum charges set forthin paragraph 5 below. (Billable shares shallnot exceed 650,000 shares times the numberof trading days in any given month.)

2. through 5. No Change.H. through M. No Change.

II. Self-Regulatory Organization’sStatement of the Purpose of andStatutory Basis for, the Proposed RuleChange

1. Purpose

In its filing with the Commission, theself-regulatory organization includedstatements concerning the purpose ofand basis for the proposed rule changeand discussed any comments it receivedon the proposed rule change. The textof these statements may be examined atthe places specified in Item IV below.The self-regulatory organization hasprepared summaries, set forth inSections A, B, and C below, of the mostsignificant aspects of such statements.

A. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

1. Purpose

The Exchange has determined toamend the fee charged limit ordersexecuted through the facilities of theExchange’s limit order book such thatthe fee charged for market orders andlimit orders executed through thatfacility will be the same.4 Additionally,the fee charged Designated Dealers 5 hasbeen lowered.

2. Statutory Basis

The proposed rule change isconsistent with Section 6(b) of the Act 6

in general and furthers the objectives ofSection 6(b)(4) 7 in particular in that itprovides for the equitable allocation ofreasonable dues, fees, and other chargesamong the Exchange’s members andother persons using its facilities.

B. Self-Regulatory Organization’sStatement on Burden on Competition

The proposed rule change does notimpose any burden on competition that

is not necessary or appropriate infurtherance of the purposes of the Act.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants, or Others

No written comments were solicitedor received with respect to the proposedrule change.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

The foregoing rule change constitutesor changes a due, fee, or other chargeimposed by the Exchange and, therefore,has become effective pursuant toSection 19(b)(3)(A) of the Act 8 andsubparagraph (e) of Rule 19b–4thereunder.9

At any time within sixty days of thefiling of such proposed rule change, theCommission may summarily abrogatesuch rule change if it appears to theCommission that such action isnecessary or appropriate in the publicinterest, for the protection of investors,or otherwise in furtherance of thepurposes of the Act.

IV. Solicitation of Comments

Interested persons are invited tosubmit written data, views, andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, NW.,Washington, DC 20549. Copies of thesubmission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. 552, will beavailable for inspection and copying atthe Commission’s Public ReferenceSection, 450 Fifth Street, NW.,Washington, DC 20549. Copies of suchfiling also will be available forinspection and copying at the principaloffice of the Cincinnati Stock Exchange.All submissions should refer to File No.SR–CSE–95–08 and should besubmitted by January 25, 1996.

For the Commission, by the Division ofMarket Regulation, pursuant to delegatedauthority.10


1 15 U.S.C. 78s(b)(1).2 The terminal equipment is necessary to access

the BBSS.

3 Telephone conversation on December 8, 1995between George A. Villasana, Attorney, MarketRegulation, SEC and Dennis Covelli, Vice President,Post Trade Services, NYSE.

4 The NYSE’s On-Line Comparison System allowsNYSE clearing members to submit trade data oncertain securities on trade date to NYSE for initialcomparison. Compared trades are submitted by theNYSE to a ‘‘qualified clearing agency’’ to completethe clearance and settlement process. See SecuritiesExchange Act Release No. 34153 (June 3, 1994), 59FR 30071 (June 10, 1994) (order approving File No.SR–NYSE–94–08).

5The NYSE provides its members and memberorganizations with one BBSS terminal per boothwithout charge. The exchange charges its membersand member organizations $3,600 per annum foreach additional BBSS terminal installed in eachbooth with access to the BBSS. Telephoneconversation on December 13, 1995 between GeorgeA. Villasana, Attorney, Market Regulation, SEC andDennis Covelli, Vice President, Post Trade Services,NYSE.

6See Securities Exchange Act Release No. 34395(July 18, 1994), 59 FR 38007 (July 26, 1994) (orderapproving File No. SR–NYSE–94–25).

7 While the number of terminals on the NYSEfloor is approximately 400, the number of terminalsin the ‘‘upstairs’’ offices is approximately 20. Seesupra note 5.

8 See supra note 5.9 15 U.S.C. 78f(b).10 15 U.S.C. 78f(b)(4).11 15 U.S.C. 78s(b)(3)(A).12 17 CFR 240.19b–4.

Margaret H. McFarland,Deputy Secretary.[FR Doc. 96–79 Filed 1–3–96; 8:45 am]BILLING CODE 8010–01–M

[Release No. 34–36630; File No. SR–NYSE–95–40]

Self-Regulatory Organizations; Noticeof Filing and Immediate Effectivenessof Proposed Rule Change by the NewYork Stock Exchange, Inc. Relating toFees for Terminal Equipment

December 21, 1995.

Pursuant to Section 19(b)(1) of theSecurities Exchange Act of 1934(‘‘Act’’),1 notice is hereby given that onNovember 30, 1995 the Stock Exchange,Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed withthe Securities and ExchangeCommission (‘‘Commission’’) theproposed rule change as described inItems I, II, and III below, which Itemshave been prepared by the self-regulatory organization. TheCommission is publishing this notice tosolicit comments on the proposed rulechange from interested persons.

I. Self-Regulatory Organization’sStatement of the Terms of Substance ofthe Proposed Rule Change

Beginning January 2, 1996, theExchange plans to charge a fee of $3,600per annum for a package of terminalequipment that its members andmember organizations use to operate theExchange’s Broker Booth SupportSystem (‘‘BBSS’’) from their ‘‘upstairs’’offices.2 Previously, the Exchange hasnot charged for this terminal equipment,because it was installed and operated ona trial basis.

II. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

In its filing with the Commission, theself-regulatory organization includedstatements concerning the purpose ofand basis for the proposed rule changeand discussed any comments it receivedon the proposed rule change. The textof these statements may be examined atthe places specified in Item IV below.The self-regulatory organization hasprepared summaries, set forth inSections A, B, and C below, of the mostsignificant aspects of such statements.

A. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

1. PurposeThe Exchange’s BBSS is designed for

use by its members and memberorganizations either in their boothspaces on the Trading Floor or in their‘‘upstairs’’ offices or both.3 The BBSS isan order management system providingorder processing capabilities as well asaccess to other services such as marketdata, the Exchange’s On-LineComparison System,4 and informationservices. Booth routing, a feature offeredthrough BBSS, enables Exchangemembers and member organizations toalgorithmically route market andlimited price orders to their booths or toa specialist based on share size andprice parameters, as may be determinedby each participant.

The Exchange has charged a fee 5 forBBSS terminal equipment located inmembers’ and member organizations’floor booth spaces since July 1, 1994,but does not currently charge forterminals located in members’ andmember organizations’ ‘‘upstairs’’offices because they were installed andoperated on a trial basis.6

Now, however, the Exchange hasconcluded its trial, and the number of‘‘upstairs’’ installations areproliferating.7 Commencing on January2, 1996, the Exchange intends to chargea fee of $3,600.00 per annum for apackage of hardware, consisting of aterminal, keyboard, and printer, that isnecessary to operate the BBSS. Thischarge is in line with the charge for the

use of similar equipment located on itsTrading Floor,8 and will enable theExchange to recoup part of itsdevelopment and hardware costs.

2. Statutory BasisThe proposed rule change is

consistent with Section 6(b) of the Act 9

in general and furthers the objectives ofSection 6(b)(4) 10 in particular in that itprovides for the equitable allocation ofreasonable dues, fees, and other chargesamong the Exchange’s members andother persons using its facilities.

B. Self-Regulatory Organization’sStatement on Burden on Competition

The proposed rule change does notimpose any burden on competition thatis not necessary or appropriate infurtherance of the proposes of the Act.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants, or Others

The Exchange has neither solicitednor received written comments on theproposed rule change.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

The foregoing rule change constitutesor changes a due, fee, or other chargeimposed by the Exchange and, therefore,has become effective pursuant toSection 19(b)(3)(A) of the Act 11 andsubparagraph (e) of Rule 19b–4thereunder.12

At any time within sixty days of thefiling of such proposed rule change, theCommission may summarily abrogatesuch rule change if it appears to theCommission that such action isnecessary or appropriate in the publicinterest, for the protection of investors,or otherwise in furtherance of thepurposes of the Act.

IV. Solicitation of CommentsInterested persons are invited to

submit written data, views, andarguments concerning the foregoing.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, N.W.,Washington , D.C. 20549. Copies of thesubmission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with thecommission, and all written


13 17 CFR 200.30–3(a)(12).

communications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. 552, will beavailable for the inspection and copyingat the Commission’s Public ReferenceSection, 450 Fifth Street, N.W.,Washington, D.C. 20549. Copies of suchfiling also will be available forinspection and copying at the principaloffice of the New York Stock Exchange,Inc. All submissions should refer to FileNo. SR–NYSE–95–40 and should besubmitted by January 25, 1996.

For the Commission, by the Division ofMarket Regulation, pursuant to delegatedauthority.13

Margaret H. McFarland,Deputy Secretary.[FR Doc. 96–80 Filed 1–3–96; 8:45 am]BILLING CODE 8010–01–M

[Rel. No. IC–21626; File No. 812–9580–01]

Great-West Life & Annuity InsuranceCompany et al.

December 27, 1995.AGENCY: Securities and ExchangeCommission (the ‘‘SEC’’ or the‘‘Commission’’).ACTION: Notice of Application forExemption under the InvestmentCompany Act of 1940 (the ‘‘1940 Act’’).

APPLICANTS: Great-West Life & AnnuityInsurance Company (‘‘GWL&A’’),Maxim Series Account (the ‘‘SeparateAccount’’), and The Great-West LifeAssurance Company (‘‘Great-West’’).RELEVANT 1940 ACT SECTIONS: Orderrequested under Section 6(c) of the 1940Act for exemptions from Sections26(a)(2)(C) and 27(c)(2) of the 1940 Act.SUMMARY OF THE APPLICATION:Applicants seek an order permitting thededuction of mortality and expense riskcharges from: (i) the assets of theSeparate Account in connection withthe offer and sale of certain flexiblepremium variable annuity contracts (the‘‘Contracts’’) issued with a guaranteeddeath benefit, and of variable annuitycontracts established in the future (the‘‘Future Contracts’’) which aresubstantially similar in all materialrespects to the Contracts (‘‘FutureContracts’’); and (ii) the assets ofseparate accounts (‘‘Future Accounts’’)established in the future by GWL&A—which are substantially similar to theSeparate Account—in connection withthe offer and sale of Contracts andFuture Contracts.

FILING DATE: The application was filedon April 25, 1995. An amended andrestated application was filed onOctober 16, 1995.HEARING OF NOTIFICATION OF THE HEARING:An order granting the application willbe issued unless the Commission ordersa hearing. Interested persons mayrequest a hearing on this application bywriting to the Secretary of theCommission and serving Applicantswith a copy of the request, personally orby mail. Hearing requests must bereceived by the Commission by 5:30p.m. on January 22, 1996 and should beaccompanied by proof of service onApplicants in the form of an affidavit or,for lawyers, by certificate of service.Hearing requests should state the natureof the interest, the reason for therequest, and the issues contested.Persons may request notification of thedate of the hearing by writing to theSecretary of the Commission.ADDRESSES: Secretary, SEC, 450 FifthStreet, N.W. Washington, D.C. 20549.Applicants: Beverly A. Byrne, Esq., TheGreat-West Life Assurance Company,8515 East Orchard Road, Englewood,CO 80111.FOR FURTHER INFORMATION CONTACT:Patrice M. Pitts, Special Counsel, Officeof Insurance Products, Division ofInvestment Management, at (202) 942–0670.SUPPLEMENTARY INFORMATION: Thefollowing is a summary of theapplication. The complete application isavailable for a fee from the PublicReference Branch of the Commission.

Applicants’ Representations1. GWL&A, a stock life insurance

company, originally was organizedunder Kansas law as the NationalInterment Association. In 1963, thecompany’s name was changed to RangerLife Insurance Company, and later waschanged to Insuramerica Corporation; inFebruary 1982, the company assumedits current name. In September 1990,GWL&A redomesticated and now isorganized under the laws of Colorado.GWL&A is wholly-owned by GreatWest, which is a subsidiary of Great-West Lifeco Inc., an insurance holdingcompany which, in turn, is a subsidiaryof Power Financial Corporation, afinancial services company.

2. The Separate Account wasestablished by GWL&A under the lawsof Kansas on June 24, 1981, and nowexists under the laws of Colorado as aresult of the redomestication of GWL&Ain 1990. The Separate Account is a unitinvestment trust registered under the1940 Act. The Separate Account acts asa funding vehicle for flexible premium

variable annuity contracts—includingthe Contracts—which have a guaranteeddeath benefit, as well as for otherflexible premium annuity contractswithout a guaranteed death benefit(‘‘Standard Death Benefit Contracts’’).

3. The Separate Account currently hasfourteen investment divisions, twelve ofwhich invest solely in correspondinginvestment portfolios of Maxim SeriesFund, Inc. (‘‘Maxim’’), and two of whichinvest solely in correspondinginvestment portfolios of TCI Portfolios,Inc. (‘‘TCI’’). (Maxim and TCI shall bereferred to herein collectively as the‘‘Funds.’’) Each investment division issubdivided into six subaccounts, two ofwhich are used for allocation under theStandard Death Benefit Contracts andthe Contracts in connection withretirement plans (‘‘qualified plans’’) thatqualify for favorable federal income taxtreatment under Sections 401 and 408 ofthe Internal Revenue Code as well asretirement plans not receiving suchfavorable tax treatment (‘‘non-qualifiedplans’’). The remaining foursubaccounts are used for allocationsunder other contracts previously offeredby GWL&A—through the SeparateAccount—in connection with qualifiedand non-qualified plans. In the future,GWL&A may establish additionaldivisions within the Separate Accountto invest in other portfolios of the Fundsor in other investments, and may issueother contracts—including FutureContracts—which may be funded by theSeparate Account or by Future SeparateAccounts.

4. Each of the Funds is a registeredopen-end, diversified investmentcompany under the 1940 Act; eachconsists of one or more investmentseries or portfolios which pursuedifferent investment objectives andpolicies and have distinct investmentadvisers. GWL&A purchases andredeems portfolio shares for thecorresponding investment divisions ofthe Separate account at net asset value.Shares of the Funds also are offered toother affiliated or unaffiliated separateaccounts of insurance companiesoffering variable annuity contracts orvariable life insurance policies.

5. The principal underwriter of theContracts, Great-West, is registered withthe Commission under the Securitiesand Exchange Act of 1934 as a broker-dealer, and is a member of the NationalAssociation of Securities Dealers, Inc.

6. The minimum initial purchasepayment for a Contract used inconnection with a non-qualified plan is$5,000; the minimum initial purchasepayment for a Contract used inconnection with a qualified plan is$2,000. Additional purchase payments


for both non-qualified plan andqualified plan Contracts must be at least$500, except for payments madethrough an automatic contribution plan,which are subject to a $50 minimum.The Contracts also permit periodicpayments and partial surrenders.

7. Prior to issuance of a Contract, theContract owner selects a ‘‘RetirementDate’’ on which annuity payments are tobegin. All or part of the Contract valuemay be placed under one or more of theannuity payout options available underthe Contract, or the Contract owner mayelect to receive the Contract value in alump sum of the Retirement Date.

8. The Contracts provide for thepayment of a death benefit. If theAnnuitant dies before the RetirementDate, a death benefit will be paid to thedesignated beneficiary in an amountwhich is the greater of either: (a) theContract value as of the date of death,less premium taxes, if any; or (b) theguaranteed death benefit, less premiumtaxes, if any. The guaranteed deathbenefit equals the initial purchasepayment on the date the Contract isissued, and thereafter is adjusted uponeach purchase payment, partialsurrender, or periodic payment. Theguaranteed death benefit is recalculatedat the end of each calendar year byadding interest at an annual effectiverate of 5%. At any date (other than theend of a calendar year) the guaranteeddeath benefit equals the lesser of: (a)The guaranteed death benefit as of theend of the last calendar year, plus anysubsequent purchase payments, and lessany partial surrenders and periodicpayments; or (b) the result of thefollowing calculation—Contract valueafter the last partial surrender orperiodic payment made during thecalendar year, multiplied by theguaranteed death benefit prior to suchpartial surrender or periodic payment,divided by the Contract value prior tosuch partial surrender or periodicpayment.

9. Various fees and expenses arededucted under the Contracts. Prior tothe Retirement Date, an annualmaintenance charge of $27 will bededucted from the Contract value tocompensate GWL&A for administrativeservices. The charge will not exceed thecost of services to be provided over thelife of the Contract, in accordance withthe provisions of Rule 26a–1 under the1940 Act. GWL&A does not anticipateany profit from this charge.

10. Any premium or other taxeslevied by any government entity withrespect to the Contracts or the SeparateAccount will be paid by GWL&A. If theContract value is used to purchase anannuity under the annuity payout

options, the dollar amount of anypremium tax previously paid or payableupon annuitization by GWL&A will becharged against Contract value. Theapplicable premium tax rates currentlyrange from 0% to 2.50%.

11. The Separate Account and itsinvestment divisions will bear their ownoperating expenses and charges forfederal income tax, should such taxes beincurred by GWL&A in connection withthe operation of the Separate Account.No charge is made by GWL&A fortransfers of Contract value amongSeparate Account investment divisions.

12. No front-end sales load will bededucted from premium paymentsunder the Contracts. Rather, upon anytotal or partial surrender of ContractValue prior to the Retirement Date, acontingent deferred sales charge will bededucted from purchase paymentswhich have been credited to a Contractfor fewer than seven years. Once peryear, however, up to 10% of theContract value as of December 31 of thecalendar year prior to the year in whichthe amount is being surrendered may bewithdrawn without incurring acontingent deferred sales charge. Totalsurrender charges will not exceed 7% ofthe purchase payment under theContract.

13. A daily charge equal to aneffective annual rate of 1.45% of the netasset value of the Separate Accountattributable to the Contracts will beimposed to compensate GWL&A forbearing certain mortality and expenserisks in connection with the Contracts.Of this amount, 0.85% is allocable tothe mortality risk apart from thatassociated with the guaranteed deathbenefit, 0.20% is allocable to themortality risk associated with theguaranteed death benefit, and 0.40% isallocable to the expense risk. Themortality and expense risk charge isguaranteed by GWL&A and cannot beincreased.

14. The annual mortality and expenserisk charge assessed under FutureContracts will be the same as thatmentioned above. In addition, there willbe no front-end sales charge for FutureContracts, and the maximum contingentdeferred sales charge will not exceed7% of the amount distributed.

15. The mortality risk under theContract is that, upon selection of anannuity payout option with a lifecontingency, annuitants will live longerthan GWL&A’s actuarial projectionsindicate, thereby resulting in higherthan expected annuity payments.GWL&A also assumes a mortality riskunder the Contract if the death of anannuitant results in a death benefitbeing payable under the Contract.

GWL&A is at risk to the extent that theamount of the guaranteed death benefitexceeds the Contract value as of the dateof death.

16. The expense risk borne byGWL&A under the Contracts is that thecharges for administrative expenses,which charges are guaranteed for the lifeof the Contracts, may be insufficient tocover the actual costs of issuing andadministering the Contracts.

Applicants’ Legal Analysis1. Applicants request an order of the

Commission under Section 6(c) forexemptions from Sections 26(a)(2)(C)and 27(c)(2) of the 1940 Act to theextent necessary to permit thededuction of a maximum charge of1.45% for the assumption of mortalityand expense risks from the assets of: (a)The Separate Account in connectionwith the issuance of the Contracts orFuture Contracts; and (b) any FutureSeparate Accounts in connection withthe issuance of Contracts or FutureContracts. Applicants submit that therequested exemption is appropriate inthe public interest and consistent withthe protection of investors and thepurposes fairly intended by the policyand provisions of the 1940 Act.

2. Section 6(c) of the 1940 Actauthorizes the Commission to exemptany person, security, or transaction orany class or classes of persons,securities, or transactions from theprovisions of the 1940 Act, and the rulespromulgated thereunder, if and to theextent that the exemption is necessaryor appropriate in the public interest andconsistent with the protection ofinvestors and the purposes fairlyintended by the policy and provisions ofthe 1940 Act.

3. Sections 26(a)(2)(C) and 27(c)(2) ofthe 1940 Act, as herein pertinent,prohibit a registered unit investmenttrust and any depositor or underwriterthereof from selling periodic paymentplan certificates unless the proceeds ofall payments are deposited with aqualified trustee or custodian and areheld under arrangements which prohibitany payment to the depositor orprincipal underwriter. Exception ismade for fees, not exceeding any suchreasonable amounts as the Commissionmay prescribe, for performingbookkeeping and other administrativeservices.

4. Applicants submit that theirrequest would promote competitivenessin the variable annuity contract marketby eliminating the need for GWL&A tofile redundant exemptive applications,thereby reducing GWL&A’sadministrative expenses andmaximizing the efficient use of


GWL&A’s resources. Applicants furthersubmit that the delay and expensesinvolved in having to seek exemptiverelief repeatedly would impairGWL&A’s ability effectively to takeadvantage of business opportunities asthey arise. Further, if GWL&A wererequired to seek exemptive reliefrepeatedly with respect to the issuesaddressed in this application, investorswould not receive any benefit oradditional protection thereby. Thus,Applicants believe that the requestedexemption is appropriate in the publicinterest and consistent with theprotection of investors and the purposesfairly intended by the policy andprovisions of the 1940 Act.

5. Applicants represent that themortality and expense risk charge of1.25% (which includes all risk chargesimposed under the Contracts except the0.20% mortality risk charge for theguaranteed death benefit) is within therange of industry practice for variableannuity contracts which, while notoffering a guaranteed death benefitfeature, are otherwise comparable to theContracts. This representation is basedupon Applicants’ analysis of publiclyavailable information regarding theaggregate level of the mortality andexpense risk charges under suchcomparable variable annuity contractscurrently being offered in the insuranceindustry, taking into consideration suchfactors as current charge levels, themanner in which charges are imposed,the presence of charge-level or annuity-rate guarantees, and the markets inwhich the contracts will be offered.Applicants represent that GWL&A willmaintain at the administrative offices atits headquarters, and make available tothe Commission, a memorandumdetailing the variable annuity productsanalyzed in the course of, and themethodology and results of, itscomparative survey.

6. Applicants represent that beforerelying on exemptive relief resultingfrom this application in connection withany Future Contracts funded throughthe Separate Account or Future SeparateAccounts, they will determine that themortality and expense risk charge of1.25% imposed under such FutureContracts (which includes all riskcharges imposed under the FutureContracts except the 0.20% mortalityrisk charge for the guaranteed deathbenefit) will be within the range ofindustry practice for variable annuitycontracts which, while not offering aguaranteed death benefit feature, areotherwise comparable to the FutureContracts. GWL&A will maintain at theadministrative offices at itsheadquarters, and make available to the

Commission, a memorandum detailingthe variable annuity products analyzedin the course of, and the methodologyand results of, its comparative survey.

7. Applicants also hereby representthat the mortality risk charge of 0.20%for the guaranteed death benefit isreasonable in relation to the additionalmortality risks assumed by GWL&A inoffering a guaranteed death benefitunder the Contracts. This representationis based upon GWL&A’s examination ofa large number of trials at different issueages to determine the expectedadditional cost of offering a guaranteeddeath benefit. GWL&A fist projectedhypothetical asset returns usinggenerally accepted actuarial simulationmethods. GWL&A then calculatedhypothetical accumulated values byapplying the projected asset returns tothe initial value in a hypotheticalaccount for each asset return patterngenerated. GWL&A compared eachaccumulated value so calculated to theamount of the guaranteed death benefitpayable in the event of the hypotheticalannuitant’s death during the year inquestion. GWL&A also studies recentpublished actuarial statistics regardingthe costs associated with similarenhanced or guaranteed death benefits,and sought reinsurance bids in relationto the guaranteed death benefit. GWL&Awill maintain at the administrativeoffices at its headquarters, and makeavailable to the Commission, amemorandum detailing themethodology used in determining thatan additional level cost of 0.20% for theguaranteed death benefit is reasonablein relation to the additional risksassumed by GWL&A in offering such adeath benefit under the Contracts.

8. Before relying on exemptive reliefresulting from this application inconnection with any Future Contractsfunded through the Separate Account orany Future Separate Accounts, GWL&Awill prepare and maintain at theadministrative office at its headquarters,and make available to the Commission,a memorandum detailing themethodology used in determining thatan additional level cost of 0.20% for aguaranteed death benefit is reasonablein relation to the additional risksassumed by GWL&A in offering such adeath benefit under the FutureContracts.

9. GWL&A does not believe that thecontingent deferred sales chargesimposed under the Contracts willnecessarily cover the expected costs ofdistributing the Contracts. Any‘‘shortfall’’ will be made up from theassets of the general account of GWL&A,which will include amounts derivedfrom the mortality and expense risk

charges. GWL&A has concluded thatthere is a reasonable likelihood that thedistribution financing arrangementbeing used in connection with theContracts will benefit the SeparateAccount and the Contract owners. Thebasis for this conclusion is set forth ina memorandum which will bemaintained by GWL&A at theadministrative offices at itsheadquarters, and will be madeavailable to the Commission.

10. Applicants recognize that thecontingent deferred sales charges thatmay be imposed under Future Contractsmay not necessarily be sufficient tocover the expected costs of distributingsuch contracts. Any ‘‘shortfall’’ will bemade up from the assets of the generalaccount, which will include amountsderived from the mortality and expenserisk charges imposed under FutureContracts. Applicants represent thatbefore relying on exemptive reliefresulting from this application inconnection with the Future Contractsfunded through the Separate Account orany Future Separate Accounts, GWL&Awill determine that there is a reasonablelikelihood that the distributionfinancing arrangements being used inconnection with the Future Contractswill benefit the Separate Account or anyFuture Separate Accounts and theirrespective Future Contract owners.GWL&A will maintain at theadministrative offices at itsheadquarters, and make available to theCommission, a memorandum settingforth the basis for this conclusion.

11. Applicants also represent that theSeparate Account and any FutureSeparate Accounts will invest only inunderlying funds which haveundertaken, in the event they shouldadopt a plan for financing distributionexpenses pursuant to Rule 12b–1 of the1940 Act, to have such a planformulated and approved by their boardof directors/trustees, a majority of whomare not interested persons of any suchfunds.

Conclusion

For the reasons set forth above,Applicants represent that theexemptions requested are necessary andappropriate in the public interest andconsistent with the protection ofinvestors and purposes fairly intendedby the policy and provisions of the 1940Act.


For the Commission, by the Division ofInvestment Management, pursuant todelegated authority.Margaret H. McFarland,Deputy Secretary.[FR Doc. 96–132 Filed 1–3–96; 8:45 am]BILLING CODE 8010–01–M

[Investment Company Act Rel. No. 21629;812–9850]

Mutual Fund Group, et al.; Notice ofApplication

December 28, 1995.AGENCY: Securities and ExchangeCommission (‘‘SEC’’).ACTION: Notice of Application forExemption under the InvestmentCompany Act of 1940 (the ‘‘Act’’).

APPLICANTS: Mutual Fund Group(‘‘MFG’’), Mutual Fund Trust, MutualFund Variable Annuity Trust, Growth &Income Portfolio, Capital GrowthPortfolio, International Equity Portfolio,Global Fixed Income Portfolio(collectively, the ‘‘Chase Funds’’);Atlanta Capital Management Company(‘‘Atlanta Capital’’); and The ChaseManhattan Bank, National Association(the ‘‘Adviser’’).RELEVANT ACT SECTIONS: Order requestedunder section 6(c) for an exemptionfrom section 15(a).SUMMARY OF APPLICATION: The ChaseManhattan Corporation (‘‘Chase’’), theAdviser’s holding company, will bemerged with Chemical BankingCorporation (‘‘CBC’’). The merger willresult in the assignment, and thus thetermination, of the Chase Funds’existing investment advisory and sub-advisory contracts with the Adviser andAtlanta Capital, a sub-adviser.Applicants request an order to permitthe implementation, withoutshareholder approval, of interimadvisory and sub-advisory contracts,during a period of up to 120 daysfollowing January 31, 1996. The orderalso will permit the Adviser and AtlantaCapital to receive fees earned under theinterim advisory and sub-advisorycontracts following approval by theChase Funds’ shareholders.FILING DATES: The application was filedon November 6, 1995 and amended onDecember 28, 1995.HEARING OR NOTIFICATION OF HEARING: Anorder granting the application will beissued unless the SEC orders a hearing.Interested persons may request ahearing by writing to the SEC’sSecretary and serving applicants with acopy of the request, personally or bymail. Hearing requests should bereceived by the SEC by 5:30 p.m. on

January 22, 1996, and should beaccompanied by proof of service onapplicants, in the form of an affidavit or,for lawyers, a certificate of service.Hearing requests should state the natureof the writer’s interest, the reason for therequest, and the issues contested.Persons who wish to be notified of ahearing may request such notificationby writing to the SEC’s Secretary.ADDRESSES: Secretary, SEC, 450 FifthStreet, NW., Washington, DC 20549.Applicants: The Chase Manhattan Bank,National Association, One ChaseManhattan Plaza, New York, New York10081; Atlanta Capital ManagementCompany, Two Midtown Plaza, 1360Peachtree Street, Suite 1600, Atlanta,Georgia 30309; all other applicants, 125West 55th Street, New York, New York10019.FOR FURTHER INFORMATION CONTACT:Marianne H. Khawly, Staff Attorney, at(202) 942–0562, or Robert A. Robertson,Branch Chief, at (202) 942–0564(Division of Investment Management,Office of Investment CompanyRegulation).SUPPLEMENTARY INFORMATION: Thefollowing is a summary of theapplication. The complete applicationmay be obtained for a fee from the SEC’sPublic Reference Branch.

Applicant’s Representations1. The Chase Funds are registered

open-end management investmentcompanies. The Adviser is a nationalbanking association and is a wholly-owned subsidiary of Chase, a bankholding company. Each Chase Fund hasentered into a investment advisoryagreement with the Adviser. TheAdviser and Atlanta Capital haveentered into an investment sub-advisoryagreement pursuant to which AtlantaCapital acts as sub-adviser to a portfolioof MFG, IEEE Balanced Fund (the sub-advisory agreement together with theinvestment advisory agreements, the‘‘Existing Agreements’’).

2. On August 27, 1995, CBC andChase entered into an Agreement andPlan of Merger, pursuant to whichChase will be merged with and into CBC(the ‘‘Holding Company Merger’’). CBCwill be the surviving corporation andwill continue its corporate existenceunder the name ‘‘The Chase ManhattanCorporation.’’ The Holding CompanyMerger will be effected as a stocktransaction, with the outstanding sharesof Chase common stock beingexchanged for newly issued shares ofCBC common stock at a predeterminedexchange rate. Applicants anticipatethat the Holding Company Merger willoccur on or before January 31, 1996.

Subsequent to the Holding CompanyMerger, the Adviser will be merged withChemical Bank, a wholly-owned directsubsidiary of CBC (the ‘‘Bank Merger’’and together with the Holding CompanyMerger, the ‘‘Mergers’’). The survivingbank will continue operations under thename ‘‘The Chase Manhattan Bank.’’

3. On December 11, 1995, therespective shareholders of Chase andCBC voted to approve the HoldingCompany Merger. At a special meetingheld on December 14, 1995, therespective Boards of Trustees of theChase Funds (the ‘‘Boards’’) met todiscuss the Mergers. During thismeeting, the Boards, met to discuss theMergers. During this meeting, theBoards, including a majority of theBoard members who are not ‘‘interestedpersons,’’ as that term is defined in theAct (the ‘‘Independent Trustees’’), of therespective Chase Funds, with the adviceand assistance of counsel to theIndependent Trustees, made a fullevaluation of interim investmentadvisory and sub-advisory agreements(the ‘‘Interim Agreements’’). Inaccordance with section 15(c) of theAct, the Boards voted to approve theInterim Agreements. The Boards of eachChase Fund also voted to recommendthat shareholders of each Chase Fundapprove the Interim Agreements.

4. In approving the InterimAgreements, the Boards concluded thatpayment of the advisory and sub-advisory fees during the interim periodwould be appropriate and fair becausethere will be no diminution in the scopeand quality of services provided to theChase Funds, the fees to be paid areunchanged from the fees paid under theExisting Agreements, the fees would bemaintained in an interest-bearingescrow account until payment isapproved or disapproved byshareholders, and the nonpayment offees would be inequitable to the Adviser(including its successor in the event thatthe Bank Merger occurs during theinterim period, the ‘‘Successor’’) andAtlanta Capital in view of thesubstantial services to be provided.

5. Chase and CBC expect acombination of Chase Funds andregistered investment companies thatare advised by CBC subsidiaries(collectively, the ‘‘CBC Funds’’) into afamily of mutual funds with consistentstructural characteristics whereappropriate, consolidated management,consistent share class structures,rationalized investment objectives andpolicies, and consolidated marketingefforts (the ‘‘Fund FamilyCombination’’). Applicants expect that anumber of Chase Funds willconsummate a transaction with (a) an


existing CBC Fund providing for thetransfer of substantially all of the assetsof one such fund to the other inexchange for the other’s shares, or (b) aCBC Fund to be newly createdproviding for the transfer ofsubstantially all of the assets of suchChase Fund to the newly created CBCFund in exchange for shares of thenewly created CBC Fund (each suchtransaction, a ‘‘Fund Merger’’).

6. Applicants believe that it will notbe possible to complete the FundFamily Combination or any of theexpected Fund Mergers prior to theHolding Company Merger. Accordingly,applicants request an exemption fromsection 15(a) of the Act to permit theimplementation, without shareholderapproval, of the Interim Agreements.The exemption would cover the periodcommencing on the date of the HoldingCompany Merger and continuingthrough the date the Interim Agreementsare approved or disapproved byshareholders of the respective ChaseFunds, which period shall be no longerthan 120 days after January 31, 1996(the ‘‘Interim Period’’). Applicants alsorequest that such relief extend to theBank Merger during the Interim Period.

Applicants’ Legal Analysis1. Section 15(a) prohibits an

investment adviser from providinginvestment advisory services to aninvestment company except under awritten contract that has been approvedby a majority of the investmentcompany’s voting securities. The sectionfurther requires that the written contractprovide for its automatic termination inthe event of an assignment. Section2(a)(4) of the Act defines ‘‘assignment’’to include any direct or indirect transferof a contract by the assignor or of acontrolling block of the assignor’soutstanding voting securities by asecurity holder of the assignor.

2. Section 2(a)(9) defines ‘‘control’’ asthe power to exercise a controllinginfluence over the management orpolicies of a company. Beneficialownership of more than 25% of acompany’s voting securities is presumedto constitute control.

3. Upon consummation of the HoldingCompany Merger, approximately 43% ofthe voting securities of the survivingcorporation will be owned by thecurrent Chase shareholders and 57%will be owned by the current CBCshareholders. Thus, the HoldingCompany Merger may be deemed toresult in an ‘‘assignment’’ of the ExistingAgreements. Therefore, theseagreements will terminate by theirterms. Similarly, the Bank Merger maybe deemed to result in an ‘‘assignment’’

of the Interim Agreements, thusterminating these agreements.

4. Rule 15a–4 provides, among otherthings, that if an advisory contract isterminated by assignment, theinvestment adviser may continue to actas such for 120 days at the previouscompensation rate if a new contract isapproved by the board of directors ofthe investment company, and if theinvestment adviser or a controllingperson of the investment adviser doesnot directly or indirectly receive moneyor other benefit in connection with theassignment. Because Chase and theAdviser will receive a benefit inconnection with the assignment of thecontracts, applicants may not rely onthe rule.

5. Absent the requested relief,applicants believe that it may benecessary, in the case of most ChaseFunds, to undertake multiple proxysolicitations within a relatively shorttime frame. Applicants believe thatengaging in the solicitation of multipleproxies from the shareholders of a singleinvestment company for approvalsarising out of the same series of eventswould be confusing to shareholders,burdensome, inefficient, costly, and notin the best interests of the Chase Fundsor their shareholders.

6. Applicants believe that therequested relief will allow for theorderly completion of the Fund Mergersand the Fund Family Combination, aswell as reasonable adjournments ofshareholder meetings if necessary toobtain sufficient shareholder responsesto proxy solicitations to obtain thevarious approvals as may be necessaryin connection with the Fund Mergers.

7. Section 6(c) of the Act provides thatthe SEC may exempt any person,security, or transaction from anyprovision of the Act, if and to the extentthat such exemption is necessary orappropriate in the public interest andconsistent with the protection ofinvestors and the purposes fairlyintended by the policy and provisions ofthe Act. Applicants believe that therequested relief from section 15(a) meetsthis standard.

Applicants’ ConditionsApplicants agree as conditions to the

requested exemptive relief that:1. Each Interim Agreement will have

the same terms and conditions as therespective Existing Agreement, exceptfor the effective and termination dates.

2. Fees earned by the Adviser (or theSuccessor, if applicable) and AtlantaCapital and paid by a Chase Fundduring the Interim Period in accordancewith the Interim Agreement will bemaintained in an interest-bearing

escrow account, and amounts in suchaccount (including interest earned onsuch paid fees) will be paid to theAdviser (or the Successor, if applicable)and in the case of IEEE Balanced Fund,paid to Atlanta Capital only uponapproval of the related Chase Fundshareholders or, in the absence of suchapproval, to the related Chase Fund.

3. Each Chase Fund will holdmeetings of shareholders to vote onapproval of the related InterimAgreement, on or before the 120th dayfollowing January 31, 1996.

4. Chase, CBC and/or one or moresubsidiaries of the foregoing will paythe costs of preparing and filing thisapplication. Chase, CBC and/or one ormore subsidiaries of the foregoing willpay the costs relating to the solicitationof the approvals of the Chase Fundshareholders, to the extent such costsrelate to the shareholder approval ofInterim Agreements necessitated by theMergers.

5. The Adviser (or the Successor, ifapplicable) and Atlanta Capital, as thecase may be, will take all appropriateactions to ensure that the scope andquality of advisory and other servicesprovided to the Chase Funds under theInterim Agreements will be at leastequivalent, in the judgment of therespective Boards, including a majorityof the Independent Trustees, to thescope and quality of services previouslyprovided. In the event of any materialchange in personnel providing servicesunder the Interim Agreements, theAdviser (or the Successor, if applicable)or Atlanta Capital, as the case may be,will apprise and consult the Boards ofthe affected Chase Funds to assure thatsuch Boards, including a majority of theIndependent Trustees, are satisfied thatthe services provided by the Adviser (orthe Successor, if applicable) or AtlantaCapital, as the case may be, will not bediminished in scope or quality.

For the SEC, by the Division of InvestmentManagement, under delegated authority.Jonathan G. Katz,Secretary.[FR Doc. 96–129 Filed 1–3–96; 8:45 am]BILLING CODE 8010–01–M



National Highway Traffic SafetyAdministration

[Docket No. 95–99; Notice 1]

Notice of Receipt of Petition forDecision That Nonconforming 1994Alfa Romeo 164 Passenger Cars AreEligible for Importation

AGENCY: National Highway TrafficSafety Administration, DOT.ACTION: Notice of receipt of petition fordecision that nonconforming 1994 AlfaRomeo 164 passenger cars are eligiblefor importation.

SUMMARY: This notice announces receiptby the National Highway Traffic SafetyAdministration (NHTSA) of a petitionfor a decision that a 1994 Alfa Romeo164 that was not originallymanufactured to comply with allapplicable Federal motor vehicle safetystandards is eligible for importation intothe United States because (1) it issubstantially similar to a vehicle thatwas originally manufactured forimportation into and sale in the UnitedStates and that was certified by itsmanufacturer as complying with thesafety standards, and (2) it is capable ofbeing readily altered to conform to thestandards.DATES: The closing date for commentson the petition is February 5, 1996.ADDRESSES: Comments should refer tothe docket number and notice number,and be submitted to: Docket Section,Room 5109, National Highway TrafficSafety Administration, 400 Seventh St.,SW, Washington, DC 20590. [Dockethours are from 9:30 am to 4 pm].FOR FURTHER INFORMATION CONTACT:George Entwistle, Office of VehicleSafety Compliance, NHTSA (202–366–5306).


BackgroundUnder 49 U.S.C. 30141(a)(1)(A)

(formerly section 108(c)(3)(A)(i)(I) of theNational Traffic and Motor VehicleSafety Act (the Act)), a motor vehiclethat was not originally manufactured toconform to all applicable Federal motorvehicle safety standards shall be refusedadmission into the United States unlessNHTSA has decided that the motorvehicle is substantially similar to amotor vehicle originally manufacturedfor importation into and sale in theUnited States, certified under 49 U.S.C.30115 (formerly section 114 of the Act),and of the same model year as themodel of the motor vehicle to becompared, and is capable of being

readily altered to conform to allapplicable Federal motor vehicle safetystandards.

Petitions for eligibility decisions maybe submitted by either manufacturers orimporters who have registered withNHTSA pursuant to 49 CFR Part 592. Asspecified in 49 CFR 593.7, NHTSApublishes notice in the Federal Registerof each petition that it receives, andaffords interested persons anopportunity to comment on the petition.At the close of the comment period,NHTSA decides, on the basis of thepetition and any comments that it hasreceived, whether the vehicle is eligiblefor importation. The agency thenpublishes this decision in the FederalRegister.

Liphardt & Associates ofRonkonkoma, New York (‘‘Liphardt’’)(Registered Importer 90–004) haspetitioned NHTSA to decide whether1994 Alfa Romeo 164 passenger cars areeligible for importation into the UnitedStates. The vehicle which Liphardtbelieves is substantially similar is the1994 Alfa Romeo 164 that wasmanufactured for importation into, andsale in, the United States and certifiedby its manufacturer as conforming to allapplicable Federal motor vehicle safetystandards.

The petitioner claims that it carefullycompared the non-U.S. certified 1994Alfa Romeo 164 to its U.S. certifiedcounterpart, and found the two vehiclesto be substantially similar with respectto compliance with most Federal motorvehicle safety standards.

Liphardt submitted information withits petition intended to demonstrate thatthe non-U.S. certified 1994 Alfa Romeo164, as originally manufactured,conforms to many Federal motor vehiclesafety standards in the same manner asits U.S. certified counterpart, or iscapable of being readily altered toconform to those standards.

Specifically, the petitioner claims thatthe non-U.S. certified 1994 Alfa Romeo164 is identical to its U.S. certifiedcounterpart with respect to compliancewith Standards Nos. 102 TransmissionShift Lever Sequence * * *, 103Defrosting and Defogging Systems, 104Windshield Wiping and WashingSystems, 105 Hydraulic Brake Systems,106 Brake Hoses, 107 ReflectingSurfaces, 109 New Pneumatic Tires, 111Rearview Mirrors; 113 Hood LatchSystems, 116 Brake Fluid, 118 PowerWindow Systems; 124 AcceleratorControl Systems, 201 OccupantProtection in Interior Impact, 202 HeadRestraints, 203 Impact Protection for theDriver From the Steering ControlSystem, 204 Steering Control RearwardDisplacement, 205 Glazing Materials,

206 Door Locks and Door RetentionComponents, 207 Seating Systems, 209Seat Belt Assemblies, 210 Seat BeltAssembly Anchorages, 211 Wheel Nuts,Wheel Discs and Hubcaps, 212Windshield Retention, 214 Side ImpactProtection, 216 Roof Crush Resistance,219 Windshield Zone Intrusion, 301Fuel System Integrity, and 302Flammability of Interior Materials.

Additionally, the petitioner states thatthe non-U.S. certified 1994 Alfa Romeo164 complies with the Bumper Standardfound in 49 CFR Part 581.

Petitioner also contends that thevehicle is capable of being readilyaltered to meet the following standards,in the manner indicated:

Standard No. 101 Controls andDisplays: (a) substitution of appropriatesymbols on the brake failure, parkingbrake, and seat belt warning lamps; (b)installation of a U.S.-modelspeedometer.

Standard No. 108 Lamps, ReflectiveDevices and Associated Equipment: (a)installation of U.S.-model headlampassemblies which incorporate sealedbeam headlamps and front sidemarkers;(b) installation of U.S.-model taillamps;(c) installation of a high mounted stoplamp.

Standard No. 110 Tire Selection andRims: installation of a tire informationplacard.

Standard No. 114 Theft Protection:installation of a warning buzzer in thesteering lock electrical circuit.

Standard No. 115 VehicleIdentification Number: installation of aVIN plate that can be read from outsidethe left windshield pillar, and VINreference label on the edge of the dooror latch post nearest the driver.

Standard No. 208 Occupant CrashProtection: installation of a seat beltwarning buzzer. The petitioner statesthat the vehicle is equipped with an airbag and knee bolster that have identicalpart numbers to those found on its U.S.-certified counterpart.

Interested persons are invited tosubmit comments on the petitiondescribed above. Comments should referto the docket number and be submittedto: Docket Section, National HighwayTraffic Safety Administration, Room5109, 400 Seventh Street, S.W.,Washington, DC 20590. It is requestedbut not required that 10 copies besubmitted.

All comments received before theclose of business on the closing dateindicated above will be considered, andwill be available for examination in thedocket at the above address both beforeand after that date. To the extentpossible, comments filed after theclosing date will also be considered.


Notice of final action on the petitionwill be published in the FederalRegister pursuant to the authorityindicated below.

Authority: 49 U.S.C. 30141 (a)(1)(A) and(b)(1); 49 CFR 593.8; delegations of authorityat 49 CFR 1.50 and 501.8.

Issued on: December 29, 1995.Marilynne Jacobs,Director, Office of Vehicle Safety Compliance.[FR Doc. 96–106 Filed 1–3–96; 8:45 am]BILLING CODE 4910–59–M



Agency Information CollectionActivities; Comment Request

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Notice and request forcomments.

SUMMARY: The Department of theTreasury, as part of its continuing effortto reduce paperwork and respondentburden, invites the general public andother Federal agencies to take thisopportunity to comment on proposedand/or continuing informationcollections, as required by thePaperwork Reduction Act of 1995.

Currently, the IRS is solicitingcomments concerning new Form W–7,Application for IRS Individual TaxpayerIdentification Number.DATES: Written comments should bereceived on or before March 4, 1996, tobe assured of consideration.ADDRESSES: Direct all written commentsto Garrick R. Shear, Internal RevenueService, T:FP, room 5571, 1111Constitution Avenue NW., Washington,DC 20224.FOR FURTHER INFORMATION CONTACT:Requests for additional information orcopies of the information collectionshould be directed to Martha R. Brinson,(202) 622–3869, Internal RevenueService, T:FP, room 5571, 1111Constitution Avenue NW., Washington,DC 20224.SUPPLEMENTARY INFORMATION:

Title: Application for IRS IndividualTaxpayer Identification Number

OMB Number: To be assigned later.Form Number: W–7.Abstract: Proposed regulations under

section 6109 of the Internal RevenueCode introduce a new type of taxpayeridentifying number called the ‘‘IRSindividual taxpayer identificationnumber’’ (ITIN). When available,individuals who currently do not have,and are not eligible to obtain, socialsecurity numbers can apply for this

number. Taxpayers may use thisnumber when required to furnish ataxpayer identifying number underregulations. An ITIN would be appliedfor on Form W–7 and is intended for taxuse only.

Current Actions: This is a newcollection of information.

Type of Review: New OMB approval.Affected Public: Individuals.Estimated Number of Respondents:

500,000.Estimated Time Per Respondent: 56

minutes.Estimated Total Annual Burden

Hours: 470,000.REQUEST FOR COMMENTS: Commentssubmitted in response to this notice willbe summarized and/or included in therequest for OMB approval. Allcomments will become a matter ofpublic record. Written comments shouldaddress the accuracy of the burdenestimates and ways to minimize burdenincluding the use of automatedcollection techniques or the use of otherforms of information technology, as wellas other relevant aspects of theinformation collection request.Garrick R. Shear,IRS Reports Clearance Officer[FR Doc. 96–63 Filed 1–3–96; 8:45 am]BILLING CODE 4830–01–U

This section of the FEDERAL REGISTERcontains notices of meetings published underthe ‘‘Government in the Sunshine Act’’ (Pub.L. 94-409) 5 U.S.C. 552b(e)(3).

Sunshine Act Meetings Federal Register

369

Vol. 61, No. 3


FEDERAL ELECTION COMMISSION

DATE AND TIME: Tuesday, January 9, 1996at 10:00 a.m.PLACE: 999 E Street, N.W., Washington,D.C.STATUS: This meeting will be closed tothe public.ITEMS TO BE DISCUSSED:

Compliance matters pursuant to 2 U.S.C.437g.

Audits conducted pursuant to 2 U.S.C.437g, 438(b), and Title 26, U.S.C.

Matters concerning participation in civilactions or processings or arbitration.

Internal personnel rules and procedures ormatters affecting a particular employee.

DATE AND TIME: Wednesday, January 10,1996 at 10:00 a.m.PLACE: 999 E Street, N.W., Washington,D.C. (Ninth Floor)STATUS: This meeting will be open to thepublic.ITEMS TO BE DISCUSSED:

Correction and Approval of Minutes.Title 26 Certification Matters.Draft Advisory Opinion 1995–37: Ralph W.

Holmen, National Association of Realtors(NAR).

Draft Advisory Opinion 1995–40: BarbaraE. Wixon, (Continental Airlines).

Draft Advisory Opinion 1995–42: Rep. JimMcCrery, on behalf of McCrery for Congress.

Draft Advisory Opinion 1995–43: StephenM. Sacks on behalf of Arnold & Porter.

Draft Advisory Opinion 1995–44: Paul E.Sullivan, Esq. on behalf of Forbes forPresident Committee, Inc.

Draft Advisory Opinion 1995–45: MichaelSpivak, Treasurer, Dr. John Hagelin forPresident 1996.

Routine Administrative Matters.

PERSON TO CONTACT FOR INFORMATION:Mr. Ron Harris, Press Officer,Telephone: (202) 219–4155.Marjorie W. Emmons,Secretary of the Commission.[FR Doc. 96–176 Filed 1–2–96; 3:19 pm]BILLING CODE 6715–01–M

fede

ral r

egiste

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371

ThursdayJanuary 4, 1996

Part II

Department ofHealth and HumanServicesFood and Drug Administration

International Conference onHarmonisation, Guidelines Availability:Impurities in New Drug Substances;Notice




[Docket No. 94D–0325]

International Conference onHarmonisation; Guideline onImpurities in New Drug Substances;Availability


SUMMARY: The Food and DrugAdministration (FDA) is publishing aguideline entitled ‘‘Impurities in NewDrug Substances.’’ The guideline wasprepared under the auspices of theInternational Conference onHarmonisation of TechnicalRequirements for Registration ofPharmaceuticals for Human Use (ICH).The guideline is intended to provideguidance to applicants for drugmarketing registration on the contentand qualification of impurities in newdrug substances produced by chemicalsyntheses and not previously registeredin a country, region, or member State.DATES: Effective January 4, 1996. Submitwritten comments at any time.ADDRESSES: Submit written commentson the guideline to the DocketsManagement Branch (HFA–305), Foodand Drug Administration, rm. 1–23,12420 Parklawn Dr., Rockville, MD20857. Copies of the guideline areavailable from the Consumer AffairsBranch (previously the CDER ExecutiveSecretariat Staff) (HFD–210), Center forDrug Evaluation and Research, Foodand Drug Administration, 7500 StandishPl., Rockville, MD 20855.FOR FURTHER INFORMATION CONTACT:

Regarding the guideline: Robert W.Trimmer, Center for DrugEvaluation and Research (HFD–625), Food and DrugAdministration, 7500 Standish Pl.,Rockville, MD 20855, 301–594–0370.

Regarding the ICH: Janet J. Showalter,Office of Health Affairs (HFY–20),Food and Drug Administration,5600 Fishers Lane, Rockville, MD20857, 301–827–0864.

SUPPLEMENTARY INFORMATION: In recentyears, many important initiatives havebeen undertaken by regulatoryauthorities and industry associations topromote international harmonization ofregulatory requirements. FDA hasparticipated in many meetings designedto enhance harmonization and iscommitted to seeking scientificallybased harmonized technical procedures

for pharmaceutical development. One ofthe goals of harmonization is to identifyand then reduce differences in technicalrequirements for drug developmentamong regulatory agencies.

ICH was organized to provide anopportunity for tripartite harmonizationinitiatives to be developed with inputfrom both regulatory and industryrepresentatives. FDA also seeks inputfrom consumer representatives andothers. ICH is concerned withharmonization of technicalrequirements for the registration ofpharmaceutical products among threeregions: The European Union, Japan,and the United States. The six ICHsponsors are the European Commission,the European Federation ofPharmaceutical Industries Associations,the Japanese Ministry of Health andWelfare, the Japanese PharmaceuticalManufacturers Association, the Centersfor Drug Evaluation and Research andBiologics Evaluation and Research,FDA, and the Pharmaceutical Researchand Manufacturers of America. The ICHSecretariat, which coordinates thepreparation of documentation, isprovided by the InternationalFederation of PharmaceuticalManufacturers Associations (IFPMA).

The ICH Steering Committee includesrepresentatives from each of the ICHsponsors and the IFPMA, as well asobservers from the World HealthOrganization, the Canadian HealthProtection Branch, and the EuropeanFree Trade Area.

In the Federal Register of September22, 1994 (59 FR 48740), FDA publisheda draft tripartite guideline entitled‘‘Impurities in New Drug Substances.’’The notice gave interested persons anopportunity to submit comments byDecember 6, 1994.

After consideration of the commentsreceived and revisions to the guideline,a final draft of the guideline wassubmitted to the ICH SteeringCommittee and endorsed by the threeparticipating regulatory agencies at theICH meeting held in March 1995.

The guideline is intended to provideguidance to applicants for drugmarketing registration on the contentand qualification of impurities in newdrug substances produced by chemicalsyntheses and not previously registeredin a country, region, or member State.The guideline is not intended to applyto new drug substances used during theclinical research stage of developmentor clinical trials. The guideline alsodoes not apply to biological/biotechnological substances, peptides,oligonucleotides, radiopharmaceuticals,fermentation and semisyntheticproducts derived from that process,

herbal products, and crude products ofanimal or plant origin. Impurities innew drug substances are addressed inthe guideline from two perspectives: (1)Chemistry aspects—classification andidentification of impurities, reportgeneration, setting specifications, and abrief discussion of analyticalprocedures; and (2) safety aspects—guidance for qualifying impurities thatwere not present in batches of the newdrug substance used in safety andclinical studies and/or impurity levelssubstantially higher than in thosebatches.

In the past, guidelines have generallybeen issued under § 10.90(b) (21 CFR10.90(b)), which provides for the use ofguidelines to state procedures orstandards of general applicability thatare not legal requirements but that areacceptable to FDA. The agency is nowin the process of revising § 10.90(b).Therefore, the guideline is not beingissued under the authority of § 10.90(b).Although this guideline does not createor confer any rights on or for anyperson, and does not operate to bindFDA in any way, it does represent theagency’s current thinking on the contentand qualification of impurities in newdrug substances produced by chemicalsyntheses and not previously registeredin a country, region, or member state.

As with all of FDA’s guidelines, thepublic is encouraged to submit writtencomments with new data or other newinformation pertinent to this guideline.The comments in the docket will beperiodically reviewed, and, whereappropriate, the guideline will beamended. The public will be notified ofany such amendments through a noticein the Federal Register.

Interested persons may, at any time,submit to the Docket ManagementBranch (address above) writtencomments on the guideline. Two copiesof any comments are to be submitted,except that individuals may submit onecopy. Comments are to be identifiedwith the docket number found inbrackets in the heading of thisdocument. The guideline and receivedcomments may be seen in the officeabove between 9 a.m. and 4 p.m.,Monday through Friday.

The text of the guideline follows:

Impurities in New Drug Substances

1. Preamble

This document is intended to provideguidance for registration applications on thecontent and qualification of impurities innew drug substances produced by chemicalsyntheses and not previously registered in aregion or member state. It is not intended toapply to the regulation of new drugsubstances used during the clinical research


stage of development. Biological/biotechnological, peptide, oligonucleotide,radiopharmaceutical, fermentation andsemisynthetic products derived therefrom,herbal products, and crude products ofanimal or plant origin are not covered.Impurities in new drug substances areaddressed from two perspectives:

Chemistry aspects include classificationand identification of impurities, reportgeneration, setting specifications, and a briefdiscussion of analytical procedures; and

Safety aspects include specific guidancefor qualifying impurities which were notpresent in batches of new drug substanceused in safety and clinical studies and/orimpurity levels substantially higher than inthose batches. Threshold limits are defined,below which, qualification is not needed.

2. Classification of ImpuritiesImpurities may be classified into the

following categories:• Organic Impurities (Process and Drug

Related)• Inorganic Impurities• Residual SolventsOrganic impurities may arise during the

manufacturing process and/or storage of thenew drug substance. They may be identifiedor unidentified, volatile or nonvolatile, andinclude:

• Starting Materials• By-Products• Intermediates• Degradation Products• Reagents, Ligands, and CatalystsInorganic impurities may derive from the

manufacturing process. They are normallyknown and identified, and include:

• Reagents, Ligands, and Catalysts• Heavy Metals• Inorganic Salts• Other Materials (e.g., Filter Aids,

Charcoal, etc.)Solvents are organic or inorganic liquids

used during the manufacturing process.Since these are generally of known toxicity,the selection of appropriate controls is easilyaccomplished.

Excluded from this document are:Extraneous contaminants which should notoccur in new drug substances and are moreappropriately addressed as goodmanufacturing practice issues; polymorphicform, a solid state property of the new drugsubstance; and enantiomeric impurities.

3. Rationale for the Reporting and Control ofImpurities3.1 Organic Impurities

The applicant should summarize thoseactual and potential impurities most likely toarise during the synthesis, purification, andstorage of the new drug substance. Thissummary should be based on sound scientificappraisal of the chemical reactions involvedin the synthesis, impurities associated withraw materials which could contribute to theimpurity profile of the new drug substance,and possible degradation products. Thisdiscussion may only include those impuritiesthat may reasonably be expected based onknowledge of the chemical reactions andconditions involved.

In addition, the applicant shouldsummarize the laboratory studies conducted

to detect impurities in the new drugsubstance. This summary should include testresults of batches manufactured during thedevelopment process and batches from theproposed commercial process, as well asresults of intentional degradation studiesused to identify potential impurities thatarise during storage. Assessment of theproposed commercial process may bedeferred until the first batch is produced formarketing. The impurity profile of the drugsubstance lots intended for marketing shouldbe compared with those used in developmentand any differences discussed.

The studies conducted to characterize thestructure of actual impurities present in thenew drug substance at or above an apparentlevel of 0.1 percent (e.g., calculated using theresponse factor of the drug substance) shouldbe described. Note that all recurringimpurities at or above the 0.1 percent levelin batches manufactured by the proposedcommercial process should be identified.Degradation products observed in stabilitystudies at recommended storage conditionsshould be similarly identified. Whenidentification of an impurity is not feasible,a summary of the laboratory studiesdemonstrating the unsuccessful effort shouldbe included in the application. Whereattempts have been made to identifyimpurities below the 0.1 percent level, it isuseful to also report the results of thesestudies.

Identification of impurities below apparentlevels of 0.1 percent is generally notconsidered necessary. However,identification should be attempted for thosepotential impurities that are expected to beunusually potent, producing toxic orpharmacologic effects at a level lower than0.1 percent. In all cases, impurities should bequalified as described later in this guide.Although it is common practice to roundanalytical results of between 0.05 and 0.09percent to the nearest number (i.e., 0.1percent), for the purpose of these guidelines,such values would not be rounded to 0.1percent and these impurities would notrequire identification.3.2 Inorganic Impurities

Inorganic impurities normally are detectedand quantitated using pharmacopeial or otherappropriate procedures. Carry over ofcatalysts to the new drug substance should beevaluated during development. The need forinclusion or exclusion of inorganicimpurities in the new drug substancespecifications should be discussed. Limitsshould be based on pharmacopeial standardsor known safety data.3.3 Solvents

The control of residues of the solvents usedin the manufacturing process for the newdrug substance should be discussed. Anysolvents which may appear in the drugsubstance should be quantified usinganalytical procedures with an appropriatelevel of sensitivity. Pharmacopeial or otherappropriate procedures should be utilized.Limits should be based on pharmacopeialstandards or known safety data taking intoconsideration dose, duration of treatment,and route of administration. Particularattention should be given to quantitation of

toxic solvents used in the manufacturingprocess.

4. Analytical Procedures

The registration application should includedocumented evidence that the analyticalprocedures are validated and suitable for thedetection and quantitation of impurities.Differences in the analytical procedures usedduring development and proposed for thecommercial product should be discussed inthe registration application.

Organic impurity levels can be measuredby a variety of techniques, including thosewhich compare an analytical response for animpurity to that of an appropriate referencestandard or to the response of the new drugsubstance itself. Reference standards used inthe analytical procedures for control ofimpurities should be evaluated andcharacterized according to their intendeduses. The drug substance may be used toestimate the levels of impurities. In caseswhere the response factors are not close, thispractice may still be acceptable, provided acorrection factor is applied or the impuritiesare, in fact, being overestimated.Specifications and analytical proceduresused to estimate identified or unidentifiedimpurities often are based on analyticalassumptions (e.g., equivalent detectorresponse, etc.). The assumptions should bediscussed in the registration application.

5. Reporting Impurity Content of Batches

Analytical results should be provided forall batches of the new drug substance usedfor clinical, safety, and stability testing, aswell as batches representative of theproposed commercial process. The content ofindividual identified and unidentified andtotal impurities observed in these batches ofthe new drug substance should be reportedwith the analytical procedures indicated. Atabulation (e.g., spreadsheet) of the data isrecommended. Impurities should bedesignated by code number or by anappropriate descriptor, e.g., retention time.Levels of impurities which are present butare below the validated limit of quantitationneed not be reported. When analyticalprocedures change during development,reported results should be linked with theprocedure used, with appropriate validationinformation provided. Representativechromatograms should be provided.Chromatograms of such representativebatches, from methods validation studiesshowing separation and detectability ofimpurities (e.g., on spiked samples), alongwith any other impurity tests routinelyperformed, can serve as the representativeimpurity profiles. The applicant shouldensure that complete impurity profiles (i.e.,chromatograms) of individual batches areavailable if requested. A tabulation should beprovided which links the specific new drugsubstance batch to each safety study and eachclinical study in which it has been used.

For each batch of the new drug substance,the report should include:

• Batch Identity and Size• Date of Manufacture• Site of Manufacture• Manufacturing Process• Impurity Content, Individual and Total


• Use of Batches• Reference to Analytical Procedure Used

6. Specification Limits for ImpuritiesThe specifications for a new drug

substance should include limits forimpurities. Stability studies, chemicaldevelopment studies, and routine batchanalyses can be used to predict thoseimpurities likely to occur in the commercialproduct. The selection of impurities toinclude in the new drug substancespecifications should be based on theimpurities found in batches manufactured bythe proposed commercial process. Thoseimpurities selected for inclusion in thespecifications for the new drug substance arereferred to as ‘‘specified impurities’’ in thisguideline. Specified impurities may beidentified or unidentified and should beindividually listed in the new drug substancespecifications.

A rationale for the inclusion or exclusionof impurities in the specifications should bepresented. This rationale should include adiscussion of the impurity profiles observedin the safety and clinical developmentbatches, together with a consideration of theimpurity profile of material manufactured bythe proposed commercial process. Specificidentified impurities should be includedalong with recurring unidentified impuritiesestimated to be at or above 0.1 percent. Forimpurities known to be unusually potent orto produce toxic or unexpectedpharmacological effects, the quantitation/detection limit of the analytical methodsshould be commensurate with the level atwhich the impurities must be controlled. Forunidentified impurities, the procedure usedand assumptions made in establishing thelevel of the impurity should be clearly stated.Unidentified impurities included in thespecifications should be referred to by someappropriate qualitative analytical descriptivelabel (e.g., ‘‘unidentified A,’’ ‘‘unidentifiedwith relative retention of 0.9’’). Finally, ageneral specification limit of not more than0.1 percent for any unspecified impurityshould be included.

Limits should be set no higher than thelevel that can be justified by safety data, and,unless safety data indicate otherwise, nolower than the level achievable by themanufacturing process and the analyticalcapability. In other words, where there is nosafety concern, impurity specificationsshould be based on data generated on actual

batches of the new drug substance allowingsufficient latitude to deal with normalmanufacturing and analytical variation, andthe stability characteristics of the new drugsubstance. Although normal manufacturingvariations are expected, significant variationin batch-to-batch impurity levels mayindicate that the manufacturing process ofthe new drug substance is not adequatelycontrolled and validated.

In summary, the new drug substancespecifications should include, whereapplicable, limits for:

Organic Impurities:• Each Specified Identified Impurity• Each Specified Unidentified Impurity at

or above 0.1 percent• Any Unspecified Impurity, with a limit

of not more than 0.1 percent• Total ImpuritiesResidual SolventsInorganic ImpuritiesA summation of assay value and impurity

levels generally may be used to obtain massbalance for the test sample. The mass balanceneed not add to exactly 100 percent becauseof the analytical error associated with eachanalytical procedure. The summation ofimpurity levels plus the assay value may bemisleading, for example, when the assayprocedure is nonspecific (e.g., potentiometrictitrimetry) and the impurity level is relativelyhigh.

7. Qualification of Impurities

Qualification is the process of acquiringand evaluating data which establishes thebiological safety of an individual impurity ora given impurity profile at the level(s)specified. The applicant should provide arationale for selecting impurity limits basedon safety considerations. The level of anyimpurity present in a new drug substancethat has been adequately tested in safety and/or clinical studies is considered qualified.Impurities that are also significantmetabolites present in animal and/or humanstudies do not need further qualification. Alevel of a qualified impurity higher than thatpresent in a new drug substance can also bejustified based on an analysis of the actualamount of impurity administered in previoussafety studies.

If data are not available to qualify theproposed specification level of an impurity,studies to obtain such data may be neededwhen the usual qualification threshold limitsgiven below are exceeded:

Maximum daily dose Qualification thresh-old

≤ 2 grams (g)/day ..... 0.1 percent or 1 milli-gram per day in-take (whichever islower)

> 2 g/day ................... 0.05 percent

Higher or lower threshold limits forqualification of impurities may beappropriate for some individual drugs basedon scientific rationale and level of concern,including drug class effects and clinicalexperience. For example, qualification maybe especially important when there isevidence that such impurities in certaindrugs or therapeutic classes have previouslybeen associated with adverse reactions inpatients. In these instances, a lowerqualification threshold limit may beappropriate. Conversely, a higherqualification threshold limit may beappropriate for individual drugs when thelevel of concern for safety is less than usualbased on similar considerations (e.g., patientpopulation, drug class effects, clinicalconsiderations). Technical factors(manufacturing capability and controlmethodology) may be considered as part ofthe justification for selection of alternativethreshold limits. Proposals for alternativethreshold limits are considered on a case-by-case basis.

The ‘‘Decision Tree for Safety Studies’’(Attachment I) describes considerations forthe qualification of impurities whenthresholds are exceeded. In some cases,decreasing the level of impurity below thethreshold may be simpler than providingsafety data. Alternatively, adequate data maybe available in the scientific literature toqualify an impurity. If neither is the case,additional safety testing should beconsidered. The studies desired to qualify animpurity will depend on a number of factors,including the patient population, daily dose,route, and duration of drug administration.Such studies are normally conducted on thenew drug substance containing theimpurities to be controlled, although studiesusing isolated impurities are seen asacceptable.

BILLING CODE 4160–01–F


BILLING CODE 4160–01–C


a If considered desirable, a minimumscreen for genotoxic potential should beconducted. A study to detect point mutationsand one to detect chromosomal aberrations,both in vitro, are seen as an acceptableminimum screen.

b If general toxicity studies are desirable,study(ies) should be designed to allowcomparison of unqualified to qualifiedmaterial. The study duration should be basedon available relevant information andperformed in the species most likely tomaximize the potential to detect the toxicityof an impurity. In general, a minimumduration of 14 days and a maximum durationof 90 days are seen as acceptable.

8. New ImpuritiesDuring the course of a drug development

program, the qualitative impurity profile ofthe new drug substance may change, or anew impurity may appear as a result of, forexample, synthetic route changes, processoptimization, or scale-up. New impuritiesmay be identified or unidentified. Suchchanges call for consideration of the need forqualification of the level of the impurity,unless it is below the threshold values asnoted above. When a new impurity exceedsthe threshold, the ‘‘Decision Tree for SafetyStudies’’ should be consulted. Safety studiesshould compare the new drug substancecontaining a representative level of the newimpurity with previously qualified material,although studies using the isolated impurityare also seen as acceptable (these studies maynot always have clinical relevance).

9. Glossary

Chemical Development Studies: Studiesconducted to scale-up, optimize, and validatethe manufacturing process for a new drugsubstance.

Enantiomers: Compounds with the samemolecular formula as the drug substance,which differ in the spatial arrangement of

atoms within the molecule and arenonsuperimposable mirror images.

Extraneous Substance: An impurity arisingfrom any source extraneous to themanufacturing process.

Herbal Products: Medicinal productscontaining, exclusively, plant material and/orvegetable drug preparations as activeingredients. In some traditions, materials ofinorganic or animal origin may also bepresent.

Identified Impurity: An impurity for whicha structural characterization has beenachieved.

Impurity: Any component of the new drugsubstance which is not the chemical entitydefined as the new drug substance.

Impurity Profile: A description of theidentified and unidentified impuritiespresent in a new drug substance.

Intermediate: A material produced duringsteps of the synthesis of a new drugsubstance which must undergo furthermolecular change before it becomes a newdrug substance.

Ligand: An agent with a strong affinity toa metal ion.

New Drug Substance: The designatedtherapeutic moiety which has not beenpreviously registered in a region or memberstate (also referred to as a new molecularentity or new chemical entity). It may be acomplex, simple ester, or salt of a previouslyapproved drug substance.

Polymorphism: The occurrence of differentcrystalline forms of the same drug substance.

Potential Impurity: An impurity which,from theoretical considerations, may arisefrom or during manufacture. It may or maynot actually appear in the new drugsubstance.

Qualification: The process of acquiring andevaluating data which establishes thebiological safety of an individual impurity ora given impurity profile at the level(s)specified.

Reagent: A substance, other than a startingmaterial or solvent, which is used in themanufacture of a new drug substance.

Safety Information: The body ofinformation that establishes the biologicalsafety of an individual impurity or a givenimpurity profile at the level(s) specified.

Solvent: An inorganic or an organic liquidused as a vehicle for the preparation ofsolutions or suspensions in the synthesis ofa new drug substance.

Specified Impurity: Identified orunidentified impurity that is selected forinclusion in the new drug substancespecifications and is individually listed andlimited in order to assure the safety andquality of the new drug substance.

Starting Material: A material used in thesynthesis of a new drug substance which isincorporated as an element into the structureof an intermediate and/or of the new drugsubstance. Starting materials normally arecommercially available and of definedchemical and physical properties andstructure.

Toxic Impurity: Impurities havingsignificant undesirable biological activity.

Unidentified Impurity: An impurity whichis defined solely by qualitative analyticalproperties (e.g., chromatographic retentiontime).

Validated Limit of Quantitation: Forimpurities at a level of 0.1 percent, thevalidated limit of quantitation should be lessthan or equal to 0.05 percent. Impuritieslimited at higher levels may have higherlimits of quantitation.

Dated: December 21, 1995.William K. Hubbard,Associate Commissioner for PolicyCoordination.[FR Doc. 96–64 Filed 1–3–96; 8:45 am]BILLING CODE 4160–01–F

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ThursdayJanuary 4, 1996

Part III

Department ofJusticeBureau of Prisons

28 CFR Part 545Inmate Work and Performance PayProgram; Final Rule


DEPARTMENT OF JUSTICE

Bureau of Prisons

28 CFR Part 545

[BOP–1027–F]

RIN 1120–AA29

Inmate Work and Performance PayProgram

AGENCY: Bureau of Prisons, Justice.ACTION: Final rule.

SUMMARY: In this document, the Bureauof Prisons is amending its regulations oninmate work and performance pay inconformance with revised provisionsgoverning drug abuse treatmentprograms and pretrial inmates. Inaddition to making these conformingamendments, the Bureau is also revisingvarious terms defined in the regulations,updating examples cited, and addingexception procedures pertinent to payreduction and work evaluation. Thisamendment is intended to provide forthe more efficient operation of Bureauinstitution work programs.EFFECTIVE DATE: January 4, 1996.ADDRESSES: Office of General Counsel,Bureau of Prisons, HOLC Room 754, 320First Street, NW., Washington, DC20534.FOR FURTHER INFORMATION CONTACT: RoyNanovic, Office of General Counsel,Bureau of Prisons, phone (202) 514–6655.SUPPLEMENTARY INFORMATION: TheBureau of Prisons is amending itsregulations on Inmate Work andPerformance Pay. A final rule on thissubject was published in the FederalRegister on October 1, 1984 (49 FR38915) and was amended on May 21,1991 (56 FR 23478) and July 10, 1991(56 FR 31530). A proposed rule on theconforming provisions of the drug abusetreatment programs was publishedJanuary 7, 1994 (59 FR 1240), and a finalrule for those provisions was publishedOctober 21, 1994 (59 FR 53342). A finalrule for the conforming amendments tothe provisions on pretrial inmates waspublished November 22, 1994 (59 FR60284).

The January 7, 1994 proposed rule ondrug abuse treatment programs (28 CFR550, subpart F) included conformingamendments to inmate work/programassignment (§ 545.23(a)) and toeligibility for performance pay(§ 545.25(d)). No comment was receivedon these provisions. These conformingamendments are being adopted as finalwith the following adjustments.Paragraph (a) of § 545.20 is revised inorder to conform to recommended

Federal Register codification practice,to include reference to drug treatmentprogramming, and to make consistentreference to education (rather thaneducational) program. In § 545.21,paragraph (f) is revised to includereference to drug treatmentprogramming and education programs.As proposed, § 545.23(a) was to beamended by revising the last sentence toinclude reference to the drug treatmentprogram. This reference is moreaccurately stated in the secondsentence, and the Literacy Program isgiven as an example of programinvolvement mandated by either Bureaupolicy or statute. For ease of reference,the entire paragraph is revised. In§ 545.24(d), the reference to‘‘educational’’ has been revised as‘‘education’’. The provision oneligibility for performance pay inproposed § 545.25(d) has been revisedfor the sake of simplification. Paragraph(a)(2) of § 545.25 has been revised toinclude the acronym for GeneralEducation Development in the referenceto the Bureau’s literacy program. Thereis no change in the intent of these twoparagraphs. In § 545.26, paragraph (e)(1)is revised to include reference toeducation programs. Section 545.28 isbeing revised as an administrativemeasure to allow for the payment of thelimited financial incentives authorizedby the provisions of the drug abusetreatment programs (§ 550.57(a)(1)).

The November 22, 1994 final rule onpretrial inmates removed references towaiver of separation because thedecision to maintain separation ininstances where the design, structure,and operation of the institution maymake separation not practicable is madeby staff. Section 545.23(b) accordinglyhas been revised to remove similarreference.

Changes to the definitions in § 545.21include the following. The definition ofinmate in paragraph (a) has beenremoved, because this definition iscovered more generally in 28 CFR 500.1.A new paragraph (a) has been added todefine the phrase ‘‘physically andmentally able.’’ Paragraph (c) has beenrevised to include Federal PrisonIndustries’ acronym rather than its tradename. Paragraphs (d) through (g) havebeen redesignated as paragraphs (e)through (h) in order to add a newdefinition for ‘‘commissaryassignment.’’ This assignment, alsoreferenced in newly revised § 545.23(a),operates under the Bureau’s Trust FundDivision.

In § 545.26, the Bureau is adding aprovision in paragraph (d) to makeexception for a reduction in inmate paybased upon absence from a scheduled

assignment. This exception provides theBureau the flexibility to continuepayment in instances where theAssistant Director, CorrectionalPrograms Division deems this advisable.In paragraph (e), the Bureau is adding asimilar provision with respect to workevaluations. This exception may beinvoked at independent camps ininstances where, in order to conservestaff resources, staff may monitor aninmate’s performance on a periodicbasis rather than a monthly basis whenthe inmate has received exceptionalevaluations over an extended period.

Because the additions to the proposedregulations either relieve a restriction onthe inmate or are administrative innature, the Bureau finds good cause forexempting the provisions of theAdministrative Procedure Act (5 U.S.C.553) requiring notice of proposedrulemaking, the opportunity for publiccomment, and a delay in the effectivedate. Members of the public may submitcomments concerning this rule bywriting to the previously cited address.These comments will be considered butwill receive no response in the FederalRegister.

The Bureau of Prisons has determinedthat this rule is not a significantregulatory action for the purpose of E.O.12866, and accordingly this rule was notreviewed by the Office of Managementand Budget. After review of the law andregulations, the Director, Bureau ofPrisons has certified that this rule, forthe purpose of the Regulatory FlexibilityAct (Pub. L. 96–354), does not have asignificant impact on a substantialnumber of small entities.


Prisoners.Kathleen M. Hawk,Director, Bureau of Prisons.

Accordingly, pursuant to therulemaking authority vested in theAttorney General in 5 U.S.C. 552(a) anddelegated to the Director, Bureau ofPrisons in 28 CFR 0.96(p), part 545 insubchapter C of 28 CFR, chapter V isamended as set forth below.

SUBCHAPTER C—INSTITUTIONALMANAGEMENT

PART 545—WORK ANDCOMPENSATION

1. The authority citation for 28 CFR545 continues to read as follows:

Authority: 5 U.S.C. 301; 18 U.S.C. 3013,3571, 3572, 3621, 3622, 3624, 3663, 4001,4042, 4081, 4082 (Repealed in part as tooffenses committed on or after November 1,1987), 4126, 5006–5024 (Repealed October12, 1984 as to offenses committed after that


date), 5039; 28 U.S.C. 509, 510; 28 CFR 0.95–0.99.

2. In § 545.20, paragraph (a) is revisedto read as follows:

§ 545.20 Purpose and scope.

(a) The Bureau of Prisons operates aninmate work program within itsinstitutions. To the extent practicable,the work program:

(1) Reduces inmate idleness, whileallowing the inmate to improve and/ordevelop useful job skills, work habits,and experiences that will assist in post-release employment; and

(2) Ensures that activities necessary tomaintain the day-to-day operation of theinstitution are completed.

Sentenced inmates who are physicallyand mentally able to work are requiredto participate in the work program.When approved by the Warden ordesignee, drug treatment programming,education, or vocational training may besubstituted for all or part of the workprogram.* * * * *

3. In § 545.21, paragraphs (a) and (c)are revised, paragraphs (d) through (g)are redesignated as paragraphs (e)through (h), and a new paragraph (d) isadded and newly designated paragraph(f) is revised to read as follows:


(a) Physically and mentally able. Forpurposes of this rule, this shall includeinmates with disabilities who, with orwithout reasonable accommodation, canperform the essential function of thework assignment.* * * * *

(c) Industry assignment. A FederalPrison Industries (FPI) work assignment.

(d) Commissary assignment. A TrustFund work assignment.* * * * *

(f) Part-time work assignment. A workassignment to which an inmate isassigned for only a portion of thescheduled work day. Part-time workassignments are ordinarily made inconjunction with drug treatmentprogramming, education, and/orvocational training programs.* * * * *

4. In § 545.23, paragraphs (a) and (b)are revised to read as follows:

§ 545.23 Inmate Work/ProgramAssignment.

(a) Each sentenced inmate who isphysically and mentally able is to beassigned to an institutional, industrial,or commissary work program. Exceptionshall be made to allow for inmateparticipation in an education,vocational, or drug abuse treatmentprogram, on either a full or part-timebasis, where this involvement ismandated by Bureau policy or statute(for example, the Literacy Program).Where such participation is not requiredby either policy or statute, exceptionmay be made to allow an inmate toparticipate in an education, vocational,or drug abuse treatment program ratherthan work full-time upon the request ofthe inmate and approval of the Wardenor designee.

(b) A pretrial inmate may not berequired to work in any assignment orarea other than housekeeping tasks inthe inmate’s own cell and in thecommunity living area, unless thepretrial inmate has signed a waiver ofhis or her right not to work (see 28 CFRpart 551, subpart J).* * * * *

§ 545.24 [Amended]5. In § 545.24, paragraph (d) is

amended by revising in the firstsentence the word ‘‘educational’’ to read‘‘education’’.

6. In § 545.25, paragraph (a)(2) isrevised and a new paragraph (d) isadded to read as follows:

§ 545.25 Eligibility for performance pay.(a) * * *(2) Literacy program (GED)

participation;* * * * *

(d) An inmate who refusesparticipation, withdraws, is expelled, orotherwise fails attendance orexamination requirements of the drugabuse education course shall be held atthe lowest pay grade (Grade 4).

7. In § 545.26, paragraphs (d), (e)introductory text, and (e)(1) are revisedto read as follows:

§ 545.26 Performance pay provisions.* * * * *

(d) An inmate is eligible to receiveperformance pay only for those hoursduring which the inmate is actuallyperforming satisfactory work or activelyparticipating in an education or

vocational training program. Absencesfrom an inmate’s scheduled assignmentfor such reasons as call-outs, visits, sickcall, interviews, or making telephonecalls shall be deducted from themonthly number of hours worked andwill accordingly reduce the amount ofpay received by the inmate. Anyexception to such reduction in pay mustbe approved by the Assistant Director,Correctional Programs Division, CentralOffice.

(e) Work Evaluation. At the end ofeach month the work detail/programsupervisor shall compute on anevaluation form the hours worked bythe inmate and the pay to be awarded.The supervisor shall also rate theinmate’s performance over the pastmonth in each of several categories. Forexample, an inmate may be rated insuch categories as quality of work,quantity of work, initiative, ability tolearn, dependability, response tosupervision and instruction, safety andcare of equipment, ability to work withothers, and overall job proficiency. Anyexception to the work performanceevaluation procedures cited aboverequires approval of the AssistantDirector, Correctional ProgramsDivision, Central Office.

(1) An inmate shall receiveperformance pay only for those hoursduring which the inmate is satisfactorilyperforming work or is activelyparticipating in an education/vocationalprogram.* * * * *


§ 545.28 Achievement awards.

(a) With prior approval of theEducation Department, each inmatewho completes the Literacy program,Vocational Training, or related tradesclassroom work that is part of a certifiedapprenticeship program may be grantedan achievement award fromperformance pay funds.

(b) With prior approval of thePsychology Services Department, eachinmate who is making satisfactoryprogress or completes a residential drugtreatment program may also be grantedan achievement award fromperformance pay funds.

[FR Doc. 96–126 Filed 1–3–96; 8:45 am]BILLING CODE 4410–05–P

i

Reader Aids Federal Register

Vol. 61, No. 3


CUSTOMER SERVICE AND INFORMATION

Federal Register/Code of Federal RegulationsGeneral Information, indexes and other finding

aids202–523–5227

Public inspection announcement line 523–5215

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FEDERAL REGISTER PAGES AND DATES, JANUARY

1–98.........................................299–246.....................................3247–380...................................4

CFR PARTS AFFECTED DURING JANUARY

At the end of each month, the Office of the Federal Registerpublishes separately a List of CFR Sections Affected (LSA), whichlists parts and sections affected by documents published sincethe revision date of each title.

3 CFR

Executive Orders:12944 (Superseded by

EO 12984)........................23512984...................................235

5 CFR

1201.........................................1

7 CFR

97.........................................247928.........................................99979.......................................248989.......................................100997.......................................1021773.....................................1043017.....................................250Proposed Rules:930.........................................211789.......................................21

10 CFR

50.........................................232Proposed Rules:26...........................................2730.........................................29531.........................................29532.........................................29540.........................................29570.........................................295

12 CFR

268.......................................251707.......................................114

14 CFR

23.....................................1, 25235.................................114, 25439.........................................11671 ............3, 120, 121, 232, 25573.............................................4Proposed Rules:39 ........................131, 133, 134

19 CFR

162.......................................258

21 CFR

510...............................258, 259522.......................................260573...........................................5Proposed Rules:101.......................................296

26 CFR

1 ..............................6, 260, 262301.......................................260602 ..........................6, 260, 262Proposed Rules:1.....................................28, 338301.......................................338

28 CFR

540.........................................90542.........................................86545.................................90, 378Proposed Rules:540.........................................92545.........................................92

32 CFR

69.........................................271Proposed Rules:199.......................................339

33 CFR

Ch. 1 ........................................881.............................................8Proposed Rules:165.......................................136207.........................................33

40 CFR

86.........................................12288.................................122, 129Proposed Rules:85.........................................14086.........................................14088.........................................140

41 CFR

201–1.....................................10201–2.....................................10201–3.....................................10201–4.....................................10201–6.....................................10201–7.....................................10201–17...................................10201–18...................................10201–20...................................10201–21...................................10201–22...................................10201–24...................................10201–39...................................10

48 CFR

225.......................................130252.......................................1301215.....................................2731252.....................................2731253.....................................273Proposed Rules:31.........................................234

49 CFR

573.......................................274576.......................................274577.......................................274Proposed Rules:195.......................................342553.......................................145

50 CFR

222.........................................17

ii Federal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Reader Aids

227.........................................17611.......................................279625...............................291, 292641.........................................17652.......................................293663.......................................279675.........................................20Proposed Rules:17...........................................35

REMINDERSThe rules and proposed rulesin this list were editoriallycompiled as an aid to FederalRegister users. Inclusion orexclusion from this list has nolegal significance.

Rules Going Into EffectToday

AGRICULTUREDEPARTMENTAgricultural MarketingServicePlant Variety Protection Act

conformance; certificationfee increase; published 1-4-96

DEFENSE DEPARTMENTPersonnel:

Elected school boards--National Defense

Authorization Act;implementation;published 1-4-96

FEDERAL TRADECOMMISSIONTrade regulation rules:

Used motor vehicle;Regulatory Flexibility Actreview; published 12-5-95

HEALTH AND HUMANSERVICES DEPARTMENTFood and DrugAdministrationAnimal drugs, feeds, and

related products:Sponsor name and address

changes--American Home Products

Division, AmericanCyanamid; published 1-4-96

TRINADA, Inc.; published1-4-96

Wildlife Laboratories, Inc.;published 1-4-96

INTERIOR DEPARTMENTSurface Mining Reclamationand Enforcement OfficePermanent program and

abandoned mine landreclamation plansubmissions:Indiana; published 12-20-95

JUSTICE DEPARTMENTPrisons BureauImate control, custody, care,

etc.:

Work and performance payprogram; drug abusetreatment programs andpretial inmates; published1-4-96

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

Sikorsky; published 12-20-95Airworthiness standards:

Normal, utility, acrobatic,and commuter categoryairplanes--Powerplant and equipment

standards; published 1-4-96

Class D airspace; published11-9-95

Class E airspace; published11-1-95

Class E airspace; correction;published 12-6-95

VOR Federal airways;published 11-2-95

TRANSPORTATIONDEPARTMENTNational Highway TrafficSafety AdministrationMotor vehicle safety

standards:Manufacturers’ obligations to

provide notification andremedy without charge toowners of vehicles oritems not complying withsafety standards;published 1-4-96

Rulemaking procedures:Petitions for reconsideration

and extension of commentperiod; published 12-5-95

TREASURY DEPARTMENTInternal Revenue ServiceIncome taxes:

Individual returns; filingextension; published 1-4-96

Comments Due NextWeek

AGRICULTUREDEPARTMENTAgricultural MarketingServiceOkra (frozen); grade

standards; comments dueby 1-8-96; published 12-7-95

Onions grown in--Texas; comments due by 1-

11-96; published 12-12-95Peas, field and black-eye

(frozen); grade standards;comments due by 1-8-96;published 12-7-95

COMMERCE DEPARTMENTNational Oceanic andAtmospheric AdministrationFishery conservation and

management:

Bering Sea and AleutianIslands groundfish;comments due by 1-10-96; published 12-11-95

COMMODITY FUTURESTRADING COMMISSIONCommodity Exchange Act:

Futures commissionmerchants; minimumfinancial requirements,subordinated debtprepayment, and grosscollection of exchange-setmargin for omnibusaccounts; comments dueby 1-12-96; published 12-13-95

DEFENSE DEPARTMENTAcquisition regulations:

Ground and aircraft flightrisk; comments due by 1-12-96; published 11-13-95

Multiyear contracting andother miscellaneousprovisions; comments dueby 1-12-96; published 11-13-95

Federal Acquisition Regulation(FAR):Contingent fee

representation; commentsdue by 1-12-96; published11-13-95

Employee stock ownershipplans; comments due by1-8-96; published 11-7-95

EDUCATION DEPARTMENTPostsecondary education:

Student support servicesprogram; clarification andsimplification; commentsdue by 1-12-96; published12-13-95

ENERGY DEPARTMENTFederal Energy RegulatoryCommissionNatural gas companies

(Natural Gas Act):Outer Continental Shelf; gas

pipeline facilities andservices; agency’sjurisdiction; comments dueby 1-12-96; published 12-11-95

ENVIRONMENTALPROTECTION AGENCYAir pollutants, hazardous;

national emission standards:Chromium emissions from

hard and decorativechromium electroplatingand anodizing tanks, etc.;comments due by 1-12-96; published 12-13-95

Air quality implementationplans; approval andpromulgation; variousStates:Pennsylvania; comments

due by 1-12-96; published12-13-95

South Carolina; commentsdue by 1-10-96; published12-11-95

Washington; comments dueby 1-8-96; published 12-8-95

Air quality implementationplans; approval andpromulgation; variousStates; air quality planningpurposes; designation ofareas:Florida; comments due by

1-8-96; published 12-7-95New Jersey; comments due

by 1-8-96; published 12-7-95

Clean Air Act:State operating permits

programs--California; comments due

by 1-8-96; published12-7-95

California; comments dueby 1-8-96; published12-7-95



Hazardous waste:Military munitions rule;

explosives emergencies;redefinition of on-site;comments due by 1-8-96;published 11-8-95

Pesticides; tolerances in food,animal feeds, and rawagricultural commodities:Imidacloprid; comments due

by 1-12-96; published 12-13-95

Superfund program:National oil and hazardous

substances contingencyplan--National priorities list

update; comments dueby 1-11-96; published12-20-95

Toxic substances:Significant new uses--

Ethane, 1,1,1,2,2-pentafluoro-; commentsdue by 1-12-96;published 12-13-95

FEDERALCOMMUNICATIONSCOMMISSIONCommon carrier services:

Hearing aid compatiblewireline telephones inworkplaces, confinedsettings, etc.; commentsdue by 1-12-96; published12-12-95

Radio stations; table ofassignments:Maine; comments due by 1-

8-96; published 12-4-95

iiiFederal Register / Vol. 61, No. 3 / Thursday, January 4, 1996 / Reader Aids

Television broadcasting:Cable Television Consumer

Protection andCompetition Act of 1992--Rate regulation;

comments due by 1-12-96; published 12-11-95

FEDERAL EMERGENCYMANAGEMENT AGENCYFlood insurance programs:

Insurance coverage andrates; comments due by1-8-96; published 11-9-95

FEDERAL RESERVESYSTEMTransactions with affiliates;

conformity of capital stockand surplus definition tounimpaired capital stock andsurplus definition, etc.;comments due by 1-8-96;published 12-4-95

HEALTH AND HUMANSERVICES DEPARTMENTFood and DrugAdministrationMedical devices:

Medical device user facilitiesand manufacturers;adverse events reporting;certification andregistration; commentsdue by 1-10-96; published12-11-95

INTERIOR DEPARTMENTSurface Mining Reclamationand Enforcement OfficeIndian lands program:

Abandoned mine landreclamation plan--

Hopi Tribe; comments dueby 1-8-96; published12-7-95

Permanent program andabandoned mine landreclamation plansubmissions:Colorado; comments due by

1-8-96; published 12-7-95LABOR DEPARTMENTOccupational Safety andHealth AdministrationSafety and health standards,

etc.:Respiratory protection;

comments due by 1-8-96;published 11-7-95

PERSONNEL MANAGEMENTOFFICEFederal claims collection:

Claims collectionsstandards; delegation ofauthority; comments dueby 1-8-96; published 11-9-95

POSTAL RATE COMMISSIONPractice and procedure rules:

Rate and classificationchanges; expedition,flexibility, and innovation;comments due by 1-8-96;published 12-18-95

TRANSPORTATIONDEPARTMENTCoast GuardAnchorage regulations:

Louisiana; comments due by1-12-96; published 11-13-95

International Convention onStandards of Training,

Certification andWatchkeeping for Seafarers(STCW 78)Comment request;

comments due by 1-12-96; published 11-13-95

Ports and waterways safety:Boon Island, ME; sunken

vessel M/V EMPIREKNIGHT; safety zone;comments due by 1-12-96; published 11-13-95

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

de Havilland; comments dueby 1-12-96; published 11-14-95

Airbus; comments due by 1-8-96; published 11-9-95

British Aerospace;comments due by 1-12-96; published 11-13-95

Fokker; comments due by1-8-96; published 11-28-95

Hamilton; comments due by1-8-96; published 11-8-95

Teledyne ContinentalMotors; comments due by1-12-96; published 11-13-95

Airworthiness standards:Special conditions--

Beech model 200airplane, etc.; commentsdue by 1-8-96;published 12-7-95

Class E airspace; commentsdue by 1-8-96; published12-1-95

Rulemaking petitions;summary and disposition;comments due by 1-8-96;published 11-8-95

TRANSPORTATIONDEPARTMENT

Federal HighwayAdministration

Engineering and trafficoperations:

Emergency relief program;comments due by 1-12-96; published 11-13-95

TRANSPORTATIONDEPARTMENT

National Highway TrafficSafety Administration

Motor vehicle safetystandards:

Child restraint systems--

Booster seat safety;comments due by 1-11-96; published 12-12-95

LIST OF PUBLIC LAWS

Note: No public bills whichhave become law werereceived by the Office of theFederal Register for inclusionin today’s List of PublicLaws.

Last List January 3, 1996